2GB MONEY NEWS
THURSDAY, 10 SEPTEMBER 2020
SUBJECT: JobKeeper, BonusKeeper, DividendKeeper
BROOKE CORTE, HOST: Dr Andrew Leigh is the Shadow Assistant Minister for Treasury. Welcome to Money News, Andrew Leigh. Do you reckon it passes the sniff test?
ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY AND CHARITIES: I don't, Brooke, and very few people I've spoken to think it does. We had the head of the Business Council Jennifer Westacott out on Sunday, saying that she didn't think that firms receiving government subsidies through JobKeeper should be paying the executives a bonus. It's just one of those basic principles, that if you have to put your hand out to the taxpayer to ask for assistance in order to hold onto your staff, then you shouldn't be paying executive bonuses to those at the very top of the organisation. Yet we've seen some of those firms which are paying bonuses of over a million dollars, despite being in receipt of taxpayer assistance.
CORTE: The BCA as you said, I saw that too, they’ve called it out. Jennifer Westacott. It's tricky though, isn't it? The companies haven't done anything wrong. They met the eligibility requirements for JobKeeper.
LEIGH: Just because something's legal doesn't mean it's morally the right thing to do. People need to recognise that in a crisis like this, we need to pull together. There's a great Australian egalitarian tradition. We're a nation that does prize the notion of working together, and most firms did do the right thing. The purpose for JobKeeper was not to keep billionaires in champagne - it was to keep battlers in jobs. It's called JobKeeper. It's not called BonusKeeper. It's not called DividendKeeper. The fact is if you've got enough money to be paying bonuses, then you should think about doing what the New Zealand company Mainfreight did. They actually went back to the New Zealand government and said ‘we're eligible for the wage subsidy payment, but we don't need it - spend the money on others who need it. Spend the money on people who are living pay cheque to pay cheque, who are worried about how they're going to feed their family’. This is the worst economic downturn in nearly a century, and we don't need to be paying million-dollar bonuses to people on multimillion dollar salaries.
CORTE: Yeah, I don't know what we can do about it though. What else do we do, apart from just identify that maybe the culture of those companies which have done that - taken the money, paid the bonus - maybe I mean, they probably leave a little bit to be desired in terms of their own corporate culture.
LEIGH: Yes, I think we need to put the pressure on those those boards - firms like Accent Group, Qube Holdings, Star Entertainment, IDP education, whose CEO indeed was the best paid CEO in Australia last year, so he hardly needed a $680,000 bonus. It's important too for those firms to recognise that they are among a small number of entities in Australia who are out of step with the business community. They're out of step with public opinion. I think it’d help to if the Prime Minister and the Treasurer were willing to speak out on this. So far, they've been silent as a churchmouse.
CORTE: And is anything changing with the next round of JobKeeper, from what you understand? I haven't seen any changes, maybe the corporates themselves will treat it differently.
LEIGH: I certainly hope that's the case. I mean, there's countries that have done it differently. There's countries that have said if you're getting government assistance through wage subsidy programs, then you can’t pay out dividends. Of course many countries around the world have put in place wage subsidy programs, so that's why Labor encouraged the government to do it so strongly here and it's been the most effective program the government's put in place, saving maybe three quarters of a million jobs. But the program needs to be administered in a way that's ethical and in constant with Australian community values. Firms aren't just there for their shareholders, as you know, Brooke. They’re there for their workers, they're there for the customers, they're there for the community as a whole. That's why we give them the corporate veil. That's why we give them many of the privileges that go with being a corporation.
CORTE: The legislation just passed parliament. You didn't push for these types of changes for the next round, did you?
LEIGH: The discretion of the Treasurer is pretty broad on this. The legislation sets out only general parameters. What we've got now is a program which is looking at phasing down. It’s still got other problems, Brooke. Other countries actually subsidise the exact wage, so an employee on $250 a week gets a wage subsidy of $250 a week. JobKeeper is still a bit clunky. Everybody gets the flat rate payments. So that means that some people are getting too much, which means that the program is more expensive than it needs to be. And that's one of the reasons the government's excluded one million casuals, a whole lot of arts workers, the entire university sector. So it's a program that could certainly do with a lot of tightening up, and also a program that oughtn’t be going to subsidise excessive dividends and massive bonuses.
CORTE: Dr Andrew Leigh, Shadow Assistant Minister for Treasury, thanks for your time on Money News.
LEIGH: Always a pleasure, Brooke.
Authorised by Paul Erickson, ALP, Canberra.