THURSDAY, 18 MARCH 2021
SUBJECT: Morrison Government’s JobKeeper waste exposed.
LEON BYNER, HOST: I'm going to talk to a bloke who is a former professor of economics at the Australian National University, and he's got some very interesting data about JobKeeper. I'm talking about the Shadow Assistant Minister for Treasury, Dr Andrew Leigh. Andrew, thanks for joining us today.
ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY AND CHARITIES: Always a pleasure, Leon.
BYNER: Now, you've uncovered that one fifth of JobKeeper payments made to major listed companies in the second half of last year went to firms who grew their profits during the pandemic. Just explain this.
LEIGH: That’s right, Leon. So JobKeeper could be claimed based on a forecast downturn, but not all firms who said their profits were going to go down actually saw them fall. And this new report from Ownership Matters highlighted that for listed companies, a fifth of the money went to firms that very clearly didn't need it, that had a better 2020 than 2019. You think of firms like Harvey Norman or Premier Investments, which owns Just Jeans and Smiggle - these retailers saw a bonanza profit in 2020. They didn't need money, but they got it anyway. And if these findings are replicated right across the JobKeeper recipients, that would be somewhere between $10 and $20 billion going to firms with rising profits.
BYNER: Andrew, is there any compulsion on their part that because they didn't need it, and it's provable they didn’t, that they need to give it back?
LEIGH: There’s a moral compulsion, I think Leon, but not a legal one. So they're not required to, but all these firms say that they're there for the broader community. If they believe their corporate social responsibility statements, then they'll follow the lead of firms like Domino’s and Toyota Australia that have chosen to hand back JobKeeper they didn’t need.
BYNER: So just give me a figure again, so people in SA know - how much of our money should actually be given back?
LEIGH: It looks like somewhere between $10 and $20 billion. But the thing is we don't really know, Leon, because we don't have the transparency from the government. They've been very cagey about how many firms forecast a downturn and didn't have one, how much of the JobKeeper went to firms that ended up being more highly profitable than the year before. But if these results for public firms hold up, this is waste on a colossal scale. Australia's never seen this kind of waste - $10 to $20 billion going to firms in JobKeeper that didn't need it, that then paid shareholder dividends to billionaires and bonuses to millionaire CEOs.
BYNER: And this includes, by the way - some people know and some will be very surprised to hear this - this includes casino operators.
LEIGH: That right. Crown Casino in Western Australia did pretty well through the pandemic, but were still able to benefit from JobKeeper. You also saw a range of firms in areas like car dealing – AP Eagers that sells luxury cars received over $100 million in JobKeeper. JobKeeper went to an investment bank, it went to a hedge fund. There's a whole lot of firms out there, Leon, who were getting JobKeeper when they didn't need it. And the irony now is the government saying they can't afford to extend JobKeeper to the tourism sector, to the arts sector, to the university sector. They're just going to cut it off at the end of the month, and that could mean a quarter of a million people out of work.
BYNER: So what we're saying by implication is simply this - that because the scheme was of some ill design and it allowed people who probably shouldn't have qualified to get the money, there's now not the money to help those people who would surely definitely qualify.
LEIGH: That right. If they hadn't been throwing so much money at those that didn't need it, there'd be plenty more for battlers right now. This isn't a program that was meant to fund billionaires buying their next racehorse, but it's been used that way. And some of those in corporate Australia have done the right thing. Many haven't done the right thing, and the government's turned a blind eye to it. They've taken exactly the opposite approach to JobKeeper rorts than they've taken to social security recipients with their illegal Robodebt scheme, attempting to chase down $100 here and $100 there. When we're talking about a billion dollars here or a billion dollars there, suddenly Scott Morrison and Josh Frydenberg aren't interested anymore.
BYNER: Alright. So let's forward now - not long away, to the end of this month. And-
LEIGH: I was speaking to a travel agent in my electorate who was employing 16 people at the start of the pandemic. He took that down to 14, but under JobKeeper was able to keep almost everyone on. He tells me now if he doesn't get more support at the end of the month, he's going down to three or four people across his two travel agencies. He's basically going to be closing the doors, and the government's travel package doesn't help him at all. It bypasses travel agents. He's got a lot of expertise in those staff. These are people who've been in the industry for decades, who will be productive workers in his firm, will help a whole lot of people in the future. But without JobKeeper support to tide them through to the end of the travel shutdown, he’s simply not going to be able to keep them on the books.
BYNER: Andrew, I want to keep an eye on this one and I thank you for contacting us this morning too. That's the Shadow Assistant Minister for Treasury, who is a former professor of economics at the ANU, so he knows his stuff and explains it very well.
Authorised by Paul Erickson, ALP, Canberra.