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Furniture retailer Nick Scali has announced it will return $3.6m it received in jobkeeper wage subsidies after the company last week revealed a $40.6m profit for the second half of 2020.
Nick Scali received the federal government support under the jobkeeper scheme – which was designed to help businesses hit by the coronavirus crisis keep staff employed – during the second half of 2020.
Over the same six months, its profit almost doubled, rising by 90% compared with the same time the previous year, the company told the ASX on Thursday.
In a statement to the ASX after trading closed on Monday night, the company said it would return the wage subsidies to the commonwealth.
“As highlighted in last week’s announcement, the company fully recognises that it has benefited from the increased consumer confidence this program has created, which resulted in record sales and net profit after tax,” Nick Scali said.
“The board of directors and management have considered the $3.6m wage subsidy received in the half-year ended 31 December 2020 and decided to refund this amount to the federal government.”
The payment of dividends and executive bonuses by companies that received jobkeeper has been controversial. Federal opposition frontbencher Andrew Leigh last week called on Nick Scali to follow the lead of other companies and pay back the subsidy.
Leigh said the company’s own corporate governance guidelines committed it to transparency and “the highest standards of behaviour, ethics and accountability”.
“If the company wants to live out these values, then it faces a test today,” he said last week. “Will they follow the lead of Super Retail Group, Toyota Australia, Domino’s and Iluka by handing back jobkeeper they didn’t need? Or will they enjoy a near-doubling in profits, and simply funnel taxpayer support through to their shareholders?”
The auditor general is investigating the operation of jobkeeper, including whether the taxation office, which runs the scheme, has put in place “effective measures to protect the integrity of jobkeeper payments”.
Research by corporate governance advisory group Ownership Matters shows that last year 17 companies in the top 300 listed on the Australian stock exchange received government subsidies, including jobkeeper, and went on to pay dividends totalling more than $250m.
Source: The Guardian
Keyword: Nick Scali to return $3.6m in jobkeeper payments after announcing record sales and profit | Business