Taking the money
One argument is a slippery slope. If the government asked business to pay back $13 billion in undeserved pandemic subsidies, it would look a lot like accountability. And if they were to ask for that of business, then what accountability might they have to ask of themselves?
Data from the Parliamentary Budget Office shows about 20,000 companies claimed JobKeeper while at the same time tripling their turnover. Another 15,000 claimed the payment while their revenues doubled.
The treasurer, Josh Frydenberg, says businesses can’t be expected to return the money. When it was given to them, he says, the whole country was staring into the abyss. “If they were going to pay back that money, then they wouldn’t have necessarily taken it in the first place,” he says. “If businesses had had to show an actual turnover decline, then we wouldn’t have gotten the money out the door.”
The money that was paid didn’t all go to workers. Some of it went to executive bonuses. Some of it was paid out in dividends to shareholders. It could be argued that the two defining policy initiatives of the Morrison government are now tax cuts for the rich and handouts for companies.
“The idea that we should be giving taxpayer cash to firms that are doubling or tripling their revenues is reprehensible,” says Andrew Leigh, an economist and Labor MP. “This is the sort of flagrant misspending of money that you’d expect to see in some tinpot dictatorship, not in a well-run economy like Australia’s.”
In a speech this week, Leigh complained that welfare recipients were being hounded on overpayment while billionaires were free to keep millions of dollars in excess subsidies. He called it a welfare scheme for lottery winners.
Leigh pointed to automotive company AP Eagers, which posted profits of $200 million last year. It received $130 million in JobKeeper that will not be paid back. “The last two years have seen back-to-back records for our shareholders,” the company boasts. “Sales revenue is currently $3.0 billion per annum.”
The investment bank Moelis took $3 million in JobKeeper and paid $5 million in executive bonuses. Tabcorp took $12 million and posted a profit of $269 million. Its chief executive was given a $1.5 million bonus. Footwear company Accent Group paid a similar bonus while collecting the supplement. In the recent Sydney lockdown it has put off staff.
Leigh quoted The Australian Financial Review, describing Frydenberg as “transactional, tactical, erratic, profligate and ultimately empty”. Incredulous, he said: “This is the Financial Review, the nation’s financial paper of record, and this is what they are saying about the treasurer on their back page.”
He imagined the shareholders and chief executives enjoying the payment, thinking: “You only get one Morrison government in your lifetime, and we just got ours.”
That’s not so certain. They may yet get another Morrison government at the next election. The way politics has been in this country for the past decade, they may get a third at the election after that.
But the people who give them that government should think about who it is Scott Morrison represents. The mishandling of JobKeeper and the stubborn refusal to correct it gives a fairly compelling answer: rich taxpayers and big business and not much else; a government by spivs for spivs, paying it forward to those who will never pay it back.
This article was first published in the print edition of The Saturday Paper on Sep 4, 2021 as "Taking the money".
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