Mounting calls for corporate Australia to repay JobKeeper as profits recover

“JobKeeper was extraordinarily generous but accompanied by very little transparency, and the fact of the matter is that the Australian taxpayer will be paying for employers who’ve been unjustly enriched by JobKeeper for the next 30 years,” Mr Paatsch said.

The government established JobKeeper in March, allowing small or large businesses that had lost 30 per cent or 50 per cent of revenue to claim $1500 fortnightly payments for each eligible employee. The program was extended in July and will expire in March this year.

In December the cost of the program was revised down to $90 billion from $101 billion previously. As such, any moves by companies to repay the funds they received under the scheme would be largely symbolic.

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“It’s a gesture that’s open to every company. Consumers, employees, everyone knows there’s value in doing the right thing,” Mr Paatsch said. “But public companies on JobKeeper represent around 3 per cent of the total subsidy, so it’s unlikely to make a real dent in public finances.”

Andrew Leigh, Labor’s shadow assistant minister for treasury, has been a fierce proponent of the cause, calling on major JobKeeper recipients such as Solomon Lew’s Premier Investments to repay the subsidy in light of the retailer’s soaring profits.

“Companies are constantly talking about corporate social responsibility, and they’ve all got guidelines and they’re all giving money to COVID charities and so on,” he said. “But when the rubber hits the road on corporate social responsibility is at a time like this.”

“If you’ve taken a handout from the government that you didn’t need, and there are millions of Australians who are in dire need, do you do the right thing and hand the money back?”

Investors in major listed JobKeeper recipients such as Mr Lew’s Premier have also expressed their opposition to how boards have used the subsidy payments, with a number of major claimants receiving strikes against them at their annual general meetings last year.

Casino operator Crown pocketed $111 million in JobKeeper, and suffered a 34.3 per cent vote against its remuneration report at its AGM in October, well above the 25 per cent threshold required.

Similarly, Accent Group, Premier Investments, and Star Group all received strikes against them after drawing criticism for paying executive bonuses whilst receiving JobKeeper.

Electronics retailer Harvey Norman took around $10 million in JobKeeper for various franchisees across the country while also increasing its executives’ pay packets. Profit before tax at the retailer rose 160 per cent for the first quarter of the new financial year.

However, founder and chairman Gerry Harvey told The Age and The Sydney Morning Herald he currently has no plans to repay the subsidy, saying his business and franchisees will repay it through higher taxes on its elevated profits.

“Because we’re franchised, all our people earn very big money, so all the money our franchisees have earned they’ve got to pay 50 cents on the dollar in tax,” he said.

“So we’ll be repaying it back in tax.”

James Cook, chief investment officer at sustainable fund U Ethical, said this argument was “tenuous”, saying companies who repaid JobKeeper were going a long way towards improving their corporate credentials.

“We’re seeing evidence of more positive economic news over the last month, which is why we’re seeing companies now stepping forward now and reassess,” he said.

“It’s a good signal for ethical investors to see which companies are prepared to take a stance. I think it’s a great example of strong leadership in the field of corporate social responsibility.”