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The port and rail giant Qube Holdings had a good year in 2020: strong revenue, healthy profits, bonuses for executives and dividends for shareholders.
So how is it that Qube qualified for more than $30 million in emergency wage subsidies under the federal government's JobKeeper scheme in the same year?
It is one of the many mysteries of a scheme that was designed to keep Australians in jobs during the COVID-19 economic shock but has also resulted in a big chunk of taxpayers' money being pumped into big companies that now say they did not need it.
Some, like Qube, have started paying part of the money back.
Now correspondence between the company and government officials, which ABC Investigations has obtained under Freedom of Information laws, has shed some light on the sequence of events that led to Qube finding its way on to JobKeeper in the first place.
As the scheme started rolling out in early April last year, Qube's managing director Maurice James wrote to Treasury secretary Steven Kennedy, pushing for his company to access the subsidy.
"I know you will be very busy so I haven't bothered to call you," he wrote.
"We would welcome the opportunity to access the JobSeeker program where impacts are occurring on a business unit or regional business," he added, appearing to confuse the name of the scheme with the government's modified Newstart payment.
Qube was initially ineligible for JobKeeper because companies with revenue of above $1 billion needed to show a 50 per cent drop in turnover to qualify.
That would have been a massive hit for Qube, which had posted revenues of above $1.7 billion for the previous two years.
Instead, the company wanted to access JobKeeper though one of its subsidiaries, Qube Ports.
Qube's ports and logistics division recorded an increase in revenue in 2020.(ABC News
)It is unclear whether the Treasury secretary responded to the email from Maurice James, however other senior officials within his department moved quickly on Qube's request.
"Michael, our JobKeeper people will contact you soon to set up a meeting for tomorrow," Treasury official Tom Dickson wrote in a text message to Qube Ports director Michael Sousa on April 15.
"They are arranging a priority referral to the ATO," he texted on the same day.
Mr Sousa met with officials from the Treasury and the Australian Tax Office on April 16, but the details of their discussions have been redacted in the Freedom of Information disclosure.
However, a follow-up text from Tom Dickson indicates the meeting delivered the desired outcome for Qube.
"Michael, I hear you had a good result with your issues this morning. Trust that resolves things," he wrote.
Mr Sousa replied: "Hey Tom, yes it sounds like we have a way through now … thanks for you [sic] help".
In a statement, Qube said it was told in the meeting that its ports division qualified "on the basis of a forecast revenue test, which was in excess of a 50 per cent drop in revenue".
"The ATO has since audited the ports division and confirmed it qualified for JobKeeper and that the payments have all been applied correctly and in accordance with the legislation," the statement said.
Yet it is unclear from the company's financial accounts exactly what kind of revenue fall Qube Ports experienced while receiving JobKeeper.
In fact, Qube's ports and logistics division recorded a revenue increase of 1.7 per cent in the first half of last year and almost 8 per cent in the second half.
Qube says this is because the publicly available financial statements do not show the full impact of the COVID-19 economic shock.
"The ports figures are not broken down in the published financial reports," the company said.
"We estimated that approximately 270 employees in the ports division would have been retrenched had it not been for JobKeeper.
"Those employees are from regional ports where job opportunities are limited and they would almost certainly have required JobSeeker."
Treasurer Josh Frydenberg says Treasury consulted widely with individual companies as it rolled out the JobKeeper scheme.(ABC News: Matt Roberts, File Photo
)The ATO would not comment on how Qube Ports qualified for the scheme but indicated it had exercised discretion in deciding the eligibility of some companies.
"Some entities were … able to use a modified test, and alternative tests as prescribed by the commissioner, to meet the turnover requirements depending on their circumstances," the ATO said in a statement.
Treasurer Josh Frydenberg said in a statement that Treasury had consulted widely with individual businesses like Qube during the JobKeeper rollout, "including through the dedicated Business Liaison Unit established for this purpose during the pandemic".
Labor MP Andrew Leigh, who has been outspoken on profitable companies receiving JobKeeper, said the correspondence raised the question of whether the government had done a "special deal" with Qube.
"These FOI documents clearly indicate that Qube … sought assistance from the Treasury in qualifying for JobKeeper," he said.
"Yet we know that Qube's profits in the first half of 2020 ended up being larger than their profits in the first half of 2019."
Mr Leigh has written to the auditor-general Grant Hehir, asking his office to investigate how Qube became eligible for the scheme despite remaining profitable while receiving the subsidy.
Labor MP Andrew Leigh questions whether the government made a "special deal" with Qube.(ABC News: Adam Kennedy, File Photo
)Last week, Qube announced that it would hand back the $16.8 million it received in the second half of last year after reporting a 10 per cent increase in its profits compared to the same period a year earlier.
"Other companies may make different decisions and choose not to repay as, like Qube, they have no legal obligation to do so," the company's statement said.
"However on balance, the Qube board felt returning JobKeeper was the right decision."
Qube has not returned the $13.5 million it received during the first few months of the scheme.
This article first appeared on www.abc.net.au
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