Critics questioned the ethics of the board’s decision
Ryman Healthcare has been called upon to repay its $14.2 million government wage subsidy after paying dividends worth $44 million to shareholders.
New Zealand’s biggest retirement village operator has defended applying for the subsidy scheme, citing the amount it spent on Personal Protection Equipment (PPE) to protect employees and residents during the pandemic.
But Auckland University professor of financial accounting Jilnaught Wong said keeping people safe was part of Ryman’s duty – and not a justification for accepting the government payout.
He told Stuff: “Essentially the fact that they are in a position to pay the dividends suggests to me that they do not need the wage subsidy, otherwise all that wage subsidy is tantamount to is a wealth transfer from people like you and me to the shareholders of Ryman.”
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Healthcare providers Bupa confirmed to the publication that it had not applied for the wage subsidy.
Metlifecare, another large retirement village operator in New Zealand, said it had repaid $6.8m in wage subsidies.
A spokesman for Ryman Healthcare confirmed it had not repaid the subsidy and provided HRD with commentary from board chairman David Kerr who was asked about the issue last week.
Kerr said the board had a lengthy discussion over their decision to pay out the dividends after accepting the government’s wage subsidy.
“We felt that the wage subsidy was a great initiative by government that we were, as a result of it, able to continue to employ all our staff and redeploy staff and engage new staff to enable the villages to stay safe,” he said.
“So effectively, we kept and grew jobs and so when you then look at the other side of it in terms of what we have spent to keep our villages safe and our staff safe, we’ve probably spent about three times the wage subsidy.
“We felt that the whole thing balanced out. That it was appropriate to pay a dividend. That’s been our practice over many years to pay 50% of the underlying profit and so the Board decided that was the right call to make.”
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However, critics have questioned the ethics over the board decision, saying businesses that did not need the subsidy purely for staffing costs should have to repay it.
The government’s wage subsidy scheme offered financial support to enable businesses to continue employing and paying staff affected by COVID-19.
