Finance Finance News ‘Big corporate largesse’: Nick Scali slammed over JobKeeper half measure

‘Big corporate largesse’: Nick Scali slammed over JobKeeper half measure

CEO Anthony Scali has paid back some of his JobKeeper handouts. Photo: TND
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Greens leader Adam Bandt has joined calls for a parliamentary inquiry into JobKeeper after retailer Nick Scali handed back less than half the payments it received, despite booking a whopping $40.6 million profit over the second half of last year.

In an interview with The New Daily, Mr Bandt, a member of the House Economics Committee, called on the government to investigate the matter amid growing concern that many profitable companies are funnelling the subsidies to shareholders.

“The public is entitled to know whether the government’s big corporate largesse is really bringing value for money … [their] economic strategy is based on a hope that big corporations will do right by the Australian people,” he said.

It comes after furniture retailer Nick Scali sparked outrage on Monday by pledging to hand back $3.55 million in JobKeeper payments taken over the December half, all while failing to mention the other $3.73 million it received from taxpayers between April and June.

Pressure was building on chief executive Anthony Scali before the announcement after a COVID-19 sales surge drove a 89.9 per cent rise in after-tax profits over the December half.

But the eventual pledge was $865,000 less than the Scali family’s $4.4 million dividend.

The full amount should be given back,” Mr Bandt said.

“The government should have built-in mechanisms to claw back money from corporations.”

Labor MP Andrew Leigh, who has written to Treasurer Josh Frydenberg requesting a parliamentary investigation, said Mr Scali should cough up the extra cash.

“Nick Scali will today be basking in the glow of public admiration for having handed back half their JobKeeper subsidies,” Dr Leigh told The New Daily.

“I can only imagine how proud they’ll be of their corporate ethics once they’ve returned the other half.”

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

Oxfam Australia chief executive Lyn Morgain said Australians expected full transparency over how taxpayer money was spent during the pandemic.

“When a small group of largely white men in rich nations are making billions at the expense of low wage and vulnerable workers, with profits funnelled to shareholders and the wealthy few, it’s clear the system is not fit for purpose,” Ms Morgain told The New Daily in an email.

“All Australians have been impacted in some way by the coronavirus crisis, but it’s clear that some have suffered more than others, and it has exposed and deepened existing inequalities in our society.”

Corporate earnings season is revealing the extent to which publicly listed companies received taxpayer handouts and went on to pay large dividends to shareholders.

But at the moment there’s no public register of companies that received JobKeeper, despite Treasurer Josh Frydenberg having access to reams of turnover data showing how quickly companies recovered from the pandemic.

This means there’s no way of knowing how many private companies misused the subsidies.

To be eligible for JobKeeper, companies like Nick Scali were required to show their revenue had or was projected to decline by at least 30 per cent in April.

But eligibility was not re-tested again until September.

Nick Scali’s revenue declined just 2 per cent over the 2019-20 financial year – which takes into account quarters before and after the pandemic struck last March.

Sales then shot up 24.4 per cent year on year over the following December half.

In a statement on Monday evening, Nick Scali said it was “very appreciative” of JobKeeper and the program was “highly successful and of great assistance”. But the retailer ignored repeated requests for additional comment.

“The JobKeeper scheme enabled the company to continue to pay employees throughout the state government-mandated closures in Melbourne throughout August, September and October,” it said in the statement.

The upmarket retailer isn’t the only company to pay dividends to investors after receiving JobKeeper handouts.

Others including Mayfield Childcare and Peter Alexander owner Premier Investments have done the same.

But Toyota, Domino’s and Rebel owner Super Retail Group have paid back about $30 million in handouts between them.

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