A trail of confusion
The Government has talked up the transparency of its $11 billion Covid-19 wage subsidy scheme. But if you want to see a list of every recipient, you’re out of luck.
The illusion of transparency has been created by an online search tool that allows members of the public – and stickybeak journalists – to look up a company’s name and see whether it’s received the subsidy.
But the search engine returns only five results at a time. Stuff – and other media – sought the full list. It seemed a straightforward request. We only wanted what the Government had already made public, just in a different form. Days went by and it became clear the Ministry of Social Development (MSD) could not, or would not, provide the list. Why? Privacy.
‘‘We designed the tool with close involvement from the Privacy Commissioner to ensure compliance with the Privacy Act,’’ said Nadina Kilmister, deputy chief executive of organisational assurance and communication at the ministry, in a statement.
A closer look at the online tool showed no results for employers with fewer than three employees. Very small employers risked being personally identified if they were included on the public register, the Office of the Privacy Commissioner confirmed in a statement.
‘‘New Zealanders do not expect that their ACC entitlements, sickness benefits, accommodation supplements, unemployment benefits and Working For Families tax credits are published to the world. We have not seen any case for publishing support given to individuals as part of the pandemic response. If such a case is made, we will evaluate that and provide our advice to decisionmakers.’’
But New Zealand is a nation of small businesses. They make up 97 per cent of all businesses and employ more than 30 per cent of our working population. It makes sense, then, that 97 per cent of businesses which have received the subsidy have fewer than 20 employees. More than half (54 per cent) have ‘‘zero staff’’, according to ministry data. Of those, the biggest group, 35 per cent, are from an ‘‘unknown industry’’.
It’s easy to understand why individuals, particularly in sex work and other marginal industries, wouldn’t want to be identified by the online search tool.
However, given it already excludes employers with fewer than three employees, it was unclear why media couldn’t get access to the database. After all, the same information could be gathered by searching the name of every New Zealand company.
The reason, the ministry explained, was because the database includes ‘‘sole traders’’ with three or more employees. MSD has made those larger ‘‘sole trader’’ employers getting the wage subsidy public via its searchable tool. But it would not make it available to anyone else. How could this make any sense?
In short: MSD had partially obscured those companies by making it harder to find them on its search tool. ‘‘It was agreed with the Privacy Commissioner they could be included in the search tool because the privacy intrusion for this group of sole traders was moderated by the fact that they can only be searched for on a case by case basis,’’ Kilmister said.
Why then should ‘‘sole traders’’ who employ three or more people have more rights to privacy than other businesses of the same size? Kilmister said the publication of their information is also the publication of personal information, ‘‘and would reveal that they personally are receiving financial support. We are conscious that for some, there is stigma around receiving government support.’’
There are three basic types of business structure in New Zealand; sole trader, partnership, and company.
The easiest way to start a business is as a sole trader; the business operates under the owner’s IRD number, and they are responsible for the running and management of the business. They take home the profits, but are also liable if something goes wrong.
Sole traders are often tradespeople, contract workers, and artists. Most start out as the only person working in their business, but they can hire staff.
If MSD was going to give anyone else the database that informs its search tool, it said it would have to manually remove the thousands of sole traders on the list. That would take ages. But it remains unclear where the advice to do that has come from. It doesn’t appear to have come from the Office of the Privacy Commissioner, which said its advice pertained to ‘‘single-person businesses’’ only.
The public might not care. After all, the scheme was established in urgency and its primary purpose was to help keep New Zealanders employed. And without doubt, it’s helped. For valid privacy reasons, total transparency will never be possible. But to refuse to provide even a redacted list of recipients falls well short of the insight taxpayers deserve.