A guest post by Simon Lusk:
Two of New Zealand’s largest meat companies, Alliance and Silver Fern Farms, have taking over $75 million of public money for wage subsidies. They are essential industries and are still operating in Level 4. Their taking of the wage subsidy is wrong.
New Zealand’s economy is going to take a massive hit from Covid-19. Many small businesses are no longer viable, and many people will lose their jobs. We need every cent we can get to help get people new jobs, especially those in hospitality and tourism where their entire industry has been destroyed.
The Wage Subsidy scheme was set up to keep people employed in businesses that were shut down. It was to avoid the mass layoff of workers who were not working through no fault of their own. It was not a hand out to essential industries that are working through the lockdown.
We need our profitable essential industries to be good corporate citizens and not take the wage subsidy that was supposed to keep people unable to work employed in vulnerable small businesses. Silver Fern Farms made a profit of $70.7m in the last financial year, so they are cashed up and do not need a subsidy. Alliance made a profit of $20.7m in 2019 so they are also not like a struggling bar or café that is going to be ruined by Covid-19. They are not even like the plumber or builder or hairdresser who still has a business after the lockdown, but will have lost almost all their revenue for many weeks.
As a taxpayer I am happy to help out those in need in a time of crisis. Most New Zealanders are happy to help out. It is the right thing to do. Alliance & Silver Fern Farms are not in need and are in a far better position that the vast numbers of small businesses and workers who have an incredibly uncertain future. These people are going to be asked to pay taxes to subsidise Alliance & Silver Fern Farms.
Some PR bullshit artist will probably come out to justify these meat companies taking the subsidy saying they “fit the criteria”. This does not make taking the wage subsidy right. Other companies in the industry have chosen not to take it because they are good corporate citizens and are doing the right thing.
If Silver Fern Farms & Alliance do not immediately say they are going to pay this back you can sign a petition asking the government to take it back forcibly. You can choose to boycott these company’s products. You can do what economist Cameron Bagrie suggested and ask supermarkets to refuse to stock their products.
And you can ask your MPs & Ministers to refuse to appoint the directors of Silver Fern Farms or Alliance to any government board, or renew any appointment to any government board. Ministers have the right to decide who represents us on state owned enterprise boards, and they can send a very clear message to the directors of these companies that they need to take their governance role more seriously if they want state appointments. That way there is a personal consequence for the directors who have overseen the wage subsidy. You can see the Alliance Board Members here and the the Silver Fern Farms Board Members here.
Silver Fern Farms & Alliance’s directors should immediately instruct their executives to pay back the wage subsidy. That is what a good corporate citizen would do because it is the right thing to do. Having to pressure them to do the right thing is frustrating, because it should be so obvious to them they do not need to think about it.
To sign a petition to Parliament follow the following link.
That the House of Representatives urge the Government to require businesses such as Silver Fern Farms and the Alliance Group to pay back any wage subsidies they have claimed while their plants are still operating.