Australian Treasurer Welcomes Businesses Repaying JobKeeper
The federal treasurer Josh Frydenberg has acknowledged the Super Retail Group’s decision to voluntarily return its $1.7 million JobKeeper subsidy after posting a record half-year profit but said paying back the handout is not a legal obligation.
The move by the group that owns brands, including Supercheap Auto, Rebel Sports, BCF outdoor and Macpac, was made public by the company in its trading update (pdf ) on Jan 18. The company also noted that its net profit after tax would surpass $170 million during the first half of the 2021 financial year.
It also comes only one week after Toyota also announced it would return $18 million in Jobkeeper payments following an unexpectedly strong sales result for 2020.
The treasurer welcomed the decision, saying it is “additional money flowing into government coffers and it is appreciated”.
He added there was no legal obligation to repay JobKeeker supplements.
“They don’t have obligation to pay back JobKeeper, and it’s a matter for individual businesses to do as they see fit,” he told reporters in Melbourne on Jan 18.
Frydenberg’s comments also came with a clear message that the JobKeeper program will expire in March, as legislated, on the back of a string of positive signs pointing to economic recovery.
“It is a remarkably successful program, with 3.3 million workers and 1 million businesses behind at its peak,” he said. “But at the same time, the recovery has seen many businesses no longer need Jobkeeper as their customers have come back through the doors.”
Super Retail’s announcement also prompted Labour MP Andrew Leigh to ratchet up his call to businesses thriving through the pandemic to follow their lead.
In a post on Twitter, Leigh wrote: “Repaying JobKeeper isn’t a legal obligation – it’s just the right thing to do.”
“If your profits went up in 2020, and if you can afford to pay executive bonuses, then your firm doesn’t need a government subsidy,” he said.
Repaying JobKeeper isn’t a legal obligation – it’s just the right thing to do. If your profits went up in 2020, and if you can afford to pay executive bonuses, then your firm doesn’t need a government subsidy #auspol @GemmaActon @OMgovernance pic.twitter.com/96kT2fGr4Y
— Andrew Leigh (@ALeighMP) January 19, 2021
Leigh also argued that lining billionaires’ pocket with taxpayer handout is the last thing we should see during this challenging time. He also noted that the economic recovery has yet to take hold, the federal government’s budget is tight, and there are still a million out of work and another million wanting more hours.
“At a time like that, we shouldn’t be giving many millions of dollars to firms whose profits in 2020 were better than their profits in 2019,” he told 2sm radio host Marcus Paul during an interview.
Leigh commended Super Retail Group and Toyota for making the moral decision saying this has “shown that their corporate ethics are in line with most Australians.”
However the former economist singled out Premier Investments chaired by billionaire Solomon Lew, urging it to repay its Jobkeeper payments last year.
“Last year, billionaire Solomon Lew reportedly cried as he urged Josh Frydenberg to create JobKeeper. His firm got $45m, then used it to pay CEO bonuses & huge dividends. Now they’re enjoying a profit bonanza, it’s time Premier repaid the taxpayer,” he posted on Twitter Jan 14.
Last year, billionaire Solomon Lew reportedly cried as he urged Josh Frydenberg to create JobKeeper. His firm got $45m, then used it to pay CEO bonuses & huge dividends. Now they’re enjoying a profit bonanza, it’s time Premier repaid the taxpayer https://t.co/X5knbgues5 #auspol
— Andrew Leigh (@ALeighMP) January 13, 2021
Premier Investments (ASX PMV), which owns retails chains Smiggle, Just Jeans, Dotti and Portmans, has seen its first-half sales jump by 80 percent sales growth during the first half-year.
In the trading update (PDF) on Jan 13, the group expects earnings before interest and tax to sit between $221 million (US $170 million) and $233 million (US $179 million) in the six months to Jan 30 2021.
The $4 billion (US $3.8 billion) company received JobKeeper during August and September 2020, but was not eligible for JobKeeper after the September changes.
Other winners thriving through the pandemic include Harvey Norman and JB HiFi, as lockdown and the oversea travel ban has redirected the discretionary spending to home entertainment and office electronics, furniture and leisure equipment.