At a glance
- The JobKeeper package, delivered between March 2020 and March 2021, was one of the largest fiscal packages in Australia’s history.
- The continuing business support from the government following the closure of the JobKeeper program co-opts the accounting and finance profession into the delivery of essential public services.
- The ongoing pressure on tax practitioners and finance professionals highlights the need for closer collaboration on government-run support programs at early stages.
By Elinor Kasapidis
Designed to keep Australians connected to their jobs in the face of significant uncertainty, the JobKeeper Payment (JobKeeper) subsidised payments to employees and supported sole traders throughout the early phase of the COVID-19 pandemic response.
The program was delivered alongside other Australian federal and state government support measures, including the cash flow boosts, loss carry-backs, instant asset write-offs and relief from state taxes, which added further billions to government expenditures.
Announced in March 2020, JobKeeper was designed to be broad-based, accessible and temporary. The federal government chose to leverage existing systems to maximise the speed of program implementation.
The Australian Taxation Office (ATO) was nominated to administer the program, and JobKeeper used established tax concepts, reporting obligations such as activity statements, tax returns and Single Touch Payroll, as well as the ATO’s digital and compliance capabilities.
Tax practitioners were called upon to perform an essential role in understanding the program requirements, supporting all their clients, undertaking turnover calculations, preparing documentation and reporting to the ATO – often while also working virtually, in lockdowns and with their staff and clients in significant emotional and financial distress.
Behind the scenes, a diverse group of stakeholders, including CPA Australia, worked with the Treasury and ATO to help ensure that the rules and guidance were practical and as clear as possible.
These discussions resulted in program modifications such as the alternative turnover test and improved treatment of certain group structures.
The rapid release of legislative instruments and supporting products such as factsheets, website information and public advice and guidance were needed to support tax practitioners and millions of Australian businesses to assess their eligibility.
Within six weeks, the program enrolment and claims process began, with the ATO building the digital infrastructure that supported the program. It collected and checked the information provided to minimise fraud and non-compliance. However, a sizeable burden fell on businesses and their tax practitioners to demonstrate and document their eligibility to access the payments.
With almost a million declarations lodged each month, Treasury undertook a three-month review of the JobKeeper program. CPA Australia and fellow professional associations provided feedback and assistance throughout. The review resulted in a tightening of the eligibility criteria, including a shift to using actual decline in turnover and a reduction in the payment value. Subsequently, from October 2020, the number of declarations fell to about 500,000 per month. This number fell further to about 375,000 in the final three months of the program.
As JobKeeper drew to an end in March 2021, Treasury Secretary Dr Steven Kennedy PSM said, “The trade-offs that arise with any government intervention typically include speed and impact versus targeting and associated complexity, among many others. In our view, these trade-offs were well-considered, and a sensible and prudent balance was struck.”
After JobKeeper ceased, federal and state governments have continued to deliver further business support as lockdowns and uncertainty continued throughout 2021. These programs replicated certain elements of JobKeeper, with a consistent theme being the necessary involvement of tax practitioners and the accounting profession for successful delivery.
However, this approach, which co-opts the profession into the delivery of public services, does not recognise the capacity constraints and business pressures faced by practitioners, nor does it recognise the cumulative impact on them and their clients of ever-changing programs and rules.
While the ATO was able to shift back to normal operations within weeks, practitioners have experienced relentless pressure over the past two years from a multitude of new government initiatives, alongside business as usual. They continue to struggle with workloads, unpaid bills and skills shortages. The toll on mental health and emotional wellbeing has also been significant.
From the JobKeeper experience, we learn that, while the short-term economic results were positive and the intended outcomes were broadly achieved, there is a longer-term – in particular, human – cost manifesting. This is especially true for those who were “in the trenches” with their clients, going far beyond the services for which they were engaged, often without compensation.
CAP Australia resource
As Australia moves beyond lockdowns, there remains a backlog of unfinished compliance work, struggling clients, re-started work programs such as Modernising Business Registers, and the usual ongoing changes to the tax and superannuation systems at both the legislative and administrative levels.
Critical lessons that CPA Australia believes must be embedded in government policy design going forward are:
- governments must heed the advice of the accounting and tax profession when designing them into programs
- program design must consider the capacity of critical delivery partners such as the accounting and tax profession and the impact on the market for services and cost of advice
- program delivery must ensure that taxpayers and businesses are able to access support and advice in an orderly way
- policies must not create unmanageable burdens or unreasonable pressures on those who support the effective operation of the Australian tax and superannuation system
- government costs must not be externalised by passing these on to tax practitioners and business
- Federal and state governments must coordinate their programs and reforms in a way that maintains stability and minimises the costs of change for businesses and their tax practitioners.
Thank you to all CPA Australia members around the world who came together during the past two years and used their professional skills to help people, businesses and economies survive and adapt.