Date posted: 11/08/2020 4 min read

Accountants welcome JobKeeper 2.0 but say more needs to be done

Many businesses across Australia, but particularly in Victoria, will breathe a collective sigh of relief at Treasurer Josh Frydenberg’s quick pivot on COVID-19 JobKeeper arrangements to apply from 28 September, says Chartered Accountants Australia and New Zealand (CA ANZ).

Just over two weeks ago, the Treasurer announced changes that would have seen many businesses ineligible for JobKeeper support after September.

According to Michael Croker, Head of Tax at CA ANZ, many chartered accountants in Melbourne would be particularly welcoming of this announcement given the lockdown in Melbourne and the economic impact on businesses.

“The key problem – the decline in turnover test – has now been addressed,” Mr Croker said.

“Instead of the need to prove declining turnover in both the June and September 2020 quarters, only the September 2020 quarter turnover will be compared to the turnover in September 2019 quarter when determining continued eligibility for JobKeeper from 28 September.”

“To qualify for JobKeeper from 4 January 2021, the comparative turnover decline test will now look only at the December 2020 quarter and not each of the three June, September and December 2020 quarters.”

Mr Croker also welcomed a change to one of the employee eligibility conditions.

“The original requirement was that an individual had to be employed (or a long term casual) as at 1 March 2020.

“Employers can now look at who was employed on 1 July 2020, removing a JobKeeper design flaw which penalised businesses who had hired during the pandemic, but were still struggling turnover-wise.”

“Employers should check-in with their chartered accountant to identify which additional employees are eligible for the existing and extended JobKeeper arrangements.”

CA ANZ is also calling on the Government to provide certainty for businesses and clarify whether the temporary changes made to the Fair Work Act will be extended.

The current Fair Work arrangements end on 28 September 2020, and with it the ability to give “directions” on workplace issues such as hours of work and pay.

Mr Croker said businesses should also be aware the hard end date of the JobKeeper scheme is still 28 March 2021.

“JobKeeper support is finite,” Mr Croker said.

“Many CAs are already engaged in tough conversations with struggling businesses given the continuing economic uncertainty.

“With consumer spending and business investment at a low ebb, even the improved JobKeeper 2.0 will not prevent business closures.

That means COVID related insolvency and business turnaround reforms remain an important issue for the government to address.

“Looking forward, we know an increase in insolvencies will come, especially given the current exceptionally low levels. It is critical the government starts to prepare now for this wave through allocated funding for liquidators to undertake assetless administrations,” said Karen McWilliams, CA ANZ’s Insolvency Leader.

“For small business in particular, CA ANZ and the other major accounting bodies have called on the Federal Government for a grant or voucher to enable struggling, cash-strapped businesses to access the professional advice and assistance they need to assess their current financial position, viability and future recovery prospects.”

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