Accountants on the frontline

The IPA has been tirelessly churning out information, recognising the frontline role its members play in the COVID-19 fight. Professor Conway talks about the strength shown by accountants under unprecedented conditions, the government’s efforts and the importance of staying connected. 

Q. The year dawned with fires, then we were hit by floods. Now we’re in the midst of a global pandemic. How are Aussie small businesses holding up?

If we cast our minds back to the last quarter of 2019, the emergence of bushfires, rolling into other natural disasters across the country - that being the most significant bushfire event the world has ever seen - and now those issues have been compounded by the coronavirus and an overwhelming sense of uncertainty.

There is an uncertainty not just in terms of general business continuity, but also in the sense of our own livelihoods and our freedom of movement and our capacity to actually live our lives… I think it’s just brought out this rawness, a vulnerability.

For me it’s been a case of reflecting on how vulnerable we are, not just our businesses, but how vulnerable humans really are. 

From the perspective of small business and the interactions we’re having, unquestionably they’re doing it very, very tough. Governments have made a number of changes and a number of announcements designed to soften the impact, but it’s just that overarching sense of uncertainty and almost a notion of living, not as day-to-day but from media briefing to media briefing…

Tuning in to find out what the next wave of restrictions might be. Everyone’s using the term unparalleled. I just characterise it as uncertainty.

Q. Governments have been announcing measure after measure, are you happy with what you’re seeing?

The federal government, state governments and local governments have banded together. So, governments in general, I think have been very, very swift to respond.

The measures that they are providing are direct, are targeted. And again, at levels that the nation has never seen before. To consider that a package of economic measures will pass by the Federal Parliament that amounts to something like 60 per cent of what a federal budget would be and in an emergency-sitting of Parliament with only a proportion of MPs present… I think that speaks to the fact that we are capable as a nation of acting quickly to address challenges.

As we sit and speak today, it is important to note the dynamism of this pandemic. It does seem as though the responses have been responsible. They’ve been targeted. They’ve been appropriate. And I think they do provide an element of certainty in terms of people being able to maintain a connection with employment, and for small businesses to be able to hang in there, at least for this period of six months.

People are talking about how it compares to the UK and the US, but it’s very difficult to say.

What’s quite clear is that the way the UK has operated through the minimum wage subsidy seems to have been a path that Australia has obviously gone down with JobKeeper.

The US is a different kettle of fish altogether. The issue of federalism in the US and the impact that political structure has is quite interesting to note, but in relation to Australia, I think Australia is positioned quite well.

I think generally at all levels of government, I’ve been impressed with the capacity to negotiate terms, to get outcomes and make sure that there’s some certainty being provided.

So, the challenge, as coronavirus passes and we get to either a vaccine or more effective treatment and we come out the other side, is how rapidly can we respond? And I think that’s where our effort is being focused now - to address life post-coronavirus and think about how we will assist businesses to navigate through that.

And it does come back to many of the points we’ve been making for a number of years now, about the capacity of small business to assist in this regard. And if you look at the measures that governments have announced, almost without fail, every single measure has a primary target of small business. And we’ve been saying for some time that the economic lever the government has at its disposal to navigate through issues of productivity decline, issues of major economic crisis, really does relate to small business. So, it’s been encouraging to see those measures, such as JobKeeper, and we know that members are being inundated with inquiries about all of that.

Q. Have you had much feedback from your members on how they are handling the multitude of information surrounding the stimulus measures? Accountants would be under immense pressure at the moment having to navigate through all of the government announcements. 

Accountants and tax agents are being swamped with enquiries from clients and businesses about helping them navigate through this uncertainty. I mean, the challenge that we’re seeing from our members is that there’s just so much to digest here. If we look at the just the federal stimulus measures and the quantum of information that needs to be waded through… So, what we are saying to members is, our job is to synthesise this for you, and make it available to you, obviously free, but making sure it is available so that they can then get that information to clients and businesses as soon as possible.

Now, that extends not just to members in practice, but members that are working in commerce and the not-for-profit sector as well. Every sector is affected by this. What members are saying to us is that there’s never been a more important time to have a professional membership. It is that sense of a professional safety net, a professional community insurance policy, if you like.

We’ll do that heavy lifting of crunching through that volume of information provided by governments to say, “Right, here’s what you need to do. Here’s what you need to know. And here’s how you can provide that service to your clients.”

And that’s what they’re saying they’re really finding beneficial from us. So, we’ve been doing a lot of free webinars for members. I’ve been speaking directly with members. We’re asking them, what is it you want more information about? What feedback do you have for government for us to take on? And that’s been really effective.

So, members are generally supportive of the stimulus measures, of course, keeping in mind that they’re all running their own small businesses as well. So, they’re having to navigate through it as a business owner, and as a trusted adviser. So, we are trying to do our bit to take all that burden away.

Q. ASIC recently came out and lifted, temporarily, the restrictions preventing accountants from providing super advice to their clients, tell me about the partnership you’ve since forged with the other professional bodies?

We refer to ourselves as the group of five, made up of ourselves, CPA, Chartered Accountants Australia and New Zealand, the FPA and SMSF Association. We came together in mid to late last year to address feedback that was coming through from members and various attempts to discuss the issues related to financial services in the context of accounting practices.

So, we formed a technical working group of the five bodies. The CEOs would meet regularly to look at the challenges from a regulatory burden point of view. And we made some good progress in presenting our cases to government. As a result of COVID-19, we’re assessing the measures, one of those measures related to the ability of Australians to access the superannuation early. And what we started to detect in practice around the country was an increasing number of clients seeking information about early access to super.

Now, the way in which the future of financial advice legislation is structured, generally speaking it says that unless you hold a licence, you’re not able to provide advice to the client in relation to matters relating to superannuation. In a specific example, if a client walked in the door and said, “I want to get some advice around accessing my superannuation early”, the tax agent would have to refer them to a person with a licence.

And we didn’t think that was appropriate, because you’ve got a person who’s coming to you for advice clearly in financial distress because if they weren’t, they probably wouldn’t be asking the question. For a statement of advice, it might cost them upwards of $3,000 or $4,000, this is just ridiculous because they are trying to access super early to the tune of $10,000.

So, we put that position to government, the Treasury. They were all supportive of the approach. Now, this does not turn the financial advice world on its head. It’s not about saying to an accountant in practice “off you go, provide as much advice as you’d like”.

Of course, anyone providing financial advice and product-related advice requires a financial services licence. What this is specifically in relation to is a registered tax agent with the Tax Practitioners Board being allowed to provide advice within the context of the COVID-19 measures, and in this case about accessing superannuation.

So, we think it’s a practical measure. We hear some noise from some commentators saying this could be a slippery slope. I don’t buy that at all, because practitioners worth their salt will not be charging for that advice.

This is about a client who’s coming to you in financial distress, all you want to be able to do is say, in regards to early access to superannuation, is here’s how the process works. And what that legislative instrument does is it provides that tax agent the ability to give that advice to their client, which is by any measure, by any reasonable person, common sense.

So, we’re very pleased with that. And I think it’s a good example of how the bodies work together. I’d say it’s a testament to our shared focus and a common purpose.

And that common purpose is providing the best possible quality advice at an accessible price for clients. So, making sure Australians have access to high quality, but most importantly at this time, affordable financial advice.

Q. We’ve covered what the IPA is doing for its members around the various regulatory measures, what about mental health support? This is something the IPA has always been very passionate about.

Yeah, absolutely. We’ve encouraged any member who is finding it tough to reach out to us. I’ve had my own details provided to members, if they want to reach out to me personally. We’re fortunate to have a large number of our IPA team and members, in fact, who have received a Mental Health First Aid certificate. And we are having those staff make wellbeing and welfare calls to members. So, we’re making hundreds of calls a day. Just to check-in and see how they’re going.

And the response from those calls is overwhelming. Members are saying to us “thanks for touching base”. There are members who have sought specific assistance. So we have been, even through the bushfire crisis, we’ve provided a service to members, and piloted that through a program called Uprise.

It is a service that we’re providing targeted to communities that have been at risk or have been directly affected by the bushfires to get access to clinical psychiatrists and psychologists. And that’s been a trial that we’ve run through. It’s been a very, very successful pilot. Reiterating something I said earlier, we see ourselves as the hub of this professional community, and that goes for encouraging members to interact as well.

So virtual discussion groups and virtual divisional advisory committee meetings and in the UK, for example, a members’ wellbeing network that’s been established for members to interact, which has been facilitated by the Institute.

All these things do matter and allow people to dip into when they need to, which is important. But as I said, from an IPA point of view and our own business perspective, we’ve got the mental health perspective, which is really, really important. Our business is affected like everyone else’s. For example, our CPD, we’ve sought to provide discounts on CPD anywhere between 25 per cent to up to 100 per cent. We’re giving that content away for free, which is important to do.

This has a direct impact on the business. We’ve frozen member fees and we’ve developed far more flexible pathways of payment, deferrals, instalments, because our view is that this is the time that members need their memberships. And we want to make that as flexible and as responsive as possible.

What this has proven to me is, both from a mental health point of view and from a business point of view, is that members are incredibly resilient. But they’re anxious to get fast, quality advice from us, for them to pass on to their clients.

Q. And what do you think the main lessons coming out of this crisis will be? Or is it too early to tell?

Oh, look, I think we’re already starting to learn that there might be a simpler way of doing things, a more efficient way. The notion of face-to-face meetings and the fact that overnight, our entire economy has gone digital.

Some of the things we are asking ourselves is how do we ensure that we have the appropriate mechanisms in place to ensure that we’re operating within a secure environment.

I don’t want to be a doomsayer. But I’m just concerned. We’ve had bushfires in Australia, compounded by the coronavirus. But I don’t want to see the coronavirus compounded by cyber. Overnight we’ve gone digital. The last thing we need is a mass cyber attack in Australia, targeting organisations and individuals, which would be even more disastrous.

So, I think the lesson for us is that we need to have appropriate reviews around business continuity planning, of course, but perhaps most importantly, is that this notion of trusted advice has never been more important.

The Institute is a trusted adviser to our members who are in turn trusted advisers to the communities they’re working with, and we all collectively need to step up to the plate and rely upon that community of support to push through.

We are fortunate we’ve got really highly capable and willing and empathetic members. And what we need to do is make sure that we are synthesising that information for them to make sense of the change and help them to support those communities they’re working with.

So, I think it’s that sense of connection to each other. Yes, we’ve gone digital. Yes, we’ve got social distancing. But perhaps there’s never been a more important time for us to be connected. And we need to be looking at ways of doing that more efficiently in the future.

Q. Speaking about overnight digitisation, how do you think this crisis has changed an accountant’s perspective on technology and the need to modernise their practice?

What the data tells us is that 40 per cent of small businesses have very little technology in their business. I’d say to an accounting practice that has struggled with technology, or a small business struggling with technology, that it’s never too late.

We’ve almost been forced into technology overnight. But there are copious amounts of information available to accountants and to clients and businesses.

We spend a lot of time talking to accountants and small businesses about the benefits of cloud computing and cloud accounting. And that is an immense opportunity. And that’s precisely why we’ve rolled things out like IPA Books+ as an accessible platform. I was literally talking to a member yesterday who said “I’ve gone through, I’ve looked at the information, looked at the software package, and it’s ideal for my small business”.

So that’s encouraging for us because it says that that segment of the market we targeted is actually right. And so I just want to say, if you are an accountant, or a small business that is struggling with getting to grips with technology, lean into it, reach out to us, contact us, we’re more than happy to assist you make that transition and understand it.

It is not as scary as you might think. In fact, it can lead to significant business enhancement and efficiencies in your business.

Q. Any final words for members?

We continue to run a very efficient ship. We have the same number of staff we had, by way of headcount, 10 years ago. We pride ourselves on the way we’ve been able to grow the business, but not the number of staff because of our efficient processes and practices that are in place. If you like, we’re trying to practice what we preach and that means we’re able to navigate through this uncertainty and we believe we have the plans in place.

We’re very appreciative of the member support that has been shown to the Institute. I also have to mention the quality of our team, which is going out of its way to make sure members are connected and have a sense of security behind them.