(Image: Tom Red/Private Media)

Back during the global financial crisis, when the Rudd government decided to rush out $900 stimulus cheques using the tax system to do it quickly, it copped huge grief from News Corp — which seriously argued stimulus would hurt the economy — for sending cheques to dead people, backpackers still in Australia and those who’d returned overseas, and expatriates who’d paid tax recently.

In the end, about $25 million was estimated to have gone overseas in the rush to send cheques out. The Coalition back then had a great old time mocking Labor for providing stimulus to foreigners.

As it turns out, that was chump change compared to the amount of the Morrison government’s JobKeeper payments that have gone offshore. The program proved a winner for foreign shareholders as well as Australian companies, an analysis of the available data shows.

While the government’s refusal to allow transparency around recipients of tens of billions of dollars in government support prevents an accurate of how much support ended up going to foreign shareholders, there’s enough data to make a reasonable estimate for how much went to foreign shareholders.

According to a report from March this year by Nikitha Kariyawasam and James Samson of Ownership Matters, a total of $2.45 billion in JobKeeper payments were received by ASX300 companies in 2020.

That’s nowhere close to the total JobKeeper payments to all companies, listed and unlisted, of course, but let’s start there for an assessment of where the money went.

According to Treasury’s review of the scheme, around one-quarter of JobKeeper payments ended up with individual employees, while “around three-quarters of JobKeeper payments constitute a wage subsidy to the employer”, meaning that the company retained the payments.

In the case of the 20% of JobKeeper payments that Ownership Matters found went to ASX300 companies that enjoyed increased earnings in 2020 rather than a significant fall in revenue, those payments simply added to profit, often ending up in increased executive bonuses or increased dividends to shareholders.

Given total foreign investment in Australian equities was around $675 billion last year — separate from foreign direct investment (over $1 trillion) or loans ($1.3 trillion) — and the total value of the ASX was around $2.2 trillion, around 30% of dividends would have flowed offshore. That means, on a conservative basis, around $110 million in JobKeeper payments would have flowed to foreign shareholders from Australian-listed companies that didn’t need it.

That $110 million is the absolute minimum — including direct investment by foreign investors would dramatically increase that level of offshore transfers by taxpayers. And then there are also the unlisted giants — the likes of the world’s biggest luxury goods group, LVMH (Louis Vuitton, controlled by Bernard Arnault, the world’s richest man worth $186 billion), which received just over $6 million from JobKeeper paid a dividend to its French parent of $A6.6 million. Very generous of Australia to help out a struggling French super-billionaire.

It’s clear that the amount of JobKeeper payments that went to foreign investors was in the hundreds of millions. That dwarfs the amount of stimulus cheques that flowed overseas back in 2009. They at least went to individuals — much of the JobKeeper largesse flowing offshore would have gone into the accounts of the world’s largest pension funds via increased dividends and boosted share prices. Beneficiaries would have included investment houses like Blackstone and Vanguard, the two biggest investors in the world, along with the Norway’s Government Pension Fund, the single largest fund in the world, which owns around 2% of every major listed company on global stockmarkets.

The people of Norway are presumably grateful to Scott Morrison and Josh Frydenberg for an unexpected bonus return on the investment of their oil fund revenues.