ABC RADIO PERTH MORNINGS WITH NADIA MITSOPOULOS
FRIDAY, 23 JULY 2021
SUBJECTS: Scott Morrison’s historic $13 billion in JobKeeper waste
NADIA MITSOPOULOS, HOST: Well, there is data out from the Parliamentary Budget Office which shows 157,000 businesses received JobKeeper payments at the height of the pandemic last year even though they increased their turnover. All up, they got $4 billion, and some elite private schools did the same, including Hale here in Perth. Now, that school pocketed $7 million in JobKeeper while posting an operating surplus of more than $8 million. It then offered its parents a discount, and these are some parents who are paying up to $27,000 a year in fees. So does this sound OK to you? Should Hale and all those other companies pay the money back? Keen to know what you think this morning: 1300 222 720. They've not done anything legally wrong, but is it morally wrong? That is the question being asked this morning. Andrew Leigh thinks these companies and those schools should pay the money back. He's the Shadow Assistant Minister for Treasury and I spoke to him a little earlier this morning.
ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY AND CHARITIES: Good morning, Nadia. Great to be with you.
MITSOPOULOS: Does that seem right to you, that a private school can post a profit and offer parents a discount while claiming JobKeeper?
LEIGH: Nadia, when the JobKeeper legislation was going through parliament I don't remember any member of the Government standing up and saying the real virtue of this will be that we'll pad the surpluses of cashed-up private schools. Hale is not the only one. We've seen Kings School in Sydney, Brisbane Grammar, Wesley College, all post increased surpluses on the back of receiving JobKeeper from the taxpayer. I've spoken to principals of other independent schools who said look, we might have been eligible but we didn't see a downturn. We didn't see people pulling their kids out, so we decided it wasn't ethically right to take the money. Many small businesses took the same approach. They didn't claim JobKeeper because they didn't feel they needed it. And some big businesses have handed the money back. I think organisations that increased their surpluses or their earnings or their profits and got JobKeeper should now have a hard look at themselves and consider repaying.
MITSOPOULOS: But Hale may have felt that they did need it and that they were eligible, so may well argue well, we didn't do anything wrong.
LEIGH: No-one's suggesting that Hale's broken the law. The question is an issue of morality rather than legality. Their operating surplus went to $8.3 million. They've done very well on the back of JobKeeper, and considering whether they should pay it back in part or full would be an appropriate conversation for the board to have.
MITSOPOULOS: What other businesses have been captured in this data, these 157,000 businesses received payments of $4 billion. What are some of those businesses?
LEIGH: We know about the listed ones. Harvey Norman, Premier Investments, which owns Dotti and Just Jeans, saw their best year ever in 2020. Many Australians couldn't travel and couldn't spend on services, so they spent on retail instead and those retailers' earnings went through the roof. We've got AP Eagers, a car dealership, which received $130 million in JobKeeper despite setting record profits. We've got the men-only Australian Club in Sydney, the Royal Sydney Golf Club, 1300Smiles, whose majority owner just bought himself a $6 million mansion, partly fuelled by the $3 million of JobKeeper that the company received. There's a few firms, as I said, that have paid it back. Domino's, Iluka, Toyota, have done the right thing, but that's a drop in the bucket. Much less than 1% of JobKeeper has been repaid despite the fact that we now know that around $13 billion went to firms with rising earnings.
MITSOPOULOS: Do you think all those companies should pay the money back?
LEIGH: I think they should certainly have a hard conversation and certainly work out if they have a good reason for not repaying. Indeed, some of the firms, like Premier Investments and Accent Group, said earlier this year they wouldn't repay because they were hanging on to the money in case there was a further lockdown and they needed to keep on staff. And yet when the Sydney lockdown happened, both firms stood down staff. So they weren’t even straight with the Australian people about why they were hanging on to JobKeeper. I just think if you've paid your chief executive a million-dollar bonus then there's no excuse for not repaying JobKeeper. If you paid out dividends that have gone to billionaire shareholders - we know that there's almost a dozen Australian billionaires who benefited from JobKeeper - you really ought to have a hard look at yourself and consider repaying.
MITSOPOULOS: Well, tell me what you think: 1300 222 720. Should this money be paid back? Are you OK with what you're hearing this morning? I'm speaking to Dr Andrew Leigh, the Shadow Assistant Minister for Treasury. Could that be a valid argument, though? Look, I'm going to hang on to this money, in case we face lockdown again, which is exactly what has happened.
LEIGH: It would have been a more valid argument from Premier and Accent if they’d actually gone through and done it. The fact is that when things got tough, they didn't say 'Well, we've just had our best year on record, we can afford to use some of those profits to keep on the workers who sold the goods.' No, they just let those workers go, just stood them down. Last year, for the first time in more than a generation, we saw the labour share of national income fall below half. We've seen billionaires’ wealth double, and meanwhile we've got the government budget which projects real wages will fall over the coming years. There's real issues of fairness in the Australian economy, and the rorting of JobKeeper goes to the heart of that.
MITSOPOULOS: The Government will argue, though, that JobKeeper did prevent workers being sacked, and while there are companies that increased their turnover during the pandemic, at the height of the pandemic it saved jobs. Isn't that what JobKeeper was all about: saving jobs?
LEIGH: If you look at the Government's estimates on the number of jobs saved, it looks like each job cost more than $100,000. Given that we're talking about a job being saved for half a year, it doesn't look like great value for money. Yes, JobKeeper was absolutely essential. That's why Labor and the union movement called for it. We didn't need the kind of JobKeeper whose benefits have flowed so strongly to billionaire shareholders and millionaire CEOs.
MITSOPOULOS: The Government wouldn't have been aware of that at the time.
LEIGH: Absolutely they would. I mean, what we know now, Nadia, and you and I are seeing a year on, is what Josh Frydenberg and Scott Morrison saw a year ago. Through single-touch payroll the Government is able to see in close to real time what businesses are reporting, and that would have allowed them to crack down on the rorts if they'd wanted to. The fact is they chose not to. Let's be clear: if we were talking about social security recipients or people on the National Disability Insurance Scheme, they would have moved very swiftly to close any loopholes and claw money back. But when we're talking about money going to their corporate mates, suddenly they don't seem to care. They're treating taxpayer money just like it's Liberal Party money.
MITSOPOULOS: So Andrew Leigh, how could things have been done differently? What would a Labor Government, for instance, have done?
LEIGH: A Labor Government would have seen this money going out the door to firms that didn't need it and called a stop to it. We would have recognised that if the wastage went on that you would end up with the biggest waste of taxpayer dollars in Australian history, which is exactly what we've got today. $13 billion, Nadia, is more than the Commonwealth Government spends on the childcare subsidy. It's more than the Commonwealth Government gives to public schools. It's almost $1,000 for every Australian adult. This is waste on a gargantuan scale, and for Scott Morrison and Josh Frydenberg to be ducking scrutiny on this is utterly outrageous. We need more support for people in these lockdowns. We need the reintroduction of JobKeeper without the rorts, but it's become harder to do that because the Government wasted so much taxpayer money last year on JobKeeper.
MITSOPOULOS: We'll leave it there. Appreciate your time. Thank you.
LEIGH: Thanks, Nadia.
MITSOPOULOS: That was Andrew Leigh, the Shadow Assistant Minister for Treasury.
Authorised by Paul Erickson, ALP, Canberra