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‘Transitional measure post-JobKeeper wage subsidy is a must’

Maja Garaca Djurdjevic
Maja Garaca Djurdjevic
22 June 2020 2 minute readShare
ATO Jobkeeper

Targeted assistance for businesses suffering the impacts of the coronavirus crisis should be enacted post-JobKeeper, said the Institute of Public Accountants’ CEO, adding his concern for what happens when “the scaffolding comes down”.

“I don’t see JobKeeper being wiped out post-September. What I would like to see, this is aspiration in many ways noting the constraints on government spending, but I’d like to see a system where targeted assistance is provided and some greater clarity,” said IPA chief executive Andrew Conway exclusively on the MyBusiness webcast.

Mr Conway explained that it would be “reasonable” for businesses to re-qualify for JobKeeper post-September, ensuring that only those that really need it are kept on for further assistance.

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“Hopefully, throughout the course six-month period that JobKeeper was introduced for, there has been businesses that have been able to build and sustain and therefore move on from JobKeeper,” Mr Conway said.

Interestingly, he noted, there has been no real clarity about how businesses are expected to wean themselves off JobKeeper at the end of September.

 

“It’s a strange thing. Once you’re in, you’re in,” Mr Conway commented.

Noting that there are numerous seasonal businesses in Australia, many of which are yet to feel the peak of the coronavirus financial hit, Mr Conway said the government needs to ensure it has the capacity to support them when needed.

“Rather than an all-in system, I think it’s appropriate to increase the testing requirements on those small businesses,” Mr Conway said.

Agreeing with the IPA CEO, small business ombudsman Kate Carnell said some type of transition needs to exist.

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“Certainly, there does need to be some form of transition,” Ms Carnell said.

“Whether that’s JobKeeper continuing in some areas or some other approach. Academics have suggested a revenue contingent loan scenario, a bit like HECS, so you can borrow some money and not pay it back until your revenue is at a level.”

Speaking about her recent talks with tourism operators in the Northern Territory, Ms Carnell said the dilemma for many is that their next tourism season isn’t until next year.

“No one comes to the NT during summer, they said. So, for them, the challenge is, even though they’re starting to reopen their borders, they’ve probably missed this season,” she said.

“So, there are still some real issues, in particular industries with particular problems.

“I think focus is going to be really needed from the government, moving forward, and not assuming everyone is the same, because they’re really not.”  

Bank deferrals 

Moving on to other stimulus measures and things like the banks’ deferral policies, the ombudsman explained that businesses will be given a choice come end of September.

Ms Carnell said: “What the banks have said already is, although a lot of businesses have asked for their loans to be pushed out for six months, categorically, businesses and individuals will be given the option of whether they increase their payments or increase the length of their loan. 

“They won’t end up with a big bill at six months; they will have a choice on how they manage that.

“Remember, interest is accumulating, even though you might not be paying you repayments.”

Touching on rent abatements and deferrals, Ms Carnell said that while the tenancy code has stipulated that a chunk of rent will need to be repaid, businesses will have a choice to meet their requirements over a 24-month period. 

“There are some options here. That’s why it is really important to have a cash-flow document,” Ms Carnell said, advising business owners to turn to their accountants. 

Tune into our free webcast here.

‘Transitional measure post-JobKeeper wage subsidy is a must’
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Maja Garaca Djurdjevic
Maja Garaca Djurdjevic

Maja Garaca Djurdjevic is the editor of My Business. 

Maja has a decade-long career in journalism across finance, business and politics. Now a well-versed reporter in the SME and accounting arena, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies and enabling citizens to influence decision-making.

You can email Maja on [email protected] 

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