"We’ve Got To Get The Economy Moving Again" – Josh Frydenberg – Federal Treasurer
Accountant's Minute 231
Greetings, we hope that you're well and looking after yourself as well as your clients and that you're communicating with your clients in relation to their reopening strategies.
The National Cabinet has started the first tentative steps towards reopening the Australian economy with the release of the three step plan process that is to be implemented, primarily by state and territory governments, according to their own timetables.
Josh Frydenberg has indicated that it's costing the economy $4 billion for every week that the lockdown continues and he is keen to “get the economy moving again”.
Last Friday we conducted another of our "COVID-19 Survival Panel" webinars with keynote speakers Matthew Karakoulakis, Senior Partner AMK Law, Adelaide and Melbourne and Geoff Goodrich, Businessman, Managing Director of Great Power Solutions and “Ambassador for Territory Proud”.
Matthew Karakoulakis gave an interesting overview of the legal position relative to contracts and force majeure which outlined the historical significance of “force majeure” and “frustration”.
Matthew indicated that force majeure is generally where there is an unforeseen consequence, normally termed an “act of God”.
“We have never experienced COVID-19 before, meaning the definition of force majeure, as defined in that contract, probably would not operate to enable the force majeure clause to operate in the current circumstances, unless the definition itself permitted operation the principal as such which is unlikely given the virus itself is probably not an “act of God”.
“If the coronavirus (COVID-19) is not included in the definition of force majeure or if the contract does not have a force majeure clause, then it is likely the contract can be enforced".
Matthew also spoke about other legal issues that can affect SMEs including:
- Employment law, particularly as it relates to the current circumstances with a lot of employees working from home.
- There have been some temporary amendments made to the Corporations Law to protect directors during the period up to 30 September 2020.
- There has been temporary laws introduced for commercial tenancy arrangements which SMEs can utilise if they have qualified for the JobKeeper Payment Program.
Geoff Goodrich discussed cost reductions within businesses and urged accountants to take a close interest in the cost reduction strategies that their clients are implementing, in particular, the reduction of energy costs. A number of examples of the financial benefits that businesses could obtain, in conjunction with government grants and the 100% instant asset right off, were presented by Geoff.
In the COVID-19 weekly update comments were made on the following items:
- The payment deadline for April wages eligible for the JobKeeper payments in May has been extended to 8 May 2020.
- The registration date for JobKeeper for wages relative to the month of April has been extended to 31 May 2020.
- The Australian Taxation Office rulings on the calculation of the 30% turnover reduction were discussed and, in particular, commentary contained in Accountants Daily 7 May 2020.
“In the ruling, the ATO notes that the Commissioner’s compliance approach will allow for some tolerance around projection predictions".
“If it later eventuates that your actual turnover for your turnover test period is greater than your prediction for your projected turnover, you do not lose access to the JobKeeper scheme”.
“The Commissioner will accept your assessment of these turnovers, unless he has reason to believe that your calculation of your projected GST turnover was not reasonable”.
You can link to the recording of the webinar featuring Matthew Karakoulakis and Geoff Goodrich by clicking here.
The next COVID-19 Survival Panel webinar is being presented on Friday, 15 May 2020 at 12 noon AEST with keynote presenters:
- Paul Barnaby, a Predictive Accounting Consultant and the Australasian Representative of Plan Guru an international software company specialising in Budgeting, Cash Flow Forecast and Predictive Balance Sheets. Paul will present a case study on the utilisation of the software to prepare three-way financial forecasts for a business.
- Trent Butler, a Chartered Accountant who specialises in assisting accounting firms to utilise social media and other marketing activities to promote their services to the wider SME market, will discuss issues relative to assisting clients to rejuvenate their businesses so that they can take advantage of the opportunities as the lockdown provisions are relaxed.
You can register for the complimentary webinar to be presented on Friday 15 May at 12 noon AEST by clicking here.
Want to know more about the services that are available to assist you to proactively assist your SME clients on a wide range of business matters to rejuvenate their businesses as the lockdown ceases? If so, why not visit www.essbiztools.com.au – “Survival in Difficult Times – Learn More” and the other 23 product packages that ESS BIZTOOLS offers to assist accountants to perform a broader range of services than just taxation.
If you have any questions on any aspect of the assistance that ESS BIZTOOLS’ products can provide for you to use to assist your clients to navigate through the “COVID-19 SURVIVAL CHALLENGES” please do not hesitate to contact us:
“Want to know more?” – To read more about the presentations made by Matthew Karakoulakis and Geoff Goodrich, please click on the image below.
Do you want to know more?
To gain an overview of what is included in the ESS BIZTOOLS’ Silver Package, please contact us for further information or go to www.essbiztools.com.au.
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Have a great day!
