Finance Finance News Frydenberg knows but won’t tell which profitable companies received JobKeeper
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Frydenberg knows but won’t tell which profitable companies received JobKeeper

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Treasurer Josh Frydenberg has brushed off suggestions that JobKeeper payments went to companies that didn’t need them, but he knows more about how businesses fared during the pandemic than you might think.

In fact, despite platitudes about the uncertainties of developing policy on the run, the government has been filing away turnover records for every single business that’s been sent a JobKeeper cheque since April.

And so Treasury knows exactly which companies were raking in the big bucks while taking money from taxpayers.

The Australian Taxation Office (ATO) confirmed as much in a statement to The New Daily, which outlined the myriad disclosure rules for all companies under the $101.3 billion scheme.

“Each eligible business will self-assess and make declaration to the ATO that they have paid eligible employees the correct amount, and will reconfirm eligible employees, contact details and financial institution details,” an ATO spokesperson said in a statement.

“The ATO monitors and maintains a record of the information on GST turnover submitted by businesses for the entirety of the program as part of our oversight of the JobKeeper Program.”

ATO data contains JobKeeper dirt

It all means Mr Frydenberg has access to an enlightening set of graphs.

The government knows, for example, how many businesses qualifying under the rule requiring a 30 or 50 per cent drop in turnover (actual or forecast) in April have now increased their revenue above these levels, as well as how long it took them to achieve this.

This data is available by business size and could be plotted against how much government money each company was receiving.

Despite this, Mr Frydenberg has so far resisted calls to publicise such data, even though it could let taxpayers examine how much of their money went to profitable businesses.

Treasurer Josh Frydenberg has the JobKeeper dirt. So why don’t we? Photo: AAP

Although turnover is not itself a measure of profitability, accountant Lisa Greig said a rough extrapolation could be calculated if declarations were cross-referenced with subsidy payments and Business Activity Statements, which are also provided to the ATO.

“They haven’t really got enough to work out what an accounting profit would be, but they’ve probably got enough to extrapolate if they wanted to,” Ms Greig, principal at Perigee Advisers, told The New Daily.

Missing data points could include rent payments and other pandemic-related charges, she said. But wages, which are known to the ATO, typically constitute the largest portion of company costs.

Ms Greig explained that, under the rules of JobKeeper, companies weren’t required to re-test their eligibility until September, meaning businesses could stay on the program for six months irrespective of what happened to their turnover.

“You only had to show a projected downturn in one month,” Ms Greig said.

“[A business] could have sucked for a month and then turned around the next five months going great guns.”

This changed under phase two of the program in October, when a re-test of eligibility against September quarter turnover saw hundreds of thousands of businesses kicked off the scheme.

Raking in the subsidies

The devil is in the detail with programs like JobKeeper, which helped prevent an avalanche of layoffs at the height of the pandemic but also allowed many companies to rake in revenue with drastically reduced wage bills.

Businesses receiving JobKeeper had to pay the subsidies to workers in full.

But independent economist Saul Eslake said businesses began using cash they would have otherwise paid in wages on other things like investor returns.

“Money companies didn’t have to spend paying their employees went into paying higher dividends than they would have done [otherwise]. There’s not a lot of evidence [that] companies reinvested it,” Mr Eslake told The New Daily.

For example, companies such as Premier Investments, which received $68.7 million in handouts from seven countries, saw revenue recover quickly after the lockdowns, even though they received JobKeeper subsidies until September.

PM Scott Morrison says talk of JobKeeper profits are “the politics of envy”. Photo: AAP

Premier maintained its investor dividends last year and paid bonuses to executives, but is yet to return a cent to Australian taxpayers.

Other companies, such as Adairs, Harvey Norman and Nick Scali, also paid dividends to investors last year after benefitting from taxpayer handouts.

Mr Frydenberg said last March that the $1500-a-fortnight subsidy covered 70 per cent of the national median wage.

But it’s impossible to tell from public data what proportion of wages JobKeeper covered for each business, and how this aligned with their turnover over the six-month subsidy period.

In other words: Mr Frydenberg should know how many companies received JobKeeper payments without needing them, but the public has no way of finding this out.

Subsidy secrets: Committee could eye JobKeeper dirt

This hasn’t stopped the Treasurer from encouraging firms to return the payments.

Mr Frydenberg told the ABC’s Insiders program on Sunday that companies in a position to return JobKeeper payments to the taxpayer should do so.

Although the government hasn’t made JobKeeper returns tax deductible, a handful of profitable businesses have already coughed up.

Toyota, Macpac, Domino’s, and Iluka Resources have paid back a combined $30 million over the last month after booking higher-than-expected profits.

Many more have held onto the payments, but Mr Frydenberg is yet to respond to calls for increased transparency.

Last week, Labor MP and House Economics Committee deputy chair Andrew Leigh wrote to the Treasurer requesting a parliamentary inquiry into JobKeeper.

Such an investigation would uncover the dirt the ATO has on the scheme.

Taxpayers have funded JobKeeper and they have a right to know what share of the money has gone to firms who had their most profitable year in 2020,” Dr Leigh told The New Daily.

But committee chair Tim Wilson, a Liberal MP, suggested in an email to The New Daily that there were better uses of the economics committee’s time.

“The Australian Taxation Office is already looking into companies incorrectly claiming JobKeeper, and of course any misconduct should be remediated,” he said.

“The disco card of House Economics is chockers, but if we have space we should do an inquiry into www.homefirstsupersecond.com.”

The home first super second campaign is calling for superannuation rules to be relaxed so that first-home buyers can more easily tap into their super.

Labor MP Andrew Leigh wants an inquiry into JobKeeper. Photo: AAP

Mr Eslake said a lack of public data about the program also made it difficult to determine if companies handing back payments would be good for the economy.

“Given you don’t know what they’ve done with [the payments], it’s equally difficult to determine what companies might have done if they didn’t repay,” he said.

Auditor-General to run the ruler over JobKeeper

The calls for greater transparency come as the Australian National Audit Office (ANAO) on Wednesday announced it would run the ruler over JobKeeper after Dr Leigh requested a review last year.

The audit office will investigate whether companies played by the rules, but that doesn’t necessarily mean it will look at how the scheme’s design contributed to taxpayer money flowing into investor returns.

Prime Minister Scott Morrison accused Labor of having a bob each way in its criticism of JobKeeper on Wednesday, noting the opposition had supported the wage subsidy scheme.

When JobKeeper was introduced there was great uncertainty,” Mr Morrison said during Question Time in Canberra.

“Once you set out the certainty under which those payments are going to be made, then, after the event, you don’t welsh on that arrangement.”

Dr Leigh said the crucial role played by JobKeeper in supporting employment during the pandemic didn’t absolve the government of scrutiny.

“It doesn’t meant the program couldn’t have been more carefully designed,” he said. “It’s important the ANAO looks at the design features of the scheme.”

New Zealand offers greater transparency

In New Zealand, where the government paid out wage subsidies of up to $NZ7029.60 ($6608.01) over 12 weeks, a public register allows searches of businesses that received handouts.

Taxpayers can look up the names of recipient employers, the number of workers who were supported, and the total amount of payments businesses received under three separate COVID-19 programs.

Businesses that hand back the payments are also listed within two to three working days, allowing taxpayers to see which companies have repaid taxpayers at a later date.

For example, Premier’s kiwi subsidiary, Kimbyr Investments, received $NZ5.4 million ($5.1 million) in NZ wage subsidies for 1802 workers during the pandemic.

We don’t know how much Premier claimed in Australia, but while Mr Frydenberg does, he declined to comment.

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