View from the trenches has accountants worried

• Australian-first survey tracks economic sentiment against National COVID-19 Plan.
• Many accountants pessimistic about economy over next three to six months.
• Uncertainty about lockdowns is the number one pain point for businesses.
• Lack of awareness about National COVID-19 Plan points to communications issue

Nearly half of surveyed accountants are “fairly” or “extremely” worried about the state of the Australian economy, according to Australia’s leading 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,” according to CPA Australia Chief Executive Andrew Hunter. “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.”

Around 50 per cent 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 per centage point when looking at the state of the economy over the next six months. Only 20 per cent 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. 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 around 60 per cent 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 are experiencing high to very high levels of financial stress. Nearly 54 per cent expect their business clients to find it “difficult” or “very difficult” to pay debts over the next three months.

Meanwhile, over 46 per cent of surveyed accountants say enquiries they have received regarding financial distress have increased in the past month. Even in non-lockdown areas, nearly 38 per cent of surveyed accountants report an increase in these inquiries.

According to the survey, the leading cause of pain for businesses is 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. 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.”

Nearly three-quarters of surveyed accountants are “unclear” or “unaware” of the National COVID-19 Plan. This figure was lower in lockdown areas versus non-lockdown areas (66 percent to 78 per cent).

“When it comes to the National COVID-19 Plan, it’s apparent that the government has a communications problem.

“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. 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 per cent 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. We’d welcome governments exploring opportunities and engaging with business on how they can contribute.”

The inaugural survey was conducted from the 9th to the 15th of August and captures the views of nearly 200 CPA Australia members working in accounting practices and Australian businesses. We will conduct this survey at regular intervals as the National COVID-19 Plan is implemented.

Recommendations

Based on the results of this survey, CPA Australia recommends:

1. Business supports should be delivered nationally, not at a state or territory level.
2. Involve the accounting profession early in the design and implementation of business support programs.
3. Conduct a business education program on the National COVID-19 Plan.
4. Explore ways the private sector can assist with the vaccine roll out.

Media contact

Dr Jane Rennie
General Manager External Affairs
P: +61 425 869 017
E: [email protected]