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Commercial deposits have skyrocketed and borrowing has fallen, according to the latest Reserve Bank figures, prompting calls for more wage subsidies to be repaid.
So far, $ 533 million in wage subsidies have been reimbursed: the Ministry of Social Development has carried out more than 10,600 audits, submitting 973 cases for investigation.
Photo: 123RF
Figures released at Control showed that commercial bank deposits in October rose more than $ 17 billion in the same period last year – $ 104 billion, compared to $ 87 billion in 2019.
That was in contrast to commercial bank loans of $ 109 billion, about $ 6 billion less than at the same time last year.
The boom comes after more than $ 14 billion in Covid-19 wage subsidies were paid this year.
Auckland University accounting professor Jilnaught Wong said the figures show that many teams are doing very well.
“Despite the various blockages we have had, business this year has been better than last year,” Wong said.
“Companies are operating more efficiently, managing inventories and accounts receivable better and that is why deposits have increased.”
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More companies needed to reconsider repaying their wage subsidies given the strong economic outlook, he said.
Inequality researcher Max Rashbrooke added to those calls: He said the Reserve Bank figures highlighted a real problem around justice, as the economic impact of the pandemic had not been felt uniformly.
“I think it’s been a good year to be a wealthy person – we don’t have detailed figures on that yet, but given that New Zealand companies as a whole have done relatively well, certainly better than expected, a lot of people’s investments They will have endured. “
Those who could least afford it suffered the most, he said.
“Inevitably, this year has been the worst for people who were already struggling; there are many people who already had low wages who have lost their jobs.
“The latest advice to the government in briefings for incoming ministers on child poverty is that the pandemic will hit children who were already making it harder.”
He wanted the companies that made more profits in 2020 than in 2019 to pay back their wage subsidies to try to fix things.
“Those companies received significant support from us as taxpayers; the first people in line to get paid from companies that have done well should be us as taxpayers.
“I think putting the interest of a relatively small number of shareholders before the interest of the entire country when it comes to paying back the wage subsidy is completely unacceptable.”
Today, the government received a large wage subsidy refund, and retiree village groups Summerset and Ryman announced that more than $ 22 million would be repaid to each other.
Both businesses had paid dividends to shareholders.
Summerset chairman Rob Campbell said the backlash against the company’s dividend payments had influenced his decision.
“Obviously it was taken into account, but frankly, a bit of discussion on this topic came from people whose mouths are bigger than their brains.
“If they really understood how public companies work and the various stakeholder interests that need to be balanced by a board taking into account a number of factors that make a decision, they would understand it much better.”
Summerset had acted in the way the government would have hoped: using the subsidy in a period of uncertainty and repaying it when they felt more secure, he said.
So far, $ 533 million in wage subsidies have been reimbursed: the Ministry of Social Development has carried out more than 10,600 audits, submitting 973 cases for investigation.
Finance Minister Grant Robertson announced yesterday that the wage subsidy scheme would be available again if there was a regional or national move back to alert levels 3 or 4.
