Tepid response to claw-back idea
Opposition leader Judith Collins’ suggestion that a future Nationalled government might claw back some wage subsidies has met with a cool response from the country’s biggest business body.
Businessnz chief executive Kirk Hope said any retrospective rule change would create ‘‘a huge amount of uncertainty for businesses’’.
Jonathan Scragg, the chairman of law firm Duncan Cotterill, put Collins’ comment down to ‘‘the excitement of the campaign’’, voicing doubt over whether it would amount to an ‘‘actual policy position’’.
Controversy over the payment of wage subsidies has been stoked by some businesses claiming the subsidies and then laying off staff and posting big profits.
Prime Minister Jacinda Ardern identified The Warehouse as one business in that position.
Collins said during the Newshub election debate on Wednesday that the rules for the wage subsidy should have been ‘‘more carefully put in place’’.
Employers that ‘‘did not need’’ the money should pay it back and a National government would try to claw back payments, she said.
‘‘We may have to change a law,’’ Collins said in response to a question from host Paddy Gower.
‘‘I would have thought we would have a lot of support in Parliament to do that,’’ she said.
Collins clarified to Stuff yesterday that her party ‘‘would take advice from officials but we accept it isn’t ideal to institute retrospective legislation’’.
In an emailed statement, she said: ‘‘However, if we were to become government, we would pursue large companies who received wage subsidies who then went on to terminate hundreds of jobs. This would not be necessary if Labour had set clear rules ... in the first place.’’
Finance Minister Grant Robertson, of Labour, issued a statement saying: ‘‘National’s new suggestion that it will look to take money from companies that used the wage subsidy legitimately’’ would send shockwaves through the business community.
‘‘We stand by our decision to protect jobs and cushion the blow. There is no way Labour would go back on the agreements we had with those private businesses who used the wage subsidy legitimately,’’ he said.
Hope said he believed the Government had got the wage subsidy rules broadly right.
The Ministry of Social Development already had the power to demand the repayment of wage subsidies if businesses had not met the criteria for them and Businessnz hoped there would be no retrospective change, he said.
About $500 million had been repaid, for example in situations where businesses ended up being in a position that was not as bad as anticipated. But that did not imply wrongdoing, Hope said.
To be entitled to the subsidy, businesses had to experience or expect at least a 30 per cent drop in revenue during one month because of Covid and retain the staff for whom it was claimed during the period of payment.
‘‘I do take a bit of issue with the idea that if your business made a profit then you [should] be required to pay the subsidy back,’’ Hope said.
Scragg said laws could be passed with retrospective effect but it was ‘‘generally not done’’ as it was seen as unfair to ‘‘move the goalposts after the event’’.