Corporate Greed and Government Failure
Although Area of Study 1 and Government Failure is long since behind you, there's a relevant topic about it I've become quite interested in over the past week and wish to share with you all. This is relevant to VCE Economics, but this post is really more about issues in the allocation of resources by the Federal Government and how that is going to negatively impact Victorian's during our current lockdown.
Harvey Norman is a national chain of retailers specialising in selling furniture and technology necessary for households which is owned by Australian billionaire Gerry Harvey (current Net Worth of $3.2 billion). Gerry Harvey as an entrepreneur can potentially be seen as a bit of a scrooge. He loves making money for himself and loathes paying taxes, competing internationally or paying his workers more than the bare minimum. During the COVID-19 lockdowns of 2020, the Federal Government provided businesses wage subsidies in the form of JobKeeper payments to allow businesses to keep trading throughout the pandemic. These subsidies did not discriminate between the wage rates of the employees who would receive them, nor whether the business could keep operating or not during the pandemic.
Harvey Norman as a business thrived during the pandemic with profits rising by 116% in 2020 due to the increase in demand for appliances and furniture during the pandemic as the majority of households were working from home and needing to feel comfortable there as there was not many other options of places to go.
In January of 2020 it was announced that businesses would not have to pay back the government any leftover JobKeeper subsidies which they had received. For Harvey Norman, this means that as a business (which I remind you had soaring profits) they pocketed an extra $22 million dollars in wage subsidies. Flashforward to this current lockdown in Victoria where our state treasurer and premier are pleading with the Federal Government to reinstate JobKeeper support for Victorian businesses and we are being told that nothing can be done to help.
This is a severe misallocation of resources which is likely to lead to significantly reduced living standards for many households in the state of Victoria. To add insult to injury, reports were released this week where it was stated that dollar for dollar, NSW has received more JobKeeper than any other state, despite Victoria being locked down for the longest period and being the most significantly impacted by the pandemic.
I personally, won't be shopping with Harvey Norman ever again in future as ethically I cannot support a business who would pocket $22 million in taxpayer money, demand GST on imports so his business doesn't have to be competitive, fight against wage increases for their workers and in most recent times block and make fun of ex-workers on social media who were raising questions about the impacts of their past work on their mental health.
To end this post, I give to you two things. One is a Simpsons meme which highlights this exact situation, the other is a simple message of 'eat the rich' which essentially means that if we don't stand up to corporate greed we will never get to live in a more equitable world.