Gerry Harvey won’t follow Lew’s lead on returning JobKeeper funds

By Dominic Powell
Updated

Billionaire retailer Solomon Lew’s unexpected decision to repay $15.6 million in government JobKeeper subsidies will not be followed by a number of other notable ASX-listed recipients, including Harvey Norman founder Gerry Harvey.

On Monday, Mr Lew’s retail empire Premier Investments, which operates companies such as Peter Alexander and Smiggle, notified shareholders it would pay back the JobKeeper ‘net benefit’ it had received for the first half of the 2021 financial year.

Premier Investments chairman Solomon Lew wil repay $15.6 million in JobKeeper.
Premier Investments chairman Solomon Lew wil repay $15.6 million in JobKeeper.Credit:Eddie Jim

The move is a remarkable backflip for Mr Lew and Premier, who took a firm stance against repaying the subsidies earlier this year alongside a number of other major Australian companies, including retailer Harvey Norman, car dealer Eagers Automotive, and footwear seller Accent Group.

However, it appears the billionaire’s change of heart will not be replicated by other major companies who received the stimulus while also reporting higher profits and paying dividends.

Mr Harvey confirmed to The Age and The Sydney Morning Herald on Monday his position on repaying the subsidy remained unchanged. The 81-year-old businessman has previously said he would not repay the approximately $20 million claimed by his electronics retailer due to it being a “tiny amount of money”. He has also said the company will repay it through higher taxes.

Gerry Harvey says the backlash over JobKeeper repayments is a non-issue.
Gerry Harvey says the backlash over JobKeeper repayments is a non-issue. Credit:Janie Barrett

A spokesperson for Eagers Automotive, which recorded $130 million in JobKeeper subsidies for the 2020 calendar year alongside a $156 million profit, did not comment on whether the company still did not intend to repay the amount.

Premier had initially said its JobKeeper funds would be used to compensate staff for future lockdowns. On Monday, the business said while it had used the funds during Queensland and Western Australia’s snap lockdowns sales performance upon reopening had “fully offset the cost of supporting our teams”, meaning the JobKeeper funds were not required.

“The Premier Board, having regard to these outcomes, combined with the success of the Commonwealth and State Government’s management of COVID-19, has determined that it is now appropriate to refund the net JobKeeper benefit of $15.6 million to the Australian Tax Office,” the company said.

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Premier has been one of the companies directly in the firing line of politicians and governance advocates who have been calling for profitable businesses to repay their JobKeeper takings. Shares in the retailer fell 1.85 per cent on Monday.

At the business’s half-year result, Premier reported a profit of $188 million, nearly double its profit in the prior corresponding half. It also declared a 34 cent per share dividend.

The $15.6 million in JobKeeper set to be repaid by Premier is not the total amount claimed by the retailer during COVID-19, with the company’s 5500-odd Australian employees eligible for nearly $110 million of the stimulus payments.

Andrew Leigh, federal Labor’s shadow assistant minister for Treasury and its main spokesperson on JobKeeper, told The Age and The Sydney Morning Herald the $15.6 million repayment was insufficient in the context of the company’s broader success during the pandemic.

“Premier Investments hasn’t disclosed its full JobKeeper receipt, but it could be as much as $110 million. Given the extraordinarily profitable year they’ve just had, nothing less than full repayment is appropriate,” he said.

“Premier could afford to pay their millionaire CEO a multi-million dollar bonus, and pay shareholders a generous dividend. They can certainly afford to return to Australian taxpayers every single dollar of JobKeeper. It’s the only decent thing to do.“

Mr Leigh has also written to the corporate watchdog ASIC in an effort to force Premier to reveal the full extent of its JobKeeper takings. At the retailer’s half-year result earlier this year it only reported its net, rather than total, JobKeeper claims, which runs contrary to ASIC advice that businesses should disclose the total amount of JobKeeper received in its accounts.

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Source: Thanks smh.com