Last week we saw the announcement of winner of “the best job in the world” up in Queensland. What a great job. $150,000 for six months “work” telling the world how beautiful it is staying on those beautiful tropical islands. What a lucky “you-know-what.”
That was one of the great marketing campaigns. The whole world found out what a lucky country we are living in. But I have found out some info to truly knock your socks off & realize just how lucky.
How would you like a $260,000 job? Don’t think you have a chance? Don’t worry there are 200,000 of them. Got your interest yet? Where do you apply?
Well looking at the reports on the impact of the Federal Government’s stimulus package, that is exactly what has happened in Australia in the past year.
The Prime Minister yesterday announced that an estimated 200,000 jobs have been saved as a result of the two stimulus packages in the past year. Great news headline. When I heard that it sounded great but hang on a minute. I worked out that given the cost of the packages totaled $52 billion, that equates to $260,000 per job potentially saved.
The headline doesn’t look so attractive now, does it? Imagine the cost per job if we find out that only 100,000 jobs have been saved.
With record deficit budgets, perhaps the Government would have been better off doing nothing at all. Instead wait and see if there would have been an 200,000 extra on the unemployment line this time next year and provide extra Centrelink benefits to those people then. Based on current Centrelink rates, the extra unemployment could be carried for more than a decade for the same cost.
Perhaps it would have been better for businesses to have been the direct benefactors of the stimulus packages. After all they are the ones that need to incentivized, via grants or lower taxes, to create more jobs and kick-start the economy again. If you can’t make a decent profit when you run a business, why take the risk in the first place?
As I say there is no point paying someone $900, if they are going to lose their $50,000 job.
What do you think the Government should have done last year? Should they have tried to stimulate the economy?
Monday, May 11, 2009
$260,000 Jobs - Where Do I Apply?
Monday, May 4, 2009
You may change the tax rules, but we will still find the loopholes!
Aaahh … Federal Budget week. It always brings so much joy to accountants throughout Australia. Why? Because you matter who is in Government & no matter how long they have been in power, they always feel that there is a need to tinker with the tax rules.
FBT, CGT, GST, Simple Super, Simplified Tax System, Consolidation, Personal Services Income, Investment Allowances, Senior Australians Tax Offsets, highest marginal rates, rebates … the list seems to go on & on.
And when they tinker with the tax rules, there is always one common denominator and that is that these changes always bring more work to accountants around Australia.
Legislation changes also seem to provide an opportunity for the “boring number crunchers” to show their “creative flair” to try and create a loophole to get around the tax change. Every year the government changes the tax system and every year there is a new strategy that comes into play to combat. Make no mistake, the rich – or rather their accountants’ - will always find a way to pay as little tax as possible.
Even the $900 stimulus payment has strategies like co-contributing into super to make it worth $2,250. Something simple as a handout has a loophole to make it more attractive and against the grain of its original purpose.
I am seeing a number of accountants about town with a bit of a smirk this week. This is because they have heard all the whispers and leaks of dramatic changes in next Tuesday’s budget by Mr Swan. Changes to marginal tax rates, super surcharges, stopping of imputation credits, and the like. I am not really sure if it will make a lot of difference at the end of the day.
The real winner? Not the Government. Not the poor. Not even the rich. But the accountants’ bank account of course because they get to charge more and more fees as the rich still find a way to pay the same amount as before.
Why does the Government still persist in changing the laws all the time? I don’t know but I reckon they will lose some voters next Tuesday night.
If you want to see accountants cry foul at the budget … and I mean really cry foul & not pretend that they do … make tax returns no longer compulsory and give taxpayers a cheque automatically from the Government based on an estimate of their income and expenses. A budget that takes business away from accountants … I’d like to see that!
Wednesday, April 29, 2009
Accountants charging "handling fees"? What a joke!
I almost choked on my dinner last night when I heard that there are accounting firms out there charging a $45 “handling fee” for their part in forwarding on the $900 stimulus payment. What on earth are they thinking?
I have been involved in accounting firms for the past 20 years & I have always hated when firms tried charging clients a “handling fee” when they get tax assessments and the like from the tax office. As the assessment goes from the ATO to the accountant’s mailbox to reception to partner back to reception & then eventually out to client, the process will take 3 to 4 days. Accountants will defend themselves and say that the ATO gets it wrong from time to time so there is a need to check the assessment. Fair enough 20 years ago when calculations were done manually. But in this day & age of computers and self-assessment, I reckon the ATO are correct in 99% of instances. So that is 3 or 4 days wasted that the client waits patiently for that cheque to arrive to pay for their rego, credit card bill or holiday. My firm has always had a simpler process where we show the client’s address as the mailing address for the ATO. We figure that if it was wrong then the client would contact me & we can sort it out then. And they get their refund cheque 4 days earlier.
So when the “Kev 07” stimulus payment got announced a few months ago there were alot of tax agents - who had their business address and trust bank account as the details for all their clients – that jumped up & down about it being wrong and how it would be a waste of administration resources during a busy time of year. So the ATO listened & told them the process to change the default address to the client direct, together with the client’s bank account. I got the notice from the ATO a few times. The ATO even placed adverts in the newspapers telling the public the same. So put simply it is nothing more than poor practice management for accounting firms to get a ream of $900 cheques arriving in their office. Yet they now have the hide to charge $45 for their poor practices??
I have also been wondering how these firms even came to the $45 figure to charge clients as well. It is hardly rocket science work, so you would be paying the pimply faced teenagers in the office to do it. Now I reckon that even an inefficient office clerk – if they are given 1000 cheques - could get a stimulus payment sent to a client, on average, every 3 minutes. So that’s 20 sent out per hour - or a handy $900 hour’s work! Pretty handy profit margin when you are paying that office clerk under $20 per hour isn’t it!!
The whole “handling fee” just reeks of poor client service (and poor understanding of the current economic situation) by these accountants. Their attempted money grab will backfire badly on them and I can assure you that they will lose alot of clients in the coming tax season. Thanks guys for sending customers our way!
What would you do if your accountant tried to pull this stint? Would you simply pay their $45 fee and shut up … or would you walk? I know what I would do!
