6PR PERTH LIVE WITH OLIVER PETERSON
WEDNESDAY, 20 JANUARY 2021
SUBJECTS: Companies using JobKeeper to pay out executive bonuses; Companies repaying JobKeeper payments after reporting huge profits; Support for the hospitality industry; Deloitte’s Business Outlook.
OLIVER PETERSON, HOST: The Prime Minister seems to be on your team now, Andrew. He likes the idea of the companies repaying JobKeeper if they don't need it.
ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY AND CHARITIES: He's willing to smile, but he's not willing to scowl. He's not willing to actually ask for firms to pay the money back who’ve received JobKeeper, seen increased profits, paid CEO bonuses and paid out stonkingly big dividends to billionaire shareholders. I mean, there are firms that just need to be asked to do the right thing and to move their corporate ethics in line with the ethics of most Australians.
PETERSON: Toyota’s done it, obviously handing back a fair wad of cash to the federal government - to us, to you and me, taxpayers of the country. The latest as well is the Super Retail Group. But there is some resistance at the moment as well, we know, from Solomon Lew’s Premier Investments, which is doing pretty well. No indication at the moment that they would be paying back the JobKeeper payments, despite making a fair bit of money as of last year.
LEIGH: Premier Investments has had record profits. They closed down their stores for a month in March last year, which is how they got to be eligible for JobKeeper. But when they reopened them, they saw a surge in sales and they've posted record profits. They've used it to pay a $2.5 million bonus to their CEO, to pay out a multi-million dollar dividend. And good luck to them for being successful, but does a firm that successful really need government handouts? I don't think so. I think they ought to follow the lead of Super Retail Group. They ought to follow the lead of Toyota Australia, which recognised that firms aren't just there for their shareholders. They're there for the whole community - for customers, for workers, for taxpayers. That's what gives companies their social licence to operate.
PETERSON: There's no legislation, no law that the companies have to do this. But it's good corporate governance. There’s good will in this, Andrew, if you've recognised the fact that you've got record profits over the last year. If you're going to return some of that money, as you say, look at the positive publicity out of this and Australians will support the fact that the companies are doing the right thing by everybody else.
LEIGH: Absolutely. Super Retail Group operates Supercheap Auto, Rebel, BCF. They ought to be commended, and I’d encourage your listeners to go out and shop in those stores and say thanks to the staff that are there. But the fact is, this is a pro-business measure. The Business Council of Australia says you shouldn't be taking taxpayer handouts in the form of JobKeeper and paying executive bonuses. Jeff Kennett, the former Liberal premier, says it. The Australian Taxation Office says it. So you know, I'm hardly out there on the socialist fringe. This is a mainstream view that these firms ought to act in accord with basic corporate morality.
PETERSON: Should JobKeeper still wrap up at the end of March? I know the hospitality industry today is pushing for HospoKeeper. Andrew, there’s still a lot of uncertainty and border closures and state border arrangements still in place. Those tourism businesses are particularly doing it tough.
LEIGH: Yes, they're really fragile, particularly the ones that can't supplement lost international tourism with domestic tourism. It’s an industry that's doing it tough, as is the higher education sector and other parts of the economy. And the fact is that the government hasn't signed us to enough vaccine deals, so the vaccine rollout is going to take the better part of this year. In that environment, I think the government ought to be open to calls for targeted support beyond March for those workers, small businesses, industries, regions that are still doing it tough.
PETERSON: Would you put an end date or qualify that with a successful rollout or a certain percentage of the Australian population being vaccinated? Is that when those support measures could remain in place until we would have more or less free movement, at least within the country?
LEIGH: Look, that would certainly be one way of doing it. It would be much better than the boneheaded approach of saying we've got to cut this off regardless of where the economy is at. The fact is Deloitte’s wage forecast this week had wages being lacklustre for years. The government's unemployment numbers say it'll be years again before unemployment returns to where it was before the pandemic. So in that environment, there's room for careful targeted fiscal policy to support jobs and to avoid the scourge of long term unemployment that blights lives and ruins careers.
PETERSON: The Prime Minister’s saying to Ray Hadley on 2GB this morning, you know, we can't run the Australian economy on government money forever. Is that just the blanket approach though, Andrew, or could we still have as you've suggested here the targeted approach to particular industries which are gonna be doing it tough?
LEIGH: Yes, absolutely have a targeted approach and that again reinforces the call for firms like Premier Investments to pay back JobKeeper they don't need. When firms do the right thing, that frees up taxpayer money in order to go to those who are most in need. Australia’s got kids in disadvantaged schools who've lost the better part of a year of learning. We need targeted support to make sure they catch up, not just in terms of equity, but in terms of productivity - to make sure those kids are back on the path to being able to leave school with the skills they need to contribute to a modern economy.
PETERSON: Without getting too romantic about it, we're almost going full circle in the end, Andrew. We started this pandemic with Australians all saying we're all in this together. It certainly hasn't been the case. But if you can find a way or if everybody can find some sort of common ground, as you've mentioned - businesses which don't require JobKeeper to give it back, businesses which may require JobKeeper or some similar stimulus past the end of March, then maybe the ideal of the objective of all being in it together could be achieved. But that's probably unlikely.
LEIGH: Yes, that's the right aspiration to have. We don't want to go back to the old Gordon Gekko days of the 1980s. We need to recognise that firms do have a corporate social responsibility. JobKeeper has been the most important program for keeping people in work. It's the most expensive program we put in place. We've got to make sure it's got integrity - that firms who don't need it, pay it back. But for people who do need it, potentially we extend the program.
PETERSON: Appreciate your time, Andrew, Have a good afternoon.
LEIGH: Thanks Olly. You too.
Authorised by Paul Erickson, ALP, Canberra