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No appetite for JobKeeper extension, says ombudsman

Adrian Flores
Adrian Flores
18 June 2020 1 minute readShare
Kate Carnell

Small business ombudsman Kate Carnell recommends SMEs seek financial advice in formulating a cash-flow plan ahead of the September JobKeeper deadline, saying there hasn’t been “any big appetite for an extension”.

Speaking exclusively on the MyBusiness webcast, Ms Carnell said “the smart way to go” for small businesses right now is to be talking to their accountant or their financial adviser ahead of the planned September finish date.

However, Ms Carnell also cited the issues around some industries, like tourism or the airline industry, that really aren’t open for business yet.

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“For them, I would be surprised if there wasn’t an announcement maybe when the government makes some announcements in late July on whats going to be done in those particular industries,” she said.

“It will take longer than September for them to really get up and running through no fault of theirs at all.

 

“I think there might be something separate done in those sorts of industries, but generally, I dont get any big appetite for an extension, certainly not an across-the-board extension of JobKeeper past September.”

Institute of Public Accountants chief executive Andrew Conway agreed with Ms Carnell, saying the Treasury doesn’t want to be spending more money than it needs to.

“I think in many ways, what weve seen through our members and through the various interactions weve had with small businesses since the pandemic has unfolded and had its impact is that it has been a fundamental game-changer in terms of the economic landscape,” Mr Conway said.

“Weve seen unemployment [figures] come out. It has spiked, likely to spike again even further. So, the challenge will be on the government to identify what does it do to try and arrest that, and will the current JobKeeper settings be enough.”

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Mr Conway said his concern is what happens when “the scaffolding comes down” for small businesses, and whether the fundamentals of the business still sound enough.

He said, ideally, businesses shouldn’t be relying on JobKeeper but should be engaging in advice if they are.

“Therell be accountants, financial advisers, tax agents, whoever the case may be, providing advice around the country. They have been providing advice, in many cases free of charge, to ensure that people have access to that information to start planning,” Mr Conway said.

“It comes back to that age-old adage in business, and in particular small business, that cash is king, and making sure you have adequate cash-flow planning in place so that when the scaffolding comes down from JobKeeper, the fundamental foundations of your business are still rock solid.”

No appetite for JobKeeper extension, says ombudsman
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Adrian Flores
Adrian Flores

Adrian Flores is the deputy editor of MyBusiness. Before that, he was the deputy editor for SMSF Adviser as well as features editor for ifa (Independent Financial Adviser), InvestorDaily, Risk Adviser, Fintech Business and Adviser Innovation.

You can email Adrian at [email protected].

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