COVID-19 Lockdown - Impact Update

The last two weeks have been very challenging with incomplete and confusing information circulating from the Government for businesses affected by the four week lockdown of New Zealand.

This has made it very difficult for all business owners to get their head around what to do, especially with their business advisers scrambling to understand the situation where everything keeps changing and moving at lightning speed.

The one thing that is abundantly clear is that businesses that were put into lockdown for four weeks on 26 March are now fighting for their survival. This must equate to 95% or more of all businesses in New Zealand. Every business put into lockdown is in the same boat. A significant number of businesses will not have the resources set aside to deal with the impact of a full month of wage and overhead costs with no sales/income even with the wage subsidy.

What to do?

  • Start talking with staff now and ask them what they propose as a solution as your business viability and their jobs are on the line if everyone does not work through this together immediately and share the pain. Be abundantly clear that you are not alone, as all 95% of businesses throughout New Zealand who are currently in lockdown will now be having the same discussions.
  • Start talking with your major overhead suppliers ( rent, insurance etc. ) regarding sharing the pain and how they can support you through both the lockdown period and in the chaos immediately after the lockdown.
  • Start talking with other non-overhead suppliers ( paint suppliers etc. ) regarding how you can manage their outstanding accounts by entering into payment plans for existing payables.
  • Start reviewing your sales records for the last four months and consider what your sales will look like after the lockdown ends and what level of staffing your business will require going forward. For example: there is no point in ignoring the fact that 40% of your sales came from tourist companies - this work has now gone. You need to assess this now and plan/make the required staffing changes now. Watch COVID-19 Wage Subsidy Conditions!!
  • Understand your cash position now. Use the new Wages Subsidy Calculator and Cash Flow Forecaster. This may save your business!!
  • It is important to do the above now while your business is in lockdown, as when the lockdown is over you will have no time as you will be very focused on getting work completed and cash in.

What help is currently available?

Be Aware

The COVID-19 Wage Subsidy comes from the Public Purse. As such you must remain fully aware of the conditions attached to the wage subsidy. Ensure that you cross your t‘s and dot your i‘s with regard to the conditions of the wage subsidy; as if you don’t this can be treated as fraud.

We are all currently at war for the survival of our businesses. Take care with the way you handle staff and documentation, both with regard to the process and the supporting evidence for your decisions with regard to any possible redundancies. Employment Law has not been suspended.


There is currently a lot of confusion around the businesses community relating to the four week lockdown of New Zealand and the resulting implications. In order to try to provide some clarification, which is urgently needed, we have prepared this discussion document. Because this document is a ‘discussion document’ we cannot accept any liability to any person who places reliance on the contents of this discussion document. You must seek your own independent specialist advice before making any decisions around your particular circumstances.

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