Treasury concedes JobKeeper paid billions to profit making businesses
October 11 2021
Canberra Times.
An insight report conducted by Treasury, revealed in the first two quarters of 2020 impacted by the coronavirus pandemic, found $27 billion was paid to businesses that had not met the scheme's 30 per cent turnover eligibility threshold.   

Of those funds, $13.8 billion went to firms that reported increases in turnover compared to the prior year.

The payments made to profit-making businesses covers 480,000 individual employees.


JobKeeper was brought in as a safeguard during the pandemic to ensure businesses could keep people employed and to curtail a mass job shedding across the economy.

Following revelations that some companies were taking the payments and then turning a profit, Labor and a number of crossbenchers have called for a transparency index, in a bid to mount public pressure on large corporates to payback the subsidy if financial positions were boosted.

ACT Labor MP Andrew Leigh, who has led the opposition's campaign on JobKeeper rorts, claimed the government remains tight lipped about revealing which firms did not forecast a downturn.

"Even now, the Morrison government is fighting to keep secret the names of big firms that got JobKeeper," Dr Leigh said.

"This was a program meant to help battlers, but instead helped line the pockets of offshore billionaires."

Treasurer Josh Frydenberg in a statement defended the scheme, claiming it prevented mass economic scarring during the onset of the pandemic.

"Treasury has estimated that the unemployment rate would have peaked at least 5 percentage points higher, and remained above 12 per cent for two years," Mr Josh Frydenberg said.

"It was designed to ensure the strongest possible economic recovery and avoid the scarring impacts on the labour market, which were characteristic of previous recessions."

Shadow treasurer Jim Chalmers said the report was an admission by the Morrison government that it provided handout to businesses which did not need support. 

"A competent Treasurer could have saved those jobs without wasting billions and billions of dollars on businesses that didn't need it," Dr Chalmers said.

Treasury noted 99 per cent of payments had gone to small businesses, and firms that had reported increases in turnover were still negatively impacted by COVID-19 during the shutdown period.

Most of the firms which did not meet the 30 per cent turnover threshold were small businesses, with no more than four workers.

The federal government also claimed a claw back mechanism to recoup funds would have been a disincentive to take up the scheme, which would have hindered the recovery.

An estimated 700,000 jobs were saved because of the wage subsidy scheme.

Mr Frydenberg flagged the swift implementation of the scheme occurred at the onset of the pandemic, where there was "unprecedented uncertainty" about the impact it would have on the economy and the job market.

A number of large public companies have already bowed to public pressure and paid back JobKeeper funds, including Premier Investments, Harvey Norman and Nick Scali.

Around half of the payments made in the first six months were to workers employed in the arts and recreation sector, while 35 per cent was paid out to the hospitality and accommodation industry.

"For many businesses that were eligible for JobKeeper but did not end up experiencing their projected decline in turnover, this was because health restrictions were eased earlier, and these businesses' operations recovered more rapidly than expected," Treasury said in its report.

"Other businesses were able to operate as a result of the support and successfully adapted their business models."

JobKeeper ended in March 2021 following the end of the first two rounds of major lockdowns.

The scheme has been replaced by COVID-19 disaster repayments and business support grants.

Shadow treasurer Jim Chalmers said the report was an admission by the Morrison government that it provided handout to businesses which did not need support.

"A competent Treasurer could have saved those jobs without wasting billions and billions of dollars on businesses that didn't need it," Dr Chalmers said.   

polite_gandalf wrote on Oct 12^th, 2021 at 2:10pm:


The cheapest form of power is Hydro electric. The Greens oppose Hydro which is clean energy.

The Greens also oppose nuclear which is also excellent for reducing emissions.

The 2 cleanest forms of power generating are opposed by the Greens.

polite_gandalf wrote on Oct 12^th, 2021 at 2:10pm:


....apples with oranges Mith old bean

Quote:


Another fukkwit that doesn't understand the difference between turnover and profit.

Jovial Monk wrote on Oct 18^th, 2021 at 7:29am:


Maybe so but grateful shareholders and company executives probably won’t forget the favour when the Libs hold their hands out for electoral funding contributions.
Amazing what the advocates of so called free enterprise get up to.

Grappler Truth Teller Feller wrote on Oct 18^th, 2021 at 8:18am:


Quote:

No, it’s not. Under any pure free enterprise system, such as that advocated by Ayn Rand, Milton Friedman, Ludwig von Mises et al, governments would have no power to play with taxpayers money to their political advantage.
The hypocrisy of the Liberals is on full display in this monstrous racket.

Tax commissioner Chris Jordan facing Senate investigation after refusing to provide JobKeeper details
ABC News
October 19 2021

The tax commissioner is facing an investigation by the Senate privileges committee, with Labor, the Greens and the crossbench banding together in a bid to force him to reveal details about the JobKeeper wage subsidy scheme.

Key points:
JobKeeper went to some companies that turned a profit during the pandemic
ATO commissioner Chris Jordan has resisted requests to reveal which large companies received the payments for privacy reasons
Senator Rex Patrick says the investigation will put pressure on Mr Jordan to comply with a lawful order
The Senate had ordered ATO boss Chris Jordan to reveal the names of businesses with a turnover of $10 million that received taxpayer funds, but he had refused, citing privacy provisions.

While it has been widely accepted the $89 billion JobKeeper scheme kept many businesses afloat during the worst of the COVID-19 lockdowns and restrictions, the federal government has faced criticism over revelations some beneficiaries actually increased their turnover during the pandemic.

South Australian independent senator Rex Patrick has been one of the most vocal in demanding greater transparency in the scheme, citing the approach of the New Zealand government in publishing a list of employers who received support under a similar program.

His motion to refer the commissioner for investigation succeeded, 25 votes to 21.

"It's a lawful order and just as he might be given an order to carry out something in accordance with a police direction or a court direction, the same applies for the Senate," he said.

"The privileges committee will look at the order and will make sure that the order is, in some way, complied with and can ultimately make a recommendation back to the Senate to either fine or jail the tax commissioner."


Senator Patrick conceded those consequences, while serious, were unlikely.

"This just increases the pressure for the tax commissioner to comply with this the lawful direction of the Senate," he said.

"I don't think he has any choice — this is now a standoff between one of the most powerful committees of the Senate and the tax commissioner, and I don't think the Senate will allow itself to lose that battle."

To access funding through JobKeeper, businesses had to forecast a downturn as a result of the pandemic.

Calls for religious organisations to repay JobKeeper millions
Members of a Christian congregation are shown from behind raising their arms.
Australia's biggest churches and other religious institutions pocketed millions of dollars in JobKeeper payments during 2020, research shows.

Read more
Businesses with a yearly turnover of less than $1 billion needed to predict a fall of more than 30 per cent, while businesses with a yearly turnover in excess of $1 billion had to predict a 50 per cent decline.

The ABC asked the ATO whether the commissioner would cooperate with the inquiry, and whether he had changed his stance on producing the information.

"I acknowledge and respect the powers of the Senate and the critical function it undertakes," Mr Jordan said in a statement.

"The Senate Standing Committee of Privileges will now further consider the Senate's order for information about businesses which received JobKeeper.

"One of my fundamental roles as Commissioner of Taxation is to safeguard the integrity of the tax and super systems by ensuring the community's confidence in taxpayer secrecy is maintained."

Treasurer Josh Frydenberg has repeatedly defended the JobKeeper program, arguing it was designed to quickly get money into the economy and many companies "desperately needed" the funding.

But some businesses actually recorded profits.

Senator Patrick said Mr Jordan may change his mind on releasing the names.

"If a business goes to a bank and receives money that is private business of the bank," he said.

"If a business goes to the taxpayer and asks for money, that is the business of the taxpayer — just as we disclose contract values that are given to companies, and we disclose grants that are given to companies."