In 2020, the federal government paid over $1 billion to some of Australia’s most profitable companies. Over 60 publicly listed businesses have revealed that they were given handouts such as JobKeeper despite recording a combined profit of $8.6Bn in the past 18 months.
These companies distributed an excess of $3.6 billion in dividends to their investor since April 2020, when JobKeeper payments were originally introduced. The businesses have agreed to pay back $72 million. After receiving millions of taxpayers money, these companies also paid out $20 million in executive bonuses.
Approximately $1.5 billion worth of payments was handed to ASX-listed organisations from governments across the world in 2020. The large majority of these payments were linked to the JobKeeper subsidy.
Companies that have repaid theit JobKeeper payments in full include; Dominos, CIMIC Group, Iluka Resources, Santos and Super Retail Group. These repayments however, have not been recorded on The JobKeeper Files.
There are several other companies who have decided to repay parts of the subsidies as an amount which is either determined appropriate by the board or to only repay payments that were made to staff members who were given JobKeeper without being stood down or made redundant.
Collins Food and Adairs chose to hold onto JobKeeper payments for staff that were stood down, as they contended that these payments had zero impact on their earnings.
It has been reported that over $250 million worth of payments to employees retained on zero hours across these companies. Despites this, most of these businesses failed to reveal if they forced these workers to draw down on leave entitlements.
Other companies like Nick Scali have returned the money they received over December, but retained the subsidies they received during the previous financial year. Integral Diagnostics and Bingo Industries are yet to decide whether they will pay back the money that has been handed to them.
The JobKeeper scheme will end on 28th March 2021. Since September 2020, over half a million businesses across the country have graduated from the scheme. Despite the schemes success at helping businesses survive during the pandemic there are a number of businesses struggling in industries such as aviation, tourism and the arts and recreation services.
Insolvency experts are encouraging businesses who are facing an uncertain future to act promptly as it is imminent that the ATO will be determined to pursue debts once JobKeeper ends.
The January Sensis Business Index discovered that 39 percent of small businesses believe that the loss of JobKeeper will have a huge impact on their viability. These figures have increased from 29 percent in November and 31 percent in December.
The survey which was completed by 1,000 small-business owners found that another 51 percent believed that the end of JobKeeper would have a moderate impact on their ability to remain viable. One in 10 businesses who were surveyed believed that phasing out JobKeeper would make no difference to their business.
The Australian Government has also recently announced that the JobSeeker payment will permanently rise to $615 a fortnight from April 2021 onwards. This means that the base rate of the JobSeeker payment will be increased by $50 a fortnight once the coronavirus supplement concludes next month.
The permanent $50 increase will commence on 1 April and will be applied to JobSeeker, Youth Allowance, Abstudy Austudy, and Parenting Payments. The increase is projected to cost about $9bn over the next four years.
The team at C&D Restructure and Taxation Advisory are here to help. As part of the Vault Group we can offer the full suite of financial products and advice to help you navigate the business landscape. Schedule a meeting here via Calendly or give us a call on 07 36086800.
The team at C&D Restructure and Taxation Advisory are here to help. As part of the Vault Group we can offer the full suite of financial products and advice to help you navigate the business landscape. Schedule a meeting here via Calendly or give us a call on 1300 1 VAULT (1300 182 858)
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