JobKeeper scheme fails the taxpayer and delivers more auto industry welfare
Several automotive companies in Australia swallowed millions in JobKeeper corporate welfare in 2020, despite multi-million-dollar profits. Another major regulatory failure by the Morrison Government…
Which automotive business can turn the biggest profit out of Jobkeeper? It’s suddenly looking like a photo finish for Scumbag Carmaker of the Year - SCOTY.
No comment whatsoever on individuals is made or implied in this report- unless I name them specifically. My critical comments relate solely to the corporations mentioned, and their conduct. These comments are also my honest personal opinion.
Nor am I alleging the companies mentioned are engaged in criminal or illegal conduct. They’re just dodgey, worthy (in my view) of wide-ranging community opprobrium.
Mercedes-Benz - the hallowed three-pronged suppository - first. Here in Australia, the Suppository managed to Hoover up almost $5 million in JobKeeper corporate welfare payments between April and September last year.
But COVID, frankly, was not a major hurdle for The Suppository. It managed to make $62.7 million in profit last year here in Australia. And yet, the company has no plans to give the Jobkeeper funds back. That’s pretty messed-up, even for them, I’d suggest. Perhaps even a new benchmark.
That’s a direct quote from Merc-Australia’s financial statements there, reported by the ABC.
Jobkeeper, of course, was an Australian Government pandemic stimulus package designed to help businesses affected by COVID cover the costs of wages, so that more people could retain their jobs during the crisis. It was not to help investors line their pockets.
To qualify for JobKeeper, businesses like Mercedes-Benz Australia, with more than $1 billion in turnover, had to estimate that their turnover would fall by 50 per cent or more.
It’s unclear exactly how the Suppository arrived at the determination that it qualified for this support, by virtue of projected turnover reduction. And they certainly have not been forthcoming with the details on that. Not that I could find.
It’s also unclear exactly who in the government swallowed this hook, line and sinker.
In fact, Benz sold 38,684 vehicles in Australia in 2019. In 2020, during the height of COVID, its sales were 36,233 vehicles. That’s hardly a turnover collapse worthy of governmental intervention with a barrow full of taxpayer cash.
I’m not seeing a 50 per cent drop in turnover, or more. Not even close.
The official Benz sales data reveals a drop of just six per cent, which in the context of COVID impacts is pretty much Mercedes-Benz Australia getting off scot-free. It’s nowhere near the 50 per cent required to qualify for taxpayer-funded corporate welfare.
You might form the view that this is just a bunch of suits looking at an easy windfall by taking advantage of a bad situation. And hoping nobody notices. Either that, or it’s an honest error and they’re just beyond incompetent. I guess we’ll never know.
When I was an engineer, errors this big - 800 per cent out - were the kinds of things that made bridges collapse.
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Big, bad Benz there. So, riddle me this, Mercedes-Benz Australia spin doctor who wrote that statement: What economic downturn? You (MB Aus) did not experience one. You went from a $25 million loss in 2019 to more than $60 million in profit during COVID. The ABC reported that last week.
If that’s a downturn, I’ll take two…
I’d suggest, with due respect that Mercedes-Benz Australia could have done that anyway, and still made $58 million in profit, without the $5 million taxpayer-funded handout, which could have been far better spent elsewhere on roads or hospitals or clean energy reform, or a hundred other things society actually needs.
We don’t need to be propping up the Antipodean arm of a German multinational with almost 300,000 employees and 154 billion Euros in annual revenue.
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A Ford Ability: The Blue Oval returns for taxpayer ‘support’
Moving on to Ford Australia.
Ford managed to Hoover up $38 million in JobKeeper, in 2020, while hospital staff were running double shifts, people’s parents and grandparents died in aged care facilities, and the country was in the grips of stopping COVID taking hold.
Meanwhile, Ford Australia posted a $59 million profit, which it described as a “solid result” in its 2020 financial reporting.
Thanks very much, JobKeeper. Sorry, ‘taxpayer’. Collectively, you and I helped more than double Ford’s Australian profit last year. Where is the moral conduct here?
But only the blue-oval can turn a $59 million profit into a justification for hanging onto free cash from the Australian taxpayer.
What “tough months” do these disingenuous leeches refer to? Ford was making an average of $5 million in profit per month during the entire 2020 pandemic.
Ford even manages to cry poor on this, though, claiming that without JobKeeper, and without selling its old factory in Geelong, that it would have made a loss. What rubbish.
What “tough months,” you disingenuous leeches? Ford was making an average of $5 million in profit per month during the entire 2020 pandemic. Ford even manages to cry poor on this, though, claiming that without Jobkeeper, and without selling its old shitbox factory in busted-arse Geelong, that it would have made a loss.
The chaps at Dearborn must be so pleased with this windfall, which we all paid them.
Toyota, on the other hand, at least has a moral compass which appears to be calibrated.
Toyota announced in January that it would repay the $18 million it received in JobKeeper after its finances improved in the latter half of 2020. So not every carmaker is morally bankrupt. It is fairly tragic, however, when simply doing what’s right is the bar of excellence. That’s how shallow the car industry is.
The jury is still out on Honda, GM and Nissan, all yet to lodge their Australian financial returns. So it’s unclear at this stage exactly who Australia’s biggest automotive dole-bludger will be.
Solid performance from Aussie aftermarket accessories giant ARB - equipping all those Hiluxes, Rangers and LandCruisers for COVID-19 pilgrimages to the back of beyond.
Almost $10 million in Jobkeeper for ARB. The company is profitable. No plans to pay it back, of which I am aware.
But my favourite so far is Eagers Automotive, the car dealership conglomerate you’ve probably never heard of.
Here’s what Eagers Automotive had to say for themselves:
Whatever it is, the way you tell your story online can make all the difference.
Cough up, taxpayer. Stand aside. Make way for vital back-to-back records for our shareholders.
And thank you very much for your $133 million in taxpayer-funded JobKeeper profit contribution.
Eagers Automotive made $156 million profit last year, according to the ABC. That’s $133 million of which was taxpayer-funded corporate welfare from JobKeeper. During a pandemic, when small businesses were crushed, people died and kids did exams on the kitchen bench.
This is what moral bankruptcy looks like.
Immoral Compass: When corporate greed goes unchecked
I need to make three points on this. The first one is really simple. It’s just about right and wrong. Like, I know we need laws - but we need widespread community commitment to doing what’s right and opposing what’s wrong much more than we need laws.
We can all name people the world would be better off without. No problem. But most of us don’t go murdering them to make the world a better place. Obviously, this conduct would be illegal, and ineffective, and you’d probably get caught.
We abstain from this conduct because it’s wrong.
And it amazes me that there’s one standard for moral conduct for each of us as individuals, and quite another for corporations. The two standards could not be more different.
If you’re a corporation like the Suppository, or Ford, or Eagers or even the Dingo Piss Creek embassy at ARB - or any other corporation profiting from JobKeeper - the fact that you can just get away with it is seen as ample justification for behaving like a morally bankrupt arsehole. (That’s a collective term.)
Perversely, these same companies are very keen to promote their virtue in other domains - such as environmentally, or in relation to diversity or inclusiveness, for example. Anywhere it will help them sell their shit, basically.
Take Mercedes - Daimler - which has dozens of posts on its website promoting its culture of diversity, respect, inclusiveness … endless pages on sustainability and the environment.
But when it comes to taking money - bending over a few taxpayers in some third-world shithole below the equator - it’s apparently all part of doing business. And, in my view, that’s really gotta change.
They have a formal internal whistleblower protection system. (Perhaps they can use it on their own business.)
They even have a specific board member - Renata Jungo Brunnger in charge of integrity and social responsibility.
Point number two: Reform on this is going to be very hard, because the media is generally disinclined to oxygenate these kinds of stories.
Props to Pat McGrath at ABC Investigations for breaking this one. Don’t expect any real enthusiasm from Uncle Rupert, or Costello’s Cocks at Nine, or Seven West - because they’re all kneeling on the floor in the time-honoured position, waiting to lap up the sticky streams of advertising revenue from organisations such as these.
In a media environment like ours, getting away with being a shady corporate is easy. Just compensate the media outlets that pump you up, with advertising cash.
Point number three is the comprehensive lack of regulatory checks and balances. We saw this with local manufacturing of cars, and how well that ended for the taxpayer, and we’re seeing it again now.
I want you to think about how hard it is for you to earn your income, and how inevitably you pay your taxes, and what that money is meant to be used for. Do you really want it being sent back to Dearborn, or Stuttgart, as dividends for shareholders? In what universe is that morally appropriate?
This is what happens when you leave self-entitled, incompetent lawyers in charge of the shop.
Australia’s 30th Prime Minister, Scott Morrison, is a pretty enthusiastic Pentecostal. As far as I can see, this is the one thing he’s any good at. That’s allowed. According to him, the big guy upstairs has approved him for the top job… Otherwise he wouldn’t be there. This has been a fairly common delusion at the top, over the centuries.
Pentecostalism, in so far as I can tell, was entirely invented in the early 20th Century. It appears to hinge on the future being determined by a ‘real battle’ between Jesus and Satan. To a devout worshiper, this is not an abstract concept. Or a metaphor. It’s happening.
Even most other Christians think that’s a bit strange.
Except that here, in the real world, people’s lives are actually made better or ruined by the decisions he and his fumbling government make, or don’t make. Think of the lives that could be made better by injecting those hundreds of millions into the aged care sector, or into fighting climate change, or bushfire fighting resources.
And of course, ScoMo has some terrific support from the Federal Treasurer, Josh Frydenberg. He’s a tennis playing Lawyer with a Masters in International Relations and Public Administration, a former staffer for Foreign Affairs Minister Alexander Downer, and he’s probably not all that useful with a shovel, or in the aftermath of a helicopter crash.
Today (May 11,2021), of course, Frydenberg is operating the treasury for Scott Morrison, where he’s on the record to the effect that Australia’s worst government ever will not require companies that turn a big, fat profit using JobKeeper to return any of the funds.
He says instead that he would merely:
With ScoMo and Frydenberg shovelling out your hard-earned cash to Daimler, Ford, Eagers and ARB, is it any wonder these corporate entities are stuffing the boot with taxpayer cash and making like Thelma and Louise, into the sunset? (No reference to individuals is implied.)
It is kinda disrespectful, though, isn’t it? This conduct. In the context of how hard you worked to earn that money, which was consolidated in the treasury and now, essentially, just lines the pockets of investors, as profit.
What, exactly, did the community get out of that?
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