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Perspective

2020 Federal Budget: JobMaker and other business highlights

On 6 October 2020, the Federal Treasurer announced a raft of new measures intended to kickstart the economy in the wake of the COVID-19 pandemic.

A summary of important key points for businesses is outlined below.

JobMaker hiring credit

A new $4 billion incentive to engage employees between the ages of 16 and 35 years old. Employees must be engaged in new jobs between 7 October 2020 and 7 October 2021 (therefore headcount must go up).

Employers can receive the following credit for each eligible employee:

  • $200 a week if they hire an eligible young person aged 16 to 29 years; or
  • $100 a week if they hire an eligible young person aged 30 to 35 years.

Application for the system occurs through the ATO’s Single Touch Payroll system. JobMaker is only available for employees who were receiving JobSeeker, Youth Allowance or the Parenting Payment at the time of being hired. Businesses receiving JobKeeper will be ineligible for JobMaker.

Boosting apprenticeships wage subsidy

A new Boosting Apprenticeships Wage Subsidy has been introduced and will take effect until 30 September 2021. Employers can receive a new 50% wage subsidy for new apprentices and trainees. The subsidy is also available for any existing workers that start new apprenticeships and traineeships. The subsidy is capped at a total of $7000 per quarter.

Business tax incentives

Businesses with turnover of less than $5 billion will be able to temporarily claim full expenses of eligible depreciable assets from 6 October 2020 until 30 June 2022. These eligible businesses will also be able to offset tax losses from the financial years after 2018-19 up to June 2022.

Investment into manufacturing industry

  • Modern Manufacturing Strategy – $1.5 billion to support a more competitive, productive and resilient manufacturing sector that can employ more Australians.
  • Modern Manufacturing Initiative – $1.3 billion to assist manufacturers with collaborating and building scale, commercialising their ideas and connecting to global supply chains.
  • Supply Chain Resilience Initiative – $107 million to resolve supply chain vulnerabilities.
  • Manufacturing Modernisation Fund – $52.8 million for second round of capital investments to assist with upskilling and investing in research & development.
  • Industry Growth Centres – $50 million to manufacturing priority industries.

Changes to insolvency framework

The Government’s new changes will protect small businesses from becoming insolvent. They have announced a new process to assist with restructuring of debt without losing ownership over the company. This will allow many businesses to remain solvent despite the significant debts from COVID-19. The Government has introduced a streamlined liquidation process to expedite proceedings and reduce cost. Further details will be announced soon with the changes to take place from 1 January 2021 for all incorporated businesses with liabilities of under $1 million.

Written by Nina Hoang

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Heightened levels of stress around the pandemic is also a relevant factor. An April 2020 study reported 88% of the participants (US employees) faced moderate to extreme stress during the pandemic and nearly 70% faced the most stressful time of their professional career.

Paul Evans

Managing Director, Toro Digital

Psychological hazards of e-working during the pandemic is a relevant factor. The Australian Psychological Society identified these hazards as conflicts between work and family, workload and over-working, future uncertainty and isolation/loneliness.

Heightened levels of stress around the pandemic is also a relevant factor. An April 2020 study reported 88% of the participants (US employees) faced moderate to extreme stress during the pandemic and nearly 70% faced the most stressful time of their professional career. Participants noted their productivity consequently declined by at least one hour a day for 62% and at least two hours for 32%.

Unsurprisingly, there has been a marked rise in mental health related prescriptions since March 2020.

These risks can be mitigated by undertaking appropriate risk analysis for each employee, ensuring controls are instituted that mitigate those risks, ensuring regular communication between management and employees around individual circumstances, setting clear expectations including around joint goals and objectives, scheduling regular informal team gatherings, and ensuring access to support and resources.

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