Facing a parliamentary inquiry into the government’s COVID-19 response, Treasury Deputy Secretary Jenny Wilkinson said her department was not currently looking at making any further changes to the JobKeeper scheme.
“We’re continuing to receive information from entities about bits and pieces about how the program is rolling out, but there’s nothing in particular that we’re working on at this stage,” Ms Wilkinson said.
When pressed by Senate select committee chair Senator Katy Gallagher on possible significant changes to the eligibility criteria, Ms Wilkinson was adamant that the Treasury was not considering it.
Instead, Ms Wilkinson said the Treasury was currently prioritising work on the alternate test for special purpose service entities, announced by Treasurer Josh Frydenberg last Friday.
“Those changes to the rules that the Treasurer announced on Friday would be made this week, and we’re working on defining those rules and getting them published this week so that it will provide clarity to people,” she said.
Speaking on Accountants Daily Live, Chartered Accountants Australia and New Zealand tax leader Michael Croker said the new alternative test would be important for service entities who were supplying employees to group companies.
“Treasury officials, ATO officials and parliamentary draftsmen are working flat out to get another legislative instrument ready to cater for the situation where you have inside a company group a bespoke company which provides the services of employees to other group companies,” Mr Croker said.
“What we’re envisaging here is a combination of the turnover calculation so that you take into account the turnover of the related entities.”
He added: “This is an important one because, for these bespoke service entities, that’s all they do, they just have labour and they charge out among the group companies a service fee for providing those workers to the group companies.
“Now as you can imagine, the service entity turnover is not going down while it is entitled to this constant charge, and the only way to get the turnover down would be to start sacking employees in the service entity, and no one wants that, so it is a good move.”
Mr Croker also noted that further guidance on service trust arrangements could also be on the cards.
“The other dialogue we’re having is around our profession and the use of service trusts or service companies which support the activities of accounting firm partnerships, or a law firm partnership, or engineers, or architects — it is a model that is used across a whole host of professions, so we’re looking on some news on that front as well in response to the advocacy work that we are doing,” he said.
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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.