Which businesses are on 2020’s naughty list?
Every good Christmas story has its heroes and villains, and this year, Kiwi companies have shown who is worthy of our support, and who has acted on their worst impulses during the Covid crisis. On Christmas Eve, let’s take a look at who should make this year’s naughty list.
It’s hard to put together such a list without mentioning some of the business lobby groups and politicians that were far too hasty in calling for open borders and changes to New Zealand’s elimination strategy. Those changes would have been costly.
In May, just months into the deadliest pandemic in a century, the Auckland Business Chamber penned an article titled Open the
Bloody Border, making an early push for a trans-Tasman bubble. In July, chief executive Michael Barnett added that ‘‘totally eliminating the contagion is unrealistic and simply not backed by science’’.
Some media commentators were also in a hurry to steer the Covid response in a different direction. They asked whether it was cost-effective to save the old and infirm. Others questioned whether we should follow Sweden’s voluntary lockdown strategy.
Opportunistic politicians got in on the act.
In April, then-National Party leader Simon Bridges worried that ‘‘the medicine is worse than the cure’’ with our lockdown strategy. He asked if we should follow the more relaxed Australian model to save the economy. In June, shortlived National leader Todd Muller said it was ‘‘untenable’’ for the nation to remain ‘‘locked up’’ for months awaiting a vaccine.
I shudder to think what would have happened if some of the above suggestions, seemingly made in the interests of big business and the economy, were implemented. An economy running at 95 per cent, with no foreign tourists and international students, is better than us being in and out of lockdown, or hospital, this Christmas.
Meanwhile, the use of the Government’s wage subsidy, designed to help businesses retain staff during lockdown, exposed the very worst corporate behaviour.
One of New Zealand’s biggest employers, Fletcher Building, claimed $68 million in wage subsidy funds. Following the end of the 12-week subsidy period, it announced plans to lay off more than 1000 Kiwis.
The wage subsidy helped Fletcher narrow losses to $196m in the year to June without tapping into shareholder funds. Last month, Fletcher said profits had improved in the early part of the 2021 financial year, as increased efficiency had boosted margins.
Not to be outdone, infrastructure company Fulton Hogan, which received $34.3m in wage subsidy payments, made a $222m profit last year, and announced a $79.5m dividend. It has only partially repaid the subsidy.
New Zealand’s largest retirement village operator, Ryman Healthcare, which received $14.2m in wage subsidy payments, also paid a $44m dividend to shareholders. Following weeks of public pressure, Ryman agreed to repay the subsidy last week.
This week, The Warehouse Group also backtracked on plans to keep $68m in wage subsidy funds, after posting a $44.5m profit in 2020 and signalling plans to make about 1000 people redundant. Briscoes is another retailer to repay funds following a public backlash.
Some of the world’s biggest corporations also got their share of taxpayer cash. Coca-Cola Amatil (NZ) Ltd, the global drinks giant’s Kiwi subsidiary, reaped $7.1m in wage subsidy payments.
Even Tesla, owned by billionaire Elon Musk (who recently became the world’s second-richest person), took $168,700 in wage subsidy funds, enough money to pay three junior teachers for a year.
When this pandemic is over, Kiwis will remember the parties of self-interest, those who put the economy over our health, the companies that were forced into doing the right thing, and the businesses that seized on a crisis to enrich themselves.