Tuesday, 31st March, 2020
I am feeling a bit scared to write an update, by the time I get to the bottom of the page it will be out of date. But here goes ...
Many members have, for the time being, moved on from wage subsidies and are now turning their head to managing other parts of their OPEX and their balance sheets. Starting with rent. Members are asking me if the Chamber has thoughts on this. The official view ... it's complex, it's a two-way relationship and both sides of the fence need professional advice.
But if pressed ... and my fingers are trembling as I write ... returns in the residential and commercial property market have collapsed and almost all members are expecting their landlords to partially fund them through this crisis. I am suprised that some members feel that landlords should all be behaving the same way. Even if landlord circumstances were the same they are prevented from colluding to set a price, the Commerce Commission would have something to say about that. We see landlords behaving in different ways as we would expect in a functioning, private market.
On the plus side, the short term assistance provided by many landlords as their tenants get their labour issues sorted and do a guesstimate-forecast so they can apply for bank funding is really, really being welcomed by many members and recognises the pain that most of you are feeling. Landlords however are rightfully hesitant about extending credit to a business that is unable to secure a bank loan - if the bank will not lend - why should they? The government doesn't seem to be signalling that they are willing to underwrite the debt for commercial landlords or suppliers acting as creditors to other businesses. If your business needs capital and you need to borrow, your bank, in my view is the place you should go.
That being said ... the pendulum has firmly swung to the buyer (tenant), from the supplier (landlord) for now and the foreseeable future. This presents buyers with an enormous opportunity. The tenant should be thinking way beyond short-term rent reduction/holidays which will help until just they get their bank loans in place. Both sides need to start negiotiating new agreements that incentivise the landlord and tenant to invest in rebuilding the local economy. This will ultimately offer business and the economy much more benefit. What contracts could be written that make this happen? Buyers may need to work together to drive this type of thinking.
I wrote in defence of the business community addressing the concern and confusion regarding why some staff are still being made redundant despite the wage subsidy scheme. Not a perfect response, but outlines some of the key issues affecting business owners. You can read the article published in Crux here.
Wishing you all well in this, quite frankly, shitty-as time.
(Ring me if you need a hand)
Free employer advice line
Otago Southland Employers Association (OSEA) are extending their employer advice line to all our members. Call 0508 656 757 to speak to an employment advisor. I have accepted this kind offer on behalf of our members.
Influenza vaccinations - order your staff vaccines now
Southern DHB has confirmed vaccinations should continue. Chamber inflenza vaccines for employees are available through the lock down and after at Unichem Remarkables Park Pharmacy and Life Wilkinson's Phamacy in downtwn only.
Five Mile Pharmacy is also offering vaccinations, but is not included in the Chamber offer. Please ring them directly for booking time, or visit the pharmacy.
I meet with the combined social agencies and members who are running boarding houses and shared accommodation businesses today. There are now 900 plus people registered with EOC Welfare team now. There is a sense that the level of unmet need will increase over the next week or two. If you, or someone you know, needs assistance with housing, food or healthcare needs, please encourage them to register with the Emergency Operations Centre (EOC). https://www.qldc.govt.nz/covid-19#need-help
Volunteer Central has a large number of qualified volunteers available, but very little requests for assistance. Please don't be shy in coming forward if you, or someone you know, needs a hand.
A local fundraising campaign, Greatest Needs Fund, has been launched for people affected by Covid19 locally. If you are in a position to donate, the money will be used to support community agencies locally to give support to those in our community.