Seven West Media reports $116 million half-year net profit, with no plans to return $47 million in JobKeeper subsidies

Seven West Media

Seven West Media chairman Kerry Stokes. Source: AAP/David Moir.

The corporate reporting season is turning up more disclosures about JobKeeper claims, with public companies such as Nick Scali, Coca-Cola Amatil and Iluka responding to pressure and announcing they will pay back public money they did not need to claim in the first place.

However, there’s another category of company which deserves further scrutiny: the profitable firm that pocketed big dollops of JobKeeper in the December half-year and refused to hand any back.

Step forward billionaire Kerry Stokes and Seven West Media.

Yesterday, Seven West Media reported a stronger-than-expected $116 million half-year net profit, which sent its share price surging to a near two-year high of 50 cents.

Shopping centre giant Scentre Group had the right idea from the start when its board took the view: “We didn’t apply for JobKeeper because we didn’t need to. We think this was the right thing to do as a government assistance program like this should be accessed by those in greatest need.”

Federal Labor MP Andrew Leigh is doing a good job highlighting JobKeeper rorting, as is the proxy advisory firm Ownership Matters, and academics such as professors Rabee Tourky and Rohan Pitchford at ANU (see this example of their work).

Leigh and fellow federal Labor MP Susan Templeman launched a notice of motion in the House of Representatives yesterday afternoon calling for a full disclosure of JobKeeper recipients.

The real problem here is the enormousness of the $100 billion scheme, the ease in which entities could qualify based on a one-month revenue forecast, and the lack of transparency by the federal government in terms of who pocketed the cash.

How can it defend not disclosing claimants’ identities in what is the biggest government handout in Australian history, when a searchable public register is standard practice in countries such as New Zealand and the UK?

When so many other recent federal grants schemes have been corrupted by partisan political interventions (see this ABC 7.30 piece on Peter Dutton’s pre-election efforts), surely we deserve to be told who are the biggest JobKeeper claimants?

Seven West Media tried to downplay its JobKeeper windfall in yesterday’s results. The 22-slide pack presentation for investors made no mention of JobKeeper. Nor did the five-page press release.

You had to go to the 45-page formal accounts to be told in the fine print on page five under the “cost management” headline that “the group benefited from temporary net cost savings of $30.5 million during the half from government measures to support businesses through COVID-19”.

Inquiries of the company clarified this $30.5 million figure was “the P&L benefit of JobKeeper in this half ($25.7m) plus the benefit of the spectrum charge waiver ($4.8m)”.

Controlling shareholder Stokes wasn’t on the call yesterday to answer questions about this largesse, but CEO James Warburton was drawn into the debate, contributing these quotes to this news story in The Australian:

“I think from our perspective we qualified for JobKeeper in accordance with the program, and it did its job.

“We would have had to retrench or sack 120 or 150 people; staff took a 20% pay cut, which contributed to liquidity in the business through the time and we employ hundreds and hundreds of people in terms of production. So for us, it helps us emerge as a stronger, larger taxpayer, let alone what we’ve paid in tax over the last … nine to 10 years.

“So that’s exactly what the program was intended for, and that’s been the use.”

Rather than trying to extract morsels from media interviews, it would have been nice if Seven West Media had just come straight out and said the company claimed $47 million in JobKeeper benefits between March and September but then didn’t qualify for any JobKeeper 2.0 payments which commenced on October 1.

At $47 million, Seven West Media will finish in the top 100 national recipients of JobKeeper — not that we’ll ever be officially told that by the federal government.

Given that it went into COVID-19 with annual revenues exceeding $1 billion, it needed to prove a 50% monthly revenue drop to qualify. How on earth it qualified is yet to be explained.

It really is time for the auditor-general to take a deep dive on this scheme, along with a serious parliamentary inquiry where CEOs, CFOs and public company chairs explain how they gained access to such huge amounts of public money.

This article was first published by Crikey.

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