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Furniture retailer Nick Scali has bowed to public pressure and will return $3.6 million in JobKeeper payments after posting a surge in profits.
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Nick Scali repays $3.6m in JobKeeper subsidies
08 February 2021
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The move comes after Nick Scali reported an 89.9 per cent increase in profits to $40.6 million for the six months to 31 December last year, lifting its interim dividend to 40¢ a share, up from 25¢ last year.
In an announcement to the ASX on Monday night, Nick Scali said it was “very appreciative” of the JobKeeper wage subsidies and how it allowed the company to “provide security of employment during a particularly uncertain time”.
“Further, the JobKeeper scheme enabled the company to continue to pay employees throughout the state government-mandated closures in Melbourne throughout August, September and October, and continue to pay employees in full during other temporary COVID-related store closures in South Australia and Western Australia as recently as last week, despite the completion of the subsidy program in September 2020,” Nick Scali said in a statement.
“The company fully recognises that it has benefited from the increased consumer confidence this program has created, which resulted in record sales and net profit after tax.
“The Board of Directors and management have considered the $3.6 million wage subsidy received in the half-year ended 31 December 2020 and decided to refund this amount to the federal government.”
The voluntary repayment of JobKeeper payments comes as Labor continues to lead calls for large corporates to return the wage subsidies before paying executive bonuses or dividends.
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Shadow assistant minister for Treasury Andrew Leigh believes large businesses benefiting from a surge in revenue should exercise good corporate ethics and return the payments.
“There’s a range of firms that have recognised that the right thing to do on a pandemic — when everyone else is tightening their belts and when there’s a million people out of work, another million people wanting more hours — is to hand back taxpayer support if it turns out you didn’t need it,” Dr Leigh said last Thursday.
“The thing about JobKeeper is that the eligibility required just a brief downturn because the government was keen to get money out the door. But some firms had that brief downturn followed by a stonking upswing, in which they then received so much extra profits that they’re able to pay executive bonuses and dividends.
“They would say there’s no legal obligation to hand it back and in that they’d be right. This is a question of ethics, not law.”
Toyota Australia has since returned $18 million in JobKeeper payments, followed closely by Super Retail Group’s $1.7 million, Iluka Resources’ $13.6 million and Domino’s Pizza’s $792,000.
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