'Far from perfect': Tweed expert reveals JobKeeper loophole
THERE'S a clause in the eligibility criteria for the Federal Government's JobKeeper Payment and it's a game-changer.
The $130 billion support package, announced on March 30, promises to help business owners retain their staff during the coronavirus shutdown.
Eligible employers will be paid $1500 a fortnight before tax, which will be passed onto their workers.
The process sounds straightforward, however employers will have to pay their staff for the month first before the Australian Taxation Office will release the backpay.
Murwillumbah accountant Nick Moran said the ATO was making "decisions on the fly" about the JobKeeper application process and there were still a lot of unanswered questions.
Mr Moran said he had clients who were relying on the JobKeeper Payment to retain staff but simply couldn't afford to fund a month's wages until being paid.
"If there's a restaurant with 10 staff, they have to come up with $45,000 to be eligible to be paid later," Mr Moran said.
"The (NSW) Treasury's advice was if you can't make those payments, speak to your bank because you won't be eligible unless you pay.
"That's a significant cash flow deficit a business has to fund."
Mr Moran said some clients were dipping into their savings or loan accounts to pay staff until payments started next month.
He said business owners had to apply by the end of April to qualify for the first two payments, paid sometime in May.
"The process we're at currently is you apply for the payment but you're not actually approved for it yet," he said.
"If you get paid the first payment relating to April, that's not saying you're approved, the ATO may still say you're not approved and you'll have to return the money.
"On the whole, it's (JobKeeper) good but it is far from perfect."
A new $10,000 grant has been announced for business owners who have suffered a significant loss due to the coronavirus shutdown.
Businesses that have seen a 75 per cent decrease in turnover, employ between one and 19 staff and normally turnover more than $75,000 a year can apply.
Mr Moran said it was targeted towards businesses that had to close due to the State Government's Covid-19 Restrictions on Gathering and Movement Order.
He said most business owners who applied for the grant used the funds to pay outstanding invoices.
Business NSW regional manager Jane Laverty said businesses that were able to innovate after the shutdown were still applying for the grant to free up cash flow.
"Everything happened very quickly and many businesses had to shut the doors … but there are still fixed costs to run a business," Ms Laverty said.
"The $10,000 has helped many people to cover costs and it came at a time when people were at their wit's end."
Ms Laverty said business owners were also using the money to pay for financial advice.
"Some people are starting to think about how they can position themselves well on the other side of the Covid-19 crisis," she said.
"The $10,000 has been great for that. They can pay their accountant and get the advice from someone who knows their business well."
Governments will need to "turbocharge" the economy after recovering from the pandemic, according to the state's peak business organisation.
Ms Laverty said new data from the Australian Bureau of Statistics on job losses and the economic impacts of the pandemic highlighted the need for all governments to rewrite the rule book for economic recovery.
She said the data, with an in-depth analysis by Business NSW, showed more than 250,000 jobs had been lost in NSW since the start of the pandemic.
"In the Northern Rivers we estimate the unemployment rate has more than doubled, with impacts to some sectors such as hospitality taking a bigger hit than others at this time," Ms Laverty said.
"The best way to jump-start our economy is to take a chainsaw to regulation, red tape and taxes that hamper innovation, investment and job creation.
"It's also clear we will need a complete rethink of our workplace relations system because pre-Covid-19 rules simply won't support keeping people in work in the years ahead."
Ms Laverty said for job growth to rebound, governments would need to ditch the job-killing rules that were allowed to build up over the past 30 years.
"We became complacent when it came to driving important workplace relations reforms," she said.
" It also highlights the huge task in front of all tiers of government once the pandemic is over.
"The path to recovery is an incredibly steep one - it seems clear the Federal and State Governments are up for the challenge of implementing substantial reforms to support business growth and jobs.
"(But) it is less clear local government is being supported in its preparation to assist businesses in recovery, with many of them fighting for their own survival.
She said the number of people employed was down by six per cent across Australia and wages fell by nearly seven per cent.
"NSW performed in line with the national average.
"While the impact the pandemic … is having on the economy is clear, it still makes for tough reading and inspires us to work together on developing recovery strategies to get our businesses up and thriving again as soon as the restrictions start to ease."