Gucci Handbag: Josh Frydenberg’s JobKeeper gifts to Gucci and Prada

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Gucci, JobKeeper
Gucci headquarters in Florence

Gucci and Prada owe Josh Frydenberg a debt of gratitude. Louis Vuitton is not alone. The Italian high fashion houses got JobKeeper too. Michael West and Callum Foote report as evidence emerges the Treasurer opted to ignore advice regarding a claw-back mechanism to get the money back from profitable companies.

At Gucci’s headquarters in picturesque Tuscany, chief executive Marco Bizzari really owes Australia’s treasurer Josh Frydenberg un grande abbraccio, or at least a token of gratitude.

Here they were over on the Via Tornabuoni in Florence fretting about a 30% drop in revenues in the Italian fashion sector last year when Australian taxpayers strode valiantly to their rescue with Josh’s JobKeeper scheme.

If he has the slightest skerrick of decency, Marco Bizzari must at least consider giving Josh something nice in return, perhaps the latest $2,680 GG embossed shoulder bag from Gucci’s Ouverture range. 

Deep in the latest set of financial statements for Gucci Australia, you will find this footnote:  “The company qualified for the Job Keeper wage subsidy program in Australia and received throughout 2020 a total amount of $4,756,500”.

Not that Marco and his ragazzi dell’industria della moda particularly needed the cash. Gucci’s cash receipts soared from $415m to $582m last year. Thanks to JobKeeper, their profits rose too. Even a modest $435 Gucci Ophidia Airpods case would do the trick, just something thoughtful.

Likewise, down in Milan, Prada’s billionaire proprietor, Miuccia Prada, really ought to pop a little $3,900 Prada Saffiano leather handbag in the mail for Josh, just a token of her appreciation for Josh’s $2m in JobKeeper. Or maybe something more fragrant might be suitable, a little bottle of L’Homme Prada Eau de Toilette, “mixing classic and unexpected ingredients to reflect duality of the masculine identity”.

For, the sheer extravagance of the JobKeeper scheme has certainly aroused the olfactory nerves of ordinary Australians.

Like Gucci, Prada’s Australian operations also enjoyed rising sales, and profits, and both had more cash sitting in the bank at the end of the year than they did at the start: Prada $7.7m and Gucci $135m.

A familiar aromatic name appears on the accounts of both: Deloitte. Yes, not only did the Big Four auditor Deloitte append its signature to both these sets of financial statements but, as it emerged late on Friday at a parliamentary hearing into JobKeeper, Deloitte is the mysterious government consultant which advised Treasury on the JobKeeper scheme, on its “risk and integrity”.

What value for money that is.

As revealed previously, the French scions of haute couture at Louis Vuitton also got their slice of the action d’Australie, although we can report that Hermes, whose Birkin Tanaka bag retails at $US1.9m, appears to have failed to avail themselves of this grand gift from Australian taxpayers. 

Perhaps they might capitalise on this fiscal valour by launching a new range of fragrances called L’eau de Conscience.

In any case, Josh must surely be under consideration to join Air Chief Marshal Sir Angus Houston wearing France’s highest insignia the Chevalier of Légion d’Honneur.

And if the Italians don’t at least shortlist our Treasurer for their highest honour, the Ordine al Merito della Repubblica Italiana, for services to Italy’s alta moda they surely are ungrateful swine. For never has there been a greater gift to foreign multinational fashion houses on behalf of ordinary working Australians than JobKeeper.

Excuse? … no excuse 

The Treasurer was busy last week trying to derail rising anger over the biggest transfer of wealth in Australian history from working Australians to large and profitable corporations, taking his normal space in that verdant garden of government propaganda, the editorial pages of The Australian newspaper, to explain away his government’s exhilarating incompetence.

On Friday evening, Treasury and Tax Office chiefs were doing their darndest to avert responsibility while ducking tricky questions from senators Rex Patrick and Nick McKim.  

Here are some of the highlights from the the “We’ll take that question on notice” fes which was the Senate, Economics Legislation Committee (Coronavirus Economic Response Package Amendment (Ending Jobkeeper Profiteering) Bill 2021):

There was much derriere covering by Treasury officials, covering of both Josh’s and their own derrieres but it appears it was recommended to the Treasurer that a clawback mechanism in the first implementation of the JobKeeper program be included – a recommendation which was rejected.

Bear in mind that, even despite the notion that billions should be returned to the people who are paying, Australians, the Government is still holding out with its secrecy over the scheme, refusing to disclose even the very big companies which received it. 

Greens senator Nick McKim, endeavouring to glean a straight answer out Jenny Wilkinson, Deputy Secretary, Fiscal Group at the Department of Treasury, as to whether or not the Treasury recommended a clawback mechanism to the Treasurer:

Q: Did Treasury recommend a clawback mechanism in the original design of Jobkeeper?

A: So Senator, I think it’s … all I can say is that we provided advice. As we do, around all aspects of the scheme design. We expressed very strongly what our concerns were about the potential impact of the clawback mechanism.

Senator McKim, before losing the call at the direction of chair and Liberal Senator Andrew Bragg, wanted to make absolutely clear that: “The witness has not denied recommending a clawback mechanism to the treasurer. I want to be very clear about that”.

Wilkinson disclosed that Deloitte had been hired to assess implementation risks surrounding Jobkeeper. When asked what measures Treasury took to ensure that Deloitte did not have a conflict of interest, Treasury merely responded that they trusted Deloitte’s “integrity systems”.

Deloitte enjoys hundreds of millions of dollars in consultancy work from government and is reliably optimistic about the Government’s economic policies and performance. Upon questions from MWM, Deloitte declined to say how much it was paid.    

The Doctrine of Reasonable Excuse?

Elsewhere, the drama continued between Senator Rex Patrick, who has been demanding transparency and compelled the Tax Commissioner to appear before the Senate’s Privileges Committee for possible prosecution for contempt, as ATO Commissioner Chris Jordan refuses to reveal the legal advice upon which he is relying to keep JobKeeper secret.

Rex Patrick: “What is protected information?”

Chris Jordan: “We could spend all afternoon talking about that and I’d rather lawyers do so.

“When I’m looking at the order for the production of documents, that was something we applied the rules to, and we did it in a way with a high level of integrity”.

Rex Patrick: “How do you treat information that is generated by the Tax Office as protected information?”

Chris Jordan: “I’m not sure I could take that on notice because I have got legal advice that it does fall within that thing and that would be subject to legal privilege”.

Jordan said he was relying on the “notion of reasonable excuse”. 

Chris Jordan: “ the order for the production of documents, I made the public interest immunity claim based on a genuine desire to protect the confidentiality of information. That has been rejected and I have still not provided it at this stage.

“There’s also the notion of reasonable excuse that has not been tested yet. Which I assume will be. In regard to the order of production of documents. If I don’t produce the documents, and I have a reasonable excuse not to, then that leaves the matter there.

Notwithstanding the matter of his novel doctrine of “reasonable excuse”, the ATO later responded that it would rely on the Government’s own claim for “Public Interest Immunity” in regards of its refusal to accede to Senate demands for disclosure.





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