Are you ready for the beginning of the end of Stimulus Funding and Support?
The first rounds of the Government’s stimulus funding and support is due to end just before and during October. Now is the time to plan for the effects of how this will affect you.
What are the changes?
The end of JobKeeper as we know it
The JobKeeper Scheme as we know it is due to end at the end of September. It is due to be replaced with what has been dubbed as JobKeeper 2.0. Businesses need to reapply and requalify for a reduced rate. The rates are:
- $1,200 per fortnight (down from $1,500) for those employees that worked more than 20 hours per week on an averaged basis across the four weeks leading up to 1 July 2020.
- $750 per fortnight (down from $1,500) for those employees that worked less than 20 hours per week on an averaged basis across the four weeks leading up to 1 July 2002.
However, on a good note the date of employment for eligibility for JobKeeper has been moved to 1 July 2020 from 1 March 2020.
The downside of this is for those that were hibernated during June where the employees were not working more than 20 hours per a week. For those in that boat, this means that even if you’re picking up and now employing staff, you’ll only be subsidized for the first $750 per fortnight and not the $1,500 which you are currently receiving.
Cash Flow Boost 2 ends
In September, the Cash Flow Boost 2 will end too. Even though these have been offsetting your BAS/IAS liabilities, with some lucky businesses receiving refunds. This will all end after the September Activity Statement is lodged.
COVID-19 Commercial Rent Assistance automatically ends
In NSW this automatically ends on 23 October 2020 unless extended. The other States are subject to the same automatic termination of the Scheme with different dates based on when the legislation was passed.
There has been no indication this will be extended but initial expectations when the National Code was being drafted was that it would be in line with JobKeeper. So there may still be a chance this may be extended especially in Victoria. However, you should never plan in hope politicians will pass a law.
Where do you sit?
With these Stimulus funding and support ending and for those that successfully qualify for JobKeeper 2.0, your cashflow will change. Planning needs to be taken now to ensure your business is remains viable and can continue to trade.
To assist your review your business’ position in a post September world I have provided a list of questions:
- Are you going to apply and be successful in receiving JobKeeper 2.0?
- How many employees fall into Rate 1?
- How many employees fall into Rate 2?
- Can your cashflow support the reduction of JobKeeper support? If not, is there other funding support available?
- Have you planned for the end of the Cash Flow Boosts?
- Can you support the payment of the Activity Statements without the CFB?
- Have you planned for the end of the COVID-19 Commercial Rent Assistance?
- Can you support the payment of the full rent as well as the deferred amount allocated to the monthly rent costs?
- Have you addressed changing staffing and resource needs? Will you need them all going forward?
- If your business has been hibernating or working on a reduced capacity, have you planned for the shortfall between the costs of increased activity before the revenue is received?
- Have you set-up or amended your budget and cashflow forecast / needs going forward?
- Have you changed your business plan and strategy to consider the changing economic conditions?
- Do you think you need help to address the issues above?
Take the time to address the above questions and start planning now.
What if you need help?
After taking time to consider each of the above and if you cannot answer or there are a few no answers in response to the first 12 questions, you should be answering yes to lucky 13.
At Van Cotter Partners we have prepared clients for the circumstances, and we have a support packages available to assist businesses with the circumstances above.
Package 1 – End of JobKeeper/CFB review – $500+GST
We undertake a business health check and provide feedback and advice in an hour meeting. During the meeting we will discuss:
- The health check results;
- Your trading position going forward; and
- discuss your options.
Package 2 – End of JobKeeper/CFB review and coaching – $500+GST plus $250+GST per month
In this package you will receive Package 1 plus an ongoing review of your position and an hour coaching/advisory zoom meeting per month for as long as you need it.
Package 3 – Budget, Forecasting and Business Planning in a COVID-19 world – Minimum of $1,000+GST
This package adds onto either Package 1 or 2 and would need to be tailored to your needs which is dependent on:
- if you have these documents already; and
- how much work needs to be done to amend and update due to the impact of COVID-19 on your business.
During the coaching / advisory meeting, if time permits, we will coach to be able to prepare these for yourself over time but if you feel you need assistance, we will prepare these for you. But before we undertake any of this work, we will review and quote the exact cost this will be to you.