JobKeeper went to thousands of companies whose turnover tripled at the height of the COVID-19 pandemic

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Hundreds of millions of dollars in JobKeeper flowed to companies where turnover doubled or even tripled, the ABC can reveal.

Thousands of profitable companies qualified for the subsidy based on projected turnover falls that never eventuated.

7.30 can also reveal about $6 billion in JobKeeper was racked up by businesses that increased turnover during both the June and September quarters last year.

“The idea that we should be giving taxpayer cash to firms that are doubling or tripling their revenues is reprehensible,” Labor MP Andrew Leigh said.

“This is the sort of flagrant misspending of money that you’d expect to see in some tin pot dictatorship, not in a well-run economy like Australia’s.”

Profitable JobKeeper recipients have been under pressure to repay the taxpayer support.

Retailer Harvey Norman this week announced it had returned $6 million after months of controversy.

The ABC earlier this year revealed one in six JobKeeper businesses did not suffer a downturn during the scheme’s first three months, racking up $4 billion in subsidies during the period.

New data from the independent Parliamentary Budget Office reveals nearly 20,000 of these firms tripled their turnover yet accrued approximately $370 million for the three months.

An additional 15,000 firms doubled their turnover — compared to the same quarter in 2019 — yet earned approximately $320 million in JobKeeper.

Increase in turnover (April – June 2020) Approximate value of JobKeeper paid (April – June 2020)
0-1 per cent rise $138 million
1-10 per cent rise $1.15 billion
10-50 per cent rise $2.03 billion
50-100 per cent rise $599 million
100-200 per cent rise $322 million
200+ per cent rise $368 million

“This is the biggest waste of taxpayer money in Australian history,” Dr Leigh said.

“The intent of the Parliament was never that we would be giving corporate welfare to firms that were doubling or tripling their earnings.”

Most businesses with turnovers below $1 billion a year needed to show or predict at least a 30 per cent turnover fall to qualify at the beginning of the scheme.

The turnover threshold was 50 per cent for big companies and 15 per cent for charities.

Once businesses qualified for JobKeeper — including based on a turnover estimate — they continued receiving payments until around the end of September, when turnover tests changed.

JobKeeper did not include a mechanism to recoup money from firms that were profitable after qualifying for the subsidy.

Treasurer defends lack of clawback provision in JobKeeper

Federal Labor is lobbying firms that were profitable while receiving JobKeeper to return the funds.

But in an interview with Leigh Sales on 7.30, Treasurer Josh Frydenberg defended not including a clawback provision when setting up the $90 billion program.

“If [businesses] were going to have to pay back that money, then they wouldn’t necessarily have taken it in the first place and you would have seen jobs being lost,” he told 7.30.

Mr Frydenberg backed the decision to allow firms to join JobKeeper based on an anticipated decline in turnover.

“If we didn’t do that … we wouldn’t have got the money out the door,” Mr Frydenberg said.

“If you go back … to what we encountered in March of last year when we introduced JobKeeper, we were staring into the economic abyss.

“This was economic Armageddon.”

More than 150,000 companies increased turnover during the June quarter (April-June) last year. About half of this group also boosted their turnovers during the September quarter.

Businesses with turnover up during both periods accrued about $6 billion during the six months.

“You didn’t save jobs by paying money to firms with rising earnings — they were always going to keep on their staff,” Dr Leigh said.

“Paying money that went into the pockets of billionaire shareholders and millionaire CEOs didn’t save the jobs of battlers.”

Mr Frydenberg said many businesses that received JobKeeper “desperately needed it”.

“JobKeeper was a very successful program that was well-targeted and it actually delivered the strong economic recovery,” he said.

Dr Leigh obtained the figures from the Parliamentary Budget Office.

The Parliamentary Budget Office obtained its data from the Australian Taxation Office, which administered the JobKeeper scheme.

The Reserve Bank has previously estimated that JobKeeper saved 700,000 jobs.

Exclusive by Dan Conifer (Original ABC Article)