Official figures released by Greenpeace show the Government could be due a huge refund from the Covid wage subsidy scheme.
The environmental organisation has some strong views on how it could be better spent.
A total of $14 billion was paid out to businesses which claimed a substantial income drop during the pandemic.
Figures obtained under the official information act reveal business GST receipts in the first nine months of 2020 jumped by two billion compared with 2019 – indicating that business mightn’t have done as badly as they expected.
“It looks as if there’s been a big overpayment, potentially in the billions of dollars,” says Dr Russel Norman, executive director of Greenpeace Aotearoa.
“Rather than transferring wealth to business – the money should be spent fighting inequality and tackling the climate emergency.”
Successful business applicants for the first subsidy needed to predict a 30 per cent drop in revenue, and a 40 per cent decrease for the second instalment.
The figures show net GST receipts actually rose by 14 per cent in the nine months to 30 September 2020 compared to the same period in 2019 – a $2.175 billion increase.
“At a time when we are seeing worsening climate change impacts and more and more people struggling to make ends meet, there are much better ways of spending this stimulus money, such as tackling New Zealand’s biggest source of climate emissions – agriculture.”
Greenpeace is calling for a billion dollar fund to help make the transition to regenerative methods of farming. Nearly half of Aotearoa’s greenhouse gases come from agriculture.
After a barrage of news reports highlighting abuse of the wage subsidy scheme, the Ministry for Social Development has begun carrying out random audits of applicants. So far about 10% have been required to make a full or partial repayment of the subsidy.
Fletcher Building reportedly won’t pay back its $68 million wage subsidy even after it laid off 1000 New Zealand workers. Fletcher’s earnings from July to October came to $227m, with the firm announcing that revenues were up $80m from the same time last year.
Fulton Hogan reportedly only paid back $1m out of its $34m wage subsidy in spite of making a $222m profit and awarding its shareholders with $79.5m in dividends. The firm announced an after-tax profit increase of 28% in the year to June.
Greenpeace believes the Government urgently needs to ask all businesses who got payouts for proof that they complied with the terms of the subsidy and get any overpayments back.
“The Government has set aside billions of dollars for the Covid Recovery. Instead of allowing that money to simply make the rich richer, the Government should invest it in making New Zealand a cleaner, fairer and better place for everyone,” says Dr Norman.
ENDS
Notes:
The rise in GST receipts is not connected to the subsidy.
Legislation has exempted the wage subsidy from GST, so the $14 billion cash flow injection doesn’t feature in this already increased figure.
Reference for Fletcher Building wage subsidy and related figures
Reference for Fulton Hogan wage subsidy and related figures
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