An independent audit of Jobkeeper by the Australian National Audit Office (ANAO) has found the federal government largely implemented the pandemic support scheme effectively while having some shortcomings.
The federal government created the JobKeeper scheme at the beginning of the COVID-19 pandemic to keep Australians employed by supporting impacted businesses with payments of $1,500 (US$1,144) per worker per fortnight from March 30, 2020, to Sep. 28, 2020. The scheme was later extended twice at reduced rates.
The ANAO audit report found that the Australian Tax Office (ATO), which was tasked with administering the scheme, made around $89 billion in JobKeeper payments, with an average of 3.6 million individuals receiving support monthly in the first six months.
On average, the audit found that it took the ATO four days to process a claim, and businesses could claim the first monthly reimbursement five weeks after the government announced the scheme.
However, the audit report discovered that not all of the required compliance and integrity measures were carried out by the ATO as intended.
Among the 22 compliance measures, the ANAO found that two were partly implemented as intended, seven mostly as intended and eight fully as intended. However, the audit office could not provide conclusions on five measures because of data integrity issues.
One of the measures that the ATO did not carry out completely was ensuring businesses would pay their employees when receiving JobKeeper payments.
More specifically, the ANAO checked 49 compliance cases on this measure and detected that 15 cases were closed “without evidence that the risk that the client receiving JobKeeper payments was not paying their employees had been addressed”.
Additionally, the audit found that the inconsistencies in the documentation that occurred when the tax authority conducted reviews on businesses’ proposed decline in turnover “did not provide strong assurance on the assessed eligibility of entities that were reviewed”.
In particular, there were concerns about the evidence asked for and received by the tax office showing a business satisfied the test of decline in turnover.
For instance, some entities submitted a spreadsheet that included only a calculation of their declines in turnover without indicating when the calculation was completed.
The ATO has acknowledged the issue and said that the variability of documentation existed because there was no definition of what records were required to be kept or how to present the calculation.
Meanwhile, the ATO reported in September 2021 that it had identified $470 million in JobKeeper overpayments and waived $180 million out of this amount using the legislative discretion provided to the tax authority.
The ATO used the discretion to forgive overpayments to ineligible businesses when it judged that those entities made an honest mistake and did not receive direct financial benefit from the JobKeeper payments.
Nevertheless, after reviewing a sample of 63 overpayments, the ANAO found that the tax authority did not consistently document how its exercise of discretion related to the two criteria above.
“A more structured approach for documenting the reasons for exercising discretion on JobKeeper overpayments would have provided more transparency and accountability for the use of public funds,” the audit report said.