Uncertainty, job losses, and business closures are being anticipated for restaurants, bars and cafes with the wage subsidy winding down.
More than 400,000 jobs were being supported by the Government's support scheme at the beginning of July.
Now, a month and a half on, that figure has nearly halved, and for one of the most vulnerable sectors - hospitality - there are questions over what's going to happen next.
One hospitality operator, Richard Bagnall, said the impact of a second Auckland lockdown has been particularly devastating.
"We are reduced on a Friday and Saturday night, when we would normally have in between 450 and 500 [customers].
"That also represents between 60 percent of our turnover for the week. So that's gone, and we're operating under 40 percent and we've got a high wage cost to operate at alert level 2."
He's the co-owner of Longroom & Longshot - a Ponsonby-based bar and grill. The business has used every dollar available from the wage subsidy, starting with the initial 12-week instalment, then the eight-week extension, and ending with the two-week resurgence.
Despite Auckland remaining at level 2, and the reduced income that means, he won't be able to access any more subsidy.
While his business should be alright, he said, he is concerned about others in similar positions.
"I don't think a lot of businesses will be able to survive without some form of support, whether that comes from another wage subsidy, whether that comes in some form of legislation that says to landlords, 'We would like you to take a fair and reasonable approach to your tenant'."
Data from the Ministry of Social Development shows in late-July - during the peak of the subsidy extension - accommodation and food services had the highest number of jobs being propped up by the scheme compared with any other sector.
It was 69,000 jobs in total, representing 48 percent of the entire sector.
The subsidy is winding down - the number of jobs being supported by the scheme down half since the beginning of August.
Over the same period, the number of people receiving the Jobseekers Support benefit rose by more than 8,000. Similarly, just under 11,000 people applied for the COVID-19 Income Relief Payment - that's the 12-week long government handout for anyone who has recently lost their job.
Forecaster at Infometrics, Gareth Kiernan, said it's sectors like hospitality which, so far, have bore the brunt of the pandemic.
Moving forwards, he said it's not looking easier.
"In terms of the broader economic downturn, or recession, and the job losses flowing through into other industries, it does take time.
"So initially, the tourism, hospitality and some of the retail areas, I'd expect to be under most pressure."
Whether another round of wage subsidy is the solution, however, he said he wasn't sure.
"It's always a fine line, and the Government, if it keeps pumping money into those areas, does risk just propping up businesses for longer and longer, without necessarily there being a clear exit strategy, or a clear way that those businesses are able to survive.
"I don't think any amount of Government money are necessarily going to change those outcomes."
General Manager for the Restaurant Association, Nicola Waldren, said it's not necessarily another subsidy they want.
They're calling for a hospitality-targeted support package, and have been giving their own suggestions:
- a "Dine Out to Help Out" scheme, similar to the UK, where the Government pitches in 50 percent of the customer's cost for a meal
- the removal of GST on fruit and veg
- commercial lease assistance.
So far, not much has been forthcoming from the government.
"We did meet with Treasury a couple of weeks ago, and have been able to put forward our proposals to them, so they are ongoing discussions, but up to now, the Government hasn't really come to the party with assistance for our sector."
She said with no more subsidy available, action now is vital.
"A lot of businesses are really concerned for their future, that's the message coming through very strongly from our discussions with members, is that they are highly in survival mode.
"That industry employs over 130,000 workers so it's a significant number of workers that we're concerned for."
Finance Minister Grant Robertson said the Government had supported the hospitality sector.
"Businesses in the accommodation and food services industry received just over $1 billion from the initial wage subsidy, which ran for 12 weeks, covering 164,000 jobs - that's 93 percent of the industry's jobs.
"There has also been support through the Small Business Cashflow Loan Scheme, tax changes and business advice support," he said.
RNZ
