Police union gets $370k from subsidy
The New Zealand Police Association has received $370,000 under the Government’s coronavirus wage subsidy scheme, citing the closure of its holiday homes as having a significant impact on revenue.
However, a tax commentator says the association should not be relying on the scheme, as it has $7 million in cash and cash equivalents and investments of $60m.
The wage subsidy is available to all businesses that can show a minimum 30 per cent drop in actual or predicted revenue in any month from January to June that is attributable to Covid-19.
Employers are not required to satisfy a good character test or sell assets before applying. However, Work and Income’s website does advise businesses to mitigate the financial impact, which can include ‘‘drawing from your cash reserves (as appropriate)’’.
The New Zealand Police Association Incorporated (NZPA) was granted $373,000 to cover 54 staff. According to the union’s website, it has 11,500 members comprising 99 per cent of all constabulary police officers across all ranks and 75 per cent of police employees.
NZPA president Chris Cahill said the NZPA Group, which includes the Police Welfare Fund, ran a ‘‘significant and diverse’’ portfolio of business units as a not-for-profit enterprise.
‘‘This offers welfare services to members including a portfolio of holidays homes throughout the country and a large health insurance business.’’
The association had to close its holiday homes due to the Covid-19 restrictions. It was unclear when they would reopen.
‘‘NZPA applied for the wage subsidy to help mitigate this loss in revenue. The application met the Government’s benchmark for subsidisation,’’ Cahill said.
‘‘This has enabled NZPA to support our more than 50 full-time staff with 100 per cent wage payments.’’
NZPA’s financial statement for the year ending June 30, 2019, reveals it had $7m in cash equivalents, $60m in investments, and $20m worth in property across the country.
The union made $14.2m in revenue from its operations during the same year, and had $11.8m in operational expenditure.
Michael Gousmett, an independent researcher and adjunct fellow at the University of Canterbury, said companies should have been asked to attach their latest set of financial statements when applying for the wage subsidy.
‘‘It’s an effrontery that an organisation that has this wealth at its disposal is making a claim for a wage subsidy when it’s got $7m in cash as at June last year, it’s got $60m in investments.
‘‘It’s just absurd quite frankly.’’