Federal Treasurer, Joe Hockey, has strengthened the Government’s hard line on industry subsidies, declaring that assistance would not be forthcoming without rigorous examination of a company’s accounts. From The Australian:
“The government should not be subsidising poor workplace practices,” he said in an exclusive interview…
Mr Hockey said there were “inevitably” cases where federal government funds went into a company only to be paid out on dividends or higher wage claims rather than used to repair the business.
“It is not the responsibility of taxpayers to prop up unprofitable companies,” Mr Hockey said.
“It is not the responsibility of taxpayers to ensure that shareholders get dividends. If we are going to provide any support to any company, we want to do a complete due diligence on a company’s balance sheet.
“That was never previously done by Labor. That applies to any company as far as I’m concerned”…
“We need to go through their balance sheets with a fine-tooth comb to ensure that when there is a cheque from taxpayers it’s going toward the restructuring of the company rather than just simply propping up shareholder returns,” he said. “But that is a last resort. The starting point is we are not in the business of subsidising commerce.”
Sounds like an eminently sensible position from Hockey. Any subsidies provided to a private company should, as a minimum, require proper due diligence of the firm’s books. Otherwise, there is no way of knowing how taxpayer funds will be used and whether taxpayers are likely to receive value for money.
Frankly, I am surprised that such due diligence does not take place already.
