Robert Millner says JobKeeper must be fine-tuned and better targeted

Businessman and billionaire investor Robert Millner has called for a more nuanced and better targeted JobKeeper package.

Billionaire investor Robert Millner broadly supports the JobKeeper scheme but sees the need for it to more nuanced and better targeted. Picture: Adam Yip

Businessman and billionaire investor Robert Millner has called for a more nuanced and better targeted JobKeeper package that supports Australians in need, citing examples of part-time hotel staff who might have worked only one or two shifts a week but were now getting paid $1500 a fortnight under the government program.

Mr Millner, who is chairman of listed fund manager BKI Investment, which posted its full-year results on Friday, also expressed concern over the global economy and the rush by many central banks to print money as the mountain of public and private debt grows steadily higher.

BKI is wearing the bruises of a tough market in the wake of the coronavirus pandemic that has seen the Australian companies it invests in cut dividend payments or cancel them, while low interest rates have slashed the income it earns from its cash holdings.

BKI was one of the first listed investment companies to kick off earnings season, reporting a 35 per cent drop in full-year profit to $48.6m as investment revenue from its $1bn equities portfolio fell 13 per cent to $45.4m.

This forced it to cut its full year dividend by 29 per cent to 6.945c per share.

The payout will include a final dividend of 2.32c per share and a special dividend of 1c, both fully franked and payable on August 27.

In an earnings briefing Mr Millner, who is also chair of conglomerate Washington H Soul Pattinson, said there was probably a better way to structure the JobKeeper program, with the government support to millions of workers slated to end in late September.

He described the poor outcomes where part-time and full-time workers were both getting the same $1500 a fortnight.

“I think we all have got to bear in mind, and I know for a fact, my youngest son-in-law is in the hotel game, this was a system (JobKeeper) that was put in place very quickly and obviously didn’t cater for everybody,’’ Mr Millner said.

“And I know that there are people who were working one or two shifts a week and they are getting the $1500 and some of these people have never had that sort money before, whereas other people that have worked for, some of them, six days a week are still getting the $1500, so it is a very difficult one.”

But he does support the scheme, with some reservations about the debt piling up, as the country waits for the federal Treasurer to announce the next phase of JobKeeper next week.

“We need to support people when things aren’t going well but I think there is probably a better way to distribute money to people that need it. At the end of the day we all have to remember that we have got this massive, not only government debt, but we have also got this private debt as well, so it is a very difficult time,’’ Mr Millner said.

“The government will obviously print more money, I would have thought, and we are not alone — this is happening all around the world. I am quite concerned about what could end up in the next five or six months.’’

BKI co-portfolio manager Tom Millner. Picture: Hollie Adams

BKI co-portfolio manager Tom Millner said there was a difficult road ahead for companies and the Australian economy as the world battled COVID-19.

“We believe that every Australian company has been impacted by the COVID-19 economic crisis, and as we’ve already seen, it has had a direct negative impact on earnings, balance sheet strength and dividend distributions on many companies within our market,” Mr Millner said.

“Unfortunately, the way we are viewing the broader economy suggests that the current situation may deteriorate over the next 6-12 months.”

He warned that the global economic and social shutdown will cause some “long-lasting negative impacts on businesses across our market”.

He added: “There may actually only be a small number of companies that could escape with earnings unharmed, benefiting over the short-term from a change in consumer behaviour or through significant government stimulus packages.

“These companies could come out of this situation quicker and better than others. However, for the most part we believe that it will be a long and slow road ahead.”

Mr Millner expected many companies would have difficulty maintaining their dividends and anticipates “many organisation restructures, cost-out programs and … further capital raisings”.