Last month, K&S Corporation posted a five-fold increase in net profit on the back of $12.4 million in JobKeeper subsidies:
And earlier this week, The AFR reported that retailers receiving millions of dollars in JobKeeper subsidies are earning higher profits and paying significantly increased dividends to shareholders:
Manchester and homewares retailer Adairs reported a 19 per cent increase in net profit to $35.3 million after a boom in online sales in Australia and New Zealand during the COVID-19 lockdowns.
Adairs joins fellow JobKeeper recipient, furniture retailer, Nick Scali, in increasing shareholder payouts…
Adairs received $11.3 million in wage subsidies from JobKeeper and the equivalent New Zealand scheme… Adairs lifted its final dividend by 37.5 per cent to $18.6 million, or to 11¢ a share…
Nick Scali said it received $3.9 million under JobKeeper and the New Zealand scheme. In addition, it received rent relief from more than 85 per cent of its landlords, worth another $2.3 million…
Nick Scali increased its dividend 12.5 per cent to 22.5¢ and its share price hit a record high last week…
Now corporate welfare has been taken to a whole new level with Solomon Lew’s Premier Investments set to post record profit thanks in part to JobKeeper:
In a trading update released on Thursday, Premier said it expects its full-year earnings before interest and tax (EBIT) to be between $184.4 million and $185.8 million, about an 11 per cent increase on the prior year.
This record figure is despite an 18 per cent, or $106 million, decline in sales across the second half of the financial year after the retailer’s stores were shut for two months due to COVID-19 and the business stood down 9000 staff…
Premier has also been a significant beneficiary of the federal government’s JobKeeper wage subsidy program and a similar program in New Zealand, with the company signing on to the scheme in April after total sales fell 74 per cent during the first six weeks of the second quarter.
The company noted it had “maximised” the use of various subsidy schemes along with rent relief globally, however, it did not specify the amount claimed through JobKeeper.
With 12,000 staff stood down around the world, the amount of JobKeeper claimed by Premier is likely to be in the tens of millions. In New Zealand, the company has claimed $NZ4.56 million ($4.19 million) for 840 staff.
Premier also refused to pay rent for its stores during the pandemic shutdown…
Truly amazing stuff:
- Don’t pay your rent
- Sack a bunch of employees
- Bury your snout in the government trough for as many handouts as possible
- Report record profits
JobKeeper should have finish on its legislated late-September expiry date.
Instead, JobSeeker should have been maintained at its current elevated level of $1,100 a fortnight until the labour market returns to ‘normal levels’, and then be lifted permanently by at least $95 a week (as advocated by ACOSS).
However, those working in a limited capacity (such as independent contractors) should also receive income support, but at a tapered down rate. That is, as hours and incomes increase back to pre-COVID levels, Jobseeker support is tapered.
Maintaining JobSeeker at a base level of $1,100 would provide an adequate universal social safety net that catches anyone left unemployed. It is also far less distortionary than JobKeeper, which misses a wide variety of businesses and can be manipulated.
JobSeeker is a genuine non-distortionary social safety net, whereas JobKeeper is a convoluted program that benefits some businesses over others, can be gamed, and hides the true extent of unemployment.
JobKeeper also supports industries and firms that have no long-term future, thus preventing the Australian economy from restructuring via the process of ‘creative destruction’.
Displaced workers need emergency income support, but they shouldn’t be supported in jobs that have little chance of recovering.
Nor should taxpayer subsidies be used to juice shareholder profits and to make billionaires richer