Andrew Leigh

SUBJECT: JobKeeper being misused as BonusKeeper and DividendKeeper.

ROBBIE BUCK, HOST: Well, this is an interesting one. We’ve been hearing about JobKeeper coming to an end at the end of this month and some of the industries that are really concerned - the tourism industry, for example, and plenty of people in the arts as well who are concerned about what's going to happen there. But then on the other side of it, there are growing calls for some of the companies that have received millions of dollars in the JobKeeper wage subsidy scheme to hand back some of those dollars after hitting very high - sometimes record - income over the last 12 months.

WENDY HARMER, HOST: Some of them got a good chunk of change. I mean, Qantas -they got the 459 million. Another company called AP Eagers, 130 million. And with no real understanding, I don't think, or guarantees of where the money's actually gone. 

BUCK: Yeah. We’ve been told that an investigation will be conducted into the federal government's $100 billion scheme, amid concerns that some of the money that was supposed to be used to retain staff was diverted to pay dividends and bonuses. Companies like Harvey Norman and Athlete's Foot owner Accent Group have refused to pay back the money to the government, despite having bumper seasons. Andrew Leigh is the Shadow Assistant Treasury Minister and requested the investigation last year, and he joins us from Canberra. Morning, Andrew.

ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY AND CHARITIES: Morning, Robbie. Great to be with you. 

BUCK: Thanks for joining us. Alright. Tell us about some of the companies that have received essentially taxpayers’ money in large amounts, who have also done extremely well in amongst COVID. 

LEIGH: I think the two companies you mentioned in the lead in are a great example of where JobKeeper should and shouldn't have gone. In Qantas’s case, it clearly needed support to hold on to many of its workers and they certainly haven't been paying a dividend. But AP Eagers, they've returned a stonking big profit - $156 million - and then churned back $64 million in dividends to their shareholders. You look at Premier Investments who gave a $2.5 million bonus to its CEO - more than most of your listeners will learn in a lifetime - and then also paid out a significant dividend to shareholders, a big chunk of which went to Solomon Lew, their largest shareholder and one of Australia's billionaires. There’s around a dozen of Australia's billionaires who benefited directly from JobKeeper as a result of owning big shares in companies that paid out dividends. And billionaires have had a fabulous year - their collective wealth has gone up some 50 per cent since the pandemic started. So the last thing our billionaires need is more taxpayer handouts.  

HARMER: Well, you know, this is the way this scheme was designed though. I suppose you can’t blame - as Kerry Packer used to say, I'm gonna do everything to minimise my tax. It's not illegal. So Andrew, I mean, is it the fault of the way that the thing was designed? Or is this about morality? What are we on about here? 

LEIGH: Great question, Wendy. In terms of the companies themselves, they just need to look at their own corporate mission statements, all of which say they're not just there for their shareholders and executives - they’re also there for the broader community. If these firms actually believe their own corporate mission statements, then if they've enjoyed stonking profits they'll hand back the money they didn't need. In terms of the government, we gave Josh Frydenberg extraordinary latitude to tweak JobKeeper where it wasn't working as intended. But he hasn't used that at all to prevent money flowing to shareholders and executives. He’s been as silent on this as the government was noisy about RoboDebt, clawing money out of the hands of social security recipients in an illegal approach. And so we have this contrast between billionaires doing very well, getting a lot of corporate welfare, and battlers struggling either through RoboDebt or else just because there's not enough jobs available. And the government is going to cut off JobKeeper without continuing support to sectors like the arts, higher education and tourism who are really struggling. 

BUCK: There were quite a number of large companies though who had been receiving JobKeeper who fronted up and said ‘well, you know what, we made lots of money during the pandemic - we’re going to give that JobKeeper back’. And they did that voluntarily, I take it. 

LEIGH: There’s been some firms who have handed it all back, there's been some firms have handed part of it back. Credit to firms like Iluka and Domino's, who've done the right thing in handing it back, and one and a half cheers to firms like Lynas who handed half of the JobKeeper back. But the bulk of Australian firms haven't handed it back, and they haven't received the pressure to do so because the Treasurer hasn't come out and been clear about how the JobKeeper scheme operated. We don't know simple questions like how many firms forecast a downturn, got JobKeeper off the back of that forecast and then didn't actually experience the downturn. You look at a firm like Harvey Norman, where their founder Gerry Harvey was saying in March last year his sales were up 9 per cent. And yet some of the Harvey Norman entities and some of the franchisees received JobKeeper support. I think it's important for taxpayers to know how Harvey Norman managed to qualify. I think it'd be useful for Harvey Norman and the government to clarify that in order to provide public confidence about the JobKeeper scheme.

HARMER: Perhaps Andrew, it is true to say that no one could have predicted how, you know, the profits were going to go. I mean, I suppose Gerry Harvey - he may have had an inkling that there might be a few more people in the store, maybe looking for a video game or a new TV or whatever under lockdown. He could have equally had no one in there because, you know, we were completely locked down and no one can go out and buy anything.

LEIGH: Wendy, let’s flip that around and imagine if Harvey Norman had had a worse year than expected. I think you’d be pretty confident they'd be asking for more government assistance right now. The fact that they've done so well means that they should look around and see that we're in an economy right now where for every job opening there’s eight job seekers. I'm too worried that the government is taking a real sit-back-on-its-laurels approach to the economy, and that the GDP figures today are just going to be a cause for the Treasurer to sit back and do nothing. Corporate Australia needs to recognise its social responsibility, and the Morrison Government needs to do more to spur productivity, wage growth and get unemployment down. I only wish Scott Morrison was as ambitious for the Australian economy as he is for his own career. 

BUCK: We’ll leave it there, Andrew. Thank you very much for your time this morning. 

LEIGH: Thanks so much. 

BUCK: Andrew Leigh. He's the Shadow Assistant Treasury Minister and Deputy Chair of the House Economics Committee. He's a former professor of economics at ANU and has been making a lot of noise about where the JobKeeper money has been going and who's been keeping it and who's been making profits, as you heard just there.

ENDS

Authorised by Paul Erickson, ALP, Canberra.