Covid support package for media announced

Media were really struggling before Covid-19 generally due to competition via the Internet and specifically due to international online media like Google and Facebook getting a big proportion of advertising revenue.

The impact in businesses further affected advertising revenue, ironically as audiences surged due to virus coverage. The Bauer media Group has already announced they were shutting down New Zealand operations, and other media companies have made it clear their survival was at stake, and have reduced staff and wages.

Today the Government announced support for media companies.


Media support package delivers industry request for assistance

  • $21.1 million to completely cut transmission fees for 6 months
  • $16.5 million to cut by 80% contribution for NZ On Air screen content in 2020/21
  • $1.3 million for government departments to purchase organisation wide news service subscriptions

The Government has announced a suite of initiatives valued at $50 million that have been developed with the media industry to help them get through the COVID-19 pandemic.

“This package is about freeing up cash in the short term to assist the industry get through the immediate crisis and dramatic drop in advertising revenue experienced since the start of COVID Alert Level 4,” Minister of Broadcasting, Communications and Digital Media Kris Faafoi said.

“The proposals in this package were generated by the industry themselves in a recent series of workshops to identify means of delivering immediate support to the sector. We have chosen the proposals that have a relatively quick impact to get support out the door as fast as possible.

“By cancelling transmission fees we are freeing up cash the media companies can use to help them in the short term. This is in addition to the wage subsidy and other tax measures.

“Initiatives in this first stage aim to provide some immediate relief and allow time for work to be done on longer term strategies to ensure future sustainability in New Zealand’s news media“The media sector is only the third sector, after primary health care and aviation, to receive a specific pool of funding over and above the wage subsidy to help it get through the COVID-19 crisis.

“This support reflects the essential role media play at this time in delivering access to reliable and up to date news coverage and keeping New Zealanders connected while in lockdown.

“There is evidence New Zealanders are turning to trusted news sources in record numbers at this time so it is critical the media is supported to keep doing the great job they have been doing.

“We will continue to work with media organisations to make sure assistance is targeted and appropriate.

“However, I want to be very clear that this first phase of support alone will not be sufficient to see the sector through a prolonged period of restrictions and reduced advertising.  A second package of support is being developed and will be submitted for the COVID-19 budget discussions in May,” Minister Faafoi said.

Full details of the package are:

  • $20.5 million to cut 100% of Kordia TV/FM transmission fees for 6 months
  • $600,000 to cut 100% of RNZ AM transmission fees for 6 months
  • $16.5 million to reduce, by 80%, media organisations’ NZ On Air content contribution fees for the 2020/21 financial year.
  • $1.3 million to purchase central government news media subscriptions in advance for the 2020/21 financial year and encouraging Crown entities to increase their uptake of news media subscriptions.
  • $11.1 million for specific targeted assistance to companies as and when needed.
  • Commitment to build on the Local Democracy Reporting pilot as part of longer term support

More: https://www.beehive.govt.nz/release/media-support-package-delivers-industry-request-assistance

$3 billion small and medium business relief package announced

The Government has just announced a “tax loss carry-back scheme” package for small and medium sized businesses amounting to over three billion dollars.


Government backs business through COVID-19

The Government has announced a suite of new measures to provide relief for small and medium-sized businesses during the COVID-19 pandemic.

Finance Minister Grant Robertson says while the Government has already acted swiftly in response to the crisis, with about $20 billion in support already announced, it recognises that more is needed.

The new measures include:

  • $3.1 billion tax loss carry-back scheme (estimated cost over the next two years)
  • $60 million estimated annual savings to business each year from changes to the tax loss continuity rules
  • $25 million in the next 12 months for further business consultancy support
  • Greater flexibility for affected businesses affected to meet their tax obligations
  • Measures to support commercial tenants and landlords

“We have taken decisive action throughout this pandemic to cushion the blow for our businesses and workers – today’s announcement continues that focus. We need our businesses to stay solvent to help with the economic recovery as we emerge from this health crisis.

“Our focus on cashflow and confidence continues through these measures. We have approved a tax loss carry-back scheme that will allow a large number of businesses to access their previous tax payments as cash refunds. Essentially this means a forecast loss in the current financial year can be offset against the tax paid on a profit from last year.”

We are also changing the tax loss continuity rules to make it easier for firms to raise new capital without losing the benefit of their existing tax losses” Grant Robertson said

Minister for Small Business Hon Stuart Nash says some businesses are struggling to meet their non-wage fixed costs, like interest, rent and insurance, but are not currently in a position to take on additional debt.

“In the absence of further support from the Government, these otherwise viable SMEs may be forced to close down permanently.

“We don’t want that to happen, so as well as the tax measures which should provide some cashflow relief, we are going to provide tailored support services to help businesses weather the storm, at no charge to the business.

“Using established services including the Regional Business Partner Network and the helplines run by the Employers and Manufacturers Association and Canterbury Chamber of Commerce, we can get specialist, tailored advice where it is needed, fast. This could range from human resources advice to business continuity planning to financial management – because every one of these small businesses will have a different need,” Stuart Nash said.

New measures are also being announced to support stability in commercial property transactions, extending the timeframes required before landlords can cancel leases and mortgagees can exercise their rights to sale or repossession.

Justice Minister Andrew Little says many businesses may be finding it difficult or impossible to pay rent if they are no longer able to access their property, and if landlords are not receiving rent, they may not be able to meet their mortgage obligations.

“As a result, the Government will extend the current 10 working day timeframe that commercial landlords may cancel the lease to 30 working days. This will be for both the period the tenant is in arrears before the notice is given, and for the period to remedy the breach.

“The Government will also extend the timeframes for lenders from 20 to 40 working days for mortgaged land, and from 10 to 20 working days for mortgaged goods. This will apply to commercial mortgages and home loans. However, the already announced mortgage deferrals are likely to be the first port of call for residential borrowers.

“These measures will ensure an orderly process to deal with commercial lease disputes caused by COVID-19,” Andrew Little said.

Legislation enacting the changes announced today will be introduced on April 27 and will apply effectively retrospectively once the bill is passed.

Work is also underway on further support for businesses and households as the impacts of COVID 19 become clearer.

Where is all the money coming from?

Businesses and economies around the world will take a severe hit from the costs and effects of the Covid-19 coronavirus.

New Zealand has already announced $12.1 in spending to prop things up. It equates to about 4% of our GDP.

That amount is likely to grow substantially, and will add to borrowings. But that’s only small change in the international finance pond.

Across the Tasman: What Australia’s $189bn coronavirus economic rescue package means for you

The government has announced a second major economic rescue package worth $66bn, on top of an initial $17.6bn package and more than $100bn in emergency banking measures to prevent against a credit freeze.

Framed as a “safety” package, the second wave of stimulus ramps up support for small business and also includes a major boost to welfare recipients and for people who lose work as a result of the Covid-19 pandemic.

In total, the government has now committed economic support worth $189bn – almost 10% of GDP – and has also flagged more packages as the crisis unfolds.

UK Government: Support for those affected by COVID-19

On 17 March, the Chancellor announced an unprecedented package of government-backed and guaranteed loans to support businesses, making available an initial £330 billion of guarantees – equivalent to 15% of GDP.

This was on top of a series of measures announced at Budget 2020, the government announced £30 billion of additional support for public services, individuals and businesses experiencing financial difficulties because of COVID-19, including a new £5 billion COVID-19 Response Fund, to provide any extra resources needed by the NHS and other public services to tackle the virus.

Just announced in the US: Senate, White House reach $2 trillion stimulus deal to blunt coronavirus fallout

Senate leaders and the Trump administration reached agreement early Wednesday on a $2 trillion stimulus package to rescue the economy from the coronavirus assault, setting the stage for swift passage of the massive legislation through both chambers of Congress.

National Post: Trump and his children banned from applying to US$2 trillion stimulus plan

Together with Fed intervention, the proposed legislation amounted to a $6 trillion stimulus, according to White House economic adviser Larry Kudlow, or about 30 per cent of annual GDP.

The package will likely more than double a U.S budget deficit that was already set to hit $1 trillion this year before the outbreak. It also may not be the last infusion of government spending in response to the spread of the virus.

The US has had growing deficits and growing debt since the GDP in 2008:

As of February 2020, federal debt held by the public is 17.23 trillion and intragovernmental holdings were $6.02 trillion, for a total national debt of $25.3 trillion

 

At the end of 2018, debt held by the public was approximately 76.4% of GDP and approximately 29% of the debt held by the public was owned by foreigners. The United States has the largest external debt in the world.

https://en.wikipedia.org/wiki/National_debt_of_the_United_States

When the US package was announced the country was heralded as ‘the greatest country in then world’, as they tend to do. That may refer to the greatest debt in the world. That’s one thing trump has been biggest and best at, growing debt.

There’s some big numbers here, and this is just four countries.

Where will all this support package money come from? Are loans already secured?