Question:
Our banks: Dance of the drones
Answer:
Recent changes are outlined below:
July 1, 2022
- Loss carry back for eligible companies extended to cover 2023 income year.
- Professional firm profits diverted to the professional's spouse or other associates to be reviewed under new Tax Office guidance.
- Corporate collective investment vehicle legislative regime introduced.
- Temporary full expensing of depreciating assets extended to include 2023 income year.
- Depreciable assets of a company joining a tax consolidation group have tax costs setting rules modified for assets depreciated under temporary full expensing rules.
December 9, 2021
- Reduced Pandemic leave disaster payment of $750 per week made available through to 30 June 2022.
August 5, 2021
- COVID-19 Disaster Payments are non-assessable non-exempt income in 2021 income year and later. Payments phasing out as vaccination rates increase.
July 1, 2021
- New Investment Engagement Service launched for businesses planning significant new investments in Australia.
- Tax Office small business independent review service made permanent for businesses with turnover < $10m, for income tax, GST, exercise, luxury car tax, wine equalisation tax and fuel tax credits. Requested before amended assessment issued.
- Small business income tax offset for individuals increased to provide a reduction of 16% for a tax payable up to $1,000.
- Self-managed superannuation funds can now have six members, increased from four members previously.
July 1, 2021
- Some COVID -19 state and territory business grants received by small and medium enterprises are non-assessable, non-exempt income for 2021 and 2022 income years.
- Certain state, territory and local government financial support for individuals and businesses suffering COVID-19 impacts made exempt where businesses have turnover less than $50 million and only in eligible programs.
March 31, 2021
- JobKeeper payments scheme ended.
October 5, 2020
- Boosting apprenticeship commencements subsidy (up to 50% of apprentice's wages) is assessable income.
June 4, 2020
- Homebuilder grant for new home or substantial renovation construction is not subject to income tax.
April 1, 2020
- COVID-19 cash flow boost payments are not subject to income tax
In a recent article for SmartCompany.com.au, Christopher Tipler illustrated current Australian bank behaviour as being like the “dance of the drones” where people place an over emphasis on process rather than outcomes. With an over emphasis on complying with regulations and the pretence of best practice there is lazy commercial thinking.
He lists some quite irrational behaviour from our banks that will probably be familiar for most readers:
+ Refusing to accept the credibility of well developed business plans;
+ Having no regard to the long-standing relationship between the business and the bank; “loyalty” seems to mean nothing;
+ Requiring loan advances to be fully secured by real estate and director’s guarantees;
+ Reluctance to consider working capital as security;
+ Attaching onerous covenants with short term horizons;
+ Complex approval processes with faceless credit managers overriding the bank relationship manager;
+ Excessive documentation;
+ Large establishment fees; and
+ Excessive penalty interest rates.
We would add another item to this list: Onerous fixed and floating corporate charges despite director’s guarantees and loan amounts being fully secured by real estate.
Mr Tipler further recommends some steps for small businesses to take in these difficult times:
1. Focus on selling harder, reducing cost and cutting back on working capital to generate funds from trading;
2. Improve the presentation of your business case when applying from credit. He suggests using accountants to help put together your submission; and
3. Consider debtor funding (or factoring)
.SmartCompany.com.au, http://corpusrios.com/
