Why are your power bills soaring while energy companies pocket millions in government subsidies? Why can’t you afford a house while property developers get fast-track approvals and tax breaks? Why are hospital waiting lists growing while billions flow to businesses that don’t need it?
The answer is corporate welfare – a rigged system where your tax dollars are handed to wealthy businesses and their owners, not because it helps you or creates genuine economic benefits, but because powerful interests have learned how to game the system. While you face strict requirements and endless scrutiny to access any government support, profitable companies can walk away with millions of dollars in taxpayer money with minimal questions asked.
This isn’t about helping struggling small businesses survive tough times. This is about a systematic transfer of wealth from ordinary New Zealanders to those who already have plenty. Every dollar that goes to corporate welfare is a dollar that can’t go to fixing our hospitals, schools, or housing crisis. And the biggest scandal? Much of this corporate welfare doesn’t even work – it’s just expensive window dressing for policies that benefit the wealthy at your expense.
What Is Corporate Welfare?
Corporate welfare is government assistance given to private businesses – subsidies, grants, tax breaks, bailouts, and special deals that put public money into private pockets. Unlike support for individuals and families, corporate welfare often comes with minimal oversight, weak conditions, and generous terms that would never be offered to ordinary citizens.
The term “corporate welfare” exposes the hypocrisy in how we talk about government assistance. When a solo mum needs help feeding her kids, it’s “welfare dependency” that must be tightly controlled and constantly monitored. When a profitable company wants millions in taxpayer subsidies, it’s “economic development” or “job creation” that deserves red-carpet treatment.
Corporate welfare takes many forms in New Zealand. Film studios get tens of millions to shoot movies here. Farmers receive billions in subsidies while being exempt from environmental costs everyone else pays. Energy companies get taxpayer-funded handouts while charging you more for power. Tech companies receive grants for “innovation” they’d pursue anyway. And during COVID-19, we witnessed the largest corporate welfare scheme in New Zealand history – the Wage Subsidy Scheme that transferred around $20 billion to businesses, much of it to companies that didn’t need it.
The common thread? Wealthy interests have learned to dress up their demands for public money in the language of public benefit. They promise jobs, economic growth, and national competitiveness. But scratch beneath the surface, and you’ll often find the benefits flowing to shareholders and executives while costs are dumped on taxpayers and communities.
The COVID-19 Wage Subsidy Scandal: Corporate Welfare on Steroids
To understand how corporate welfare works in New Zealand, look no further than the COVID-19 Wage Subsidy Scheme – the largest transfer of public money to private businesses in our history. What was supposed to be emergency support for struggling businesses became a massive wealth transfer to companies that didn’t need it, while you were left to bear the costs.
The scheme handed out around $20 billion over two years, supposedly to save jobs. But here’s the scandal: the government used a “high-trust model” with minimal checks, meaning businesses could basically help themselves to taxpayer money with few questions asked. The result? Profitable companies lined up for their share while the money flowed out faster than anyone could track where it went.
The Auditor-General’s damning report revealed that billions may have been paid to ineligible businesses. Only around $800 million was ever returned – less than 4% of what went out. Meanwhile, many of the companies that received subsidies saw their profits spike by 39% or $20 billion in the year to March 2022. That’s your money flowing into wealthy shareholders’ pockets.
Consider the absurdity: while you might have lost your job or struggled to pay rent during lockdowns, profitable companies were receiving millions in wage subsidies that they used to boost profits rather than genuinely save jobs. Companies that should have been able to weather the storm using their own resources instead helped themselves to public money. And when called out on it, most simply shrugged and kept the cash.
The scheme perfectly illustrates how corporate welfare works. Business lobby groups, including Business New Zealand, met with Treasury officials, the Prime Minister, and Finance Minister to design their preferred subsidy scheme. Two weeks later, Cabinet approved something remarkably similar to what the business lobby had requested. The result? A scheme wide open to abuse that transferred massive wealth upward while ordinary New Zealanders faced unemployment, business closures, and economic hardship.
Even more galling, the same government that handed out billions to businesses with minimal oversight maintained strict controls on support for individuals. Benefits remained inadequate, emergency housing was rationed, and those seeking help faced invasive questioning and constant monitoring. The message was clear: corporate welfare flows freely, but support for people is grudgingly provided.
The Corporate Welfare Hall of Shame
The wage subsidy scheme wasn’t an isolated incident – it’s just the most expensive example of New Zealand’s corporate welfare problem. Consider these taxpayer-funded gifts to wealthy interests:
Hollywood’s $575 Million Handout: Since 2010, New Zealand has paid out around $575 million in film subsidies, including $75 million for The Hobbit trilogy. Warner Brothers literally threatened to pull production unless they received law changes and additional subsidies. The government caved, changing employment law and handing over tens of millions. Meanwhile, you struggle to afford housing in the same cities where film productions drive up costs.
The Provincial Growth Fund Fiasco: This $3 billion regional development fund became a vehicle for politically directed spending. The Auditor-General found the fund lacked confidence that money was being well spent, with projects chosen through processes that weren’t “fit for purpose.” Meanwhile, you watch local services cut due to “budget constraints.”
Agriculture’s Permanent Subsidy: Farmers receive billions in subsidies while remaining exempt from the Emissions Trading Scheme that everyone else pays into. The government recently allocated $710 million from the ETS for agricultural research – money that farmers don’t contribute to but benefit from. You pay carbon costs through higher fuel and energy prices while agriculture gets a free ride.
Energy Sector Welfare: Companies like the Tiwai Point Aluminium Smelter have received direct government payments and favourable electricity deals for decades. In 2013, the government paid $30 million directly to keep the smelter running. Meanwhile, your power bills keep rising while energy companies book record profits.
Tourism Industry Bailouts: The Strategic Tourism Assets Protection Programme (STAPP) distributed millions to tourism businesses during COVID-19, but the Auditor-General found “poor record-keeping by ministers” and instances where businesses received funding before application processes were even established. While tourism operators got bailed out, tourism workers lost their jobs and struggled to retrain.
Why Corporate Welfare Hurts You
Every dollar spent on corporate welfare is a dollar not spent on the things you actually need. When $20 billion goes to businesses through wage subsidies while hospitals face budget cuts, that’s a choice about priorities. When film studios get tens of millions in subsidies while teachers struggle in underfunded classrooms, that reveals what politicians really value.
Corporate welfare creates a vicious cycle that makes your life harder:
Higher Costs, Lower Services: The money for corporate welfare has to come from somewhere. Either taxes go up, government borrowing increases (pushing up interest rates), or spending on public services gets cut. You end up paying more while getting less, all so profitable companies can boost their bottom lines.
Entrenched Inequality: Corporate welfare flows upward to business owners, shareholders, and executives who are already wealthy. This widens the gap between rich and poor while you struggle with stagnant wages and rising living costs. The COVID wage subsidies perfectly illustrate this – corporate profits soared while workers faced job insecurity.
Market Distortion: When government picks winners through subsidies, it distorts competition and blocks innovation. Why should energy companies improve efficiency if they get taxpayer handouts? Why should businesses pay decent wages if Working for Families tops up their workers’ incomes? Corporate welfare removes incentives for businesses to operate efficiently or treat workers fairly.
Democratic Corruption: Corporate welfare isn’t allocated based on public need or rigorous analysis – it’s often the result of lobbying and political influence. Companies that can afford lobbyists and make political donations get better access to corporate welfare. This corrupts democratic decision-making and ensures policies serve those who pay rather than those who vote.
The Myths That Sell Corporate Welfare
Politicians and business lobbyists use the same tired arguments to justify corporate welfare, but these claims rarely stand up to scrutiny:
“Job Creation”: The promise is always that corporate welfare will create jobs. But studies consistently show that much of this spending goes to businesses that would have hired anyway. The COVID wage subsidies were supposed to save jobs, but many recipients simply pocketed the money while maintaining employment levels they could afford without assistance.
“Economic Growth”: Corporate welfare is supposedly an “investment” that will pay dividends through economic growth. But if the spending was genuinely profitable, private investors would fund it themselves. When government has to subsidise something, it’s often because the real economic returns don’t justify the costs.
“Global Competitiveness”: We’re told that without subsidies, businesses will go overseas. But this creates a race to the bottom where countries compete to give away more taxpayer money. The result is that mobile capital extracts concessions while communities bear the costs.
“Innovation”: Many corporate welfare schemes are justified as promoting innovation. But if companies genuinely believed in their innovations, they’d invest their own money. Government grants often subsidise research that companies would do anyway or projects that aren’t commercially viable for good reasons.
The reality is simpler: corporate welfare exists because businesses have learned that it’s easier to lobby for taxpayer handouts than to compete in the market. Politicians go along with it because they can claim credit for “supporting business” while the costs are hidden in higher taxes and reduced services.
What The Integrity Institute is Doing
The Integrity Institute is committed to exposing corporate welfare and advocating for a system that puts public money toward genuine public benefit rather than private profit.
Research and Investigation
We’re building New Zealand’s most comprehensive database of corporate welfare recipients and outcomes. Our investigations track who gets public money, how decisions are made, and whether the promised benefits materialise. Recent work has exposed how Covid-19 schemes became vehicles for wealth transfer and how ongoing subsidies benefit connected insiders rather than genuine economic development.
We’re also investigating the lobbying and political networks that enable corporate welfare. By mapping the connections between subsidy recipients and political decision-makers, we’re exposing how corporate welfare gets allocated through influence rather than merit.
Public Education
Most New Zealanders don’t realise how much corporate welfare costs them personally because the system is designed to be opaque. We’re changing that by translating complex subsidy schemes into clear stories about their impact on ordinary families.
Our analysis shows exactly how corporate welfare trade-offs work – when $20 billion goes to businesses, what public services don’t get funded? When film studios get massive subsidies, how does that affect housing affordability in Auckland and Wellington? We’re making these connections visible so citizens can see the real costs of corporate welfare.
Advocacy for Reform
The Integrity Institute is campaigning for comprehensive corporate welfare reform:
- Transparent Cost-Benefit Analysis: All corporate welfare should be subject to rigorous, public analysis that demonstrates clear public benefit exceeding costs
- Clawback Mechanisms: Companies that receive public money should repay it if they don’t deliver promised outcomes or if they prove they didn’t need assistance
- Sunset Clauses: Corporate welfare schemes should have automatic expiry dates, forcing regular justification for their continuation
- Alternative Targeting: Instead of subsidising businesses, public money should go directly to public services, infrastructure, and support for people who genuinely need it
Time to End the Corporate Welfare State
New Zealand faces a choice. We can continue funnelling billions to businesses that don’t need it while our hospitals, schools, and infrastructure crumble. Or we can demand that public money serves the public interest rather than private profit.
The COVID-19 wage subsidy scandal should be a wake-up call. When $20 billion can disappear into business bank accounts with minimal oversight while public services face funding cuts, the system is fundamentally broken. When profitable companies get taxpayer handouts while struggling families face benefit sanctions, our priorities are backwards.
Corporate welfare isn’t inevitable – it’s a political choice. Other countries have successfully reduced business subsidies while improving public services and economic performance. New Zealand can do the same, but only if citizens demand change.
The Integrity Institute is building the case for that change through research, investigation, and advocacy. But real reform requires public pressure that makes corporate welfare politically costly. Every corporate welfare scheme that gets exposed, every subsidy recipient that gets questioned, every false promise that gets debunked – these all help build momentum for a system that works for everyone, not just the wealthy and well-connected.
Your tax dollars should work for you, not against you. It’s time to end the corporate welfare state and build an economy that rewards genuine effort rather than political connections. The integrity of our democracy – and the fairness of our society – depends on it.
Corporate Welfare in New Zealand: A Comprehensive Bibliography
This bibliography provides a curated list of resources on the issue of corporate welfare in New Zealand. Corporate welfare, also known as corporate assistance or corporate handouts, refers to government programs that provide financial assistance, subsidies, tax breaks, or other favourable policies to private businesses or industries. The materials cover various facets of corporate welfare, including the Covid-era Wage Subsidy Scheme, film industry subsidies, the Investment Boost scheme, and other forms of business assistance.
Each entry below includes bibliographic details and a brief description of the item. The bibliography is divided into three parts: Part One lists selected works by The Integrity Institute’s Bryce Edwards; Part Two details key investigative journalism and media commentary; and Part Three highlights academic and research resources. Each part is in chronological date order where possible.
Part One: Works by Dr Bryce Edwards
Bryce Edwards: “The politics of The Hobbit.” NZ Herald, 27 November 2012
URL: https://www.nzherald.co.nz/nz/politics/bryce-edwards-political-round-up-the-politics-of-the-hobbit/3UFCT4LFUIFWNFB6L6MKGDM3G4/
Summary: A critical examination of film industry subsidies, focusing on The Hobbit production. Edwards details how the Government increased subsidies to Warner Brothers by $25 million, bringing the total to around $75 million, along with employment law changes to appease the studio. He notes skepticism about the value of luring major studios to New Zealand through corporate welfare, and questions the sustainability of an industry based around one person (Peter Jackson). The article reveals that TVNZ reported tax rebates had swelled to $67.1 million with pressure to raise subsidies further to compensate for the higher kiwi dollar.
Bryce Edwards: “The Government’s urgency in repealing the ‘Hobbit law’.” 2017
URL: https://democracyproject.nz/2017/11/14/bryce-edwards-the-governments-urgency-in-repealing-the-hobbit-law/
Summary: Examines the 2010 “Hobbit crisis” as an example of corporate welfare and business power. Edwards details how Warner Brothers threatened to pull The Hobbit production unless they received law changes and additional subsidies, describing it as “an unusually dramatic example of corporate leverage exerted against a nation-state.” The article reveals how the film industry successfully lobbied for employment law changes and increased financial subsidies, with the total subsidy package reaching around $75 million of the project’s $500 million budget.
Bryce Edwards: “Working for Families is corporate welfare.” Newsroom, 12 July 2018.
Summary: An opinion piece contending that New Zealand’s Working for Families (WFF) tax credit program has effectively become a subsidy for low-wage employers. Edwards observes that WFF, originally pitched as helping working families, now “has become a subsidy scheme for employers who can’t, or won’t, pay adequate wages”. By topping up the incomes of workers with children, the state relieves pressure on businesses to raise pay, thereby socializing labour costs. The commentary notes critics from across the political spectrum and warns that continually expanding WFF (e.g. another $370m in 2018) entrenches this form of corporate welfare.
Bryce Edwards: “Political and corporate governance under scrutiny.” NZ Herald, 16 September 2020.
URL: https://www.nzherald.co.nz/nz/politics/bryce-edwards-political-round-up-political-and-corporate-governance-under-scrutiny/MR7KNW6LB7D7JQCZWHW4QPFOBU/
Summary: This article examines various forms of government handouts to businesses, noting that “when it comes to taxpayer handouts, this Government is up there with best.” Edwards highlights the $1.6 billion bailout for South Canterbury Finance investors, elite private schools being bailed out, and Warner Brothers receiving $67 million in subsidies. He also discusses drought relief for farmers and questions the double standard compared to welfare beneficiaries, examining the controversy over Solid Energy ex-CEO Don Elder’s $1.3 million “gardening leave” and potential additional payout of $1.5 million.
Bryce Edwards: “Have billions been incorrectly paid out in the wage subsidy scheme?” NZ Herald, 12 May 2021.
URL: https://www.nzherald.co.nz/nz/political-roundup-have-billions-been-incorrectly-paid-out-in-the-wage-subsidy-scheme/LO6SZY5PGLJTAKKAV4M2HCIH3I/
Summary: This column scrutinizes the Auditor-General’s critical report on the Wage Subsidy Scheme, highlighting concerns that billions of dollars may have been paid to ineligible businesses due to a lack of robust auditing and lax eligibility criteria. Edwards discusses the “high-trust model” employed for the scheme’s rapid rollout and contrasts the government’s initial promises of audits with the subsequent reality of minimal checks. The piece frames the scheme as potentially constituting “corporate welfare” on a massive scale, questioning the integrity of its administration and the challenges in recouping misspent public funds. It underscores the Auditor-General’s view that the post-payment checks conducted by the Ministry of Social Development (MSD) were insufficient to be termed “audits” and did not adequately verify eligibility. Relevance to Corporate Welfare: Directly addresses the largest government financial assistance program in recent New Zealand history (Wage Subsidy Scheme), critically examining its administration, oversight failures, and the potential for it to have functioned as large-scale corporate welfare due to payments to businesses that may not have met eligibility or genuine need criteria. The lack of rigorous verification processes is central to this assessment.
Bryce Edwards: “Is the Wage Subsidy still transferring massive wealth to the rich?” 24 September 2021.
URL: https://democracyproject.nz/2021/09/24/bryce-edwards-political-roundup-is-the-wage-subsidy-still-transferring-massive-wealth-to-the-rich/
Summary: This article explores sustained criticisms that the Wage Subsidy Scheme, while credited with saving jobs, also acted as a significant mechanism for transferring wealth to already profitable businesses and their owners, thereby exacerbating inequality.2 Edwards cites commentators like Bernard Hickey who argue that many businesses received substantial “corporate welfare” they did not genuinely need, leading to increased corporate profits and inflated asset values for the wealthy. The piece discusses the scheme’s design flaws, particularly the lack of clawback mechanisms for profitable recipients, and highlights ongoing calls for more thorough auditing and accountability for the billions disbursed. Relevance to Corporate Welfare: Focuses critically on the distributive impacts of the Wage Subsidy Scheme. It argues that due to its design and implementation, the scheme functioned as a significant wealth transfer to businesses and their owners – a key characteristic often associated with corporate welfare, particularly when benefits accrue to entities not in genuine financial distress or need.
Bryce Edwards: “Questions of integrity surround Government’s tourism ‘slush fund’.” NZ Herald, 4 April 2022.
URL: https://www.nzherald.co.nz/nz/covid-19-omicron-outbreak-bryce-edwards-questions-of-integrity-surround-governments-tourism-slush-fund/XO4MTEFQDKG6OG3FZQT4AWV434/
Summary: This column analyses the Auditor-General’s scathing report on the Strategic Tourism Assets Protection Programme (STAPP), a multi-million-dollar scheme set up to support tourism businesses during the Covid-19 pandemic.16 Edwards questions whether political favouritism was involved in the distribution of these funds, highlighting the lack of clear eligibility criteria, poor record-keeping by ministers, and instances where businesses received funding before application processes were formally established or criteria advertised. He connects this specific programme to a broader theme of “crony corporate welfare” and a tendency for governments to provide generous subsidies to business interests without robust integrity systems, particularly evident during the crisis conditions of the pandemic. Relevance to Corporate Welfare: Provides a detailed case study of a specific Covid-era bailout program (STAPP) for the tourism sector. It critiques the scheme’s administration and lack of transparency, explicitly linking it to the concept of “crony corporate welfare” and government handouts to businesses, where procedural propriety and equitable distribution are compromised.
Bryce Edwards: “Covid-19 spending and wage subsidy is under-scrutinised.” NZ Herald, 10 May 2022.
URL: https://www.nzherald.co.nz/nz/politics/covid-19-spending-and-wage-subsidy-is-under-scrutinised-bryce-edwards-political-roundup/Y6263ZS5TXON4W5WE4VHF4QG2E/
Summary: Edwards critiques the Government’s $74 billion Covid Response and Recovery Fund, particularly the Wage Subsidy Scheme component. He notes that “vested interests and business have been the main beneficiary of opaque and poor decision-making.” The article reveals that of $19 billion given to businesses over two years, just under $800 million was returned, and that only seven businesspeople were being charged with fraud despite 5,535 allegations of misuse. Edwards highlights the Auditor-General’s scathing report suggesting billions may have been incorrectly paid to ineligible businesses, and criticizes the scheme’s “high-trust model” that was easily abused. He highlights how many profitable companies “had their profits inflated by millions of dollars of handouts,” contrasting the leniency shown to these “corporate welfare” recipients with the strict treatment of ordinary welfare beneficiaries.
Bryce Edwards: “Was the Government’s climate plan watered down by lobbying?” 27 May 2022.
URL: https://democracyproject.nz/2022/05/27/bryce-edwards-was-the-governments-climate-plan-watered-down-by-lobbying/
Summary: Discusses whether the government’s Emissions Reduction Plan was unduly influenced by agricultural lobbying, citing commentary from Matthew Hooton and Mike Joy. Highlights the $710 million handout for farmer research from the Emissions Trading Scheme (to which farmers are exempt from contributing directly) as a key point of contention, seen by critics as corporate welfare. The article notes counterarguments that industry figures claimed they hadn’t asked for these specific subsidies, suggesting the government’s motivation might have been to secure the primary sector’s buy-in for broader climate plans.
Bryce Edwards: “How much of our cost-of-living crisis is due to incompetence?” NZ Herald, 19 July 2022.
URL: https://www.nzherald.co.nz/nz/bryce-edwards-how-much-of-our-cost-of-living-crisis-is-due-to-incompetence/5ETY6CXQMDUCTA6EM2GJYAI2T4/
Summary: This article links the Wage Subsidy Scheme to inflation and the cost-of-living crisis. Edwards notes that the Government’s $20 billion Wage Subsidy Scheme “was set up to meet genuine need, but poor design saw much of the $20b flow into the bank accounts of the rich.” He cites Treasury’s warning that Covid stimulus policies would worsen inequality and reports that corporate profits spiked by 39 percent or $20 billion in the year to March 2022. The piece argues that massive Covid expenditure advantaged the rich and contributed to inflation that hurt ordinary New Zealanders.
Bryce Edwards: “Clawing back $7bn of corporate welfare.” 2 December 2022.
URL: https://democracyproject.nz/2022/12/02/bryce-edwards-clawing-back-7bn-of-corporate-welfare/
Summary: This piece discusses the legal efforts initiated by philanthropists Grant and Marilyn Nelson, who sought a Judicial Review to compel state agencies to recover an estimated $7 billion in Covid-19 wage subsidies allegedly overpaid or paid to ineligible businesses.19 Edwards highlights the central argument that the Auditor-General should require the Ministry of Social Development (MSD) to recoup these funds. The article contrasts MSD’s reportedly lenient approach with businesses regarding the wage subsidy to its typically stricter handling of beneficiary overpayments. The unrecovered subsidies are framed as “corporate welfare” that exacerbates existing inequalities and places an undue long-term burden on taxpayers. Relevance to Corporate Welfare: Directly addresses the concept of “clawing back” funds identified as corporate welfare, specifically focusing on the Wage Subsidy Scheme. It underscores the financial scale of potentially misallocated assistance and delves into the legal and ethical arguments surrounding its recovery, highlighting the implications for public finance and fairness.
Bryce Edwards: “Budget 2024 shows NZ has some tough choices to make – Scandinavia or Singapore.” 31 May 2024.
URL: https://democracyproject.nz/2024/05/31/bryce-edwards-budget-2024-shows-nz-has-some-tough-choices-to-make-scandinavia-or-singapore/
Summary: This article analyses the 2024 Budget, noting that while it aims for “tax relief” and “fiscal responsibility,” it continues a pattern of relatively high government spending alongside relatively low taxation, creating an unsustainable mix.20 Edwards cites economist Eric Crampton’s observation that the Budget continues to fund “unnecessary expenditure – or ‘corporate welfare’,” specifically mentioning ongoing subsidies for videogame makers as an example. The piece critiques the lack of a clear, coherent economic direction and the embedding of high state spending, portions of which benefit corporate interests without clearly demonstrated public gain or rigorous justification. Relevance to Corporate Welfare: Discusses the continuation of specific corporate subsidies (e.g., for videogame makers) within the broader budgetary context. This illustrates how corporate welfare can persist as an accepted part of government expenditure even amidst fiscal pressures and wider debates about the overall size, role, and efficiency of the state.
Bryce Edwards: “What business is lobbying government for.” NZ Herald, 9 October 2024.
URL: https://www.nzherald.co.nz/business/what-business-is-lobbying-government-for-bryce-edwards-political-roundup/JN5ONDVFPRFGVMMRET3NF7FBYQ/
Summary: This political roundup details the lobbying efforts of New Zealand CEOs and business interests, as revealed by the NZ Herald’s “Mood of the Boardroom” survey. Key demands from the business elite include significant cuts to the company tax rate (from 28% to 25%, with some advocating for rates as low as Singapore’s 17%), and various forms of tax relief for “ultra-rich” individuals and their investments. These include changes to the taxation of trusts, the reintroduction of tax depreciation for buildings, and more investor-friendly Foreign Investment Fund (FIF) rules. While not direct subsidies, these sought-after tax changes represent substantial potential financial benefits to corporations and high-net-worth individuals. Relevance to Corporate Welfare: Highlights how influential business lobbies actively seek favourable tax policies that would result in considerable financial advantages for corporations and wealthy individuals. Such tax concessions, if enacted, can be considered a form of corporate welfare by significantly reducing the tax burden on specific, already advantaged groups, potentially at the expense of public revenue that could fund public services or lead to a greater tax burden on other segments of society.
Bryce Edwards: “Auditor-General damns the Govt’s charity funding processes.” NZ Herald, 12 October 2024.
URL: https://www.nzherald.co.nz/nz/auditor-general-damns-govts-charity-funding-processes-bryce-edwards-political-roundup/MJPG43ZVFRASDEZP7C6W4VWOGM/
Summary: Covers the Auditor-General’s criticism of how Minister Matt Doocey allocated $24 million to Mike King’s Gumboot Friday charity without proper process. While focused on charity funding, Edwards frames this as part of a broader pattern of favouritism in public funding, noting that historically “public money wasn’t just dished out to the mates of politicians.” The case illustrates how personal relationships between politicians and beneficiaries can lead to improper allocation of taxpayer funds, with Edwards highlighting it as “an example of favouritism and bypassing rules in public funding.”
Bryce Edwards: “Investment Boost or Corporate Welfare?” 26 May 2025.
URL: https://theintegrityinstitute.substack.com/p/integrity-briefing-investment-boost
Summary: This Integrity Briefing critically examines the New Zealand Government’s “Investment Boost” initiative, which was presented as a centrepiece of the 2025 Budget. = The piece questions whether this “massive business tax incentive” genuinely fosters widespread productive investment that benefits the broader economy or primarily serves as a corporate handout, benefiting select businesses without commensurate public gain or accountability. It likely analyses the specific mechanics of the policy, its projected fiscal costs versus anticipated economic benefits, and the political rhetoric surrounding its introduction, framing it within the wider discourse on corporate welfare and the effectiveness of such supply-side incentives. Relevance to Corporate Welfare: Directly analyses a significant government tax incentive (“Investment Boost”) and explicitly questions whether it functions as corporate welfare. This aligns with the bibliography’s core theme by examining a policy that provides financial advantages to businesses, prompting discussion about its distributive effects and overall public value.
Part Two: Investigative Journalism and Media Commentary
NZ Herald: “Callaghan Innovation fund queried.” 12 March 2015.
URL: https://www.nzherald.co.nz/business/callaghan-innovation-fund-queried/YMDJIRIII3MEGVK3R374WP5T6I/
Summary: News report (via BusinessDesk) covering a parliamentary review of Callaghan Innovation, the government’s high-tech R&D grants agency. Opposition MPs raised concerns that Callaghan had been funding failing or dubious companies. In the 2013/14 year reviewed, Callaghan gave grants to firms that later collapsed or left New Zealand. Examples included a $333k grant to a magazine publisher that was halted amid Serious Fraud Office investigation, $287k to a home builder that went bust owing $17.5m, and money to a mining project that never secured permits. Then-CEO Mary Quin defended the agency by saying some failure is inevitable in innovation, but critics like MP David Cunliffe argued the criteria for these grants were too loose. The piece underscores the risk of “picking winners” with public funds – a form of corporate welfare that may waste taxpayer money when due diligence is lacking.
Matt Nippert: “Inside Wellywood: How NZ taxpayers forked out $575 million for Hollywood to film here.” NZ Herald, 23 June 2018.
Summary: An investigative report (Weekend Herald) by business journalist Matt Nippert that tallied the total cost of New Zealand’s film industry incentives. Nippert found that since the introduction of the NZ Screen Production Grant in 2010, about $575m of public funds had been paid out to attract international film and TV projects. The article delves into who benefits from these grants – noting that major Hollywood studios received hundreds of millions – and whether the promised economic benefits (jobs, tourism, “brand NZ” exposure) justify the expense. It was one of the first comprehensive attempts to put a figure on “Wellywood” subsidies, and it fueled discussion on whether such rebates are smart investment or simply “corporate welfare” for Hollywood.
Colin Peacock. “Shining a light on our movie money.” RNZ, 8 July 2018.
URL: https://www.rnz.co.nz/news/mediawatch/548073/shining-a-light-on-our-movie-money
Summary: A media analysis piece that discusses the NZ Herald’s investigation into film industry subsidies. Peacock notes the Herald’s “Inside Wellywood” series revealed New Zealand had spent $575 million subsidising Hollywood productions since 2010. Despite this huge outlay (via the Screen Production Grant scheme), there is little consensus on whether the economic benefits have outweighed the costs. The article highlights how some TV shows even added contrived Kiwi content (or in one case, filmed in Fiji while getting NZ money) to qualify for subsidies – raising questions about policy integrity. This expose sparked debate on the wisdom of generous film rebates, with commentators weighing the promotional value of hosting big productions against the cost to taxpayers.
Jason Walls (NZ Herald): “National slams the Government’s Provincial Growth Fund, saying it’s not delivering for Kiwis.”
NZ Herald, 4 February 2019.
Summary: This article reports on early political criticism of the $3 billion Provincial Growth Fund (PGF) by the then-Opposition National Party.5 Based on data it provided, National asserted that only a small fraction (3.4%) of the $850 million in PGF funding announced to date had actually been disbursed in the fund’s first year, resulting in the creation of only 54 jobs at an average cost equivalent to $490,191 per job. National’s economic and regional development spokesman, Paul Goldsmith, described this as a “dismal outcome” and accused the Government of obfuscation, suggesting the PGF was more focused on New Zealand First’s re-election prospects. Regional Economic Development Minister Shane Jones acknowledged that some PGF projects would take time to establish and admitted the PGF involved a “quite a red-tape process.” Relevance to Corporate Welfare: Highlights early political debate and scrutiny over a significant government fund aimed at regional development, which involved substantial investments in or loans to businesses and infrastructure projects. Accusations of inefficiency, political motivation, high cost per job, and lack of tangible outcomes raise pertinent questions about whether the PGF was an effective development policy or risked becoming a vehicle for politically directed corporate welfare.
Thomas Coughlan: “Beware corporate welfare in disguise.” Newsroom, 16 April 2019.
URL: https://www.newsroom.co.nz/2019/04/16/beware-corporate-welfare-in-disguise
Summary: A commentary by Thomas Coughlan (then a Newsroom reporter) arguing that some government programs billed as social support are really corporate welfare in disguise. In particular, Coughlan examines the Working for Families scheme and draws parallels to a historical policy known as the Speenhamland system (an 18th-century poor relief mechanism that topped up low wages with parish funds, ultimately deemed a failure). He suggests that, like Speenhamland enabled landowners to pay poverty wages, modern wage subsidies and tax credits (such as Working for Families) allow today’s employers to keep wages lower than a true living wage, knowing the government will supplement workers’ incomes. The article urges readers to reconsider policies like WFF not just as welfare for families, but as indirect subsidies that prop up low-paying industries. Relevance: This piece adds historical context to the critique that when the state intervenes to alleviate poverty (through wage top-ups, etc.), it may inadvertently be subsidizing employers – effectively a form of corporate welfare since businesses, rather than workers, ultimately reap the financial advantage of the support.
Guyon Espiner and Kate Newton: “Wealthy and powerful NZ First Foundation donors revealed.” RNZ, 3 February 2020.
URL: https://www.rnz.co.nz/news/in-depth/408785/wealthy-and-powerful-nz-first-foundation-donors-revealed
Summary: While focused on political donations, this investigation revealed connections between wealthy business donors and government subsidies. The story exposed how businesses that donated to political parties often benefited from government programs, including various forms of corporate welfare such as Provincial Growth Fund grants. This highlighted the intersection between political influence and access to taxpayer subsidies.
Schouten, Vanessa: “The wage subsidy is for those in need, don’t abuse it.” The Spinoff, 18 May 2020.
URL: https://thespinoff.co.nz/business/18-05-2020/the-wage-subsidy-is-for-those-in-need-dont-abuse-it
Summary: This opinion piece argues that businesses, especially profitable ones, had a moral obligation not to claim the wage subsidy if they didn’t genuinely need it to retain staff, even if they met the legal criteria. Schouten contends that exploiting the “high trust” model during a national crisis was ethically wrong and akin to price-gouging, emphasizing that the subsidy’s intent was to protect jobs, not business profits.12
Stewart Sowman-Lund (The Spinoff): “What’s the deal with agriculture, the emissions plan and its ETS exemption?”
The Spinoff, 16 May 2022.
Summary: This article discusses the government’s $2.9 billion Emissions Reduction Plan, which included various funding initiatives aimed at helping New Zealand meet its climate targets. A key element of the political reaction reported is the National Party’s criticism of the plan. Then-leader Christopher Luxon stated, “Too much of the new spending will go to corporate welfare and more working groups. The government is proposing to give hundreds of millions of dollars to companies for investments they should be making anyway.” While the government, through then-Finance Minister Grant Robertson, disputed this characterization, the accusation itself highlights how government spending aimed at climate change mitigation, particularly funds directed towards businesses for decarbonisation efforts, can be framed and debated as corporate welfare. Relevance to Corporate Welfare: Illustrates how government spending initiatives, even those with environmental objectives like emissions reduction, can be perceived and criticized as corporate welfare. The core of such criticism is often that public funds are being given to businesses for activities they should or would undertake independently, or that the benefits disproportionately favour corporate recipients over broader public good.
Bernard Hickey: “Why Covid windfall taxes make sense.” interest.co.nz, 25 July 2022.
Summary: Economic commentator Bernard Hickey argues that those who profited during the Covid-19 era – notably large companies and asset owners – should return some of their windfall gains to the public. He points out that the Government paid around $20 billion in wage subsidies to businesses in 2020–21, yet less than $1b was ever paid back, even as many firms emerged from the pandemic with robust profits. At the same time, ultra-loose monetary policy drove up asset values, creating an estimated $621 billion in untaxed wealth gains for households (especially property owners). Hickey suggests it’s a “massive Covid injustice” that those who did well (thanks in part to government largesse and economic policy) aren’t required to compensate those who fared poorly. He proposes “Covid windfall refunds” – essentially one-off taxes or voluntary repayments – such as asking profitable companies to return the wage subsidies they didn’t ultimately need, and imposing a special tax on speculative property gains. The crux of the piece is that a huge transfer to businesses and the wealthy occurred via public pandemic support and market dynamics, amounting to a form of corporate welfare and wealth redistribution upward. Hickey’s call for redress emphasizes the ethical and fiscal case to claw back some of that windfall to help cover the pandemic’s costs or assist those left worse off.
Dan Brunskill: “Auditor-General lacks confidence that Provincial Growth Fund money is being well spent.” Interest.co.nz, 12 June 2023.
Summary: A public policy news story on a damning assessment by the Auditor-General of the Provincial Growth Fund (PGF). The PGF was a $3 billion regional development fund (2018–2020) championed by NZ First, with $640m later repurposed for post-Covid economic recovery. The Auditor-General’s review letter to Parliament in 2023 found the PGF’s hurried Covid-era “reset” had inadequate scrutiny and unclear results. In particular, John Ryan (AG) wrote that not enough attention was paid to whether PGF investments were delivering value for money. Key elements of good process were missing, and the AG “lacks confidence” that the spending was effective. Brunskill notes the AG concluded the rushed scheme did not meet even low expectations – the process was not fully “fit for purpose”. This reporting underlines concerns that the PGF – criticized by some as regional corporate welfare – was poorly managed and potentially wasteful.
John Weekes: “Covid-19 wage subsidies: The top 10 company repayments to the Government.” NZ Herald, 1 August 2023.
Summary: A news feature listing the largest voluntary repayments of wage subsidies by New Zealand companies. By mid-2023, ten firms had voluntarily returned a total of almost $200 million in wage subsidy funds – roughly a quarter of all money repaid nationwide. Weekes explains that these refunds came after public and political pressure on profitable companies that took the subsidy in 2020. The article (Herald Premium) names the top paybacks – likely including major corporates in retail, construction, etc. – and notes that while many companies did the right thing by returning excess funds, the government did not mandate any repayment. This coverage provides insight into how the wage subsidy, initially a no-questions-asked lifeline, later led to moral suasion on firms to give back unneeded taxpayer support.
Bruce Curtis: “Corporate welfare for agribusiness.” 2 June 2025.
URL: https://theintegrityinstitute.substack.com/p/integrity-briefing-corporate-welfare
Summary: Curtis shines a light on the longstanding subsidies and special treatment enjoyed by New Zealand’s agriculture sector. Drawing on industry sources like KPMG’s Agribusiness Agenda, he argues that agribusiness has “an almost untouchable status” in NZ, often influencing policy to its advantage. The briefing details how government support (for example, taxpayer-funded irrigation schemes, R&D grants, and an exemption from full carbon pricing for farmers) effectively shifts costs off agribusiness and onto the public. It also critiques how environmental and climate concerns are downplayed in favour of short-term profits. Edwards raises integrity issues, noting the close ties between government and primary industry lobbyists, and questions whether this “farming corporate welfare” is undermining public trust in policymaking.
Part Three: Academic and Research Resources
Trinh Le & Adam B. Jaffe: “The impact of R&D subsidy on innovation: evidence from New Zealand firms.” Economics of Innovation and New Technology, 2016.
URL: https://www.nber.org/papers/w21479
Summary: This academic study used a large database linking administrative and tax data to examine whether R&D grants led to increased innovation. The research found that while grants almost doubled the probability of firms introducing new products, there was little evidence of differential effects between small and large firms. Importantly, the study raised questions about the cost-effectiveness of subsidies, finding that much of the funding went to firms that would have innovated anyway.
Wikipedia: “Tiwai Point Aluminium Smelter.”
Wikipedia (Ongoing Updates)
URL: https://en.wikipedia.org/wiki/Tiwai_Point_Aluminium_Smelter
Summary: This comprehensive Wikipedia article documents the history of the Tiwai Point Aluminium Smelter, including multiple instances of government involvement and financial assistance to ensure its continued operation amid threats of closure by its majority owner, Rio Tinto.10 A notable direct subsidy was a $30 million payment from the New Zealand government to NZAS (New Zealand Aluminium Smelters) in August 2013. Beyond direct payments, the smelter has benefited from periodically renegotiated electricity prices with Meridian Energy (a majority state-owned enterprise), including a significant price reduction reported in 2021 to keep the smelter operational until December 2024, and new 20-year supply contracts agreed in May 2024 with Meridian, Contact Energy, and Mercury. These deals often occurred under duress, with the smelter’s foreign owners leveraging the threat of closure and associated job losses. A One News report from May 2024 framed the latest 20-year deal positively, emphasizing the expected regional benefits and energy security contributions. Relevance to Corporate Welfare: Documents a long-running and high-profile case of a major industrial enterprise receiving direct government payments and favourable energy pricing (from a SOE, involving complex public interest considerations) to ensure its continued operation. This is a classic example of industry-specific assistance frequently debated as corporate welfare, especially given the smelter’s foreign ownership and its significant impact on the national electricity market.
