JobKeeper went to QLD companies which increased turnover

Thousands of Queensland businesses that received JobKeeper payments during the first six months of the program actually experienced an increase in turnover.

More than one third of Queensland businesses on JobKeeper payments in September last year had actually increased their turnover, while benefiting from $1.8 billion in government-funded wage subsidies.

It is revealed in a report into the first six months of the wage subsidy program released by the Federal Treasury department on Monday afternoon.

The report found that these payments still helped prevent companies shedding jobs as they were impacted by Covid restrictions.

The queue outside Southport Centrelink during the first Covid lockdown. Picture Glenn Hampson

It found that without the program unemployment rates could have stayed at 12 per cent for two years in an economy struggling to bounce back.

To qualify for JobKeeper, in April 2020 the company had to have a forecast fall in financial turnover of at least 30 per cent, or 50 per cent if its turnover was more than $1 billion, compared to the same time 12 months earlier.

According to the report, in the three months to June there were 116,500 Queensland businesses and not-for-profits on JobKeeper which received $3.9 billion in wage subsidies.

But of these companies, just 47 per cent had their turnover decline by more than 30 per cent, for small and medium businesses, or 50 per cent for big businesses with a turnover of more than $1 billion.

By the September quarter, there were 125,800 Queensland businesses on JobKeeper receiving $4.9 billion in wage subsidies.

But 38 per cent of these had seen their actual turnover increase compared to a year ago, and another 22 per cent had their turnover decrease less than 30 per cent.

It means that about $1.8 billion in subsidies help support Queensland companies which saw turnover, but not necessarily profits, improve.

The treasury report noted that to qualify the companies only needed to have to have a forecast decline, and the economy was at the time predicated to fall much more substantially than it did.

“Guaranteed support for six months was designed to provide certainty to businesses,” the report stated.

Treasurer Josh Frydenberg tightened eligibility criteria of JobKeeper after its first six months. Picture: NCA NewsWire / Martin Ollman

“Some businesses, in particular, experienced a decline in turnover following the imposition of the Covid-19 restrictions, but because they were growing businesses or had otherwise changed their structure, this is not evident when their turnover is compared with a year earlier.

“JobKeeper payments to these businesses were important to offset the impact of COVID-19 restrictions on their operations and avoid labour shedding.”

After September 2020 the eligibility criteria shifted from forecast decline in turnover to actual decline.