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Related

The Auditor-General responded on 23 December 2020 to correspondence from the Hon Dr Andrew Leigh MP dated 8 December 2020, requesting that the Auditor-General conduct an investigation to examine the JobKeeper scheme. The Auditor-General provided a follow-up response on 8 February 2021, advising the Hon Dr Andrew Leigh MP that a performance audit Administration of the JobKeeper Scheme has commenced.

The Auditor-General responded on 26 March 2021 to follow-up correspondence from the Hon Dr Andrew Leigh MP dated 2 March 2021, requesting that the Auditor-General explore specific aspects of the JobKeeper scheme. 

Auditor-General's response to follow-up correspondence

26 March 2021

The Hon Dr Andrew Leigh MP
Shadow Assistant Minister for Treasury
Shadow Assistant Minister for Charities
Member for Fenner

By email: Andrew.Leigh.MP@aph.gov.au

Dear Dr Leigh

Administration of the JobKeeper Scheme

I am writing in response to your letter of 2 March 2021, in which you requested that the performance audit of the Administration of the JobKeeper Scheme examine a number of matters raised in a media article, concerning ports operator Qube.

The Australian National Audit Office’s performance audit activities involve the independent and objective assessment of all or part of an entity’s operations and administrative support systems. Performance audits, in particular, primarily focus on systemic issues in the administration of government programs.

Our audit procedures and methodologies are designed to provide reasonable assurance against the audit criteria that were outlined in my letter on 8 February 2021, to form a conclusion against the audit objective on the effectiveness of administration of the JobKeeper Scheme by the Australian Taxation Office (ATO). The matters raised in the media article concerning Qube may be considered in the audit, to the extent that they are consistent with our planned audit procedures and methodologies, or for informing our processes for identifying material risks to the ATO’s administration of the scheme.

To receive updates on the progress of the audit, please subscribe through the following link: www.anao.gov.au/work/performance-audit/administration-the-jobkeeper-scheme.

Yours sincerely

Grant Hehir

Follow-up correspondence from the Hon Dr Andrew Leigh MP

The transcript of this correspondence is contained on this page

Transcript of letter from the Hon Dr Andrew Leigh MP

2 March 2021

Mr Grant Hehir - Auditor General
Australian National Audit Office
38 Sydney Avenue
Forrest ACT 2603

Dear Mr Hehir

I am writing regarding your inquiry into the JobKeeper program. On 26 February 2021, Michael West Media published a story regarding ports operator Qube. That story raises a number of allegations that I believe would be worth the ANAO exploring. Specifically:

  1. The story quotes a witness statement from Michael Sousa that 'after lengthy discussions with the Department of Treasury and the Australian Taxation Office, it was determined that Qube would be eligible for the subsidy'. What is the nature of these discussions?
  2. Are there examples of representatives from other companies engaging in discussions of similar scope or was this an unusual process in the context of this program?
  3. Did Qube qualify for JobKeeper based on an actual 50 percent drop in turnover, or a forecast 50 percent drop in turnover?
  4. Given that it experienced a 9 percent increase in revenue in the first half of 2020 (compared with the first half of 2019), how could Qube have satisfied either test?
  5. The Australian Taxation Office's second commissioner Jeremy Hirschhorn said in October 2020: 'There [is] nothing explicit in the rules for the [COVID] stimulus measures that required companies to stop paying executive bonuses or from increasing dividends to shareholders:  but there was a quick backlash for those companies seen to be exploiting the spirit of the measures'. As the agency responsible for administering the scheme in keeping with its intended role, does the ATO take a view on whether Qube's decision to pay an executive bonus of $2 million to its CEO is exploiting the spirit of the measures? If not, why not?
  6. Is Qube attempting to require employees to 'pay back' a portion of their JobKeeper if they did not work their full hours while receiving the subsidy? If so, how is this consistent with the requirement that firms pass JobKeeper on to employees in full?

Thank you for your consideration.

Yours sincerely
Andrew Leigh

Auditor-General's follow-up response

8 February 2021

The Hon Dr Andrew Leigh MP
Shadow Assistant Minister for Treasury
Shadow Assistant Minister for Charities
Member for Fenner

By email: Andrew.Leigh.MP@aph.gov.au

Dear Dr Leigh

Administration of the JobKeeper Scheme

Further to your letter of 8 December and my response, 23 December 2020, I write to advise that a performance audit Administration of the JobKeeper Scheme has commenced.

This audit will assess the effectiveness of the Australian Taxation Office’s (ATO) administration of the JobKeeper Scheme. To form a conclusion against the audit objective the Australian National Audit Office proposes to examine whether the ATO has:

  • Effectively administered the rules for the JobKeeper scheme.
  • Implemented effective measures to protect the integrity of JobKeeper payments.
  • Effectively monitored and reported on the operational performance of the scheme.

The report is expected to table in the Parliament October 2021.

To receive updates on the progress of the audit, please subscribe through the following link: www.anao.gov.au/work/performance-audit/administration-the-jobkeeper-scheme.

Yours sincerely

Grant Hehir

Auditor-General's response

23 December 2020

The Hon Dr Andrew Leigh MP 
Shadow Assistant Minister for Treasury 
Shadow Assistant Minister for Charities 
Member for Fenner
By email: Andrew.Leigh.MP@aph.gov.au

Dear Dr Leigh

I am writing in response to your letter of 8 December 2020 requesting that should a potential audit of the JobKeeper scheme be undertaken by my office, the audit include consideration of the three questions listed in your letter. 

As described in the Annual Audit Work Program 2020–21, the proposed objective of the JobKeeper audit is to assess the effectiveness of the Australian Taxation Office’s (ATO’s) administration of the scheme.

An audit on the administration of the JobKeeper scheme may consider a range of matters, including the ATO’s arrangements for administering the rules of the scheme, and its arrangements for identifying and addressing any fraud and abuse of the scheme. The three questions listed in your letter will be considered during any planning of objective and scope of the potential JobKeeper audit. 

Consistent with our normal processes, if the audit proceeds its objective and criteria audit will be published on the Australian National Audit Office website. If you subscribe to the audit topic on our website you will receive an automated notification when the audit has commenced: https://www.anao.gov.au/work/performance-audit/jobkeeper.

Yours sincerely

Grant Hehir

Correspondence from the Hon Dr Andrew Leigh MP

Page one of correspondence from the Hon Dr Andrew Leigh MP. A transcript of this correspondence is contained on this page.

Page two of correspondence from the Hon Dr Andrew Leigh MP. A transcript of this correspondence is contained on this page.

 

8 December 2020

Grant Hehir
Auditor-General
Australian National Audit Office
GPO Box 707
Canberra ACT 2601

Dear Auditor-General

I am pleased to see that your forward work program for 2020-21 includes a potential audit on the JobKeeper scheme. When COVID hit, Labor strongly encouraged the Australian Government to put in place a wage subsidy scheme, and we are pleased that the Morrison Government eventually acceded to pressure to do so. JobKeeper has doubtless saved hundreds of thousands of jobs.

However, Labor believes that with significant spending must come careful scrutiny. With a cost of over $100 billion, it is vital to ensure that the JobKeeper program delivers value for money to the Australian taxpayer.

While I recognise the financial constraints that your office is operating under (as my colleague Julian Hill points out, the Coalition has reduced your budget by more than one-fifth in real terms since 2013), I believe a JobKeeper inquiry should be a high priority.

If your office proceeds with an inquiry into JobKeeper, I encourage you to seek answers to the following questions:

  1. How many large firms manipulated their revenue? For example, there are reports of firms artificially adjusting the timing of invoices in order to engineer a revenue shortfall that qualified the business for JobKeeper.
  2. How much JobKeeper support was paid out to large firms that experienced higher revenue in 2020 than 2019? For example, Harvey Norman qualified to receive JobKeeper from March to September based on an initial revenue drop, but enjoyed a surge in profits. Indeed, Gerry Harvey recently stated: 'This is like the greatest boom I've ever seen in my lifetime.'
  3. How much JobKeeper support was paid out to large firms that paid executive bonuses? I note that the practice of companies receiving taxpayer support via JobKeeper and then paying executive bonuses has been criticised by the Australian Taxation Office, as well as by the Business Council of Australia.

Unfortunately, the Morrison Government has been unwilling to share much of the. information around JobKeeper with the COVID Senate Committee, making it all the more important for the issue to receive scrutiny from your office.

I would be pleased to expand on any points in this letter.

Yours sincerely

Andrew Leigh

Related documents
Correspondence from the Hon Dr Andrew Leigh MP (PDF)
Follow-up correspondence from the Hon Dr Andrew Leigh MP (PDF)