Millions of dollars have been scooped up in CEO bonuses and paid out in stock dividends by corporations that also claimed the JobKeeper wage subsidy, a Labor MP claims, in a situation described as “disgraceful”.
The makeup of the wage subsidy program, which was officially extended by the federal parliament on Tuesday for another six months, has been criticised in a speech from Labor MP, Dr Andrew Leigh.
JobKeeper was meant to be for businesses that had sustained a serious downturn in income due to the COVID pandemic.
However, in an address to the parliament on Monday, Dr Leigh shared a list of big companies that claimed JobKeeper from the federal government while also paying out hundreds of thousands – or even millions – of dollars in CEO bonuses and share dividends.
JobKeeper was designed to reduce inequality. But some firms are using taxpayer money to pay massive executive bonuses. In 90 seconds, I listed the worst offenders https://t.co/zbWfA7eiD6 #auspol #ausecon @OMgovernance pic.twitter.com/5l7ApALJtr
— Andrew Leigh (@ALeighMP) August 31, 2020
Dr Leigh, Labor’s shadow assistant treasurer, claimed the scheme was “being misused by a small number of firms”.
“Accent Group received $13 million in JobKeeper, and gave CEO Daniel Agostinelli a $1.2 million bonus,” he said in a speech, video of which has racked up nearly 200,000 views in less than a day on Twitter.
“IDP Education received $4 million in JobKeeper, and gave CEO Andrew Barkla a $600,000 bonus. Last year, he was Australia’s highest-paid CEO, taking home $37 million.”
Dr Leigh’s office said the MP – a former treasury adviser and professor of economics at the Australian National University – had gleaned the numbers from corporate reports lodged by the companies themselves.
“Star Casino received $64 million in JobKeeper, and gave CEO Matt Barkier an equity bonus worth $800,000. Sea Link received $8 million in JobKeeper, and gave CEO Clinton Feuerherdt a $500,000 bonus,” he said.
Labor has also taken aim at a situation it has mockingly labelled “DividendKeeper”, saying companies are crying poor to claim JobKeeper while also paying out dividends to shareholders.
Dr Leigh claimed some companies were “diverting money for workers into shareholder payouts”.
“Furniture firm Nick Scali received $4 million from Australian and New Zealand taxpayers. Its increased dividend will deliver $2 million to the Scali family,” he said.
“1300 Smiles got $2 million in JobKeeper and paid out $3 million to shareholders. Managing director Daryl Holmes owns two-thirds of the company, so will get about $2 million: Roughly what his company received in JobKeeper support.”
“If you’re getting taxpayer subsidies, the CEO shouldn’t be getting a bonus.”
Dr Leigh’s speech gained huge attention on social media, racking up many thousands of views. It was retweeted more than 3000 times within a day, with some describing the situation as “astonishing”, “disgraceful” or “disgusting”.
This, from former @ourANU economics prof is astonishing. Think about the chronic underfunding in aged care and the tragedy it has amounted to in practice. Or homelessness. Or charities dying right now, starved of donations, unable to function. Spend 90 seconds watching this. https://t.co/1hAjo1Fouf
— Mark Kenny (@markgkenny) August 31, 2020
Speaking to The New Daily on Tuesday, Dr Leigh said he was upset at how some companies were acting while collecting JobKeeper, claiming businesses “have a social obligation to do right by the Australian community”.
“JobKeeper was a program designed for battlers, not billionaires. It was aimed to keep people in work, not pad dividends and executive bonuses,” he said.
“When JobKeeper went through parliament, I don’t remember a single parliamentarian from either side saying that they were voting for the bill so that it could be used to pay dividends or bonuses.”
Dr Leigh called on companies to “act in the interests of the whole community, not just their shareholders and managers”.