Harvey Norman and the JobKeeper Payment

Harvey Norman is an Australian retailer of bedding, computers, electrical and furniture products founded by Gerry Harvey and Ian Norman in 1961. Harvey Norman Holdings, the parent entity of the brand, operates over 300 stores across Australia, Europe, New Zealand and Singapore. In 2021 the company came under fire for seeing record profits during the COVID-19 pandemic despite having received the Australian government JobKeeper payment and wage subsidies from the New Zealand government.

In August of 2020 Harvey Norman saw $480 million of net profit for that financial year, a 19.4% growth on the previous year. In New Zealand, Harvey Norman saw profits grow 28% to $99 million. Harvey Norman had applied and received nearly $13 million in wage subsidies from the New Zealand government.

In September of 2020 Harvey Norman revealed its sales from July through to September had grown 30% compared to the same period in the previous year. In March of 2021, Harvey Norman's profits had grown 116% over the previous 6 months. In the financial year of July 2020 to June 2021, Harvey Norman saw profits after tax of more than $840 million, a 75% uplift on the same period of the previous year. Profit before tax for the year was $1.18 billion, an increase of $521 million or 78.8 per cent.

Australian companies could qualify for the JobKeeper program on the assumption of an anticipated downturn in revenue of 30%. However there was no obligation to repay these funds if revenues ultimately surpassed these expectations. Initially the company had resisted repaying JobKeeper funds leading to both politicians and the public criticising the company in light of its profits, including protests by the ACTU held in front of Harvey Norman stores.

Despite these criticisms, Gerry Harvey "held firm."

In August of 2021 Harvey Norman repaid $6 million of their original $20.5 million JobKeeper payment back to the Australian Government. The remaining $14.5 million was received by the company’s privately owned franchisees.

Speaking to The Age and the Sydney Morning Herald, Gerry Harvey stated that he would not comment on why Harvey Norman was now repaying the subsidy:

“I’m not going to talk about JobKeeper. Every time I open my mouth about JobKeeper I get into trouble."

Federal Labor MP, Andrew Leigh, described as "one of the company’s fiercest critics", questioned whether Mr. Norman would have repaid the JobKeeper money without public pressure:

“Six months ago, Gerry Harvey flatly refused to repay. Does anyone imagine he would’ve repaid without huge public pressure? Harvey Norman has given us the best advertisement for more transparency into the secretive, rorted JobKeeper scheme.”

Sources & Further Reading

https://www.smh.com.au/business/companies/harvey-norman-cofounder-ian-norman-dies-20140529-3974f.html

https://cdn.shopify.com/s/files/1/0593/8003/9732/files/HVN_Annual_Report_30_June_2022_-_FINAL_FOR_RELEASE_300922_HIGH_QUALITY_V2.pdf?v=1664496196

https://www.nzherald.co.nz/business/covid-19-coronavirus-harvey-norman-profits-rise-20-per-cent-on-back-of-lockdown-sales-surge/DXOC6DCB2LZS3QG6INYFJIH4VA/

https://www.smh.com.au/business/companies/harvey-norman-profits-up-185-per-cent-as-retailer-captures-more-covid-spending-20200921-p55xm1.html

https://www.9news.com.au/national/harvey-norman-repays-more-than-six-million-in-jobkeeper-payments/de7680ba-bbb0-4ff1-b7b8-3ef1c6efebef

https://www.smh.com.au/politics/federal/insult-to-injury-harvey-norman-s-jobkeeper-refund-reignites-calls-for-review-of-70b-scheme-20210830-p58n1z.html

https://thenewdaily.com.au/finance/consumer/2021/05/31/harvey-norman-jobkeeper-boycott/

https://www.theguardian.com/australia-news/2021/feb/26/harvey-norman-to-keep-22m-in-jobkeeper-despite-profits-doubling-to-462m-in-pandemic

https://www.accountantsdaily.com.au/business/15397-harvey-norman-hangs-on-to-jobkeeper-as-profits-double

https://www.smh.com.au/business/companies/harvey-norman-repays-jobkeeper-after-record-profits-20210831-p58nei.html

https://www.theguardian.com/australia-news/2021/aug/31/harvey-norman-repays-6m-of-the-22m-it-claimed-in-jobkeeper-after-record-profits

https://michaelwest.com.au/they-let-her-rip-and-she-ripped-government-collapses-in-australia/

https://michaelwest.com.au/jobkeeper-shame-and-the-collapse-of-business-leadership-in-australia/

https://www.channelnews.com.au/exclusive-what-harvey-norman-actually-did-with-millions-in-jobkeeper-payments/