Coronavirus: wage subsidy is the biggest monetary dispute NZ has ever seen

OPINION: The generous government wage subsidy received the unconditional support of almost all sectors of the community. Many of us, actually me and my neighbor Rob, begin to wonder if it has become an obscene fight for money.

The scheme has already cost the government around $ 10 billion, and claims keep coming. Workers can check the Job and Income website to see how much their employer has received.

This was a pretty sneaky idea to keep employers honest, but the site contains a gold mine of information and allows sticky spikes like me to see who’s had their hand.

Employers must meet certain criteria, but they are so easy to meet that the subsidy is actually more of a universal payment for businesses.

READ MORE:
* Coronavirus: Rugby receives $ 7.3 million under government wage subsidy
* Coronavirus: Employers should consult before firing staff during Covid-19 pandemic
* Coronavirus: how much popular New Zealand restaurants have been paid for welfare in the midst of the Covid-19 crisis
* Coronavirus: the list of wage subsidies reveals the magnitude of the economic devastation

All a company has to do is demonstrate that it has experienced a minimum 30 percent decrease in foretold (my emphasis) income compared to the same month last year and retain their employees on the books.

The Covid-19 grant is paid at a flat rate of $ 585.80 full time and $ 350 for people who work part time. The employer should continue to pay at normal rates or at least 80 percent of earnings when reasonably possible.

The opportunity to manipulate or change the wage subsidy scheme clearly presents a danger. Some employers say the requirement that earnings decrease for just one month is too short. Businesses can defer billing and slow sales to qualify.

Finance Minister Grant Robertson has responded to fears with some difficult conversations.

“We are confident that the vast majority of New Zealand companies will do the right thing and use the money to pay their staff. Anyone who abuses the system, we will prosecute him,” he said.

As of April 10, the Ministry of Social Development had received 476,176 applications and 372,957 had been approved. The subsidies paid went to 1,236,875 employees and 185,909 self-employed. On the same date, 63,329 requests were closed and 25,732 requests were rejected.

While we can all agree that wage subsidy is a good idea, you wonder what happened to self-sufficiency and searching your own pockets before seeking taxpayer help. We don’t mind supporting people with real needs, especially if they deserve it, and we don’t expect people to be pampered before seeking help. But necessity is a debatable concept.

The idea behind the wage subsidy is easy to understand. A government cannot allow companies to shutdown en masse overnight due to the devastating changes caused by Covid-19.

Many tourism, retail and hospitality companies will not be viable for years and something must be done to cushion the blow. For many, the subsidy could be a lifesaver. A 12-week wage subsidy gives each business a little room to decide how it will cope with the changes.

Who can blame any company for joining the queue for the state brochure? It’s easy to say that companies must rely on their fat to pay wages while companies are down, but there is no income and great staff is a recipe for early insolvency.

And no one knows how long this recession will last. However, it still squeaks when companies that have done extremely well in the past cry badly.

There are even more incentives to take the subsidy when your competition is also reaching out. An injection of the taxpayer into one company is putting other similar companies that do not claim the subsidy at a disadvantage.

But it is difficult to be holier than you. My employer Stuff, which was already fighting for revenue before Covid-19, received $ 6.3 million to cover 809 employees, many of whom agreed to a 15 percent temporary cut in voluntary pay.

New Zealand’s other major media company, NZME, received $ 9.36 million to cover 1,359 employees.

However, you can’t help but wonder if some of the applicants couldn’t have tried a little harder to get by before asking for money.

Take, for example, Christchurch’s two elite gentlemen’s clubs: The Christchurch Club and The Canterbury Club. They have raised $ 136,125 and $ 122,244 respectively for approximately 45 employees under the scheme.

The exclusive Northern Club in Auckland earned $ 443,250, for 73 employees, and other rookie clubs like the Auckland Golf Club earned $ 288,124 for 43 employees, and the Parnell Lawn Tennis Club earned $ 19,629 for four. New Zealand’s oldest private club, The Wellington Club, raised $ 264,117 for 42 employees.

Owners of exclusive resorts can also be expected to look out for their own resources to care for their staff. The various entities of the American billionaire and philanthropist Julian Robertson received $ 1.2 million to pay 180 employees in exclusive cabins and golf clubs in Queenstown, Cape Kidnappers and Kauri Cliffs. The Millbrook Country Club, near Queenstown, received $ 1.9 million for 290 employees, and the Clearwater Plum Golf and Resort Club of Christchurch earned $ 140,503 for 20 employees.

Medical specialists are some of the highest-paid people in the country who, as you might have thought, could pay their staff salaries for 12 weeks without having to dip into public money. Not so for many.

Christchurch’s Heart Specialists Ltd raised $ 91,296 for 15 employees and the Auckland Institute of Plastic and Cosmetic Surgery in Auckland raised $ 49,207 for seven employees. Fertility Associates raised $ 1 million for 64 employees, and the Eye Institute in Auckland raised $ 667,723 for 97 employees. Auckland Eye received $ 493,353 for 73 employees and Pacific Radiology $ 5.3 million for 815 employees.

So you have those services that some might think should not be backed by the public portfolio. The Casino Bar, which runs the Calendar Girls strip club in Christchurch, received $ 64,636 and Auckland stripper / brothel companies GS Entertainment and B & M Entertainment received $ 212,257 for 31 employees. Dunedin Casino raised $ 855,974 for 127 workers, SkyCity Management $ 15.3 million for 2,365 and Christchurch Casinos $ 2.9 million for 438.

New Zealand churches, temples and mosques have taken the wage subsidy. The Anglican and Catholic Dioceses of Auckland raised around $ 1.3 million between them and many smaller congregations of various faiths have received payments: the Evangelical Majestic Church $ 68,836, New Lynn Islamic Trust $ 15,429, NZ Muslim Association $ 23,829 and Christchurch Chinese Abundant Life Church $ 32,318. The Churches of Destiny in Nelson, Hamilton and Whakatane raised $ 102,613 and the Eastgate Christian Center in Pakuranga raised $ 219,199 for 34 employees.

Meat companies claiming the subsidy have been criticized. After all, like supermarkets, they should coin it. His justification for the claims is that social distancing and other precautions have slowed production. However, other meat processors in similar positions have not asked for help, saying sales are healthy.

Payroll subsidy payments of approximately $ 84 million went to meat processors, of which $ 77.7 million was contributed by meat giants Silver Fern Farms and Alliance Group for 11,000 workers.

Millions have gone to some of the largest law firms in the country: Bell Gully, $ 1.8 million for 260 employees; Simpson Grierson, $ 2.3 million for 335 employees; Duncan Cotterill, $ 1.4m for 215; Lane Neave, $ 1.1m for 162; Minter Ellison Rudd Watts, $ 2 million for 300; and Meredith Connell, $ 1.6 for 236. Four other legal titans, Kensington Swan, Chapman Tripp, Russell McVeagh and Buddle Findlay have yet to ask for anything.

Perhaps it is unfair to bother someone, without knowing their circumstances. There will be plenty of small businesses and professionals who claim the subsidy when they can pay the 12-week wage bill.

But this is not printed money. Someone, somewhere in the future, will have to pay and they may not be doing as well. Some will need more help longer than others, and at this rate there will be no money left.

When will the money fight end? It seems that the government pockets are bottomless. Come in while things are going well.