- New audit as part of climate change compliance legislation
- Will affect thousands of companies
- You may have to pay up to $50,000 in audit fees each.
Thousands of Australians will be hit with a big bill and more frustrating bureaucracy under an Albanian government climate change plan.
Treasurer Jim Chalmers is forcing up to 8,000 small and medium-sized businesses (SMEs), as well as not-for-profit organisations, to undertake costly and time-consuming audits to assess “climate risks”, despite his own department estimates that 95 percent of them don’t even need to do it.
The tax is part of climate change compliance legislation that Dr Chalmers introduced to parliament earlier this year as part of the Climate Reporting Bill.
The new laws require up to 7,600 companies to unnecessarily spend up to $50,000 each on audits – with a total cost of up to $380 million – that serve no purpose.
Dr. Chalmer’s department has already noted that “we assume that 5 percent of the companies in this group have significant climate risks that they would be forced to disclose”; However, it still expects thousands of companies to perform the audits anyway.
Treasurer Jim Chalmers’ own department knows that only 5 percent of companies have climate risks that need to be disclosed
The SME sector and accounting professionals are up in arms, demanding changes to the laws before the audit process begins next year.
The new audit is being carried out as national economic data released last week reveals that the economy is at a virtual standstill (quarterly GDP growth of 0.1 percent) and productivity improvements have completely stalled.
The accounting industry said the legislation should be amended to exclude unnecessary red tape, describing the climate reporting bill as a “multi-hundred-million-dollar time bomb.”
Amir Ghandar of Chartered Accountants said the legislation will unnecessarily affect “thousands of small and medium-sized entities.”
The main accounting bodies (CAANZ and CPA) have joined together to call on the Albanian government to amend the legislation.
New legislation introduced by Anthony Albanese’s government (pictured above) has been branded “unsustainable” by accountants.
It comes at a time when the accounting industry is also warning of a shortage of auditors within the profession, and the government’s recent draft recommendations for qualified visas do not include auditors in Category 1 for approved entry to help close gaps. employment gaps.
While auditors will benefit financially from the additional bureaucracy the Albanian government is introducing – because they would be the ones doing the unnecessary and expensive work – an industry survey in April this year still found that 88 percent did not supports the new laws being enforced the way they are, and 84 percent do not believe affected businesses will be ready to comply by the deadline.
Of course, this could lead to higher compliance penalties for companies that don’t even engage in practices that include “climate risks” in the first place.
Ghandar called the situation “unsustainable.”
“Not only does it waste limited financial resources, it also hinders the critical will to participate,” he said.
The opposition has committed to analyzing the situation if elected and making the necessary changes to reduce bureaucracy and avoid unnecessary financial burden on businesses and non-profit organizations.