$8bn property parasite rorts JobKeeper

Via Michael West:

Mirvac, an $8 billion property juggernaut, is claiming the JobKeeker subsidy. Michael West reports on large corporations rorting taxpayers by pocketing their employees’ PAYG tax while avoiding their obligation to pay entitlements to workers they have sacked.

While regaling shareholders with big-ticket commercial property spending proposals, Mirvac has concocted a devious plan to usurp the JobKeeper scheme. Not only does Mirvac pay zero income tax, thanks to its trust structure, it also profits from government contracts and, now, has even availed itself of the JobKeeper subsidy as well. It’s the triple-decker taxpayer sandwich.

This, despite the JobKeeper rules which prohibit companies with more than one billion in revenue claiming the payments unless their revenues have fallen by 50 per cent.

Detailed questions were put to Mirvac chief executive Susan Lloyd-Hurwitz, who is yet to respond, however a statement from a company spokesperson said:

“We have applied for JobKeeper assistance for some of our employees across the Mirvac Group where we have experienced a significant decline in our normal operations”.

As Mirvac records revenues of around $2 billion a year, it should not be eligible for JobKeeper. Moreover, it has not informed the ASX that its revenues are down by more than 30%.

It appears therefore that Mirvac is being cute. Large property groups have typically established dozens of Special Purpose Vehicles (SPVs) to house their various businesses and game the GST regime.

Presumably, although part of a larger group, Mirvac is claiming JobKeeper based on the performance of some of these SPVs, probably where they can claim a 30% fall in income based on specific GST records within certain timeframes.

One former Mirvac manager, who was fired by Mirvac in April, told Michael West Media that, along with another colleague who was also fired, both were asked to fill out JobKeeper application forms.

“Mirvac chose to fire contracted employees across the entire business on April 21st 2020 “due to COVID”. The decision had nothing to do with the need of the specific roles as all different contractors were terminated.

“Mirvac exploited this COVID-19 crisis as a way to fire all staff employed on contracts. Considering that retail centres were open as an essential service our roles my role was certainly not genuinely redundant.

“I would think any business cannot use the pandemic as a guise to get rid of employees that they would otherwise be unable to dismiss under the laws of unfair dismissal.

“I was asked to work out the rest of the week and so still had access to my emails and phone. I received a termination letter … and then, later that week, received a JobKeeper nomination form from Mirvac HR. I cannot imagine why they would need me to fill out a JobKeeper nomination form if I am not keeping my job. I also received a follow-up phone call from one of Mirvac’s HR team on my personal phone number asking me to fill this out.

“What it did show was that Mirvac was clearly in the process of applying for JobeKeeper payments and should have incorporated that scheme to protect all staff.”

Mirvac’s chief executive declined to respond to specific questions regarding the amount of JobSeeker claims it had made or whether the board of the company was aware that it had been claiming the allowance.

According to the Government’s JobKeeper rules, a big business with more than $1 billion has to show a fall in turnover of more than 50% to be eligible to claim JobKeeper:

“Your business has faced either a:
30% fall in turnover (for an aggregated turnover of $1 billion or less)
50% fall in turnover (for an aggregated turnover of more than $1 billion),

Aggregated turnover tests for entities likely to exceed $1 billion:
Large businesses must show a shortfall percentage of 50% or more.

For the purposes of determining if the 50% shortfall percentage applies, a large business is an entity that:

had an aggregated turnover of more than $1 billion in the previous income year to the income year in which the turnover test period occurs, or
is likely to have an aggregated turnover of more than $1 billion in the income year during which the turnover test period occurs.

————–

Questions to Mirvac Chief Executive Susan Lloyd-Hurwitz

1. On what grounds is Mirvac applying for the JobKeeper subsidy? It is a billion-dollar company whose revenues have presumably not fallen 30% (the eligibility criteria)?

2. What eligibility criteria is Mirvac invoking to claim JobKeeper?

3. How many employees and ex-employees has Mirvac claimed for?

4. Could you please respond to this claim by somebody who used to work for Mirvac in March: “Mirvac chose to fire contracted employees across the entire business on April 21st 2020 “due to COVID”. The decision had nothing to do with the need of the specific roles as all different contractors were terminated.

Mirvac exploited this COVID-19 crisis as a way to fire all staff employed on contracts. Considering that retail centres were open as an essential service our roles my role was certainly not genuinely redundant.”

5. Does Mirvac retain the tax of PAYG employees who are now on JobKeeper?

6. Do you agree this amounts to a taxpayer subsidy which also allows Mirvac to avoid having to pay entitlements to workers it has let go?

7. Has the board of Mirvac been privy to your JobKeeper activities and have they been discussed at board level?

8. Has Mirvac taken legal advice in relation to its JobKeeper claims? Please detail.

Statement from Mirvac:

We have been impacted right across the breadth of our business, which is why we withdrew market guidance in March. We still have some way to go before we understand the full extent of the impact.

We moved quickly to implement a number of key measures in response to COVID-19, including

– reducing discretionary spend and deferring capital expenditure;

– a voluntary 20 per cent reduction in remuneration for the ELT and the Board, from 1 April to 30 June, to preserve cash and jobs; and

– a voluntary reduction in working hours for most employees, from 1 May to 30 June, to share the impact across the business.

We have applied for JobKeeper assistance for some of our employees across the Mirvac Group where we have experienced a significant decline in our normal operations.

David Llewellyn-Smith
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Comments

      • I’m surprised. while I expect obscene, this is extraorinarily obscene and sounds fraudulent.

        Quite possible though that Mirvac is dodging it’s legal obligations to employees under the cover of COVID

        • DominicMEMBER

          It is obscene – but when you’re one of the big boys, with big pockets, and smart lawyers, well … what are the penalties? A few mil in fines?

          Jail for the small people, obviously.

    • Mirvac is behaving in line with the general standards of Corporate Australia i.e. utter scum who deserve the noose.

    • Me too. I rarely read his articles, too depressing and I know every company and pollie rips us off. But he is absolutely worth supporting, so I contribute every month. For those who can afford too I encourage you all do the same.

    • Ronin8317MEMBER

      QAN definitely qualify under the 50% drop in revenue. I don’t see Mirvac letting people who buy off the plan defer their settlement though, so any revenue drop must come from ‘very creative accounting’.

      • QAN were rorting it by pocketing the $1500 themselves while staff were on enforced annual and LSL.

      • kannigetMEMBER

        Simple, Mirvac dont build anything, they have a collection of small entities who they own but pay to do the work. Each employee is actually part of the smaller entity for payroll purposes.
        Settlements are all through a seperate entity that pays the smaller entities for their work component. In order to show revenue is down in the smaller entity they just stop the flow of payment. That entity is under the total revenue cap and they now show it has reduced revenue.

        The ATO should be able to claw all of this back once they get looking properly, but really depends on the legislation.

        • GlendaFMEMBER

          Really depends on how ballsy the ATO is, Mirvac would fight them tooth and nail!

        • kannigetMEMBER

          Considering how enamored the LNP are with supporting poor little construction industry I expect this will be assessed as nothing to see here… But I live in hope.

  1. It is outrageous but just a more complex variation of the painters at my house who have quoted one price for cash and another for a bank transfer (bank transfer it is) and are also asking me if the painting (outside the house) is for my “home office” (wink, wink and no it isn’t).
    If they were running Mirvac they would be doing the same thing.

  2. This is not free, printed money is tax payers money. We are paying rich people a wage, simple as that. We are paying upper middle class a wage. None of them need these payments. All tax payers and non taxpayers will pay for every cent of this massive hand out to the wealthy and lazy through hyper inflation of goods and services. Tax will also be higher to pay for the debt.

    These LNP are idiots, Labor supports them all the way also but are not the ones doing this so it is on LNP.
    We will be crippled, the only way out will be a bigger mass immigration scheme in future.

      • You don’t understand how printing money works. Every dollar printed has a direct and equal effect on every dollar existing as capital or cash. The bond is borrowings not printing. Borrows are debt that needs to be paid back.

  3. M West is also being a bit cute re his lambasting their 50% reduction in GST Turnover to meet the JK eligibility. He should clearly state how it works before just saying Mirvac doesn’t comply. Not saying I’m batting for some smug property developer but it is only proper to be clear why he thinks they do not comply. “GST Turnover” only had to be down > 50% in one month compared to equivalent month in prior year. Doesn’t mean its gone down for the entire year nor for an ASX reporting period.

      • and jobkeeper eligibility works that once you are in you are in. don’t have to prove again during the 6 month period.

        far too easy for unscrupulous types to rort.

  4. going to be these who benefit. many micro not going to go through having to re qualify etc. many accountants who didnt charge or charged reduced rates cant afford to do so this time around. means many wont go for mark 2.0. i suspect many white collar workers going to be hit hardest. 1929 rhyming