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.
