THE Australian Small Business and Family Enterprise Ombudsman Kate Carnell said small businesses are breathing a sigh of relief following today’s Federal Government announcement extending JobKeeper by six months.

“Thousands of small business owners across Australia will be sleeping better tonight, knowing JobKeeper will be maintained in its current form until the end of September,” Ms Carnell said.

“Small businesses will be comforted most by the Prime Minister’s remarks today that the Federal Government will continue to support small businesses who need it for the duration of this crisis.

“JobKeeper 2.0 will support small businesses from the end of September through until 28 March 2021," she said.

“From October to December the payment will reduce to a fortnightly rate of $1200 per full time employee and $750 for employees working 20 hours or less per week.

“From January until March that payment will reduce again to $1000 for full time workers and $650 for part timers.

“The payments are reducing at a reasonable rate, in line with predictions of economic recovery and trading conditions picking up. It’s generous support for small businesses, who can now plan ahead for at least the next six months," Ms Carnell said.

 “Small businesses, including sole traders, will need to prove their eligibility again in October and January by showing their turnover has fallen by 30 percent.

“Crucially it will allow struggling small businesses to continue operating and paying their staff. It will also keep small businesses connected to their staff, who have been stood down, so they can re-engage their team when the time comes to ramp up.

“We know that many of the small businesses struggling now were viable and strong just a few months ago and many have the capacity to recover from this.

“The government is providing the safety net these small businesses need to help them get to the other side of this crisis.”

www.asbfeo.gov.au

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WHILE the Government should be commended for the introduction of JobKeeper at such a critical time for Australia’s businesses and individuals, too many changes to its next phase will erode community confidence, warns the Institute of Public Accountants (IPA). 

“JobKeeper has achieved many of its intended outcomes including not adding to the jobless queues,” IPA chief executive officer, Andrew Conway said.

“It is understandable that there were some design flaws considering the short time given for its implementation. 

“However, there were also benefits and we need to ensure that we don’t throw the baby out with the bathwater; we should recognise what good has been achieved by this initiative.

“Notwithstanding making changes to JobKeeper at this point in the cycle, we would like to see the following:

• The way a new business, that commenced operations from January 1, 2020, reports on GST should not determine whether they are in or out of the JobKeeper scheme.
• Review of the declining turnover eligibility test.  JobKeeper 2.0 needs to be better targeted to support those who continue to suffer during this pandemic.
• Review the flat payment structure of JobKeeper and whether it should be a proportional payment. 

“All of the stimulus initiatives around Australia to date have not distinguished between viable and non-viable businesses.  The challenge for the government is to make this distinction to ensure JobKeeper 2.0 achieves the desired outcomes.

“There is also an opportunity for the government to provide direct assistance to adversely affected industries beyond September,” Mr Conway said..

About the Institute of Public Accountants

The IPA, formed in 1923, is one of Australia’s three legally recognised professional accounting bodies.  In late 2014, the IPA acquired the Institute of Financial Accountants in the UK and formed the IPA Group, with more than 38,000 members and students in over 80 countries.  The IPA Group is the largest SME focused accountancy organisation in the world. The IPA is a member of the International Federation of Accountants, the Accounting Professional and Ethical Standards Board and the Confederation of Asian and Pacific Accountants. 

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THE House of Representatives Standing Committee on Infrastructure, Transport and Cities will hold a videoconference public hearing on July 21 for its inquiry into options for financing faster rail.

The Committee Chair, John Alexander MP, said key stakeholders and industry experts will cover issues of rail priorities and practical approaches to financing infrastructure. The committee will hear from the Property Council of Australia, Infrastructure Partnerships Australia, the Urban Development Institute of Australia, and the Committee for Melbourne.

"The MTR Corporation, Spacecon Australia Consortia and Tipping Point will draw on their international experience to discuss how innovate international approaches could be utilised in Australia, he said."

Mr Alexander said a consistent message from groups is that it was  crucial that rail infrastructure planning be part of wider master planning and design of Australia’s cities and regions.

"I am looking forward to hearing from this diverse range of witnesses," Mr Alexander said.

Public hearing details

Date: Tuesday. 21 July 2020
Time: 9.30am to 4pm
Location: Videoconference

A program for the hearing is available on the Committee’s website.

The hearing will be broadcast live at aph.gov.au/live

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THE Australian Small Business and Family Enterprise Ombudsman Kate Carnell has urged small business owners to do their homework, before taking out a loan.

The warning comes as the Ombudsman’s office issued its second ever notice of refusal to mediate under section 74 of the Act, against lender Prudent Capital Pty Ltd.

Ms Carnell said her office received a request for assistance from a small business in dispute about its loan with Prudent Capital, however Prudent Capital refused to engage in mediation and proceeded to take direct action against the small business.

“I am extremely disappointed by the refusal of Prudent Capital to engage in mediation and seek to resolve the dispute in a fair way and I continue to encourage Prudent Capital to reconsider its refusal,” Ms Carnell said.

“The dispute involved allegations that Prudent Capital applied substantial interest and penalties to the loan that increased through its own delays. It was also alleged Prudent Capital acted in ways that obstructed the small business from refinancing.

“This serves as a timely and critical reminder to small businesses to ensure the lender is an AFCA member before taking out a loan. Small business borrowers can only access a free and independent dispute resolution process for their financial complaints if their lender is an AFCA member," Ms Carnell said.

“Not all lenders are AFCA members – in fact many are not – and small businesses need to be aware of the risks.Access to funding continues to be a major issue for small businesses. It’s crucial they make the right choices when it comes to managing their finances.

“I would encourage small businesses to go to their trusted accredited financial adviser before making any big decisions.” 

www.asbfeo.gov.au

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