ABC NEWSRADIO BREAKFAST
FRIDAY, 23 JULY 2021
SUBJECT: Scott Morrison’s historic $13 billion in JobKeeper waste.
TOM ORITI, HOST: First this half hour: the ABC has revealed that 150,000 businesses received JobKeeper despite increasing their turnover during the height of the pandemic last year. The Federal Government announced the $1,500 a fortnight wage subsidy last March, of course, as parts of the economy began shutting down. Some of you might remember, to qualify for the wage subsidy businesses needed to demonstrate or, importantly, predict a fall in turnover below certain levels. New data from the Parliamentary Budget Office reveals turnover actually rose for more than 157,000 employers, and they accrued more than $4 billion in JobKeeper between April and June last year. Turnover did fall for about another 200,000 employers, but not below the thresholds.
Now, Federal Labor MP Andrew Leigh has been a strident critic of the program and joins us now. Good morning, Andrew.
ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY AND CHARITIES: Good morning, Tom. Great to be with you.
ORITI: Thanks for joining us. Big numbers there. what's your reaction to this data?
LEIGH: JobKeeper was a good idea terribly implemented by the Coalition Government. The fact is that if this degree of waste is true across the entire program then some $13 billion of JobKeeper went to firms with rising earnings: firms like Harvey Norman, Best & Less, Cotton On, Accent Group; institutions such as The Australian Club in Sydney that bans women members; for independent schools such as The Kings School, Wesley College or Brisbane Grammar, organisations that were doing pretty well through 2020 and didn't need taxpayer handouts.
ORITI: OK, but when we look at this, you say it was a good idea in theory. The Government says that JobKeeper prevented hundreds of thousands of Australians becoming unemployed. You focus there on the company name, but let's not think about all the employees that are potentially kept on the books. Even unions, welfare groups, they say that the Government needed to act fast, and they credit the program with saving the economy. Isn't that fair enough?
LEIGH: Labor called for a program like JobKeeper. We think wage subsidies were a good idea and they were implemented across the world, but in no country were they botched like the Morrison Government botched JobKeeper.
Just to give your listeners a sense as to what $13 billion of waste equals: that is more than the federal government spent on the childcare subsidy last year. It's more than the federal government spent on public schools last year. It's almost $1,000 for every Australian adult.
ORITI: How would you have done it different? Let's say Labor's in government, no-one had a crystal ball in March last year when JobKeeper was announced. I don't think anyone could predict what we're going through now, either. How would you have done it different to prevent that wastage?
LEIGH: That's exactly the right question, Tom. The fact is that Josh Frydenberg, a year ago, knew what we only know now. He could see the data in real time. He could see that there were companies claiming who were getting ready to pay dividends out to billionaires, or executive bonuses to millionaire CEOs. He knew full well that some of these forecast downturns weren't coming close to occurring, and yet he sat on his hands and did nothing. The Prime Minister-
ORITI: -Sorry, but I mean, no-one, one pillar of all this is the uncertainty with Covid. How on earth could you have said that the Treasurer, Josh Frydenberg, knew what was coming in March last year, with everything that's eventuated since?
LEIGH: Tom, the Government has pretty good real-time data on what businesses are doing through the single-touch payroll system. That gave them a good sense of how the economy was travelling in real time, and they knew exactly what they were paying out. They had the opportunity to tighten up this system. Parliament gave Josh Frydenberg extraordinary latitude to tighten up on rorts and to expand the program if it was needed, and yet he didn't crack down on these sorts of rorts.
The amount of money going out the door here is staggering. It's like they opened the public coffers like it was some sort of Aladdin's Cave and said to their corporate mates, "Come in, take whatever you like." There are billions of dollars going out the door, and at the very same time the Government is penny-pinching on Pfizer. They wouldn't pay Pfizer $1 billion in July last year to vaccinate all Australians, and yet they gave $13 billion to corporate Australia.
ORITI: Ok, that's the dollars and cents, but let's look at the other scenario here. Many businesses might not have had reduced turnover enough to qualify. OK. But they might not have known that would be the case at the time, and hypothetically they might have stood down workers anyway to shield themselves against the blow, so isn't that a good outcome, that in the end these employees were kept in work?
LEIGH: Well, let's take Harvey Norman, for example. In March of last year Gerry Harvey said that his sales were up 9 per cent, and yet Harvey Norman head office and franchisees took in some $22 million. For firms in the retail sector, they enjoyed an extraordinarily good year last year as customers switched away from spending on services and international travel to buying products. In the car sector, AP Eagers, a major car dealer, took in $130 million of JobKeeper despite having its most profitable year ever in 2020. And yet the Government did nothing to crack down on these rorts.
I've been out there calling on those businesses to pay it back. I haven't heard Josh Frydenberg or Scott Morrison once call on corporate Australia to hand back money if their earnings went up.
ORITI: Some of these companies, though, is it, perhaps, just knowing what we do now, is it perhaps good that some of them kept the money, given what's happening with three states in lockdown, and, importantly, now, the same assistance program not being available despite widespread calls for it to be reintroduced?
LEIGH: Well, there's certain firms that have kept the money, promising that they would not stand down staff in future lockdowns, and then have stood down staff anyway. I'm thinking of Premier Investments and Accent Group, both of which said earlier this year that they wouldn't repay JobKeeper, despite 2020 being their best year on record, because they were holding onto the money to pay staff in future lockdowns. And yet Premier Investments and Accent Group have both stood down Sydney staff.
In Accent Group's case it had $1.3 million to pay as a bonus to its CEO, and yet it wasn't able to hang on the staff in the Sydney pandemic. I think that's a pretty thin excuse from firms like that.
ORITI: Can I just ask, though, do we know, do we have an estimate of how much money has been returned? Important to say that some companies are playing ball with this and they are returning the money.
LEIGH: Absolutely. Big shout out to Toyota, Domino's, Iluka: they're among the 25 companies that have paid back some $225 million. But that is a small fraction of one per cent of the overpayment that went out to firms.
This is a program which was rorted on an industrial scale. Just imagine if the Morrison Government saw this sort of thing happening among social security recipients or among people on disability support. They would be out there clamouring for those people to pay the money back. Constituents of mine are being hounded by the government for $100 of overpayment from Centrelink, and yet when we're talking about billions of dollars going to offshore-based billionaires, the government does nothing.
ORITI: So Andrew, what's your view: despite your reservations, should JobKeeper be restored? I mean, one thing we're hearing at the moment, I think, I don't think many people are convinced the Sydney lockdown is going to be ending in a week. I mean, what's your feeling about the future here in terms of support for the millions of people who are currently in lockdown?
LEIGH: The Federal Government absolutely needs to do more to look after workers in Sydney. It shouldn't be beyond their wit to design a scheme that won't see billions of dollars being rorted as it was through JobKeeper. The fact is that if we hadn't spent that $13 billion on firms with rising earnings last year, there would be more money in the federal coffers to help out right now when Sydney and Melbourne need it most.
ORITI: Andrew Leigh, thank you very much for your time.
LEIGH: Thank you, Tom.
ORITI: That's Federal Labor MP Andrew Leigh.
Authorised by Paul Erickson, ALP, Canberra