JobKeeper changes for business

JobKeeper changes for business

The Federal Government's $70 billion JobKeeper wage subsidy is currently being reviewed by Treasury, and the results will be made public on July 23, when the Government will provide an economic and fiscal update.

The scheme, which has benefited about 3.5 million workers via a $1500 fortnightly wage subsidy paid to businesses, was meant to operate for six months to the end of September, however on Monday 15th June, 2020, Federal Education Minister Dan Tehan announced the pay would end from July 20 for employees of childcare providers.

Instead of JobKeeper, the Government will allocate $708 million to pay childcare services a transition payment of 25 per cent of their fee revenue from July 13 until September 27.

Childcare providers will need to meet certain conditions to qualify for the transition payment. But the call for hospitality and tourism firms for an extension is unsure at this stage. 

With the JobKeeper safety net stated to end in just over 100 days, insolvency experts are urging businesses to ask themselves the hard questions and start planning for the future. According to the Australian Bureau of Statistics (ABS), 72 per cent of businesses have taken a revenue hit as a result of COVID-19, while 73 per cent of Aussie businesses have accessed support measures, including wage subsidies, renegotiated rent/lease and deferred loan repayments.

Before JobKeeper ends, business owners should determine what expenses can be reduced to minimise the cash-flow impact on their business, invest in further digitisation, particularly e-commerce and digital marketing, and most importantly keep healthy, talk to other business owners and family, keep close to creditors and involve them in their plans.

With Friday, 19 June marking 100 days until the end of the government’s JobKeeper wage subsidy program, businesses should be asking themselves the following 8 questions: 

1. Cash flow - What is it like now? What will it be like after the stimulus ends? 
2. Revenue Streams - Will my current streams recover? Are there new oppertunities? 
3. Staff Requirements - Will I be able to afford to keep staff on post  jobkeeper? 
4. Deferred Liabilities - Am I able to postpone my payments? 
5. Tax Obligations - Do I have the money to pay my tax bill?
6. Superannuation Guarantee - Do I have the money to meet my super obligations?
7. Motivation - Do I still want to hang in there? Or have I lost my passion for business? 
8. Personal Guarantees - Are my personal assets at risk?