Jobs and Skills Summit Accounting outcomes

Intro:
Welcome to CPA Australia's With Interest podcast, bringing you this week's need to know information for businesses and accounting professionals.

Jane Rennie:
Hello, and welcome to CPA Australia's With Interest podcast. I'm Dr. Jane Rennie, General Manager Media and Content at CPA Australia. It's Tuesday, the 6th of September. This is the second of two With Interest episodes discussing outcomes from last week's jobs and skills summit. The first of these episodes discussed business outcomes. In this episode, we're going to focus on outcomes for accountants. The national skills shortage is especially pronounced in the accounting profession. Latest Seek data shows that accounting jobs advertised on Seek increased 34.3% in the year to June, 2022 and 4% over that month alone. Joining me to provide an expert perspective on what the summit delivered for accountants is Mitch Ajduk. Mitch is Senior Manager of Recognition Standards at CPA Australia, and heavily involved in CPA Australia's advocacy activities around the accounting skills shortage, skilled migration and recognition of professional standards. Welcome to With Interest, Mitch.

Mitch Ajduk:
Thanks for having me, Jane.

Jane Rennie:
According to the OECD's most recent economic outlook, Australia is grappling with the second worst skill shortage in the world. In terms of accountants, we know from speaking with our members that for many practises, this is their number one concern right now, but Mitch, in your words, just how bad is the accounting shortage in Australia now?

Mitch Ajduk:
Look, Jane, I think the accounting shortage that we're seeing at the moment is something we haven't seen before. We know that unemployment rate in Australia is at its lowest it's ever been. We all know that our borders have been closed for a substantial period of time and have now just started reopening again, and we've also seen things around limited skilled migration coming in. This is really kind of impacting, I guess, the availability of accountants in Australia and when we've got increasing demand, because we need a broader skill sets of accounting professionals, we're also seeing challenges from our members trying to find mid and senior level experience accounting and finance professionals. And when we balance this with I guess the supply and the demand, applying those core economic principles, it just doesn't match up. There is an accounting shortage and we need to make sure we're taking action to address this.

Jane Rennie:
And that shortage is exactly why the government invited around 150 industry, sector, and union representatives to last week's summit. The intention wasn't to get everybody in the room, but to have a range of interests represented. I know ahead of the summit CPA Australia engaged with the government in multiple forums and that helped shape the agenda. Can you share with us to the extent that it's not confidential, a little bit about CPA Australia's involvement in pre-summit consultations?

Mitch Ajduk:
Yeah, absolutely. CPA Australia regularly engages with the federal government through consultations and submissions on aspects such as accounting shortages, and we've done that through our budget submissions at a state and national level, and we've also done it through our submissions on the migration programme planning levels. If we look more recently into the work that's gone into the job summit, we've actively kind of engaged with the federal government at round table discussions where our CEO, Andrew Hunter, was represented and talked about the challenges facing the profession from a skills perspective. And we've also continued to share our policies and asks with different ministers and representatives.

Jane Rennie:
Well, I'm curious to know a little bit then about how the agenda and the speakers were organised because it felt like on day one, there was lots of talk about industrial relations and TAFE places, but not so much about the issues affecting highly skilled roles. So what can you tell us about the agenda?

Mitch Ajduk:
Yeah, so the agenda, I guess, was developed based on a lot of the kind of pre consultations that had already happened. And what they'd come up with in the agenda was five kind of broad themes that wanted to be covered across the two days. There was structured panels and discussions that were held with presentations from different representatives during the two days and the five themes that they looked at really focused on how can they maintain full employment and growing productivity, looking at boosting job security and wages, lifting participation and reducing barriers to employment, looking at how can high quality labour be delivered through skills training and migration, and then also we maximise the opportunities for industries in the future. And I guess whilst the first day did kind of focus more on maximising that full employment and productivity, the highly skilled focus really started to come into play on day two where we looked at migration and maximising the labour force contribution.

Jane Rennie:
And in terms of the highly skilled issue, was the accounting profession discussed specifically during the summit or only in that broader context of highly skilled employees?

Mitch Ajduk:
Unfortunately, the accounting profession wasn't specifically discussed, but when I guess we look at it, the broader issues that were being addressed as part of the summit were still highly relevant for the accounting profession. And it's important that we discuss those higher issues so that they can contribute to alleviating the shortages that many of our members are experiencing.

Jane Rennie:
So does that mean you are comfortable with the shortage in accountants was captured then in the discussion of highly skilled migrants?

Mitch Ajduk:
Yes. We're comfortable that they were covered. However, we still want to see more that needs to be done as part of the outcome from the summit to ensure that those shortages continue to be addressed.

Jane Rennie:
I'd like to put you on the spot by getting your sense of whether the summit was useful because before things got underway, some commentators derived it as just being a talk fest and Prime Minister Anthony Albanese also watered down expectations by stating it wouldn't aim for anything as ambitious as Bob Hawke's landmark 1980s prices and incomes accord. In practical terms to start with perhaps, what was CPA Australia hoping to see from the summit in terms of the accounting profession?

Mitch Ajduk:
Yeah. From the summit, I guess what we were really looking to see was first making sure that we got appropriate coverage of the skills shortage that was impacting the accounting profession. And then when we dug down into some more of the specifics, we wanted to see an increase in the cap of the highly skilled migrants due to their importance to the economy, in terms of participation. We also wanted to see a broader review of the migration programme to improve efficiency in the way that visas are processed to look at the pathways to permanent residency, to make sure that we're putting the right focus there rather than focusing on the temporary workers there as well. And we also wanted to make sure that there continued to be a focus on training and education to support, I guess, the homegrown skills that are needed to address skill shortages.

Jane Rennie:
Did it deliver them? Does it get your tick of approval?

Mitch Ajduk:
I'll say that I'm encouraged by the discussions that were held and there definitely is some momentum there, but I think it's important that we don't lose that momentum and we need to kind of continue to follow up and engage with the government on those outcomes.

Jane Rennie:
And I think encouraged is probably a good word because there is no single solution to the accounting shortage, but there are many areas for improvement. What were some of the solutions proposed during the summit to address the highly skilled shortage in Australia?

Mitch Ajduk:
Some of the solutions that came out of the summit focused on increasing the migration cap for migrants by 35,000 to 195,000 are for this financial year, which is great to see that kind of immediate change happen. There was things to extending visas and relaxing work restrictions for some different categories of migrants and also the investment into Australia's visa system as well, to accelerate processing, to try and bring the migrants in. If we look at some of those other initiatives that also came out, there was a number of initiatives to maximise jobs and opportunities for women and people with disabilities to increase their participation and also additional funding from a federal and state level for fee free TAFE places in 2023.

Jane Rennie:
And I'll focus now on the migration proposals that were put forward, because I guess really in terms of TAFE places, that's not where accountants do receive their training as much. Skilled migration though, it's not the solution to everything, but there's no doubt that it does play a big part. We know that COVID led to a collapse in net migration over the past two years and federal budget papers estimate that it will take until 2024-25 for net migration to return to the pre pandemic trend. Other estimates though put the deficit as being higher and lasting longer. So the increased cap is great in migration, but here's the issue I have, Mitch, and what I'm hoping that you can shed light on. The borders have in fact been open to skilled migration since December, 2021, but that doesn't seem to have made much of a difference. And also accountants were added to the priority migration skilled list in June, 2021. Yet, if anything, the problem has just gotten worse. What is stopping accounting professionals from migrating to Australia?

Mitch Ajduk:
I think there's no easy way to put it Jane, other than to say we're in a global war for talent. We have countries trying to steal skilled migrant migrants from each other. We have firms that are competing against each other for skilled migrants, and then even within own service lines of companies, they're trying to find skilled migrants and bring them in. And what we also have seen, and I guess what's stopping accounting professionals from coming to Australia is the attractiveness of Australia itself. We have a migration system that is broken as a result of years of neglect. And that's I guess really kind of seen through the complexity in our visas that we have.

Mitch Ajduk:
There's over 70 visas with different criteria. I'm not even sure how you navigate that. That's a minefield in itself, but then we also have our pathways to permanent residency, which are extremely difficult and quite time consuming to go through. And what that means is that we tend to, from an economic perspective, encourage more temporary workers than permanent workers, and this is really contradictory to, I guess, trying to help maximise the economic participation that we want to see.

Jane Rennie:
And I guess no one really wants to be seen as holiday labour or a temp when you're talking at the highly skilled end of the market. You mentioned delays, can you shed some light on just how slow the processing times are for some of these visas?

Mitch Ajduk:
Yeah, absolutely. And I think I'm going to steal a couple of the statistics because I do like a few statistics, that were shared at the actual summit. And if we go back to when there was a change in government in May this year, there was one million visas in the backlog. One million, that's a lot. And whilst now that might have dropped down by a hundred thousand to 900,000, it's still a significant amount that's in there. If you then look, I guess at skilled permanent visas, on average, this was taking over 24 months for 90% of those applications to be processed. That's a significant amount of time to get highly skilled labour into Australia and into some of the regional areas where we're talking places that could be like Ballarat or Bendigo or those places. And then if we look at employee sponsored, we're talking about 75% of those are not being processed within six months. So we're still struggling to get the temporary workers in to meet a kind of seasonal demand within the accounting profession.

Jane Rennie:
Let me see if I've got this right. I pick from the 70 odd types of visas that you've mentioned, but then it could take two years from the time I submit my application until it's processed and possibly even longer, if I need to provide additional information or I've made a mistake in the application. Is that right?

Mitch Ajduk:
Yeah, absolutely right. That's just the visa processing. There's a number of other steps, whether it's having to get English tests or provide, as you said, provide further information. That's assuming that all goes well, you'll get processed within that time.

Jane Rennie:
As you've said, Mitch, it is a global war for talent. I'm guessing if I know it's going to take some two years to get my visa processed, I might look at other countries which have simpler visa processing or quicker, or have made a greater investment in terms of processing visas quickly. Would that be right?

Mitch Ajduk:
Yeah, absolutely. And this is, I guess the other challenge that's stopping accounting professionals from migrating to Australia. We're not attractive when we do have a system that is broken. People will go to a country that can process their visa faster, that can guarantee them a secure job as well.

Jane Rennie:
But the summit did deliver then a bit of a win. I think you mentioned this earlier, essentially the government acknowledged these systemic issues by promising new funding and extra staff. What can you tell me about that proposal or announcement?

Mitch Ajduk:
Yeah, I think this was great to get this bit of a win for the profession for us. So what we saw was there was an increase in funding to the Department of Home Affairs of about 36 million to support its visa processing. What this will mean is that they will be putting in an additional 500 staff to try and clear that big backlog of 900,000 visas. But I think it's also kind of important to where that whilst this will go some of the way, we need to make sure that they're continuing to invest in broader systemic changes to the migration programme that do favour those things like pathways to permanent residency and making sure there isn't complexity or bureaucracy in the system as well.

Jane Rennie:
And I was just going to ask you about sufficiency because some 36 odd million or 500 new staff against a backlog of 900,000 visa applications waiting in the pipeline, that might not be sufficient really, might it?

Mitch Ajduk:
It might not be sufficient. I think time will kind of tell there. I think it's important to recognise that they have already put some staff on in this space and I think ... I'll probably get the number wrong, but it's about 180 staff already since they have started government. But yeah, we need to continue to watch that. And I think when you have got positive indicators going out to migrants, particularly the highly skilled ones, that Australia is open for business, we have increased our cap, we've got increases in limits for states that we will see more applications coming in, which is great for us, but we need to make sure we can process them as well.

Jane Rennie:
It certainly does sound like progress. I'm wondering other than migration, what other strategies were explored to deal with the highly skilled shortage in Australia? Because I assume that we are not just going to focus on stealing talent from overseas.

Mitch Ajduk:
No, absolutely not. I think it's important to recognise that migration really isn't just that sole solution. We need to tackle these issues and particularly for the highly skilled shortage on multiple fronts. And this is where some of those other outcomes from the summit come in, and there's different aspects that we're kind of looking at. We obviously have an ageing workforce that's in place at the moment. There's allowances for those that may be highly skilled in their area to continue to work a little bit longer by providing them kind of upfront temporary income, to make sure that their pension won't be reduced too soon. There was also kind of further enhancements to reporting standards, which looked at improving gender equality in the workplace and trying to support greater women representation, and then there was also other aspects around working to improve disability employment outcomes by connecting smaller businesses and employment service providers and job seekers with disability.

Jane Rennie:
So now that the summit is done and as we've noted, that was really only one of a large number of round table meetings held with different stakeholders all around the country, what practical action are you hoping to see from the government to address the accounting skills shortage?

Mitch Ajduk:
For us, I think what I want to see is that immediate action on migration outcomes and relief to businesses where it becomes, I guess, related to highly skilled migrants and accounting professionals. We need to make sure, I guess, that there is dedicated funding available to support the outcomes that have come from the summit and this needs to be in the form of increased funding to home affairs, for visa processing, it needs to be making sure there is the commitment to the migration programme planning levels. It needs to ensure that the budget really does reflect things like the funded TAFE places as well.

Jane Rennie:
And the budget in October, that would seem the likely place for the government to, if you like, put its money where its mouth is. If some of these things you've mentioned aren't mentioned in the budget, what then?

Mitch Ajduk:
Well, I think that's a bit concerning if some of these initiatives aren't in the budget. It kind of shows that there may not necessarily be that commitment that we'd hoped for and a reflection of the consensus that had occurred from the summit. From our perspective, then that's something we need to look at and how we continue to push the accounting shortages and the work that needs to be done there.

Jane Rennie:
So what's CPA Australia going to do now in terms of continuing to advocate and I guess put pressure on the government to implement these and other solutions to the accounting skills shortage?

Mitch Ajduk:
Look, CPA Australia will continue to consult with the government on accounting shortages as it's kind of been our position over the past few years, and obviously make sure that that revised federal budget does include the relevant commitment to support the outcomes from the job summit. With the employment white paper consultation opening up later in the year and then being released next year, we'll obviously continue to make submissions into this to ensure that the accounting skill shortages are appropriately addressed

Jane Rennie:
Well, that's all we've got time for today. Thanks very much to our guest expert, Mitch Ajduk. Don't forget if you haven't listened to part one of our jobs summit discussion looking at business outcomes, that episode is available on your favourite podcast app. And if you'd like to know more about CPA Australia's policy positions, links to CPA Australia's CEO, Andrew Hunter's pre and post summit media statements are available in the show notes. With Interest is a weekly podcast. If you like what you've heard today, why not subscribe on your favourite podcast app so that you'll receive notifications when new episodes become available? From all of us here at CPA Australia, thanks for listening.

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