Should Qantas pay back Job Keeper ?

[cove]

Even though we are shareholders we think Qantas should pay back the $900 million they trousered from Job Keeper.
It would be voluntary as there was no provision for refunds in the legislation.
What do you think?

 

[BAM1748]

How? Qantas is not paying company tax on its record profit. Individuals don't get to accumulate past "losses" to offset income tax.

I think if you check you’ll find they can.

Post automatically merged: Sep 3, 2023

The biggest Q is why didn't ScoMo take an equity stake in QAN in exchange for taxpayer support?

Would've make a killing when cashing out!

Do for one do for all, and they light have come out way worse with failing business.

 

[drron]

Even the PM, although not expecting it to happen, would like all companies to pay back Jobkeeper when they can.

"I would like to see every company, when they can, (pay back JobKeeper). JobKeeper was a good thing - we supported it - but we said at the time that the problem of billions of dollars going to companies that were actually increasing their profits at the time that hasn't been repaid."

PM: Taxpayers deserved better of JobKeeper

The former Coalition government should have better designed JobKeeper to ensure taxpayers were better protected, Prime Minister Anthony Albanese has said.

www.dailymail.co.uk

 

[RooFlyer]

what is the rest of the $2.5 billion that gets bandied about (aka QantasKeeper)?

I believe at least a fair chunk of it was the government renting/chartering QF planes to bring Australians home.

I think if you check you’ll find they can.

I can for capital gains/losses - what about income (which was the discussion initiated in post 16 and developed subsequently)?

If I don't make a income for a year, can I declare some sort of 'loss' and offset that against income later? If so, my bad; never found out that one.

 

[justinbrett]

Even the PM, although not expecting it to happen, would like all companies to pay back Jobkeeper when they can.

"I would like to see every company, when they can, (pay back JobKeeper). JobKeeper was a good thing - we supported it - but we said at the time that the problem of billions of dollars going to companies that were actually increasing their profits at the time that hasn't been repaid."

Which is quite a disingenuous comment from the PM - there are companies that received Jobkeeper that turned a profit whilst receiving it - those were required to pay it back.

Other companies like QF made a loss - 7 billion I believe - so that was not used to "increase their profit", it was to decrease their loss. Whether rightly or wrongly, government policy made Australian airline losses far more than overseas counterparts, if we had policies like the US/UK international travel would have returned a year earlier, domestic travel would have been much closer to normal, and the losses incurred would have been far less.

I can for capital gains/losses - what about income (which was the discussion initiated in post 16 and developed subsequently)?

If I don't make a income for a year, can I declare some sort of 'loss' and offset that against income later? If so, my bad; never found out that one.

You can't make a loss if you just have a wage/salary, as everything you receive is profit (minus a small amount for allowable deductions - no where near 100%). If you were a sole trader or operated a business you can incur a loss and then offset against future profit.

The point was companies and individuals pay tax in the good times so there is a safety net in the bad times.

 

[MEL_Traveller]

I can for capital gains/losses - what about income (which was the discussion initiated in post 16 and developed subsequently)?

If I don't make a income for a year, can I declare some sort of 'loss' and offset that against income later? If so, my bad; never found out that one.

Exactly!

If I have a sabbatical one year, or take a three-month holiday, or leave work to study full time for a year… why can’t I average my income over multiple years and pay tax at a lower band, if that’s where the average salary comes in?

 

[Pushka]

Qantas was impacted significantly by covid, I would rather they spend that money on things which would make them more competitive - like newer aircraft, better lounge food, higher staff salaries, etc - rather than wasting it on paying dividends.

The goal of the company is to deliver maximum value - not to piss away money on dividends with the oldest fleet in the world, and a rapidly declining level of service.

Put a moritorum on dividends until Qantas is back on track I say.

But that wont happen. The shareholders and Board who receive shares as part of salary package.won't allow it.

 

[RooFlyer]

What’s quite interesting is what this week has potentially done to the company’s finances. $570m of travel credits will no longer booked as profit in this half, potentially $250m+ in fines from the ACCC and then the possibility of repaying $900m in JobKeeper. Depending on what happens, the worst case could be a $1.7m hit from what they were forecasting a week ago.

You may have meant $1.7b ? Yes, you can only imagine Vanessa Hudson contemplating the thick poo sandwich that's about to be handed to her.

I'm no accountant, but have done a fair bit of corporate accounting (mainly resources and renewables); it would be interesting as to how the formerly-about-to-be-banked former customer credits would have been handled according to accounting standards. "Profit earned ex nihilo" ?

More seriously, a straightforward line "Cash retained after we put a line in the sand and decided we then wouldn't give the customers' money back" might be a good one, and eagerly accepted by the corporate community.

If you were a sole trader or operated a business you can incur a loss and then offset against future profit.

Granted; but this bit of the discussion arose when post 16 posed a question about individuals. But we all digress ...

 

[justinbrett]

Granted; but this bit of the discussion arose when post 16 posed a question about individuals. But we all digress ...

Since I'm the one that brought it up, it was to highlight that individual and corporate welfare are both funded by taxes they each pay.

If the government wanted to make it a loan it could have, but it went out to prevent job losses and long term damage to the economy.

Government policy cost QF (and most businesses) money, far more than it received.

 

[drron]

Which is quite a disingenuous comment from the PM - there are companies that received Jobkeeper that turned a profit whilst receiving it - those were required to pay it back.

Other companies like QF made a loss - 7 billion I believe - so that was not used to "increase their profit", it was to decrease their loss. Whether rightly or wrongly, government policy made Australian airline losses far more than overseas counterparts, if we had policies like the US/UK international travel would have returned a year earlier, domestic travel would have been much closer to normal, and the losses incurred would have been far less.

No companies that made a profit were not required to pay that back. The PM stated that in the link I gave.
The policies that you complain about that increased the loss for Australian airlines were basically all State Government policies either border closures affecting domestic operations or limits on OS arrivals for International operations.

Whereas QF certainly has been helped making an increased profit from Government decisions such as blocking Qatar from increasing flights.

 

[justinbrett]

The policies that you complain about that increased the loss for Australian airlines were basically all State Government policies either border closures affecting domestic operations or limits on OS arrivals for International operations.

That's quite revisionist.

It was the federal government who closed the international borders and imposed mandatory quarantine (and remember it wasn't just quarantine caps stopping travel - you needed a federal government permit to leave the country). Beyond that it was the collective "National Cabinet" that kept the restrictions in place, only at the very end was the federal government opposing state governments with domestic border restrictions. It also supported the states halving the quarantine spots at one point when they asked for it.

It was really only the Liberal NSW Premiers that were advocating for restrictions to be lifted.

To clarify - I'm not complaining about the policies. It's just a statement of fact they had consequences.

 

[Pushka]

That's quite revisionist.

It was the federal government who closed the international borders and imposed mandatory quarantine (and remember it wasn't just quarantine caps stopping travel - you needed a federal government permit to leave the country). Beyond that it was the collective "National Cabinet" that kept the restrictions in place, only at the very end was the federal government opposing state governments with domestic border restrictions. It also supported the states halving the quarantine spots at one point when they asked for it.

It was really only the Liberal NSW Premiers that were advocating for restrictions to be lifted.

To clarify - I'm not complaining about the policies. It's just a statement of fact they had consequences.

Internal Australian travel would have been a boon to local tourism when the international borders closed. I don't believe the Federal Govt ever advocated closed state borders, and then when extreme, even regional bans. And even when borders open, they snapped shut with no notice stranding thousands. And all State parties were at fault.

 

[justinbrett]

Internal Australian travel would have been a boon to local tourism when the international borders closed. I don't believe the Federal Govt ever advocated closed state borders, and then when extreme, even regional bans. And even when borders open, they snapped shut with no notice stranding thousands. And all State parties were at fault.

Yes but it was all sanctioned by the Federal Government under the guise of National Cabinet. They resisted public opposition for political reasons (especially with WA, and removed themselves from the court case), and it was really only at the very heard the spats were aired publicly.

That's the problem with all of this, everything is distorted by partisan politics - even the PM's latest comments is just a partisan swipe at the former government since they're putting political pressure on him over QF.

 

[Pushka]

Yes but it was all sanctioned by the Federal Government under the guise of National Cabinet. They resisted public opposition for political reasons (especially with WA, and removed themselves from the court case), and it was really only at the very heard the spats were aired publicly.

That's the problem with all of this, everything is distorted by partisan politics - even the PM's latest comments is just a partisan swipe at the former government since they're putting political pressure on him over QF.

Yeah well the National Cabinet was a joke and everyone knew that. There was no Federal control at all. It was every state for the themselves. Made me realize what a sham the Federation actually is.

 

[CaptJCool]

I am of an open mind with this question

but lets take the view they ought pay it back

why?
Revenue Received in Advance
At the turn in 2020, this figure was $5 billion (in 2019 $5,8b)
https://investor.qantas.com/FormBui...file/2020FY/FY20-Interim-Financial-Report.pdf (see part 11 on page 37)
by end 2021 this figure was $5.4 billion, (with a declared loss of $1,7 billion FOR TAX PURPOSES) by end 2022, this figure was $7.9 billion, (with a declared loss of $860 million) and by end 2023 $8.6 billion

Qantas posts $1.9bn loss but revenue jumps 54% as air travel surges after borders reopen

Airline’s loss halves on back of revival in travel as company announces share buyback of up to $400m

www.theguardian.com

the Court case on JOBKEEPER

Qantas hails High Court JobKeeper win over workers as a victory for thousands of small and big businesses

The High Court rejects an application by Qantas workers and their unions to hear an appeal of a case about how the airline used the JobKeeper wage subsidy scheme to allegedly deny them penalty rates.

www.abc.net.au

Unions take Qantas to High Court over alleged misuse of JobKeeper scheme, underpayment of staff

Unions are accusing Qantas of not paying staff their rightful wages for public holidays, weekends and overtime they have worked during COVID-19 lockdowns, saying the airline has been manipulating rosters and paying workers no more than the basic JobKeeper wage.

www.abc.net.au

this was an issue around working for the $750 (and what was "included" in the base figure (eg overtime, public holiday pay rates, arrears payments and leave payments (eg sick leave and the annual etc) unlike the 18 year old cafe worker who normally got paid $300 for a WEEKEND shift who sat out COVID and pocketed $750 per week

the baggage handlers

QANTAS OUTSOURCING ON TRIAL AT HIGH COURT - Transport Workers’ Union

A High Court Hearing will today put outsourcing on trial as Qantas attempts to overturn two Federal Court rulings that found its axing of 1700 ground and fleet presentation workers was unlawfully intended to prevent workers accessing their rights to collectively bargain and take possible...

www.twu.com.au

The Government relief
COVID-19 Support to the Aviation Sector | Australian National Audit Office (ANAO) (see table 3.3)

Recipient	Segment	Approved funding ($m)	% of total	AAFRP ($m)	DANS ($m)	RANS ($m)	Other measure ($m)
Qantas Airways	Passenger airline	2,134.6	56.7	229.8	528.7	40.1	1,335.8

Fuel price movements
its a pity this price fluctuates but from the final figures this didn't appear to impact airfares as in the savings was pocketed by the airlines
and lets not forget the aviation fuel excise waiver Australian airline industry to receive $715m rescue package

Airport Fees
some of your might find this of interest
Inquiry report (while 5 years ago, it gives you the gist of what's going on with all the extra service charges (lucky us paying a $1 per pax for Security charges to arrive at an airport (see chart on page 43)

https://www.pc.gov.au/__data/assets/pdf_file/0013/231430/sub050-airports-attachment3.pdf

Resumption Airfare Pricing
this is where some of the issue lies - the whopping net profit in 2022-23 tells us lots of people were flying to "visit family", eg witness the direct flights into India, "renew work relationships" attend conferences and so on so forth - with the effect of less planes in the air, because of the individual plane pricing model with the high demand and relatively low supply because of less planes in the air, more people had to pay higher fares. It operated much like a major sporting event pricing structure (noting the cancellation of flights issue worked in the opposite direction as it opened up more cheap seats that could then be moved across to another flight, and why lots of flights were full)
I know using the flight credits I had, the fares were twice the price of pre-COVID

and then there's the SHARES
3x$500 million $1.5 BILLION OF SHARE BUYBACKS and the millions of shares for free
How on earth do you afford to do this if you are "crying poor"

 

[drron]

That's quite revisionist.

It was the federal government who closed the international borders and imposed mandatory quarantine (and remember it wasn't just quarantine caps stopping travel - you needed a federal government permit to leave the country). Beyond that it was the collective "National Cabinet" that kept the restrictions in place, only at the very end was the federal government opposing state governments with domestic border restrictions. It also supported the states halving the quarantine spots at one point when they asked for it.

It was really only the Liberal NSW Premiers that were advocating for restrictions to be lifted.

To clarify - I'm not complaining about the policies. It's just a statement of fact they had consequences.

No it was not only NSW that wanted their border opened in the end. Tasmania opened it's border in June 2020 as they had published in their road map out of lockdown soon after the border closure. And they didn't stop International people coming in. I was able to get a New Zealander in to Launceston to see his dying brother. Permission was granted immediately by the Tasmanian police.
As it turned out the biggest mistake the Feds made was having a National Cabinet and so having their hands tied by the wishes of the States.

The last decision restricting our tourism was only lifted last month. That was the Cruise ship agreement of the Eastern and western Seaboards. That insisted that OS cruisers needed to be vaccinated and have a negative covid test prior to boarding and still had to wear masks on the ship if they could not social distance and when off the ship on a ship's excursions. That last bit was ludicrous as an OS visitor to Australia in the last year has not needed to be tested unless symptoms and was not subject to a mask mandate. It is known that the States who opposed lifting these restrictions until now was QLD and WA.

 

[Himeno]

You can't make a loss if you just have a wage/salary,

Of course you can. It's also known as wage theft.

 

[love_the_life]

The money was provided to keep staff at work, staff who otherwise, given the global situation, would have been placed on unpaid leave or let go.
The money was used for that. There is no reason Qantas should have to pay it back.

Unless you can prove that Qantas used the money for something other then what it was given to them for, they shouldn't need to return it.

I thought part of the argument was that QF laid off staff without pay - ie the JobKeeper funds were not used to pay staff. I can't quite remember what actually happened though.

 

[Pushka]

I thought part of the argument was that QF laid off staff without pay - ie the JobKeeper funds were not used to pay staff. I can't quite remember what actually happened though.

It does seem strange doesn't it, they could have given the sacked staff the option to just stay on JobKeeper instead of being outright sacked. Given them the choice. Because it would have been paid by the Govt and would have kept some loyalty of crew. Or does it mean that Qantas was not employing people in the way in which qualified for JobKeeper or that it did claim JobKeeper but they were sacked anyway which opens up a rather large can of worms. Maybe an independent audit needed.

JobKeeper was paid to the company, then it was up to the company to pay that money, amd any top ups, to the employee. The money didn't go direct to the employee.

 

[CaptJCool]

JobKeeper was paid to the company, then it was up to the company to pay that money, and any top ups, to the employee. The money didn't go direct to the employee.

yes
and what QF said was it did just that - all employees were given at least $1,500 per fortnight

just what that entailed is the matter of dispute
ie were you required to work ?

No, then its $750 per week (then the dispute was whether you took "leave" which enabled you to top up to normal salary" of which your weekly payment included the government JobKeeper payment)

Yes. then its $750 per week regardless of if you worked a public holiday
the Union and Management had agreed to "share the constrained working hours around" so basically people sat at home one week and worked the next. However, the extras were not included in the actual working week, they were offset in the week where people sat at home, thus denying the employees the extra pay they might otherwise have received if it was paid in the same week they worked

 

[Pushka]

yes
and what QF said was it did just that - all employees were given at least $1,500 per fortnight

just what that entailed is the matter of dispute
ie were you required to work ?

No, then its $750 per week (then the dispute was whether you took "leave" which enabled you to top up to normal salary" of which your weekly payment included the government JobKeeper payment)

Yes. then its $750 per week regardless of if you worked a public holiday
the Union and Management had agreed to "share the constrained working hours around" so basically people sat at home one week and worked the next. However, the extras were not included in the actual working week, they were offset in the week where people sat at home, thus denying the employees the extra pay they might otherwise have received if it was paid in the same week they worked

Then why were so many thousands sacked then?

"The 6,000 redundancies will include 1,450 office roles, 1,500 ground operations staff including baggage handlers, 1,050 cabin crew, 630 engineering jobs and 220 pilots."

Jobkeeper would simply be money in money out for them.