Yahoo Finance $13.8 BILLION in JobKeeper went to profitable companies, Treasury admits
Tens of billions of dollars paid through the JobKeeper wage subsidy scheme wound up going to businesses that weren’t supposed to receive it, according to newly released Treasury figures.
In fact, wage-subsidy payments in the first six months of the scheme went “disproportionately to more productive business”.
A new Treasury report on JobKeeper found $11.4 billion and $15.6 billion in the June and September quarters of 2020 – or a total of $27 billion – went to businesses that did not meet the turnover criteria of 30 per cent or 50 per cent.
Also read:
21 companies promise to return $297 million in JobKeeper: Who are they?
Centrelink chases Aussie families over $35.3 million in debts
A total of $13.2 billion across six months went to businesses that did suffer drops in turnover, though not to the required 30 or 50 per cent.
Meanwhile, $13.8 billion went to businesses that actually saw turnover increase compared to the year prior.
The bulk of this money (88 per cent, or $12.1 billion) went to small businesses with four employees on average.
“JobKeeper payments to these businesses were important to offset the impact of COVID-19 restrictions on their operations and avoid labour shedding,” the Treasury report said.
Defending the payments, Treasurer Josh Frydenberg said the program was “well-targeted” and “highly effective”.
“The program did what it was intended to do. It kept employers and employees connected,” he said.
“It saved more than 700,000 jobs and it supported Australia’s world-leading economic recovery.”
Government under fire over JobKeeper ‘waste’
The Morrison Government has faced criticisms of hypocrisy over the past few months over its refusal to claw back JobKeeper payments that were wrongfully awarded, while chasing up Centrelink recipients who were allegedly overpaid JobSeeker payments.
On Monday, Shadow Treasurer Jim Chalmers said the Treasury report was a “stunning admission of failure” from Frydenberg.
“This report is a really damning indictment of his mismanagement,” Chalmers told ABC radio.
Frydenberg had been advised last year by Treasury and “various officials” that a lot of money was going to waste in the program, Chalmers added.
“The report points to that as well. He knew that there was waste in the program, he was solely responsible for the eligibility and the rate of the program, and he did nothing about it.”
Speaking to the Senate Economics Legislation Committee last month, ATO Commissioner Chris Jordan said the tax agency would not pursue $180 million from small businesses due to “honest mistakes”.
Meanwhile, Centrelink has issued debt letters to 12,000 Aussies ordering them to pay back debts worth a combined $32.8 million.
These debts were raised because it was found some received JobKeeper and JobSeeker at the same time, which was not permitted.
“Taxpayers only pay recipients what they're eligible for – no more and no less,” a government services spokesperson told Yahoo Finance.
But the Coalition Government has a poor track record when it comes to wrongful debt recovery, with the highly controversial robodebt scheme deemed legally unlawful and ruled “a massive failure” by a Federal Court judge.
More than 20 major companies have already pledged to return a portion of JobKeeper payments they received, including SEEK, Nick Scali, Super Retail Group, Dominos Pizza, Domain, and more.
But big businesses aren’t forced to reveal whether they took JobKeeper payments or not, despite independent senator Rex Patrick’s efforts on the matter.
Follow Yahoo Finance on Facebook, LinkedIn, Instagram and Twitter, and subscribe to the free Fully Briefed daily newsletter.
