Qube’s JobKeeper Rort

By Andrew Martin

The JobKeeper payment scheme finished on 28 March. Through it, the Morrison government handed an unprecedented $90 Billion of federal money to bosses. The money was to be passed on to workers, who could then keep their jobs. Ninety billion dollars is equivalent to the entire federal health budget for 2020-2021.

The scheme would have been far less prone to systematic corruption if the government opted to simply send funds directly to affected workers bank accounts instead of to their bosses. However, handing it to bosses granted greater social power and legitimacy to the rich, and the opportunity for massive-scale corporate welfare was not missed.

The scheme gave a significant boost to businesses, small and large, struggling through the worst of the pandemic (if worse is not yet to come) as well as to those workers who did eventually receive payments. No doubt the subsidy alleviated much hardship. As could easily be foreseen, and almost by design, it also boosted businesses that weren’t struggling.

It has been widely reported that retail outlet Harvey Norman received $22 million of taxpayer funds – even as its profits doubled. Harvey Norman made $462 in net profit in the last six months of 2020 – an increase of 116%. Corporate executives and owners such a billionaire Gerry Harvey have pocketed much of this money and defied public pressure to pay the money back.

Qube Rorts

A business that did not receive as much attention was Qube. Focussed mainly on logistics, Qube is less familiar to most people. The firm received $30.3 million from JobKeeper in 2020. Qube Holdings, the parent company of its many divisions, paid some of the most considerable executive dividends of any company that received JobKeeper – some $2.8 million, of which $2 million was paid to its CEO, Maurice James.

A cursory look at Qube’s financial position reveals it never needed JobKeeper. The company made record underlying earnings for 2021; its net profit after tax rising 37% to $142 million. It turned over revenue of over $2.1 billion.

Qube Holdings CEO Maurice James

Neither was 2020 a bad year for Qube with a revenue of $1.9 billion. In December 2019, Qube had made just under $980 million. Its revenue was solid even through the worst part of the pandemic. Yet oddly, Qube was somehow able to qualify for the JobKeeper subsidy. Qube could not have met the fall in turnover tests set by the government. Any company with over $1 billion revenues would need to have had a 50% loss in earnings.

Qube has paid back $17 million it took from the government but has pocketed the remaining $13.5 million. It is not known how Qube could receive this money from the government in the first place. However, it is known that Michael Sousa, the Director of Qube Ports, threatened the MUA during negotiations for a national enterprise agreement that he would shut down seven major ports around Australia if Qube did not receive the subsidy.

The Qube executive consists of many former Patricks managers and executives. It has strong ties to the Liberal party dating back to the 1998 Patricks dispute. Qube has a controlling interest of 50% in Patricks, which operates container terminals. During a national round of negotiations between Patricks and the MUA, prime minister Scott Morrison publicly condemned the MUA for taking industrial action and would not rule out using the army to intervene. Morrison had (falsely) claimed the MUA was holding up 40 ships outside of Port Botany. The ABC later debunked Morrison’s claims in its online Fact Check segment.

Morrison’s rantings were in response to a standard 4-hour stop-work meeting, hardly an action that would bring the country to the point of crisis. The meeting, which is protected by a clause in the worker’s Enterprise Agreement, is an industry-wide standard and was held to inform workers of the outcome of initial negotiations. The Qube-Patricks octopus has a long-held relationship with the Liberal party, and they are wrapped in each other’s tentacles. The extraordinary relationship has been very beneficial for Qube’s executives.

The ABC sought correspondence between Qube and the treasury department. Qube’s former CEO and managing director Maurice James wrote to the federal treasury secretary, Steven Kennedy, requesting a handout: “We would welcome the opportunity to access the JobSeeker (sic) program where impacts are occurring on a business unit or regional business”. Kennedy appeared to have confused the JobKeeper program with the JobSeeker welfare payment, but he knew there was money in the offing.

The ABC was not able to reveal much more than that. Its journalists had sought a Freedom of Information Disclosure, but the details of discussions were redacted and remain secret. Text messages from a treasury official to Michael Sousa stated Qube would receive a priority referral to the ATO.

Qube has not shared the generosity it has received from the government. Despite Qube’s record profits  and the corporate welfare it received, it has forced its workers to pay back the portion of JobKeeper they received. Qube was able to swindle the JobKeeper system using a “forecast revenue test”; they stated in effect to the ATO and treasury department “we’re not going to earn much, so give us what loot you have”. The government obliged, and Qube went on to earn record profits.

Meanwhile, it continued to act as a militant and aggressive employer and, as of publication, is using scab labour to undermine the MUA’s attempts to secure better working conditions for wharf labour. See Stevedores on Strike at Fremantle for more details.

Corporate Welfare

JobKeeper has massively boosted the profits of major corporations that already had significant revenues in reserve. Private insurance firm NIB is an example. Managing director Mark Fitzgibbon (brother of ALP parliamentarian and coal champion Joel Fitzgibbon) reported a 62% increase in profits in 2019 yet claimed $3.8 million in JobKeeper. The closure of optional and non-urgent surgeries has been a boon for private investors, and they’ve continued to make profits and raise premiums.

Research conducted by Deloitte Access Economics suggests the government scrambled to keep spending on corporate welfare under control. According to Labor MP Andrew Leigh, the government has given $13 billion to firms and organisations that increased their revenue during the pandemic. This includes religious organisations, private schools and sporting clubs. For example, $500,000 was given to Margaret Court’s Pentecostal Church, even though there’s no evidence it suffered any financial hardship at all.

The government claims it has sought to recover just $290 million in JobKeeper payments from companies that misrepresented their eligibility criteria. That is a fraction of 1% of the 90 Billion total spend on JobKeeper. However, there is no legal requirement for these companies to repay that money, and the government has ruled out passing any law that would require them to do so.

Tightening the Screws on Working People

The government’s income support is currently running at $277 million per week under the new Covid-19 disaster payment scheme. The disaster payment pays $750 per week directly to those who lost 20 hours or more of work during the lock-down. It pays out far less in terms of overall spending than what was paid out to bosses during the peak of JobKeeper.

By contrast, JobKeeper was paying out $2.5 billion per week in May last year. Payouts then shrunk to $5 billion for the month of August 2020 compared to an average of $18 billion monthly from March to July. The treasurer Josh Frydenberg has indicated that the government will make further cuts to welfare payments to workers: “There should be no expectations that the Commonwealth will continue to provide emergency economic assistance … to the scale that we’re doing right now,” Frydenberg stated to the ABC on August 19.

While billions were handed to bosses through JobKeeper, the government chose to raise the unemployment benefit – “JobSeeker” – by just $50 to $630 per fortnight for a single person. The Henderson poverty line, as defined by the Melbourne Institute, is $561 per week or $1122 per fortnight. To add insult to injury, the government is chasing down welfare recipients with more Robo-debt collectors.

Increasing unemployment payments to a liveable income level would make it possible for working people to refuse the most dangerous, underpaid, odious and exploitative jobs. Giving working people that degree of power over their own lives is not something the bosses or their political representatives are prepared to do – no matter how many lives are ruined in the process.

In June 2020, already planning to cutback both JobKeeper and JobSeeker, Morrison claimed “we are getting a lot of anecdotal feedback from small businesses, even large businesses, where some of them are finding it hard to get people to come and take the shifts because they’re on these higher levels of payment.”

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