Senate debates

Thursday, 5 August 2021


Treasury Laws Amendment (COVID-19 Economic Response No. 2) Bill 2021; In Committee

10:52 am

Photo of Rex PatrickRex Patrick (SA, Independent) Share this | | Hansard source

I move amendment (1) on sheet 1352:

(1) Page 9 (after line 17), at the end of the Bill, add:

Schedule 6 — Publication of information about COVID 19 payment recipients

Coronavirus Economic Response Package (Payments and Benefits) Act 2020

1 Section 6


annual turnover of an entity for a financial year is the total of the following that is earned in the year in the course of the entity's business:

(a) the proceeds of sales of goods and/or services;

(b) commission income;

(c) repair and service income;

(d) rent, leasing and hiring income;

(e) government bounties and subsidies;

(f) interest, royalties and dividends;

(g) other operating income.

If the entity is a non-profit body (within the meaning of section 23-15 of the A New Tax System (Goods and Services Tax) Act 1999), treat the operations or activities carried out by the body as the business of the body.

jobkeeper payment means a payment under the jobkeeper scheme.

jobkeeper scheme means the scheme for the Coronavirus economic response payment known as the jobkeeper payment provided for in rules made for the purposes of subsection 7(1) in relation to the period 1 March 2020 to 28 March 2021.

2 After section 19


19A Commissioner must publish information about entities that received jobkeeper payments

(1) The Commissioner must publish the following information about each entity covered by subsection (2) that has received a jobkeeper payment:

(a) the name of the entity;

(b) the number of individuals for whom the entity received a jobkeeper payment;

(c) the total amount of jobkeeper payments received by the entity;

(d) whether the entity has voluntarily paid to the Commonwealth an amount equal to all or part of the amount referred to in paragraph (c), and if so, the amount of the payment.

(2) An entity is covered by this subsection if the annual turnover of the entity for a financial year in which the entity received a jobkeeper payment is more than $10 million.

(3) The information must be published as soon as practicable after the commencement of this section on a publicly available website maintained by the Commissioner.

19B Commissioner must publish information about entities that received certain Coronavirus economic response payments

(1) The Commissioner must publish the following information about each entity covered by subsection (2) that has received a Coronavirus economic response payment provided for in rules made for the purposes of subsection 7(1B):

(a) the name of the entity;

(b) the total amount of such payments received by the entity;

(c) whether the entity has voluntarily paid to the Commonwealth an amount equal to all or part of the amount referred to in paragraph (b), and if so, the amount of the payment.

(2) An entity is covered by this subsection if the annual turnover of the entity for a financial year in which the entity received such a payment is more than $10 million.

(3) The information must be published as soon as practicable after the commencement of this section on a publicly available website maintained by the Commissioner.

(4) Information published under this section must be kept up to date.

I want to make it clear to everyone what this amendment does—I misled the chamber the other day, because I was working off a draft amendment. This amendment allows for the disclosure of companies that have received JobKeeper in the past and any other measures that are proposed in this bill that the Treasurer may wish to use to assist companies.

JobKeeper is really important for businesses and no-one begrudges them using it. But there have been a number of companies that, in effect, have abused the JobKeeper scheme. In New Zealand, for every company that gets assistance such as this from the taxpayer, they disclose how much the company received, for how many employees they received that money and how much they have paid back. In Australia, only 0.28 per cent of money from the JobKeeper scheme has been paid back. In New Zealand, just through having transparency so that people can look at what companies received and what they have returned, it's five per cent. My amendment seeks only to replicate what has been done in New Zealand. It's not private company information that we're asking for. We're asking for disclosure of what the taxpayer has given these companies and what that has been for.

Just to be very clear, all this bill seeks to do is disclose four things: the name of the entity, the number of individuals for whom the entity received a JobKeeper payment, the total amount of JobKeeper payments received by the entity, and whether or not the company has voluntarily paid to the Commonwealth an amount equal to all or part of the amount received. Obviously, the bill also seeks to have a similar regime for any future funds received by companies. Again, it's not a shame to be helped; we just don't want to have people abusing the JobKeeper scheme or, indeed, any other scheme where the taxpayer is helping a company, so I ask the Senate to support this bill.

10:55 am

Photo of Nick McKimNick McKim (Tasmania, Australian Greens) Share this | | Hansard source

I indicate to the Senate that the Greens will be supporting Senator Patrick's amendment. What we know already is that at least $12½ billion in JobKeeper payments went to businesses and other entities that didn't actually need that money. We also know that the final number will likely be higher, because there is the publication of some figures, which we are awaiting, that will likely make that number higher.

I've tabled a bill on behalf of the Australian Greens, the Coronavirus Economic Response Package Amendment (Ending Jobkeeper Profiteering) Bill 2021. That is currently under inquiry as we have this debate today. That bill would withhold tax input credits equal to the value of JobKeeper payments made to large companies that ended up being profitable or that paid executive bonuses. It would also establish a public register of large companies that received JobKeeper, which is almost identical to what Senator Patrick is proposing in his amendment to this bill. Far too many big corporations have rorted JobKeeper, and a little bit of the disinfectant of the shining of sunlight on the whole process by including transparency provisions such as those proposed by Senator Patrick in this amendment would go a long way to forcing companies to pay that money back.

10:57 am

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Minister for Finance) Share this | | Hansard source

The government does not support Senator Patrick's amendment. In responding to the amendment, I want to speak a little about the JobKeeper program, and then we'll go to the particular content of the amendment.

What we see is that the JobKeeper program was one of the most successful economic responses to a time of crisis in Australia's history and, right around the world, it was one of the most successful economic responses applied to the COVID-19 pandemic. According to the Reserve Bank of Australia's research, JobKeeper saved at least 700,000 jobs over the period April to July 2020. The RBA has also said that, from its analysis, JobKeeper was far more cost effective than similar schemes in other countries. Estimates are that JobKeeper had a cost of around $100,000 for each job saved, compared with some $224,000 for similar attempts at such programs in the United States. This was consistent with Treasury's own three-month review, which found that the program was at that stage well targeted, with payments going to businesses that had experienced an average decline in turnover of 37 per cent, as well as a doubling in their job separation rate just before JobKeeper was introduced. In comparison, other businesses had had a four per cent decline in turnover, and businesses that were not claiming JobKeeper had had no change in job separation rate.

The success of the JobKeeper program meant that businesses across Australia performed better than expected. That, along with Australia's success in the suppression of COVID-19, has underpinned Australia's rapid economic recovery. It has also meant that some businesses within the JobKeeper program that were entirely eligible under the rules established at the time of making claims ultimately performed better than expected because the economy reopened faster and grew more strongly and because we saw the recovery come back more strongly. The combination of those factors helped to see our unemployment rate decrease for eight consecutive months and fall to 4.9 per cent in June, prior to the recent challenges of additional lockdowns occurring. Australia was the first economy to see both GDP—the size of our nation's economy—and the level of employment across Australia surpass pre-COVID levels, ahead of other advanced economies. We also saw business, with the strength it had as a result of programs like JobKeeper, able to invest in new machinery and equipment and to grow at its fastest rate since March 2003, increasing by 8½ per cent in the December quarter and 10.3 per cent in the March quarter, to be 7.2 per cent higher over the year.

These measures show the economic dividend that has accrued from good management, including programs like JobKeeper, as well as the particularly targeted saving of individual jobs at the time. It was so successful because JobKeeper provided firms with certainty and confidence at a time of great uncertainty. JobKeeper was put in place quickly, with broad eligibility criteria, and was easy to access, because at that time we were seeing lockdowns occurring across every state and territory. At that time we were seeing public-facing businesses, particularly, right across the country, including some of the retail businesses whose names I hear used quite frequently, being told they had to shut their doors. It is a good thing that they were able to reopen their doors earlier than anticipated. It is a good thing that they were able to grow faster than anticipated. It is a good thing that they have been able not only to maintain the jobs they had but, in some instances, for some of these businesses, to employ more Australians as a result of the economic dividend that flowed from the management through the pandemic.

As a government, we hear the calls that are made now to try to go back and retrospectively change the terms of eligibility for JobKeeper. The government does not believe that we should be retrospectively changing those rules. We adapted—

Senator Patrick interjecting

Senator Patrick says this doesn't do that. He's right. The amendment itself does not, but the motivations for the amendment are clearly about continually going after certain businesses, trying to demonise them and imply or suggest they did the wrong thing. Businesses who did the wrong thing, who claimed what they were not eligible for under the rules of the program at the time, are subject to all the enforcement provisions of the ATO, but businesses who claimed what they were eligible for at the time weren't doing the wrong thing don't deserve to be targeted, to be demonised or otherwise. The government welcomes and encourages those who choose to make voluntary repayments. That is a welcome and honourable thing undertaken by those businesses. But other Australian businesses who have made profits during the course of the year have been in a position to reinvest, as I said, driving investments in Australia to higher levels; to create more jobs, driving employment in Australia to higher levels; and to pay dividends, often flowing into the superannuation accounts of many Australians. These are all of the things you expect to see in a stronger economy, and it is a good thing that JobKeeper, as structured, helped to achieve a stronger economy.

I note that the Greens in the remarks made and, indeed, Senator Patrick's amendment only seek to target businesses above a certain threshold. We know that just as there would be and are businesses above that threshold who ended up doing better than expected, so too would there be many small Australian businesses, many small traders—sole traders—across Australia and many not-for-profit organisations across Australia. Again, it is a good thing that they all did better than anticipated at the start of JobKeeper.

Today we have new programs in place, new measures that are able to be better targeted, better focused, in the way in which they are applied. We are working with states and territories in the delivery of assistance to businesses that is targeted for the duration of lockdown and focused very clearly on businesses affected during those lockdowns. That's because over time we've been able both to learn about how we as a country can respond to COVID-19 and the changing circumstances, particularly those brought about by the delta variant, and to appreciate and understand how we as a nation can make sure that we provide targeted assistance geographically, locally and to people most affected at the time. Back when JobKeeper was born, that wasn't an option. It was nationwide, it was urgent and it was in the face of great national uncertainty. The rules were written then to deal with the circumstances at the time, and we don't support putting in place measures today that are about furthering some sort of argument that we should go back and retrospectively change the rules or the expectations for businesses.

11:05 am

Photo of Katy GallagherKaty Gallagher (ACT, Australian Labor Party, Shadow Minister for Finance) Share this | | Hansard source

Labor will be supporting this amendment. We think there are good arguments to be put in place around increasing transparency for entities that are receiving payments from the Commonwealth. I was waiting to hear the Leader of the Government in the Senate's arguments opposing this amendment, but other than his giving a historical rundown on JobKeeper and the reasons we had it it wasn't clear to me why the government was prepared to oppose it. Considering the length of the pandemic, the fact that it has been ongoing and the fact that we have had such enormous amounts of money going out the door, it wasn't clear why there is an argument against being transparent around where those payments are going. There was a criticism about it covering only businesses or firms where the annual turnover is more than $10 million, but I didn't understand whether that was an argument that it should cover the field. It doesn't seem to me that there is a strong argument against this.

Labor agree that JobKeeper was important. That's why we suggested a wage subsidy program back in the day. Remember that the government was opposed to a wage subsidy program and actually said it was dangerous. We were arguing for it. We saw the merits. We argued for it because of what it achieved—700,000 jobs saved. The successful rollout of a wage subsidy scheme is something that we were always supportive of, as well as the very significant suppression of the virus, which contributed to our economic recovery. I don't think there are any arguments around that at all.

We did have concerns about the lack of transparency once we got through the crisis stage. We did think there was merit behind reporting, and New Zealand has shown how that is done. We were also concerned—and I think we raised it at the time—about how some people who were earning considerably less than they got on the JobKeeper program received that money as well. We think there were elements of the program that could have been better managed by the government to make sure that every dollar spent in this crisis was targeted to where it was needed the most.

Now, with the opportunity we've had, with some of the work the PBO and others have done, and as we enter reporting season for firms, we can see that billions of dollars went to large companies that did very well through the pandemic. There were massive executive bonuses and returns to shareholders, and taxpayers were footing the bill for that. I think people who have done it tough through this pandemic look at that and think that it does not sound fair at all. I congratulate those firms that have returned JobKeeper money. They understand that the reason behind the JobKeeper program was not for firms to increase their profits but to keep people connected to jobs. That was the main reason behind it. So where firms have been in the position to repay it and have done so, I say, 'Good on them.' We just wish there were a few more of them who would follow that lead. Sometimes you change behaviour by shining a light on things. That's where transparency like this is needed and is probably expected by the Australian community.

We support this. I don't think the government has a very strong argument against it. I don't want to hold up this bill passing. My understanding was the government wanted this bill dealt with this week. We were ready to deal with it last night so that, if this amendment passed, it could go to the House. We want to make sure that we are not slowing this bill down, and we absolutely have not been doing that. We were trying to work with the government last night to make sure this bill was passed. With our colleagues in the Greens we amended our speeches and made sure we were in a position to deal with this bill. I don't want to delay it any further. I think it is important that this passes at the earliest opportunity, but this is an important amendment and we're happy to support it.

11:10 am

Photo of Rex PatrickRex Patrick (SA, Independent) Share this | | Hansard source

I thank Labor and the Greens for their support. I understand One Nation will also be supporting this amendment. I have to take the Minister for Finance to task on some of the things that he said. This is important because you cannot rewrite history, Senator Birmingham. We need to go back to what this program was about. I'm going to read from the ATO website, which says:

The JobKeeper Payment scheme was a subsidy for businesses significantly affected by coronavirus (COVID-19).

The JobKeeper payment supported businesses significantly affected by coronavirus. It's the first principle of this bill. So don't you come in here and tell us that it is a bill for economic stimulus. If you'd come to us in the middle of a pandemic and said, 'I want to give a whole bunch of companies taxpayer money so they can go off and profit,' it would not have passed this chamber. Please do not rewrite history.

You've got companies like Harvey Norman, who almost proudly are saying they took $22 million of JobKeeper money from the Australian public and then doubled their profits. 'We took money from taxpayers and we funnelled it into dividends and executive bonuses.' Do you really think that's fair, Senator Birmingham? Is that what the people of South Australia want, their money funnelled from their wallets to big business? That is not right. That is absolutely inappropriate. Gerry Harvey must be laughing at everyone right now. Every morning, people can see ads in the papers and the tabloids where he's selling his wares, knowing full well those ads are paid for by the taxpayer. Every time we see the Olympic Games—I was up in the press gallery yesterday, and Channel 7 are very happy with their ratings in relation to the Olympic Games—and see a Harvey Norman ad, every taxpayer needs to understand that they're paying for that ad. It's their money that's paying for the ad, and the government thinks that that's okay.

I went onto the New Zealand website while you were talking, Minister. I had a look at how much Harvey Norman were paid in New Zealand's wage subsidy: $12,700,622.40. That's what New Zealand tells us about Harvey Norman, but you're trying to protect Australians from being able to see that very information. Everyone in New Zealand can see how their money was spent. I'm not saying that every single company abused the JobKeeper scheme; I'm not saying that at all. I'm not suggesting that the program shouldn't have been implemented. But transparency in New Zealand has caused a much greater return of money that didn't meet the objective of the program, where companies have decided: 'You know what? I don't want to take money from the taxpayer and use it in a way for which it was not intended.' All Australians can do now in relation to JobKeeper is look at those Harvey Norman ads and increase their resilience and resolve to not shop at Harvey Norman, because it's ripping off Australians.

The accomplice alongside them is the Liberal Party. In particular, we have the finance minister supporting this. Most South Australians would be most unhappy with Senator Birmingham. He's allowing a rort to take place. I limit this to the companies that made greater profits in the period over which they claimed JobKeeper than those in the previous year. I'm not saying all companies were bad.

This bill does not seek to retrospectively do anything. All it does is say, 'Please lay out what taxpayers gave to companies to assist them.' That's all it's doing. There can be no excuse for not supporting this. Even in the amendment where we're saying that, as you pay money to companies moving forward, there ought to be disclosure about that money, I don't see you trying to carve out that part of the amendment and supporting it.

Progress reported.