- by Valentin Cartillier
- The Guardian
- Issue #1973
It has been revealed that businesses have rorted the JobKeeper program during 2020, with many of them using it to turn a profit. Between April and June last year, around one million businesses and not-for-profits signed up. It was designed as a $1,500 a fortnight wage subsidy so businesses could keep paying their employees during the coronavirus pandemic and maintain their link with them.
But as it turns out, many businesses simply pocketed most of the money. $4.6bil went to businesses that were actually still making a profit and clearly not suffering financial hardship. A review by the Parliamentary Budget Office, which offers transparency around fiscal and budget policy issues, showed that 157,650 employers increased their turnovers in 2020 as compared to the same period (April-June) in 2019. The figures look even more exploitative when you look at the statistics from a broader perspective.
It is essential to keep in mind that this subsidy was to enable struggling businesses to keep paying workers, not go to the businesses’ bottom line. To qualify for JobKeeper, businesses had to show that their turnover had fallen below a certain threshold or that their turnover was “projected to fall” beneath that threshold due to the impact of COVID-19. The federal government would then pay them $1,500 for each eligible worker which they were obliged to pass on to their staff regardless of whether they were still working or stood down.
“Projected to fall” is the sleight of hand that 365,000 businesses used to access the subsidy without suffering a downturn in revenue, but continuing to turn a profit. These businesses pocketed $12.5bil by claiming that their projected turnover was expected to decrease compared to the previous financial year. In most, if not all, cases it is plain to see that this was probably intentional.
Once “qualified”, businesses continued to receive the payment until the end of September, which was when the next threshold test took place. The figures for the July-September period have not yet come out, though we can reasonably expect similar numbers. This incredible waste of taxpayers’ money is just another example, in an increasingly expanding pile, of making workers pay for the crisis. Unemployed workers received a temporary supplement bringing their payment to $1100 a fortnight.
Best & Less presents a pretty egregious example of this profiteering. They received $46mil in JobKeeper subsidies of which only $15.7mil was passed on to employees. So, just thirty-four per cent of the money designed to keep workers employed actually made it to Best & Less employees. To add insult to injury, not only did Best & Less increase its earnings by sixty-two per cent in the 2020 financial year, with a third of that thanks to the JobKeeper payment, its earnings increased 100 per cent in the past financial year.
And this is just a single business. The entire JobKeeper subsidy has cost around $90bil though, as more of the figures come out, that number could end up at over $100bil. We will undoubtedly see many more examples of this rort being brought to light.
This is truly one of the finest examples of the absolute lie of so-called “trickle-down” economics. The wealth of businesses does not “trickle-down” to workers, it pools at the top. If we are to humour the capitalist economists and politicians who cling so dearly to this concept, we can proclaim, “Why yes! The wealth does trickle down. Into the bottom lines of your businesses and out to your shareholders.”
Labor MP Dr Andrew Leigh has called for businesses to return the money they pocketed. Given how viciously Centrelink has pursued welfare recipients in the past – we need only recall the fatal Robodebt scandal from a few years ago as one example – it shouldn’t be outside the government’s capacity to recover the funds.
However, it is very unlikely that this demand will be met without a united front campaign by members of all areas of the working class. Since the government has been so hellbent over the years on forcing welfare recipients to pay back money to the government (money which people desperately needed and did not owe), then it is only fair that the biggest welfare recipients of all, private businesses, pay it back too.
This JobKeeper scheme may be the single greatest misuse of public money in the history of the country. However, misuse is not entirely the right word. Misuse implies a lack of intention. When you understand how this money has been allocated according to the logic of capitalism and the state, it becomes clear that keeping businesses in the green was what was intended all along. As Lenin wrote in State and Revolution:
“A democratic republic is the best possible political shell for capitalism, and, therefore, once capital has gained possession of this very best shell […] it establishes its power so securely, so firmly, that no change of persons, institutions or parties in the bourgeois-democratic republic can shake it.”
The state aids and abets the expansion of capitalism, which is its economic foundation. Therefore, particularly in this case, it comes as no surprise that the government has once again aligned itself with private interests by handing out money to businesses while workers suffer and starve.
The value created by the working class through their labour is appropriated by business-owners who use it to increase their overall value and expand their businesses without any regard for the welfare of workers. The capitalist state will always be on the side of capitalism and the capitalists until it is brought under the control of the working class. The working class may demand that businesses pay back the money they took but this cycle will only keep repeating itself until there is a fundamental change in who controls the state. The “trickle-down” policies of the government should be met by the rising tide of working-class organisation.