Josh Frydenberg wage stagnation
(Image: AAP/Mick Tsikas)

The pressure is on. After months of brushing off criticisms over his bungled JobKeeper scheme, Treasurer Josh Frydenberg is finally facing a brutal reckoning over his government’s failure to recoup the billions of public support payments that flowed into the hands of profitable big businesses. 

The full scale of the corporate rorting has now been laid bare. More than $13 billion went to companies whose revenue increased during the pandemic — almost $1000 for every taxpayer. According to the ABC, around 35,000 companies either doubled or tripled their takings while receiving the support payment.

The anger in the community is palpable, with the government’s unwillingness to claw back the money in clear contradiction to its brutal treatment of welfare recipients. 

Now the issue has become so serious that Australian Taxation Office (ATO) commissioner Chris Jordan faces potential jail time if found in contempt of Parliament over a push in the Senate to release details of who got what.

The push for transparency

Frydenberg has used all the tools at his disposal to try to make the issue go away. His friends in the business community have tried and failed to generate some positive headlines. Innes Willox, who represents the powerful industry lobby Ai Group, claimed on Sunday the scheme “was not designed to be repaid”.

But the issue has only gotten bigger, thanks (or no thanks) to Gerry Harvey’s decision to pay back only $6 million of the $21 million his company received during a year it made $1.1 billion in pre-tax earnings. The decision, and a bunch of absurd media appearances by the retail billionaire, has only aggravated people further. Why did he not pay back the full amount? And why was he paying it back now? 

Behind the scenes, Frydenberg faces an even bigger challenge to keep the details of the recipients of the scheme secret. Independent Senator Rex Patrick has successfully brought a motion requiring the ATO to release the details of who got what. 

The tax commissioner insists that releasing the information is not in the public interest, and would undermine confidence in the tax system. 

Frydenberg has intervened in the request on behalf of the government, saying in a letter to the Senate on August 26 that releasing the information would breach “strict tax secrecy laws” and adversely impact “almost every aspect of government”. He also claims the disclosure of the information would “prejudice the commercial interests” of the businesses that received the payment. 

Patrick has been scathing of the treasurer’s attempt to run interference in the process and has promised to refer Jordan to a parliamentary committee. 

“Under no circumstances can anyone say the way in which public money is spent should not be public,” he said. 

An ATO spokesperson told Crikey the commissioner now found himself in “an unprecedented situation”.

“The government has lodged its own claim for Public Interest Immunity in respect of the documents sought under the order,” it said. 

“It is the commissioner’s understanding that if the government’s claim for Public Interest Immunity is accepted by the Senate, it will have the practical effect of relieving him of his obligations to provide documents in response to the order.”

Why can’t we see the data? 

Ultimately the data could be released tomorrow if the government wanted it to be made public.

But JobKeeper has always been a unique scheme in that it was paid out through the ATO, not Services Australia. 

Under Australia’s tax law, there are secrecy provisions that protect certain taxpayer information, including how much a person or company pays in tax. 

But it is not clear as to whether this includes money given to companies via the ATO in support payments.

“Governments can be transparent about it, or they can seek to withhold it from the public,” ANU tax lecturer Daniel Stewart said.