Companies urged to repay wage subsidy
AUCKLAND: A leading philanthropist is pressing one of New Zealand’s largest private companies to repay most of the $35 million it took in wage subsidies, claiming the payments were not needed and are contributing to growing inequality.
James Pascoe Group, the retail empire of Anne and David Norman, owns fashion, jewellery and book chains on both sides of the Tasman.
The Ministry of Social Development’s website shows the company behind the Farmers department stores, The Farmers Trading Company, claimed more than $28 million over two rounds of the wage subsidy for more than 3700 staff.
James Pascoe Ltd claimed more than $3 million for almost 450 staff, while the company through which the retailer owns the Whitcoulls chain, Whitcoulls 2011 Ltd, claimed more than $4 million for around 600 staff.
The payments have become a focus for a Christchurch man who describes the wage subsidy as ‘‘the biggest financial scandal in New Zealand history’’.
Grant Nelson, who set up the charitable Gama Foundation with his wife Marilyn after selling their building materials business in the 1990s, said although the nationwide lockdown forced retailers to close for more than a month, when they reopened most saw a surge in business.
‘‘Most businesses were only closed for about five weeks, and then they had a big upsurge after that . . . ‘‘Overall, a lot of businesses did better than they did in the previous year and often they were retailers.’’
While the trading figures of the Norman’s businesses are not publicly available, Mr Nelson said figures from Inland Revenue showed business profitability improved in 2020, compared with 2019. He believed the Normans should repay most of the money.
‘‘My position is they should be paying most of it back. If we did know what their results were, we might be saying they should be paying all of it back, because they’ve done better than in previous years.’’
The Normans, who rarely give interviews or make public statements, have not responded to a request for comment.
Hundreds of millions of dollars has been repaid, including by some leading retail companies, including Briscoe Group and later The Warehouse, amid signs that high street trading had bounced back strongly after the lockdown ended.
As well as Farmers, Whitcoulls and Pascoe chains, James Pascoe Group also owns the Stewart Dawsons and Goldmark brands in New Zealand. In Australia, it owns Prouds and Angus and Coote. — The New Zealand Herald