Date posted: 21/07/2020

JobKeeper 2.0 extends lifeline, but businesses must learn to navigate difficult economic current unaided

CA ANZ welcomes the revised JobKeeper package but is calling for the government to arm businesses with expert financial advice to survive the COVID-19 recession.

Chartered Accountants Australia and New Zealand (CA ANZ) welcomes the revised JobKeeper package but is calling for the government to arm businesses with expert financial advice to survive the COVID-19 recession.

"Many businesses have already made difficult financial decisions assuming the existing JobKeeper package will finish in September," said Chartered Accountants Australia and New Zealand (CA ANZ) Tax Leader Michael Croker.

"Now they need to re-assess their continued eligibility using real time turnover data after 27 September.

"Employers will need to trawl through staff records and apply a 20 work hours test which 'looks back' to February 2020, and communicate which employees get the full JobKeeper rate and who gets the lesser amount.

"The behavioural response from both employers and employees to this two-tier JobKeeper regime will be watched with interest.

"COVID-19 continues to cause significant economic uncertainty with some business having turned the corner and no longer need JobKeeper, while others still need support or need to exit with dignity. 

"In particular, the proposed retesting based on actual GST turnover every quarter to determine continuing JobKeeper eligibility means that most businesses will look even more closely at their billing and cashflow arrangements. Accounting systems may need to be fine-tuned to ensure accurate, evidence-backed data.

"For those businesses with fluctuating fortunes, once JobKeeper is lost because of a once-off good quarterly result, it appears there's no way back into JobKeeper if things go pear-shaped the next quarter.

"Unfortunately, many businesses are cash-strapped following declines in revenues, and many aren't seeking the proper advice they need because right now they simply can't afford it.

"Business owners are being asked to work on their business plans when they are all frantically working in it.

"This JobKeeper extension has equipped some Australians with an extended lifeline but the government is clearly signalling that it's time for businesses and employees to become more self-reliant.

"We are at a critical point where businesses need to consider their future and ongoing eligibility for JobKeeper.

"That is why CA ANZ has been calling for the government to fund vouchers to give businesses access to crucial professional advice on navigating a COVID-19 afflicted economy."

Croker said Chartered Accountants will need further details about JobKeeper 2.0 to help their clients make important decisions, noting that there is time for consultations to occur before September with Treasury and ATO officials.

"Legislative details of the tightened eligibility criteria need to be designed and road-tested well before being enshrined in law," said Croker. "Parliament needs to debate the new model".

"CA ANZ will continue to work closely with the ATO and Treasury to assist. For example, the new '20 hours worked test' envisages that the Commissioner will be empowered to design 'alternative tests' and we need to co-design these with payroll and human resources expertise.

Mr Croker also noted that the ATO wasn't the only party interested in turnover data.

"Banks, landlords, suppliers and other creditors are all circling, wanting information on business viability. COVID and JobKeeper have highlighted the importance of real time financial and tax reporting."

JobKeeper 2.0

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