THE Australian Small Business and Family Enterprise Ombudsman, Kate Carnell has welcomed the Federal Government’s latest support measures designed to see small businesses through the COVID-19 crisis.

Ms Carnell said the economic support package includes: Support for households including casuals, sole-traders, retirees and those on income support; assistance for businesses to keep people in a job; regulatory protection and financial support for businesses to stay in business.

“The Federal Government has listened to the feedback we have provided and responded to the needs of small and family businesses accordingly,” Ms Carnell said.

“In particular, we support the measures extended to sole traders, which make up more than 60 percent of Australia’s business community.

“Importantly, sole traders who experience a significant loss of income, will be eligible for the coronavirus supplement and jobseeker payment which will assist them to continue working for the next six months. 

"The government is providing small and medium sized businesses that employ people with up to $100,000 (minimum payment of $20,000) to assist with outgoings so they can keep their doors open for as long as possible.

“People experiencing financial hardship can now access up to $10,000 of their superannuation this financial year and an extra $10,000 the year after without paying tax," Ms Carnell said.

“The creation of the Coronavirus SME Guarantee Scheme will help businesses gain access to the working capital they need. We support the government’s pledge to guarantee 50 percent of new loans issued by approved lenders.

“Ultimately, this package gives small and family businesses some breathing space until circumstances return to normal, which will play a critical role in their survival and the ability for our economy to bounce back.”

www.asbfeo.gov.au

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THE Federal Government’s second stimulus package contains welcome measures to support the viability businesses, particularly the viability of small businesses, including sole traders, and non-profit-organisations to keep people in jobs.

“We commend the government for its commitment to doing what it takes to see the country through the health and economic shock of Covid-19 and we restate the importance of building and construction as an essential service,” Master Builders Australia CEO Denita Wawn said.

"Economically it's one of the main chances of stimulus measures hitting the ground hard and fast,"she said. 

“Maintaining building and construction activity around the country is one of the most effective ways of injecting money into the economy at this time of crisis. A shutdown on construction sites will have devastating impact on the economy and the well-being of millions of Australians.

"Our industry is already implementing social distancing and risk mitigation policies and we are working collaboratively with trade unions to this end. We will continue to enact measures to safeguard the health of the 1 in 10 Australians employed in our industry and call on governments to keep them in jobs by keeping our industry building,” Ms Wawn said.

www.masterbuilders.com.au

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THE Financial Services Council (FSC) has announced that it supports the package of temporary measures "which will greatly assist Australians in financial hardship during the current national emergency".

The measures include temporary early release of a limited amount of superannuation for individuals in financial stress; temporary reduction in minimum superannuation drawdown rates for retirees; temporary reduction in social security deeming rates.

FSC CEO Sally Loane said the FSC had always supported the early release of superannuation in cases of genuine hardship, and recognises that the existing early release framework was not designed to address the needs of individuals during a national emergency such as the current pandemic. 

"We understand that the government's temporary measures for early access to $10,000 tax-free this financial year and another $10,000 the following financial year will apply only to those in severe economic hardship, such as people who have lost their jobs as a result of the coronavirus crisis,” Ms Loane said.

"The FSC will continue to work closely with our industry, the agencies and government to understand the potential impact of the package and ensure these measures are implemented in a way that manages liquidity and systemic risks.

"Accessing superannuation should not be the default response to providing income support for Australians in need over the short term, so we are pleased to see that this is a temporary measure as part of a broader income support package," Ms Loane said.

“Also, the decision to support retirees at this time by temporarily reducing minimum drawdowns and halving social security deeming rates is a welcome acknowledgement that it is inappropriate to force individuals to crystallise investment losses in a volatile market.

“We urge the government to continue working with the superannuation sector as we focus on safeguarding the retirement savings of Australians through this period of uncertainty, and look toward the industry’s role in investing to support the economic recovery effort,” Ms Loane said.

About the Financial Services Council

The Financial Services Council (FSC) has over 100 members representing Australia's retail and wholesale funds management businesses, superannuation funds, life insurers, financial advisory networks and licensed trustee companies. The industry is responsible for investing almost $3 trillion on behalf of more than 14.8 million Australians. The pool of funds under management is larger than Australia’s GDP and the capitalisation of the Australian Securities Exchange and is the fourth largest pool of managed funds in the world.

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INDUSTRY Super Australia (ISA) has acknowledged the announcement made by the Federal Government today and is ready to work through the all important detail that will enable people suffering hardship access to some of their super in an efficient way that doesn’t undermine our national savings system.

"As we have been indicating publicly, this is an issue that must be handled very carefully in order to prevent the compounding of liquidity pressures that may be faced by superannuation funds in the current market conditions, and as they support anxious members," Industry Super Australia chief executive officer Bernie Dean.

"Although industry superannuation funds were not consulted in the formulation of this proposal, we stand ready to engage with government and the ATO to make it work.

"Assisting those in financial hardship will come down to how well the ATO works with the funds, given each superannuation fund will have to manually issue the money," he said.

"Effective co-ordination from the government and the ATO will be vital to ensure the scheme works efficiently and does not frustrate people further, remembering that the workforce of many funds are working remotely just like other affected businesses. 

"Aside from getting the details right, we need a commitment from the government to transparently report the scheme’s applications and any issues encountered. The scheme should also be reviewed as it is rolled out to ensure it will not hamper funds’ capacity to support the macro economic recovery."

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