Australians deserve to know where JobKeeper went – it shouldn’t be a state secret
Thursday, 2 September 2021
As economies locked down in early 2020, many countries around the world established wage subsidy schemes. Economists know that employment relationships are easier to break than make. So wage subsidy schemes incentivise firms to maintain employment through a temporary slump.
The British scheme was called the job retention scheme. In New Zealand, it was the Covid wage subsidy. Canada set up the Canada emergency wage subsidy. The United States created the paycheck protection program.
Some of these schemes were established by progressive governments; others by conservative governments. But whether it was Johnson or Ardern, Trudeau or Trump, other countries’ wage subsidy schemes had one thing in common: full transparency. Taxpayers could log on to a website and find out the names of every firm that got wage subsidies.
Transparency isn’t a left- or right-wing value; it’s simply good government. It reflects the fact that taxpayers are the people who pay the government’s bills, and taxpayers should know how the money is spent. As former US supreme court Justice Louis Brandeis put it, sunlight is the best disinfectant.
Australia too created a wage subsidy scheme (though not before Scott Morrison called it a “dangerous” idea). Yet JobKeeper didn’t include any transparency. The government provided no information about which firms received JobKeeper. None, zilch, nada.
The main reason we know about JobKeeper recipients is because the Australian Securities and Investments Commission required that listed firms disclose to shareholders and the public how much JobKeeper they had received. This wasn’t part of the design of the scheme. It happened after the JobKeeper legislation passed parliament.
Without the corporate watchdog’s decision to require listed firms to disclose their JobKeeper receipt, Australians would not know that luxury car dealer AP Eagers got $130m in JobKeeper, despite accelerating profits. We wouldn’t know about jewellery seller Lovisa, part owned by Monaco-based billionaire Brett Blundy, that got $23m in JobKeeper and other subsidies despite sparkling profits. We’d be ignorant about Monash IVF that pocketed $10m in JobKeeper, then almost doubled its CEO’s salary to $1m. And we wouldn’t know about home seller McGrath, which recently saw a 38% increase in revenue, yet shows no sign of returning its $4m in JobKeeper.
Giving corporate welfare to firms with increasing turnover cannot have saved a single job. It was waste on a gargantuan scale
These companies may have all been entitled to JobKeeper when they received it, but they have a choice about whether to repay now that their expected losses have not come to pass.
If Harvey Norman knows how to do one thing, it’s advertise. So when Harvey Norman this week announced that it would repay $6m in JobKeeper received by its head office, the company inadvertently created the best possible advertisement for JobKeeper transparency. Six months earlier, pugnacious founder Gerry Harvey had bluntly refused to repay JobKeeper despite the company recording a massive profit, but after concerted public pressure, the company buckled. Without the corporate disclosure required by Asic, it’s hard to imagine Harvey Norman repaying it.
Thanks to figures provided to me by the Parliamentary Budget Office, we know that $13bn in JobKeeper went to firms with rising revenues. That’s a terrifyingly large amount of money – almost $1,000 for every adult, and more than the federal government provides to public schools each year. Almost by definition, giving corporate welfare to firms with increasing turnover cannot have saved a single job. It was waste on a gargantuan scale, and it has generated outrage in the business community. Peter Strong, former head of the Council of Small Business Organisations Australia, described firms that have kept JobKeeper despite ultimately recording massive profits as “not theft but pretty close to it”. In other countries, whole governments have resigned for less.
Yet because JobKeeper was shrouded in secrecy, Australians know the scale of the waste, but not its details. Listed entities account for just 3% of all JobKeeper, according to analysis by Ownership Matters. That means that almost 97% of JobKeeper payments remain a state secret.
To shine a light on the JobKeeper scandal, Labor has supported the creation of a public register of all JobKeeper recipients that have a turnover above $10m (the tax office’s cutoff for a small business). We believe it is only fair for Australians to know how our money was spent. Our call for transparency has been supported by conservative commentators and editorialists alike.
Absurdly, when we attempted to enact this measure in the Senate, the Morrison government did a deal with One Nation to provide a faux transparency register. Their register would disclose JobKeeper receipt – but only by companies listed on the sharemarket. In other words, the government will set up a public register to provide taxpayers with information that is already public. The 97% of JobKeeper that went to unlisted entities will remain confidential.
Like a biscuit jar raider who won’t take their hand out from behind their back, the Morrison government knows they’ve done the wrong thing. They know that more transparency will only fuel outrage at the greatest smash-and-grab raid on public finances in Australian history.
Nothing to hide, Mr Morrison? Then be honest and tell us how you spent our money.
This opinion piece was first published in The Guardian on Thursday, 2 September 2021
Authorised by Paul Erickson, ALP, Canberra