"To repay or not to repay": Directors' duties and the JobKeeper wage subsidy scheme
Editorial
Goding, Vincent. 2022. ""To repay or not to repay": Directors' duties and the JobKeeper wage subsidy scheme." Australian Law Journal. 96 (12), pp. 869-871.
| Article Title | "To repay or not to repay": Directors' duties and the JobKeeper wage subsidy scheme |
|---|---|
| ERA Journal ID | 33861 |
| Article Category | Editorial |
| Authors | Goding, Vincent |
| Journal Title | Australian Law Journal |
| Journal Citation | 96 (12), pp. 869-871 |
| Number of Pages | 3 |
| Year | 2022 |
| Publisher | Lawbook Co. |
| Place of Publication | Australia |
| ISSN | 0004-9611 |
| Web Address (URL) | https://search.informit.org/doi/10.3316/agispt.20221209079476 |
| Abstract | The JobKeeper wage subsidy scheme (JobKeeper) was the federal government’s flagship economic policy response to the pandemic. Running initially from March to September 2020, it was designed to assist businesses affected by the pandemic to cover their wages by providing a subsidy of $1,500 per eligible employee per fortnight. Under the first iteration, an entity would qualify if it passed a basic decline in turnover test, calculated by comparing “projected” turnover for a relevant period in 2020 with the corresponding period in 2019. There was no requirement to reassess the projection during the first six months of the scheme. That the decline in turnover might not eventuate, or that an entity might remain profitable, or increase profits during the period of support, was irrelevant once the test was met. Widely supported and praised for contributing to the country’s economic recovery, JobKeeper and its perceived undeserving beneficiaries were also criticised when public funds ended up subsidising the wages bills of profitable – even booming – companies. Due to their transparency, publicly listed companies bore the brunt. JobKeeper “profiteers” were called upon to repay the unnecessary corporate welfare. Few did. It has been reported that at least $38 billion under the scheme went to companies whose turnover did not fall below applicable thresholds; while $2.6 billion went to companies whose turnovers doubled or tripled during quarters for which they claimed JobKeeper. While there is no reliable public record of the total amount repaid, based on disclosures to the Australian Stock Exchange the amount repaid by listed entities as of July 2022 is just over $242 million. JobKeeper provides a contemporary case study to consider corporate responsibilities and the trajectory of the law regarding directors’ duties to act in companies’ best interests. |
| Keywords | Corporation law |
| Contains Sensitive Content | Does not contain sensitive content |
| ANZSRC Field of Research 2020 | 480103. Corporations and associations law |
| 350702. Corporate social responsibility | |
| 350701. Corporate governance | |
| Public Notes | Files associated with this item cannot be displayed due to copyright restrictions. |
| Byline Affiliations | University of the Sunshine Coast |
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