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Australia Foreign-owned retailers Specsavers, OPSM and Sunglass Hut received millions in JobKeeper

15:41  15 september  2021
15:41  15 september  2021 Source:   abc.net.au

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a person standing next to a glass door: Retail giants Specsavers and Luxottica, which owns OPSM and Sunglass Hut, were among the 1 million businesses which collected JobKeeper. (ABC News) © Provided by ABC News Retail giants Specsavers and Luxottica, which owns OPSM and Sunglass Hut, were among the 1 million businesses which collected JobKeeper. (ABC News)

Two of Australia's most recognisable retailers doubled their profits after claiming JobKeeper, new figures reveal.

Global retailer Specsavers claimed more than $90 million in JobKeeper, becoming one of the biggest publicly known recipients of the federal government's wage subsidy.

The ABC can also reveal its rival Luxottica – the parent company of OPSM and Sunglass Hut – more than doubled its profits too after receiving tens of millions of dollars in JobKeeper support.

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Both companies are foreign-owned, with Specsavers based in the British tax haven of Guernsey.

"Between these two companies, they've benefited $130 million in increases in profits," investment analyst Dean Paatsch said.

"Absence the miracle of JobKeeper, this could never have happened.

"You can't suddenly make 100 per cent more profit unless your expenses fall."

JobKeeper paid about $90 billion to around 1 million businesses, supporting about 3.8 million workers.

The names of most JobKeeper recipients or the amounts they received are not publicly available.

But documents lodged with the financial regulator ASIC and obtained by 7.30 reveal the impact the subsidy had on Specsavers and Luxottica.

Specsavers' revenue plunged in April last year amid lockdowns before rebounding as the economy reopened.

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Revenue across the year fell by just 1 per cent, while profit jumped $78 million to $150 million.

Specsavers received about $92 million in JobKeeper, while the ABC understands it repaid about $4 million.

"Taxpayers kept paying that wage subsidy, even though in every state and territory, apart from Victoria, after July things had returned to normal," Mr Paatsch said.

"It gave a benefit to the employer that flowed straight through to the profits of those offshore owners."

Specsavers' Australian operations include a local head office along with about 500 optical and audiology businesses, which are owned independently in a franchise-like structure.

"They all saw dramatic declines in revenue and each one of them individually qualified for JobKeeper," a company spokeswoman said.

"The JobKeeper scheme was invaluable as it enabled our store partners to stay in business, continue to provide urgent and essential care … and keep their team members employed."

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Stores continued to provide optometry services during lockdowns while non-essential retail parts of its business were restricted.

Profit increase for Luxottica

Luxottica South Pacific Holdings owns about 200 Sunglass Hut outlets and most of OPSM's 300 stores in Australia.

Revenue in its Australian operations fell by five per cent while profit shot up by $50 million to $67 million.

Its financial report showed employee expenses, helped by JobKeeper, fell by $56 million.

"Again, all of the heavy lifting of their profit increase … was done by JobKeeper," Mr Paatsch said.

"Let's be clear, these companies did absolutely nothing wrong; they legitimately qualified for this scheme.

"If you qualified in an instant, you continued to receive the subsidy for six months, regardless of whether you're trading returned to normal or not."

Luxottica's parent company is based in Paris and is chaired and part-owned by one of the richest 100 people on earth, according to Forbes.

Luxottica did not respond to the ABC's questions about JobKeeper.

Specsavers' financial year is from March 2020 to February 2021, while OPSM's financial year is from January to December 2020.

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'Much needed certainty and support'

Treasurer Josh Frydenberg said JobKeeper saved at least 700,000 jobs and was an "economic lifeline".

"Without JobKeeper, many more jobs would have been lost and businesses forced to close their doors," he said in a statement.

When companies entered JobKeeper in early-mid 2020, they remained in the scheme until around the end of September when revenue was re-tested.

Until then, businesses received $1,500 per eligible employee each fortnight.

The September turnover test resulted in most workers and about half of all JobKeeper firms exiting the scheme.

Mr Frydenberg defended not re-testing turnover sooner to remove firms where turnover had recovered.

"Treasury's advice at the time was to keep JobKeeper in its current form to provide much-needed certainty and support to the economy," he said.

Mr Frydenberg also stood by the decision not to include a clawback provision to recover money from profitable companies.

"In Treasury's view, introducing a mechanism to require businesses to pay back JobKeeper would have been a handbrake on the recovery," he said.

Federal Labor MP Andrew Leigh said the retailers' profits highlighted how the wage subsidy became "corporate welfare" for some firms.

"The government's short-sighted approach to JobKeeper has seen millions of dollars go to tax havens and offshore billionaires," he said.

Decision not to take JobKeeper

Independent optometrist Robyn Main provides services to aged care residents across Perth.

She had almost no work early last year as aged care facilities went into lockdown, but she decided against applying for JobKeeper.

"I didn't need it, so why take something when you don't need it?" she said.

"We had the savings … we were going OK."

The mobile optometry business had a strong recovery in the second half of 2020 — she even needed to employ a staff member for the first time.

Ms Main said bigger industry players should consider repaying JobKeeper amounts they did not eventually need.

"In the end it was OK. We had a good year, guys," she said.

"I hope that they think about the next generation and the burden of who's going to pay for it."

Some $6.2b in JobKeeper paid to businesses with more than $10m in turnover, but whose revenue did not fall enough during pandemic .
About $6.2 billion in JobKeeper wage subsidies were paid to businesses with more than $10 million in turnover that did not experience a minimum 30 per cent fall in turnover in the six months of the scheme, analysis of Parliamentary Budget Office data shows.About $6.2 billion in JobKeeper wage subsidies were paid to businesses with more than $10 million in turnover that did not experience a minimum 30 per cent fall in turnover in the first six months of the scheme.

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