National would introduce a GST refund scheme for businesses badly affected by the Covid-19 crisis to help with cash flow, leader Simon Bridges said in a major pre-Budget speech today.
National Party leader Simon Bridges, who had a career in law before entering Parliament, says major law firms "do not need" the wage subsidy.
Administered by the Ministry of Social Development, the scheme has seen more than $10 billion paid out to New Zealand employers since it was introduced a little over a month ago.
But the scheme has started to come under fire since the ministry began allowing the public to search who has applied.
Operating under what the Government has described as a "high trust model", claimants have included a number of large NZX-listed companies and some of New Zealand's largest and most prestigious law firms.
NZME, owner of the NZ Herald, has applied for the wage subsidy.
A search of the MSD website also shows that Bell Gully has claimed $1.81 million in wage subsidies, Simpson Grierson has claimed $2.36m, Minter Ellison Rudd Watts has claimed $2.07m, Duncan Cotterill has claimed $1.49m and Meredith Connell has claimed $1.64m.
Bridges, who announced a new policy today to offer tax credits for businesses, told reporters afterwards that while it had been crucial to get the scheme up and running, a number of critics had claimed that it was not sufficiently targeted.
"I'm not critical of that. It had to be done quickly in circumstances of urgency, they got it out the door. Let's give them a bouquet for that."
But any further assistance for businesses needed to be targeted at the place it was needed.
"Otherwise we are spending billions of dollars of taxpayers money where it doesn't need to go," Bridges said.
"Big law firms, like I used to work for, don't need this money. Small shop keepers, tourist operators, some of those players who are not only struggling, but could well go out of business, they need it."
As well as acting as a Crown prosecutor, Bridges worked in Auckland for Kensington Swan (now named Dentons Kensington Swan), which does not appear to have applied for the wage subsidy.
Bell Gully, Simpson Grierson, Minter Ellison Rudd Watts, Duncan Cotterill and Meredith Connell have all been asked for comment on their firm's need for the subsidy.
Duncan Cotterill said it would not comment. Simpson Grierson and Minter Ellison Rudd Watts declined to be interviewed but said would issue prepared statements.
Earlier, a report by former Finance Minister Sir Roger Douglas and University of Auckland Professor Robert MacCulloch questioned why major firms needed the money when partners "have enjoyed years of high six (and sometimes even seven) -figure salaries".
The pair added: "Why haven't they been required to fend for themselves and their businesses? Why, when the good times suddenly come to an end, have they gone cap in hand to the Government? And why has the Government responded by treating them the same as workers and small businesses who have never enjoyed an equivalent level of wealth and who do not enjoy access to the resources they do? It is the old maxim rendered true – there is never someone more socialist than a wealthy capitalist in a time of crisis."
Andrew Barnes, the rich lister who founded Perpetual Guardian, said in April while the circumstances of each business was different, not all should reach out because ultimately the cost would fall on taxpayers.
"As business leaders we do have to think about whether or not we should be taking subsidies. If we are capable of funding our companies then I believe we should try and do that, because ultimately, this is not free money."
