Weekly Digest – 28 October 2020

Welcome back to our Weekly Digest. We hope you and your family are safe and doing well. Read on for this week’s updates and some ideas that will help us all overcome this crisis.

Australia Starts Fourth Quarter on Stronger Economic Footing

Flash Australia PMI signals faster output growth in October as COVID-19 restrictions loosen.

The IHS Markit Flash Australia Composite PMI, covering both manufacturing and service sectors, increased from 51.1 in September to 53.6 in October. This marked the fastest increase in private sector output for nearly a year, and coincided with further easing of social restrictions, particularly in Victoria.

Also, business sentiment was at its strongest for just over two years due to expectations of the economy opening up further in the months ahead.

If your business is still struggling amid the COVID-19 crisis, don’t hesitate to get in touch with us for personalised business advice.

Victoria Reported No New Cases Two Days in a Row (Monday and Tuesday)

Great news! Victoria reported 0 new COVID-19 cases on Monday after a huge testing drive.

This means Melbourne have moved out of lockdown and into the Third Step. From 11:59pm on Tuesday, Melbourne moved from “stay home” to “stay safe”, with no more restrictions on the reasons to leave home. However, the 25-kilometre limit will remain in place and the border between regional Victoria and Melbourne will remain in place for just a bit longer.
If the number of cases continues to decline, the limit will come off from November 8.

Which COVID-19 Restrictions Are Easing

Melbourne is getting a taste of well-earned freedoms this week, as there were no new COVID-19 cases found over the weekend. Here’s what the Third Step means and the restrictions that were eased:

  • Cafes, restaurants and pubs can reopen. Outdoors with a limit of up to 50, indoors up to 20.
  • Weddings can be attended by up to ten people, and funerals up to 20.
  • Beauty and personal care services can resume, and remaining retail are open.
  • Outdoor contact sport for those aged 18 and under can begin again.
  • PT, fitness and dance classes can also be held outdoors with up to ten people, and the number of people at outdoor pools can increase to 50.
  • Workplaces will no longer need to be on the permitted work list to open.
  • While the boundary is in place between regional Victoria and Melbourne, work permits will be required for those travelling between these areas.

Although restrictions are easing, each person’s responsibility remains. If you need help on how to operate your business safely, get in touch with us so we can provide you with expert business advice.

Victoria Building QR Code Check-In Tool

The Victorian government is developing a QR code check-in system to achieve gold-standard COVID-19 contact tracing.

The system will be based on the technology used in New South Wales and the ACT. ACT Health has offered to give its system to the Victorian government for free.

It is not yet clear if the Victorian system will be an app or a website. We will keep you posted as soon as further details are available.

Westpac Helps AU Small- and Medium-Sized Businesses

Westpac will be accepting applications for new and existing eligible customers for equipment finance goods loans, as part of phase two of the Federal Government’s Coronavirus SME Guarantee Loan Scheme.

Those with up to $50m in annual turnover will be offered new equipment loans with interest rates starting at 2.99% fixed for 5 years on loans up to $1 million. This comes as new research from the Westpac SME COVID-19 Response Report revealed 80% of SMEs have either reduced their spending, held off making huge purchases, or held off borrowing due to economic uncertainty.

Westpac will also waive the Equipment Finance establishment fee (usually from $450) on Equipment Finance Goods Loan applications submitted under Westpac’s SMEG offer and settled between 1 November 2020 and close of business 31 December 2020.

If you need professional assistance for your loan application, feel free to flick us a message. We can also help you consider other funding assistance you may be eligible for.

Australian Business Growth Fund Launches

The government-backed Australian Business Growth Fund has launched to ensure small- and medium-sized businesses have access to equity finance, as the country recovers from the COVID-19 crisis.

Initially, the Australian Business Growth Fund will have an initial investment capacity of $540 million, with a goal to grow the fund to $1 billion.

The government is making a $100-million investment, while major banks including ANZ, Commonwealth Bank, NAB, and Westpac have also committed $100 million each.

The fund will allow Australian businesses to apply for long-term equity capital investments between $5 million and $15 million, where they have generated annual revenue between $2 million and $100 million and can demonstrate three years of revenue growth and profitability.

If you need help in assessing your eligibility or to consider other financing options, don’t hesitate to contact us for guidance.

Claiming Motor Vehicle Expenses

The ATO allows you to claim motor vehicle expenses that are part of everyday business operations, including travelling between different business premises and visiting clients.

Common expenses include:

  • fuel
  • repairs
  • lease payments
  • insurance registration
  • depreciation

You may work out your claim using the cents per kilometre method or the logbook method.

For the cents per kilometre method, the rate is 72 cents and applies for a maximum of 5,000 business kilometres per car.

Meanwhile, for the logbook method, you must keep a logbook for at least 12 consecutive weeks and work out the percentage of business use for each car expense.

Remember to claim only the business portion of the expenses and keep records of how you calculated your claim. Alternatively, you may contact us so we can help you with your claims and ensure your compliance.

Proposed Superannuation Reform Measures

The Government has announced that it will spend $159.6 million over the next four years to implement a number of reforms to the superannuation system that will save fund members $18 billion in fees and other costs between now and 2030. The key elements of these reforms include:

  • From 1 July 2021, when a person changes jobs, their super account will be ‘stapled’ automatically to them. At the time of starting a new job, and unless a member decides otherwise, their employer will pay superannuation contributions into their existing ‘stapled’ fund.
  • By 1 July 2021, the Government will develop a new interactive online ‘YourSuper’ comparison tool, which will be administered by the ATO, to allow people to research and select a MySuper fund to manage their super savings.
  • MySuper products and other trustee-directed superannuation products will be subject to an annual objective performance test, based on net investment returns. A fund determined to be underperforming will be required to notify its members and provide them with information and tools to switch to a better performing fund

The government has not yet announced any change to the already legislated SG increases, which are due to see the SG rate increase from the current 9.5% to 10% from 1 July 2021, with further gradual increases to 12% by 2025.

JobKeeper Key Date: 31 October 2020

For the JobKeeper fortnights starting 28 September and 12 October only, the ATO is allowing employers until 31 October to meet the wage condition for all employees included in the JobKeeper scheme.

New entities enrolling for the JobKeeper will also need to enrol and submit their ‘Check decline in turnover’ form to the ATO online on 31 October. You can find more details on the actual decline in turnover test here.

Australians to Receive Tax Cuts

The Government approved $17.8 billion in personal tax cuts, quickly pushing through measures announced recently.

More than 11 million Australians and 1 million businesses will begin receiving tax relief within weeks.

Under the new tax package, people earning $48,000 to $90,000 will gain an extra $1,080 in 2020-21 from a one-off extension of the low and middle-income tax offset. Meanwhile, those earning more than $120,000 will have a permanent cut of $2,430 in 2020-21 and beyond.

If you need help with your taxes, get in touch with us so we can sort it out for you.

$800m Digital Business Plan to Drive Economic Recovery

The Australian Government has announced a Digital Business plan to enable businesses to take advantage of digital technologies to grow their businesses and create jobs in the wake of COVID-19. PM Scott Morrison and Treasurer Josh Frydenberg announced the almost $800 million scheme on Tuesday that will facilitate doing more business online in a post-pandemic world.

Under the plan, the rollout of Australia’s 5G network will be accelerated, the digital capacity of the agriculture, manufacturing, mining, logistics and financial services will be boosted, and Australians will be able to start a new business in 15 minutes using online government services.

If you need our expert advice on how you can start a business or pivot to adapt to the crisis, don’t hesitate to message us.

Major Overhaul to Bankruptcy Laws

After the major changes to the JobSeeker and JobKeeper programs, Australia’s bankruptcy laws have been overhauled, throwing a lifeline to struggling businesses amid the COVID-19 crisis.

Under the proposed changes, businesses with liabilities of less than $1 million will be able to keep operating while they come up with a debt restructuring plan, rather than be placed in the hands of administrators.

The new rules which will become effective from 1 January 2021 follows the government’s decision earlier this month to extend its temporary insolvency and bankruptcy protection rules until the end of 2020.

Supporting Apprentices and Trainees Wage Subsidy Extended

The Supporting Apprentices and Trainees wage subsidy has been expanded and extended to include medium-sized businesses who had an eligible apprentice in place from 1 July 2020.

Eligible employers will receive a wage subsidy of up to 50% of the wages paid until 31 March 2021 worth up to $7,000 per quarter, per eligible apprentice or trainee, to manage their cash flow challenges. Subsidies will also be available to any new employer who re-engages an eligible apprentice that was displaced by an eligible small- or medium-sized business.

This may be of particular interest to employers who are not eligible for the JobKeeper extension. For professional assistance in applying for this wage subsidy or any other funding assistance, feel free to contact us.

Business Resilience Package for Victorian Businesses

The Victorian government is investing $3 billion in cash grants, tax relief, and cashflow support to aid businesses hit by the tight restrictions and help them prepare for COVID Normal. The types of support included in this package are divided into three categories: Business Support, Business Adaptation, and Waivers and Deferrals.

Included in Business Support is the third round of the Business Support Fund for small- and medium-sized business ($822 million), with applications opening on 18 September 2020.

Meanwhile, Business Adaptation involves funding, tools, and resources to help businesses adapt to COVID Normal. Tax and cashflow support amounting to $1.8 billion will be provided by the government under the Waivers and Deferrals scheme.

For a detailed rundown of the inclusions of the Business Resilience Package, click here. Let us help you assess your eligibility and gain access to government support! Get in touch with us so we can schedule a consultation.

Sole Trader Support Fund

The Victorian Government has announced the Sole Trader Support Fund for eligible non-employing businesses affected by COVID-19 restrictions. Under this scheme, sole traders will receive a grant of $3,000.

Grant applications will open in the coming days and the full list of eligibility criteria will be published soon. We will keep you updated as soon as more information is available.

Government-backed COVID-19 Loans Extended

The government is extending its small business COVID-19 loans scheme until June 2021. If you need help to access these loans or you want to find out if you are eligible, don’t hesitate to drop us a message.

How to Write a Business Proposal

So you’ve found a great opportunity to sell and you need to submit an impressive business proposal to convince your potential client to grant you the contract. It may seem overwhelming at first, but you can craft this document with a bit of a know-how and a good understanding of your business and what you can offer.

Below are the basic points to be included in your business proposal:

  • Title page
    This keeps your document tidy and gives a nice first impression of how you do business.
  • Cover letter
    Your cover letter should introduce your business and your proposal. It is recommended to keep it concise, friendly, and with a positive tone.
  • Table of contents
    It will let your potential client know right away what are the points included in the document.
  • Executive summary
    Present a high level overview of the problem you’re meaning to solve, overview of the solutions you will provide, the expected result, and a call-to-action.
  • Proposal
    Identify the gap and how you intend to fill this gap.
  • Services and methodology
    Go into the finer details of what products or services can get from you to address their needs. Provide a timeline to transform your proposal to reality and share a realistic delivery plan.
  • Why hire us
    Lay out what sets you apart from other players in the industry. Let your potential client know about your experience, expertise, relevant projects you’ve worked on, and case studies or testimonials from previous clients.
  • Costs
    It is good to let the client know right on how much it will cost to execute what you proposed and what you expect the return to be.
  • Terms and conditions
    Outline what the client can expect from you and your business by agreeing to your proposal. Through the terms and conditions, you will also be able to set expectations regarding delivery dates and payments.
  • Agreement and call to action
    This section is where the client can formally agree to your business proposal. Add a gentle call to action to encourage them to sign.

In some cases, it is the client which provides the outline or template for the proposal. Regardless, when writing a business proposal, it is important to ensure that it shows your potential clients the value that you can add to their business. Be as detailed as possible regarding your plan and make it visually appealing for a positive first impression.

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