On 23 July 2020, the Treasurer released an update on Australia’s Economic and Fiscal Outlook.

The update provided details of the impact of the COVID-19 pandemic on Australia’s economy and fiscal position, taking into account the stimulus measures introduced, including the JobKeeper program.

This follows announcements on 21 July 2020 in respect of the outcomes of Treasury’s review of JobKeeper and the Coronavirus Supplement payment.

The update reiterates that the economic and fiscal outlook remains highly uncertain at this stage, and therefore presents fiscal estimates for 2019-20 and 2020-21 only. It highlights that the Government’s stimulus and support measures expenditure together with large declines in taxation receipts, has resulted in a major deterioration in the budget position.

Learn more about the economic outlook, a review of JobKeeper and support for businesses.

By Greg Travers, William Buck

Larger private groups are about to come under even more scrutiny from the Australian Taxation Office (ATO).

The ATO has announced that it’s now notifying larger private companies that they will be required to lodge the Reportable Tax Position (RTP) schedule with their income tax return for the 2020/21 financial year.

This significantly expands the tax disclosures that private companies need to make and will materially increase the possibility that the ATO will identify tax risks in a private group and select them for audit.

Private groups should view this as an opportunity to reassess the potential tax issues in their group and improve their approach to managing them.

The RTP is required to be lodged by private companies that have total business income for 2018/19 of either:

• $250m or more; or
• $25m or more and are a part of a private economic group with total business income over $250m.

This information is based on the 2019 tax returns.

Public companies and foreign owned companies are required to self-assess the need to lodge the RTP schedule for the 2020/21 income year. Large private companies will be required to self-assess their lodgement requirement from the 2021/22 income year.

There are three categories of RTP that need to be considered:

• Category A – A position disclosed in the taxpayer’s income tax return that is as likely to be correct as incorrect, or less likely to be correct than incorrect
• Category B – A position where uncertainty about taxes payable or recoverable is recognised and/or disclosed in the taxpayer’s or related party’s financial statements; and
• Category C – A reportable arrangement, being any arrangement identified and listed by the ATO as high-risk.

The company and its public officer will need to be able to demonstrate that they have a reasonable basis for the disclosures they make in the RTP schedule.

Even if no RTPs are identified, the RTP schedule still needs to be lodged disclosing this “nil” position.

In addition to the 26 Category C arrangements that public companies and foreign owned companies are required to consider, private companies will also be required to consider four additional arrangements:

• Division 7A focused arrangements, where loans are made to shareholders from subsidiary companies
• CGT focused arrangements, where assets are transferred to a unit trust prior to disposal to a third party
• Trustee shareholder focused arrangements including change of trustee and trust splitting; and
• Foreign income tax offset arrangements where a credit is claimed in respect of tax paid on a foreign income or capital gain.

These disclosures reflect the four key tax risk areas identified by the ATO for private groups:

• Division 7A (shareholder loans)
• Business sales
• Trusts; and
• International transactions.

Additionally, there are a range of other risk areas that apply to both public and private groups. Key among these is transfer pricing. If a taxpayer does not have contemporaneous transfer pricing documentation that meets the requirements of the Australian tax laws, this will need to be disclosed to the ATO in the RTP schedule.

If you need to lodge a RTP or have concerns over potential tax risks in your business, please contact William Buck.

As a Platinum Partner of WSBC, the Institute of Strategic Management (ISM) are offering all WSBC members a complimentary Business Strategy Session.

Valuing your business and understanding the direction you want your business to take is more important now than ever before.

Take some time OUT of your business to focus on the IN.

What can we discuss?

It's your business. Let's chat about what's important to you. We could consider:

• Getting back to the basics of business planning
• Understanding target profit/income planning
• Setting ideal targets
• A practical approach to building value of lead generation sources
• Aligning resources, activity, sales campaigns to achieve target sale profits
• Understanding growth model options
• Link plan to the ideal business structure

About ISM

Here at ISM, we take the time to understand your business. ISM is a Registered Training Organisation who specialise in building business capabilities through consultation, planning and tailored training to help you achieve your business goals.

We provide strategic planning, governance and leadership coaching to many organisations across an array of industries. We can also work with you in trying to obtain government funding where possible.

WSBC Members can book their free consultation by:

• Logging into the WSBC website. Once logged in, go to:
• The Members Tab (far right on the menu bar) and click on the:
• Accessing Your Member Benefits Page
• Details for consultations are listed under the Get Support section

If you have any log in enquiries, please contact WSBC Membership Manager Julie Falzon.

If you are not yet a member, click here to view WSBC's Membership Packages or to join online. For membership enquiries please contact:

Amanda Brisot  l  WSBC General Manager

M: 0421 118 441

E: abrisot@wsbc.org.au

Featherdale Sydney Wildlife Park has been delighting animal lovers of all ages since it first officially opened its gates on 22 July 1972. Originally founded by Bruce and Margaret Kubbere on the site of Margaret’s family poultry farm, in its 48-year history Featherdale Sydney Wildlife Park has grown to proudly now care for the largest collection of Australian animals in the world, with over 2000 Australian native animals across 260 species.

With a collection this large, Featherdale Sydney Wildlife Park is able to offer its guests incredible hands-on wildlife experiences, from hand-feeding wallabies and kangaroos, to the chance to pat a koala, and now even the opportunity to take a selfie with a Quokka or hand feed Australia’s smallest species of penguin, and much more!

On Wednesday 22 July, Featherdale celebrates its 48th birthday, and like many of us this year, we have had to take a different approach to celebrating our special day. No cake or party this year for us, as we know we need to maintain sensible social distancing. So, to still share some birthday joy, we are holding a 5-DAY FLASH SALE on ANNUAL PASSES to celebrate and you save over 30%!

(Sale runs from tomorrow Wednesday 22/7 until 11:59pm Sunday 26/7 - buy one for yourself or as a gift!)

The Featherdale annual pass already offers great value with unlimited entry to Featherdale Sydney Wildlife Park AND our sister park Mogo Wildlife Park, and generous member benefits including:

• No timed sessions
• No pre-booking for annual pass members (or any guest)
• 20% all purchases park-wide
• 20% off encounter bookings at Featherdale Sydney and Mogo Wildlife Park
• 20% off renewals
• 20% off guest tickets each time you visit
• Free Parking

Visit www.featherdale.com.au/48th for more information and to grab yours!

In appreciation of your support,

Team Featherdale

Blacktown City Council is finding different ways to support their local businesses during this difficult time.

The Idea

Recently, the City of Parramatta and one ward of Brisbane City Council have been promoting their local businesses through online business directory maps provided by tech start-up Spot Local. Blacktown City Council want to further develop this concept as an ongoing way of promoting their businesses. Blacktown City has some 25,000 registered businesses (the great majority of which are too small to have an online presence).

The Project

Blacktown City Council has engaged Spot Local to assist them in the development of an online interactive business directory map. This gives, particularly small business-to-customer businesses, additional exposure to promote their products and services to the local community and visitors to the area, where they might not have a website or sufficient online capability to promote themselves. Council do not expect to have the brand awareness of a Google maps, but they can over time develop a superior service for business and customers to build local usage. The intent of the business finder map is to complement, not compete with, other relevant tools.

This service will be free for those local business who want to participate.

Proof-Of-Concept

Blacktown City Council are looking to trial this service in the Riverstone/Schofields districts of their LGA over the coming months. The map above illustrates the boundary of the trial (pink line) and indicates how the map will be used.

The pilot will allow Council to identify how they can market this initiative and provide good value to both local businesses and to potential customers of this service. They hope to receive a broad range of feedback on how such a service could be improved.

These learnings will prepare Council to consider extending the service across the whole of their City.

If you like more information on this initiative, please contact:

David Somerville

Head of Economic Development  l  Blacktown City Council

E: david.somerville@blacktown.nsw.gov.au 

How can you be positive as a leader in this current time of uncertainty, without being fake?

This was the question World Class Team's CEO Diana Tapp was asked by one of her favourite clients recently, after a virtual classroom she had run on how to lead through the COVID-19 crisis.

In a follow-up coaching call, Lara (the client) was keen to talk about the notion of being positive, without being fake. She was really keen that her team would see her as being a positive leader, yet an authentic one at the same time.

In this short 3-minute video, Diana will give you her two top tips to ensure you come across as genuine and authentic without ever feeling forced or fake.

To learn more about World Class Teams and find out how you can rapidly upskill the management and leadership capacity of your people, contact them on:

P: 1300 085 248

E: info@worldclassteams.com.au

The Retail and Other Commercial Leases (COVID-19) Amendment Regulation 2020 (NSW) (the Amendment) commenced on 3 July 2020 and changes some of the rules affecting retail/commercial landlords and tenants when it comes to the impact of COVID-19.

Background

The Retail and Other Commercial Leases (COVID-19) Regulation 2020 (NSW) (the Regulation) commenced operation on 24 April 2020. The Regulation gave effect to the National Cabinet Mandatory Code of Conduct for Commercial Leases (the Code).

Key aspects of the Regulation include:

• an “impacted lessee” (that is, a tenant under a retail or commercial lease in NSW who qualifies for JobKeeper and has turnover of less than $50 million for FY18/19) is, amongst other things, entitled to re-negotiate the rent payable under their lease
• a landlord cannot take any “prescribed action” against an impacted lessee (such as eviction, termination of the lease, or calling on any security provided by the tenant) due to non-payment of rent or outgoings during the “prescribed period” (ie, a period of 6 months commencing on 24 April 2020)
• any rent negotiations must be conducted in good faith having regard to the leasing principles set out in the Code which includes:

(a) rent reductions must be proportionate to the reduction in the tenant’s trade during the COVID-19 period

(b) rent reductions must be in the form of waivers and deferrals – waivers must be a minimum of 50% of the total rent reduction and could be as high as 100% of the total rent reduction (although regard must be had to the financial capacity of the landlord to provide additional waivers above 50%)

(c) any deferred rent must be repaid over the balance of the lease term or 24 months (whichever is greater)

• the landlord cannot take any action (such as seeking to recover possession of the premises, terminating the lease or exercising or enforcing its rights under the lease through legal proceedings) unless and until the parties have attempted mediation
• any court or tribunal hearing a dispute over these matters must have regard to the leasing principles set out in the Code

New Changes

The Amendment clarifies that the onus is on the tenant to prove that they are an “impacted lessee” and they must provide the following information to the landlord:

• a statement to the effect that the tenant is an impacted lessee
• evidence that the tenant is in fact an impacted lessee

If the tenant does not comply with these requirements, the landlord is permitted to take “prescribed action” against the tenant.

The Amendment applies to any ongoing negotiations between landlords and tenants under the Regulation, but it does not apply to any concluded negotiations or to any matters for which proceedings have already commenced in a court or tribunal.

Unresolved Questions

The Amendment has unfortunately not clarified a number of other issues though including:

• what form of evidence is satisfactory to prove that a tenant is an “impacted lessee”?
• does the Regulation apply to rental arrears incurred prior to the commencement of the “prescribed period” (eg, rental arrears incurred in March due to COVID-19)?
• is the landlord absolutely prohibited from taking any “prescribed action” during the “prescribed period”, or is a landlord permitted to take such action provided it has attempted mediation?

At the time of writing this article there have been no published court or tribunal decisions regarding the application of the Regulation, thus landlords and tenants await clarification through further legislative change and/or relevant court/tribunal decisions.

More Information

Please contact our commercial law team at Matthews Folbigg Lawyers on 9635 7966 if you would like advice or assistance in respect of your rights and obligations arising from COVID-19 or any other matter relating to your business.

DISCLAIMER: This article is provided to readers for their general information and on a complimentary basis. It contains a brief summary only and should not be relied upon or used as a definitive or complete statement of the relevant law. Liability limited by a scheme approved under Professional Standards Legislation.

For decades Lowes has supported the incredible work done in the labs at Children’s Medical Research Institute in Westmead and this year it is exciting to announce that the national retailer is selling Jeans for Genes merchandise in its stores.

This year, in the lead up to Jeans for Genes Day on August 7th, Lowes we will be selling merchandise including denim phone wallets, bamboo pens, keyrings, and badges.

Lowes is a national icon, established in 1898, and still a proud family business that is 100 per cent Australian owned.

Lowes Charities Manager Jason Nicholson said they were proud to have had such a long association with Children’s Medical Research Institute to help during this vital time.

“We know that charities are doing it tough during the pandemic, so it was incredibly important to us to show our support for Jeans for Genes this year,’’ Mr Nicholson said. “As an Australian business we believe in getting behind Australians who are making a real difference in the lives of future generations.

“I have personally visited the labs at CMRI in Westmead and seen the inspiring work that is being done to find treatments and cures that can truly transform lives.

“We’d encourage all our customers to get behind this year’s Jeans for Genes campaign.’’

Every purchase made at Lowes will help the 1 in 20 children living with a genetic disease or birth defect. So, pop into a store today and show your support!

To find a store near you visit: https://www.jeansforgenes.org.au/get-involved/where-to-buy-merchandise

With so many grants up for grabs, you may not even realise that you’re eligible to apply.

There are a number of government incentives that you could be eligible to access either at a Federal, State or local level. Australia has over 3000+ grants, funding programs, tax incentives and assistance measures to help SMEs.

Many businesses have turned to government grants and funding programs as relief from the hardship of COVID-19. There’s a good chance that most SMEs are eligible for a grant they don’t know exists. In addition to the latest coronavirus measures, if you’re considering updating your equipment or wanting to expand your business, there are countless grants available.

Receiving a government grant is seen as a highly prestigious opportunity and attracts attention from investors and other funding providers. For startups in particular, being seen as ‘validated’ by the government has a positive impact on the legitimacy and influence of your business.

The facts

- Grants can be in the form of R&D tax incentives, wage subsidies, loan deferrals or cash

- Business applicant criteria is commonly small to medium enterprises (SME)

- You can claim for a range of activities including research and development, marketing, training, and exporting

- You’ll be surprised at how many industry specific grants are available

- Grants are also available from companies such as Coles, Woolworths and Mars

- Most grants have a firm deadline for application submission

You can find a grant or support program to help your business either by searching on the Australian Government Business website or speaking with your local William Buck advisor.

William Buck’s Top Pick

Research and Development (R&D) Tax Incentive

Details: This is a Federal grant providing eligible applicants with a tax offset of up to 43.5% for costs incurred conducting eligible R&D activities. The tax offset is received upon lodgement of the applicant’s Income Tax Return with the Australian Taxation Office.

Who can apply? Companies incorporated in Australia that engage in eligible R&D activities and  have R&D expenditure of at least $20,000 in an income year.

Deadline to apply: Companies must submit their R&D application with AusIndustry within 10 months of the end of their income year. As a result of the COVID-19 pandemic, applications for the 1 July 2018 to 30 June 2019 income year will be accepted until 30 September 2020.

Tip: Don’t wait until after the end of the income year to determine whether your company qualifies for the R&D tax incentive. Contemporaneous documentation is crucial and now is the time to implement comprehensive record keeping.

Click here for more information on the R&D Tax Incentive. Make sure you’re not missing out on the R&D tax break.

At a glance – other grants to consider

- The NSW Small Business COVID-19 Support Grant of up to $10,000 available to eligible NSW small business owners.

- The Cooperative Research Centre Grant for medium to long-term projects (three-ten years). They fund up to 50% of eligible grant project costs for an industry-led research collaboration between at least one Australian industry organisation and one Australian research organisation (e.g. university). Previous grants range between $7 million and $75 million. The latest round closes on 29 July 2020.

- The Export Market Development Grant for Australian exporters is a cash grant of up to 50% of promotional expenses incurred to a maximum of $150,000. Applications are due by 30 November each year.

- Recycling Equipment Rebates for NSW businesses of between $1,000 and $50,000 to cover up to 50% of the capital costs of installing small-scale, on-site recycling equipment.

- Digital Adaptation and Innovation Grants are available through most local councils to assist with website development, online presence and online sales ordering. Eligibility and amounts available for funding vary between councils. Check your local council website for more information.

- The NSW Minimum Viable Product Grant is a cash grant of up to $25,000 for NSW startups to progress from a proof of concept stage to an MVP.

Insight tips from Experts

John Spender, Director of Business Advisory

There are adjustments being made to current funding programs such as the Manufacturing Modernisation Fund with the maximum number of grants being awarded to help businesses prepare for post-COVID. There are a range of initiatives and programs that support different sectors and projects which are even more critical now. Businesses can find it overwhelming to apply but given that grants range from $25,000 to over $10m, it’s worth investing the time. Depending on your needs and what stage you’re at, whether its product development or a business transformation project, you should check if there’s a grant to help finance it.

Dr. Michelle Cull, Associate Dean, Western Sydney University

Some businesses can benefit from collaborating with other organisations or research institutions such as universities. This not only helps to pool resources but can expand your network and also lead to new collaborations. A lot of businesses are unaware that they can collaborate with their local university  to apply for grants. We have research teams that are experienced in completing and reviewing grant applications and can provide additional evidence and skills to give your project more credibility.

Alex Zinzopoulos, Senior Manager, R&D

The R&D Tax Incentive is one of the most common government grants applied for by Australian businesses and with good reason – it can provide much needed non-dilutive capital for businesses to fund their research and development activities. Despite the much-publicised increase in review activity by AusIndustry and the Australian Taxation Office, the rules around the R&D Tax Incentive have not changed. Accordingly, applicants should not be weary of applying for the grant provided they are receiving holistic R&D and tax advice – after all, it is a tax incentive.

“What you have to get ready for is surfing the disruption, as opposed to expecting the ‘new normal’”.

In this video, Michael Maness, Co-founder of Subculture and Harvard Business School’s first ever ‘innovator in residence’, explains how COVID-19 is challenging traditional assumptions across industries – sparking innovation and lasting change. Watch here.

Macquarie has been providing Business Banking solutions for over 30 years and provides SME clients with tools and strategies to grow and develop their business. You can get regular updates by subscribing to the monthly newsletter, Strictly Business by visiting macquarie.com.au/businessbanking. If you would like to find out more about how Macquarie can support you to take your business further, call Sam McCarthy at our Parramatta office on 0417 518 724 and be connected with one of our banking specialists.

This information has been prepared by Macquarie Bank Limited ABN 46 008 583 542 AFSL and Australian Credit Licence 237502 (“Macquarie”) for general information purposes only. This information does not constitute advice. Opinions expressed are subject to change without notice. No member of Macquarie accepts any liability whatsoever for any direct, indirect, consequential or other loss arising from any use of this information.