New measures to help business through COVID-19 crisis
The Government has announced new measures to provide relief for small and medium-sized businesses during the COVID-19 pandemic.
The new measures include:
- $3.1 billion tax loss carry-back scheme (estimated cost over the next two years),
- $60 million estimated annual savings to business each year from changes to the tax loss continuity rules,
- $25 million in the next 12 months for further business consultancy support,
- Greater flexibility for affected businesses affected to meet their tax obligations,
- Measures to support commercial tenants and landlords.
“We have taken decisive action throughout this pandemic to cushion the blow for our businesses and workers - today’s announcement continues that focus. We need our businesses to stay solvent to help with the economic recovery as we emerge from this health crisis,” says Finance Minister Grant Robertson.
“Our focus on cashflow and confidence continues through these measures. We have approved a tax loss carry-back scheme that will allow a large number of businesses to access their previous tax payments as cash refunds. Essentially this means a forecast loss in the current financial year can be offset against the tax paid on a profit from last year.”
We are also changing the tax loss continuity rules to make it easier for firms to raise new capital without losing the benefit of their existing tax losses.”
Minister for Small Business Stuart Nash says some businesses are struggling to meet their non-wage fixed costs, like interest, rent and insurance, but are not currently in a position to take on additional debt.
“In the absence of further support from the Government, these otherwise viable SMEs may be forced to close down permanently.
“We don’t want that to happen, so as well as the tax measures which should provide some cashflow relief, we are going to provide tailored support services to help businesses weather the storm, at no charge to the business.
“Using established services including the Regional Business Partner Network and the helplines run by the Employers and Manufacturers Association and Canterbury Chamber of Commerce, we can get specialist, tailored advice where it is needed, fast. This could range from human resources advice to business continuity planning to financial management – because every one of these small businesses will have a different need,” Mr Nash says.
New measures are also being announced to support stability in commercial property transactions, extending the timeframes required before landlords can cancel leases and mortgagees can exercise their rights to sale or repossession.
Legislation enacting the changes announced today will be introduced on 27 April and will apply retrospectively once the bill is passed.
Work is also underway on further support for businesses and households as the impacts of COVID 19 become clearer.
Last updated on the 15th April 2020