Liberal Party elder Jeff Kennett said JobKeeper was overly generous and led to “enormous wastage”.
Among the top 20 ASX-listed JobKeeper recipients, seven companies paid executive bonuses. Casino operator Star Entertainment took in $65 million in wage subsidies – the fourth highest amount among listed companies – and awarded CEO Matt Bekier nearly $830,000 in deferred shares, although he also took a 40 per cent cut to his base salary.
The Star’s annual report says its board approved bonuses worth 40 per cent of the allowable amount based on a strong pre-COVID performance and a separate scorecard during the pandemic. A spokesman said key strategic milestones were achieved over the entire the financial year.
“There was no connection between JobKeeper and bonuses,” the spokeman said. “The Star passed on JobKeeper payments of $64.8 million to eligible employees. Every dollar was used for the purpose the government intended.”
Retail giant Premier Investments received $45 million in Australian wage subsidies as it stood down workers across brands like Smiggle, Peter Alexander and Just Jeans. It paid CEO Mark McInnes a $2.5 million bonus after increasing profits by 29 per cent. Mr McInnes didn’t take any pay during April and he took a pay cut in May. Co-founder Solomon Lew, who called Treasurer Josh Frydenberg in tears to ask for subsidies, said a shareholder vote against executive pay was unjustifiable given the profit results.
Accent Group, which owns several shoe brands, paid CEO Daniel Agostinelli a $1.28 million bonus after receiving $21 million from JobKeeper, about half of which was passed directly on to workers. Logistics and freight company Qube Holdings received $14 million from JobKeeper and awarded managing director Maurice James nearly $1.3 million and said its earnings “did not benefit materially from the JobKeeper program”.
By comparison, executives at Qantas, which received $276 million or nearly a third of all JobKeeper payments to listed companies, received no salary between March and June and no bonuses.
Mr Paatsch notes just three per cent of the $101 billion JobKeeper scheme is visible because the vast majority of it went to small businesses and non-listed companies that aren’t required to publicly report financial results.
“It looks like there are clearly billions of dollars that have been transferred to owners of companies but unless and until there is some serious analysis of which employers benefited from it, well then we’ll never know.”
Labor’s assistant treasury spokesman Andrew Leigh hopes an Auditor-General investigation can get to the bottom of this. The auditor’s office has proposed examining the JobKeeper scheme and whether it had sufficient protections against abuse.
Dr Leigh has written asking it to also examine how much in JobKeeper payments went to companies that increased profits in 2020, how much was paid to firms that subsequently awarded large executive bonuses, and how many may have wrongly qualified for the scheme”.
“At a time when we’ve got a million people out of work and government debt is headed towards a trillion dollars, we just can’t afford to be giving handouts to firms that are enjoying record profits and paying them out to millionaire CEOs,” he said.
Mr Kennett wants a royal commission into Australia’s response to the coronavirus pandemic, “not to apportion blame but to learn”.
He said the problems with JobKeeper aren’t that business owners acted illegally, rather that some applications might not have been “morally correct”.
“Maybe it’s hard to know all these things when you’re starting something and in retrospect it’s very easy to be critical. But there is no doubt it’s been abused by some and it has been very, very generous,” he said. “Now we’re borrowing money like drunken sailors and the wastage is going to be enormous.”
Business Council of Australia head Jennifer Westacott and the Tax Office’s second commissioner, Jeremy Hirschhorn, have also taken aim at companies who took JobKeeper and paid bonuses.
Mr Frydenberg said JobKeeper had been an economic lifeline for 3.6 million Australians and about a million organisations. Although businesses only had to qualify once for the first six months of the scheme, the extended program required them to demonstrate continued downturns in trade in September and again in December.
“The eligibility criteria for JobKeeper is clear,” he said. “This will see businesses who have recovered through this challenging period transitioned off the payment.”
Mr Frydenberg did not answer questions specifically about executive bonuses.
Katina Curtis is a political reporter for The Sydney Morning Herald and The Age, based at Parliament House in Canberra.