National is pushing for struggling businesses to be offered GST cash refunds of up to $100,000 as part of its alternative plan to salve the economic damage caused by Covid-19.
The proposal stands in contrast to the government’s scheme for small businesses unveiled last week which offers 12-month interest-free loans.
Speaking to business leaders over a video call this afternoon, National leader Simon Bridges said the government’s approach was a “a recipe for more debt, more misery and more pain”.
“If you’re a business already struggling with cash flow and turnover, getting another loan is probably the last thing you need,” Bridges said.
Instead, the opposition would implement a GST cash-back scheme.
If a company could show that its revenue had dropped by more than 50 percent across two successive months, it would be able to claim back the GST paid over the second half of 2019, up to a maximum of $100,000, he said.
Bridges said National’s proposal was more targeted than the government’s, but also more generous as the eligible businesses would not have to pay the money back.
“These businesses have been forced to shut down in the national interest. It is in the national interest to keep them afloat.”
Firms which had paid more than $100,000 in GST over the six-months could also apply for an additional low-interest loan of up to $250,000.
“We estimate this could benefit up to 160,000 businesses and save countless jobs.”
On that basis, National estimated the scheme would cost approximately $8 billion.
National would also go further than the government in allowing firms to deduct capital investment from tax, Bridges said.
As part of its initial rescue package, the government allowed companies to immediately expense any assets up to $5000, up from $500.
“We’d go much further and lift it to $150,000 for two years,” Bridges said.
“If you have a company and spend $145,000 on new machinery, rather than depreciating that asset over many years, you’ll be able to expense the full $145,000 in this tax year.”
Concluding his speech, Bridges acknowledged the government had taken “the right steps to contain the virus”, but was now stalling.
“National has a plan to rebuild our economy,” he said.
“We will get New Zealand working again, and it is our New Zealand heroes, all five million of them, that depend on us doing so.”