Porirua council paid $2.6m through Covid-19 wage subsidy as income plunges

Tuesday, 2 June 2020

Porirua City has accessed $2.6 million through the Government's wage subsidy scheme.

A council that earned millions through the Covid-19 wage subsidy says it would have been an injustice to ratepayers if it hadn't applied for the cash.

Porirua City Council was one of a handful of councils paid through the scheme aiming to save jobs from the affects of Covid-19.

The decision surprised residents - stirring online criticism from those who thought the subsidy was not applicable to rates-earning councils.

Porirua was paid $2.6 million covering 396 staff. Chief executive Wendy Walker said jobs were in jeopardy without the money.

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Porirua mayor Anita Baker says she's glad the council applied for the wage subsidy.

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Porirua council chief executive Wendy Walker says jobs were in jeopardy without the money.

She said Porirua would be 'doing ratepayers an injustice' if it hadn't applied for the subsidy.

'We also applied so that the cost of these wages would not be met by having to borrow the funds.' The council had a 40 per cent loss of earnings in April, she said.

Porirua's forecast covid-related loss from earnings from the likes of Pātaka museum, Te Rauparaha Arena and Spicer Landfill was $2.3m for the next financial year.

It was the only council in the region to receive the payment.

The Ministry of Social Development would not supply a list of which councils were paid, referring Stuff to a search engine covering the scheme.

Tauranga City Council received $3.7m covering 576 staff members, Northland Regional Council received about $1.5m covering 220 staff, West Coast Regional Council about $105,000 for 15 staff, Waikato District Council, about $143,000 covering 26 staff, and Westland District Council about $38,000 covering seven staff.

Local Government NZ chief executive Malcolm Alexander said council representatives, including his group, met government officials during lockdown where they confirmed councils were eligible to apply.

Councils earned money through rates but on average they only covered about half of their costs, he said.

It was up to each council to decide whether it should apply, saying it was ironic that the council had previously been encouraged to apply user-pays to services.

'The downside to that is people have got to use things, to get the revenue stream.'

The bottom line was that the criteria was set by the Government not councils. There was a 'philosophical point of view' that councils should not be sourcing money from the Crown, Alexander said.

'But, at the end of the day, do people want to stay in jobs to have money to spend on local businesses?'

Porirua mayor Anita Baker said many people did not understand the rules of the subsidy scheme.

'We've obviously lost all our income from the pool, arena hire, library, all those things.'

She was pleased Porirua made the application. 'It's saving the ratepayer, it's money that comes in that you don't have to borrow … if we didn't apply, they [residents critical of the move] would still be complaining.'