A billion is hard to wrap your head around.
Some billionaires say that they’re part of the ‘three comma club’. In the comedy series The Hollowmen, the political insiders decide they’ll need to spend billions of dollars before the public whistles in awe.
So if you haven’t been watching the scandalous waste from the JobKeeper scheme, don’t blame yourself for forgetting to groan on cue.
Some quick background. In the year from March 2020, JobKeeper paid out $89 billion to firms based on their salary bill.
For companies that would’ve otherwise fired their staff, that’s money well spent.
For those that would’ve kept trucking along regardless, it was free cash for the bottom line.
The idea behind JobKeeper was that it would only go to businesses that suffered a revenue shortfall. Turnover had to drop by 50 per cent or more for billion-dollar businesses, and by 30 per cent or more for smaller firms.
To get JobKeeper, firms could either demonstrate a revenue drop, or forecast a drop. If the forecast drop didn’t occur, it didn’t matter. They still got to keep the cash.
In the hope of preventing rorting, Parliament gave unprecedented powers to Treasurer Josh Frydenberg to tweak the scheme.
Unlike in Britain, the United States and New Zealand, there was no public register of JobKeeper recipients, so the community relied on the Morrison government to monitor misuse.
Alas, the Liberals dropped the ball.
Figures supplied to me by the Parliamentary Budget Office show that over the first six months of the scheme, $13 billion went to those whose earnings rose.
Fattening the fat cats
We already know some of the most egregious examples.
Retailers such as Best&Less and Cotton On enjoyed their most profitable year on record, yet collected millions in JobKeeper. Accent Group used the money to pay its CEO a $1.3 million bonus. Daryl Holmes, the majority owner of 1300Smiles, received a dividend payout that he used to buy a $6 million mansion.
Almost a dozen billionaires, including Marc Besen, James Packer, Nick Politis and Brett Blundy, got JobKeeper-fuelled dividend payouts from companies whose earnings rose during the pandemic.
Asked to repay JobKeeper in full, billionaire Solomon Lew said in March that his company was quarantining it to pay staff that might be stood down in future lockdowns. In July, Sydney went into lockdown, and Lew’s company stood down staff without pay.
Public universities were denied JobKeeper, but private institutions such as Bond University and New York University’s Sydney campus got the money.
Private schools also reaped the largesse, with The King’s School, Wesley College and Brisbane Grammar getting JobKeeper despite increasing their surplus.
Even the Australian Club in Sydney, which recently voted two to one to continue barring women members, used $2 million of JobKeeper to increase its surplus.
Analysis by sharemarket research firm Ownership Matters reveals that 25 firms have repaid JobKeeper, giving back a total of $225 million (0.3 per cent of the total scheme).
Evidence from the Australian Taxation Office also demonstrates that tens of thousands of eligible small businesses chose not to take JobKeeper because they felt they didn’t need it.
I’ve spoken to managers in some of these companies, and they’re outraged that taxpayer money was wasted on firms with rising earnings.
What else could Australia have done with the $13 billion that was paid to firms with rising earnings? We could easily have bought enough Pfizer vaccine for the whole country.
In July 2020, Pfizer wanted just $1 billion to vaccinate every adult. But the Morrison government thought the price was too high, so didn’t take the deal.
For $13 billion, Australia could give every suburban home and business a super-fast fibre broadband connection.
We could transform our energy grid, lowering prices and emissions.
We could save the university sector, which has been gutted by the loss of more than 17,000 staff. Or the government could write a cheque worth almost $1000 to every Australian adult.
Just because JobKeeper saved some jobs, it doesn’t mean Australians should let the Morrison government get away with the massive waste that accompanied the scheme.
When they saw that hedge funds, investment banks, luxury car dealers and exclusive golf clubs were using the money to increase their profits, red flashing lights should have gone off in the Prime Minister’s office.
Yet when I raised the issue in Parliament, Scott Morrison accused me of playing ‘the politics of envy’.
Coming from the man who invented Robo-debt, that’s pretty rich.
Andrew Leigh is the Shadow Assistant Minister for Treasury, and his website is andrewleigh.com