Daryl Holmes. Picture: Zak Simmonds
Daryl Holmes. Picture: Zak Simmonds

No smiles behind shocking claims made in parliament

A Labor MP has accused a profitable Townsville company of misusing JobKeeper funds to channel them into shareholder payments.

Andrew Leigh spoke in parliament on Monday, questioning a number of small firms, including 1300SMILES, about their use of the JobKeeper scheme amid the COVID-19 pandemic.

The federal MP named Accent Group, Star Casino, SeaLink and Nick Scali, claiming they were using JobKeeper payments to reward CEOs during the pandemic.

Mr Leigh claimed some businesses had diverted money for workers into shareholder payments and called out 1300SMILES.

"If you're getting taxpayer subsidies, the CEO should not be getting a bonus," he told parliament.

In 1300SMILES's case, Mr Leigh said the dental group had received $2m in JobKeeper payments and paid out $3m to shareholders.

"Managing director Daryl Holmes owns two-thirds of the company and so will get about $2m, roughly what his company received in JobKeeper support," Mr Leigh said.

A spokesman for 1300SMILES said the company strongly objected to how the use of JobKeeper funds was characterised in Mr Leigh's speech to parliament.

"1300SMILES is grateful to the federal government for its JobKeeper program, which has helped the company to keep on approximately 200 employees throughout Australia," the spokesman said.

"No employees lost their jobs despite the closure of multiple dental practices and a dramatic hit in earnings in the months affected by the pandemic."

Unlike many companies, 1300SMILES weathered coronavirus without much change to the bottom line with a 1.3 per cent drop in revenue.

The company's annual report revealed revenue had been hit hard in April (down 90 per cent), but it had gradually risen again in May (down 40-50 per cent) and June.

The 1300SMILES spokesman said the company had financial obligations to its shareholders and Mr Holmes earnt $90,000 a year.

"The dividend in question relates to the company's financial performance to June 2020," he said.

"Despite the pandemic's impacts during March, April and May ... the company delivered a strong financial performance and growth under Dr Holmes's leadership.

"The company has financial obligations to its shareholders, which include many self-funded retirees and mum and dad shareholders who depend on dividend income.

"The continued impacts of the pandemic remain unclear, but the financial performance and dividends paid to shareholders at the conclusion of the current financial year will reflect those impacts."

 

Originally published as No smiles behind shocking claims made in parliament


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