July is usually marked in the business calendar for EOFY, stock clearances and tax and occasionally adapting to new budget policies. But of course 2020 is no ordinary year due to the impacts of COVID-19 situation. July this year has been marked in many diaries as the time when the month was highlighted on the Roadmap to Recovery by PM Scott Morrison as when he hoped the economy would be pretty much reopened and back to a new level of business as usual, with a few exceptions.
However, the second wave of coronavirus cases diagnosed in Victoria and new clusters in New South Wales caused a roadblock on the roadmap. Restrictions for many businesses have been re-implemented and some states are tightening not reopening their borders.
In addition, July is half-way through the 6 month timeframe for a number of the stimulus and support measures which were introduced in March. In particular, JobKeeper and JobSeeker. The PM and Treasurer stated that these programs were under review and an announcement would be made in late July as to how both would look beyond September.
Many businesses and individuals have been banking on these measures continuing so it was all eyes on the press conference on 21 July.
Jade Finance has been staying up to date with developments in both government measures and in the lending sector as much as possible and bringing you updates. In this update we cover off on changes to programs and measures.
JobKeeper: Extended But Amended
The JobKeeper program has been hailed as the saviour to the Australian economy throughout the economic crisis caused by COVID-19. It was put in place for 6 months, which on reflection, seemed such a long time way back in March. But as the end date looms, it was clear to all that both businesses and individuals were going to need support for longer.
The government has changes and an extension to JobKeeper. Here are the basics and we refer you to the ATO website for full details.
- The current JobKeeper arrangements will stay in place until the existing 27 September 2020 deadline.
- The changes announced will come into effect from 1 October 2020.
- Currently all recipients, regardless of hours worked, receive the $1500 per fortnight payment.
- From 1 October there will be different payment amounts for 2 different groups or tiers: full time and part time workers. Part time is defined as working 20 hours or less per week. The employment category is defined as what that worker was working on 1 March 2020, not what they are working today.
- The JobKeeper program now goes to late March 2021 but the payment amount will be reduced in several stages.
- From 1 October 2020 through to 31 December 2020, for workers in the full-time worker category, full timers, the payment will be reduced from $1500 to $1200 per fortnight. On 1 January 2021 this will be further reduced to $1000 per fortnight through to end of March 2021.
- From 1 October 2020 through to 31 December 2020, for workers in the part-time worker category, part timers, the payment will be reduced from $1500 to $750per fortnight. On 1 January 2021 this will be further reduced to $650 per fortnight through to end of March 2021.
Action required:-
- Businesses which are currently receiving JobKeeper through to end of September 2020 will not automatically continuing receiving the payments after that time.
- Each business will need to go through a reapplication process and demonstrate that they meet the criteria as detailed in the link above. That is, prove they have experienced the percentage turnover reduction for their business category.
One would expect that businesses currently on the scheme would be notified by the ATO of the need to reapply but it is advisable not to assume you will receive such notification. Being proactive and seeking the details and preparing would be our advice.
SME Loan Scheme: Changes
Another measure which was also introduced early on in the crisis was the Coronavirus Small and Medium Enterprises Guarantee Scheme. This allowed eligible SMEs to access a limited amount of unsecured loans though participating approved lenders with 50% guaranteed by the government.
- The scheme has not received the take-up expected by the government so it has also been extended with some changes.
- Phase 1 does conclude at the existing expiry time of the end of September 2020.
- Phase 2 comes into effect from 1 October 2020 and extends through to 30 June 2021.
- Originally the loans were for working capital but that criteria has been expanded to included investment and there are other changes around eligibility etc.
- Access the full detail at https://treasury.gov.au/coronavirus/sme-guarantee-scheme
If this scheme is of interest to you and you would like Jade Finance to assist you in sourcing your loan, please contact us to discuss. If you would prefer not to be involved in the scheme we can of course source your finance through our normal channels with one of our large number of accredited lenders.
No doubt there will be further changes and supports introduced and we will post articles in our news section as they are announced. Meanwhile, if you would like to move forward with your asset acquisition, motor vehicle, truck or equipment finance plans, contact Jade for a quote.
To discuss business finance for asset acquisitions or other business purposes, please contact Jade Finance on 1300 000 008
DISCLAIMER: THE INFORMATION PROVIDED IS FOR GENERAL CONSIDERATION. ANY REFERENCE TO OFFICIAL GOVERNMENT POLICIES HAS BEEN SOURCED FROM AUSTRALIAN GOVERNMENT AND STATE GOVERNMENT SOURCES. INFORMATION ON INDIVIDUAL VEHICLE SPECS IS SOURCED FROM THE MANUFACTURER WEBSITE. NO LIABILITY IS ACCEPTED FOR ANY ERRORS IN PRESENTATION OR INTERPRETATION OF THE FACTS AS PROVIDED BY THESE SOURCES. WE ADVISE ALL INDIVIDUALS AND BUSINESSES TO REFER TO THEIR ACCOUNTANT OR FINANCIAL ADVISOR FOR PROFESSIONAL ADVICE SPECIFIC TO THEIR INDIVIDUAL CIRCUMSTANCES.
