A new announcement from the Australian Government today, has provided a much needed life-line for businesses.
- For employers who declare that their business has/will have a 30% decrease in turnover (comparable to same period last year)
- Employers must have eligible employees as at 1 March 2020 to receive this payment
- Eligible employees are – employees currently employed (including those stood down or re-hired)
- Eligible employees are full-time, part-time or casual (provided casual employed regularly for at least 12 months as at 1 March 2020)
- Employers will receive $1,500 (before tax) per fortnight per eligible employee
- Employers must ensure that each eligible employee receives at least $1,500 per fortnight (before tax)
- Employers must notify all eligible employees that they are receiving the JobKeeper Payment
- Employers must apply online via ATO website https://www.ato.gov.au/general/gen/JobKeeper-payment/
- Employers will receive first payment from first week of May
- We believe that the payment will be back-dated to application date or from 30 March 2020
- Employers will be required to provide monthly updates
- Business without employees can also apply – although the information provided mentioned ‘self-employed’ – and is not entirely clear – we take this to mean and cover – the situation where the business operates as a family trust and net income (profits) are distributed (paid) via trust distribution. We recommend that you apply notwithstanding that it is not entirely clear, pending further clarification
For government details on JobKeeper Payment
COMMERCIAL LANDLORDS & TENANTS
The Federal Government has announced a moratorium on evictions for the next 6 months.
As the legislation relating to landlord and tenant are State laws, the details are unclear and we understand that the States are working towards having a ‘somewhat’ uniform approach.
- 6 month moratorium on eviction if the tenant is significantly financially impacted by COVID-19.
- Landlords & tenants are encouraged to agree of some amendments to the Lease, such as:
- Reduction of rent
- Waiver of rent
- Deferral of rent
- Termination of Lease
- Any benefits that landlords receive in respect to their properties due to COVID-19 should flow through to the tenant
- Cost-sharing or deferral of losses borne between landlord and tenant
We expect further details from the government on this but it is quite complex and every Lease arrangement is different but we note:
- A Lease is a legal binding agreement – legally rent is due & payable
- Therefore, any amendments to the Lease, we strongly advise to place this in writing detailing the obligations of each party and ensure both parties sign the amendments.
- Retain all documents relating to the negotiation – preferably by email and retain hardcopy
YOUR BUSINESS OR ACTIVITY
With the government using language such as 6 months or more of social distancing, you should be continuously review and amend your business or activity, if possible, as there may well be 6 months or more of business disruption.
- During these times you should ensure & preserve cash flow
- Ensure that your business or activity can survive the period and ensure that when you commence trading that you can do so with a ‘running start’
- Review all possibilities of building a ‘war chest’ of cash
- Commence now to discuss with your bank on the ability to draw-down of facilities to build the cash reserves
- Consider restructure of your finance facilities, if your current bank is being difficult reach out to another bank – be able to provide evidence to the bank that your business or activity will ‘weather the storm’ and be able to trade profitably after it passes
- how you do business
- are you able to implement digital systems or processes
- make changes to operations for efficiency
- review and analyse how you do business
- can you do it better
- one of your best & critical assets is your human resources – analyse & review to achieve the best ROI (Return on Investment)
- monitor your financial information constantly
- ensure you maintain your financial information and that it is up to date
- this will ensure you have all available information at your disposal to make the best management decisions
- review existing contracts or agreements
- communicate with your creditors
- communicate with your stakeholders
- review overheads
The above is certainly not an exhaustive list but will assist you in managing your business or activity during this period.
Also, thumb-through our recent newsletters on the financial stimulus assistance and business advice – there maybe something that you missed.
Importantly, we are here to provide advice and assistance to you during these times.
So do not hesitate to reach out for advice if you are unable to see clarity on any subject matter.
We still maintain that the best form of communication with us is firstly by email, as this appears to be the most efficient and provides a prompt response. Then if necessary, a follow up by telephone for further clarification.