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Concerns over the state of the Australian economy have swelled across the profession, according to a new survey, as uncertainty and economic support inconsistencies begin to reveal holes in the Morrison government’s national COVID-19 plan.
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‘Canary in the coalmine’: Accountants fear economic downturn
19 August 2021
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11 minute read
The results of a new survey conducted by CPA Australia, which aimed to track the impacts of the federal government’s national COVID-19 plan on the economy, reveal about 50 per cent of its members feel “fairly” or “extremely” worried about the state of the economy over the next three months.
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When asked about the next six months, sentiment improved by less than 1 percentage point, while just 20 per cent of respondents reported feeling confident in the state of the economy at all over the same periods.
CPA Australia chief executive Andrew Hunter said if sentiment doesn’t improve, even as vaccination rates increase, the survey’s results could offer themselves as a sign that the Morrison government may need to rethink its pandemic economic support strategy.
“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,” Mr Hunter said.
“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.”
Accountants frustrated, overworked
Business leaders and accountants across the country have grown frustrated by ad hoc state support measures, and even delays. In New South Wales, swathes of businesses have yet to receive business grants and JobSaver payments announced nearly a month ago.
These frustrations were reflected in the survey’s results, too, which found accountants working in practices report that many of their business clients are experiencing high to very high levels of financial stress.
Nearly 54 per cent of respondents expect their business clients will find it “difficult” or “very difficult” to pay debts over the next three months. Meanwhile, the rate of enquiries related to financial distress has swelled, too.
More than 46 per cent of the accountants surveyed reported an increase in the number of enquiries they’d received related to financial distress in the last month. Financial distress wasn’t limited to areas in lockdown, either, with 38 per cent of respondents unimpeded by lockdown restrictions reporting an uptick in distress as well.
As a result, accountants are shouldering heavier workloads, and higher levels of stress. Some 67 per cent of respondents reported experiencing a moderately or significantly heavier workload over the last month, while more than 37 per cent reported high or very high stress levels, and another 43 per cent said they’d experienced moderate stress over the same period.
However, the most common pain point for businesses undergoing lockdown, according to the survey’s results, is the uncertainty that accompanies it. Other challenges reportedly faced by businesses under lockdown were attracting and retaining staff and the speed of the national vaccine rollout.
Mr Hunter said state governments could mitigate some of these challenges by announcing business support measures — and delivering them — faster.
“Governments can reduce the pain of lockdowns by announcing business support at the same time 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.”
In delivering the survey’s results, CPA Australia called on the Morrison government to reintroduce a federal business support mechanism, instead of leaving it to states to design and administer.
The survey also revealed that the federal government has a “communications problem”, Mr Hunter said, as nearly 75 per cent of respondents reported either being unaware of, or unclear on, Australia’s national COVID-19 plan.
CPA Australia also called on the federal government to involve the accounting profession in early discussions related to the design and implementation of business support packages, and to conduct a business education program on the national COVID-19 plan.
“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 per cent,” Mr Hunter said.
“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.”
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