Businessman took wage subsidy despite believing company would survive without - won't pay it back

Source: 1News

An Auckland businessman says he claimed the Government's Covid-19 wage subsidy for his business despite believing it could survive without it, but he has no intention of paying it back.

Damien Grant runs Waterstone Insolvency, which specialises in winding up companies, and he is also an occasional columnist .

He's also a fireworks importer who last year argued against a proposed ban on personal use by the general public.

Speaking this morning to TVNZ1's Breakfast, Mr Grant said he is a strong critic of the Government giving out the subsidy to struggling businesses - but also said he took the subsidy for his own company.

Mr Grant, who was jailed in his 20s for dishonesty-related offences and is a self-described libertarian, said his business would have been fine without it and that he has no intention of paying it back.

Waterstone Insolvency claimed $63,266.40 from the wage subsidy scheme for nine employees.

"Absolutely I used it," Mr Grant said. "I don't like paying tax, but that's the law, so I pay tax.

"So now we have a system where the Government is saying, 'Hey, we're going to give you some of the money that we took back' - I'm going to take it.

"Thousands of New Zealand companies did - we had something like 1.6 million employees effectively on the wage subsidy.

"The vast majority of those companies did not need the money. I certainly didn't need the money, I could have survived that period without it.

"The Government's passed a law and it says if you meet these criteria you're entitled to the money - I met the criteria, I'm entitled to the money and I'm going to keep it."

More than $11b has been paid out by the Government to businesses who said they were struggling due to the economic impact of Covid-19.

The first version of the scheme was eligible to employers who thought they would suffer a 30 per cent fall in revenue, and was designed to help them keep staff employed. It has since been extended. 

Law firm Simpson Grierson and transport and warehousing company Mainfreight are among those to repay the wage subsidy after faring better than expected through lockdown. 

Mr Grant said companies like his would end up paying the money back indirectly in future, through things like taxes, inflation or a reduction in government services.

"Given that almost every snout was in that trough, I almost feel sorry for those people who weren't in a position to take this money - it was a form of universal basic income."

Mr Grant said New Zealand is still on a "sugar high" from the stimulus given out by the Government, but that "the crash is going to hurt".

He said that while "philosophically I think the unemployment benefit is a terrible policy", he would have advocated that the Government had instead made that benefit easier to obtain for people who lost their jobs rather than paying companies the wage subsidy.

"If you had just paid unemployment benefits to people who had lost their jobs you would have maintained people in their houses and prevented people going hungry and we wouldn't have squandered the amount of money that this Government's spending."

Mr Grant said people being charged over gaming the wage subsidy system was a possibility but said that would be "missing the point".