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The Treasurer has mounted a last-ditch effort to block a Senate order that would have required the Tax Commissioner to provide a list to the Senate of employers that received JobKeeper.
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Frydenberg launches JobKeeper gag order to block transparency move
27 August 2021
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12 minute read
Treasurer Josh Frydenberg on Thursday made an eleventh-hour attempt to claim public interest immunity over the publication of details related to the payment of JobKeeper to large companies, which he believes would undermine public confidence in tax law and administration.
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The Senate order, moved by independent senator Rex Patrick, would have required the ATO to table the list in the Senate at 4.30pm on Thursday, publicising the names of businesses with a turnover of more than $10 million that received the JobKeeper wage subsidy.
It would have also compelled the commissioner to reveal how much these businesses received and how much they had moved to repay.
Mr Frydenberg said businesses and taxpayers provide the government with private tax details on the basis that the government won’t publicise it. He said businesses would expect his government to take the necessary steps to keep it confidential.
“Crucially, the confidential information that is the subject of this order has been collected by the Australian government under strict tax secrecy laws which restrict both the use and sharing of that confidential information,” Mr Frydenberg said.
“Upholding these laws is therefore vital to the continued confidence of Australians in government and the assurances it provides about the protection of their confidential information.
“Almost every aspect of government would be significantly and adversely impacted were Australians to lose confidence in the protection of the confidential information they provide to the Australian government.”
Mr Frydenberg also claimed that disclosing details related to those who received JobKeeper payments could also do damage to the commercial interests of the entities that received it.
“The harm resulting from disclosure would include revealing the extent to which those entities suffered a substantial decline in turnover as a consequence of the economic impacts of the coronavirus, which has ongoing and, like adverse, implications for the market position of those largely private businesses,” he said.
Commissioner of Taxation Chris Jordan said on Thursday that he would wait for the Senate to determine whether Mr Frydenberg’s public interest immunity claim would be accepted before moving forward, two weeks after the ATO launched a public interest immunity claim of its own.
“It is my understanding that if the government’s claim for public interest immunity is accepted by the Senate, it will have the practical effect of relieving me of my obligations to provide documents in response to the order which is required by 4.30pm today,” Mr Jordan said.
“Given the public interest immunity claim has been lodged, I believe the best course of action is to wait for the determination of that claim by the Senate.”
The Treasurer’s public interest immunity claim was described by Senator Patrick as an interference effort launched to cover up “JobKeeper misuse”.
“Australians have a right to know which large employers have received taxpayer money and how much they received,” Senator Patrick said.
Senator Patrick argued that the information sought by the Senate isn’t related to an employers’ business or tax information, but instead, the amount of public money they were provided.
“It is no different to grant money or the total amount of money received under a government contract, which is already published information,” Senator Patrick said.
“There is huge controversy around the abuse of the JobKeeper scheme, a program set up to assist struggling businesses during the pandemic.
“JobKeeper was a wage subsidy scheme for businesses significantly affected by COVID-19. And yet some businesses took it, improved their profits and then paid larger dividends to their shareholders and bonuses to their executives.
“Those companies that abused the taxpayers’ goodwill should pay it back.”
Institute of Public Accountants general manager of technical policy Tony Greco said publishing a register would level the playing field for entities that have already been forced to disclose.
“Making this information publicly available levels the playing field, as there are many entities that received JobKeeper that are not disclosing entities,” Mr Greco said. “Only reporting entities that have disclosed this information have so far been the subject of public scrutiny.
“Most of the voluntarily refunded JobKeeper support has so far come from listed companies, so when more information becomes publicly available on all recipients, expect more pressure on others to do the same.”
Mr Greco said that, while the subsidy’s design flaws are understandable, it’s worth remembering that the Treasury was provided an opportunity to tighten eligibility to thwart profiteering, but opted not to.
“In the mid-point review it was noted [that] ‘since its introduction, the rate of decline in employment has slowed, then stabilised, and towards the end of May was showing tentative signs of recovery’,” Mr Greco said.
“Treasury had an opportunity to tighten the eligibility so that entities that did not experience an actual decline in turnover would not continue to receive the Jobkeeper payment for the full six months, particularly in cases where projected turnover was the avenue for meeting eligibility.
“JobKeeper version two tightened eligibility, requiring an actual decline rather than a forecast decline.
“Entities which took advantage of this generous feature should not be vilified as having done something wrong when the rules made it perfectly legitimate to receive this support.”
Thursday’s development comes off the back of a groundswell of calls for more transparency around the recipients of substantial government support, and mimics a similar system in New Zealand, where company details are made publicly available.
In New Zealand, where the government spent $12.35 billion on its JobKeeper equivalent, as much as $673 million — or 5.45 per cent — has been voluntarily repaid. Comparatively, in Australia, where only $225 million of the $89.3 billion shelled out for JobKeeper has been repaid, the rate is far lower at just 0.25 of a percentage point.
“The New Zealand government publishes the names of employers who received a wage subsidy payment and how much they were paid,” Senator Patrick said on Thursday.
“If the employer fully repaid the money, their name was removed from the published list. Transparency had an effect and is something we should do here.
“Those employers that used the money in a manner consistent with the intent of the JobKeeper program need not be concerned in any way by the proposed disclosure, only those that rorted the system.”
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