Prime Minister Scott Morrison has praised the Super Retail Group’s decision to voluntarily return $1.7 million worth of JobKeeper subsidies after posting a record half-year profit.
The move by Super Retail, which owns Supercheap Auto, Rebel Sports, BCF, and Macpac, was made public by the company in its trading update (pdf) on Jan 18, after it posted profits of over $170 million during the first half of the 2021 financial year.
It also comes only one week after Toyota announced it would return $18 million in Jobkeeper payments following an unexpectedly strong sales result for 2020.
Speaking to 2GB radio on Wednesday Morrison said that this demonstrates that Australians know when they need financial support, but that they will not take advantage of it.
“We can’t run the Australian economy on government money forever,” Morrison said. “We’ve had to step in at a very serious time, but we have done that but now we have the hard job of getting the Australian economy back on its own feet.”
“It’s all taxpayer money, it’s all debt, and it’s got to be paid back,” he said.
Federal Treasurer Josh Frydenberg also acknowledged Super Retail Group’s decision noting that paying back the handout was not a legal obligation. But he welcomed the decision, saying it is “additional money flowing into government coffers and it is appreciated.”
“They don’t have an obligation to pay back JobKeeper, and it’s a matter for individual businesses to do as they see fit,” he told reporters in Melbourne on Jan 18.
Both Frydenberg and Morrison were clear though that the JobKeeper program will expire in March, as legislated, on the back of a string of positive signs pointing to economic recovery.
“We’ve got to be very careful with how we deal with these programs, they can’t just continue endlessly,” Morrison said.
While Frydenberg noted that while it was a successful program, aiding 3.3 million workers and 1 million businesses at its peak, the recovery has seen many businesses no longer in need of Jobkeeper.
Super Retail’s announcement also prompted Labour MP Andrew Leigh to ratchet up his call to businesses thriving through the pandemic to follow their lead.
In a post on Twitter, Leigh wrote: “Repaying JobKeeper isn’t a legal obligation – it’s just the right thing to do.”
“If your profits went up in 2020, and if you can afford to pay executive bonuses, then your firm doesn’t need a government subsidy,” he said.
Repaying JobKeeper isn’t a legal obligation – it’s just the right thing to do. If your profits went up in 2020, and if you can afford to pay executive bonuses, then your firm doesn’t need a government subsidy #auspol @GemmaActon @OMgovernance pic.twitter.com/96kT2fGr4Y
— Andrew Leigh (@ALeighMP) January 19, 2021
Leigh also argued that lining billionaires’ pocket with taxpayer handouts is the last thing we should see during this challenging time. He also noted that the economic recovery has yet to take hold, the federal government’s budget is tight, and there are still a million Australians out of work, and another million wanting more hours.
“At a time like that, we shouldn’t be giving many millions of dollars to firms whose profits in 2020 were better than their profits in 2019,” he told 2sm radio host Marcus Paul during an interview.
Leigh commended Super Retail Group and Toyota for making the moral decision saying this has “shown that their corporate ethics are in line with most Australians.”
However the former economist singled out Premier Investments chaired by billionaire Solomon Lew, urging it to repay its Jobkeeper payments last year.
“Last year, billionaire Solomon Lew reportedly cried as he urged Josh Frydenberg to create JobKeeper. His firm got $45m, then used it to pay CEO bonuses & huge dividends. Now they’re enjoying a profit bonanza, it’s time Premier repaid the taxpayer,” he posted on Twitter Jan 14.
Last year, billionaire Solomon Lew reportedly cried as he urged Josh Frydenberg to create JobKeeper. His firm got $45m, then used it to pay CEO bonuses & huge dividends. Now they’re enjoying a profit bonanza, it’s time Premier repaid the taxpayer https://t.co/X5knbgues5 #auspol
— Andrew Leigh (@ALeighMP) January 13, 2021
Premier Investments (ASX PMV), which owns retails chains Smiggle, Just Jeans, Dotti, and Portmans has seen its first-half sales jump by 80 percent during the first half-year.
In the trading update (PDF) on Jan 13, the group expects earnings before interest and tax to sit between $221 million (US $170 million) and $233 million (US $179 million) in the six months to Jan 30 2021.
The company received $40 million in JobKeeper payments between August and September 2020, but was not eligible for the subsidy after changes in September.
Other winners during the pandemic include Harvey Norman and JB HiFi, as lockdowns and overseas travel bans have redirected discretionary spending to home entertainment, office electronics, furniture, and leisure equipment.