The aged workforce, coupled with graduates who are not adequately prepared for practice, is compounding skill shortages across Australia’s accounting sector that has been grappling with surging demand since the changes to capital gains tax (CGT) and negative gearing were announced in May’s Federal Budget.
New research by The Tax Institute published on Tuesday revealed 58% of existing practitioners sit within the retirement horizon, while only 1% were under the age of 30. At the same time, 82% of employers said graduates’ foundational education had not adequately prepared them for practice.
The study also found 80% of respondents had been in a role where they needed to upskill beyond their existing qualifications, and one in three were actively pursuing further education to take the next step in their careers.
“Not only is there a shortage of people entering the tax profession, but our mainstream secondary and tertiary education institutions aren’t set up to teach the very specific technical knowledge that a good tax adviser needs,” Dr. Sharon Smulders, Academic Director at The Tax Institute, said.
“Employers are competing to engage a shrinking pool of emerging professionals, then needing to invest in further training.
“It means that replacing tax and accounting staff as they retire or move into other careers is a slow process that can’t stand up to the demand for excellent tax advice.”
The study also found that the supply of new entrants into the tax profession is contracting at every stage of the pipeline. Fewer secondary school students are engaging with accounting, and university enrolments have declined significantly over the past six years.
Temporary skilled visa holders working as taxation accountants have grown more substantially, rising from around 100 per quarter in 2015 to approaching 292 by 2025.
However, the study noted that these are transitory workers who may return home, and their numbers are not large in the context of a profession of nearly 78,000 registered practitioners.
“The urgency of the situation cannot be overstated. With 32% of registered tax agents already past retirement age and accounting enrolments at historic lows in many jurisdictions, the window for proactive action is narrowing,” Smulders said.
“The profession, employers, education providers, and policy makers need to act with intention and speed.”
