Australian accountants are becoming increasingly worried about the state of the Australian economy, as financial stress continues to mount for the businesses they work with.
This is the key takeaway from a survey of nearly 200 members of professional accounting body CPA Australia, which is calling on governments to better consult with the industry when designing COVID-19 support payments to get financial assistance to SMEs faster.
The survey, released today, has revealed that around half of those accountants are “fairly” or “extremely” worried about the state of the Australian economy over the next three months.
A similar number said they are also worried about the economic outlook over the next six months, while only 20% of surveyed accountants said they feel “fairly” or “extremely” confident about the economy over the same time frame.
While accountants located in locked down areas were generally more worried about the economy, there was not significantly higher than those in non-locked areas. CPA Australia chief executive Andrew Hunter says this suggests that “lockdowns create a lot of referred pain for businesses no matter where they’re located”.
The findings — taken from a poll conducted between August 9 and 15 — are the first data release from an Australian-first longitudinal survey being undertaken by CPA Australia to track the economic and business sentiment of accountants, in relation to the National Cabinet’s recently agreed-to COVID-19 Response Plan.
Hunter said the survey will provide important insights into how the national response plan is affecting businesses and the economy, as accountants are “in the trenches with Australian businesses every day during COVID-19”.
“This survey will serve as a canary in the coalmine,” he said.
“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.”
More than half of the accountants surveyed by CPA Australia reported feeling confident in Australian businesses’ performance over the coming months, however, they said many clients are currently experiencing high to very high levels of financial stress.
In particular, more than half (54%) said they expect the businesses they work with to experience difficulties paying their debts over the next three months.
Enquiries from businesses in financial distress have increased in the past month according to 46% of surveyed accountants, including in areas that are not under lockdown.
Unsurprisingly, uncertainty around lockdowns was cited as the leading cause of pain for businesses. This was followed by attracting and retaining staff and the vaccine rollout.
Communication and consultation needed
Almost three quarters of the accountants surveyed were also either “unclear” or “unaware” of the National Cabinet’s COVID-19 recovery plan, which Hunter says demonstrates a “communications problem” on the federal government’s behalf.
Accountants play a critical role in helping businesses prepare for the possibility of future lockdowns or restrictions, said Hunter, and therefore understanding how the government intends to respond to future COVID-19 outbreaks is essential.
At the same time, Hunter tells SmartCompany greater collaboration between government and the accounting profession when designing business support programs would help avoid lengthy wait times for businesses who need urgent financial assistance.
“At the moment, the balance is tipped too far in favour of governments unilaterally designing such programs,” says Hunter.
“We’ve currently got members who are unable to lodge business support applications because there are still dozens of questions about grant requirements unanswered by the relevant authority.”
Instead, if they consulted early, accountants could provide a “practical perspective” on how best to design business support grants, says Hunter, which would allow for support to get to businesses early and for roadblocks to be avoided.
Based on the results of this first survey, CPA Australia is also calling for business support programs to be delivered on a national level, rather than by state or territory, and for the federal government to conduct a business education program in relation to its National COVID-19 Plan.