by Michael Bright
last updated 22/04/2020
Relief for businesses - updated
by Michael Bright
last updated 22/04/2020
22 April 2020 - Michael Bright of Gaze Burt provides an updated summary with links of where to get up-to-date and accurate information about the relief available for businesses
There is an avalanche of information online about conducting business under Covid-19 – from which businesses may operate and how, to what support Government is providing. However much of the information is repetitive and the situation changes daily. Legal commentaries can quickly become out of date. To make it easier for you to keep up, here are the best sources of information on a range of topics.
Many of the websites referred to below update frequently. Re-click each link to get the latest updates.
Although the information on these sites is improving over time, it only goes so far. Many situations don’t quite fit the ‘norm’ anticipated in the Government guidance. In these situations, a principled approach must be used to work out what will be permitted, and what not, under the Covid-19 rules and relevant law. We are helping clients figure out what to do in these situations, every day.
Summary of current situation and interventions by Government
Government news releases (often the first notification but few details)
Overall summary of business information
0800 779 997 (8am–1am, 7 days a week) or
0800 22 66 57 (9am-5pm, Monday-Friday)
Guidance around Business Operations
Summary guidance as to which businesses can open at different alert levels and what rules apply:
Government wage subsidy
Work and Income can provide support if you are contemplating redundancies:
Leases and Rent Abatement
The Government intends to change the law so that commercial landlords may not terminate leases for non-payment of rent, unless the rent is 30 business days overdue and they have given at least 30 business days notice (but these two time periods can run concurrently).
If your lease is the current standard ADLS version, it will most likely have a ‘no access’ clause providing that a 'fair proportion' of the rent and outgoings will cease to be payable during the time you can’t access the premises due to lockdown. The key issue is how to assess what is a ‘fair proportion’. That is a matter of commercial negotiation and is something we are assisting with daily.
If your lease does not have a ‘no access’ clause (and many don’t) then it may have a ‘force majeure’ clause or you might be able to claim the lease has been ‘frustrated’. Both would give relief against rent obligations, however force majeure clauses are uncommon in leases and in most cases it will be premature to decide that a lease has been ‘frustrated’. Rent relief under these circumstances is more difficult to achieve but often still possible with effective negotiation.
We are helping various organisations put pressure on the Government for further assistance with rent costs. We are hopeful that further support will be provided – keep an eye on the media and https://www.beehive.govt.nz/releases for any further announcements.
Business finance relief
$500,000 loan per business, for businesses with turnover between $250k and $80M. Application must be made to your bank and will be subject to usual lending criteria, terms and limits. Be aware this is not a grant – it is an ordinary interest-bearing loan and security may be required.
Insolvency and Debt Relief
Various measures are available to assist with late payment of tax or freeing up cash using the tax system. This should be discussed with your accountant. Summary details at:
‘Essential’ businesses have greater freedom to trade and a special subsidy for coping with sick leave taken by their workers.
Which businesses are ‘essential’ and operating requirements:
Information for employees in essential businesses, including essential workers leave subsidy scheme and assistance with childcare, PPE and other practical matters:
https://workandincome.govt.nz/products/a-z-benefits/covid-19-essential-workers-leave-support.html (Further detail about the essential workers leave support scheme)
Note: the essential workers leave subsidy cannot be claimed if the employee is already receiving the general wage subsidy.
Essential businesses in the primary sector need to register with MPI. Further information specific to primary sector businesses at:
It is important to know that businesses who are supply chain for essential businesses can themselves be essential (or at least part of their business may be).
If you have any queries around essential services and whether you (or part of your business) might be one you can get in touch with MBIE at 0508 377 388 or email firstname.lastname@example.org.
Health and Safety
Very few businesses will have business interruption insurance that extends to cover for pandemics. Pandemics have been almost universally excluded from BI policies since the SARS epidemic.
Commercial contracts and product orders
‘Force majeure’ clauses, the doctrine of ‘frustration’ and other principles of contract law may help reduce or avoid contractual obligations. Whether these apply is something that must be carefully assessed by a lawyer, as getting it wrong may lead to legal liability for breach of contract.
Protections for Residential Tenants
Rent freeze for 6 months and restrictions (for 3 months) on landlords’ ability to terminate:
Mortgage Relief for Homeowners
Several packages being offered, including a 6 month deferral of principal and interest payments. Check your own bank’s website as to other options and discuss with the bank.
Be aware that if accepting a principal and interest repayment holiday, interest will continue to accrue and will be added to principal – increasing overall debt compared with paying interest-only.
Director, Gaze Burt Limited
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