The JobMaker Hiring Credit will be:

• $200 per week for each eligible employee aged 16 to 29;
• $100 per week for each eligible employee aged 30 to 35; and
• Paid for up to 12 months from the date the new position is created (see more information below).
• Claimed quarterly in arrears by the employer from the ATO from 01 February 2021. Employers will need to report quarterly that they meet the eligibility criteria.

Investing in education, skills and apprenticeships

The Government is making skills development a high priority as part of its JobMaker Plan. This commitment will support getting people into jobs. It also aims to ensure that Australians have the right skills for the jobs of the future. JobTrainer – growing Australia’s workforce: see our newsletter here. New apprenticeships to help the recovery Support for job seekers More job-ready graduates Short courses to re-skill and up-skill Australians If you had missed them we have also brought out other budget newsletters, which can be found here.

For more information, we have an FAQ here.

The post Budget 2020-21: JobMaker Hiring Credit appeared first on AustAsia Group.

The JobKeeper will change to a two-tiered payments system based on number of hours worked within a week.

Businesses will now need to prove financial hardship on a quarterly basis. GST Turnover quarters ending in June and September will be compared to the same period in 2019. Businesses with aggregated turnover of $1 billion or less will need to show a 30% decline. Large Businesses, those with aggregated turnover of more than $1 billion, will need to show a 50% reduction. For charities, a reduction of 15% is required. To qualify for the 4 Jan – 28 Mar assistance package, Businesses will need to be tested again for the quarter ending 31 December 2020.

If this is not an appropriate test to prove a decline in turnover, the Commissioner of Taxation can be contacted to determine an alternative test.

There are no changes to employee eligibility, and self-employed people continue to be eligible for JobKeeper if they meet the turnover test, and are not a permanent employee of another employer.

Further details can be obtained from the Government’s Factsheet: Extension of the JobKeeper Payment.

For assistance with determining your eligibility for JobKeeper payments, registering for JobKeeper payments, our Audit Shield service, or if you would just like to know more, please contact us at consulting@ww2.austasiagroup.com.

The post JobKeeper and JobSeeker extended appeared first on AustAsia Group.

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This is not a bad news story! Does that make it a good news story? Not quite, but all the Australian Government spending is designed to keep the current recession from being too sharp or going on too long.

But it has some people nervous, and the Media is trying to panic us, because that’s what they’re designed to do. So, are we spending too much?

The answer is no. We can afford this, and, if needed, we can even spend more.

Here’s the picture of debt as a percentage of GDP since 1900:

As you can see, we are not even close to historical levels. We’re not saying that we want to approach WWII levels, but you get the picture. Government Debt is generally a function of Government Spending.

Why is Government Spending important?

Government spending is important, especially now, as the impact of COVID-19 on the economy is unfolding.

Government can boost an economy by spending money in a variety of ways. How they finance the spending is one of two ways:

1. From operating revenue (taxes) and then any past surpluses; or
2. By borrowing it.

Why is Government Debt increasing?

During our research and discussions with clients, there has been an undertone of concern that Government Debt is getting out of control, and that the Australian Government should ‘pull its head in’.

There’s been talk about JobKeeper, the HomeBuilder Grant etc, that cost the Government a lot of money. So, we thought we would provide some background on the size of Government Debt, to help to ease any of our clients’ nerves in how to make our way back.

Is the level of Government Debt concerning?

Ex-Treasury official Steven Hamilton told the ABC, “The Government will have to increase its debt by about 40%, but issuing debt is not a problem, they could issue five times that and it still won’t be a problem”.

So how will it be paid back?

To answer this question, we need to rewind a bit:

Firstly, Australia is in a solid financial position in terms of budget discipline. As the chart below shows, Federal Government Debt, as a percentage of GDP (which is Gross Domestic Product, measuring the size of the economy), is well below that of the US and Japan – Australia has been frugal over recent decades.

Australia’s debt is less than 40% of the value of its GDP. If we compare this metric to a business, it is like having a debt level that is a proportion of your turnover. Government Debt will go close to doubling from just over 20% in 2019 to nearly 40% in 2021, as a result of the additional forecast spending.

Compare this to other countries who have debt levels of between 80% (Europe) to 160% (Japan) of their GDP. Those countries have not gone broke yet; Australia is well behind them.

This is the chart that the Media will sell to you.

But taken in perspective it’s just amplifying the green box taken from the first chart.

Note that we had no Government Debt in 2006 / 2007, just before the GFC.

The spending in the GFC was reasonably quick, and Australia came out better than most countries. We had started to pay down debt in the last couple of years.

Now the Government is going to need to continue to spend to stimulate the economy and to make up for lost GDP in a number of sectors and industries (such as airlines, tourism, international students – you get the picture).

Secondly, the past century has shown that Australia can progressively pay down debt over time, after a crisis has passed. Following previous times of extreme hardship, Australia proved resilient and government debts were eventually reduced. Perhaps Australia isn’t simply just a ‘lucky’ country, but a ‘plucky’ country.

Where does the money come from?

Officially, the money will be raised by selling Australian Government bonds.

We need to stress that the stimulus is absolutely necessary! It’s now more important to spend in order to stop the economy from going into a lengthy recession. It is the right response to support the economy during lockdown, otherwise economic growth could fall even further, which would be harder to recover from.

You didn’t answer the question… how is the debt paid back?

1. The COVID-19 debt does not have to be paid off all at once, but instead, just pay the interest. That might be a good choice, because at the moment, interest rates are extremely low.This will be one of the long-lasting impacts of COVID-19. Globally, interest rates look set to stay low for a very long time which will allow Governments to repay the debts that are being incurred. It is a cost-effective point in history to go into debt;
2. The main way the debt is repaid is through taxes. The Government taxes us more and spends less so it can have a surplus, and it uses that surplus to pay back the institutions they borrowed from. However, the Government would prefer option 1, as raising taxes in the near-term is counter-productive. Perhaps a temporary deficit levy would do the trick?;
3. Inflation helps debt disappear. While $200 billion might seem like a lot now, when we get some inflation over the next 30 years, it will shrink. Not filling you with confidence we hear you say, but;
4. The key point is the ratio of debt to GDP. A country can grow the GDP side of the ratio. The GDP can be made bigger using either economic growth or inflation. One reason Japan has such a high debt ratio is its GDP hasn’t grown much since 1990. It has had both low growth and low inflation. According to the IMF (International Monetary Fund), Australia is the poster child for a national response to COVID-19 and the best rated economy in a post-COVID world.

What do economists think?

Most agree with the Treasurer that the best approach to getting debt back down is to grow the economy.

The Government’s wage subsidy package will “undoubtedly” prevent the unemployment rate rising as much as it would have otherwise. The size and reach of the JobKeeper payments should reduce the peak in unemployment – the economic version of ‘flattening the curve’.

The severe COVID-19 induced market correction has been unprecedented (there’s that word again!) as economies temporarily go offline to address the pandemic challenges.

The stimulus package combined with historic low rates, at near zero, will cushion the severe correction. This will enable economies, and therefore earnings, to come back online.

Equity markets have always been driven by both fear and greed. There are significant uncertainties in the current market turmoil and the dislocation in markets is the result of these uncertainties.

Is there a way out?

The human and health impact of COVID-19 has sent our fears into overdrive. Our privileged lifestyles have been impacted, and the lack of resilience is notable.

However, there will eventually be an end to the crisis, there will be a sustainable health solution, and societies and economies will recover. Get comfortable being uncomfortable for now.

Every country, and every central bank, has had to react. Every share market has been smashed. Governments are pumping record amounts of money into the economy, just so it won’t flatline. BUT, as a percentage of GDP, we’re not at unprecedented levels – not even close.

The point of THIS piece is to compare debt levels in previous crises, to let you know that Austalia is NOT insanely exposed, and has a lot of ‘wriggle room’ left.

In conclusion

In a dramatic economic and social crisis, there are some key historical lessons for Governments:

1. Be generous;
2. Mistakes will happen but learn from them;
3. Don’t ‘sweat’ on debt as the economic recovery, and improved community well-being, will deliver better long-term returns than ‘counting the pennies’ now; and
4. Australia’s current debt-to-GDP levels are world class and relatively low.

Nothing good results from panic. History has reinforced this point time and time again. It is our response to the crisis that is critical.

The policy response from the central banks and Governments has been swift, coordinated, innovative and a significant magnitude. Whatever it takes. This will continue.

The post Government Debt – is it too high? appeared first on AustAsia Group.

The scheme will fund grants worth $25,000 for home renovations or new home builds between June 2020 and the end of December 2020. As with all Government-funded schemes, the devil is in the detail. Here are the rules that we know so far:

1. Renovation Rules:

• The renovation contract is a minimum of $150,000 and up to $750,000 per house;
• The pre-renovation value has to be under $1.5m; and
• Contract dates must be between June 4, 2020, and December 31 2020.

2. Building Rules:

• Under the HomeBuilder scheme, you can build a new house, but the house and land must be under $750,000, which links back to First Home Owner Rules around the country;
• Contract dates must be between June 4, 2020, and December 31 2020.

3. Income Eligibility:
   To be eligible, your income must be below the applicable limits. We are not sure at this stage if this will be similar to Centrelink and other provisions based on taxable income, or based on adjusted income which adds back any existing rental property losses that you may have? At the moment, the rules are:

• Single applicants must earn less than $125,000 a year;
• Couples must earn less than $200,000 a year.

For First Home Buyers, this is also a great result, as many first home buyers can build a new house that is under the current First Home Owners Scheme limits for values, and then depending on the state that they live in, get another $10,000 to $20,000, plus up to $10,000 for the Commonwealth First Home Owners Deposit Scheme. For more information on how this affects First Home Buyers, please see our article on that:

First Home Owners – Make the most of these schemes: HomeBuilder & First Home Owners Grant (FHOG)

https://treasury.gov.au/sites/default/files/2020-06/Fact_sheet_HomeBuilder.pdf

https://treasury.gov.au/sites/default/files/2020-06/HomeBuilder_Frequently_asked_questions.pdf

Before entering into a new contract, or reviewing your eligibility, please contact us at consulting@ww2.austasiagroup.com so we can assist you to make the right financial decision, and also assist with the financing.

The post Renovation Rescue! – HomeBuilder Scheme appeared first on AustAsia Group.

We have summarised below each state and how it will work with the HomeBuilder scheme. There are now more reasons to try to get into your own first home, or for family members to assist First Home Owners.

For more information, contact us for finance, property and overall financial assistance at consulting@ww2.austasiagroup.com.

The post Make the most of these schemes: HomeBuilder & First Home Owners Grant appeared first on AustAsia Group.

In line with Phase 2 of the State Government’s COVID-19: WA Roadmap, our staff who have been working from home since the beginning of April have now started to return to the office. We are pleased to announce that we are re-opening our door to clients for face to face meetings at 412 Newcastle Street, West Perth from 8:30am on Tuesday 2nd June 2020.

We will continue to focus on providing our staff and clients with a Covid-19 safe environment by maintaining the stringent cleaning, health and hygiene practices that we’ve been following for the past two months.

We know that many of our clients have been impacted by Covid-19, whether that be individuals who’ve had their working hours reduced or have lost their job entirely, and business owners who’ve had to significantly downsize their operations or close their doors completely. We’ve been busy assisting our clients to deal with these issues in the most practical and financially prudent manner and will continue to do so as we work together to get life and business back to normal as quickly as possible.

AAG is able to provide advice to our clients across accounting, tax, superannuation, finance, real estate, and legal so we’re uniquely placed to assist you with any of your financial, tax or general concerns as a result of Covid-19 or for any other reason.

A number of our clients have told us that they have found video and teleconferencing very convenient during the period our office was closed to the public. We’re very happy to continue to offer these forms of communication where they are preferred.

We look forward to seeing you again, by way of:

• Phone
• Face to Face on Video Conference; or
• Face to Face In our office.

Please feel free to contact us at consulting@ww2.austasiagroup.com or on Ph. 08 9227 6300 because we’re here to help.

The post We are available for in person client meetings once more appeared first on AustAsia Group.

WA, in particular, has stated that it will keep its borders shut for some time, so it has specifically targeted assistance for tourism operators across the state to adapt and refocus in the Covid-19 landscape, the easing of state regional borders and general social distancing restrictions, allowing some businesses to reopen, and schools in WA returning to mandatory attendance from Monday 18th May.

Queensland and South Australia are similar to WA in monitoring their borders to contain any outbreaks. SA has a business grant of $10,000 per business that is eligible. NSW and Victoria are back to school, and both are working with various national sporting codes to try to get some sort of national league sport back up and running, even if behind closed doors for the time being.

Nationally, the unemployment rate rose one percent to 6.2% however the increase was much less than most economists had predicted, with many expecting the rate would have jumped above 8%. Federal Treasurer Josh Frydenberg said today that the reason for the lower than expected rise was because of the Government’s Jobkeeper program. He acknowledged there is still a long way to go and the economic numbers will get worse before they get better, but that Australians “know their Government has their back”.

What have we been up to

Here at AAG, we’ve reviewed more than 130 business clients to check their eligibility for the two main business programs, being:

• The ATO Cashflow Booster Grants, where we have assisted more than 70 clients and obtained more than $800,000 so far in grants to assist their businesses; and
• The JobKeeper Program, where we have helped more than 40 business clients (many of them thinking that they were not eligible in March, but were eligible in April and May) over the past 3 weeks to successfully claim JobKeeper. We have assisted those 40 clients to claim more than $500,000 for the month of April 2020 and the payments have now started to flow to them.

The Federal Government has extended the JobKeeper enrollment deadline to 31 May 2020, so if you are not sure if your business is eligible, quickly drop us an email to consulting@ww2.austasiagroup.com and we can check for you.

These two programs have certainly assisted many of our business clients, so we agree that Jobkeeper has kept the unemployment rate down. A number of clients have remarked that they would have put more people off and terminated their employment had the JobKeeper payment not been available.

The JobKeeper program, which has been set to run for six months until September 2020, will be reviewed by the Government at the end of June 2020, and Prime Minister Scott Morrison said the review would provide a chance for tweaks to be made to the scheme. When asked whether that would include tapering off payments at the end of September, as opposed to snapping back to previous measures, Mr Morrison left the door open for change.
AAG will continue to monitor all of the economic news on Covid-19 and we’ll keep clients informed of the changes as they’re announced.

AAG Staff News

It is with mixed emotions that we advise that Keeva Spencer-Wright, who has worked in our Client Services and Finance teams for more than 5 years, leaves us today to pursue a career in primary school teaching. She has moved to the remote far north of WA to provide education to a lot of kids who need help and assistance. Keeva started out with us as a graduate, and worked her way up to being the Team Leader of our Finance Team, worked with Nicole Copeland in Client Services for some time as well as assisting me. Keeva has helped many clients with their finance and overall financial positions and loved a challenge to get a deal over the line. She will be missed by us all. We wish Keeva all the best in her teaching career.

Please contact us at clientservices@ww2.austasiagroup.com if you have any Covid-19 related or general queries that we can assist you with.

Best Regards,

Simon Chesson
Director

The post COVID19, JobKeeper, The Economy – Mid May update appeared first on AustAsia Group.

Step by Step Guidelines

Here we provide you with step by step instructions on how to apply for The JobKeeper program. It is recommended that you enrol your company and eligible employees for JobKeeper payments sooner rather than later. Visit our Coronavirus Covid19 home page for more information on JobKeeper and other available financial assistance programs.

Timeline

Key Steps

1. How to enrol for the JobKeeper payment:

• Step 1 – Register your interest and subscribe for JobKeeper payment updates.
• Step 2 – Check you and your employees meet the eligibility requirements.
• Step 3 – Continue to pay at least $1,500 to each eligible employee per JobKeeper fortnight. (The first JobKeeper fortnight is the period from 30 March to 12 April.)
• Step 4 – Notify your eligible employees that you are intending to claim the JobKeeper payment on their behalf. Check they aren’t claiming JobKeeper payment through another employer or have nominated through another business.
• Step 5 – Send the JobKeeper employee nomination notice to your nominated employees to complete and return to you by the end of April if you plan to claim JobKeeper payment for April. Keep it on file and provide a copy to AustAsia Group if we are assisting you with the application.
• Step 6 – From 20 April 2020, you can enrol with the ATO for the JobKeeper payment using the Business Portal and authenticate with myGovID. You must do this by the end of May(updated) to claim JobKeeper payments for April.
• Step 7 – In the online form, provide your bank details and indicate if you are claiming an entitlement based on business participation, for example if you are a sole trader.
• Step 8 – Specify the estimated number of employees who will be eligible for the first JobKeeper fortnight (30 March – 12 April) and the second JobKeeper fortnight (13 April – 26 April).

2.    Confirmation of eligible employees you will claim JobKeeper Payment for. (Available from 4 May 2020 onwards)

How to claim JobKeeper payments for your eligible employees:

• Step 1 – Apply for the JobKeeper program by logging in to the ATO Business PortalExternal Link
• Step 2 – Ensure you have paid each eligible employee a minimum of $1,500 per JobKeeper fortnight before tax.
• Step 3 – Identify your eligible employees in the application form by:
  • Selecting employee details that are prefilled from your STP pay reports if you report payroll information through an STP enabled payroll solution.
  • Manually entering employee details in ATO online services or the Business Portal if you do not use an STP enabled payroll solution.
  • The report can be submitted through us as your tax agent
• Step 4 – Submit the confirmation of your eligible employees online and wait for the confirmation screen.
• Step 5 – Notify your eligible employees you have nominated them.
• Step 6 – The Commissioner will pay you the JobKeeper payment for all eligible employees after receiving your application.
• Step 7 – Each month, you will need to reconfirm that your reported eligible employees have not changed through ATO online services, the Business Portal or via AustAsia Group. (If we are assisting you with the application.) This will ensure you will continue to receive the JobKeeper payments from the Commissioner. You do not need to re-test your reported fall in turnover, however, you will need to provide some information as to your current and projected turnover. This will be done in your monthly JobKeeper Declaration report.
• Step 8 – If your eligible employees change or leave your employment, you will need to notify the ATO through your monthly JobKeeper Declaration report.

If you use the ATO Business Portal, you will need a myGovID linked to your ABN in Relationship Authorisation Manager (RAM). You can find out how to set this up at ato.gov.au/mygovid

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