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Summary
- Rocket Lab states internal audit to determine subsidy discrepancy.
- States it shall return subsidy if eligibility glitch
- Pandemic related delay has affected business.
In a recent report, Rocket Lab, the space-based organisation has begun an internal audit in order to determine whether it was indeed eligible for the NZ$2.85m wage subsidy that it had received last year, while the world went through the pandemic and businesses across the world suffered immensely.
They had claimed subsidy from the government for their 408 employees. It was recently stated in the financial statements by the Company that it is unlikely that all the requisites for the subsidy. In a subsequent announcement by the Company, a spokesperson said that the Company shall return the funds if the audit were to find discrepancies and in the eligibility.
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What is this subsidy?
Considering the uncertainty that COVID-19 had brought about in 2020, the government had granted subsidies to many eligible companies to ensure the smooth flow of salaries for a couple of months as well as helping the organization stay afloat while there was little to no profit being made by them due to the shipment delays, reduction in demand and so on.
Rocket Lab spokesperson further said that the Company has witnessed a lot of ups and downs recently, due to the lockdowns and border restrictions amongst other uncertainty caused by COVID-19. It was further stated that due to the inability to launch as well as the manufacturing functions of the Company having been in a standstill, the situation seemed to worsen for them, not being able to generate a stable cash flow, hereby causing the problem.
She said that at that time the Company had determined that the loss of revenue being incurred by the Company would be grounds for eligibility for the payment of the subsidy. They had then kept in mind the immediate effect it was going to have on the wages of the 400+ employees of the organization.
In the Company’s attempt of keeping their dealing transparent in every way, it has stated that if the final audit find that the eligibility criteria was indeed not entirely met, then they shall return the amount to the government.
The subsidy scheme set up by the government helped several businesses during the time of the pandemic and run by the Ministry of Social Development, at one point was responsible for supporting as many as 1.8m jobs across the country. It has especially done well for small businesses that were immediately affected by the Pandemic.
