Date posted: 21/07/2020

JobKeeper 2.0 - Top 10 business discussion points on assistance changes

The Australian Government has announced cuts to payments under the JobKeeper and JobSeeker schemes but has extended their life spans. Here are CA ANZ’s suggested discussion points for members.

1. Government assistance – What is the impact of the changes? 

  • What Federal, State, Territory, financial sector, ATO or other assistance programs are currently supporting: 
    • Your business?
    • Your customer and supplier base?
    • Employees? 
  • What are their current sunset dates?
  • In the light of the Treasurer's announcements, what are the: 
    • Modifications to these programs? 
    • Revised sunset dates? 
    • New assistance programs announced relevant to your business? 
    • 'Unknowns' in the Treasurer's announcements that require urgent clarification to assess the business impact? 

2. Revisions to 2020-21 business forecasts 

  • The financial impacts of the Treasurer's announcements, together with current trading data, should trigger a revised short-term business forecast 

3. Revisit cash flow and solvency position 

  • Does the revised business forecast show improving or deteriorating cash position? 
  • Is new remedial action needed? 

4. Contract reviews 

  • Do the Treasurer's announcements trigger a need for further negotiations with suppliers and \ or customers? 
  • Do changes in forecast turnover warrant lease renegotiations? 

5. JobKeeper 2.0: Employees and eligible business participants

  • Review of current business systems and measurement of actual GST turnover

Employees

  • Do existing COVID workplace arrangements remain in place or require revision? 
  • Evidencing the February 2020 "look-back" JobKeeper 20+ work hours test from 28 September 2020
  • What is the new position with respect to the Fair Work Act temporary arrangements (e.g. JobKeeper Enabling Directions)? 
  • What communications should employees now receive as a group and individually?
    • Tier 1 employees (full JobKeeper rate from 28 September 2020)
    • Tier 2 employees (reduced JobKeeper rate from 28 September 2020)

Eligible business participants

  • Partner, trust beneficiary or shareholder\director:
    • Impact of Treasurer's announcements on any JobKeeper payments currently received
    • Evidencing the February 2020 "look-back" JobKeeper 20+ work hours test from 28 September 2020

6. Revisit future expenditure and investment plans 

  • Do more cost containment measures need to start immediately? 
  • Are there investment opportunities? 

7. The 2020 reporting season - Risks

  • Review the financial statement accounting (including tax effects) for: 
    • COVID unusual and one-off transactions 
    • Government assistance 
    • Rent concessions and the new lease accounting standard 
    • Asset values, impairments and expected credit losses 
    • Measurement and recognition of tax losses 
    • Going concern issues 
    • Profits, dividends and franking 
  • Review ASIC's year-end focus areas and its COVID FAQs
  • Review directors' \ business operators' exposure to financial risks related to business operations

8.  Tax compliance and planning 

  • Discussion points include: 
    • On-going reporting arrangements to access COVID-19 stimulus measures 
    • Accelerate 2020 tax return filings to access tax refunds 
    • Need to vary 2020-2021 PAYG tax instalments 
    • Tax loss recoupment planning 
    • Changes in SME company rate for 2020-21 and 2021-22 and impact on franking 
    • Any Division 7A risk (e.g. ability to make minimum repayments) 
  • Will changes to 2020 turnover (or projected 2021 turnover) affect government assistance programs and other tax concessions? 

9.  Business plans 

  • Does the business need to find new ways to deliver its products or services? 
  • Are current income streams at risk and is there a need to diversify? 
  • Must new cost savings be found or expenditure deferred? In particular: 
    • Employee headcount 
    • Identification and retention of "key talent", with skills retained matched to revised business strategy 
    • Are the terms and conditions of credit support changing? 

10.  Business owner wealth creation and personal career plans 

  • Your "personal" balance sheet and cashflow 
  • Superannuation strategy
  • Asset protection – Legal advice 
  • Consider "What if" scenarios (e.g. alternatives to running this business)