Whilst I may be known as Mr Taxman I profess that, as at today's date, I am not an expert about Carbon Tax. I have no opinion on whether it will be good for the economy, the Government, companies, Australian households or even the environment, in general. I have no idea of whether $20 per tonne is a fair price or whether it should be closer to $40 per tonne as per the leaked consultancy document earlier this week (although I suspect that it was a political game to scare the public with the $40 price and then announce a "lower" $20 price in order to get it passed!)
But there is one thing that I do know about the proposed Carbon Tax and that is it will be great for the accounting industry, particularly aspiring accountants looking for a job opportunity in the future. It is always the same when any significant new tax legislation is introduced. There will be a rush for accountants to know how to apply the Carbon Tax and then in a few years' time find ways to legally minimise the Tax. The quicker the minimisation process the better for company executives and shareholders.
I remember being seconded to Dunedin by a big-4 firm back in the 1990s to learn all about the Goods & Services Tax in New Zealand because Dr John Hewson was going to win the "unlosable" election and introduce a similar broad-based consumption tax in Australia. I never got to publicly thank him for his infamous birthday cake interview on A Current Affair (how many candles was it again John?) but his monumental stuff-up led to an enjoyable eight-week paid holiday in the South Island during snow season. So thank you Dr John!
So when "Uncle John" got into power in the next election and introduced the GST, all of a sudden there was an urgency for GST experts around the country. This was great news as I had just started up my own little accountancy practice a year earlier and my valuable, albeit somewhat short, NZ experience would create a competitive advantage that I would enjoy for the following decade. My small little practice grew quite dramatically and with new clients coming in the door at a rapid rate it was like shooting fish in a barrel. Again a special thank you to Dr John.
The new Carbon Tax will also provide a huge lift for the education industry as more companies will need people trained up on the new tax. Expect accounting software providers to have a "new" Carbon Tax calculator on their products.
I told my Corporate Accounting class a few weeks ago that the new Carbon Tax would provide such great opportunities for them in the future, like the GST provided me. And they could become "experts" within eight weeks! What a great incentive for them to put in the hard yards when it is so difficult to get a job with no experience these days.
So over the last eight weeks, I have got my uni students doing an assignment on Carbon Tax and the Emissions Trading Scheme. I split them into groups of five and each group is looking at a different Australian public listed company and what the impact will be on the balance sheet and the income statement. They provided a preliminary report to me a few weeks ago with some interesting results. Stay tuned for the final results in a few weeks' time.
I expect that the new tax will also provide an opportunity for the entrepreneurial accountant. Stay tuned for CarbonTaxMan to hit our screens very shortly. Whoever that is, then just remember to publicly thank "Auntie Julia" in a decade from now.