Brexit: What do CAs in Australia think?
In the UK people are deeply divided over the Brexit issue. But what does it look like from Australia? Chris Sheedy finds out.
Although it has long been on the radar, the Brexit issue seems to have developed in quite a hurry. Time for considered thought, for research and for the development of a deeper understanding of the facts has not yet made itself available.
News reports are rich with emotional arguments and imagery, some only quite thinly connected to the Brexit referendum. These include threats of waves of immigrants invading Britain’s shores, lists of bizarre and downright silly regulations enforced by the EU that allegedly cost the UK’s economy a fortune, and threats to business and the economy.
But each argument for or against the Brexit is also coloured by self-interest. The pro-EU letter signed by CEOs and Chairpeople of hundreds of the UK’s biggest organisations was also about protecting market share and profit.
From a distance the rationale seems to be being driven by emotion and popularism. Any economic or financial debate is used as a scare tactic.
London Mayor Boris Johnson surprised even those who knew him best by coming out in support of the split. However critics (including Prime Minister David Cameron) say Johnson’s decision is all about ambition as it improves his chances of one day becoming Prime Minister.
And actually most of the political arguments, as ever, are potentially less about what is in the nation’s best interest and more about surviving the next election.
The view of CAs in Australia
This lack of quality debate has frustrated ICAS members in Australia says Ken Weldin CA, partner at PKF Australia and Chairman of the ICAS community in Victoria. Weldin spoke with several members before offering a summary for this story.
“From a distance the rationale seems to be being driven by emotion and popularism,” Weldin says. “Any economic or financial debate is used as a scare tactic. ‘Don't vote this way because you will be doomed,’ they say.”
“Our members in Australia think it is already becoming very tiresome. You don't trust it and you don't believe it. The politicians and others with a vested interest have a credibility issue.”
Even for highly trained CAs, Weldin says, some of the arguments are “absolutely nonsensical”.
“They talk about ‘market transition costs’ that will make us more ‘susceptible to recession’ or ‘more susceptible to terrorism’,” he says. “It just makes no sense. I spoke with several of our members overnight and they all tell me they are interested in the discussion but are most often disappointed by the lack of substance behind the debate.”
What will the impact be on Australian businesses?
As far as Australian businesses are concerned, Weldin says most are aware that they simply need to do what they are already doing - keeping a finger on the pulse of foreign exchange rates, oil prices, stock markets and other variables.
“There is a feeling that a Yes vote could cause a big drop in Sterling,” he says. “But this could happen anyway. You need to be prepared for it and deal with it, not just because of the referendum.”
Australia and the EU are currently preparing negotiations on a free trade agreement. That will begin in January 2017, which is less than 12 months away.
So should Australian businesses even care about which way the Brexit vote goes?
David McCredie, CEO of the Australian British Chamber of Commerce, says there is no need for businesses to be overly concerned right now.
“Many organisations trade directly with EU countries, so they may or may not be affected,” McCredie says. “Some have a UK hub and could be looking at things from that perspective. But remember that even if the UK leaves the EU it will take up to two years for all of the treaties to be unwound.”
“Also there is the fact that Australia and the EU are currently preparing negotiations on a free trade agreement. That will begin in January 2017, which is less than 12 months away.”
“Finally, if the UK was to leave the EU then there is a high likelihood that a free trade agreement between Australia and the UK would be settled even more quickly than the one with the EU.”
And actually, McCredie points out, most Australian businesses are more interested in what is happening in their own neighbourhood. “We have much bigger markets right here on our doorstep,” he says.
So from Australia right now, the general feeling towards the Brexit debate is calm but tinged by mild frustration. There is broad acceptance that the decision is for the British people and the EU, but irritation around the fact that the debate appears to have descended into one that is about personal attacks, rather than one that presents all of the facts for the people to digest before they must make a very important decision.