Treasurer Josh Frydenberg has announced that Australia’s four major banks have now agreed to provide “bridging finance” to help businesses pay their employees before receiving the JobKeeper payment in arrears each month.
“Today, I held a telephone hook-up with the four bank CEOs and the Tax Commissioner, Chris Jordan,” Mr Frydenberg said.
“They have agreed to set up, each of these four major banks, a dedicated hotline for their customers to call to receive the bridging finance necessary to pay their staff ahead of receiving that money under the JobKeeper program.”
The Treasurer’s announcement comes after businesses had expressed doubts over their ability to continue paying their workers upfront, particularly where they had taken a significant hit to revenue or have had to shut up shop, before getting reimbursed by the ATO in arrears each month.
The “one in, all in” feature of the JobKeeper scheme, which requires businesses to nominate all eligible employees, has also now caused some businesses to reconsider enrolling for the scheme because of the cash-flow implications of funding wages upfront.
Just 275,000 businesses have now formally enrolled for the JobKeeper scheme, despite more than 900,000 businesses having registered their interest in the wage subsidy since 30 March.
“Our message today is if you are a business or a not-for-profit operation that is eligible for the JobKeeper payment, as required, you need to pay your staff ahead of receiving the money from the Tax Office,” Mr Frydenberg said.
“Go to your bank, ring their hotline, ask for that support, and that support will be forthcoming.
“Importantly, they have also agreed to expedite the processing of all those applications to the front of the queue.”
Prime Minister Scott Morrison said he was aware of some frustrations in accessing loans to cover wages, but he reassured businesses that the banks would now step up to the mark.
“I am aware that there has been some frustration among businesses, in particular, in accessing bridging finance with banks,” Mr Morrison said.
“We are aware of that. I have no doubt the banks are aware of that as well and we need to be addressing that.
“I am concerned at the increasing number of stories we are getting and those issues I am sure are being raised directly with the banks, but we need those turnaround times to improve.”
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.