Dr. Josephine Palmero chats with Elis Hoxha of Westwood Knight Accounting about practical ways in which businesses can work their way to recovery after experiencing restrictions and lockdown in some cases.
Helpful links mentioned by Elis:
2021 Federal Budget
Most local Councils have some sort of COVID support package so might be worth following up with your local council.
Contact Elis Hoxha at: Mobile: 0448 681 483 | Email: [email protected]
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Please send your questions or comments to [email protected]
Christy Mori (00:09):
Welcome to Gears, Action, Growth, shifting business cultures, one conversation at a time. My name is Christy Mori, and I am usually joining Dr. Josephine Palermo. Whose superpower is to transform organizations, team by team. This week, we have a special episode where Dr. Josephine Palermo is interviewing Elis Hoxha of Westwood Knight Accounting on his recommendations for small and medium businesses on post recovery after lockdown. I hope you find value in it.
Dr. Josephine Palermo (00:49):
Hi, Elis, lovely to see you. Today we have Ellis Hoxha from Westwood Knight and he’s an accountant, and we’re going to talk about everything that business owners need to know about government support and business recovery. And this is so important at the moment as businesses you know, seeing at the end of seeing months and months of restrictions and really needing to pivot again into a more recovery stage. So thank you very much for being with us today, Ellis. Really appreciate your time. I know you’re super busy.
Elis Hoxha (01:25):
Thanks for having me, Jo.
Dr. Josephine Palermo (01:26):
Great. All right, well look, I’m going to get started with the first question. Could you give people an idea of the government support that’s still available in the next few months?
Know the Government Support Available for You
Elis Hoxha (01:37):
Yeah, so as some people might’ve heard in the news, there’s been a significant amount of government support for business. So going back to May when the federal government announced the JobKeeper scheme and the cash boost scheme. So those two supports are still available. So in addition to the federal government support, the state governments have chipped in a fair significant amount as well. And obviously with the further lockdowns victorious, really contributed a fair bit as well. So from the federal government, we still have the JobKeeper scheme going. There was an extension a while back now. And in that extension, they extended the JobKeeper scheme to March. Now a lot of people think that because they didn’t register at the start, they kind of missed out. However, you still can jump into the scheme at any time.
Dr. Josephine Palermo (03:01):
Okay. That’s good to know. Yeah.
Elis Hoxha (03:03):
Yeah. So on top of that, there’s been a whole lot of different measures from subsidies to apprenticeships, the cash boosts, that is washed through the pass. So anyone that launches business activities and employs people will be eligible for that. And yeah, there’s been a lot of different other measures. The Victorian government about a month ago released their third package supporting business and also a lot of targeted support to different industries. Like the hospitality industry, the entertainment industry, and a whole raft of other measures including deferrals and subsidies to different measures.
Dr. Josephine Palermo (03:57):
So when you say deferrals, what do you mean, Elis?
Elis Hoxha (04:01):
So the state government has introduced deferrals for payroll tax, for example. Or land tax. So obviously, there’s a few different measures into that package. That was the $3 billion package. So you would have to jump on the Victorian government website and I can provide you all the links as well.
Dr. Josephine Palermo (04:27):
Elis Hoxha (04:28):
For the people listening and they can see themselves. Because, like I said, it covers a whole different raft of businesses, including sole traders, employing businesses, entertainment, hospitality, there’s grants for outdoor dining, for businesses to pivot. So there’s a lot of good stuff in there and they’re still going through. So we should say a lot of this business support going up all the way ‘til the end of March.
Dr. Josephine Palermo (05:04):
Elis Hoxha (05:04):
And after that, there was also some new measures introduced in the federal budget which will include some subsidies for a certain age range to take employed people that have not been in work. So.
Dr. Josephine Palermo (05:20):
So is that younger workers?
Elis Hoxha (05:22):
Yes, to be exact. 18 to 29.
Dr. Josephine Palermo (05:27):
Elis Hoxha (05:28):
That have been on job seekers. So there’s a few risks. Eligibility criteria there, but it does help to employ people that have been out of work in that certain age bracket, and you will get a subsidy for hiring those people.
Dr. Josephine Palermo (05:42):
What about the people that maybe weren’t able to get funding before or were rejected before? What would you advise those people to do?
Elis Hoxha (06:02):
So I advise those people to speak to their accountants straight away in saying that what with the feedback we’ve had is there’s some accountants that are not really doing much for their clients. Which is a bit of a surprise and a bit annoying because accountants are meant to be there to support their clients. So what I’ll suggest, that would be the first port of call. There’s also different websites that again, I’ll provide you the links that could be the next port of call. And the business owners can have a look at that and to see if they are eligible for any of them, or think they may be eligible, they can use that information to call their accountant or their financial advisor to say, “Hey, you know what? I think that I might be eligible for this. Can you look further into that?” So first port of call would be, hire an account. Second port of call would be, have a look at the websites. Third port of call, maybe find someone else that can help you out if you don’t understand.
Dr. Josephine Palermo (07:15):
I mentioned that because there’s a lot of different schemes and there’s been changes that something could have changed as well. So it’s kind of worth going back to maybe ask that question again, even if you have maybe not been eligible before.
Elis Hoxha (07:30):
Yeah. That’s definitely correct. I think we’re up to over $350 billion in support so far. So that is a national figure.
Dr. Josephine Palermo (07:38):
Elis Hoxha (07:40):
And businesses will be paying for that for a long time. And you know, for the next 10 years, at least. So the first measures were introduced back in, back out the end of March. That was the federal government. Then in August, the federal government extended JobKeeper. The state government on their third package. And then we had the federal budget. So in this whole time, there’s been a lot of changes. So it’s very hard to keep on top of it all. So, and you wouldn’t expect a business owner to keep on top of it all.
Dr. Josephine Palermo (08:21):
That’s right. That’s right. And that’s why the accountant is so important. But as you’re saying, not all accountants are equal. So if you don’t get the answer you need from your accountant, you need to go somewhere else, basically.
Elis Hoxha (08:35):
Yeah. Exactly. It’s very disappointing to say that in the community, but yeah.
Dr. Josephine Palermo (08:42):
Fantastic. And what are some of the ways in which you’ve seen clients sort of really use some of the support and pivot their businesses and, you know, perhaps kind of move into a more financially viable situation? What have you seen?
Go Back-to-Basics or Adapt to Technology
Elis Hoxha (09:00):
So through the whole pandemic, we’ve seen businesses be resilient and really pivot and try to earn that revenue that they missed where they would be open. So few instances we’ve seen is business have adapted to technology. So we’ve seen a lot of businesses going to e-commerce. And the other side is, we’ve seen that other side of the spectrum is people were going back to basics. So if I can share with you that there was a client of ours that is a new distributor. So they’ve gone back to providing a milk-to-your-door solution where they first started 30 years ago. So they brought back the milkman.
Dr. Josephine Palermo (09:57):
Wow. That’s fabulous.
Elis Hoxha (10:00):
Yeah. It’s fantastic to see. And I’ve used the service myself and it’s really great to see that person handing over your milk and your dairy products and staying away from the supermarkets. And in the business adaptation, it’s not just e-commerce, but we’ve also seen the fitness industry, for example, going to online classes and successfully do that. And I’ve seen that first hand from mine. So technology and going back to basics, I think are the two areas that business has really adapted a third area and with government support. The government is really trying to push businesses to outdoor dining in the hospitality space. So with some government support as well. So I think in the next 12 months, we’ll see a lot more outdoor dining in Melbourne.
Dr. Josephine Palermo (11:00):
Yeah. Which will be wonderful for the vibrancy of the city. We’ll just have to get used to the cold weather when we’re doing that.
Elis Hoxha (11:10):
We’re doing that in the fall season, too.
Dr. Josephine Palermo (11:11):
That’s right. The umbrella has to be handy. But yeah, so that support will come in the way of grants that help businesses create that space outside. Yeah.
Elis Hoxha (11:23):
Yep. Then there’s some government support there from the Victorian government as like now the $3 billion package in about a month ago and that’s life there and it hasn’t expired. So if there’s anyone out there in the hospitality space that has a restaurant and has the capacity to do outdoor dining, they support there. Yeah.
Dr. Josephine Palermo (11:48):
Yeah. Okay. And when we talk about different industries, Elis, I know that some industries have been affected in different ways through the whole, you know, through this whole kind of pandemic experience. And I’m sure that will continue because we’re obviously going into the, you know, we’re still in the impact of that and the aftermath of that impact. What do you think are some of the industries that maybe have performed better or will perform better in these circumstances?
Elis Hoxha (12:18):
Yeah, and another very interesting thing that we are saying. There’s been certain industries that have really thrived and performed much better than before the pandemic. One industry is the food industries. So when we eat, there’s a lot more people staying at home, borrowing food from the supermarkets. It’s the supermarkets, the butcher shop, or the fruit and vegetable shop. And that goes back to the farmer. The agriculture industry, the food industries are really doing well, farmers are getting better prices for their product. And it is great to see you know, these industries really doing well in the middle of the pandemic. So, yeah.
Dr. Josephine Palermo (13:11):
Yeah, exactly. And are there any industries that you feel like are being left out?
Elis Hoxha (13:18):
Left out of the funding and stuff like that? No, not really. I think the government have really done well. Especially the federal government, have really done well with their support. So there hasn’t been any discrimination. I think they ended up pulling out childcare centers out of the JobKeeper scheme. So I didn’t really quite understand that or why they’d done that, but I think that’s the only industry that we’ve seen that have been left out of something.
Dr. Josephine Palermo (13:54):
Right. And just in that, I guess you know, even with support, there’s still been quite a lot of pain felt by business and a lot of anxiety about the future, et cetera. How do you see the future for small and medium-sized businesses?
Strategize Your Business Location
Elis Hoxha (14:13):
Yeah, it’s interesting you note that because at the start of the pandemic, we were working seven days. We had clients going in every day because there was a lot of uncertainty. And then as the government support came out, businesses, they felt much better about the future. Unfortunately, I feel it’s going to be a long recovery. It’s not going to happen straight away. We might get that initial burst. However, I think small to medium business will suffer for a long time. But on top of that, in previous recessions, what we have seen is regional areas thrive. So people do tend to move away from the city. So regional area property businesses do tend to do a lot better than the city. However, as I mentioned before, the government has done, especially the federal government, have done really well with the government support. So I do think we will be much better off than other countries that are probably on the same level as us. The UK, Canada, the U.S., I think we will come out of it better than those countries. However, we will see the effect of COVID for a long time.
Dr. Josephine Palermo (15:43):
So I guess it’s a matter of feeling a little bit cautious, but really understanding that there’s a lot of support and we can make use of that support, and that with everyone being supported, there’s still going to be an economy that is buoyant in some ways. It’s kept buoyant. Kept afloat, maybe.
Elis Hoxha (16:05):
I think so. And the other thing is, this is really made to adapt to the situation as well. So I think what we will see is, we will see that, I guess, online presence. We might see a hybrid, so businesses really need, you know, any shortfall in revenue. We need to find that through services or so businesses really need to stay on their toes and utilize those other revenue streams to catch up on that missed revenue. So I think that is a very important point to make.
Dr. Josephine Palermo (16:48):
Yeah. I agree with you, Elis. It’s actually something that I’ve been thinking about too, in terms of when you know, for my business, when we came into sort of the height of the pandemic, when it first started, the first thing I was thinking about was how do I recover? I just have to kind of bunker down and recover, but now I’m thinking if I actually take my eye off the growth ball, if I take my eye off opportunities, I’m going to miss opportunities to grow as well. And so there’s a kind of conflict in a way, because I need to get back to where I was, but I also need to make sure that I’m still looking for those new opportunities.
Elis Hoxha (17:30):
Yeah, exactly. Right. You know, there’s the travel industry will have to look at promoting to the local you know, the Victorian travel industry will have to look to Victorians and such, instead of counting on the international people coming through. And obviously Victorians hopefully will stay in Victoria and spend money in Victoria to help those businesses, as well.
File for Support for Sole Traders
Dr. Josephine Palermo (18:04):
Yeah, exactly. Exactly. Before we wrap up, Elis, I wanted to ask you a question. Just going back to something you spoke about before, because you mentioned there’s some new support for sole traders and it would be remiss of me not to talk about sole traders. So can you just go into a little bit of detail in terms of what you think people who are sole traders or sole entrepreneurs need to be aware of and in terms of, you know, what the outlook is for them?
Elis Hoxha (18:32):
Yep. I think with sole traders, so going back to that grant, it’s a $3,000 grant from the state government. There’s a few eligibility criteria to that. You have to be registered for GST and you have to be leasing out a property of some sort of company. So that’s the catch there. If you don’t meet that criteria and you are a sole trader and you employ sole traders, so there’s some sole traders that employ people. There’s other support there for you as well. So there’s a business support grant of $10,000 grant from the state government. On top of that, I think with sole traders, like any other business, they will have to adapt and try to get back on their toes as quickly as possible. But one thing is a lot of the sole traders in the building and construction industry, and it’s one of the industries that we’ve seen that hasn’t been impacted as much. So hopefully we see them get back on their toes quickly.
Dr. Josephine Palermo (19:41):
Oh, okay. Is that right? So you haven’t really seen the slowdown in that sector at all?
Elis Hoxha (19:47):
No so I think building and construction were only really restricted in the last roll out of restrictions. And even then most of them were able to still work in the building and construction industry. So it’s good to see because, you know, they are the backbone of our economy.
Dr. Josephine Palermo (20:20):
Elis Hoxha (20:22):
And I think the first home buyers grant has been helped through the federal government. So they’re actually $25,000 if you’re built. So that’s a total of 35 grand in Melbourne and 45 grand in regional Victoria. So that has really boosted the building construction industry. I’m originally from Shepherd. And so just talking to people back there, there’s no land available in Shepherd.
Dr. Josephine Palermo (20:56):
Is that right?
Elis Hoxha (20:58):
Exactly right. So the property market there is red hot, and then we look back in Melbourne, it’s a completely different picture. And we’re talking to some building companies there, they’ve sold the amount of houses they sell in the year in a month. So I think it will be a very busy period in the next 12 months for that particular industry.
Dr. Josephine Palermo (21:23):
So maybe a lot of green changes. So interesting that that’s the other way of adapting, isn’t it? Normally, for example, if you weren’t thinking about regional Victoria, now’s a good time to start thinking about it.
Elis Hoxha (21:36):
Yeah, of course. Yeah. We do tend to see that in previous recessions. the ‘85 recession, the great depression, a lot of people tend to move away from the city because it’s cheaper to live in regional Victoria. Housing is much cheaper. So that is just a consequence of recessions and that happens every single time. So.
Work from Home
Dr. Josephine Palermo (22:03):
And I guess the other trend that’s been accelerated is the working from home trend because we actually have, you know, the internet enabled household now. And so that’s probably another reason why regional Victoria becomes a viable solution for people as well.
Elis Hoxha (22:23):
Well, you know, I look at myself in the last six months, so I haven’t seen a client. So it doesn’t matter if I was in Melbourne or Hong Kong, I can still work. So I think that will mean that a lot of people, if they can work from home or work from a space that is not close to their principal place of employment, they will do that if it’s a cheaper solution.
Dr. Josephine Palermo (22:52):
Yeah. So there you go. And that’s a great plug for co-working spaces like our spaces. But in all seriousness, I think it’s interesting. It kind of goes back to what you were talking about before. Adapting is actually about kind of taking up new technologies, but also going back to basics. And I think working close to home or working, you know, in your neighborhood, or at home is about kind of going back to basics anyway. You know, not spending the time, and the stress, and the money on commuting, not kind of having a smaller environmental footprint for ourselves as well. So there’s a benefit to that.
Elis Hoxha (23:33):
And yeah, exactly. Right. So I think yeah, you’re on the money there.
Dr. Josephine Palermo(23:45):
I hope so. Alright. Well, thank you, Elis. I just wanted to say, was there anything else that maybe we didn’t talk about or any advice like that you want to just wrap up on?
Adapt and Stay on Your Toes
Elis Hoxha (23:54):
Yeah, I think it’s very important for small business owners to really know what is out there and if they don’t, go and seek my advice and find out what you are eligible for. Because the government is doing a lot to ramp small to medium business up and they’ve given away money. So use that to adapt to get your business back up and running. You will need to adapt, stay on your toes and yeah, go customer services is number one at the end of the day. Yeah.
Dr. Josephine Palermo (24:35):
Those relationships. Great. Thank you so much, Elis. I really appreciate your time. I know that, you know, getting a hold of you is sometimes a bit tricky. So thank you so much. And we’ll put the links at the bottom of this video, so people can kind of go to those links and then we’ll make sure we put your details there too, so that if people want to contact you, if they’re not happy with their own accountant, we can actually send them your way.
Elis Hoxha (25:01):
Dr. Josephine Palermo (25:03):
Christy Mori (25:05):
Thanks for listening, everyone. And special thanks to Ellis Hoxha for sharing all his financial knowledge today. Let us know if this episode helped you. We really want to know, so please send us your comments and questions at [email protected] and Elis’ details for his campaign practice is in the description below. Bye for now.