Profitable Australian companies urged to repay government support for Covid

Some of Australia’s biggest companies are under pressure to repay billions of dollars in Covid-19 support provided under a program after it emerged they made money during the pandemic.

The A $ 98 billion (US $ 73 billion) JobKeeper program was introduced to help companies retain staff during the country’s coronavirus-induced shutdowns. But Australia’s parliamentary budget office released data in July showing that in its first three months of operation, around A $ 12.5 billion went to businesses that have been largely unaffected by the pandemic. .

The fallout from the project sparked controversy ahead of the general election. The poll is due to take place by May next year, although experts have said it could take place as early as November.

The opposition Labor Party attacked payments made to companies that did not need them. “This is the biggest waste of money in Commonwealth history,” Andrew Leigh, the party’s deputy deputy treasury minister, said last week. “The idea that we should give taxpayer money to companies that double or triple their revenues is reprehensible.”

Ownership Matters, a shareholder lobby group, has revealed that 34 major Australian companies are demanding wage subsidies, despite increasing their revenues from pre-pandemic levels. Of these, 21 ASX-listed companies agreed to reimburse part of the money.

Companies that have come under fire for not repaying all or part of their JobKeeper revenue despite the revenue increase are gambling group Tabcorp and sportswear retailer Accent Group.

Tabcorp has received a total of AU $ 12 million in JobKeeper payments. In the year to June 30, Tabcorp received A $ 8 million from JobKeeper funds and made a profit of A $ 269 million, but did not repay any part of the money. Tabcorp said JobKeeper’s payments were “used as intended – to pay laid-off employees.”

Last month, Accent posted an annual profit of A $ 76.9 million and announced a “record dividend” after receiving A $ 24.5 million from JobKeeper. He did not refund any money either.

Accent directed The Financial Times to comments made by Chairman David Gordon last month when presenting the group’s results. All JobKeeper funds had been “fully utilized by July 2021” and Accent had “kept the permanent members of our team at full employment and full pay,” Gordon said.

The government of Prime Minister Scott Morrison, which has been criticized for its handling of the pandemic and the slow rollout of vaccination in the country, has been accused of not keeping an eye on the funds it has disbursed.

Ownership Matters could only identify which companies benefited from the program because, as listed companies, they were required to publish the information in public reports.

Last week, after months of public pressure, furniture and housewares retailer Harvey Norman, run by billionaire Gerry Harvey, agreed to repay A $ 6 million received under the scheme.

However, the company, which posted a profit of AU $ 841.4 million for the fiscal year ended June 30, up 75% from the previous year, has been criticized for returning less. a third of the 22 million Australian dollars she had received.

Leigh of Labor said Harvey had paid back the AU $ 6 million “thanks to considerable public pressure” and called on the retail group to pay back the rest. Harvey did not respond to a request for comment.

Josh Frydenberg, the Australian treasurer, has defended the JobKeeper program, saying it has been successful in saving jobs. “An examination of JobKeeper’s treasury found it as well. . . supported businesses and job survival, preserved the employment relationship and provided much needed income support, ”he said.