Government assistance for workers, not bosses, fundie says

 — 1 minute read

As JobKeeper and other forms of government assistance are set to be a consideration for performance this reporting season, Ethical Partners Funds Management has called for companies to disclose their subsidies and to prioritise worker conditions over executive pay.

The boutique fund manager has called for listed companies to fully divulge the nature and extent of government assistance they have received and for groups to avoid using subsidies to fund share buybacks or executive incentives. 

Ethical Partners chief executive Matt Nacard told Investor Daily his firm has taken the stance that if the country is paying to support business with taxpayer money, companies should support the nation back, by investing in improving worker outcomes.


“I think the more important aspect of all this is that where there has been government assistance through JobKeeper or other measures, that companies have a heightened responsibility to look after their employees,” Mr Nacard said.

“The rationale is that here it’s essentially the taxpayer that is assisting companies to stay in business through this period. When you then look at, well what would the taxpayer or the government like to see – they would like to see their fellow taxpayer/Australian be treated well. 

“That means offering flexible working, perhaps making sure employees have the right equipment, whether it be safety equipment or whether it just be equipment to do their jobs, good working conditions, hopefully not standing down or sacking employees where it could be helped. So really it goes to human rights.”

The CEO also warned against the buyback of stock where there has been significant government assistance, because it would “alter earnings per share, and senior management in some companies are remunerated partly on earnings per share”.  

ASIC has stated in recent guidance on end of year accounts companies should be explaining for improved performance through COVID-19 in directors’ reports, as well as strategies, risks and future prospects. 

A number of companies have been outlining the extent of JobKeeper Payments they have received in their results, Mr Nacard added, noting “transparency is important”. 

The disclosure could help investors understand the underlying health of the business, excluding the government assistance.

“That’s really important because then we understand what assistance they’ve had and then we understand what assistance they may not get in the future,” Mr Nacard said.

“And then we’re also cognisant of companies that are growing their top line or their revenue line extraordinarily well and how that may have been influenced by people using government assistance to perhaps spend in different areas. And we need to be aware of what that might be in the future as well, what’s kind of a sustainable level of those sales when that assistance rolls off.”

Further, Ethical Partners has recommended government assistance to go to further business investment, combined with additional incentives for targeted areas of the economy that previously relied on international supply chains, such as food supply, protective equipment manufacturing, medical items and other essential goods and services.


Government assistance for workers, not bosses, fundie says
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Sarah Simpkins

Sarah Simpkins

Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth. 

Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio. 

You can contact her on [email protected].


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