Restrictions on Social Gatherings
Yesterday, 22 March, the Federal Government announced further restrictions on social gatherings in response to the COVID-19 outbreak.
In summary the following facilities are restricted from opening from midday local time 23 March 2020:
Pubs, registered and licenced clubs (excluding bottle shops attached to these venues), hotels (excluding accommodation)
Gyms and indoor sporting venues
Cinemas, entertainment venues, casinos, and night clubs
Restaurants and cafes will be restricted to takeaway and/or home delivery
Religious gatherings, places of worship or funerals (in enclosed spaces and other than very small groups and where the 1 person per 4 square metre rule applies).
(Isolated remote community hubs are not included in these restrictions).
Here is a link to The Prime Minister’s press release
This obviously has a massive impact on these businesses and organisations, as well as their associated supply chain. Many will close indefinitely.
The Government has attempted to mitigate the financial impact arising out of these restrictions and the other economic shocks that are occurring with some temporary relief for financially distressed businesses. Those measures are outlined further below.
Second economic response package
Earlier in the day, the Prime Minister and Treasurer announced a second economic response package. Broadly it can be summarised as
Support for individuals and households
Income support for individuals
Payments to support households
Temporary early release of superannuation
Temporarily reducing superannuation minimum drawdown rates
Reducing social security deeming rates
Boosting cash flow for employers
Supporting Apprentices & Trainees
Temporary relief for financially distressed businesses
Coronavirus SME Guarantee Scheme
Supporting the flow and reducing the Cost of Credit – Reserve Bank of Australia (RBA)
Quick and efficient access to credit for small business
Supporting non-ADI and smaller ADI lenders in the Securitisation market
Detail of the announcement can be found on Treasury page here or via this PDF copy
Banking Relief - Small Business
The Australian Banking Association also announced Small Business Relief measures on 20 March 2020. In short, Australian banks will defer loan repayments for small businesses affected by COVID-19 for six months. The announcement is available via this link or a PDF copy is here
Practically speaking, it appears Banks are set to reach out their customers to offer assistance and packages. However, we suggest getting on the front foot and getting in touch with your bank if have any commercial loans to seek payment reprieve under this relief package, should you believe it is necessary, or in fact prudent given the uncertain environment.
Similarly, this will apply to anyone with a mortgage who is concerned about their ability to meet repayments over the next six months.
Business ideas
One thing that is clear is that there are severe impacts on many businesses and individuals, some more so than other.
For businesses, it is critical to look at your costs & revenue and adjust accordingly, as well as to take advantage of the various assistance packages being offered, just to get through this period.
It is also a time to think outside the square. How can you provide your services differently? Granted very difficult in the situation where the social gathering restrictions have effectively caused your business to close or be extremely curtailed. However, there will also be opportunities, and a great chance to adapt and do things differently in order to survive and most importantly be ready for when the restrictions are lifted and things start to get back to normal.
Most importantly be proactive, think of what you need to do and get onto it. Look for new revenue streams, talk to your bank, take advantage of the ATO payment plans, talk to your suppliers, and make sure you engage your staff both for ideas, and also if you need to vary working arrangements through this period.
We do believe there will be permanent structural changes to the way many businesses operate out of all this also!
Above all, stay well and look after yourself, your loved ones and friends.
Should you need advice or need to discuss your particular requirements, please contact us, Infinite Accounting Solutions on 02 9899 4730 or via the contact page at www.ias-ca.com.au