Over a year ago, the government introduced JobKeeper in response to the COVID-19 pandemic. From March 2020, companies were eligible for the A$1,500 fortnightly JobKeeper payment per worker for a period of six months, if they estimated they would suffer a 30% revenue decline, or 50% for those with an annual turnover of A$1 billion or more. These payments were aimed at helping businesses pay and retain staff during the lockdown and uncertain period.
Almost 3.8 million employees, employed by more than 1 million businesses, have received over A$80 billion in payments. Of this, a total of A$3.78 billion was received by ASX listed companies. A report by a governance advisory group, Ownership Matters, shows that during the half-year to December 2020, 58 of the 66 companies which claimed JobKeeper reported positive earnings. Furthermore, half of these companies reported higher profits than before the pandemic.
In total, these companies recorded more than A$8.6 billion in combined profit, of which A$3.6 billion was claimed to have been paid out in dividends to investors while A$20 million was paid in executive bonuses.
Companies that initially claimed JobKeeper but did not need the payment to survive have come under increasing pressure to hand the money back. Some of the companies that have made public declarations that they are paying back JobKeeper funds include Adairs, Nick Scali, Toyota, Dominos, Super Retail Group, Iluka, Cochlear, Ingenia, Santos, Collins Foods, Nine, CIMIC, Seek, Blackmores, Lynas, Qube, Healius and Adelaide Brighton Cement. Meanwhile, some have chosen to hold on to the funding in the event of another snap lockdown, despite their strong results. So far around A$72 million has been paid back.
However, listed companies that claimed JobKeeper represent less than 3% of the total spent under the JobKeeper scheme between July and December. The rest was received by private companies, who will almost never have to succumb to public scrutiny or pressure unless caught rorting the scheme by the ATO. Repayment is a question of morality and it reflects the culture of a board when they decide to pay bonuses while receiving a subsidy on the other hand. This is one event that would have counted towards showing community support aside from charitable giving efforts proclaimed on company websites and annual reports (which is only for those who are listed).