Should retail shops like Harvey Norman repay JobKeeper?
For many, retail was a downward spiral starting 2020, with the fashion industry experiencing the hardest hit. But there’s one company who revealed booming profits despite the economic downturn: Harvey Norman.
This could sound like a success story for most retailers, except that Federal shadow assistant treasurer Andrew Leigh is calling the billion-dollar company to repay JobKeeper wages subsidies.
What’s your take on this?
According to Financial Review, Harvey Norman’s financials show that dividents paid to their investors totalled some $300 million. One million of that goes to Harvey Norman alone. Leigh also cracked millions of dollars paid out to the company’s directors including Harvey’s CEO wife, Katie Page.
In June 2020, Harvey Norman was handed over $28M in government support of that $12M came from the New Zealand Government. Sales from company-owned and franchises stores in Australia rose to 28 per cent in 20 weeks. Only 18 of their stores were closed in Melbourne for almost three months, and 11 stores in Auckland were closed for two weeks because of COVID-19 trading restrictions.
Leigh’s aggressive request is not unfounded as many large companies have already repaid the wages support. According to Channel news, Leigh said that Australia’s largest construction, CIMIC paid back $20 million in February 2021. He said that JobKeeper was designed to “keep battlers in work, not help billionaires buy their next racehorse.”
Archrival JB Hi Fi and The Good Guys chose to fund their COVID-19 operation and did not take JobKeeper payments. This strategy maintained their stores open during the pandemic.
The Australian Tax Office has yet to reveal how much Harvey Norman has been handed in JobKeeper subsidiaries. Harvey Norman is expected to report its first half results this Friday.
Gerry Harvey, who calls the event “a once-in-a-lifetime retail bonanza” claiming that instead of repaying JobKeeper, he plans to pay higher taxes, instead.