Prosper Small Business Resilience Survey
Results of our March 2021 Survey
Confidence in Government
handling of crisis wanes
The stop-start handling of February’s
Auckland Covid outbreaks has left a
noticeable dent in small business
confidence the Government can effectively
continue to manage the crisis.
When Prosper ran its first Small Business
Resilience Survey in June 2020, 65 per cent
of respondents agreed with the Government
actions to control Covid, including the
original one month Level 4 lockdown.
Confidence increased in our second survey
conducted in September 2020, ticking up to
67.5 per cent, after the Government had
piloted the country through the August 2020
Auckland community outbreak.
But as we went through the latest, February
2021, Auckland outbreak with a short, sharp
three day lockdown, only to be followed
within a week by a fourth shutdown as the
Government was caught out by incorrect
information from its contact tracing and
seemingly inaccurate information from
individuals involved in the outbreak,
business sentiment soured.
Asked ‘do you agree with how the
Government continues to manage the
response to the challenges of Covid-19,’
those answering ‘Yes’ dropped to 52 per
cent.
With those answering ‘No’ at 48 per cent,
this was the first time the Ardern
administration had come so close to having
only 50/50 support for its ‘go hard’ approach
to fighting Covid and nursing the economy.
These are findings drawn from our third
Prosper Small Business Resilience Survey.
It is a self selecting survey which drew more
than 2800 respondents, but we have
reduced our analysis to a group of 1153
who are business owners and completed all
questions. Of these 32 per cent were from
Auckland.
This Prosper SME survey result comes
roughly at the same time that the latest
TVNZ-Colmar Brunton poll, shows Jacinda
Ardern - very much the Government face of
its Covid response - has lost some support
as preferred prime minister.
Her rating fell 15 points since the last poll,
down to 43 per cent. It’s her lowest
preferred prime minister score since last
February, before the Covid-19 response.
That needs to be put in context. She is still
well in front of any other politicians in the
poll and Labour itself still holds a
commanding 49 per cent of party vote.
But it all indicates the untidy handling of the
latest Auckland outbreak has had an
impact.
Asked specifically if confidence in the
Government had altered since the latest
lockdowns because of more community
cases found in Auckland, the responses
were clear - roughly two thirds of
respondents, 60 per cent, said their
confidence had decreased because of the
Government’s management of the Auckland
cases.
As this Auckland business owner said:
“Lockdowns are inevitable, but locking
down twice in 14 days [looks like]
mismanagement.”
And this from another Auckland business
owner: “Haphazard lockdowns [are] causing
too much disruption and loss of income to
businesses.”
One Auckland caterer said: “Instant
lockdowns with less than 24 hours is killing
small businesses who have no time to
cancel fresh produce orders or deliveries
from suppliers. We then get stuck with the
stock. Perishable stock we can’t move even
if we try to operate click and collect. It’s
devastating to my business.”
A more flexible approach to containment of
community cases is expected by some.
From this owner of an Auckland
construction firm: “The government needs to
adapt now we are 12 months on. We know
how to treat Covid-19 now We have a
vaccine being rolled out We have no one in
hospital with Covid-19 We need to stop the
ideology of elimination and move to
containment or management whilst we roll
out vaccination We need to close the
border to visiting kiwis etc until we are
vaccinated.”
In contrast back in September, asked the
same question after the second Auckland
outbreak, 50 per cent of our respondents in
that poll said the fact that there had been
another community outbreak handled by a
return to a partial lockdown had decreased
their confidence in the Government.
But 40 per cent said their confidence
remained the same and 10 per cent said the
Government’s handling of it was good
enough to increase their confidence.
This time around, only 5.8 per cent thought
the Government response was good
enough that their confidence had risen.
This Auckland service provider expressed a
common sentiment: “I think they are not
doing enough and after 12 months have
only got one blunt tool which is lockdowns.
You cannot keep shutting down the
country's biggest city.”
It is not just Auckland businesses showing
weariness at the repeated lockdowns. This
from a consultancy service in the Bay of
Plenty: “It’s been over a year and they still
can't get things right, frustrating and costly
for small businesses like ours. We live in
BOP but operate around the country - most
of our business is Auckland.”
And this from a Northland tech company:
“Stop putting the rest of NZ in lockdown
when Auckland has Covid cases.”
There is a danger that no matter how slick
the PR and messaging about the need to
unite as the “team of five million”, repeatedly
plunging 1.5m Aucklanders into lockdown
without a convincing reason, is beginning to
eat away at Kiwi business’ willingness to
back the ‘go hard’ approach.
This indeed was a key issue: many SME
owners were not convinced the yo-yo
lockdown approach was warranted, as
shown in these comments:
“Closing down a city for three cases is
ridiculous.”
“Continuing to put areas in lockdown for
such a small number of cases is madness.”

The fact that the initial three day restriction

was followed quickly by a week long
lockdown was seen by many as either
mishandling of contact tracing, or that the
consequences for anyone who did not self
isolate or follow rules should be tougher
instead of making everyone else feel the
pain.

This Northland cafe owner commented:

“Good messaging coming out around Covid,
although there is a feeling of frustration
amongst our customers of what more could
we do to really get these messages across
to those that don't take this pandemic
seriously. Agree a targeted media campaign
to different demographics and age groups
on multiple platforms may help but then
again we've known these risks for over a
year, some are blatant rule breakers and
need some encouragement.”

Anger was palpable in some comments The cost to the economy and to social life is
made: not worth mass countrywide lock downs.”

“Isolating an entire city for one person’s
mistakes is ludicrous. The individual at hand
should have been arrested and the areas he
had visited put into lockdown,” said this
Auckland tour charter operator.
Here is another selection of similar
comments:
“Just isolate those who need to and let
everyone else get on with business.”
“Community cases should also go into
isolation - as do returnees from overseas.
“We need criminal fines that are enforced
for Covid rule breakers.”
“This is an absolute joke. Anyone breaches
isolation in any form, they should be held in
a detention centre to serve out there
isolation. Do you honestly think they would
do it again if they knew what was coming a
second time?”
“They are taking too much on trust - all very
‘touchy-feely’ and 'be kind’ whereas if they
checked and fined people who broke the
rules then we would reduce the need for
lock-downs at a cost of $240 million per
week. We can get fined if we do not wear
seatbelts. Not using them, while silly,
essentially hurts the individual but not
properly self-isolating hurts everyone.”
“Make people who don’t comply suffer
consequences- the rest of us certainly
have.”
Even staunch supporters of Ardern want her
to be tougher: “Jacinda is an awesome
leader, and I trust her to keep following the
science to lead our country through Covid. I
do however wish there were repercussions
for those who deliberately break the rules.
We are now living in a society where the
masses are punished for another
individual’s crime. Unacceptable.”
But others pin the blame squarely on the
Government and reject that individuals
should shoulder the blame. Take this
comment from a Northland engineering
consultant: “The lockdowns are an
ambulance at the bottom of the cliff stuff,
because the Government has been an
abject failure at keeping the virus at the
border. For months now the Government
has been told to implement saliva testing for
all frontline staff at the border and MIQ.
They have repeatedly lied about testing
frequency and completeness of testing of
these same staff, which we were far from
gold standard. This government has no one
with experience in the real world where, in
instances such as this, you develop an
execution plan and then implement it. Now
we have Jacinda having a crack at
individuals for not isolating, but the
Government has sent so many mixed
messages to these people, you can’t blame
them. Furthermore, the root cause is the
Government’s failure to stop the virus at the
border, but Jacinda is using all her
communication skills to obfuscate this
issue.”
And this from a consultancy business
operating nationally: “Government does not
acknowledge the weaknesses in border
control and refuses to listen to reason. They
also do not understand or acknowledge the
financial impact of their requests to the
‘team of five million’ and are then surprised
when people do not follow requests as they
simply cannot financially afford to do so.”
The most challenging message for the
Government from the Prosper survey was
summed up by this business owner in the
construction sector: “There is growing
complacency and lockdown fatigue.”
And from this Auckland tech business
owner: “It is not clear that the small level of
excess deaths (if any) warrants the
draconian measures in place. You look
around, people really aren't scared of the
virus itself, they are scared of the response
to it.”
If that sentiment becomes widespread, the
team of five million is on its way to
fragmenting and the Government’s efforts
which depend on mass public compliance,
will start to be less effective.
.
The extent of the impact
The importance of small and medium-sized
businesses - sole operators, tradies, the
retail stores in our main streets, the firms
that employ just a handful of staff - and how
much the country depends on them should
be clearly understood.
Of all the businesses that exist in New
Zealand, 97 per cent are small to medium
(SMEs). They are owner operators or firms
with less than 20 staff.
Pre-Covid, there were roughly 500,000
SMEs. One third of all Kiwis in jobs work for
one of these small businesses. One third of
the country's entire GDP is generated from
the efforts of these businesses.
In one of the most significant sections of the
Prosper survey, around confidence in the
survival of their own businesses, the
message is that very little has changed over
the last quarter year.
Asked ‘are you confident that you can keep
trading for the next 12 months’ the response
is that 60 per cent of those business owners
who took part in our survey are either
reasonably or very confident they will be
okay.
Confidence is slightly lower in Auckland,
which has born the brunt of the repeated
alert level restrictions. Only 55 per cent of
Auckland business owners are reasonably
or very confident. For the rest of the country
excluding Auckland the figure is 62 per cent.
But that total national figure of 60 per cent is
an almost exact replica of the September
survey results. While we can't draw direct
comparisons between this survey and past
Prosper surveys - since respondents are not
necessarily the same that completed the
previous survey - there are some interesting
broad trends in sentiment apparent.
Despite the additional lockdowns, and the
disruption and angst that caused, the
fundamentals of most businesses have not
been worsened.

What business owners are saying
“A massive amount of pressure being put on
SME businesses that means a lot won't
survive.”
“The Government has found a good balance
between enforcement and giving people
some freedom to move. The second part
requires trust which some people have
breached this time.”
“I think they had a good initial response but
don’t appear to have a coherent plan going
forward.”.
“The Govt takes a singular view when
making its decisions on lock down - that of
the Ministry of Health who will of course
always err on the conservative side. Where
is the input to decision making from
business?”
“Unhappy with the virus escaping MIQ.
Unhappy with contact tracing failures.”
“There is simply no plan to get us out of this
situation. Business needs to know precisely
when the vaccines will be rolled out to the
general public, what steps are being made
to accelerate that rollout and if centres will
be available 24/7 to cope with shift work,
when the trans-Tasman bubble will operate
and what level of vaccination is needed to
open the borders more widely. The failure of
the government to plan and execute is a
scandal.”
“I think they are operating on hope. MIQ
needs an overhaul and improvements need
to happen daily. This set and forget method
will not stand up.”
Digging into more detail around profits and
sales shows the outlook for many
businesses has in fact improved.
Asked ‘have your sales increased or
decreased in the last year’, 64 per cent
have suffered a decrease. But this is
actually a marginal improvement on the
September findings, when 73 per cent had
seen sales fall.
Where the greatest improvement is seen is
those who rate their sales performance as
staying the same as a year ago (just before
the first lockdowns). There are 17 per cent
who have managed to hold the line, up from
10 per cent in that position in September.
Regarding profitability of their businesses,
when asked ‘do you expect your profit to
increase or decrease in the next 12 months
compared to your last financial year’ there
has been a similar rate of improvement.
In our latest survey 39 per cent said profit is
well behind. Compare that to the September
survey where 46 per cent said profit was
well behind.
This time 46 per cent are managing to hold
their profit or even increase it.
Don’t underestimate the stress SMEs are
experiencing though:
From an Auckland automotive repair
business owner: “I do not think the
government understands the effect
lockdowns will have on longer term
business. There will be no tourism industry
here very soon. Many small business
owners do not make big profits, so are now
running on empty, their mental health is
being affected, and long term we will see
more bankruptcies, and loss of homes. Our
business is our Kiwi Saver.”
And from this Auckland dog minding
business: “Too much yo-yoing, Level 3,
Level 1, Level 3. Frustrated that MIQ/border
control has been inadequate and no forward
planning after one year. Small business
can't plan for the future, including taking on
staff. Although employees will be
subsidized, the business has no money to
pay regular outgoings.”
This comment comes from the owner of a
national tech firm: “They are not learning
from mistakes, failed to grasp and enforce
what isolation and quarantine really means.
All too happy to 'take a few hits' whilst trying
to be positive. Except they don't take the
hits, we as businesses do.”
Shop Local
One aspect has come through very clearly -
small businesses are overwhelmingly
thankful for locals who are supporting them
by buying local.
In a new question in the survey we asked:
‘How important is it for New Zealanders to
continue to buy local and support local
businesses?’
The response from 86 per cent of business
owners was “very important.”
But when asked ‘do you think the
Government has provided enough support
for small businesses,’ again sentiment is
souring.
40 per cent answered ‘Yes’
60 per cent answered ‘No’
What business owners are saying
“Lockdowns are unsustainable and will
cause long term economic and health
issues. Not enough effort was put into
understanding the economic impacts.”
“Responding with lockdown/level changes is
far preferred than the alternative of Covid-
19 getting out of control. Lockdowns do
represent a loss in earnings, but much less
than if we didn't.”
“I think we’ve proven our approach has
worked both socially and financially for NZ’s
economy, with some obvious areas
suffering. We are, as a nation, significantly
better off than most other nations battling
Covid.”
“I think lockdowns should be related to the
area where the covid community
transmission is located, so that in this latest
lockdown Auckland should be in level 3 but
the rest of new zealand should be still in
level 1, unless there is good evidence of
close contacts in other regions. The Covid
lockdown that we experienced for eight
weeks in 2020 is just starting to hit
businesses now and there will be
casualties.”
“The elimination strategy call was correct,
but the actual managing of it has been
remarkably poor.”
“Cracks are starting to appear, one year on
and complacency is starting to show. A
harder stance is needed on quarantine and
the people who break those
rules/guidelines.”
 acknowledged but there are many others of
Much of the frustration centred around the
us who service that industry that struggle as
speed of rolling out support, as with this
a result. Locking down Auckland impacts
comment:
immediately on the Nelson Tasman region
as Aucklanders and other NZers cancel
“Small businesses require support
bookings to holiday in our area.”
immediately that a lockdown Level 3 or 4 is
mandated by the Government. On top of
Though there are those with praise for the
wages, there are many running costs that
support given so far: “We are truly fortunate
need to be covered by business owners to
in how the Government has handled the
keep operating. These operating expenses
whole crisis. We are a budgeting service
do not cease when a lockdown is called by
and building financial capability provider and
the Government. If the Government wishes
fully expected a veritable tsunami of clients.
to maintain the support of small business
This hasn't happened and our analysis is
owners, then the Government needs to
that whilst the area's businesses and their
invoke support packages from day one of a
employees are seriously stressed the
lockdown, not wait a week.”
financial and moral support of the
government is keeping the vast majority
This comment from an Auckland financial
afloat”
firm reflects much of what came through in
other comments, that small business feels
Business owners are not just complaining.
marginalised, with no real Government
They often provide constructive alternatives
understanding of how difficult it is to keep
or additions to what the Government is
the lights on, showing “minimal care for
doing such as:
small businesses. All they [the Government]
do is provide minimal wage relief with
nothing about protecting the business profits “There needs to be a targeted support
and viability.” package for Auckland. We are now at
lockdown 4 vs 1 lockdown for the rest of the
country. There is only so much that the
SMEs also question whether the
Auckland community, businesses and
Government understand the full
economy can take. More support is needed.
repercussion of lockdowns.
This needs to include specific support for
the Auckland Council, otherwise the
“Three days lockdown for a small business
revenue loss over these lockdowns will
after such a difficult year can be the straw
force additional rates rises on top of the rate
that breaks the camel's back. There does
rises that have already occurred; effectively
not seem to be an appreciation that when
Aucklanders will get fined (via further rates
Auckland is locked down the impact on the
rises) for their greater effort (compared to
whole country is immediate. There also
the rest of NZ) to combat Covid.”
seems to be a lack of understanding of the
impact of supply chain issues (in our case
There is also a frequent call for lockdowns
for parts procurement). Although we are an
to be more geographically targeted.
auto workshop a significant portion of our
turnover is in supplying repairs to rental car
companies. When travelling stopped the “They should adopt regional responses not
impact on rental car companies was city and country wide.”
 focus is spent on Covid-19. “They need to
“Too many loopholes. Insufficient targeting
address the housing market to add capital
of areas that need more assistance. Too
gains for income and relieve business tax
much ‘one size fits all’ approach. Regions
burdens. As well housing is too expensive
for Covid purpose are too large, and should
for us to attract staff to Auckland even when
be restricted to a closer circle around the
wages could be $20k a year more.”
affected area.”

There are also calls for better use of The travel bubble
incentives to encourage self isolation
compliance: “Anyone needing to self isolate
The Government may be heartened by the
should be paid their full lost income - this
SME response on the issue of an Australian
would be far cheaper than lockdowns - and
travel bubble, which has proved so thorny
can be policed by pending test results and
for the Government to deliver on.
proof of being at a known casual or causal
plus location using the Covid App so abuse
of the system is limited.” While 28 per cent of our survey respondents
say a travel bubble with Australia is vital and
And there are those with a wider eye on the needed now, the majority are happy to keep
general economy, who worry that too much waiting until all the details are ironed out
and that safety is paramount.

45 per cent say it is important but cannot be
rushed and must wait until it is completely
safe
26 per cent rate it not important and that we
can continue to live without it
Tourism Minister Stuart Nash has just
completed a tour of South Island tourism
hotspots and said the Government is
working on a support package for regions
who have traditionally been heavily reliant
on international visitors.
He and Cabinet may find it difficult to design
a package that will appease those worst
affected by the border closures.
This South Island tourism operator said:
“Compensation and support for businesses
most affected by the border closure has
been poor. Devoid of three million plus
international visitors, the domestic market is
far too small for us to pivot to domestic only
to survive. This lack of support is especially
evident when you compare the
Government's support in similar countries to
New Zealand, like Australia and Canada,
where wage subsidies continue, along with
grants and rent relief. A majority of our
supposed $400 million tourism fund has
been offered as loans only, which to
businesses who have heavily reduced
income, is a loan a smart choice as it
means that when the borders do open, New
Zealand will have a tourism industry heavily
in debt and not able to provide the same
level of service that has strongly contributed
to the New Zealand brand worldwide.”
And this from an Otago hospo business
owner: “There is zero direct monetary
support for small businesses. This
Government is expecting businesses to
spend all cash reserves, borrow money
from anywhere except them or close their
door for good. By the time tourists come
back there will be no business.”
“Yo-yoing in and out of lockdowns is not
sustainable. We need to be far more agile.
Other island countries like Taiwan have
shown us up and we need to adapt and
become agile.”
Vaccines and border control
a sore point
The long awaited Covid vaccination has
been seen as a vital addition in the fight
against the virus. We asked ‘are you happy
with the planned roll out of the vaccination?’
and found:
54.5 per cent of respondents said ‘Yes’
45.5 per cent of respondents said ‘No’
There is frustration at the speed of the
program and lack of clarity about when and
how it will be more widely distributed.
But there is a greater level of unhappiness
at the mainstays of our response efforts to
date - the contact tracing system and border
control.
On contact tracing, the problems in
Auckland in the latest outbreak to get
accurate information to contain the spread
was an unacceptable failure, leading as it
did to another week of lockdowns.
You need to do better, is the out-take here.
“They couldn't make contact with 11 people
from the [Papatoetoe High] School. Why not
go knock on the door?”
“Very quick to blame others when they
should take responsibility. Of course not
everyone will follow the rules. This is why
we have police, courts and prisons. How
can Government be so cavalier with
people’s livelihoods and then blame a 21
year old when they [the Government] were
too slack to track down the students who
they couldn’t get hold of by phone. Was it
an emergency or not? The rest of us paid
the financial price.”
“Contact tracing hasn't risen to the
challenge nor learned from previous
experiences.”
“Greater promotion of the Tracer App and
working with retail and hospitality
associations to encourage use by
customers would help increase use and
improve the reliability and pace of contact
tracing.”
“It is time to implement a Covid card or
another tracking system that will improve
tracking above the current voluntary
system.”
“The attitude to trace and trace is extremely
lax and simplistic. We see other countries
enforcing much stricter and tighter
approaches that stop the spread - look at
Taiwan, Korea, Vietnam and Singapore
where technology is used well.”
But it is border control that has drawn most
ire. There is an inescapable logic which is
frustrating many - the only way the Covid
virus gets into New Zealand is through the
border. Clearly border control therefore
needs to be tightened. But that point seems
to evade the bureaucrats running border
control.
“Going for elimination and putting the entire
country in lockdown last year means the
borders have to be managed
properly...which clearly they aren't.”
“Covid can only get into the community
through an MIQ or Border breakdown. We
need to ensure they are firmly secure plus
speed up dramatically the vaccine roll out.”
“There is only one place the virus can enter
the country - and that is through its border.
The Government have failed to adequately
secure the border from day one and the
latest breaches are testimony to the fact
that they had become complacent - or
simply following poor procedures.”
“Lockdowns are caused by the Government
failing to secure the border. Improvements
are only made once system failures are
identified.”
Decisions by the Government about the
running of MIQ facilities also seems to baffle
business owners, who look for pragmatic
solutions.
“Things need to be stricter on areas where
there is a high potential for transmission.
There needs to be a national border worker
training regiment set up and those who
become 'qualified' and work at MIQ facilities
and border control should be paid a
premium. We need to provide these workers
with specific training and reward them for
being our main defence against Covid. We
are relying on them to protect our health
and finances, they should be given the tools
they need to do this to the best of their
abilities and compensated as such.”
“Auckland should not be the main location
for quarantine facilities. We need a
dedicated facility away from major
population areas staffed by trained
personnel. The Government has wasted
billions on lockdown subsidies that could
have been used better on this facility and
improvements in medical facilities around
the country. When we start letting travellers
in again we have medical infrastructure to
support or contain evolving strains of
Covid.”
“There have been constant breaches at MIQ
but no improvements in their overseeing of
these operations. What needs to happen
for them to understand the basics? Sadly
we are being run by a bunch of people who
have never operated in the real world
except politics.”
What business owners are saying
“Yo-yoing between alert levels has a
significant impact on my business as well as
my mental health.”
“I am mostly happy, and their response to
the business sector has been quick and
very effective. Some things could have been
thought through better but with the time
constraints this wasn't easy, particularly as
some things have changed so quickly with
Covid-19. Some of the managed isolations
areas could be far better managed.
However in business terms, I think the
Government has done a very good job
overall.”
“Government responses to Covid and alert
levels seriously affect our business area.
Wage subsidies only mitigate wage burdens
to business, other costs (rent, utilities,
compliance etc.) are major exposures of
cost. All alert levels impact on tourism /
hospitality - especially with Auckland. In my
view, the wage subsidy is like the ‘dole’.
Employers are carrying an unfair load that is
not of their making. The Government does
not appear to link enterprise (business
activity) to the fundamental taxes that
provide the income to allow them to run the
economy.”
“They cannot possibly get it right (as if there
is a single ‘right’) all the time for all aspects
of what is a fairly novel situation with so
many complexities. By and large I trust their
sources of information and their intentions.”
“Quarantine facilities should be removed
from our largest cities.”
“There should be purpose built quarantine
facilities outside of population areas run
entirely by the army. Also leaving people to
self isolate on trust without adequate checks
has just cost the country and Auckland
hundreds of millions and is a disgrace.”
“Two weeks is not long enough.”
“Either shut the border, build purpose built
quarantine facilities, fix the health system or
let it rip.”
“Would like to see stricter quarantine
methods to reduce any chance of extended
lockdown, tougher stance on people
breaking rules and deport anyone refusing
to comply with our rules.”
Methodology
This was an online, self-selecting survey,
conducted over 16 days, including the
Auckland Level 3 restrictions and Level 2 in
the rest of the country from February 18 to
March 5.
The target audience was small to medium
business owners. There were 2802
respondents but we reduced analysis to
1153 confirmed small business respondents
who answered the majority of the questions.
It was run by Prosper, the specialist section
of Stuff dedicated to supporting our small
businesses.
Prosper brings information and expert
advice on how small businesses can
recover, survive, and thrive.
Prosper talks about how to identify new
opportunities post-lockdown, adapt your
sales strategies, beef up your online
presence and take advantage of tax relief
options.
We have plenty of inspiring examples of
how other businesses are managing to
prosper.
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