NEWS JUST IN:
The government announced over the weekend that it will extend the JobKeeper wage subsidy to casual employees who have worked for multiple employers in the past year. The details are still being worked out, and will likely be announced later this week
There are encouraging signs that the virus’ curve may be starting to flatten, but it is too early to call just yet. As of 7 April 2020, 5844 Australians were infected. Wage subsidies and commercial rent relief were among the pieces of good news for SMEs in recent days, as part of the federal government’s rollout of measures to keep Australian businesses afloat in the choppy sea of the coronavirus pandemic.
Here is a roundup of two of the business relief measures announced in the last 7 days. As with many of the benefits being made available to SMEs, it is vital that you proactively check whether you are eligible and if so, register or apply to the relevant authority.
- Wage subsidies
A new $130 billion government wage subsidy proposal will allow businesses to pay their employees $1500 each a fortnight over the next six months. Employers with an annual turnover of less than $1 billion, that have experienced a 30 per cent fall in revenue since March 1, will be eligible for the wage subsidy
Known as the JobKeeper payment, the subsidy will apply to full-time, part-time, sole-traders and casuals who've been with their employer for 12 months or more.
The Australian Tax Office (ATO) will oversee the payment. As an employer, you can initially register your interest in applying for the JobKeeper Payment on the ATO website. Subsequently, eligible employers will be able to apply for the scheme via an online application.
The first payment will be received by employers from the ATO in the first week of May. Employers will have to report information to the Tax Office on a monthly basis and the funds will be paid to businesses a month in.
More than 8,000 businesses registered with the ATO site within an hour of the Prime Minster and Treasurer announcing the scheme last week.
Action you should take: Register your interest as an employer, via the ATO website
- Measures to help commercial tenants
The government announced on 3 April that a mandatory code of conduct for commercial tenancies will be developed and legislated by State and Territory governments. This will apply where the tenant is eligible for the Commonwealth government’s Jobkeeper assistance (see above) and is an SME with less than $50 million turnover.
The principles of the code will be:
- Where possible, rent should continue to be paid. Where there is financial distress as a result of COVID-19 (eg, the tenant is eligible for assistance through the JobKeeper program), tenants and landlords should negotiate a mutually agreed outcome.
- Rent reductions will be proportional, based on the decline in turnover, to ensure that the burden is shared between landlords and tenants.
- Termination of leases for non-payment of rent (lockouts and eviction) during this period will be prohibited.
- There will be a freeze on rent increases (except for turnover leases).
- Penalties for tenants who stop trading or reduce opening hours will be prohibited.
- Landlords will not be able to pass land tax to tenants (if not already legislated).
- Landlords will be unable to charge interest on unpaid rent.
- Landlords will not be able to lay claim to a bank guarantee or security deposit for non-payment of rent.
- Red tape barriers to lease extensions will be removed, so that a tenant and landlord could agree a rent waiver in return for a lease extension.
To benefit from these conditions landlords and tenants will need to sign up to the code of conduct. For landlords and tenants that do so, State and Territories have agreed to look at providing the equivalent of at least a three month land tax waiver and three month land tax deferral on application for eligible landowners. Landlords must pass on the benefits of such moves to the tenants. Mediation will be available through existing State and Territory mechanisms.
A further announcement on the development of this code of conduct will be made following the National Cabinet meeting on Tuesday 7 April.
Action you should take: If you are a tenant and in financial distress, seek a time with your landlord to discuss the options available, and the joint signing of the code of conduct for your mutual protection.