MONDAY, 19 OCTOBER 2020
SUBJECT: Misuse of JobKeeper.
LEON BYNER, HOST: You've heard of JobKeeper. You know what it is, don't you? Right. Well, there are some in the community who say no, for many companies paying very generous salaries and dividends to their shareholders, we'd rather call it DividendKeeper. This is where companies use the subsidy, which was designed to keep workers hit by the coronavirus recession connected to their jobs, to prop up payments to shareholders. So if that money is being used for this purpose - and it certainly isn't what was legitimately put out by the government, they wanted to do the right thing by the workers. But unfortunately, it's been abused. So let's talk to Labor frontbencher, Andrew Leigh, who's written to more than 200 companies - including Apple, McDonald's, Microsoft - asking them to reveal whether they receive JobKeeper subsidies and use the money to pay shareholder dividends. Dr Andrew Leigh, good morning.
ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY AND CHARITIES: Good morning, Leon. Great to be with you.
BYNER: Do you think you're gonna get an honest answer?
LEIGH: I've certainly gotten some responses rolling in so far, mostly those who are saying that they haven't received it. But I'd like to think that if a firm is receiving significant taxpayer subsidies, that they would respond when a federal Member of Parliament wrote to them to ask them about it.
BYNER: Alright. So how do we know this has happened?
LEIGH: We've already seen it among the listed companies which are required to disclose to the Australian Stock Exchange if they'd received JobKeeper. We know that of the firms that have reported so far, there's 25 large firms that used the money to pay executive bonuses. Seventeen big companies that used it to pay significant dividends. I've got nothing against dividends, but if there's a big stonking dividend going out the door – as we saw from the bull-bar maker ARB - you've got to ask whether this is really the best use of taxpayer funds.
BYNER: Well, let me ask you, what does the law - because you're scrutinising this very carefully, no doubt, which is good. What does the law say about this?
LEIGH: The law is silent on it. But it's one of those cases, Leon, where just because it's legal doesn't make it ethical. Firms need to recognise they've got a social licence to operate. Firms are not just about maximising shareholder value. That notion has been increasingly discredited. They're also there for their customers, for their workers and for the broader community. And most firms have done the right thing. Indeed, one firm reached out to me - they said ‘we don't want you to name us, but we were eligible for JobKeeper. We didn't need it, so we didn't claim it’. They decided perhaps that the money was better spent looking after the 160,000 Australians who will lose their jobs between now and Christmas.
BYNER: So what's the next step?
LEIGH: We’ll compile the results as they come in. I'm hoping that there'll be a significant number of these large firms that respond, and that that gives us a fuller picture as to what's going on. My hope is, Leon, that we don't find the same thing with the overseas listed firms and the private firms that we saw with the Australian listed companies. But it's entirely possible that some of those foreign firms and private firms are doing the wrong thing.
BYNER: It has been suggested that 17 of the top 300 listed companies in Australia that received subsidies from the government paid out dividends to investors totalling more than $250 million.
LEIGH: Indeed. We've got that information, thanks to the fact that they need to disclose. And you know, in some cases, you're seeing money go directly to billionaires. So the Crown Casino dividend, a third of that $200 million dividend goes to a billionaire. We've seen the Harvey Norman dividend, a $75 million dividend - half of that will go to a billionaire. The subsidies that Solomon Lew’s company Premier Investments received – well, he'll take a fair chunk of that as well. So there's three billionaires benefiting from a program designed to support the jobs of battlers.
BYNER: Can it be made, would you - would you be suggesting, because it's going on for a period of time still - when you raise this for the government, are they concerned about it? Or is it that there is a legal remedy for this? Or do you think that it shouldn't take that?
LEIGH: I don't think it should take that. But it would be nice if the government actually paid some attention to this. Ironically, Josh Frydenberg was out in the media last year saying he thought that Australian companies were paying too much in dividends and not doing enough investment. And yet when they're taking taxpayer handouts, with debt going to a trillion dollars, Josh Frydenberg is completely silent. Even the Business Council of Australia have condemned his practice. Their head Jennifer Westacott has said if you're receiving JobKeeper, you shouldn't be paying executive bonuses. And she's not saying that because that's the letter of the law. She's saying that because that is the morally right way for these large firms to behave.
BYNER: Alright. You keep us in touch on this one, Dr Andrew Leigh.
Authorised by Paul Erickson, ALP, Canberra.