The government today released its economic and fiscal update. Although it’s grim reading, we are faring better than most countries. Here’s a quick summary of some of the more recent news and measures that would be of interest to business owners.
The final budget outcome for 2019/20 is expected to be a deficit of $86 billion, with 2020/21’s deficit at this stage estimated to be $184 billion. Of course, this is a difficult environment for forecasting. The estimated total cost of all economic support measures is $289 billion.
See here for our summary of Tuesday’s announced JobKeeper extension, and the list of things you need to do. Although parliament sitting has been deferred until 24 August, the JobKeeper Rules are delegated legislation, and will be amended with a wave of Treasurer Josh Frydenberg’s pen. We also await some details to be sorted.
SME guarantee loan scheme extended
The existing scheme runs until 30 September 2020, under which the government gave approved lenders a 50% guarantee on qualifying loans to businesses with turnover below $50 million to fund working capital. From 1 October 2020 to 30 June 2021, the scheme will be expanded as follows:
- Businesses can borrow for reasons beyond funding working capital;
- Allowing secured lending (excluding commercial or residential property);
- Maximum loan size per borrower to increase from $250,000 to $1 million;
- Maximum loan term to increase from 3 years to 5 years; and
- Lenders will have a discretion to offer a repayment holiday period.
JobTrainer Skills package
The JobTrainer Skills Package establishes the JobTrainer Fund to provide additional low- and no-fee training places for job seekers and school leavers, and extends the Supporting Apprentices and Trainees wage subsidy for a further 6 months to 31 March 2021, and expands it to medium-sized businesses from 1 July 2020.
The 2020 Budget was delayed to Tuesday, 6 October. There is anticipation that a number of reforms may well be announced. Nexia Australia’s concise Budget Summary will be issued on the following Wednesday morning, followed by a live webinar on the morning of Thursday, 8 October. An invitation will be issued in due course, and you can listen to Nexia’s experts talk through the implications for you and your business.
It’s clear that the COVID-19 environment will continue for some time. Whilst the government is doing its bit to support businesses and their employees as much as possible, businesses that have been seeking opportunities to adapt stand a much better chance of weathering the storm.
Talk to your trusted Nexia Advisor about any of these matters and how we can assist you and your business.