View from the economic trenches concerns accountants
ALMOST HALF of surveyed accountants are 'fairly' or 'extremely' worried about the state of the Australian economy, according to Australian professional accounting body, CPA Australia.
CPA Australia has commenced an Australian-first longitudinal survey tracking economic and business sentiment of accountants against the implementation of Australia’s National COVID-19 Response Plan (the National COVID-19 Plan), recently agreed to by National Cabinet.
“Accountants are in the trenches with Australian businesses every day during COVID-19,” CPA Australia chief executive Andrew Hunter said. “Surveying them as we transition through the National COVID-19 Plan will allow us to track its impact on businesses and the economy.
“This survey will serve as a canary in the coalmine. We expect to see a positive uptick in sentiment as we transition through the National COVID-19 Plan. If that doesn’t happen, it may be an early warning sign that businesses and the economy need extra assistance -- information that we can feed back to government.”
From the research, CPA Australia has developed four clear recommendations:
Business supports should be delivered nationally, not at a state or territory level.
Government should involve the accounting profession early in the design and implementation of business support programs.
Government should conduct a business education program on the National COVID-19 Plan.
Ways the private sector can assist with the vaccine roll out should be explored.
FEAR OF ECONOMIC UNKNOWNS
About 50 percent of surveyed accountants are 'fairly' or 'extremely' worried about the state of the economy over the next three months. This figure drops by less than one percent when looking at the state of the economy over the next six months. Only 20 percent of respondents are 'fairly' or 'extremely' confident about the economy over the same periods.
“Accountants in locked down areas are generally more worried about the economy than those in non-lockdown areas, but not by a big margin," Mr Hunter said. "It’s clear that lockdowns create a lot of referred pain for businesses no matter where they’re located. This highlights the challenges associated with implementing different business support programs on a state by state or territory basis.”
Confidence in the state of Australian businesses’ performance was higher, with about 60 percent of those surveyed 'fairly' or 'extremely' confident in this over the next three and six months.
Surveyed accountants working in accounting practices reported that many of their business clients were experiencing high to very high levels of financial stress. Nearly 54 percent expect their business clients to find it 'difficult' or 'very difficult' to pay debts over the next three months.
Meanwhile, over 46 percent of surveyed accountants say enquiries they have received regarding financial distress have increased in the past month. Even in non-lockdown areas, nearly 38 percent of surveyed accountants reported an increase in these inquiries.
According to the survey, the leading cause of pain for businesses was uncertainty around lockdowns, followed by attracting and retaining the right staff and the speed of the vaccine roll out.
“Governments can reduce the pain of lockdowns by announcing business supports at the same as a lockdown is announced," Mr Hunter said. "We’ve grown increasingly frustrated with failures by governments to plan for lockdowns and with red tape holding up the delivery of vital financial support to businesses.”
LITTLE KNOWLEDGE OF NATIONAL COVID-19 PLAN
Nearly three-quarters of surveyed accountants were 'unclear' or 'unaware' of the National COVID-19 Plan. This figure was lower in lockdown areas versus non-lockdown areas (66 percent to 78 percent).
“When it comes to the National COVID-19 Plan, it’s apparent that the government has a communications problem," Mr Hunter said.
“To effectively advise clients on business strategy, accountants need to understand how governments will respond to future outbreaks when vaccination rates reach 70 and 80 percent. Forewarned is forearmed. If the business community and their advisers are better informed, they can prepare for the public and social health measures they’re likely to face.”
Close to 80 percent of surveyed accountants think governments should be doing more to increase vaccinations. This figure is similar across both lockdown and non-lockdown areas.
“Many organisations, like CPA Australia, are pleased to support the vaccine roll-out in any way we can," Mr Hunter said. "We’d welcome governments exploring opportunities and engaging with business on how they can contribute.”
The inaugural survey was conducted from August 9-15 and captured the views of nearly 200 CPA Australia members working in accounting practices and Australian businesses. CPA Australia plans to conduct this survey at regular intervals as the National COVID-19 Plan is implemented.