Finance Minister Mathias Cormann said a public register of JobKeeper recipients could have perverse effects. Finance Minister Mathias Cormann said a public register of JobKeeper recipients could have perverse effects.
Finance Finance News Good reasons to keep JobKeeper recipients secret, says Cormann Updated:

Good reasons to keep JobKeeper recipients secret, says Cormann

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The public has no way of finding out which companies are receiving JobKeeper, but some voices are calling for change.

Amid reports that some firms are manipulating their turnover to access the scheme, some tax experts have called on the government to set up a public register of companies receiving the fortnightly wage subsidy.

They argue this would minimise rorts by improving transparency and accountability, but Finance Minister Mathias Cormann sees the situation differently.

Giving evidence to a senate inquiry into the government’s handling of the pandemic, Senator Cormann said setting up a public register could discourage firms in genuine need from applying for the subsidy.

“The public disclosure of businesses that are in receipt of JobKeeper could act as a disincentive also to participate in the program, which would reduce the support to workers,” he told the Senate select committee on COVID-19.

Senator Cormann said a public register of JobKeeper recipients would negatively affect workers. Photo: AAP

Current legislation also prohibits the Australian Taxation Office (ATO) from creating a public register of companies receiving the subsidies, he explained.

This is because government used “existing mechanisms” to deliver JobKeeper so that businesses received the wage subsidies as quickly and efficiently as possible.

ATO commissioner Chris Jordan said during the hearing that, as of midnight on June 4, the ATO had paid nearly $13 billion in JobKeeper payments to more than 872,000 businesses – subsidising the wages of about 3.3 million workers.

Tax Institute senior tax counsel and University of New South Wales professor Bob Deutsch told The New Daily he believed the vast majority of JobKeeper claims were being made in good faith.

Although some employers were attempting to rort the system, Professor Deutsch said a public register of recipients would be unwise, as some people would automatically assume that companies on the register had done something wrong.

“It’s unavoidable human behaviour to assume that if you’re on that register, you’ve somehow done something that you shouldn’t be doing – and that’s clearly not the case here in, well I’d say, almost 90 per cent of the cases,” he said.

Imagine if we had a public register for everybody who received social security benefits. There’d be an outcry and rightly so, because it’s suggesting that people are somehow doing the wrong thing by accessing these benefits.”

Professor Deutsch said the ATO already had sufficient resources to catch employers that have dishonestly claimed JobKeeper.

He said the public register would therefore provide a small gain, in terms of improved transparency, at considerable cost to the reputation of honest employers.

Professor Deutsch also noted that Section 19 of the Coronavirus Act gives the ATO the power to deny JobKeeper to companies that use a number of schemes outside the spirit of the law – as listed in this compliance guideline. (The full name of the act is the Coronavirus Economic Response Package (Payments and Benefits) Act 2020.)

His comments come after independent journalist Michael West criticised major aged-care property owners Lendlease and Blue Care, among others, for accessing JobKeeper despite neither company telling shareholders they had suffered the required 50 per cent drop in revenue. (Blue Care’s revenue has actually increased, he said.)

During the senate hearing, ATO second commissioner Jeremy Hirschhorn also confirmed the Australian Federal Police was investigating bedding manufacturer The Australian Comfort Group for manipulating turnover to claim JobKeeper, as reported by the Australian Financial Review.

“That is a case that is under the Serious Financial Crime Taskforce, of which the ATO is an important member, as is the Australian Federal Police,” Mr Hirschhorn said.

Asked by Greens senator Peter Whish-Wilson whether the ATO had specific audit processes to tackle abuse of JobKeeper, Mr Hirschhorn said the ATO has a compliance program that aims to detect errors in claims as they are made, as well as assessing them after the fact.

“And so there will be a range of ordinary audit activity around, for example, turnover manipulation, but also, in extreme cases, the police may well be interested as to whether there are fraudulent elements.”

An ATO spokesperson told The New Daily that, as of May 31, 3338 complaints linked to JobKeeper were made to the ATO’s hotline.

They said employers found guilty of knowingly rorting the system could face fines of up to $126,000, or 10 years in prison in extreme cases.