Josh Frydenberg let too much taxpayer money slip through his fingers and to overseas billionaires

E&OE TRANSCRIPT
TELEVISION INTERVIEW
ALAN JONES - SKY NEWS LIVE
WEDNESDAY, 29 SEPTEMBER 2021

SUBJECTS: JobKeeper.

ALAN JONES, HOST: We're back with Andrew Leigh, who was formerly a professor of economics at ANU. He has a PhD in public policy from Harvard. He graduated from the University of Sydney with first class honours in arts and law. He is a fellow of the Australian Academy of Social Sciences, and a past recipient of the Young Economist Award, a prize given every two years by the Economic Society of Australia to the best economist under 40. Andrew Leigh is currently 49. He's married, with three sons. He's a prolific author, and I've spoken to him before because he's a keen marathon runner and we talked about honouring Peter Norman, the great Australian athlete who won the silver medal for the 200 metres in Mexico City in 1968, but because he supported the two black Americans, Tommie Smith and John Carlos, who were protesting the injustice to black Americans, Peter Norman was never selected for Australia again. Well, that's by the way, I think, of interesting background.

Andrew Leigh has applied a very clinical mind to these JobKeeper payments. You will recall they were, rightly, made to businesses who would otherwise have to lay off staff due to the economic impact of Coronavirus. The total cost, he estimates, around $90 billion - 90 thousand million dollars. To receive the payment, businesses and not-for-profit organizations had to demonstrate or forecast a particular shortfall in revenue. So if you were a business with a turnover over $1 billion, you qualified if the revenue shortfall was 50 per cent, under $1 million 30 per cent, and not-for-profits 15 per cent. That is, if there was a shortfall in revenue as a response to the government response to Coronavirus. Now, as you know, I've always described that response as disproportionate, but Andrew Leigh is now arguing that $13 billion - 13 thousand million dollars - according to an analysis by the Parliamentary Budget Office went to firms which increase their revenue, firms which increased their turnover, and that the Government also gave money to profitable overseas-owned companies leading, he argues, to tens if not hundreds of millions of dollars going to offshore owners. Ludwig von Mises asks 'are we to be an agent of reform, or the chronicler of decline?'

Andrew Leigh joins me. Andrew, thank you for your time, and congratulations on an extraordinary career to date of remarkable scholarship. What reform is needed here? I mean, you're not opposed to wealthy people, but you're saying that the Government poured tens if not hundreds of millions of dollars into the pockets of some of Australia's wealthiest people.

ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY AND CHARITIES: JobKeeper was a necessary scheme and it saved jobs, but the problem, Alan, as you've so articulately pointed out there, is that too much of it went to firms with rising revenues. It was a good idea but badly implemented, and that $13 billion amounts to $1,300 for every household in Australia. I expect most Australian households could think of better things to do with $1,300.

JONES: Absolutely. I mean, let's take Louis Vuitton, who received $6 million in JobKeeper, but increased the dividend it paid to its overseas owner LVMH by $6.5 million, and you're saying the majority shareholder in LVMH is the Frenchman Bernard Arnault, who was the richest man in the world at one point in 2020. Has the Government made any attempt to reclaim this money?

LEIGH: They haven't asked for a penny back. The fact is that we're not going to be demanding repayment, but the Government should at least be asking the question of these firms as to whether they'll do the right thing by their own corporate social responsibility statements.

JONES: Let's take another one. OPSM, you say received a $58 million JobKeeper contribution from the taxpayer, but they increased their profit by $53 million. The owner of OPSM is Leonardo Del Vecchio, and as you say reportedly the second-richest man in Italy, the 22nd richest man in the world, a net worth of $26 billion, and our taxpayers listening to you tonight are forking out money to him.

LEIGH: It's a scheme that was designed to help battlers but ended up assisting too many offshore billionaires. Too much of the money was allowed to slip through Josh Frydenberg's fingers and to offshore shareholders.

JONES: Righto, Best & Less. Viewers here shop at Best & Less. Their revenue rose by $77 million over the 2020 financial year but they got $46.2 million in JobKeeper. The car retailer AP Eagers got $130 million in JobKeeper but they posted a $156 million profit compared to a $140 million loss the year before. Now, I mean, you've raised this. What's the Government's view towards recovering this enormous amount of money?

LEIGH: The Government's view seems to be that if you're against JobKeeper waste you must be against JobKeeper, which is of course an absurd position, Alan. Just because we don't believe that money should have been wasted doesn't mean that we're against the scheme. The Prime Minister has accused me of playing ‘the politics of envy’, but this is the politics of frugality. We ought to be as careful with the public's finances as we would be with our own money.

JONES: $13 billion - and this is not Andrew, this is the Parliamentary Budget Office - $13 billion, according to the Parliamentary Budget Office, went to companies whose turnover was higher in 2020 than it had been in the same period in 2019. So I mean, as you say, if there about 10 million households in Australia, that's $1,300 for every household. Your party, business, and the union movement have argued in favour of the whole subsidy, JobKeeper, and you just said, 'I think it was a good idea but badly implemented.' But what happened in Britain, Canada, New Zealand, and the United States, because here the wage subsidy scheme doesn't require the names of recipients to be published, and ASIC, which is the corporate watchdog, required publicly listed firms to disclose JobKeeper and then of course the corporate reports came in, and that's how you established what was being paid to profitable companies.

LEIGH: That's right, Alan. We had no transparency over this scheme in Australia, unlike Britain, Canada, New Zealand, the United States, which published all of the names of recipients of their wage subsidy schemes. When we've asked the Government to disclose the big firms that got JobKeeper, they've flat out refused.

JONES: Some of these companies that got this money gave the boss a bonus. I mean, I don't think this is a party political issue, which is the reason I'm talking to you. This is a question of what is right and fair with taxpayers' money. Professor Judith Sloan has said that, 'The wildly expensive JobKeeper will rank as the single most irresponsible and reckless spending program ever undertaken by a government.' I just asked you again: what evidence is there that the government is doing anything about clawing back this money?

LEIGH: None, I'm afraid, Alan. I don't think we should be demanding money back from firms, but I think we should at least be asking. Conservatives such as Niki Savva, Janet Albrechtsen, and Judith Sloan have rightly flagged that the Government mismanaged this scheme. It gave too much money to firms that didn't need it, which meant there was too little to assist workers through the ongoing lockdowns of this year.

JONES: Quite. And of course, JobKeeper did save jobs, but as you say, not one of those jobs was saved by giving money to firms with rising revenue. You've asked, haven't you, which firms received JobKeeper? And you have asked the government what they're doing about it? They've become very defensive.

LEIGH: Yes, they've thrown this shroud of secrecy over the entire scheme, as is their wont. We've seen that when we've tried to get to the bottom of SportsRorts and CarparkRorts, just that 'nothing to see here' approach, as though the money that they're paying out was somehow money from a political party rather than taxpayer money.

JONES: I think one of the conclusions we could draw, Andrew Leigh, is I think you're a bit too smart for all these people. This bloke is a very smart bloke. I think everything he's arguing here is fair. It's taxpayers’ money, and if you juxtapose that against the first speech to the parliament the Treasurer, Josh Frydenberg, made when he said, 'We must always remember that whenever we create a new arm of bureaucracy or expand a field of activity, we're not spending our own money. We're spending the money of our citizens, who look to us as the guardians of their wealth.' JobKeeper doesn't seem to fit into that philosophical statement, Andrew.

Thank you for talking to us tonight. Keep up the running, keep up the running. I know you wanted to talk to me about charities as well. I think that's a very important point, and we'll have a yarn about that at a later point.

LEIGH: Look forward to it, Alan. Thanks again.

JONES: Not at all. There he is, Andrew Leigh. I think the bloke on struggle street would say 'how do we get the $13 billion back?' It's extraordinary stuff, isn't it, but there we are. These are the issues that have to be addressed. Andrew Leigh, the Federal member for the ACT seat of Fenner and the Shadow Assistant Minister for Treasury and Charities.

ENDS

Authorised by Paul Erickson, ALP, Canberra


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  • Andrew Leigh
    published this page in What's New 2021-09-30 11:37:06 +1000

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Cnr Gungahlin Pl and Efkarpidis Street, Gungahlin ACT 2912 | 02 6247 4396 | [email protected] | Authorised by A. Leigh MP, Australian Labor Party (ACT Branch), Canberra.