6PR PERTH LIVE
TUESDAY, 1 SEPTEMBER 2020
SUBJECT: JobKeeper payments.
ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY AND CHARITIES: Good afternoon, Olly. Great to be with you and your listeners.
OLIVER PETERSON, HOST: You have named and shamed some businesses which appear to be rorting the JobKeeper scheme.
LEIGH: JobKeeper was designed in order to keep battlers in work, not keep billionaires in champagne. What I've been concerned about is the small number of firms that seem to be using taxpayer subsidies in order to pad profits, and to pay executive salaries and dividends.
PETERSON: This is really odd, Andrew, because I would have thought that a lot of executives in particular in companies would be foregoing their bonuses, perhaps even taking a pay cut as they've asked a lot of staff around the country in various companies to do.
LEIGH: Olly, you're totally right. That is what the typical firm has done. Most firms have done right – they’ve extended sick leave, managers have tightened their belts, they've recognised we're all in it together. But there's just a few who seem to have missed the memo, not to have managed to get it right. And it’s those firms whose behaviour I think just falls outside the social contract. Firms have to remember, Olly, that they're not just there for their shareholders – they’re there for their customers, their employees and the broader community.
PETERSON: Who was some of the worst, which are some of the worst companies exploiting this scheme, Andrew?
LEIGH: We’ve seen furniture firm Nick Scali receiving $4 million from Australian and New Zealand taxpayers, and then paying out a dividend that'll be worth around $2 million to the Scali family. We've got IDP Education getting $4 million in JobKeeper, and paying a $600,000 bonus to their CEO, who last year was the best paid CEO in Australia, on $37 million. We've seen Star Casino getting $64 million in JobKeeper, and giving its CEO an equity bonus that's worth about $800,000.
PETERSON: It's remarkable really, Andrew. If you're receiving JobKeeper, surely you cannot simply pay your executives bonuses, or perhaps as I said before, you need to consider taking a wage cut.
LEIGH: If your firm's not getting JobKeeper, they can do what they like. But the fact is, if you're getting subsidies from the taxpayer, that shouldn't be used to support dividends and huge bonuses. And that's the approach that most firms in Australia have taken. And, indeed, there's been some firms that have gone a little further. There's one New Zealand firm, which is called Mainfreight, and they actually said “look, we're eligible for taxpayer subsidies, but we don't deserve it - we don't need it, we'll get through it”. And so they gave it back to the taxpayer to be spent on firms who could use it better. That's exactly the sort of attitude that I would have loved to have seen here.
PETERSON: So you're calling on these firms who may have exploited the scheme to repay that money?
LEIGH: I think it'd be appropriate for them to think about whether if they’ve got enough money to pay executive bonuses, they've got enough money to give something back to the Australian taxpayer. We know that we're going into the first recession in 30 years as of tomorrow, and we know that around 400,000 Australians will be losing their jobs over the next couple of months. So it's a dire time in the labour market, and the government needs every cent it can get - not to be treated like a mug by firms who think that they can take taxpayer handouts and use them to pad up bonuses or dividends.
PETERSON: The parliament’s obviously going to debate extending the JobKeeper scheme through until March of next year. The examples we've just outlined in this interview, would that be fixed do you imagine, Andrew, by the changes to the JobKeeper scheme? Or would you be looking to move some amendments to make sure that there wouldn't be firms who are able to walk that tightrope and perhaps exploit the taxpayer?
LEIGH: Look Olly, you might be able to find a legislative fix to this, but I actually think the better approach would be just a bit of public pressure on the firms, just to say “look guys, pull your head in, recognise we're all in this together”. Let’s recognise that one of the great things about being an Australian is we don't have this sort of rigid class structure. We're don't put those at the top on a pedestal and kick those down the bottom in the gutter, that we prize this notion of egalitarianism. By drawing on that great Aussie egalitarian ethos, hopefully we can get some of those firms to do the right thing.
PETERSON: Andrew Leigh, I appreciate your time. Thank you very much.
LEIGH: Thank you, Olly.
Authorised by Paul Erickson, ALP, Canberra.