Why are taxpayers subsidising wages at McDonalds?

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Thu, 02 Jul 2009 12:00a.m.

The fast food giant is already making plenty of money in this recession. In the last financial year McDonalds made a profit of $23m, after tax.

But during the next five years it's going to further benefit from the generosity of tax-payers.

Under an agreement with Work and Income, for each unemployed worker McDonalds hires, it will qualify for a subsidy of up to $16,000 a year.

Effectively Kiwis are subsidising the worker's weekly wage to the tune of up $300 a week.

So, McDonalds gets staff extra cheap, which is nice for their bottom line.

Campbell Live asked Social Development and Employment Minister Paula Bennett, what's in it for the rest of us?

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Comments

06 Jan 2010 11:55a.m.

Joel wrote:

As a Tax payer also I find this shocking. A company that makes over 15 million in profit a year in NZ and more throughout the world is being paid by the New Zealand Government to pay the wages of there staff. Could this be why Mcdonald's have been allowed to build so many of their 30 new restaurants right next to residential houses.

05 Jul 2009 05:07p.m.

Alex wrote:

... corporate welfare, short and simple. There is nothing new here. Labour and National governments have done this for decades. The major concern with this type of scheme (Subsidizing Macdonalds) is that it is out of step with Bill English's budget rhetoric for one; remember him talking about economic recovery through growing the economy? And two, and more importantly, basic economics vis a vis economic recovery and sustainable growth, that is, growth that will keep New zealand and New Zealanders living in a first world country. If New Zealand is going to come out of this recession sronger and more able to face the future as a first world nation it won't be because we're all 'employed' per se, but that those employed are in high end, competitive, globally relevant, value add sectors of the economy. Government funding of the type talked of hear need to be targeted to future proofed sectors of the economy, not low end, semi skilled domestic oriented jobs. These will grow anyway. Unforunately, if this is the best National can do, they will either be a one term government or this country will not see real economic recovery for a very, very long time.

05 Jul 2009 02:08p.m.

Alex wrote:

This does nothing but transfer wealth from the public at large to business. Typical National, pretending to look out for the poor but actually taking money off the rest of us to give to the already rich.

03 Jul 2009 10:34a.m.

Tony wrote:

Nice to see that I am not the only one with a sense of concern over this issue. The National party throughout its election campaign promised to New Zealand voters "we can do better", aspiration not envy was the catch-cry. We now learn that New Zealanders who are unemployed can aspire to become employees of the growing fast food business, fully endorsed by the new government. I can't see that the skills learned will be useful in either up skilling New Zealanders or earning more in international trade. The skills learned in the fast food trade have very limited practical use or benefit. Interesting that any voices of dissent such as the OAC and FOE are being shut down by having their funding cut off. This is rather like New Zealand rugby removing South Africa and Australia from the Super 14 so that we can be certain a New Zealand team will win the championship. In fairness to the government, the employment benefits in expanding McDonald's doesn't just end with those flipping hamburgers. It will ensure that those employed as cardiologists, oncologists, diabetologists, laparoscopists, as well as pharmaceutical companies, Jenny Craigs, to name a few will have plenty of work available to them.

03 Jul 2009 09:58a.m.

Alien wrote:

of course Guy McDonalds places are typically individual owned by ummm, New Zealander's. And people on a benefit who were put to work into McD's under Labour also meant McD's got finical assistance taking them. Nothing new. It's just now a deal has been signed to staff the 30 new places with 7,000 people off the benefits, great work. Way A way to show what an A you are. Teachers are heavily funded in their study, as are medical students.

02 Jul 2009 11:49p.m.

A wrote:

So let me get this straight - the government can't ensure jobs for our manufacturers, nurses or teachers, but fast food is the future of our nation?

No wonder they're cutting social work jobs - it's Key's policy to have a nation of parents who feed their children fast food (and probably use TV as a babysitter).

I suppose prison privatisation and "double bunking" will clean up the mess, according to his model.

02 Jul 2009 10:16p.m.

Lisa wrote:

It's also annoying that Winz always go on about helping "low skilled" people into jobs. Low skilled apparently means you only have two school cert papers. But there are educated people without jobs and they aren't entitled to any free training courses or work subsidies through Winz.
And yes subsidizing a New Zealand company would make a lot more sense.

02 Jul 2009 09:16p.m.

Kathleen wrote:

My son works at McDonalds we cant understand why new staff keep comming on board when they will not give more an regular hours to allready excisting staff it does not make sense so why do they want to get subsidised for more staff from tax payers come on McDonalds may be the public sould no how McDonalds really opperate

02 Jul 2009 08:30p.m.

Guy wrote:

Disgraceful. Why, of all companies, McDonalds - one of the biggest and most profitable companies in the world? Why not a NZ company? Why not one that uses real skills? Bennett's insistence that learning how to flip a burger is 'training' is outrageous and insulting.

02 Jul 2009 08:22p.m.

Mark wrote:

As a tax payer im discusted that we are paying up front to a company that makes a profit of $23m to employ people in fast food market, I would rather see our tax payers money go to save jobs with companys that are strugling and having to close up because market and high taxes and no help from the goverment, if there are jobs going at macdonalds we are they not forking out the wages out of there profits. AS the say on Target SHAME ON YOU!!macdoald.
Realy This Sucks!