According to CA ANZ’s Head of Tax Michael Croker, the extension is crucial to many businesses still struggling with the crippling economic impact of COVID-19.
“JobKeeper 2.0 buys time. Time for business to wait-out COVID-19 restrictions, time to re-jig current business models and time to plan for recovery,” said Mr Croker.
“Sadly however, there are a growing number of businesses that have decided that it’s time to close down permanently.”
Mr Croker said this was because wages are but one of many costs businesses incur.
“Our members are reporting much greater engagement from lenders and landlords keen to understand the financial position and work-out plans of borrowers and tenants. Suppliers have much stricter trade terms and creditors are circling,” said Croker.
CA ANZ notes that the legislation introduced today tasks accountants and tax professionals with an important role which directly impacts Australian workers.
“The Attorney-General has developed a model which allows employers no longer eligible for JobKeeper after September 2020 – due to improving turnover – to nonetheless retain access to temporary changes to the Fair Work Act” said Croker.
“These so-called ‘legacy employers’ who can demonstrate at least a 10% decline in turnover may continue to give employees a range of directions such as altering the days and hours they usually work.
“The legislation envisages that a ‘10% decline in turnover test certificate’ can be provided by a qualified accountant or a registered tax professional with an ‘in-house’ employed accountant not regarded as sufficiently independent to provide the certificate for the employer.
“However, a small business employer, which broadly means fewer than 15 employees, can choose to self-attest to the turnover decline.”
The practical aspects on providing the 10% decline in turnover test certificate have yet to be worked through with Government officials, with engagement only just commencing.
CA ANZ’s Assurance and Reporting Leader Amir Ghandar, said CAs undertaking such work would need to understand the scope and level of assurance sought by the regulator, a crucial practical aspect still being determined.
“We will seek to work with the Government to make sure the requirements are clear and accord with applicable professional standards. CAs should be aware of the professional practice and insurance implications in undertaking assurance engagements,” said Mr Ghandar.
“Employees and the organisations that represent them will rightly take a keen interest in the accountants’ work and the Federal Court can examine whether an employer has indeed satisfied the 10% test.”
CA ANZ will work collaboratively with Government officials on the 10% test as it has done with JobKeeper and other COVID-19 measures.