Step right up, every billionaire is a winner. There’s $100 billion up for grabs and winning is as easy as shooting fish in a barrel.
Welcome to the JobKeeper carnival, where some of Australia’s richest people are cashing in on a scheme designed to keep vulnerable workers in a job during the pandemic. A scheme so brilliant and yet so poorly designed that it’s fast becoming the biggest corporate welfare program in Australian history.
Like robodebt in reverse, JobKeeper has funnelled millions in emergency stipends into the coffers of some of Australia’s largest companies with few questions asked. And thanks to the absence of any register, there’s little transparency over who got what.
While providing a much-needed lifeline for workers during the recession, JobKeeper has also been a cash bonanza for some companies whose fortunes have greatly improved off the back of a rise in consumer spending as Australia emerges from the worst of the pandemic.
The festival has come to a head this week with company reporting season providing a glimpse into some of the biggest publicly-listed rorters of them all.
Today we hand out awards for some of the most shameless — the gambling empires, billionaires and investment bankers that have pocketed large profits during the pandemic thanks in part to millions in government handouts.
The House Always Wins award
First up is an award for the gaming industry, which has done extraordinarily well from the scheme.
Taking out first prize is Star Entertainment, which made a $51 million profit for the six months to December thanks to $123 million in JobKeeper payments it received throughout 2020. Not only did it manage to turn a profit for the period, it also paid out executive bonuses worth $1.4 million despite missing its annual financial targets.
In second place is James Packer’s Crown Resorts, which took home $255 million in JobKeeper payments in 2020, allowing it to pay $203 million in dividends in April. Crown made a $120 million loss for the six months to December and the company claimed the dividend was for the pre-COVID period. But its hefty JobKeeper bill amid a money laundering scandal has been criticised, with some saying it should be looked at as part of the Victorian royal commission.
Finally, the bronze medallist is poker machine manufacturer Aristocrat, which received $11 million in JobKeeper and paid dividends of $63.9 million, some of which flowed to the family of the company’s founder, billionaire Len Ainsworth, who is worth $4.42 billion.
The Most Brazen award
First they profited from the pandemic, now they want to profit from the taxpayer too.
In first place is retail billionaire Solly Lew, worth $3.7 billion, who was reportedly in tears in April as he spoke to Treasurer Josh Frydenberg shortly after his company Premier Investments was forced to stand down 12,000 workers.
But Premier’s retail stores are now booming, with the company reporting an even bigger profit than 2019 thanks to $40 million in government handouts.
Lew is yet to shed a tear for the taxpayer. So far he’s refused to hand the money back — instead giving $57 million to shareholders in dividends. As the largest shareholder, about $20 million of that will flow to himself. He’s also paid his chief executive Mark McInnes a $2.5 million bonus, taking his total salary to more than $5 million.
In second place is Gerry Harvey. Franchisees who run stores for Harvey Norman received $7.6 million in JobKeeper while the company itself received $2.39 million in wages support. Harvey Norman paid dividends worth $74.7 million, of which Harvey received $23.5 million.
In third place is Kerry Stokes, who has already received a shout-out for his ability to rake in JobKeeper cash. His company Seven West Media reported a stronger-than-expected $116 million half-year net profit this week, while also acknowledging it benefitted from $47 million in JobKeeper subsidies during the same period.
There were many runners up for this coveted award. The Andrew Demetriou-chaired Capitol Health unveiled a $6.2 million profit for the six months to December, thanks to $5.8 million it received in JobKeeper. Investment bank Moelis received $3.3 million in JobKeeper payments, and paid its top executives cash and equity bonuses worth $4.9 million in 2020, as well as $14.7 million worth of dividends. Moelis reported a 12.7% rise in profit to $26.5 million for the 12 months to December.
Finally, Autosports Group, which specialises in luxury cars, saw its profit rise 132% in the six months to December, thanks to $10 million in JobKeeper it is yet to pay back.
And hedge fund K2’s profit rose 106% to $21 million, thanks to “government grants” worth $246,000.
The How Did They Qualify? award
The whole point of JobKeeper was to bankroll companies that might have to sack staff because of big revenue declines during the pandemic. Yet some recipients of the subsidy haven’t appeared to have had any revenue decline at all.
Coming in first place for this award is HR payroll company Elmo Software, which pocketed $4 million in JobKeeper. Not only did it grow its revenue in 2020, but had enough cash to spare to acquire several companies. And while it couldn’t find the cash to pay staff, it managed to pay out executive bonuses worth $600,000.
Second place is tech company SuperLoop, which saw its revenue double from pre-COVID levels while receiving $2.5 million in JobKeeper. Although it still didn’t turn a profit it remains to be seen exactly how the company managed to qualify.
It begs the question: how many other big companies that aren’t required to lodge their accounts to the ASX experienced no revenue drop while subsidising their staff’s pay with taxpayer dollars?
Private Media, the parent company of Crikey, received JobKeeper last year. None of the funds were paid to shareholders as dividends. It was used entirely to pay staff salaries.