The Government needs to urgently provide clarity to start-up firms about what criteria they must meet to receive the wage subsidy, National’s Research, Science and Innovation spokesperson Parmjeet Parmar says.
“Start-up companies that were in a pre-revenue phase were unable to apply for the original wage subsidy scheme during lockdown because they could not meet the criteria set by the Government.
“However, after I wrote to the Minister of Science, Research and Innovation Megan Woods on 31st March the Government quietly changed its policy on 11th May to allow start-ups to access the scheme if they could prove a decline in projected capital income.
“Unfortunately the Government did not release any detail at the time about what ‘projected capital income’ actually meant; or, what these businesses would have to do to prove they had a decline in projected capital income.
“In last week’s Budget, the Government expanded access to the wage subsidy scheme to start-ups that are approved by Callaghan Innovation. Unfortunately the Government provided no detail about what criteria needs to be met.
“Yet again start-up firms have no clarity from the Government. Without clarity, they will have no choice but to throw in the towel.
“To add insult to injury, the Government has allocated $150 million in the Budget to provide repayable loans for the R&D sector. That means the Government is asking these firms - who have high levels of uncertainty over their future - to take on more debt. What these businesses need is cash support to get them through, not more uncertainty and more debt.”