The hefty new bill set to hit thousands of hard-working Aussies

•  New audit part of climate change compliance legislation
• Will affects thousands of businesses
• May have to pay up to $50,000 in auditing fees each  

Thousands of Aussies are set to be hit with a steep bill and more frustrating red-tape under an Albanese government climate change plan. 

Treasurer Jim Chalmers is forcing up to 8,000 small and medium-sized (SME) businesses, as well as not-for-profits, to conduct expensive and time-consuming audits to assess ‘climate risks’, despite his own department estimating that 95 per cent of them don’t even need to do it. 

The impost is part of climate change compliance legislation that Dr Chalmers put before parliament earlier this year as part of the Climate Reporting Bill.

The new laws require as many as 7,600 businesses to unnecessarily spend up to $50,000 each for audits – at a total cost of up to $380million – that serve no purpose whatsoever.

Dr Chalmer’s department has already noted that ‘we assume that 5 per cent of companies in this group have material climate risks that they would be compelled to disclose’ – yet it still expects thousands of businesses to conduct the audits anyway. 

The SME sector and accounting professionals are up in arms, demanding changes be made to the laws before the auditing process begins next year.

The new audit is happening as national economic data released last week reveals that the economy is grinding to a virtual halt (quarterly GDP growth of 0.1 per cent) with productivity improvements stalling altogether. 

The accounting industry said the legislation should be amended to exclude unnecessary red tape, describing the Climate Reporting Bill as a ‘several hundred million dollar ticking time bomb’. 

Amir Ghandar from Chartered Accountants said the legislation is going to unnecessarily impact ‘thousands of smaller and medium entities’.

The major accounting bodies – CAANZ and CPA – have teamed up to appeal to the Albanese government to fix the legislation.

It comes at a time when the accounting industry is also warning of a shortage of auditors within the profession, with the government’s recent draft skilled visa recommendations failing to include auditors in Category 1 for approved entry to help plug employment gaps.  

While auditors stand to financially benefit from the extra red-tape the Albanese government is introducing – because they would be the ones carrying out the unnecessary and expensive work – an industry survey conducted in April this year still found that 88 per cent do not support the new laws applying the way that they do, and 84 per cent don’t think the businesses impacted will be ready to comply by the due date.

This of course could risk further compliance penalties for businesses that aren’t even engaged in practices that include ‘climate risks’ in the first place.

Mr Ghandar described the situation as ‘untenable’. 

‘It not only wastes limited financial resources, it also stymies critical will-to-participate,’ he said.

The Opposition has pledged to look at the situation if it is elected, and make the changes necessary to reduce red tape and avoid the unnecessary financial burden on businesses and not-for-profit organisations.

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