Did money-making firms profit off JobKeeper?
New research from the ABC showed companies, whose projected losses for 2020 appeared to be considerable, found a way to qualify for the Federal Government program designed to save failing businesses. The problem? Some businesses never actually suffered income losses.
The firms in question purportedly benefited from the JobKeeper scheme even though they registered a higher turnover in the thick of the crisis, particularly in the June and September quarters of 2020. In fact, an estimated $6bn from the wage subsidy scheme reportedly went towards seemingly healthier businesses, new data showed.
Early warning signs
Overall, thousands of “profitable companies” enjoyed the subsidies that were allocated for businesses which faced the risk of closure because of the lockdowns. Yet some firms doubled, or even trebled, their turnover, the ABC found.
The analysis echoes the findings of the Parliamentary Budget Office (PBO), which recently discovered that more than $13bn in JobKeeper flowed into over 195,000 large enterprises that registered a profit in the first six months of the program, the Australian Financial Review reported.
“By mid-2020, Scott Morrison and Josh Frydenberg already had a report from Treasury warning that billions of dollars of JobKeeper were going to firms with rising revenue,” said Dr. Andrew Leigh, shadow assistant minister for Treasury.
The PBO relies on data from the Australian Taxation Office, which was in charge of the wage subsidy payouts. Meanwhile, Dr. Leigh is convinced the Federal Government would have been given access to the data on the turnover just as these JobKeeper recipients were raking in profits.
Time for payback?
Officials of the Morrison government would have seen the numbers “in real time,” Dr. Leigh said. “They had the numbers in front of them in a way in which we can only now, a year later, see what was going on.”
Dr. Leigh is urging the businesses in question to come clean and repay what they received from the program.
Treasurer Josh Frydenberg, however, believes JobKeeper was “very successful” and “well-targeted” and that it actually sparked economic growth. He maintains the companies had no other recourse at the time and has not endorsed a clawback.
“When we introduced JobKeeper, we were staring into the economic abyss,” he said.