As recently as March 2020, few Australians would have heard of the Burnet Institute. In little more than a year, however, it has become a key influencer of Australian governments, especially in its home state of Victoria.
Burnet produced the modelling that was used to justify Victoria’s lengthy — and ultimately successful — second-wave lockdown in 2020 and, more recently, the modelling that underpinned Premier Daniel Andrews’ very cautious 2021 reopening. But its government influence is not all that has expanded this year: Burnet recently disclosed that its annual surplus (essentially its annual profit) skyrocketed to more than $60 million.
But it gets far better. Burnet also recently announced a $200 million financial windfall, unprecedented for the not-for-profit sector. While riches were raining down upon the previously anonymous institute, buried deep in its 2020 annual report was a startling revelation: Burnet claimed almost $5 million in JobKeeper allowances in the 2021 financial year.
Although most of Burnet’s 400-strong team work on its COVID-19 response, in August it announced a significant achievement: the sale of its 75%-owned subsidiary 360biolabs to a United States acquirer for $400 million.
Did JobKeeper do its job? If the idea was to make the rich richer then yes, it fulfilled its promise perfectly
The lucrative sale was remarkable. The sheer amount of profit also creates an interesting dilemma: is Burnet a charity or a start-up incubator? The embarrassment of riches means that Burnet will soon face a similar dilemma to the Hillsong Church, which has for decades managed a delicate balance between highly profitable private enterprises and an ostensible (and of course tax-deductible) charitable mission.
Burnet’s 2020 annual report provides some clues. It said: “Other than its holding in subsidiaries 360 Biolabs Pty Limited (75% equity) and Biopoint Hong Kong Ltd (78.75% equity) the group is a not-for-profit entity and is primarily involved in medical research and associated public activities directed at diagnosis, treatment and control of infectious diseases and cancer in humans. The institute is a registered charity with the Australian Charities and Not-For-Profit Commission which holds deductible gift recipient status and is exempt from income tax.”
Even before the announcement of the 360biolabs windfall (which remains subject to FIRB approval), Burnet had a stellar 2020. Its surplus (equivalent to its net profit) skyrocketed from $2.7 million in 2019 to $63 million in 2020 (boosted by the $55 million “sale and leaseback” of its Melbourne head office). The group’s assets rocketed from $91 million to $171 million. Even without the property sale, Burnet’s operating cashflow rose from $3.8 million to $13.4 million. This growth was far higher than the $100 billion glamour stock Atlassian.
Its magnificent financial performance, however, didn’t stop the not-for-profit from claiming JobKeeper from taxpayers. Even without that largesse, Burnet’s cashflow more than doubled (and its surplus was about 20 times higher than 2019).
If that wasn’t enough, it will now pocket upwards of $200 million from the sale of a majority-owned “for profit” subsidiary. Burnett also received a $2.7 million grant from the Victorian government in 2020 to assist with its COVID response.
Burnett has one of the bluest of blue-chip boards in Australia, led by chair (and former chair of Blake Dawson Waldron) Mary Padbury alongside luminaries such as private equity kingpin and former Macquarie Investment bank chief Robin Bishop, equity capital markets guru Michael Ziegelaar, Professor Peter Colman, Professor Christina Mitchell and well-regarded Doherty Institute head Professor Sharon Lewin.
Crikey tried to contact Burnet on four occasions to ask if it would return the JobKeeper payments but it did not respond before publication.Internet Explorer Channel Network