Jobkeeper doubled return for investors compared with companies that did not have subsidy
An investor who put money into companies that received the Morrison government’s jobkeeper payment would have received almost twice the return as someone who invested in companies that did not receive the wages subsidy, new analysis shows.
The analysis, conducted for Labor frontbencher Andrew Leigh, shows that someone who invested a dollar in each of a basket of jobkeeper companies in March last year would have all but doubled their money, receiving a return of 99.2%.
An investor who invested in the same way in companies that did not get jobkeeper would have made a return of 57.3%.
The figures include increases in share prices and the payment of dividends, which has been controversial for companies that have been bolstered by the jobkeeper subsidy.
While companies including Super Retail Group, Toyota Australia, Domino’s and miner Iluka have promised to return jobkeeper money to the government, others including Gerry Harvey’s Harvey Norman and Solomon Lew’s Premier Investments have decided to keep the cash.
Almost the entire sharemarket has rebounded strongly over the past year after tumbling by 30% in March as coronavirus panic gripped traders.
However, some companies that received jobkeeper have massively outperformed the broader market, with Harvey Norman investors receiving a return of 112.7%, including dividends, since March last year and those who put money into Premier getting 117.8% over the same period.
Premier declared a dividend of $54m last month, of which Lew is entitled to $22.9m due to his 42.43% stake in the company.
In February, Harvey Norman said it would pay dividends totalling $249m, of which Harvey is to receive $78m due to his 31.4% shareholding in the company.
Leigh said the figures showed that too much jobkeeper money flowed to companies that did not need it, while at the same time areas such as the arts, tourism and education were struggling after the Morrison government shut down the program at the end of last month.
“Jobkeeper was meant to be a lifeline, not a boondoggle,” he said.
He said millions of dollars in jobkeeper money had been used to pay executive bonuses and dividends to billionaires.
“Companies such as Harvey Norman and Premier Investments got jobkeeper despite seeing their profits soar to record highs. Jobkeeper has even been paid to hedge funds.
“It’s just not fair that the Morrison government lavished taxpayer support on super-profitable firms, while ignoring the pleas of small businesses that now face insolvency.”
While other countries including the US and New Zealand have maintained public databases of companies that received jobkeeper-like funds, the Australian treasurer, Josh Frydenberg, has consistently ruled out the idea.
“Jobkeeper cost nearly $4,000 per Australian, and yet the program has been shrouded in secrecy,” Leigh said.
“It’s not Liberal party money, it’s taxpayer money, and the government must come clean on how it was spent.”