Smiggle owner Premier Investments has bowed to public pressure and promised to pay back $15.6 million worth of JobKeeper payments received during the pandemic last year.
But that’s only about 22 per cent of the $68.7 million the profitable company was paid under the scheme between April and September.
The retail giant unveiled its repayment plan on Monday after facing months of criticism for paying out $111 million in dividends to investors despite taking almost $70 million from the public purse.
Billionaire chairman Solomon Lew previously refused to repay taxpayers and only last month said he’d hold the $15.6 million in a rainy day fund to pay staff during lockdowns in Western Australia and Queensland.
But the sun is shining for Premier. It booked more than $300 million in profits over the past 18 months and so the board voted to repay part of its JobKeeper handout.
“Following the lockdowns and upon reopening, increased trading from the combined states has fully offset the cost of supporting our teams through these lockdowns. Therefore, the ‘JobKeeper 1′ funds were ultimately not required,” the company, which also owns Peter Alexander, Just Jeans and Jay Jays, said in a statement on Monday.
Premier said it was still on track to record $318 million in earnings for the financial year ended June 30, not including the partial repayment.
It has followed the same path as many other profitable JobKeeper recipients in choosing to only hand back funds that were paid to staff who weren’t stood down, rather than all the payments it received under the scheme.
Premier has argued that subsidies paid to stood-down staff didn’t benefit the company because the employees weren’t working.
But the partial repayment comes amid an investigation by the Fair Work Ombudsman into whether the company has played by the rules.
Under the rules of JobKeeper, businesses were allowed to ask staff to take annual leave while on JobKeeper, and staff were forced to agree within reason.
And so companies that received JobKeeper were able to reduce the amount of leave entitlements they owed their staff – which meant they received a net benefit from the scheme even if employees who received the wage subsidies were not working.
JobKeeper repayments worth $1.15 billion
Labor MP Andrew Leigh, who has called for a public inquiry into the profitable companies that received JobKeeper, wants Premier to cough up the full amount it received.
“Given the extraordinarily profitable year they’ve just had, nothing less than full repayment is appropriate,” Dr Leigh told The New Daily.
“Premier could afford to pay their millionaire CEO a multimillion-dollar bonus and pay shareholders a generous dividend. They can certainly afford to return to Australian taxpayers every single dollar of JobKeeper.”
Companies that received JobKeeper are not required by law to repay the handouts if they made big profits, and so only a few dozen profitable companies have agreed to pay back the wage subsidies so far.
Analysis by The New Daily found that only five companies have repaid JobKeeper in full, while more than a dozen have made partial repayments.
According to new Parliamentary Budget Office (PBO) costings, a mandatory repayment scheme would reclaim at least a billion dollars for taxpayers.
In work that ran the ruler over TND’s earlier analysis of 65 profitable companies that took JobKeeper, PBO research commissioned by the Greens found a mandatory repayment scheme could add $1.15 billion to the public purse.
Importantly, such a policy would target only large, profitable businesses that took JobKeeper payments and ignore smaller companies that participated.
Greens leader Adam Bandt wants to amend budget legislation so that profitable JobKeeper recipients are charged a levy equal to the amount of money they received under the scheme.
“It’s constitutionally possible. The question is whether there’s the political will to do it,” Mr Bandt told TND.
“The unfairness of handing over a billion dollars to billionaires and big corporations at a time when people are still doing it tough is becoming clearer by the day.
“Now that we know the parliament can do it, they should do it.”