Job Keeper, brilliant idea which was stuffed up

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    Job Keeper a brillliant idea set in place by Prime Minister Scott Morrison
    Australian Prime Minister Scott Morrison

    Job Keeper, brilliant idea which was well and truly stuffed up.

    Toss in a brilliant idea, a stuff-up by the Federal Government and tens of thousands of people have a windfall.
    Think about it.


    Covid hits the Globe
    Panic stations as Australian politicians rush to save businesses and jobs.
    Brilliant idea, help employers by subsidising their wages bill.

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    To qualify employers had to demonstrate their sales were down, or would be down by 30%
    The grants were called “Job Keeper” and $90 billion was paid to companies, partnerships, and sole traders.
    It worked a treat. The economy withstood the Covid hit, and the unemployment rate was managed.


    The government had done a great job, until financial statements started to issue.
    There was a stuff-up with the terms of conditions and as a result, some people are at best unethical, or at worst they are simply cheats.


    One needs to look at the criteria to get a clue about how it went off the rails.


    The main criteria of Job Keeper


    The criteria
    Applicants had to demonstrate that their sales were down 30% (Accounting approach)
    Or
    Applicants projected that their sales would be down 30% (Crystal ball accounting stuff)


    Point 1 is clear-cut, either sales are down 30% or not.
    Point 2 is subjective as forecasting is difficult at any time, and in the middle of a pandemic, almost impossible.


    However, point 2 provided the flexibility to meet the challenge.


    This was the brilliance of Job Keeper, but it left the gate open for abuse. The government needed contingency plans, something this federal government struggles with.


    Abuse
    Originally $130b was put aside for Job Keeper. However, only $90b was claimed.
    Of the $90b paid out, at least $13b was not justified and should have been refunded to the government.
    The expected downturn in sales for tens of thousands of organisations did not materialise. For some, such as Harvey Norman, it was a bonanza.


    These companies experienced sales increases and many refused to return the Job Keeper money. Currently the Australian Tax Office has only contacted about 800 of the potential 200,000 over payments.


    The explanation for this unsatisfactory situation is that the Morrison government simply got it wrong.


    Flawed implementation and cheats


    Whether deliberate or not, the conditions of Job Keeper did not permit the Australian Tax Office to “claw back” payments.
    An estimated 200,000 organisations received government grants they were not entitled to. Their sales had increased rather than falling.
    And the company drawing the most media attention is Harvey Norman for its initial reluctance to pay back.


    Harvey Norman

    Gerry Harvey – CEO Harvey Norman Pty Ltd


    Harvey Norman is a public company and therefore its financial reports are open to analysis.
    For the year ended June 2021 sales rose 15.3% to $9.72b and adjusted profit rose 78.8% to $1.18b. Following significant media attention, Gerry Harvey paid back $6m of the $21m received in Job Keeper grants.
    Harvey Norman had not done anything illegal, the legislation was poorly designed.


    However, it is only one of many well-known public companies who got a wind fall, and are clinging to it. Legal, but certainly not ethical, or moral and they are ducking questions.


    While these “big end of town” companies were having a picnic with Job Keeper, many country areas were barely recovering from the disaster of the three years of drought.


    Australian bush hardest hit

    What makes one absolutely disgusted is that the bush copped a double whammy.
    It had three years of drought followed by Covid 19 lock-downs.


    The drought had wiped out sales and they were flat-lining for most businesses. Income was about as low as it could go. Thus, for many there was little chance of meeting the Job Keeper criteria.


    This was a common gripe about Job Keeper, people were ruled out by the impact of the drought.
    No wonder many in the bush feel duded when reading about the ethical rorting of the system.


    Ethics

    Thanks to the poor design by Treasurer Josh Frydenberg and Prime Minister Morrison, the rest of the taxpayers will be out of pocket $13b. Obviously the Coalition Government doesn’t want to talk about the lost money, and are instead talking up the overall good economic news.

    Treasurer Josh Frydenberg


    On the other hand, the issue is a hot one in the media and the best one can hope for is a rush of ethics by those who got the windfall.


    Labour, the Greens and many in the cross-bench of the Senate are calling for a list of those withholding the funds. The fear of a public list is great encouragement of responsible ethics.


    Finally, it is interesting to note that New Zealand has again shown up the Australian Morrison government. Prime Minister Jacinta Ardern ensured that a public register was kept of all corporation recipients of government funding.


    It is reported that the refund of over-payments is 22 times higher than in Australia.

    SOURCERodney King
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