Some firms weren’t eligible despite claims of hardship
A number of ASX300 firms that received JobKeeper subsidy in the second half of 2020 might not have needed the government’s wage support at all: some major recipients increased their profit at the close of the year, data from advisory firm Ownership Matters showed.
JobKeeper aimed to support employers whose revenue declined significantly and were therefore struggling to keep workers on the payroll during the pandemic. It wasn’t only small and midsize enterprises that were in trouble of capsizing, however. A total of 66 out of Australia’s top 300 publicly listed companies reportedly received a share of the $83bn programme.
Read more: JobKeeper: What happens after the wage subsidy ends?
Out of this sample, 34 companies also reported improving their performance a year after the pandemic. Meanwhile, 58% remained profitable all throughout.
“Ninety per cent of companies that got the subsidy were making money, but it’s staggering that 50% of those who pocketed $284m for the half, were making more money than they were in 2019,” said Dean Paatsch, director of Ownership Matters.
Some employers who have managed to bounce back are looking to repay the government subsidy. Others have not been keen on the idea and instead pledged to pay higher taxes. Meanwhile, at 28 firms that performed better amid the crisis, the subsidy reportedly contributed 20% of their gains in underlying earnings.
Read more: ‘Ghost’ employees among JobKeeper recipients: ATO probe
Despite receiving criticism over the real beneficiaries of the wage scheme, Treasurer Josh Frydenberg reminded the public of the actual purpose of the programme: “JobKeeper has helped save jobs. That is what it was intended to do.”
Paatsch also said: “JobKeeper was designed for armageddon, and when that didn’t transpire the government was obliged to keep paying. It’s very clear now that was a significant benefit to many shareholders.”
