Through to the end of June our local, state and federal governments will release their budgets for the 2023/24 financial year and their forecasts for the years beyond.
We are eager to see what will and what won’t be funded. Given the current global and local economic conditions it’s probably more accurate to say what can and what can’t be funded — we are preparing for some belt-tightening.
Anyone who has been part of budget development in government or in business knows it’s an arduous process — and it doesn’t get any easier in tough economic times. We generally rely on (or blame) our finance and accounting teams for doing their job of pointing out the gap between our ambitions and our financial capacity. We often overlook the effort that goes into narrowing the gap. It’s a discipline and rigour that’s essential to our businesses and governments remaining financially viable.
There is also another side to finance and accounting; in fact, there are many sides. It’s a sector that is a lot like Dr Who’s Tardis. On the outside it can look rather predictable, but inside there is a lot more going on and with it so many exciting careers and opportunities for curious minds, problem solvers and, increasingly, people who want to influence the nature and priorities of our nation, businesses and community.
Beyond annual budgets, the accounting and finance sector is playing an expanded role in some of the biggest challenges of our time.
If you have read any of our earlier columns, you will know C4GS is doing quite a bit of work to address the supply and diversity of housing in Greater Shepparton. We are also keen to see what renewable energy and circular economy might translate into for our current waste and wastewater resources, for local manufacturing and transport — and for the Goulburn Valley’s long-standing reputation for reliable supply of quality product that can attract premium returns.
These conversations are increasingly circling back to critical questions of finance. How do the numbers stack up? What does the whole-of-life cost look like? What returns can investors expect? What’s the payback period and how does this compare with other investment options? And the big one: what do we need to measure to know if we are succeeding? They are all questions that might begin on the back of an envelope, but the projects can’t proceed without the proper rigour that comes from thorough finance and accounting analysis and guidance.
The sector also has a pivotal role in determining how we measure and account for climate risks and environmental impact — and the assurance that boards, investors and consumers already require. Later this year the Taskforce on Nature-related Financial Disclosures is expected to deliver its framework for organisations to report and act on evolving nature-related risks. A quick scan of the TNFD membership shows the range of Australian business involved, from our major supermarkets and banks to Development Victoria and the Federal Government.
These are fascinating developments, with the potential to fundamentally change how we value our natural resources, and how the impacts of climate change are priced – or putting it another way, how we build sustained environmental wealth as well as sustained financial wealth.
These developments are relevant to our region, and we are well served by an active business community that is engaged in understanding the acronyms and the opportunities. They are looking at how they can support our region’s businesses, farmers and industry prepare for and lock in opportunities.
From the World’s Happiness Report, to Doughnut Economics to the OECD’s Regional Wellbeing framework and the more than 160 submissions received by the Australian Government earlier this year when it asked how the framework could be applied in Australia, the trend is clearly towards a wider suite of national reporting measures that sit alongside our traditional economic indicators such as GDP. There are also rapidly expanding expectations that our businesses can measure and report their impact across a much broader suite of indicators.
The oft-quoted lines that what gets measured, gets managed and what gets measured matters are well and truly expanding the opportunities for anyone in or on the way to joining the accounting and finance sector. It’s certainly a fascinating time to step inside the Tardis.
— Linda Nieuwenhuizen is the chief executive of the Committee for Greater Shepparton