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The Tax Office is unlikely to review companies who have gone on to post large profits and paid out executive bonuses while receiving JobKeeper, noting that it would not be relevant to its work.
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ATO yet to analyse profit-making companies on JobKeeper
12 February 2021
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9 minute read
Labor senator Katy Gallagher had asked the ATO if it had done any analysis on companies with increased profits while on JobKeeper, as the Opposition continues to lead calls for large corporates to return the wage subsidies before paying out executive bonuses and dividends.
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“From the ATO side, the short answer is no,” said ATO second commissioner Jeremy Hirschhorn at a parliamentary hearing last Thursday.
“Profit is an accounting concept reported through the ASIC financial statements. We are concerned with the turnover effects.
“In a sense, we find out accounting profit and dividends paid when people lodge their income tax returns. I can understand your interest for us, in a sense, focusing on whether the people appropriately got money under the rules as they are.
“It would be a very complex task but not relevant to our task. We don’t have the data yet.”
Treasury deputy secretary Jenny Wilkinson also told the parliamentary committee that the government had not asked for such analysis to be done, noting that it would not be possible until corporate tax returns were all lodged.
“I don’t think we yet have the tax returns for the 2019–20 year. That would be the point at which you could do an analysis which looked at some measure of profits relative to the businesses that receive JobKeeper,” Ms Wilkinson said.
“We’ve obviously been monitoring the reporting, particularly through the newspapers, of different businesses, and there’s different information coming up through the reporting season, but we haven’t done a formal analysis of looking through the million or so JobKeeper businesses to analyse that yet.”
$50 million returned
The ATO has also revealed that just $50 million of the $83 billion JobKeeper program had been voluntarily returned so far.
Mr Hirschhorn said 10 companies have been in discussion with the Tax Office so far.
Furniture retailer Nick Scali is the latest company to return JobKeeper payments, and joins a small number of companies including Toyota Australia, Super Retail Group, Domino’s Pizza and Iluka Resources in doing so.
Shadow assistant minister for Treasury Andrew Leigh has since asked the Australian National Audit Office to determine how much JobKeeper support was paid out to large firms that experienced higher revenues in 2020 and paid executive bonuses.
The ANAO’s audit to examine the effectiveness of the ATO’s administration of the JobKeeper program has commenced, with Auditor-General Grant Hehir revealing that Dr Leigh’s request is currently being considered.
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