Kaikoura business subsidy package extended

The subsidies for Kaikoura business affected by last month’s earthquake have been extended a further eight weeks.

Economic Development minister Steven Joyce says while there has been good progress made to restoring the southern access to Kaikoura, it will still be “some weeks before both roads are open and operational for visitors.

The closure of the roads has had a serious effect on the town’s economy, as more than a quarter of employment in the Kaikoura district relies on tourism.

“The further eight-week extension is available for businesses in the Kaikoura district who face a dramatic drop in their turnover as a direct result of the earthquakes and the closure of State Highway One,” Mr Joyce says.

The extended support package will cover a total of 16 weeks at a rate of:

• $500 gross per week for a fulltime employee ($4000 per person);
• $300 gross per week for a part-time employee ($2400 per person);
• not be subject to GST ( so employees get a higher net subsidy); and
• be backdated to the date of the earthquake and employers can ‘top up' the subsidy

Mr Joyce says the business support package will now be available to businesses in Hanmer Springs and the wider Hurunui District which can show a sudden, large and sustained drop in revenue following the November earthquake.

For businesses in Hanmer Springs, the package will be limited to eight weeks and will be backdated to the date of the earthquake.

So far there have been 639 applications from businesses for the support, and almost $4.9 million has been paid out, Social Development minister Ann Tolley says.

She says  the government has set aside $5 million more for the package overall in addition to the $7.5 million originally allocated.

Yesterday’s Half Yearly Economic and Fiscal Update showed the Kaikoura earthquakes are having a short-term impact on the government accounts.

The operating balance deteriorates slightly over the current year after the unexpectedly large $1.8 billion surplus for the year ended in June. 

This is mostly put down to the effect of the earthquakes, the cost of which is expected to take $1 billion off the forecast surplus this year and probably another couple of billion dollars after that.

The government’s extension of the Kaikoura business subsidies follows a similar package for quake-affected Wellington businesses, as well as a $5 million primary sector support package.