COVID-19: Businesses call for sector-specific support as wage subsidy bill tops $1.2 billion

By Nita Blake-Persen of RNZ

The Government's wage subsidy bill has passed $1.2 billion.

It's supporting 838,000 employees, 117,000 self-employed people and 242,000 businesses.

The highest number of supported workers are in the construction industry, followed by food and hospitality.

Many of the recipients are smaller businesses, but larger businesses have also received money, including $8.5 million for Air New Zealand and $1.8 million for Burger King.

The bill is large but not a patch on the $13 billion that was paid out in last year's subsidies.

Business New Zealand chief executive Kirk Hope said that was partly down to the stricter criteria - businesses have to have had a 40 percent drop in revenue, compared to 30 percent last time.

"A lot of those businesses will still need some assistance, and there will be businesses which legitimately would need assistance but still couldn't meet the terms of the wage subsidy."

He said there needed to be more sector-specific support for industries that will struggle to operate until they are at alert level 1 - including hospitality and some of the creative arts.

Many of the big businesses that claimed tens of millions of dollars last year have not applied this time around.

Accounting professor Jilnaught Wong said many had taken note of the public response to their claims last time.

"Public monitoring and the thrashing that they got in the media made them well aware that people are keeping an eye on them because it's effectively what I describe as a wealth transfer.

"It goes from one party to another and they are the recipients of the wealth transfers when they shouldn't be getting it."

He said the Government needed to be more careful with money before it was handed out - and suggested forgivable loans might be a better option if Government assistance was needed at all.

Smaller business owners haven't been able to dip into reserves in the same way. Tanya Farrant said the wage subsidies had been a lifesaver for her New Plymouth restaurant, Deluxe Diner.

"Being able to pay them 100 percent of their wages was really important to us and that government subsidy helped big time.

"No doubt the Government does have some provisions for that but I think it's actually been really nice for big business to take the wage subsidy - and again, I just think it's because they've already got reserves there."

The Ministry for Social Development has yet to take any legal action following on from last year's wage subsidies, but five companies have been contacted about repaying money that they're not entitled to

RNZ