SEEK, Nine, Dominos to pay back JobKeeper but calls for others to come forward
There has been an “extraordinary” lack of transparency when it comes to who was paid JobKeeper, but some companies are giving the money back.
Retail
Don't miss out on the headlines from Retail. Followed categories will be added to My News.
A whopping $90 billion was dished out in JobKeeper payments, yet the lack of “transparency” on where the money went is “problematic” with companies pocketing millions despite making a profit, according to a leading risk adviser.
Dean Paatsch is the director of corporate advisory group Ownership Matters, which made a submission to the Senate inquiry into the JobKeeper program.
It says that 88 per cent of the $225 million in JobKeeper subsidies that companies are returning to the Government is coming from publicly listed companies.
Mr Paatsch said the case for a public register for companies that received JobKeeper may be necessary to ensure public scrutiny on where taxpayers’ money is going.
“The idea from a public policy perspective is a little bit of scrutiny goes a long way. Australia is one of the only countries in the world to run a wage subsidy scheme without any transparency at all,” he told news.com.au.
“It was extraordinarily generous and had zero transparency compared to the US, UK, New Zealand and other European countries. The interesting thing is that transparency does have an effect in stopping people claiming benefits that they don’t need and that certainly there seems to be the inference given that the public companies only got 3 per cent of JobKeeper yet represent 88 per cent of the small amount that has been repaid.”
RELATED: End of JobKeeper caused the loss of up to 97,000 jobs
Ownership Matters said in its Senate submission that 75 companies on the ASX300 received JobKeeper payments and 20 had announced their intention to repay $139.8 million, including Dominos Pizza, Nick Scali Furniture and Super Retail Group.
It was also aware of four other companies who had repaid $40.7 million.
However, the ATO recently revealed that 47 businesses are seeking to make voluntary JobKeeper repayments with a total of $225 million to be potentially paid back.
There were 33 businesses who have repaid $159 million, while a further 14 the ATO are in discussions with for another $66 million.
But Mr Paatsch said it was “problematic” there was no transparency on JobKeeper as the Government has a limited number of years to uncover businesses who had claimed and didn’t need it.
“Transparency means that the public can then be the eyes and ears of the Government in showing them where to look in terms of claiming back illegitimate JobKeeper but I think the thing is that next time we go into something like this it’s about what have we learned here,” he said.
“We have learned a whole bunch of companies profited from JobKeeper and haven’t repaid and transparency at least imposes a threshold of shame that if we are aware of who benefited from it then we can better inform ourselves on how to design programs in future, so as to not unjustly enrich people with no public benefit.”
RELATED: Myer’s largest shareholder demands entire board resigns
He added it was “extraordinary” to learn of cases like a private school in Adelaide, which was paid $12 million in JobKeeper subsidies last year, but posted an operating surplus of $17.5 million for 2020.
Trinity College has been urged to pay back the funds, but principal Nick Hately said it had stood down 150 staff during the height of the pandemic and is a low-fee college in a low socio-economic region in the north of Adelaide.
“The college has and will continue to use any additional funds to support its community by way of offering discounts for those experiencing financial difficulty and investing in jobs,” he told The Advertiser.
“Unlike the private sector, as a not-for-profit charity, all funds are used to support the work of the school and delivery of education to its students.”
Mr Paatsch said it highlighted a broader problem, which was rearing its head now.
“If we hadn’t splashed around so much money in the first instance we wouldn’t have the argy bargy on how to support people in Sydney at the moment, that’s the missing piece. The obvious inference is to say if so much of JobKeeper hadn’t gone to companies that were profitable and didn’t need it, there would be more to target the areas that need it before the pandemic is finished,” he said.
“The obvious thing is unfortunately 97 per cent of JobKeeper that was spent is in the dark.”
Mr Paatsch said he “wasn’t holding his breath” that much more JobKeeper would be returned because a lot of it has already been spent.
“But someone will have to pay it back sooner or later and unfortunately people who didn’t benefit from JobKeeper whose taxes are raised will be paying it back and people who benefited from it disproportionately will be laughing all the way to the bank – that’s the truth,” he said.
Treasurer defends JobKeeper
Federal Treasurer Josh Frydenberg has previously said if businesses were able to pay back their subsidies they should do so, but they were not obligated to return the cash.
He has staunchly defended the JobKeeper program, saying it “has helped save jobs. That is what it was intended to do”.
Greens Deputy Leader Nick McKim introduced a private members bill last month which would require the ATO to publish a list of all companies that received JobKeeper payments and how much they received, excluding those with an annual turnover of less than $50 million.
It would also force profitable companies to repay some of their JobKeeper funds, with a report on the bill expected by August 20.
Originally published as SEEK, Nine, Dominos to pay back JobKeeper but calls for others to come forward
Urgent recall after sofa caught fire
A reclining armchair has been recalled by authorities after a sofa overheated from an electrical default and caught fire.
Buy Now Pay Later to face harsh regulations
New legislation is holding Buy Now Pay Later providers to Australian credit licence standards in an attempt to protect consumers.