Rising Tide Blog

Both state & federal governments have now provided multiple stimulus, and the devil is not only in the detail, but the execution. We expect more clarity in the coming days & weeks, & will pass this on as it comes to hand.

Firstly, we recommend some patience, which can be tough at times like this.

In our experience anything government related can take some time to materialize, let alone when it is at such a large scale.

Here are some questions we have already been asked;

When will it end?

This is a complete unknown but we are expecting things to be shut down for months at least. This is an unprecedented event and things are moving very quickly.

Should I shut down my business?

This needs to be discussed on a per case basis. Lock in a chat with Braden Johnston (senior accountant).

How do I receive the stimulus package for my business?

Businesses can register from 1 April and the first credits will be received in the March BAS once lodged. We will provide more detail as it comes to hand.

What action should I take?

Our advice to get informed, & on the front foot, ready to take action. Being at cause, rather than effect in times like this can be empowering.

For business owners, here are some simple things we think will help.

1. Conserve cash flow where possible
2. Speak to your landlord/property agent about potential rent free periods
3. Speak to your broker or lender about having repayments put on hold, including car loans, bank loans & personal loans
4. Know your rights around employee terminations and unpaid leave periods
5. Lockin a quick chat with Braden (senior accountant) to discuss strategies tailored to your individual situation

For individual clients, here are some simple things we think will help.

1. Read this, & then do a complete review of your expenses using this simple budget tool we like.
2. Speak to your landlord/property agent about potential rent free periods
3. Speak to your broker or lender about having repayments put on hold, including car loans, bank loans & personal loans
4. Know your rights around employee terminations and unpaid leave periods
5. Once you have a good overview of where your money is coming & going, put aside a couple of hours during self isolation time to review the direct debits & either;
   1. Commit to keeping them
   2. Ring the provider to review the cost
   3. Cancel them if you don’t need them

Finally, we have summarized everything succinctly below (& in our previous post relating to the initial coronavirus stimulus packages).

Please be sure to reach out via these links for more information &/or guidance.

For accounting & business related enquiries, lock in a chat with Braden Johnston (senior accountant).

For loan & bank related enquiries, lock in a chat with Sam Gawenda (senior lending specialist).

For super, investment & insurance related enquiries, lock in a chat with Matt Hale (senior financial planner).

Victoria state government (announced 20/03/2020)

Business

• Cash refunds for payroll tax paid in this financial year (for eligible businesses with payroll of less than $3m)
• Option to defer any payroll tax in the first half of 2020/21 financial year & pay it at January 1st 2021
• Liquor licence fees for calendar year 2020 to be waived for affected businesses
• $500m fund established to support hospitality, tourism, accommodation, arts & retail
• $500m fund established to support those who have lost their jobs due to Coronavirus

Source (treasury.gov.au)

Federal government package #2 (announced 22/03/2020)

Business

• Eligible companies with a turnover of up to $50m will receive a tax-free cash payment of between $20,000 – $100,000, to be paid by the ATO from late April
• Temporary Increase in threshold of which creditors can issues a statutory demand, & a further increase in time for which the entity has to respond
• Increased flexibility on a case by case basis relating to ATO payments & deferral of payment plans

Source (treasury.gov.au)

Personal

Cash for welfare recipients

• Double the jobseeker payment providing an additional $550 per fortnight for existing recipients
• A second $750 one off payment will be paid one July 13th to eligible sole traders & casual workers, following on from the initial $750 payment announced on March 12th.

Superannuation

• Access to a tax free $10,000 withdrawal from superannuation in 2019/20, and then another in financial year 2020/21, and benefits will not affect centrelink payments
• 50% reduction in the minimum draw down amount for allocated pensions, a measure to allow people to keep more invested following recent market down turns

Social security

• Deeming rates reduced further, increasing pension payments on average $105 per annum

Sources

• Supporting Individuals and Households (treasury.gov.au)
• Fact sheet: Stimulus payments to households to support growth (treasury.gov.au)