Businesses badly impacted by Cyclone Gabrielle and other severe weather events earlier this year will be entitled to more flexible loans with lower interest rates, the Government says.
The North Island Weather Events Loan Guarantee Scheme will be used to provide relief to affected businesses wanting commercial lending, the Government said on Thursday. It will allow loans of up to five years agreed upon between businesses and their banks of a maximum of $10 million from the scheme.
A business with an "average" amount of debt could save between $45,000 and $225,000 in interest over the five years the scheme is in place, Finance Minister Grant Robertson said in a release.
"Businesses 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."
The scheme will be eligible for new loans issued between July 1, 2023 and June 30, 2024 as well as those who are refinancing.
It's hoped the scheme would be in place by the end of next month, Robertson said.
Some businesses will also have access to another programme, the Primary Producer Finance Scheme, "to provide access to capital for affected growers and farmers unable to access lending without further support".
"Many businesses severely affected by the weather events are likely to be commercially viable with the right support," Emergency Management Minister 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."
What else is the Government doing?
A significant probe into the emergency response to this year's severe weather events would also take place, the Government confirmed.
It was normal practice for local Civil Defence authorities to review their response to such events but, given the significance of Cyclones Gabrielle and Hale and the Auckland flooding, a Government inquiry was "appropriate", McAnulty said.
The probe will be led by former Governor-General Sir Jerry Mateparae.
In terms of funding, the Government ahead of Budget 2023 announced a massive $1 billion package of support for flood and cyclone-ravaged communities, including an additional $275 million to repair roads, a $100 million flood protection fund and a commitment to return all schools to their pre-weather state.
"As I've said previously, the Government can't pay the full cost of the recovery and rebuild," Robertson said on Thursday.
"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."
