Corporate welfare criticised

Stuff reports:

A payout of millions of dollars to ensure the survival of AJ Hackett Bungy New Zealand has been criticised as “corporate welfare” for a company with wealthy shareholders.

It was announced on Wednesday that the bungy jump firm could get up to $10.2 million from the Government to help it remain in operation despite the disruption of Covid-19.

It will receive a $5.1m grant in the first year, with a possible loan of up to $5.1m available in the second year if borders remain closed to international tourists. …

But economist Cameron Bagrie said the payout was inappropriate. “I’m not convinced that jumping off a bridge is a strategic asset. I would have thought that’s an asset you can hibernate and wait for the demand to come back. Bungy jumps are now a strategically important asset? You have to look at this through a common sense lens and think, really?”

He said while the operation might have a couple of lean years without tourists, it had a long and successful history that it could draw from to finance it.

I was supportive of the wage subsidies as they were temporary and a level playing field. Any employer who qualified could get one.

But now what the Government is doing is hand picking selected businesses to get money from taxpayers. Should the Minister of Tourism be deciding that a bungy jump operation is more deserving than a jet boat company?

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