Tax relief doesn’t go far enough – TIA

16th April 2020 By Staff Reporter | news@tourismticker.com | @tourismticker

The latest business support measures announced by the Government are not enough, says Tourism Industry Aotearoa.

TIA chief executive Chris Roberts said tax announcements from the Government yesterday would come as a relief to “thousands of struggling tourism businesses”, but without further support many still faced going out of business.

“The majority of tourism operations in New Zealand are small, owner-operated businesses that have been devastated by the border closures and lockdown. They desperately need every scrap of relief the Government can offer,” he said.

Chris Roberts

The Government should consider additional measures to support tourism businesses and save tens of thousands of jobs.

“The wage subsidy scheme must be extended beyond its current 12-week period or replaced by something else that keeps people in jobs,” Roberts said.

“There is almost zero chance that most tourism businesses will be attracting customers by the time the scheme ends in June. If the scheme is not extended, we will see thousands of tourism workers being made redundant at that time.”

Roberts said TIA had been working to highlight the impact of Covid-19 on the tourism industry since late January. The association had raised the need for tax relief and other measures.

“We specifically raised the idea of allowing a forecast loss in the current financial year to be offset against the tax paid on a profit from last year. So the Tax Loss Carry-back Scheme is particularly welcomed. Thousands of tourism businesses will be able to utilise this scheme.”

However, larger tourism businesses would need tailored assistance to survive the crisis, Roberts said.

Rental and lease payments on businesses that could not operate were also a problem.

The Government’s announcement included plans to introduce legislation to extend the timeframes for dealing with commercial lease disputes caused by Covid-19. Tailored support services would be provided free of charge through existing services like the Regional Business Partner Network.

“These are useful steps but do not deal with the underlying problem, that businesses without customers cannot meet ongoing rent payments and face going out of business without further government support,” Roberts said.

He added that the Government should also consider the suspension of ACC employer levies for the remainder of 2020, as this fund had sufficient reserves to cover past claims.