ABC ADELAIDE MORNINGS
THURSDAY, 21 JANUARY 2021
SUBJECTS: Companies using JobKeeper to pay out executive bonuses; Companies repaying JobKeeper payments after reporting huge profits; Labor’s plan to invest in social housing.
DAVID BEVAN, HOST: Dr Andrew Leigh, the Federal Labor MP for Fenner who in a previous life was an economist. Good morning, Andrew.
ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY AND CHARITIES: Good morning, David. Great to be with you.
BEVAN: Dr Leigh, can you explain to us, these reports of some companies - I think it was the Super Retail Group, owner of Rebel, Macpac, BFC. They're returning $1.7 million to the government. Last week, Toyota also announced they’ll pay back $18 million. These are significant amounts of money here. This is JobKeeper. What's going on? Are they required to because they didn't have the downturn they were expecting or is this a PR exercise? What's going on?
LEIGH: There's no obligation, David. It's just a matter of good corporate ethics. I thought the chief executive of Toyota Australia Matthew Callachor put it really nicely when he said returning JobKeeper payments was ‘the right thing to do as a responsible corporate citizen’. And he recognises that firms aren’t just there for their shareholders – they’re there for their customers, for their workers and for the broader community. Acting as Toyota and Super Retail Group have done builds faith with the community that you’ll take government handouts when you need them, but you'll give the money back when you don’t.
BEVAN: So they were entitled to keep it, because they were granted JobKeeper on the previous month's downturn. Is that the way it worked? And so ok, we’ll continue it for you in the next few months, but actually it turned out it wasn't so bad. But you don't have to give it back?
LEIGH: It's a great question. So it does turn on the way in which JobKeeper eligibility happened. If you had a downturn in March, you were typically able to claim JobKeeper right through from March to September. So you had retailers that closed their doors for a month, then reopened them and saw a surge in sales. In some cases, such as Solomon Lew’s Premier Investments, they had the biggest ever profit year in 2020 but still received JobKeeper. Now if you're a billionaire who's seen your wealth go up on average 50 per cent last year and you've got a firm that's paid a big dividend and executive bonuses, then I think it's time to say to the taxpayer, ‘look, have the money back’. Good luck to you for your business success, but you don't need to be getting taxpayer handouts at the same time as we’re struggling to find money for things like investing in sustainable housing as you've just been talking about.
BEVAN: We got a call from a listener who claimed to be an employee of a clothing chain - quite a big one - saying that head office told them to remove the three top selling clothing items from their stores for three weeks in the lead up to the next round of JobKeeper. Now they were not told why, but this person says they believe it was obvious it was so that the company could keep the JobKeeper for an extended period of time. So this listener is asking us to believe that the retailer, this national clothing chain is thinking it's going to make more money by being subsidised with JobKeeper than they are by selling this top selling clothing items for the next three weeks.
LEIGH: David, that's a shocking allegation. If it’s true, then it could constitute tax fraud. I'd encourage your listener to get in touch with the Australian Taxation Office, which has been looking at issues around the integrity of the JobKeeper program. This is the biggest program we put in place last year, and the most effective in terms of saving jobs. Labor argued very strongly for wage subsidies, because we knew that it would save hundreds of thousands of jobs. But it's got to have integrity about it. We've got to make sure that no one gets away with rorting the system, and also that firms which didn't need the money have a bit of moral pressure placed on them to do the right thing and hand the money back to the taxpayer.
BEVAN: Okay. Dr Andrew Leigh, before you leave us, I'm right aren’t I - you're an economist, in a previous age. And you might have heard the last conversation we were having about private rentals. Look, I really don't want to get into the point scoring over which political party stuffed up, because I get the - my impression is that there's responsibility on both sides of politics. Rather than getting into that discussion, I think our listeners want to know how people are going to solve the problem. And it's not just restricted to Adelaide, the discussion you would have heard the tail end of would be repeated right around the country. I think that the rental market in Hobart was appalling. We went there for a for a holiday two or three years ago, and you could see it was a big issue there, and this is in Hobart. What's the answer?
LEIGH: The answer is to invest in sustainable housing, which the Commonwealth hasn't done enough of in recent years. Anthony Albanese in his budget reply talked about a program to invest in and also to fix up sustainable housing. There's a lot of public housing around the country which is decrepit and not fit to be lived in. Ceilings falling down, mould in bathrooms. Investing right now would not only create jobs in the construction sector, but also provide more liveable accommodations for millions of Australians. We haven't done enough building. We also have a tax system which encourages people to overinvest in housing, and that's led to a fall in the homeownership rate, which is now the lowest it's been in 60 years. A country that's doing as well as Australia internationally shouldn't have its home ownership rate falling.
BEVAN: Dr Andrew Leigh, thanks for your time.
LEIGH: Thanks so much, David.
Authorised by Paul Erickson, ALP, Canberra