Bell Gully, Simpson Grierson, Morrison Kent & the rest: Tell NZ what your partners earned last year
Today the controversy over the wage subsidy scheme has blown up (again). The NZ Herald reports that an investigation of "prominent law firm" Morrison Kent has "raised questions about the firm's retention of the Government's Covid-19 2020 wage subsidy as its billable amounts increased in the year to December 2020".
Back in May of 2020, together with a former Finance Minister, Sir Roger Douglas, we raised this issue in a co-authored article. The NZ Herald wrote at that time, "A report by former Finance Minister Sir Roger Douglas & University of Auckland Professor Rob MacCulloch released last week questioned why major firms needed the money when partners "have enjoyed years of high six (& sometimes even seven) figure salaries .. The pair added: "Why haven't they been required to fend for themselves & their businesses? Why, when the good times suddenly come to an end, have they gone cap in hand to the Government?"
On the back of this kerfuffle, the likes of Bell Gully, Simpson Grierson & MinterEllison RuddWatts hastily repaid millions of dollars. However I never knew that there were still law firms who had not repaid the subsidy. So DownToEarth.Kiwi calls upon all law firms who took the wage subsidy to tell the nation what your partners earned last year.
Or will you hide behind legalistic words like "private", "confidential" & "commercially sensitive" to thwart the request? Well, on that note, you've all got a problem. A big one. Once you took public money, you no longer became free-standing private enterprises. Just like the big banks that took public money after the Global Financial Crisis, your judge & jury became the court of public opinion. The current media articles are now trying you in that court.
By way of technical note, your defense case is way weaker than for big public companies like Fletchers who took the wage subsidy, since their boards can argue that they were acting on behalf of the shareholders & had a legal obligation to take it to support shareholder value. But when it comes to legal or accounting partnerships, their boards are their owners, so they're not acting as agents to (shareholder) principals to whom they owe a fiduciary duty - only to themselves. In other words, it's solely their own personal ethics at issue.
So again, what did your partners earn last year? I'm sure the Kiwi public, many of whom are very hard up yet who still funded the subsidies which your firms received would appreciate an answer, so they know where their money went.