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senate vote 2020-11-10#4
Edited by
mackay staff
on
2023-01-27 09:12:16
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Title
Bills — Economic Recovery Package (Jobmaker Hiring Credit) Amendment Bill 2020; in Committee- Economic Recovery Package (Jobmaker Hiring Credit) Amendment Bill 2020 - in Committee - Increased dividends and JobKeeper
Description
<p class="speaker">Mehreen Faruqi</p><p>I move Greens amendment (1) on sheet 1088:</p>-
- The majority voted against an [amendment](https://www.openaustralia.org.au/senate/?gid=2020-11-10.36.1) introduced by NSW Senator [Mehreen Faruqi](https://theyvoteforyou.org.au/people/senate/nsw/mehreen_faruqi) (Greens), which means it failed.
- ### What does this amendment do?
- Senator Faruqi [explained that](https://www.openaustralia.org.au/senate/?gid=2020-11-10.36.14):
- > *We are moving this amendment because there is nothing in this bill that stops companies paying increased dividends during the pandemic while receiving JobKeeper. These companies will be allowed to use and abuse public money in the same way under the JobMaker hiring credit scheme. That is just obscene. This amendment will make sure that businesses who have paid increased dividends from 1 March 2020 through to the end of the scheme, which is currently 6 October 2022, will be ineligible for the JobMaker hiring credit, because they should be. It is public money in this scheme that is being used to provide employment—insecure, I might add, and precarious employment—to people, but public money should in no way be abused in this obscene way, where shareholders get dividends for it. I commend this amendment to the Senate.*
- ### Amendment text
- > *(1) Schedule 1 , page 3 (before line 27) , before item 5 , insert:*
- >
- >> *4B After section 7*
- >>
- >> *Insert:*
- >>
- >> *7B Requirements for rules that provide for jobmaker hiring credit scheme—ineligibility for paying increased dividends*
- >>
- >> *(1) This section applies if rules are made for the purposes of subsection 7(1A) that provide for a kind of payment known as the jobmaker hiring credit.*
- >>
- >> *(2) The rules must provide that an entity is not eligible for the payment at any time during the relevant period if:*
- >>
- >>> *(a) during the period beginning on 1 March 2020 and ending at the end of the relevant period the entity pays dividends to shareholders of the entity; and*
- >>>
- >>> *(b) the Commissioner is satisfied that the amount of the dividend exceeds the amount of the last such payment made by the entity.*
<p class="italic">(1) Schedule 1 , page 3 (before line 27) , before item 5 , insert:</p><p class="italic">4B After section 7</p><p class="italic">Insert:</p><p class="italic">7B Requirements for rules that provide for jobmaker hiring credit scheme—ineligibility for paying increased dividends</p><p class="italic">(1) This section applies if rules are made for the purposes of subsection 7(1A) that provide for a kind of payment known as the jobmaker hiring credit.</p><p class="italic">(2) The rules must provide that an entity is not eligible for the payment at any time during the relevant period if:</p><p class="italic">(a) during the period beginning on 1 March 2020 and ending at the end of the relevant period the entity pays dividends to shareholders of the entity; and</p><p class="italic">(b) the Commissioner is satisfied that the amount of the dividend exceeds the amount of the last such payment made by the entity.</p><p>There is nothing in this bill stopping companies that have paid increased dividends during the pandemic while receiving—</p> <p class="speaker">Hon. Senators</p><p>Honourable senators interjecting—</p> <p class="speaker">Deborah O'Neill</p><p>Sorry, Senator Faruqi, could you resume your seat for just a moment. I remind senators that debate continues. If you wish to have private conversations, please move outside into the lobby or leave the chamber. Thank you very much.</p> <p class="speaker">Mehreen Faruqi</p><p>We are moving this amendment because there is nothing in this bill that stops companies paying increased dividends during the pandemic while receiving JobKeeper. These companies will be allowed to use and abuse public money in the same way under the JobMaker hiring credit scheme. That is just obscene. This amendment will make sure that businesses who have paid increased dividends from 1 March 2020 through to the end of the scheme, which is currently 6 October 2022, will be ineligible for the JobMaker hiring credit, because they should be. It is public money in this scheme that is being used to provide employment—insecure, I might add, and precarious employment—to people, but public money should in no way be abused in this obscene way, where shareholders get dividends for it. I commend this amendment to the Senate.</p> <p class="speaker">Rex Patrick</p><p>I rise to speak in support of the Greens amendment. The fact of the matter is that, under the JobKeeper scheme, a number of companies accepted JobKeeper and then, we found out later down the track, they went on to pay higher dividends to shareholders than they had paid in previous years and they were able to pay bonuses to executives. In effect, that was a funnelling of taxpayers' money from the taxpayers' purse into a company and then on to shareholders and executives. Most people in Australia were disgusted by that. It may have been within the scope of the law, but it wasn't within the scope of social licence.</p><p>When we were dealing with amendments to the JobKeeper program, I recall asking the Senate to do something similar to this amendment. I put it to Minister Cormann back then that the government should alter the laws to make sure that these sorts of rorts did not happen, and that was effectively greeted with an arms-in-the-air 'I don't know what to say' response. Here we have another scheme being brought into place to assist businesses, and the Greens are moving an amendment to make sure that taxpayers' money does not flow again from consolidated revenue into the hands of a company that then uses that money to pay increased dividends. I understand that companies exist to make a profit; there is nothing wrong with that. But they must do so in a way that has integrity, that doesn't abuse the social licence. It's for that reason that I'll be supporting this amendment.</p><p>I might just ask the minister if it is his view that companies should be able to take money from the taxpayer, seek this assistance and then, effectively, use that money to fund shareholders. Is that an acceptable proposition within the moral framework, the integrity framework, of the government, to your mind?</p> <p class="speaker">Simon Birmingham</p><p>The short answer to Senator Patrick's question is no. This subsidy is intended, though, to support businesses to employ additional young Australians, and the additionality is a key element of this. I hear the criticisms of those opposite. The government certainly calls upon all parts of Australian business to do their bit, during these tough times, in terms of investing and helping to create more jobs. That's why we've structured policies like this one—to incentivise them to do just that: to invest, as our tax policies encourage them to do; to grow and create jobs; and, in this case, to target employment opportunities to young Australians. But they are additional employment opportunities, and the credit being provided is to support those new take-ups and jobs that are being created.</p> <p class="speaker">Rex Patrick</p><p>Could the minister explain what measures there are in this bill or in law, or what powers are within, say, the tax office to deal with the situation where taxpayers' money is taken from the public purse and handed, through the scheme, to shareholders of the company?</p> <p class="speaker">Simon Birmingham</p><p>There's nothing wrong with a company making a profit. I want to be very clear about that. We want profitable businesses in Australia. The subsidy exists through the rules and structure of this program. It is based on the condition of the employment of a young Australian who was not previously employed in a role, the filling of a role that was not filled by somebody previously and the funding being there as a wage supplement to support an employment opportunity being created for a young Australian. It doesn't negate the fact that a company can go on and make a profit and pay dividends to shareholders, and dividends being paid supports many other Australians. In fact, they support virtually all Australians through the operation of the superannuation programs and many others who rely upon those sorts of dividends or other support.</p><p>Whilst, as I say, we certainly urge all Australian businesses to do their part in trying to help through the pandemic—and many have in the way in which they have helped maintain jobs at very difficult times during the course of this year—we also recognise that business needs to be profitable to survive in the long term. This is not intended as a profit subsidy, though, and that's why it is structured in the way it is—to support and underpin employment.</p> <p class="speaker">Louise Pratt</p><p>Labor very much acknowledged the concerns around the dividends that were distributed by large firms that used the JobKeeper program. However, it is our view that this hiring credit is substantively different in both its intent and its design, particularly in relation to ensuring that jobs are additional. So we do not seek to support amendments that would prohibit the distribution of dividends when a firm has taken on eligible employees and sought to expand the level of employment within their company or small business by using this incentive. I think it's also important to note that dividends are not received just by super wealthy people but are received by low- and middle-income shareholders. I would hope that—and I would believe that they do—they support the companies that they have invested in also investing in the hiring of new workers. On that basis, we don't support the amendment.</p> <p class="speaker">Deborah O'Neill</p><p>The question is that the amendment on sheet 1088, moved by Senator Faruqi, be agreed to.</p> -
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