Contributed by Ben Wilson
The inadequacies of JobKeeper are becoming more obvious the longer it continues. At first it was that many of those who were left without an income due to Covid-19 missed out.
It was obvious from the start, that the JobKeeper system was seriously flawed, at least, in terms of providing assistance to normal wage earners sent home.
The scheme had been misleadingly presented as help for these people. But it is not this. The giveaway is that it is a payment goes to employers, to subsidise their operations, and that plenty of loopholes were left in place, to ensure that those who wanted to milk the system could do so.
It should have surprised anyone that news about employers pocketing payments, or misusing them in other ways, began to filter out. One particularly insidious trick, has been to change the hours of part time and casual workers, so they work longer hours for the same money. Their pay rate was cut.
This was given the legal go ahead to do this by the misnamed Fair Work Commission.
The latest scam to come out into the open is the use of JobKeeper money to subsidise shareholders. According to evidence, this has involved tens of millions of dollars.
If a business could show a reduction of turnover of 30 percent within the three months to June, or 50 percent in the case of a big company, it qualified for the payment. Those with the ability and will, need to just apply a bit of creative accountancy.
This allowed scope to shuffle about a company’s finances. Money that might otherwise have been used to pay wages, could be turned over to pay dividends to shareholders. JobKeeper has been transformed into what is really share subsidy. The method has also been used to pay for big salary increases to top company executives.
Two examples of the use of this scheme are Adairs (payments to shareholders and $44,000 to CEO Mark Ronan totalled $11.3 million), and Nick Scali (payments to shareholders and the $2.5 million going to the Scali family came to $3.9 million).
This is only the tip if the iceberg. The scamming has been serious enough at first to pressure the Morrison government into tightening the system a little, with its reduced rate extension till March next year.
With the arrival of the second wave, however, the restrictions have been relaxed again. Expect the corporate squeezing of JobKeeper to continue.
It is important to draw attention to this wrong. The priority should always be to help those is need because their source of income has been cut off. The rorting, whichever form it takes, is robbing from the vulnerable. A just society does not tolerate this sort of behaviour.
Those who do this should be made accountable. The problem at the moment is that the system has been set up to make this legal. That has to change as a first step. Companies caught practicing them could then be fined enough to make it unattractive.