THE Australian Small Business and Family Enterprise Ombudsman Kate Carnell has called on the Victorian Government to cover the costs associated with small business closures, with tough trading restrictions to remain in place until the end of October, at the earliest.

Ms Carnell said the latest roadmap announcement by Victorian Premier Daniel Andrews was a devastating blow to thousands of small businesses, many of which now have no other choice but to close their doors forever.

“Under the Victorian Government’s roadmap, many small businesses will not be able to open for another eight weeks at least and that’s only on the condition that there is less than five cases per day as a state-wide average,” Ms Carnell said.

“On that basis, small businesses that were thinking this lockdown would only last for another couple of weeks, now don’t know if they will ever be able to re-open.

“For those struggling small businesses that know they cannot remain viable under these imposed conditions, the Victorian Government needs to step up and help them make the sensible business decision to exit.

“This means the Victorian Government needs to pay for all break-lease termination fees – not just on the premises but also equipment so small business owners can walk away without further penalties.

“It is unreasonable to expect small businesses to continue to hang on and accumulate debt, given this ongoing forced closure is not fault of their own," Ms Carnell said.

“This is a situation no small business could have planned for. The lockdown extension has forced small businesses into this dire predicament and now the government needs to do the right thing to support them to exit if they cannot afford to hang on.

“The enormity of this lockdown extension and the psychological distress inflicted on small business owners cannot be underestimated," she said

“Small business loans are often secured against the family home, so these hard-working small business owners are now faced with gut-wrenching decisions about their future. They need to be supported in every aspect.

“I encourage all small business owner to seek help if they need it. The Partners in Wellbeing telephone hotline is 1300 375 330 and Beyond Blue’s Coronavirus Mental Wellbeing Support Service is at coronavirus.beyondblue.org.au

“Our My Business Health web portal also provides free practical resources for small business owners and also links to leading mental health organisations.”

www.asbfeo.gov.au

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ULTRA-LOW interest rates have created a unique environment where buying a house in many areas is cheaper than paying rent on one, according to new findings.

Pete Wargent, the co-founder of BuyersBuyers.com.au, an online marketplace offering affordable buyer’s agency services for all Australians, said first homebuyers were now weighing up the rent versus buy equation given the lowest borrowing rates on record.

“There are some uncertainties in the economy, but for those with access to a deposit, a reasonable level of employment security, and a sensible buffer, then it has become a compelling equation in many locations,” Mr. Wargent said.

“At BuyersBuyers.com.au we are seeing increasing levels of enquiries from first-time buyers, reflecting the change in borrowing rates and government incentives."

In many areas, rent money is dead money, according to RiskWise CEO Doron Peleg. Mr Peleg said renters with secure jobs were better off buying a house than to continue paying someone else’s mortgage.

“When it comes to houses, the preferred dwelling option in most areas of the country, in many cases it is cheaper to buy than rent, and rent money is dead money. Whereas, if you buy a house you can start building equity straight away, particularly when you take a long-term strategic view, and if you are in a good position to negotiate well and buy a ‘Grade A’ property that will serve your family to many years to come,” he said.

“Our research shows that interest-only repayments for both owner-occupiers and investors are lower than the annual rental cost in most of the 88 areas at the statistical area level 4 (i.e. SA4s). Therefore, funding costs are now lower than rental payments across all states and territories.

“And, except for Sydney and Melbourne, in all other states and territories, even the principal and interest repayments are lower than the annual rent, assuming that you have a 20 per cent deposit.

“No interest rate rises are expected in the foreseeable future and the intense competition between the banks is only going to intensify, meaning that buyers are in a very strong position to continue enjoying ultra-low interest rates.”

Mr Peleg said the biggest savings were in the capital cities where rental returns were the highest.

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THE RELEASE today of two reports by the Energy Security Board (ESB) and the Australian Energy Market Commission (AEMC) into the future of the National Electricity Market has been welcomed by Energy Networks Australia.

The ESB Post-2025 Market Design Consultation Paper and the AEMC report on the Coordination of Generation and Transmission Investment (COGATI) are important inputs to help guide the sector's transformation.

"The future energy sector will not be able to operate using current rules and frameworks; it is the time to think ahead for change," Energy Networks CEO Andrew Dillon said.

"The ESB is taking a coordinated look at how the energy market would operate post-2025 when distributed energy resources and renewable generation will have disrupted traditional wholesale markets.

"Future markets will be built on a transmission superhighway with better connections between and across states, as well as local distribution grids that are fast becoming the platforms to allow greater participation from customers.”

Mr Dillon said smarter pricing signals would be important to ensuring higher levels of distributed energy resources could be integrated into the system while keeping costs as low as possible for all customers.

"Many significant reforms are contemplated in these documents and some – like pricing reforms – should proceed," he said.

"However, it's absolutely critical that realistic cost-benefit analyses are undertaken to ensure the reforms that go ahead – and that customers end up paying for – deliver real value.

"In recent times, we have seen examples where either the costs (five-minute settlement) or the benefits (metering competition) have not been good news for customers.

"Governments and regulators also have major roles to play. Avoiding unnecessary interventions and ensuring investible frameworks with reasonable returns are key to unlocking the many billions of dollars of private investment the sector needs over the coming decades.”

Mr Dillon said Energy Networks looked forward to working with the ESB and the AEMC on these critical reforms.

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TAX PRACTITIONERS now have access to extended COVID-19 concessions to assist them to meet their registration and renewal requirements during the pandemic.

In addition to the existing extension of the annual declaration concession to December 31, 2020, other Tax Practitioners Board (TPB) COVID-19 initiatives have been extended as follows:

• continued professional education (CPE) (private reading and activities) concessions to be extended to 31 December 2020
• renewal concession to continue to June 30, 2021
• relevant experience concession to continue to June 30, 2021.

TPB chair, Ian Klug, said the concessions reflect the board’s commitment to assisting tax practitioners who are experiencing a range of changed business circumstances during this time.

"Given the COVID-19 related challenges during the year, we have been swift to relax regulatory requirements, including annual declarations, registrations and CPE requirements," Mr Klug said.

"The TPB is committed to continuing to provide support and to be pragmatic in recognition of the broad range of impacts of the pandemic on tax practitioners and their clients.

"While some are experiencing increased demand for their services, others may have less work and therefore, less relevant experience, and may need to access both self-care resources by the way of the CPE concession, and possibly fee deferrals.

"These extensions to the original concessions announced by the TPB in March are intended to provide tax practitioners with additional reassurance that their health and well-being is our number one priority,’ he said.

"We encourage tax practitioners to contact the TPB if they are encountering difficulties in meeting their TPB obligations so that we can consider their individual circumstances and work with them to find an appropriate outcome."

Mr Klug said the concessional arrangements are in line with a whole-of-government approach to managing the pandemic and its broad impacts on the community.

Resources highlighting support for tax practitioners during COVID-19 are available here.

More information on the impact of the concessions on tax practitioners is available here.

About the Tax Practitioners Board

The Tax Practitioners Board regulates tax practitioners in order to protect consumers. The TPB aims to assure the community that tax practitioners meet appropriate standards of professional and ethical conduct. Follow us on Twitter @TPB_gov_au, Facebook and LinkedIn.

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