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IBA hails assistance but calls for more help

Craft Beer

The government’s Jobkeeper announcement has been hailed as “a great result” by the IBA (Independent Brewers Association).

According to the IBA, the Jobkeepers stimulus package of $130bn could deliver up to $50m into the bank accounts of independent breweries.

However, there are still potential problems for breweries and other industries, with some of them not meeting the 30% year-on-year revenue reduction required, despite being down 50% of more.

Independent brewers who don’t draw a salary and have no full-time staff are among the 1.1m people set to go without any assistance under the current subsidy. Many new business owners and brewers don’t fall under ‘traditional’ employment and so are not including in the package.

Employers who are eligible for the stimulus measure will receive a flat rate wage of $1,500 a fortnight through the Australian Taxation Office to pay to each eligible employee.
 
Employers (including not-for-profits) are eligible if: 

  • Their business has an annual turnover of less than $1bn and they estimate their turnover has or will likely fall by 30% or more relative to a comparable period a year ago (of at least a month), or 
  • Their business has an annual turnover of $1bn or more and they estimate their turnover has or will likely fall by 50% or more relative to a comparable period a year ago (of at least a month), and
  • Their business is not subject to the Major Bank Levy.

Workplace relations company Employsure has warned business owner to be cautious but optimistic.

“Employers shouldn’t rush out and start spending money until they have gotten confirmation that they are eligible,” warns Ed Mallett, managing director of Employsure.
 
“My advice for businesses across the country in the meantime is to stay in cash preservation mode as long as you can, and make sure you are able to bridge your flow of income until the payment arrives. The payments won’t start until May. You are being asked to fund the gap until then and will only be paid back in arrears going forward.”

“The scheme only applies for wages paid since March 30, so you won’t be able to reclaim wages for earlier in that month that you have already paid.

“Importantly, JobKeeper won’t suit all businesses. It suits businesses that are still operating and have the need for staff who are paid at least $1500 a fortnight. It less suits businesses in some form of shutdown, or who typically pay their staff significantly less than the $1,500 threshold.”

According to a recent study by the IBA, at present, 93% of breweries in Australia are in a loss-making position, with regional breweries hit especially hard.

The IBA’s Advocacy Project Group is working to amend the legislation, while it also continues to push for excise relief, further support from the government and a greater understanding that most new businesses operate in a different fashion to corporate business, with owners often staying off the books and an interchanging casual workforce.

The IBA is continuing to call on people to email their MPs directly to ask for action on this matter and others.

A weekly Webinar has also been set up, after the success of the inaugural one on 26 March.

One of the questions asked was about the sale of growlers. Were these to be banned, it could have considerably dire impact for breweries and brewpubs to sell beers that had already been kegged.

In response the Australian Taxation Office has released the following statement:

“The ATO recognises the exceptional circumstances the alcohol service industry is facing as a result of COVID-19 restrictions and also acknowledges that states and territory liquor licensing requirements have been relaxed to allow the sale of takeaway alcoholic beverages.

“In these circumstances, we do not propose to take compliance action in the following alcohol repackaging circumstances that would normally require you to have an excise manufacture licence and pay excise duty:

  • Where closed alcohol service venues are in possession of duty-paid kegged beer which they repackage and sell in sealed containers (such as growlers).
  • Where alcohol service venues use duty-paid alcoholic beverages to make ‘cocktails’ for takeaway sale in sealed containers.

“This applies from 23 March until 30 June 2020 to provide licensed venues with a means of selling stock on hand.”

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