5AA MORNINGS WITH LEON BYNER
THURSDAY, 17 FEBRUARY 2021
SUBJECTS: Billionaires benefiting from JobKeeper.
LEON BYNER, HOST: I want to talk about JobKeeper because the situation is, I always understood, that if you were eligible as a business for JobKeeper, your turnover had to be down about 30 per cent or more in order to get it. But things have moved on somewhat and we now see that according to reports from our next guest, who is a gifted economist, at least 11 billionaires last year received dividends totalling tens of millions of dollars from companies that received JobKeeper subsidies designed to keep workers employed. Now my question is if that is true, how did those companies manage to qualify for JobKeeper when clearly their turnover wasn't down 30 per cent? So let's see if we can get some answers on this and talk to the Shadow Assistant Minister for Treasury, Dr Andrew Leigh. Andrew, can you answer that?
ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY AND CHARITIES: G’day, Leon. Great to be with you. The JobKeeper program allowed you to claim based on either an actual downturn or a forecast downturn. So we don't know whether companies claimed because they told the tax office they were going to be worse off, or because they actually had a couple of months where they were worse off. But we do know that there's plenty of companies that claimed JobKeeper who had their best ever profit year in 2020. That includes Premier Investments – which owns Smiggle, Just Jeans and Portmans – which did so well it could afford to pay a CEO a $2.5 million bonus. A bonus that was financed by your listeners through the JobKeeper program. We've seen many other billionaires benefiting because they own shares in companies that received JobKeeper, but then paid out significant dividends to their owners.
BYNER: Are we saying that the way in which we have criteria that you must meet in order to get JobKeeper is too broad?
LEIGH: The aim was to get money out the door, and so I don't fault the government for wanting to get JobKeeper going immediately. What I do fault them for is their secrecy over this. They haven't levelled with the Australian people as to how much money was paid to firms that said their profits were going to fall 50 per cent but then didn't actually have a 50 per cent drop in profits. They've got the Business Activity Statements, they’ve got companies’ tax returns, but they're keeping all of that information secret from the very people that pay the bills. They're treating this like it's Liberal Party money, rather than being taxpayer money.
BYNER: I’ve got a very obvious question, and that is that haven’t some of these people whose forecasts were wrong - and we know that, I mean we've had Bob Gottliebsen on earlier this morning, talking about a boom in so many areas of business, not all but very many. So in that case, you'd think that some of the companies would have to return the money, wouldn't you?
LEIGH: That wasn't part of the deal, and the companies in many cases have enjoyed significant profits. Some have voluntarily done the right thing. A shout out to Domino's, Toyota Australia and Iluka, among those that have chosen to repay all of their JobKeeper. Other firms have repaid part of their JobKeeper - Nick Scali is one of those. But many firms have just decided to hang on to it. And that's in contradiction not only to the ethics and values of most Australians, but also to the professed ethics of these companies themselves. They say they're there for their customers and their broader community. But when push comes to shove, they're hanging on to the money despite having extraordinary profits.
BYNER: So in your opinion, Andrew Leigh, what's going to happen from here to make sure that the money is targeted where it needs to be?
LEIGH: Firms need to consider whether or not they ought to be paying money back. Today, we had an investment bank Moelis announce that it received $3 million of JobKeeper, despite paying its executives millions of dollars in bonuses. They ought to be handing the money back. And then there's a job for the government - they ought to be out there being fully transparent as to what's available. Now what's strange about this, Leon, is you've got me as a Labor MP calling on firms to return money to the government. You’d think the government would be out there as well, if they cared about the budget bottom line and the fact they're driving debt towards a trillion dollars. But Scott Morrison, the man behind RoboDebt, was happy to persecute social security recipients but he's not happy to ask billionaires to urge their companies to hand the money back.
BYNER: So if you got into government at the next election - and that could be sometime late this year, I know there's a few months to go, if and when that happens - would you change anything?
LEIGH: We'd have much more transparency over the JobKeeper scheme. Australians have a right to know how much of their nearly $100 billion went to firms who said they're going to have a profit downturn and then had their best ever profit year. For every one of your listeners, Leon, they paid almost $4,000 for the JobKeeper program. So every one of your listeners is invested in this and has a right to know how their money was spent.
BYNER: I go back to my original point, though, when I covered this in the beginning. Was it not always the case that to get the JobKeeper, you had to show a downturn of 30 per cent? Was that not the case?
LEIGH: For firms below a billion dollars, it was 30 per cent. For firms above a billion dollars, it was 50 per cent. And then you could either get it through a forecast downturn or an actual downturn. In the case of retailers, some closed their stores when the pandemic hit, so they did have a brief downturn. But then sales came roaring back, they opened up to online sales, and that more than made up for what they'd lost. In those instances, firms like Premier Investments should hand the money back to the taxpayer.
BYNER: Alright. So in your view, and you would have had some idea of a broad figure, how much money should the government or the taxpayer get back? Given that many of the people who've got it, didn't need it and didn't actually qualify, but we rely on their goodwill to hand it back.
LEIGH: If firms were doing the right thing, it'd be hundreds of millions of dollars-
BYNER: That’s a lot of money.
LEIGH: Absolutely. And at a time when the government is saying that it can't afford to pay jobseekers more than 40 bucks a day, this is money that we desperately need in the budget. We’ve got a million people out of work, another million people wanting more hours. The Australian economy is still doing it tough and we won't be having unemployment back down to where it was in 2019 for a couple of years. So we need more energy on those who need it, and less money flowing from taxpayers to billionaires.
BYNER: Just a question. I had Bob Gottliebsen on from the Australian and I asked him a general question about the Australian economy, how well it's going. He said it's going gangbusters. Do you agree with that?
LEIGH: It’s getting back to where it was in 2019, which was a pretty stagnant economy. Most people aren't seeing the wage growth, most people aren't seeing the job security that they hope for. Scott Morrison reckons it's alright if you've got any job. Labor reckons you ought to have a job that is secure, and which pays well enough in order to be able to support a family and pay a mortgage. Right now, many Australians don't have that sort of stability of employment. They don't have the steady pay cheque. They don't have the wage growth that Australia's billionaires have enjoyed over the last year.
BYNER: Andrew Leigh, thank you. That's the Shadow Assistant Minister for Treasury, Dr Andrew Leigh.
Authorised by Paul Erickson, ALP, Canberra.