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Doing The Right Thing Not In Harvey Norman Management Handbook

Doing the right thing appears to not be in the management handbook at Harvey Norman, nor is doing the right thing for younger Australians who are going to have to pay back the billions in COVID-19 handouts.

Recently Harvey Norman Chairman Gerry Harvey gave the Federal Government the two-finger salute, by indicating that he is not going to pay millions in JobKeeper payments back after reporting record profits and revenues.

Grattan Institute chief executive Danielle Wood says it’s “not a great look” for companies such as Harvey Norman to report record profits and pocket JobKeeper.

Described as “grotesque” by the Australian Financial Review, management at the retailer now appear to be quite happy leaving millions in debt for future Australians with Chairman and founder Gerry Harvey claiming he’ll repay JobKeeper through higher taxes.

This is the big retailer who seems to thrive from controversy.

In the past, Harvey Norman management have had to hose down sexual assault allegations, fight the ACCC over warranty claims resulting in big fines, and handle cocaine issues with senior executives who ended up being fired.

Female staff at Harvey Norman wrote to ChannelNews last year and later contacted us claiming that the working environment at the big retailer is still a “boys club”. This is despite Katie Page, wife of Chairman Gerry Harvey, campaigning for female equality.

The company’s management have also had to handle issues involving drug use and supplier intimidation.

One executive was sacked after he was charged for coke-related possession while on a vendor trip.

The same executive was also seen as a “combative” individual with complaints over his behaviour being made to Harvey Norman Director David Ackery.

Now the business is trying to hose down issues relating to JobKeeper payments.

“I’m sort of sick of talking about JobKeeper a bit,” Gerry Harvey said to 3AW’s Tom Elliott last week.

“I think it all depends on the business and where the JobKeeper money went,” continued the exasperated billionaire, who appears to have dug himself into a massive hole, especially when he appeared on 60 Minutes at the start of the coronavirus pandemic, ridiculing the public’s fear of COVID-19.

He also bragged about the pandemic being good for his business, tipping massive sales figures for freezers and air purifiers as proof. He boasted that his predictions eventuated in money rolling in at the big retailer and these statements earned him the description of “heartless, greedy old bastard” – which is again coming into play after his refusal to repay millions in JobKeeper payments.

ChannelNews has asked the ATO as to whether they will be conducting an audit of the big retailer or asking it to repay money handed out by the Federal Government.

During his 3AW interview, Harvey referred to JobKeeper payments saying, “I think it’s $3.6 million or something, and that went to areas of our business that were suffering at the time. It’s not as if it went to Harvey Norman regular shops, like, that didn’t happen.”

Jo Aston for the Australian Financial Review wrote, “Like, yeah it did. That’s exactly what happened. Between March and September, Harvey Norman’s ‘non-franchised retail and wholesale operations’ received $6 million of JobKeeper. That includes internal businesses whose sole purpose is to make those regular Harvey Norman shops run.”

ChannelNews can also reveal that Harvey Norman got $12 million out of the New Zealand Government, a sum that has not been repaid despite Harvey Norman’s New Zealand sales increasing to NZ$637.66 million. That’s up by 19.4 per cent from NZ$533.83 million in 1H20.

Offshore profitability at Harvey Norman overseas stores increased by $56.46 million, or 69.1 per cent, to $138.15 million during 1H21, representing 21.5 per cent of total consolidated profit.

We also know that Harvey Norman’s franchisees, whose bank accounts Harvey Norman sweeps daily, received $7.6 million of JobKeeper to 30 June 2020.

The AFR estimated that Harvey Norman received around $14.5 million between March and September 2020.

It claimed that at $750 per week for 26 weeks, that is 750 franchise employees – as in, the workers in regular Harvey Norman shops – having their wages paid by the taxpayer throughout the best operating conditions the company’s ever seen. In the first 14 weeks they received JobKeeper (from 1 April 1 to 30 June), those franchisees experienced sales growth of 30 per cent.

We have not asked Harvey Norman to comment because when we have in the past, they have failed to respond.

The Sydney Morning Herald raised the question of how Harvey Norman even qualified for JobKeeper, which required an actual or forecast revenue downturn in March 2020.

That same month was when Gerry appalled the nation by fronting 60 Minutes and calling COVID-19 “an opportunity”.

It was for Harvey Norman. JobKeeper handouts, big profits, a massive rise in revenue and a reduction in rent for several Harvey Norman franchisees.

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