JobKeeper has been in the news for many months. Introduced hastily at the end of March 2020, this Australian Government scheme to keep workers tied to their employers during the Covid downturn saved an estimated 700,000 jobs. Initially much of the discussion about JobKeeper related to the enormous $89 billion cost to the taxpayer, debate about winding the scheme back and then ending it as well as concern about how the resulting deficit was going to be reduced.
More recently the focus has been on whether all those entities which accessed the scheme were actually entitled to do so. Billion-dollar businesses were eligible if they suffered a 50% or more revenue shortfall while smaller businesses were eligible if their revenue fell by 30% or more. Entities could access the scheme by either demonstrating the revenue drop or forecasting a drop. Eligible businesses were provided with $1500 per fortnight for each of their employees.
It has become increasingly obvious over recent months that many businesses did not lose the stipulated revenue and yet still obtained JobKeeper.
The rush to set up the scheme, which quickly followed the Government’s reaction to the alarming image of thousands of workers lining up outside Centrelink offices, led to the failure to include an important safety requirement. It should have been stipulated that if the projected revenue shortfall did not eventuate, the money obtained should be reimbursed to the government – just as welfare recipients are legally required to return to the government any overpayments they receive.
The extent of overpayment has developed into a scandal that unsurprisingly is being referred to as a major rorting of the scheme.
According to the Parliamentary Budget Office, over the first six months of the scheme, $13 billion went to those entities whose earnings actually rose.
Among the list of those who were ineligible but stayed on the governmental gravy train and benefitted from this taxpayer funding were some major companies and very wealthy individuals. A few examples are Specsavers, Luxottica (owner of OPSM and Sunglasses Hut), car dealer A P Eagers, retailers Harvey Norman, Best & Less and Cotton On, private schools Wesley College, The Kings School and Brisbane Grammar, Bond University and New York University’s Sydney campus and the Australian Club in Sydney.
Many of these ineligible entities were able to post enormous profits which enabled them to increase shareholder dividends and give large executive bonuses.
While there is general appreciation of the role JobKeeper played in restricting the job loss from Covid restrictions and lockdowns last year, there has been increasing public concern about brazen rorting of the scheme and the government’s failure to urge the return of benefits from those who were not entitled to receive them.
Shadow Assistant Minister for Treasury Andrew Leigh has been raising the issue in parliament and the media for months. He said, “JobKeeper overpayment is the single biggest waste of money in Australian history, and the Morrison government won’t do a thing to make it right.”
Some entities have voluntarily returned the benefits or part of them.
The publicity that has been given to those who have shamelessly kept money to which they were not entitled has been having some effect. Harvey Norman’s Gerry Harvey, who refused for months to return any Jobkeeper money, finally announced in August that the company would return $6.02 million in JobKeeper funds to the ATO. However, this repayment is less than a third of the estimated $22 million the company and its franchisees claimed in total. According to Andrew Leigh, “Harvey Norman has given us the best advertisement for more transparency into the secretive, rorted jobkeeper scheme.”
According to Dean Paatsch, a director of corporate advisory group Ownership Matters, 88% of the $225 million that companies are returning is from publicly listed companies. Paatsch also has concerns about the lack of transparency with JobKeeper saying 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.”
While Opposition and Crossbench MPs have been raising the issue of waste, lack of transparency and unethical behaviour by those who should not have received JobKeeper funds, the Government has been unmoved. Months ago the Prime Minister referred to questions about the rorting of JobKeeper and calls for the government to take action to have money returned as “the politics of envy” – an incredibly insensitive and arrogant remark given the size of the debt the nation now has – let alone the financial hardship that many people on low incomes have been suffering during the pandemic.
While the extent of rorting by ASX listed companies has been revealed because of their public reporting requirements, there has been no transparency in relation to private entities. Senator Rex Patrick and others have tried to obtain a list of JobKeeper beneficiaries with an annual turnover of $10 million or more. This has been blocked by the Government and the ATO Commissioner. Ownership Matters says publicly listed companies accounted for just 3% of the entire JobKeeper program, which means that private companies accounted for 97%. So the community is not being given the opportunity to see how much rorting was undertaken by these private entities. And, unlike Harvey Norman and other public companies, these unknown rorters can avoid being shamed into returning any funds to which they were not entitled.
While nothing was built into the scheme to actually compel rorters to return money to which they were not entitled, the ATO is taking action to recover some of the money paid to some entities. However, it is unlikely that taxpayers will ever learn the real extent of the rorting - given the lack of transparency about the majority of the scheme’s beneficiaries.
Some light could be shone on the murkier aspects of the JobKeeper scheme as the Auditor-General is investigating the ATO’s administration of the program following a request Andrew Leigh made in December last year. The A-G’s report is due to be tabled in December this year.
The national JobKeeper debt is far greater than it should have been and will create budgetary difficulties well into the future – particularly if governments try to repair the deficit quickly by cutting back on services like health, welfare and education. With inequality and poverty already major problems in Australian society, the fall-out from the JobKeeper rorts debacle has the potential to exacerbate these problems.
As the Morrison Government was responsible for the design and operation of JobKeeper, it is responsible for the massive waste of rorted taxpayer funds. No amount of spin from the Prime Minister or the Treasurer can excuse its incompetence. With the election approaching, we can look forward to plenty of distractions to encourage the community to lose interest in this and all the other rorts as well as the vaccine supply and quarantine failures.
What will be particularly interesting about the election campaign will be whether the Coalition, which has always claimed it has been a “gold standard” economic manager, will have the effrontery to push this tired line after the JobKeeper rorts debacle.
One thing we can be sure of is that the rorters, the JobKeeper Bludgers, will still be laughing all the way to the bank.
Hildegard
Northern Rivers, NSW
Guest Speak is a North Coast Voices segment allowing serious or satirical comment from NSW Northern Rivers residents. Email ncvguestpeak at gmail dot com to submit comment for consideration.
