Billionaires receive tens of millions in dividends from companies on jobkeeper | Business

Join Hafta-Ichi to Research the article “Billionaires receive tens of millions in dividends from companies on jobkeeper | Business”

At least 11 billionaires last year received dividends totalling tens of millions of dollars from companies that received jobkeeper subsidies designed to keep workers employed, new research shows.

The research, commissioned by the opposition frontbencher Andrew Leigh, shows that retail moguls Solomon Lew and Gerry Harvey were among those receiving the payments.

Leigh said the payments came against a backdrop of the rich doing extremely well during the pandemic, with Forbes estimating that the average Australian billionaire’s wealth increased by 59% over the past year, while workers struggled with wage stagnation and a spike in unemployment caused by the pandemic.

“The extraordinary increase in the wealth of Australia’s billionaires comes at a time when most Australian workers are struggling to get any pay rise at all, and two million are unemployed or underemployed,” he said.

“Jobkeeper was meant to protect the jobs of battlers, not boost the wealth of billionaires.”

He contrasted the Morrison government’s approach to the $100bn jobkeeper scheme to its determination to unlawfully claw back $1bn from recipients of Centrelink payments under the botched robodebt scheme.

“But when it comes to jobkeeper, he turns a blind eye to the fact that millions of dollars have gone to dividends, enriching billionaires,” he said.

“In referring jobkeeper misuse to the auditor general, Scott Morrison claims I’m engaging in ‘the politics of envy’. In reality, this is about fairness.”

There is no suggestion any of the rich listers have done anything wrong.

As Guardian Australia has previously reported, Lew’s retail group, Premier Investments, which runs chains including stationery group Smiggle and fashion chain Just Jeans, received $70m in wage subsidies, including jobkeeper, during the coronavirus crisis and paid dividends totalling $57m of which the billionaire’s share was $24.25m.

Lew is worth $3.72bn, according to the Financial Review rich list.

A spokeswoman for Premier declined to answer Guardian Australia’s questions about jobkeeper and dividend payments.

She said Premier was eligible to receive jobkeeper in August and September but “the loss of gross profit in Victoria during government-enforced store closures … more than offset the wage subsidy support”.

Franchisees who run stores for Harvey’s group, Harvey Norman, received $7.6m in jobkeeper while the company itself received $2.39m in what the company described in its annual report as “wages support and assistance”.

Harvey Norman paid dividends of $74.7m, of which Harvey, who is worth $2.57bn, was entitled to $23.5m.

Harvey told Guardian Australia he didn’t want to answer any questions on the topic.

“Everyone is writing stories,” he said.

“My opinion’s not worth having, in my opinion.”

Other billionaires to be paid dividends after companies in which they invested received dividends included John Gandel, the founder of Melbourne shopping centre Chadstone, who is worth $5.4bn.

He and his family own about 15.2% of shopping centre group Vicinity, which received about $10.8m in jobkeeper.

Because of the Covid-19 pandemic, the company cancelled a dividend it would have paid in June, but it made a dividend payment in December that entitled Gandel and his family to $23.5m.

Vicinity has been approached for comment.

Marc Besen and his family, who are worth $2.24bn, received dividends from property group Home Consortium.

The company received $200,000 in jobkeeper, a spokesman said.

“That revenue pales into relative insignificance when you compare it to the $5.7m in financial support HomeCo provided to its retail tenants during FY20 to help tenants remain open/viable,” he said.

He declined to answer questions about the Besen family’s shareholding in the company or how much in dividends they were paid.

Brett Blundy, who built a retail empire from a record store called Disco Duck and is now estimated to be worth $2.2bn, received an estimated $6.48m in dividends from his shares in youth-focused jewellery chain Lovisa.

Lovisa did not respond to Guardian Australia’s questions.

James Packer, who is estimated to be worth $4.69bn, was among Crown Resorts shareholders to receive a dividend payment in April last year, when the impact of jobkeeper on the company was small because it had been running since only the end of March.

His private company, Consolidated Press Holdings, owns 34% of Crown, which received about $110m in jobkeeper subsidies – almost $70m of which was passed directly on to employees who had been stood down, at no net benefit to the company.

His sister, Gretel Packer, was previously reported to be associated with CPH, but the siblings reached an agreement to divide the family fortune in 2015 and it is no longer clear whether she has any link to the company.

Nick Politis, who is worth $1.31bn, also received a dividend paid within weeks of the announcement of jobkeeper.

In April, Eagers Automotive, the car dealer chain where he is the biggest shareholder, slashed the dividend it paid in half because of the coronavirus crisis.

The family of poker machine magnate Len Ainsworth, who is worth $4.42bn, also received dividends from the company he founded, Aristocrat Leisure.

Aristocrat received $11m in jobkeeper and paid dividends of $63.9m.

Ainsworth is in his late 90s and hasn’t been a shareholder since retiring from the company in the mid-1990s.

However, company records show members of his family continue to hold shares in Aristrocrat through corporate vehicles.

“We don’t comment on dividend payments received by individual shareholders,” a spokesman said.

“The jobkeeper subsidy that Aristocrat was eligible for was applied exactly as the government intended.

“It defrayed employment costs in Australia through the period when our customers were closed, and helped preserve the maximum number of local jobs in our business. Over the year, profit in our ANZ [Australia and New Zealand] business fell 73% compared to 2019.”

The company that Ainsworth set up after leaving Aristrocrat, Ainsworth Game Technology, did not pay a dividend.

Hungry Jack’s founder Jack Cowin, who is worth $4.51bn, received dividends from his ownership of a little over a quarter of pizza chain Domino’s.

The company received about $792,000 in jobkeeper but is among companies that have paid back the subsidy.

Other billionaires entitled to dividends from companies that received jobkeeper were Dale Elphinstone (worth $1.08bn), who has a large interest in engineering and labour hire group Engenco, and Raphael Geminder, who is the chairman of packaging company Pact Group.

Hafta Ichi
Source: The Guardian
Keyword: Billionaires receive tens of millions in dividends from companies on jobkeeper | Business

Leave a Comment

Your email address will not be published. Required fields are marked *