“Business have been hard hit by the North Island weather events earlier this year and the impacts continue to be felt, particularly for those in the horticultural sector. This package was developed with primary producers and will provide relief to key growers, farmers and businesses and help their regions continue to recover,” Grant Robertson said.
“There will be three components for different types of support: a loan guarantee scheme in partnership with banks and other lenders who choose to participate, and a concessionary loan and equity scheme run by Kānoa to help hard-hit businesses get to a position to be able to re-engage with their banks and work toward being cashflow positive again.
The North Island Weather Events (NIWE) Loan Guarantee Scheme will provide relief to affected firms seeking commercial lending. This scheme leverages the Crown’s financial strength by carrying 80 percent of the credit risk on covered loans, allowing banks to reduce interest rates and offer more flexible terms.
“The Government’s underwrite will support loans of up to five years agreed by businesses and their banks of up to $10 million from the scheme, including refinancing of existing loans. For example, a reduction in interest rates from 0.3 percent to 1.5 percent would be equivalent of $9,000 to $45,000 in interest cost savings per year for the average supported firm, based on borrowings of $3 million. Over the five years the Scheme is in place, these savings could total between $45,000 and $225,000 for a firm with an average amount of debt, providing meaningful relief.
“Further details of the scheme will be announced in coming weeks. We are targeting around the end of July for the scheme to be up and running, providing time for banks to get systems in place. In the meantime, we expect customers will be able to register their interest in looking at utilising this scheme with their bank.
“Different businesses in the same industry, let alone across different industries, have all been affected by these weather events differently, meaning they all need slightly different recovery plans. That’s why this scheme isn’t going to be overly prescriptive and instead is about supporting banks and their customers to be able to get loan agreements in place. It is one part of our support for businesses affected by the weather events,” Grant Robertson said.
The package also includes the NIWE Primary Producer Finance Scheme to provide access to capital for affected growers and farmers unable to access lending without further support. The funding will be targeted towards severely affected businesses that have a reasonable likelihood of being commercially viable, but cannot currently access commercial finance.
“Many businesses severely affected by the weather events are likely to be commercially viable with the right support,” Kieran McAnulty said.
“This scheme enables the Government to provide concessionary loans and equity finance for land-based primary sector producers up to $4 million per business from a pool of up to $240 million set aside in total.
“It will provide a way for businesses to fully re-engage with lenders at a later date, once we have helped them get back on their feet. This will in turn contribute towards their recovery, and provide better regional, social and economic outcomes in cyclone-affected regions,” Kieran McAnulty said.
Horticulture New Zealand chief executive Nadine Tunley said the package is the result of cross sector involvement.
- "This package will hopefully provide vital help to businesses across the areas affected by the weather events in the North Island, including horticulture businesses. We know many businesses are still grappling with funding repairs and rebuild efforts. We hope this package and announcement will help relieve the pressure and stress people are facing, so they can get on with the recovery and provide jobs for people in regional New Zealand."
LeaderBrand’s chief executive Richard Burke also welcomed the package.
- "Businesses like ours provide hundreds-of-thousands of jobs for people in the regions. In our case, we also supply the whole country with healthy, fresh food. Being supported in this way to get on with the recovery is a win-win for everyone involved.”
Agriculture Minister Damien O’Connor acknowledged the input from those affected.
“This package is the result of working together with affected sectors to identify the most suitable schemes for viable businesses, particularly when dealing with their banks. I want to thank them in helping design tangible solutions for business and provide certainty for those going through extremely challenging circumstances,” Damien O’Connor said.
“As I’ve said previously, the Government can’t pay the full cost of the recovery and rebuild. This package has been carefully designed to ensure banks continue to play an integral role in the recovery,” Grant Robertson said.
“We are committed to helping affected regions recover. Around $2 billion of support has already been committed so far, including $74 million in grants to farmers and growers and a $1 billion flood and cyclone recovery package as part of Budget 2023. Another $6 billion in initial funding has been committed for National Resilience Plan to focus on building back better from the recent weather events.”
Cabinet has also decided to establish a Government Inquiry under the Inquiries Act 2013 to review the response to the North Island severe weather events.
“It is normal practice for local Civil Defence to review the response to a severe weather event, regardless of size. Given the significance of Hale, Auckland Floods and Gabrielle, it is appropriate that a government inquiry is set up. It will be led by former Governor-General Sir Jerry Mateparae,” Kieran McAnulty said.
“Affected communities, including rural, Māori and Pacific communities, have raised concerns about communication and support during the response.
“With climate change we are seeing more frequent and complex weather events across New Zealand, and because people’s lives and livelihoods are at stake, it is critically important that our emergency management system is fit for purpose and ready to respond to future emergency events. There are lessons to be learned. It is important we incorporate these into our systems so we can continue to improve.”
Support for silt removal from whenua Māori
The Labour Government has announced extra support to help remove sediment and debris for whenua Māori in Tairāwhiti and Hawke’s Bay, in the latest initiative to support communities recover from Cyclone Gabrielle. Funding will help whenua Māori owners with the clean up of sediment and debris on whenua Māori.
This $30 million in funding will be made available through grants to help owners of whenua Māori with costs related to the clean-up of sediment and debris.
“Māori landowners who have completed or who continue their clean-up phase are eligible for funding, along with those seeking support to begin clean-up activities on whenua Māori,” says Māori Development Minister Willie Jackson.
“We recognise that months on, Tairāwhiti and Hawke’s Bay communities are still dealing with the aftermath of the cyclone and we remain committed to supporting their post-cyclone recovery.
“This funding is the latest in our rolling maul of initiatives to support recovery and is in addition to the $172 million announced last month to help local authorities and commercial property owners manage sediment and debris.
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