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  • rmacculloch

A Furore like the one over our Wage Subsidy erupts in the UK

The Times Newspaper in the UK reports on its front page today that "Supermarkets are under growing pressure to hand back almost £1.9 billion after sparking outrage by rewarding shareholders with hundreds of millions of pounds in payouts at the same time as claiming a huge government discount. The big four - Tesco, Sainsbury’s, Asda and Morrisons - and the discounters Aldi and Lidl will collectively save the huge sum due to the Treasury’s 12-month holiday on business rates, according to the advisory firm Altus. The tax break was designed in haste in March to help struggling high-street stores ... while many are struggling, supermarkets have been among the rare winners of the pandemic ...."

In NZ, a number of big firms that qualified for our wage subsidy scheme yet have subsequently announced strong profits are under similar pressure to pay back their government hand-out. Given that both the UK and NZ governments could have solved this problem by writing a simple clause into their pandemic subsidy schemes along the lines that "should the firm applying for this grant subsequently declare profits over the course of this full financial year not materially lower than the previous year, the government reserves the right to claw back the grant", one wonders whether the UK and NZ Treasuries had any form of communication at the time which ended up in both of them making the same mistake?


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