The federal government’s $70bn JobKeeper program is brilliant in concept but its execution has left a lot to be desired, starting with a lack of transparency and evidence of big company corporate rorts.
Thankfully the corporate watchdog ASIC has required companies to list receipts so the market has some idea about who is getting what.
Myer, which on Thursday reported a $172m full-year loss, received $93 million in JobKeeper subsidies, of which $41m went to casual staff.
Many of these people actually received a pay rise thanks to the government handouts.
Some 81 of the top 300 companies received some form of government subsidy and the widespread nature of the payout underlines the risk to the economy going forward as payments are wound back.
In a statement on Thursday, proxy firm Ownership Matters (OM) noted JobKeeper and other subsidies have implications for investor forecasts on future cost bases and earnings sustainability.
“Investors should be aware of varying accounting treatment, for example JobKeeper can be an offset to wages or booked as ‘other income’ under government grants,” it noted.
OM added: “To date minimal disclosed evidence of widespread supplier and rent concessions for listed entities.”
Aggregate handouts to the top 300 companies totalled $1.8bn, of which JobKeeper was $934m, with another $556m via other foreign government subsidies.
In contrast to Australia, New Zealand lists which companies got what subsidies.
Another $294m in foreign government subsidies was received by entities that received no JobKeeper, OM said.
The largest recipients of JobKeeper were Qantas, with $267m, Crown Resorts, with $111m, G8 Education with $86m and Star Entertainment with $65m.
The two casino groups together collected $176m in JobKeeper payments.
Qantas received another $258m in additional government subsidies and education provider G8 a further $89m in childcare-related federal subsidies.
Some companies paid no bonuses to executives when they received subsidies but OM said 40 per cent of companies receiving the handouts disclosed aggregate executive bonuses of $24m for full-year 2020. Many companies which paid dividends also received material assistance from government subsidies.
Opposition frontbencher Andrew Leigh last week launched a stinging attack on companies that received JobKeeper payments and paid their executives huge bonuses.
“A scheme designed to reduce inequality is being misused by a small number of firms who are channelling it to executive bonuses,” he said in a speech to parliament.
Mr Leigh listed a number of examples including Accent Group, which received $13m in JobKeeper payments then gave its chief executive Daniel Agostinelli a $1.2m bonus and IDP Education, which received $4m in JobKeeper payments and gave chief Andrew Barkla a $600,000 bonus. Last year Barkla ranked as one of the highest-paid chief executives, taking home $37m.
While casino group Star received $65m in JobKeeper payments, its CEO Matt Bekier got an equity bonus worth $800,000.
SeaLink gave chief executive Clint Feuerherdt a $500,000 bonus after receiving $8m in JobKeeper subsidies.
Mr Leigh also cited companies that used JobKeeper to boost dividend payments.
He cited furniture retailer Nick Scali, which received $4m in payments from the New Zealand and Australian governments and increased its dividend to the Scali family by $2m.
Dentists 1300 Smiles got $2m in JobKeeper and paid $3m to shareholders. Its chief Daryl Holmes owns two-thirds of the company, so will collect nearly $2m or about the same as the JobKeeper payments.
Mr Leigh quoted Ownership Matters’ Dean Paatsch saying, “I don’t think it was ever the intention of the government to subsidise executive salaries.
“If you’re getting taxpayer subsidies the CEO shouldn’t be getting a bonus.”
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