ABC RADIO MELBOURNE DRIVE WITH RAFAEL EPSTEIN
TUESDAY, 31 AUGUST 2021
SUBJECTS: The Government’s $13 billion in JobKeeper waste
RAFAEL EPSTEIN, HOST: Hopefully my next guest will not hang up! [Gerry Harvey had just hung up on him.] It's 5.14pm.
Andrew Leigh is the Shadow Assistant Minister for Treasury and Charities. He's one of the Labor MPs in Canberra. He's part of Anthony Albanese's shadow finance team. Andrew Leigh, good afternoon.
ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY AND CHARITIES: Good afternoon, Raf. I can absolutely give you a rock-solid guarantee I will not hang up on you. Look forward to your questions.
EPSTEIN: Firstly, it's significant, isn't it, if Gerry Harvey gives back some of the JobKeeper money? That's a good thing, no?
LEIGH: Absolutely. It's terrific that Gerry Harvey's done the right thing. He was refusing to do so six months ago. It's clear the reason that he repaid was the public pressure that has been placed on him. The only reason we got that public pressure is because the corporate watchdog, ASIC, required listed companies to disclose their JobKeeper to the share market, so it really points to the value of transparency.
JobKeeper was set up by the Government with no transparency around it. It's only because ASIC required listed firms to disclose that we know about firms such as Harvey Norman and Premier Investments, but then we don't know about other big firms that aren't listed in the stockmarket. We're currently having a fight with the Government in the Senate where they're arguing that there should be no disclosure of the firms that got JobKeeper. Labor is arguing that for firms over $10 million, medium and large businesses, that the taxpayer has a right to know-
EPSTEIN: -That's just some sort of register where you could look it up?
LEIGH: Yes, exactly. Same thing that they've got in New Zealand, same thing they've got in Britain, in the United States. In Britain and the United States, their JobKeeper-like schemes were set up by Conservative governments, so transparency is not a left-wing value in itself, but it seems this right-wing government is fighting for secrecy every chance it gets.
EPSTEIN: On the design of the JobKeeper program, the Treasurer, Josh Frydenberg, has said repeatedly you could make it like a sort of tax arrangement or the welfare payment arrangement where if you get some extra income you didn't expect you pay it back, but his very strong point of view is that if you made it like that, that makes it more complicated: height of the pandemic, height of the trouble, you slow down the cash roll out, that's significantly a problem. He's got a point, doesn't he?
LEIGH: The Government knew in the middle of last year that 15 per cent of the money was going to firms with rising revenues, and it did nothing to stop the flow. It could, right then, have said 'OK, we made a mistake with the design. We've got billions of dollars going out the door to firms that don't need it in a way which isn't supporting employment.' They could have admitted their mistake back then, but they failed to do so, and most of the $13 billion went out the door well after it's clear the Government knew that money was being wasted.
EPSTEIN: But it was still when the economy needed it. It's still stimulus, isn't it?
LEIGH: JobKeeper was never designed as corporate welfare. It was meant to keep people in jobs. You don't do that by giving money to firms with rising earnings.
EPSTEIN: That wasn't quite my question, Andrew Leigh. Would you agree that, so you don't agree with the way, or the rules around JobKeeper and the way it was given to business, but would you agree that it was important stimulus at an important time?
LEIGH: Well, three quarters of the effect of JobKeeper went to the profit bottom line, a quarter went to the labour bottom line. In other words three quarters of it was going through to shareholders who on average are more affluent than Australians and tend to save more money. So if you're doing fiscal stimulus then handing out corporate welfare which flows through to shareholders is probably the worst way of stimulating the economy. If you want to do fiscal stimulus, you put the hands in money in the hands of low-income workers.
The Government didn't do that with this scheme. It allowed billions of dollars to flow to billionaire shareholders and millionaire CEOs. We've got scads of examples of the way in which this has been done, everything from the shoe seller Accent Group to the retailer Premier Investments, independent schools such as Wesley College, which raked in millions of dollars despite seeing increased revenue.
EPSTEIN: And Essendon Grammar - what's it called, Penleigh and Essendon Grammar. So, on the schools they were in the same position, weren't they? I think Wesley got a significant amount of money. So too did Penleigh and Essendon Grammar. They were in a situation of not knowing whether or not people could pay fees. They're a crucial institution. There's nothing wrong with them, in principle, getting that sort of income support, is there?
LEIGH: There's nothing wrong with them applying for it, but if their aim is to act with maximum integrity, I think the right thing to do is, after the pandemic has passed, when you see that your surplus has increased and your fee revenue hasn't taken a tangible hit, to repay the taxpayer. That's how firms such as Domino's, Iluka and Toyota behaved immediately. Harvey Norman, after a significant delay, did the same thing. But many organisations have chosen to hang on to the money. There's hedge funds, investment banks, that have taken JobKeeper, used it to pay executive bonuses and refused to repay the taxpayer.
The taxpayer has been bilked by a scheme which corporate Australia treated a bit like one of those game shows where you go into the booth for 30 seconds and grab as many banknotes as you can.
EPSTEIN: Andrew Leigh, just before I let you go, the important part of the vaccine program is clearly that people get vaccinated and they no longer are at risk from what is a dreadful disease, but a political question on the vaccine rollout: if by the end of the year we have all the vaccine the Government says we will have, it's going to be gone as a political issue, isn't it?
LEIGH: I don't want vaccines to be around as a political issue, Raf. I want the country to be vaccinated. That's the good thing for Australia, but the vaccine rollout here has been one of the slowest in the advanced world. Canada's got 66 per cent of the population vaccinated, America and Europe more than half, Australia just a quarter and lower in communities such as the Indigenous community. We need to move faster on this not only for health reasons but for economic reasons as well.
The mismanagement of the vaccine rollout, along with the mismanagement of the JobKeeper scheme, are the two main reasons why the Morrison Government doesn't deserve to be re-elected.
EPSTEIN: We'll find out next year, I guess. Thank you very much for your time.
LEIGH: Thank you, Raf.
Authorised by Paul Erickson, ALP, Canberra