INL Digital Edition April 15, 2020

APRIL 15, 2020
Businesslink
NZME-Stuff merger now becomes life-saving necessity
Tim Murphy
Inside, the pressure building on the
government to step in and save
news media businesses before it
is too late.
For months, some parts of the news
media have been sending out SOS
messages publicly and in intense lobbying
in the shadows of bureaucracy
for urgent Government financial and
regulatory help to keep them alive.
The notable biggies
The most notable were
MediaWorks, which raised the
possible closure of its Three Television
Network, and New Zealand Herald
publisher NZME and its rival Stuff
Ltd, which were pushing hard for a
dispensation from government for a
previously legally rejected merger of
their operations.
Government agencies and ministers
heard the noise, and the New Zealand
First Party was an early adopter of
the StuffMe II merger argument. But,
with their own plans for a restructure
of the two Government-owned broadcasters,
TVNZ and RNZ, stalled by a
reticent Cabinet, the powers-that-be
did not seem to know how to respond
to the urgent private media pleas.
The Covid-19 pandemic and economic
collapse has changed all that.
Will the two media giants be allowed to merge? (RNZ Image)
As with other industries stricken by
the sudden suspension of operations
and evaporation of customers and
revenue, some of the bigger private
media players are on their knees.
The perilous state of their books
and the possibility of insolvency and,
as with the closure of Bauer Media’s
magazines, disappearance of jobs and
media voices, has put the Government
response on extreme alert.
Urgent matters supersede promise
Increasingly, the indications from
the Minister of Finance Grant Robertson
last week that some ‘medium-term’
measures to assist the industry were
being contemplated are now overtaken
by a need for something urgent within
Inland Revenue to waive penalties,
interest for businesses
Venkat Raman
The New Zealand
Inland Revenue
Department has said
that it will write-off
any penalties and interest for
businesses that are unable to
pay taxes on time due to the
impact of COVID-19.
“Don’t worry about
contacting us right now. Get
in touch with us when you
can,” a notification said.
The Department said that
its officials are working to
provide essential services
for business and individual
customers. Payments, including
Working for Families
customers, will still be made.
“We would like employers
to continue to file their
returns as normal so that
we can help to make correct
payments to people. This
would help IRD to work our
the right amounts for people
and helps the Government
continue to respond to what
is happening in the economy,”
the notification said.
Contacting IRD during the
lockdown
The frontline services
of IRD have been closed,
phone services are limited
and hence the most effective
way of accessing services or
seeking information would
be online (www.ird.govt.nz)
through MyIR.
“IRD is still working on all
critical matters related to tax
entitlements and payment
obligations. We know these
are matters causing real
stress and uncertainty and
we are working urgently to
provide as much certainty as
quickly as we can. Please use
our online services to contact
us – preferably through your
myIR account on our www.
ird.govt.nz/covid-19
Ministry of Social Development
(MSD) is responsible
for the administration of the
wage subsidy.
For more information,
please contact www.
workandincome.govt.nz/
covid19support
Wage Subsidies
The Department has
tax-related guidance for
employers about the wage
subsidies.
As Finance Minister Grant
Robertson has emphasised,
employers must pass on
the wage subsidies to the
employees for whom these
have been disbursed and
any breach will be treated
as fraud.
All deductions (such as
PAYE, KiwiSaver and child
support) should be made as
normal.
If the total wage (the
subsidy plus the employer
funded pay) amounts to the
same wages as previously,
the pay and deductions on
their payslip should be the
same.
Employers won’t be liable
for income tax or GST on the
subsidy received from MSD
and will not be entitled to
an income tax deduction for
wages paid out of the wage
subsidy.
Payment Options
The notification said that
IRD would understand if a
business is unable to pay
its taxes on time due to the
impact of Covid-19.
“Get in touch with us
when you can and we will
write-off any penalties and
interest,” it said.
If a business can pay, there
are several options - with
internet banking or using
myIR are the easiest.
Businesses can also make
credit card or debit card
payments over the phone or
set up direct debit payments
through their myIR account.
For further details on
alternative ways to pay your
tax see: https://www.ird.govt.
nz/managing-my-tax/make-apayment/ways-of-paying
Westpac Branches
Only some Westpac
branches will be open one
day a week, on a Wednesday,
during the COVID-19
lockdown. Customers who
can pay their tax bill at their
local Westpac branch will
be unable to do so until they
can visit a branch on its open
day.
https://www.westpac.
co.nz/who-we-are/covid-19/
branches-and-atms/
Instalment arrangements
IRD is enabling more
flexibility and lowering the
threshold for instalment
arrangements set up in
myIR. The new minimum
repayment rates are:
Weekly $20 (previously $50);
Fortnightly $40 (previously
$100); Monthly $80 (previously
$200).
“We recognise this is a
concerning time for tax
agents and customers and
we want to support you
wherever we can through
any current audits or
disputes. We know that you
are under a lot of pressure
and uncertainty currently,
and we want to work with
you on a case by case basis.
This may be by delaying
the progress of an audit or
dispute for a period,” the
notification said.
IRD has decided to extend
the timeframe for filing Basic
Compliance Packages (BCPs).
The new due date is June
30, 2020. Please forward
questions on this to bcp@ird.
govt.nz
weeks.
We could, as early as next week,
learn of immediate measures the state
can take to relieve cost and divert
revenues to media companies. No one
measure would help all the entities,
broadcasters and print/digital, big or
small, in the same way. So a menu of
interventions could follow.
There is understood to be a firming
view among industry insiders that
a green light for changes to the
Commerce Act or an instruction to the
Commerce Commission to make media
mergers achievable - thus preventing
the possible demise of one or both of
NZME or Stuff - is winning favour.
Whether that translates to approval
for such a drastic and politically tricky
measure by the Cabinet is another
thing.
Plurality and diversity
Previous rejections of the StuffMe
proposal were firmly based on
concerns about the plurality of
media voices, diversity and a risk to
democracy of narrowing ownership
of all major newspapers and both the
country’s biggest news websites to
one entity, owned predominantly by
Australian fund managers.
Officialdom seems to have been
spooked that a real risk to NZME
and Stuff has firmed - and a merger,
however politically unappealing, is the
only answer.
The two companies had worked
out, as far back as Friday, March 13,
before the extreme effects of Covid-19
had been felt and before a nationwide
lockdown was on the horizon, terms
for NZME to buy the Stuff operations
off Nine Entertainment of Australia.
It was decided even then to communicate
to anyone who would listen
that a deal for the two companies
was the equivalent of a life or death
requirement.
No one would question that the
companies are both in a worse
position now.
NZME closed its Radio Sport station
and has laid off half its Herald sports
desk, invited voluntary redundancies,
enforced mandatory leave for staff
and made company-wide cuts.
The publications of both companies
13
are bereft of print advertising,
other than for their own products and
services and the Government Covid-19
campaign.
Exploring funding options
Both NZME and MediaWorks have
talked of exploring funding from the
multi-billion dollar state wage subsidy
scheme. Stuff’s position has not been
made public.
Possibly complicating the path
ahead for one of the industry players
under pressure is that its top boss
is understood to have recently
applied for leading executive roles in
Australia, including at that country’s
biggest outdoor advertising company,
Ooh Media.
If the Government has to move fast,
ahead of any commitment to change
the Commerce Act, it is unlikely it
would take equity stakes in private
media companies to shore them up
to prevent failure. But it could offer
bailout loans in the way it did for Air
New Zealand.
The immediate measures, when
they come, will aim to keep the businesses
running while a longer-term
strategy for public and private media
and how they are funded is completed.
The Government took its time
picking up on the media SOS. Is it now
on a rescue mission or one to recover
the corporate bodies?
Tim Murphy is Co-Founder and
Co-Editor of Newsroom. The above
article has been published under a
Special Arrangement.
Essential Workers Leave Scheme launched
Staff Reporter
The government has
launched a new Leave
Scheme to protect
essential workers from
loss of income if they take leave
to comply with public health
regulations.
Workplace Relations and
Safety Iain Minister Lees-Galloway
and Social Development
Minister Carmel Sepuloni
announced the Scheme in Wellington
today as a part of the
efforts to mitigate the adverse
effects of Covid-19.
They noted that while a
number of essential businesses
continue to operate under the
current lockdown conditions,
many are facing a significant
loss of business.
Wage Subsidy applied
“This scheme is for them and
allows them to pay those workers
who need to take leave due
to the COVID-19 Public Health
guidance at the same rates as
the Wage Subsidy Scheme of
$585.80 per week for fulltime
workers and $350.00 per week
for part-time workers,” they
said.
Mr Lees-Galloway said that
that the government is ensuring
that essential workers have the
ability to take leave, and do not
feel pressured to come to work
if they are vulnerable, sick or
otherwise unable to work.
“The Essential Workers Leave
Scheme will enable them to
self-isolate and continue to
receive an income in these
circumstances. It scheme
supports those who are unable
to work from home and need
to self-isolate, or are at higher
risk of becoming sick with
COVID-19, or have a higher risk
person in their bubble,” he said.
Not all workers in essential
businesses will be in this
position, but for those who are,
it is a significant problem. For
some workers this could be for
the duration of the lockdown.
Mr Lees-Galloway said that
the government is ensuring that
communities are supported as
people stay at home to stop the
spread of COVID-19.
Focus on three groups
Ms Sepuloni said that the
Scheme, which will become
effective at 12 pm on Monday,
April 6, 2020, will be administered
by her Ministry.
“The Scheme will focus on
three groups of essential businesses
workers and employers
will be eligible to apply for
those employees under the
scheme,” she said.
They will include (a) Workers
who are self-isolating in
accordance with public health
guidance because they have
contracted the virus or have
come into contact with someone
who has contracted the virus
(or have a dependent they
need to care for who is sick or
self-isolating) (b) Those deemed
at higher risk if they contract
COVID-19, in accordance with
public health guidance and as
such should self-isolate for the
duration of the lockdown (and
potentially longer) and (c) Those
who have household members
who are deemed at higher risk
if they contract COVID-19, in
accordance with public health
and as such should self-isolate
for the duration of the lockdown
(and potentially longer) to
reduce the risk of transmitting
the virus to that household
member.
Ms Sepuloni said that officials
are preparing guidance to support
employers and employees
to discuss what it means to be at
higher risk.
This guidance will be made
available online before the
scheme goes live on Monday,
she said.
The payment process
“Payments will be four-weekly
with the option for essential
businesses to re-apply for those
same workers after four-weeks,
or make further applications
for additional workers who
are eligible at any time, while
the scheme remains open,” Ms
Sepuloni said.
Mr Lees-Galloway said that
employers accessing the scheme
should pay workers at either
their usual weekly income before
COVID-19, if this is less than
the relevant rate provided; or a
minimum of the full leave rate,
if the workers’ usual income
before COVID-19 exceeds the
relevant rate, and in that case
also make best endeavours to
pay at least 80 percent of the
workers’ usual income before
COVID-19. Employees who are
on other forms of paid leave
should be paid at their usual
full rates of pay.
“The scheme will be available
for at least the period while the
nation is at Alert Level 4 public
health restrictions and Ministers
will review the Scheme
after eight weeks to consider
uptake and future needs,” Mr
Lees-Galloway said.