5AA MORNINGS WITH LEON BYNER
THURSDAY, 21 OCTOBER 2021
LEON BYNER, HOST: Andrew it's good to talk to you.
ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY AND CHARITIES: Great to talk to you again, Leon.
BYNER: I want to talk about some new data that suggests that almost $1 billion in JobKeeper payments were handed out to SA businesses that actually posted an increase in revenue. How did that happen?
LEIGH: We all wanted JobKeeper to succeed, and it did save jobs. Many firms needed it, but firms got it that didn't need it, and that includes this $964 million that went to South Australian businesses whose revenues were increasing rather than decreasing. That's your taxes at work. That's money that will need to be paid back through higher income taxes for Australians for years to come. It didn't need to happen. The Treasurer was warned at the time, but he didn't do anything to stop the rot.
BYNER: So, can we get any of that money back?
LEIGH: We've certainly been calling on firms to do the right thing and a few of them have -- Toyota, Domino's, Iluka -- Harvey Norman, after significant public pressure. Some firms have repaid part of the JobKeeper, such as Cochlear, but most have hung on to all the cash. The reason for that is that they're not receiving too much pressure from the federal government. We're obviously not going to retrospectively change the rules and require firms to repay, but for goodness sake, these firms have corporate social responsibility statements that say they're there for the broader community and that they want to not only serve their shareholders but serve Australians as well. If they believe that, then they should hand back JobKeeper, particularly if they did something like paying executive bonuses out of JobKeeper.
BYNER: My investigations suggest that there's $152 million that was paid to at least 220 larger businesses in this state, South Australia, with rising turnover between $10 million and $100 million, and only $28 million was paid to an unspecified number of big local companies with rising turnover of more than $100 million. Are we really saying here that the criteria was far too wide?
LEIGH: Early on you can't fault the Government for just wanting to get money out the door, but pretty quickly it was becoming clear that a lot of it was going to firms whose revenues were increasing. Josh Frydenberg was warned a couple of months into the JobKeeper program that 15 per cent of the money was going to firms with rising revenue. Now, maybe 15 per cent doesn't sound like too much, but when you're running a scheme that's $89 billion overall, you're talking a massive amount of money going to firms that didn't need the money, which meant less support was available for small businesses that needed it. There were cashed up companies like the car dealer Eagers Automotive getting $130 million in JobKeeper despite turning a $200 million profit last year and another $200 million in just the first half of this year.
BYNER: So, can we get it back from those who didn't need it, or is it too late?
LEIGH: We won't be clawing it back, but we can certainly ask them to do the right thing and hand money back. I think more firms should follow the lead of Toyota, Domino's and Iluka in doing the right thing. You look at Best & Less, which got $43 million in JobKeeper despite seeing a huge increase in their revenue; Cotton On, that claimed tens of millions of dollars in JobKeeper despite increasing revenues 35 per cent, and you've got elite private schools such as the Kings School and Wesley College receiving JobKeeper despite increasing their surpluses during the pandemic. The program just wasn't well targeted enough. It wasn't operated with that good custodianship of public finances that you'd expect a Treasurer acting in the national interest to employ.
BYNER: Look, thank you for coming on. That's the Shadow Assistant Minister for Treasury, Dr Andrew Leigh.
Authorised by Paul Erickson, ALP, Canberra