Porirua council to return $2.6 million claimed under Covid-19 wage subsidy scheme

The Porirua City Council will return $2.6 million it claimed under the Government's Covid-19 wage subsidy scheme after figuring out its loss of revenue was under the 30 per cent threshold.

Source: 1 NEWS

After clarifying with the Ministry of Social Development, it determined its drop in revenue was 26 per cent.

"Despite being just lower than the threshold, 26 per cent was a significant drop in revenue, brought about by the closure of Te Rauparaha Arena, our aquatic centre, fitness centre, libraries, landfill, the application of rent subsidies and reduced fees from licences and sports club subsidies," council chief executive Wendy Walker said in a statement.

"Fortunately, with lockdown ending and no resurgence in this part of New Zealand, the impact for our city has not been as severe as we feared it may have been. As our recently released annual report shows, we are in a stronger position than anticipated, which means we can refund the subsidy without jobs being affected. Although we will have to borrow to make up the loss of revenue, this will not significantly impact rates."

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The council says it applied for the subsidy in good faith, believing it did not have to include rates revenue in the application and that its loss would be 44 per cent.

Its application was granted by MSD, but upon clarification it was decided revenue loss should be assessed on a cash basis, which is where the 26 per cent figure came from.