The turnaround was as stunning as it was unexpected.
For a conservative government obsessed with bringing its budget into line and eradicating six years of its own deficits, JobKeeper at first glance looked like a scheme lifted straight from the texts of the much-reviled John Maynard Keynes.
Roundly proclaimed as a game changer when introduced, there's no doubt the $90 billion flagship scheme was wildly successful.
It kept 3.6 million Australians off the dole queue and tied to their employer. And as a secondary political benefit, that had the happy effect of obscuring the true level of unemployment, which only counted those on JobSeeker.
But with the program about to end next week, the shortcomings now are becoming clear: that billions of dollars of taxpayer cash was doled out to not just struggling businesses or those whose earnings had slumped, but to businesses and households that boomed during the lockdowns.
It's quite likely JobKeeper could end up being the biggest corporate welfare scheme Australia has ever run, with billions of taxpayer dollars transferred into the pockets of the wealthy, minus of course the mutual obligations associated with welfare.
And while the headlines of the past week have homed in on the usual suspects, like Solomon Lew and Gerry Harvey, it wasn't just big corporates and those at the helm who lucked out.
Tens of thousands of small- and medium-sized operations, professional partnerships and even charities received assistance. And then there are the hundreds of thousands of sole traders, which include an army of white-collar workers, tradies and contractors, many of whom couldn't keep up with demand during the lockdowns.
At its peak, between March and October last year, the scheme supported at least a million businesses.
We will likely never know the details of the largesse. While the Australian Tax Office has the data, unlike other countries, Australia had no public register of recipients despite the scheme being among the most ambitious in the world.
Then there are the great unanswered questions: Why was the assistance maintained for a full six months to those whose earnings had lifted? And why are there no mutual obligations, to at least hand the cash back?
The pandemic profit bonanza
You'd never know we'd been through the worst recession in a century or more. At least not by the recent spate of corporate earnings.
In the first half of the financial year — the six months between July 1 and December 30 — Australian companies pretty much shot the lights out on the earnings front.
Good things were expected. The federal government's hard isolationist policy and stringent state lockdowns delivered the best health impact of almost any other country, minimising the economic damage.
Then there was the resources boom. China's big-spending stimulus programs pushed iron ore prices to decade highs, helped along by Brazil's bungled COVID response, which kept supplies tight.
But there was another factor: JobKeeper.
If not for an eleventh-hour demand by the corporate regulator — for listed companies to detail their taxpayer handouts in the December-half earnings — we would have no inkling of the hugely beneficial impact JobKeeper had on corporate earnings.
Unlike the New Zealand and the United Kingdom schemes that paid out a portion of wages for stood-down staff, our scheme doled out large amounts of cash for workers whose employers merely had to demonstrate a downturn in earnings just as the pandemic hit. And that was it.
The scheme was cobbled together in a little over a week last March and its primary aim was to inject cash into the economy and keep the wheels of commerce turning; to maintain spending and mitigate the worst impacts of the impending disaster.
On that front, it succeeded brilliantly.
Unlike other countries, however, payments were maintained without question for almost all recipients, even after June 30. By that point, it was obvious that some companies were doing quite well. In fact, some recipients were earning bumper profits.
The ATO had access to Business Activity Statements delivered each quarter and was keeping a monthly eye on sole traders' income. But the cash kept on coming.
Top 300 cash splash
Superannuation advisory group Ownership Matters began unpicking the scheme midway through last year.
It was attempting to determine the real impact of the pandemic on Australian corporations from an investment viewpoint. What the group uncovered was alarming.
Its report last week is the first real glimpse into the extent of the transfer of wealth from taxpayers to the corporate sector during COVID. Even then, it is far from comprehensive.
It only looks at Australia's biggest 300 stock exchange-listed companies.
The report doesn't delve into the other 1,900 companies listed on the ASX. Nor does it examine the tens of thousands of large, privately owned companies or the millions of small companies and sole traders registered with the ATO.
Of those top 300 companies included in the study, one third disclosed in their recent filings that they had received government support. Of the $3.8 billion in total support, $2.5 billion was doled out in JobKeeper payments.
There's no question some corporations like Qantas and tourism operators were desperately in need of support as they were haemorrhaging cash.
But here's where it gets interesting. The vast bulk of recipients, 88 per cent of them, were making a profit. Even more astounding, a little over half were doing better than the previous year. But they kept receiving wage subsidies which helped lift earnings by an average 20 per cent.
While you can't simply extrapolate that across the economy, given the top 300 companies only received 3 per cent of the total JobKeeper outlay, it provides the first real evidence of how the money was distributed and the inherent flaws in the system.
And perhaps it partly explains why household savings suddenly surged. While there weren't many opportunities to spend money during lockdown, it's safe to assume many households lifted earnings and received a $19,500 bonus to boot.
Social obligation exclusion zone
Even though the corporate regulator ordered all companies to report their taxpayer-supported income, the extent of the payments is still hazy and the impact on earnings even more so.
It was one thing to lay off staff and pass the JobKeeper payment on. But what about companies that kept staff on and took the $19,500 wage subsidy?
Those employees were adding to output and helping generate revenue while taxpayers were picking up the tab. From a corporate perspective, costs were lowered and productivity lifted, delivering far more in benefits.le Australia is in its first recession in almost three decades, not all businesses are struggling. Some have boosted profits during the pandemic.
So even the findings from Ownership Matters on the earnings impact could be understated.
What hasn't been overstated is the amount of money our big companies intend to hand back.
So far, a handful of firms have pledged to return about $100 million, including car giant Toyota, Super Retail Group and logistics operation Qube.
While the scheme delivered a much-needed boost to the nation as we plunged into recession, it's now clear the scheme could have been better-targeted and far more transparent.
Instead of handing out so much welfare to the well-off, a longer-lasting economic boost could have been engineered with a decent and permanent lift in unemployment benefits, which annually cost the nation around $10 billion a year; a snip compared to JobKeeper.
While the well-off save, the poor spend pretty much everything they get, so any extra income generates consumption and economic activity.
But when it comes to handouts, and unemployment in particular, there are stringent reporting requirements, maximum transparency and an obligation to quickly wean oneself off welfare.
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