Call for businesses to return wage subsidies

Big businesses that have turned a profit this year despite the impact of Covid-19 should pay back the wage subsidy they received from the Government, one commentator says.

The scheme was launched in March to help businesses navigate the impact of lockdown. The original tranche of the subsidy required a business to have a revenue fall of 30 per cent year-onyear due to Covid. In the week ended September 11, $13.9 billion had been paid out through 756,649 applications. The majority of New Zealand jobs have been supported by the wage subsidy at one point.

But while businesses are required to pay back the money if it turns out that they did not meet the revenue drop criteria, there are calls for some big businesses recording profits this financial year to pay theirs back, too. So far, $442.3m has been paid back.

Some that have raised eyebrows include Harvey Norman, which reported a year-onyear increase in profits of almost 20 per cent, and a lift in New Zealand sales of more than 28 per cent. For July and August, profits were up 185.8 per cent, Australian shareholders were told.

Another is Briscoe Group, which reported a barely-dented $27.9 million profit this year and paid out a 9c per share dividend to shareholders, up from last year’s 8c. Harvey Norman received $12.7m in the wage subsidy and Briscoe Group, more than $11m across its businesses.

Michael Gousmett, an adjunct fellow in the school of humanities at University of Canterbury, who also acts as a consultant for charity and not-for-profit organisations, has been critical of what he sees as misuse of the scheme.

He said the subsidy scheme was intended to support businesses that were struggling, and those who had made a profit should pay it back.

It has been suggested that businesses are simply doing what is right for their shareholders, as they are required to do. But Gousmett said these were not normal times and it was a question of integrity and fairness.

Briscoe Group managing director Rod Duke said he did not want to comment. Harvey Norman did not respond.

George Van Ooyen, group general manager of client service support at the Ministry of Social Development, said businesses were entitled to the subsidy if they met the criteria. ‘‘Employers make a formal declaration at the time they apply for the subsidy. They are responsible for paying back any amount received that they’re not entitled to.’’

Gousmett said these were not normal times and it was a question of integrity and fairness.