Furniture retailer Nick Scali has backtracked on an earlier decision not to repay millions of dollars in JobKeeper payments and will instead give back $3.6 million in subsidies it received in the current financial year.
The Nick Scali board announced the repayment in a statement on Monday night, just days after releasing its half-yearly results last week.
Last Thursday, the retailer revealed its underlying net profit grew to $40.5 million, and sales increased by 24.4% to $171.1 million, for the six months to the end of December 2020.
During the same six-month time period, Nick Scali received $3.6 million in JobKeeper wage subsidies and other assistance.
In the statement on Monday, the Nick Scali board said the JobKeeper payments were of “great assistance at the height of the pandemic — enabling the company to provide security of employment during a particularly uncertain time”.
The company said it is “very appreciative” of the JobKeeper program, which helped it pay employees during the stage four lockdown in Melbourne in August, September and October, and during more recent forced store closures in South Australia and Western Australia.
However, the company said it will return the funds to the federal government as it “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”.
Nick Scali also received $3.9 million in wage subsidies in the first six months of 2020, however, the business is not repaying these funds.
A number of other retailers are under pressure to join this group, having recorded strong financial results during the pandemic, including Premier Investments, Accent Group and Harvey Norman.
Federal Labor MP Andrew Leigh has been leading the calls for such businesses to give back the wage subsidies, and SmartCompany readers have also weighed in on the issue.
In response to this article about Nick Scali last week, one reader suggested returned JobKeeper funds “could be used to reduce debt or used in continued assistance to those sectors requiring further help”.
“The intent of the government was to assist business entities during the tough economic time and not to profiteer,” they added.
Another reader said all companies that return JobKeeper subsidies “should be widely praised and supported by consumers and governments”.
“Those that do not should be named and shamed.”
The National Audit Office is currently reviewing the Australian Taxation Office’s administration of the multibillion-dollar scheme.