By GUY WILLIAMS
AS QUEENSTOWN’S tourism behemoths once again line up to claim the government’s wage
subsidy, pressure’s mounting on one company in particular to pay back what it received from the scheme last year.
As reported in Mountain Scene’s sister newspaper the Otago Daily Times last month,
Skyline Enterprises shareholders John Hilhorst and Cath Gilmour have tabled a share
holders motion to its annual meeting next Friday to pay back the $7.9 million wage subsidy it took last year.
The couple say it’s a ‘‘moral question’’ for the company, which recorded a $56.7m net profit after tax in the last financial year.
Their stance is backed by Wellington academic and writer Max Rashbrooke, who tells Scene the purpose of the wage subsidy scheme is to ‘‘tide over companies that otherwise are not going to survive’’.
‘‘A chunk of this company’s revenues have come directly from a government support payment that was supposed to ward off disaster, not fatten what’s ultimately a ‘healthy
bank account’,’’ Rashbrooke says.
‘‘So I think the moral situation is very clear — the firm should repay the wage subsidy before any payments to shareholders.’’
That argument especially applies to large companies, which have access to lending facilities and assets they can borrow against.
Mounting pressure to return 2020 subsidy
He says he doesn’t have a problem with companies applying for the wage subsidy if they meet the criteria, because they’re dealing with uncertainty during a pandemic.
However, he thinks the government needs to add a condition that if a company makes a full-year profit, the government’s ‘‘at the head of the queue’’ before share holders.
Long-time Queenstown hospitality operator Doug Champion says he admires Gilmour and Hilhorst for having the courage to speak out.
Champion, who says he weathered two major global financial crises without any government support, says if Skyline returns the money, it can be redistributed to the many smaller operators ‘‘who are actually losing their businesses’’.
‘‘The government’s been really quick to get it out, but unfortunately they haven’t put enough fishhooks in there to say that if you’ve made a profit, you’ve got to pay it back.’’
Gilmour tells Scene the motion boils down to a ‘‘moral question of is it the right thing to do when you look at New Zealand Inc?’’
There are many businesses, in tougher positions than Skyline’s, whose owners have had to mortgage their home, she points out.
She and Hilhorst have had calls of support from Skyline shareholders throughout the country, as well as locals, but she’s not optimistic the motion will be seriously considered.
‘‘But it’s feeding a good community conversation that we needed to have.’’
Skyline chairwoman Jan Hunt couldn’t be reached for comment yesterday, but in a letter to shareholders last month, said the company’s board didn’t support the motion.
The company has to ‘‘keep adequate cash reserves to cover wider costs associated with maintaining the business’’, Hunt wrote.
‘‘A simple review of our direct tourism segments demonstrates that these were barely profitable in the last financial year.
‘‘We cannot let Covid-19 waylay our capital replacement and growth projects, as we must be ready and able to deliver high-quality products to consumers when they return.’’
Skyline also received $500,000 last August for its Queenstown luge operation from
the government’s strategic tourism assets protection programme.
Another Queenstown-based company, AJ Hackett Bungy New Zealand, has claimed $290,616 from the latest wage subsidy round to date, for operations across NZ.
Last June, the company received a controversial $5.1 million grant from the government’s strategic tourism assets protection programme, and a loan offer matching that amount, for its sites in Queenstown, Taupō and Auckland.
It also received more than $2m from the subsidy scheme up till the latest lockdown.
Bungy co-founder and managing director Henry van Asch turned down Mountain Scene’s request for comment.
Some of the big August wage subsidy receivers
Millbrook Country Club: $283,888
Fergburger, Mrs Ferg, Fergbaker and Ferg Foods: $237,590
Queenstown Bungy Ltd (AJ Hackett): $233,016
Real Journeys: $231,796
Skyline Enterprises: $189,570
Eichardt’s Hotel: $155,262
Good Group Ltd: $152,390
St Moritz Management Ltd: $138,462
Republic Hospitality Ltd (Ballarat Trading Co, Winnies, etc): $127,170