CPA AUSTRALIA  has written to the Premier of Victoria, Daniel Andrews, recommending additional support for Victorian businesses significantly impacted by restrictions on their operations.

A CPA spokesperson said the extension of Stage Four restrictions in Melbourne until at least September 28, 2020, and the conditional timeline set out in the ‘roadmap to reopening’, would have disastrous consequences for businesses, many of which have already faced at least six months of severe trading restrictions. The result of this has been a significant impact on cash flow, profitability and jobs.

"The viability of many businesses is under serious threat, and with it the jobs of many Victorians. While current business support measures such as the JobKeeper Payment and the Business Support Fund-Expansion grant may limit job cuts and business closures in the short term, their effectiveness will be severely tested over the coming months.

"Tax professionals and business advisers have been working tirelessly at the coalface for several months, providing critical support to business to ensure that government stimulus is effectively implemented. Many of these professionals and advisers work in accounting firms that are themselves small businesses and are seeing firsthand the shocking impacts the ongoing lockdown is having on business, and the personal toll, including significant mental health issues.

"CPA Australia believes that more temporary federal and state government support is needed to assist businesses until the proposed ‘COVID Normal’ stage is reached. Further, a clear and less restrictive plan for economic and business recovery is needed to accompany the roadmap period and beyond."

CPA Australia has recommended the State Government extend the following supports to businesses facing an uncertain future:

• Increase the Business Support Fund-Expansion grant from $10,000 to $15,000 for all businesses in metropolitan Melbourne, and from $5000 to $7500 for all businesses in regional Victoria
• Extend the closing date for applications for the Business Support Fund-Expansion grant until two weeks following the commencement of the Third Step of the roadmap to allow those businesses who need assistance to complete the application, the additional time they need to physically meet their accountant to apply for such assistance
• Extend the Business Support Fund-Expansion to include non-employing sole traders
• Extend the payroll tax waiver for businesses with annual taxable wages up to $3 million until December 31, 2020
• Introduce a small business concessional loan for businesses significantly impacted by COVID-19 along similar lines to the bushfire concessional loans for small business
• Establish an economic recovery advisory panel of external experts from business and academia to advise the Government of how best to facilitate business recovery and create jobs
• Incentivise small business to seek professional advice from their existing trusted adviser
• Working in conjunction with professional business advisers, increase the assistance available to support the mental health of small business owners.

The CPA spokesperson said, "In a crisis of this magnitude, an effective recovery requires the government to engage with and act on the advice of business experts outside of government as well as within, just as it is acting on the advice of medical and scientific experts in informing its response to COVID-19. The ongoing lockdown restrictions are unnecessarily limiting the ability of professional service providers, such as tax professionals and business advisers, from providing the services and advice that business so desperately needs.

"CPA Australia urges the government to consult frequently with business and professional organisations to better understand the impact the crisis is having on small businesses and those who advise them."

About CPA Australia

CPA Australia is one of the world's largest accounting bodies, with more than 166,000 members working in 100 countries and regions and supported by 19 offices globally. Core services to members include education, training, technical support and advocacy. Employees and members work together with local and international bodies to represent the views and concerns of the profession to governments, regulators, industries, academia and the community. www.cpaaustralia.com.au

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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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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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NESTLE and Australian recycler iQ Renew today announced the next steps in a trial which will see soft plastics collected through kerbside recycling and diverted from landfill.

The trial will commence with 2,000 households on the NSW Central Coast, with plans to extend it to around 140,000 homes.

With the vast majority of post-consumer soft plastic going to landfill, the trial aims to find ways to collect household soft plastic and turn it into a resource. 

Participating households will collect their clean soft plastics in a purpose-made bright yellow ‘Curby’ bag, then when the bag is full, tie it up, tag it and place it in their yellow recycling bin for pick up with their regular recycling collection. 

Tags will identify the bags and help to improve the sorting process, ensuring they can be separated from other recyclables. The soft plastics will then be shredded and become a resource for use in other plastic products, chemical recycling and energy recovery.

iQ Renew CEO Danial Gallagher said the trial aimed to test how collecting and processing soft plastics could be scaled up. 

“We are delighted to partner with Nestlé and launch the Curby soft plastic recovery solution on the Central Coast. By piloting the Curby solution, residents of the Central Coast will help demonstrate that preventing soft plastic ending up in landfill is not only possible, but simple and highly achievable,” Mr Gallagher said.

“The trial will help answer a few questions – how will the community adopt this? Can we keep loose plastics out of other recyclables? Will the bags survive the truck? Can we use regular shopping bags?

“We’ve been testing ways to separate and recover soft plastic from other items in household recycling, which is challenging for sorting facilities. This trial will allow us to test that at larger scale, with the hope of bringing much needed recycling innovation to all Australians,” he said.

Mr Gallagher said that as the trial rolled out, it is important that people not participating in the trial continue to use return to store programs for their soft plastics.

Nestlé Australia CEO Sandra Martinez said with soft plastics making up 30 percent of the plastic packaging used in Australia, the company wanted to be part of finding new approaches to boosting recycling soft plastic packaging.

“While Nestlé wants to reduce its use of virgin plastics and increase our use of recycled packaging, this won’t happen without robust collection, sorting and processing systems. Experience in Australia and round the world shows that people are more likely to recycle when it’s easy to access, and that kerbside is most successful,” Ms Martinez said. 

Ms Martinez said since the trial was first announced at the National Plastics Summit in March, the company had had many approaches from the waste and recycling industries, local governments, packaging manufacturers and other companies making packaged goods wanting to know more.

“We already know Australians want better access to recycling for their soft plastics. Seeing this enthusiasm shared by so many is encouraging, as collective action by those with a shared vision for a waste free future will be critical to solving this complex challenge at scale.”

Central Coast Council’s director roads transport and drainage, Boris Bolgoff said, "The Council is excited to be piloting new ways to recover soft plastics, using existing services and facilities at no additional cost.

“Right now more than half of Central Coast residents’ household waste is sent to landfill, with soft plastics being common due to difficulties in separating it from other types of waste and recyclables and limited markets for the product,” Mr Bolgoff said. 

“Soft plastics not only pollute our land but they also cause significant damage to our environment and marine life – which is something our residents value immensely.”

Residents in the Central Coast Council area can sign up to be part of the initial phase of the trial at curbythebilby.com.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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STOIC Venture Capital has announced it has concentrated the bulk of its portfolio toward healthcare after significantly increasing its holdings to 17 companies since establishing two and a half years ago.

Stoic Venture Capital is the co-investment Fund of Uniseed, a commercialisation fund which focuses on financing early-stage companies that emerge from member universities.

Stoic Venture Capital partner, Geoff Waring said nine of the total 17 companies were developing new drugs, medical devices and treatments. The fund recently added Ferronova to its portfolio.

“Many investors prefer software to more medical and science-based technology because of the belief lengthy regulatory approval processes, clinical trials and quality-certified manufacturing processes means a longer holding period,” Dr Waring said.

“But in doing so, they do not consider that health venture capital investors typically sell to pharmaceutical companies at the end of phase 2 trials, while software companies must wait  to sell only after the product is long in the market with significant revenues.”

Dr Waring said Stoic Venture Capital’s close partnership with university-focused investment fund Uniseed gave investors access to some of the richest opportunities from Australia’s top universities that have the potential to improve the lives of millions of people.

“These companies are bringing new solutions to billion-dollar global health challenges, from enhancing immunity to treat respiratory diseases (Ena Therapeutics), to addiction rehabilitation (Kinoxis) and hot flushes in women receiving breast cancer treatment (Que Oncology),” Dr Waring said.

“Many are at an early stage of clinical development, but we believe they are the next generation of world leading medical and scientific companies.”

Dr Waring said Stoic Venture Capital’s portfolio not only had potential to deliver investors high returns but had a double purpose of contributing to the growth of Australian medical and scientific innovation.

“We recognise Australia’s need for stronger capabilities in health care to meet the needs of our ageing population,” Dr Waring said.

“Investing in health and science today, plays a vital role in creating a whole new generation of jobs and innovation for the future.

“We are committed to supporting early-stage health and science companies through initial trials to development and manufacturing.”

About Stoic Venture Capital

Stoic Venture Capital provides financing for early-stage companies, particularly those arising from university research. Stoic is unconditionally registered as an Early Stage Venture Capital Limited Partnership (ESVCLP) and takes a collaborative approach to investing in the highest potential companies.  www.stoicvc.com.au

About Uniseed

Uniseed is Australia’s longest running early stage commercialisation fund that makes investments in research emanating from five of Australia’s leading research organisations – The University of Queensland, The University of Sydney, The University of New South Wales, The University of Melbourne and the CSIRO. Uniseed is a mutual fund, owned by research organisations, for research organisations. The fund facilitates the commercialisation of its research partners’ most promising intellectual property and secures targeted investment in resulting products and technologies. Uniseed has supported 57 start-up companies to date, being the seed investor in most of these. www.uniseed.com

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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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THE Queensland Resources Council (QRC) has repeated its call for the State Government to commit to 10 years of stable royalty taxes to make the resource industry more attractive to global investors post COVID, and provide Queensland with economic stability and job security. 

The industry has also called on the government to “dramatically improve” its regulatory processes and cut excessive red and green tape. 

Chief executive Ian Macfarlane last week launched the mining and gas industry's 'You can count on us to help Queensland recover' campaign in the lead-up to the state election to raise awareness about the sector’s $74 billion annual contribution to the state economy. 

Mr Macfarlane said the only reason resources has been able to keep the state economy afloat during COVID was because of previous decades of large-scale investment in resources projects.

“Increased royalty rates and excessive regulation during the current term of the State Government has meant long term investors don’t regard investment in Queensland resource projects as positively as they have in the past,” Mr Macfarlane said. 

“The QRC is extremely concerned the Queensland Government doesn’t understand the long-term implications of the ‘go slow’ it has imposed on gas and mining operations over the past three years.

“Big resource companies that roll out big projects work on long-term timeframes, and they don’t like surprises.

“Offering 10 years of royalty stability and streamlining regulatory practices will immediately signal to potential investors that Queensland is open for business, and will translate to thousands of jobs and opportunities for Queenslanders.” 

Mr Macfarlane said the general public would be very surprised at just how difficult it’s become for resource companies to do business in Queensland. 

“The lack of legislative consultation with the resources industry, slow regulatory and approval processes, and the barriers being put in front of us has been unbelievable,” he said. 

“We have that many hoops to jump over and crawl through, by the time we get to the other side we’ve missed 10 opportunities to give Queensland another few decades of economic stability and jobs."

Mr Macfarlane said Queensland ranked 15th in terms of investment attractiveness in the globally recognised Fraser Institute survey of mining companies and investors released earlier this year, comparing poorly to Western Australia’s number one position.

“If you’re looking for the canary in the coalmine, this is it,” Mr Macfarlane said.

“Not only does Queensland rank behind Western Australia, South Australia and the Northern Territory, we’ve got 11 other international competitors ahead of us who companies would prefer to invest their money with.

“This a terrible result for such a resource-rich state and reflects poorly on the government.” 

Mr Macfarlane said the QRC needs to see real change in the Queensland Government’s attitude towards resources in the lead-up to the state election.

“Our industry needs the Premier to commit to a stable royalty regime for the next 10 years and to world class regulation processes to enable us to do what we do best, which is running world-class mining and gas operations,” Mr Macfarlane said. 

"Large scale projects that get off the ground will lead to thousands of jobs and billions of dollars in royalty taxes for the State budget for decades, so this is an opportunity for the government to secure Queensland’s future post-COVID. 

“A balance can be struck between supporting mining as an industry, and making sure companies meet legislative requirements and community expectations around their environmental responsibilities. 

“The resource industry is ready to work with any government to achieve this.”

www.qrc.org.au

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