Weekly Digest – 4 November 2020
Welcome back to our Weekly Digest. We hope you and your family are safe and doing well. Read on for this week’s updates and some ideas that will help us all overcome this crisis.
RBA Cuts Interest Rates to New Record Low
Reserve Bank of Australia has cut the cash rate by 15 basis points in November, taking it to a new record low of 0.10%.
As of November 4, 2020, the following have confirmed that they are passing on this November 2020 rate cut to variable-rate home loans:
- Commonwealth Bank
- Freedom Lend
- Homestar Finance
- Reduce Home Loans
Find out if your lender is passing the cut on with Savings.com.au‘s comprehensive and regularly updated list.
Minimum Wages Increase by 1.75%
The Fair Work Commission has announced a 1.75% increase to minimum wages. This will apply to all award wages, but the increases will start on 3 different dates for different groups of awards.
Group 1 Awards – from 1 July 2020
- Frontline Heathcare & Social Assistance Workers
- Teachers and Child Care
- Other Essential Services
Group 2 Awards – from 1 November 2020
- A range of other industries
Group 3 Awards – from 1 February 2021
- Accommodation and Food Services
- Arts and Recreation Services
Research: Local Spending Soars During Lockdown
It appears like Australia’s love for shopping locally has reignited amid the COVID-19 lockdown, as new research commissioned by Mastercard showed 91% are now spending up to $200 per week on their local high street.
Despite three quarters of Australians being mindful of their spending during the initial COVID-19 lockdown period, 73% are wanting to actively spend in the local community to help them bounce back and recover.
If your business is still struggling to stay afloat due to the pandemic and the social restrictions that come with it, don’t hesitate to flick us a message so we can work out a plan.
Victoria Building QR Code Check-In Tool
The Victorian government is developing a QR code check-in system to achieve gold-standard COVID-19 contact tracing.
The system will be based on the technology used in New South Wales and the ACT. ACT Health has offered to give its system to the Victorian government for free.
It is not yet clear if the Victorian system will be an app or a website. We will keep you posted as soon as further details are available.
Australian Business Growth Fund Launches
The government-backed Australian Business Growth Fund has launched to ensure small- and medium-sized businesses have access to equity finance, as the country recovers from the COVID-19 crisis.
Initially, the Australian Business Growth Fund will have an initial investment capacity of $540 million, with a goal to grow the fund to $1 billion.
The government is making a $100-million investment, while major banks including ANZ, Commonwealth Bank, NAB, and Westpac have also committed $100 million each.
The fund will allow Australian businesses to apply for long-term equity capital investments between $5 million and $15 million, where they have generated annual revenue between $2 million and $100 million and can demonstrate three years of revenue growth and profitability.
If you need help in assessing your eligibility or to consider other financing options, don’t hesitate to contact us for guidance.
Proposed Superannuation Reform Measures
The Government has announced that it will spend $159.6 million over the next four years to implement a number of reforms to the superannuation system that will save fund members $18 billion in fees and other costs between now and 2030. The key elements of these reforms include:
- From 1 July 2021, when a person changes jobs, their super account will be ‘stapled’ automatically to them. At the time of starting a new job, and unless a member decides otherwise, their employer will pay superannuation contributions into their existing ‘stapled’ fund.
- By 1 July 2021, the Government will develop a new interactive online ‘YourSuper’ comparison tool, which will be administered by the ATO, to allow people to research and select a MySuper fund to manage their super savings.
- MySuper products and other trustee-directed superannuation products will be subject to an annual objective performance test, based on net investment returns. A fund determined to be underperforming will be required to notify its members and provide them with information and tools to switch to a better performing fund
The government has not yet announced any change to the already legislated SG increases, which are due to see the SG rate increase from the current 9.5% to 10% from 1 July 2021, with further gradual increases to 12% by 2025.
Australians to Receive Tax Cuts
The Government approved $17.8 billion in personal tax cuts, quickly pushing through measures announced recently.
More than 11 million Australians and 1 million businesses will begin receiving tax relief within weeks.
Under the new tax package, people earning $48,000 to $90,000 will gain an extra $1,080 in 2020-21 from a one-off extension of the low and middle-income tax offset. Meanwhile, those earning more than $120,000 will have a permanent cut of $2,430 in 2020-21 and beyond.
If you need help with your taxes, get in touch with us so we can sort it out for you.
$800m Digital Business Plan to Drive Economic Recovery
The Australian Government has announced a Digital Business plan to enable businesses to take advantage of digital technologies to grow their businesses and create jobs in the wake of COVID-19. PM Scott Morrison and Treasurer Josh Frydenberg announced the almost $800 million scheme on Tuesday that will facilitate doing more business online in a post-pandemic world.
Under the plan, the rollout of Australia’s 5G network will be accelerated, the digital capacity of the agriculture, manufacturing, mining, logistics and financial services will be boosted, and Australians will be able to start a new business in 15 minutes using online government services.
If you need our expert advice on how you can start a business or pivot to adapt to the crisis, don’t hesitate to message us.
Major Overhaul to Bankruptcy Laws
After the major changes to the JobSeeker and JobKeeper programs, Australia’s bankruptcy laws have been overhauled, throwing a lifeline to struggling businesses amid the COVID-19 crisis.
Under the proposed changes, businesses with liabilities of less than $1 million will be able to keep operating while they come up with a debt restructuring plan, rather than be placed in the hands of administrators.
The new rules which will become effective from 1 January 2021 follows the government’s decision earlier this month to extend its temporary insolvency and bankruptcy protection rules until the end of 2020.
Supporting Apprentices and Trainees Wage Subsidy Extended
The Supporting Apprentices and Trainees wage subsidy has been expanded and extended to include medium-sized businesses who had an eligible apprentice in place from 1 July 2020.
Eligible employers will receive a wage subsidy of up to 50% of the wages paid until 31 March 2021 worth up to $7,000 per quarter, per eligible apprentice or trainee, to manage their cash flow challenges. Subsidies will also be available to any new employer who re-engages an eligible apprentice that was displaced by an eligible small- or medium-sized business.
This may be of particular interest to employers who are not eligible for the JobKeeper extension. For professional assistance in applying for this wage subsidy or any other funding assistance, feel free to contact us.
Sole Trader Support Fund
The Victorian Government has announced the Sole Trader Support Fund for eligible non-employing businesses affected by COVID-19 restrictions. Under this scheme, sole traders will receive a grant of $3,000.
Grant applications will open in the coming days and the full list of eligibility criteria will be published soon. We will keep you updated as soon as more information is available.
Government-backed COVID-19 Loans Extended
The government is extending its small business COVID-19 loans scheme until June 2021. If you need help to access these loans or you want to find out if you are eligible, don’t hesitate to drop us a message.
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