Australian firms getting jobs shouldn’t pay bonuses, says works council chief | Business

Companies that receive employee wage subsidies should not give executive bonuses and should think twice about paying dividends, the head of the Business Council of Australia said.

Jennifer Westacott made the comments in a wide-ranging interview on ABC’s Insiders program on Sunday during which she also denounced the mooted extension of Melbourne’s lockdown and called for investment in renewable energy to kick-start the economy out of the Covid-19 recession.

The Senate on Tuesday passed the government’s Job Guardian 2.0 legislation despite fears companies will use it to pay dividends, the rate is cut even as Australia enters the first recession in 30 years, and the program allows employers who previously had access to the program to cut workers. ‘ hours.

Jobkeeper, which pays workers in declining businesses $1,500 a fortnight through their employer, is now set to continue until March 2021. But the jobkeeper rate will be reduced to $1,200 a fortnight in September and $1,000 in January, with lower rates paid to part-time workers.

Westacott said the Job Guardian had been a “brutal but nation-saving instrument”.

“We think the government has stayed the course by phasing it out because it has a lot of distorting effects,” she said.

“You hear of restaurants seeing a 75% increase in profits when they’re not open. It does not mean anything.

Westacott said “companies shouldn’t pay executive bonuses if they get a job” because “it’s not designed for that, it’s to keep people working.”

The payment of dividends was “more complicated” because it is “generally a long-term policy of companies to [pay] their shareholders,” many of whom are self-funded retirees and mom and dad investors, she said.

“If I were those companies, I would exercise very careful judgment about them. Certainly on executive bonuses, I think companies shouldn’t be doing that.

the Australian Financial Review reported that Domino’s Pizza, Southern Cross Austereo, K&S Corporation, Adairs, ARB, Ingenia and Korvest made an average profit of 70% but received a total of $57.5 million in job retention payments.

Labor’s Andrew Leigh highlighted examples of bonuses in Parliament, including:

• IDP Education, which received $4 million in post guard payments and gave general manager Andrew Barkla a $600,000 bonus;

• Footwear retailer Accent Group, which received $13 million as a job keeper and paid CEO Daniel Agostinelli a $1.2 million bonus; and

• Star Casino, which received $64 million as a job sitter and gave CEO Matt Barkier an equity bonus worth $800,000

On Friday, the BCA presented a pre-budget brief calling on the government to boost growth by proposing the second and third stages of personal income tax cuts, introducing a 20% investment allowance for businesses and investing up to $53 billion in energy investments to de-carbonize the economy and lower prices.

Westacott said the submission reflected that Australia “is in the worst position we have been in for 100 years and there is no guarantee we will easily find our way out of it”.

Westacott said business investment is in a “free fall” and a 20% tax deduction “will cause things that don’t stack up now to stack up.”

“We believe it should be broad, simple and accessible to all sectors of the economy,” she said, including major mining companies and retailers.

Westacott has blasted Australia’s two-tier corporate tax rate, renewing calls to lower the rate from 30% for large corporations to 25%.

Despite the BCA is now advocating for the government To choose which industries will receive support to lead the recovery, Westacott reiterated that the BCA opposes the underwriting of energy projects for preferred sources of electricity generation.

“We have always called for this not to happen because we believe it crowds out important investments that the private sector would make,” she said.

“There is a lot of pent-up investment in the energy sector.

“So let’s prioritize investments in projects that will bring prices down, in projects that will reduce our emissions, to prepare our energy system for the future.”

Westacott called on governments to remove moratoriums on conventional and unconventional gas, but took issue with whether Australia should pursue a gas-led recovery as advocated by the National Commission’s Advisory Council Covid-19.

“Let’s see that,” she said. “Be very careful about spending taxpayers’ money when the private sector would.

“When governments do things that the private sector would normally do, they discourage private sector investment. More importantly, they divert taxpayers’ money from other vital areas.