The owners of outdoor retail chain Macpac Australia will return $1.7 million in JobKeeper payments to the federal government, as pressure builds on profitable companies to pay back taxpayer handouts.
Super Retail Group on Monday said it would hand back the wage subsidies as it expected to make a post-tax profit of $170 to $173 million for the second half of last year, on the back of a 24 per cent jump in like-for-like sales.
The move has reignited calls for businesses in the black to return payments under the $101.3 billion JobKeeper program, amid concerns taxpayers are ultimately funding investor returns and executive bonuses.
Federal Labor MP Andrew Leigh said companies with strong profit results should be “good corporate citizens” and repay money they received under the scheme, which was devised in March to encourage businesses to keep staff on their books.
“[Super Retail] didn’t have to give the money back, but they’ve made a principled decision that they didn’t need taxpayer support at a time when their sales were strong,” Dr Leigh told The New Daily.
Dr Leigh said other companies like Smiggle and Peter Alexander owner Premier Investments, which received JobKeeper and now expects a 75 to 85 per cent surge in earnings for the 26 weeks ended January 25, should follow Super Retail Group’s lead and pay back the taxpayer.
Premier has copped flak for taking $68.7 million in government handouts from seven separate countries during the pandemic, all while maintaining its annual dividend and paying chief executive Mark McInnes – who on Monday announced he’s stepping down – a whopping $2.5 million bonus.
Premier is profitable enough to pay a multimillion-dollar CEO bonus and a stonking dividend. They don’t need government handouts,” Dr Leigh said.
“By returning the money, they’d show their good corporate citizenship as other firms have done.”
Premier did not respond to a request for comment, but has previously said it abided by the rules of the JobKeeper program.
Should businesses return JobKeeper handouts?
Super Retail – also owner of the Rebel, BCF and Supercheap Auto chains – is just the second large business to publicly announce an intention to return JobKeeper money, following Toyota’s move last week to give back $18 million after sales rebounded.
Super Retail also claimed $4.9 million worth of wage subsidies in New Zealand, which has a public register of companies that received pandemic payments.
But because Australia lacks a similar register, it’s difficult to determine which Australian businesses could be in a position to pay back wage subsidies.
The Australian Taxation Office (ATO) has paid almost $80 billion to businesses under JobKeeper since funds started flowing in April, with more than a million businesses and three times that many workers receiving payments at the height of the scheme last year.
Although larger companies like Macpac were required to show or at least credibly forecast their annual turnover had halved in April to receive JobKeeper, eligibility was not retested until the second phase of the program in late September.
This meant companies that saw quicker rebounds in May and June reaped the benefits without having to pay much of their wage bills.
In hindsight, that was a mistake, Tax Institute senior tax counsel and University of New South Wales’ Professor Bob Deutsch told The New Daily.
“Realistically, they could have re-evaluated in June or retested eligibility,” he said.
However, Professor Deutsch acknowledged that design flaws were to be expected given the federal government devised the scheme at a time of extreme economic uncertainty.
“If JobKeeper had never been granted, it would have been a disaster,” he said.
“There’s a little bit of give and take here.”
But that was then, and this is now.
Both Professor Deutsch and Dr Leigh believe Treasurer Josh Frydenberg should release public guidance for profitable companies looking to return JobKeeper money, and publicly encourage them to do so.
Mr Frydenberg told reporters on Monday that he wouldn’t “say no” to businesses looking to return JobKeeper payments.
“That’s additional money that will flow into the government coffers, and it’s appreciated,” he said.
“But businesses don’t have an obligation to pay back JobKeeper. That is a matter for those individual businesses as they see fit.”