While Harvey Norman has repaid $6 million in wage subsidies, others are quick to point out that the retailer actually claimed $22 million in JobKeeper.
Perhaps bowing to public pressure, Harvey Norman has repaid $6m in JobKeeper wage subsidies after it posted record profits in the 2020-21 financial year. But here’s the kicker, the retail giant has repaid less than a third of the estimated funds the company claimed in total. Today, Harvey Norman announced a profit of $1.183bn, an increase of $521m from the previous year, or 78.8%.
A footnote in the annual report states that in August “all of the wages support and assistance received by controlled entities in Australia of $6.02m … was repaid to the federal government via the Australian Taxation Office”. That included $3.63m for the 2021 financial year and $2.39m for the 2020 financial year.
Harvey Norman Shareholders will receive dividends totalling $249 million, of which billionaire Gerry Harvey, the chain’s owner, is set to personally receive $78 million. About 70 Australian corporations recorded increased profits for investors during the COVID-19 period, while at the same time receiving JobKeeper payments and other taxpayer-funded support.
JobKeeper was designed to ensure companies could afford to keep paying workers while their profits took a downturn. Despite this financial support, some large corporations still stood down staff or forced employees to take leave.
Companies that have voluntarily paid back subsidies include Nine Entertainment, Dominos, Super Retail Group, and Toyota.
Others that have not, so far, include Harvey Norman and car dealership group AP Eagers which is set to pay out its shareholders $64 million after receiving $130 million in JobKeeper payments.
As Peter Martin of the Australian National University noted, “At its peak, more than 3.8 million Australians were on JobKeeper — three in every ten Australian workers. Yet when JobKeeper ended at the end of March, it looked like a mere blip in employment. The unemployment rate actually fell, for the sixth consecutive month.
“The Bureau of Statistics said the cutoff had no ‘discernible impact’. Treasurer Josh Frydenberg went further. The economy had ‘strengthened, even after the end of JobKeeper’. Since the end of JobKeeper 132,000 people had come off income support.
“My rough maths suggests this means the number of Australians actually working might have fallen by 94,100.
“An analysis prepared by Melbourne University employment specialist Jeff Borland for the Fair Work Commission puts the number of jobs lost between 45,000 and 97,000.”
Taxpayers are asking why the government, despite the haste in passing the incentive, failed to make it obligatory for those that did not ultimately fulfil the criteria to repay the funds. Many are unable to understand why these profitable corporations have not been compelled to repay the money, given the federal government had made it clear the funds were only available to smaller businesses that saw a downturn of at least 30% in turnover and large companies that had a 50% fall.
However, this appears to be the case – with federal treasurer Josh Frydenberg confirming there is no legal obligation to repay, regardless of whether businesses and companies were profitable or not.
Despite this, many Australians feel that profitable companies should do the right thing and repay the funds, especially given that many companies and the overall economy are doing it tough.
They believe it is immoral for big business to take advantage of a difficult situation, and many have even vowed to boycott companies that have put greed ahead of that they consider to be the right thing to do.
An analysis prepared by Melbourne University employment specialist Jeff Borland for the Fair Work Commission puts the number of jobs lost between 45,000 and 97,000.
Meanwhile, thousands of businesses – especially small businesses with limited cash or assets to draw upon – have shut down as a result of the downturn in business, while thousands of others are barely keeping their heads above water.
Businesses struck by Melbourne’s most recent lockdowns can no longer receive JobKeeper assistance and have had to rely on grants.
It has been reported that the Victorian government has received 72,800 applications for grants under its Business Costs Assistance Package and nearly 6,000 under its larger Licensed Hospitality Venues Fund.
There are also concerns that the latest round of financial relief for individuals in Victoria has been alarmingly slow to get to where it’s needed with figures released last week which shows that less than 8,000 people had so far received emergency cash payments from the federal government, just as the emergency support was due to cease.
Sole traders earning less than $75,000 per year, in particular, have done it tough, finding themselves not eligible for any Government support for loss of income.
‘And while the Federal Government keeps trotting out the supposed good news about the Australian economy, the truth is that a huge percentage of Australians are still struggling to find work, pay bills or even keep a roof over their own heads.
And yet, the rich getting richer is an eerily familiar story.
Every year at tax time, we see the published list of large, particularly foreign-owned corporations which get away with paying little or no tax. Ordinary Australians, in particular small businesses, get slugged and then find themselves relentlessly pursued by the ATO if they make an error calculating their taxes, or underpaying them.
It’s not clear whether the federal government or the ATO will put pressure on profitable companies to pay back JobKeeper.
The Greens Party has set up a petition on its website calling for these companies to pay it back so that the money can be allocated to those who need it most.