The vague and confusing reasons we'll never know exactly where the wage subsidy is going
Wednesday, 10 June 2020
ANALYSIS: The Government has talked up the transparency of its $11b Covid-19 wage subsidy scheme. But if you want to see a list of every recipient, you're out of luck. Even half of them? Nope.
The illusion of transparency has been created by an online search tool that allows members of the public – and stickybeak journalists – to look up a company's name and see whether it's received the subsidy.
But the search engine returns only five results at a time. Stuff – and other media – sought the full list. It seemed a straightforward request. We only wanted what the Government had already made public, just in a different form.
Days went by and it became clear the Ministry of Social Development (MSD) could not, or would not, provide the list. Why?
'We designed the tool with close involvement from the Privacy Commissioner to ensure compliance with the Privacy Act,' said Nadine Kilmister, a deputy chief executive at the ministry, in a statement.
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A closer look at the online tool showed no results for employers with fewer than three employees.
Very small employers risked being personally identified if they were included on the public register, the Office of the Privacy Commissioner confirmed in a statement.
'New Zealanders do not expect that their ACC entitlements, sickness benefits, accommodation supplements, unemployment benefits and Working For Families tax credits are published to the world.
'We have not seen any case for publishing support given to individuals as part of the pandemic response. If such a case is made, we will evaluate that and provide our advice to decision makers.'
But New Zealand is a nation of small businesses. They make up 97 per cent of all businesses and employ more than 30 per cent of the country's working population.
It makes sense, then, that 97 per cent of all businesses who have received the subsidy have fewer than 20 employees. And more than half (54 per cent) have 'zero staff', according to ministry data. Of those, the biggest group, 35 per cent, are from an 'unknown industry'.
It's easy to understand why individuals, particularly those in sex work and other marginal industries, wouldn't want to be identified by the online search tool. But given it already excludes employers with fewer than three employees, it was unclear why media couldn't get access to the database behind it. After all, the same information could be gathered by searching the name of every New Zealand company.
The reason, MSD explained, was because the database includes 'sole traders' with three or more employees.
MSD has made those larger sole trader employers getting the wage subsidy public via its searchable tool. But would not make the information available to anyone else as part of a list. How could this make sense?
'It was agreed with the Privacy Commissioner they could be included in the search tool because the privacy intrusion for this group of sole traders was moderated by the fact that they can only be searched for on a case by case basis,' Kilmister said.
Why should sole traders who employ three or more people have more rights to privacy than other businesses of the same size? Kilmister said the publication of their information is also the publication of personal information, 'and would reveal that they personally are receiving financial support'.
'We are conscious that for some, there is stigma around receiving government support.'
There are three basic types of business structure in New Zealand; sole trader, partnership, and company. The easiest way to get a business started is as a sole trader; the business operates under the owner's IRD number, and they are responsible for the running and management of the business. They get to take home the profits, but are also liable if something goes wrong.
Sole traders are often tradespeople, contract workers, and artists. Most start out as the only person working in their business, but they can hire staff.
If MSD was going to give anyone else the database that informs its search tool – including 'sole traders' with at least three employees – it would have to manually remove the thousands of sole traders on the list, it said. And that would take ages.
But it remains unclear where the advice to do that has come from. Although MSD name-checked the Privacy Commissioner, it said their advice pertained only to 'single-person businesses'.
The public might not care. After all, the scheme was established with urgency and its primary purpose was to help keep New Zealanders employed. And without doubt, it's helped.
For valid privacy reasons, total transparency will never be possible. But to refuse to provide even a redacted list of recipients falls well short of the insight taxpayers deserve.
* Stuff Ltd received $6.3m from the wage scheme on behalf of 907 employees.