Hi everyone – I’m Sam, and I will be a regular finance and tax writer on Shirl’s Pearls. I’m thrilled to contribute towards demystifying a topic that can seem scary at times. But it doesn’t have to be, and I hope you’ll soon feel the same way!
I first started working in tax in 2005. At the time, I was employed part-time at an accounting firm while studying the subject at UNSW. I started out preparing PAYG (‘Pay As You Go’) tax returns, but found the most enjoyable part of it was actually talking to people about their jobs to find out exactly what deductions they could claim!
With more experience, I prepared tax returns for clients with investment properties (both with and without ‘negative gearing’), shares, and small businesses. After graduating, I spent several years working in corporate tax and became a chartered accountant in 2012.
I later returned to university to begin a PhD in Accounting at UTS, completing it in 2021. I’ll spend more time talking about it and what it taught me about investing in future posts; for now, all I’ll say is you had a sneak peek of it in September’s Investing Updates …
When my mother (Shirley of course) asked me if I wanted to write for her website, I was reluctant at first – primarily because us accountants are good at talking to each other, but don’t often share our knowledge with a non-technical audience. This may be one reason why most people don’t consider accounting as one of their pet subjects, and often fear it. Sorry, but I think this is a great shame!
Accounting is essentially about economic transactions and events and how they are recorded.
Whether we’re employees, investors or business owners, we transact every day of our lives. I hope to help you better understand the implications of these (often important!) transactions.
I had originally planned to talk about dividends and franking in my first post. However, over the next couple of weeks I’ve decided to share my thoughts on eastern Australia’s emergence from lockdown – and what this will mean for the economy.
Life after lockdown: ‘Freedom Day’, or baby steps forward?
I finally had my second Pfizer jab in mid-October. While I felt like someone had punched me in the arm, and had mild fever and a headache a day or so after the jab, I’d much rather suffer this than contract the virus (despite its high recovery rate). We already know one dose isn’t enough to avoid hospitalisation – but both doses have been shown to be highly effective at preventing intensive care admissions.
I’m happy that NSW and the ACT have begun taking their first steps out of lockdown, and that Victoria is about to follow suit. The long separation has been incredibly difficult for all of us, as has having to forgo the activities we love.
Having said that, I’m cautious about celebrating the end of lockdown as ‘freedom day’. The ‘COVID-safe’ behaviours to which we have become accustomed over the past 18 months (i.e., social distancing, handwashing and mask-wearing) are likely to remain with us for a while. There are still quite a number of people without the second vaccine dose, and those with both jabs have to wait 7 to 14 days before full protection.
As Scott Phillips, co-host of the Motley Fool Money podcast (which I follow) said in a recent tweet, while many of us are enjoying the current and impending removal of lockdown restrictions, the pandemic is not over for our healthcare workers.
My family and I have benefited greatly from the Australian public health system – so I feel we owe it to ourselves and to the community to ensure the most vulnerable still get needed care, whether for COVID-19 or other health conditions.
We can all do our part by following Shirl’s Pearls (of course!) and doing everything we can to live well by eating the right foods and staying active, but we still need access to health services when things go wrong.
This is why I believe a cautious approach is best.
It’s a view shared by AMA President, Dr Omar Khorshid. In a recent statement, he recently expressed support for a gradual opening up of the economy. He warned against being reckless, as hospitals may still be overwhelmed despite high vaccination rates. While this scenario may not occur, Delta has proven to be unpredictable thus far. If we relax too soon and cases start to rise again, consumer confidence could take a hit, which would be devastating to the businesses that decided to re-open.
The success of our economic recovery hinges on being able to limit the spread of the virus. Just as we cannot be successful in life if we are not healthy, we cannot have a strong economy without a functioning health system.
Implications for business
So, what does this mean for businesses as they emerge from the extended lockdowns?
Some sectors, such as tourism, hospitality, the arts and education, have been decimated if not destroyed, and many more businesses would not have been able to recover without government support. Sadly, for some, this support hasn’t been enough.
Businesses that survive will need to have a strong ‘COVID plan’ reviewed regularly. However, such a plan, in my opinion, should not only be about addressing what the business needs to do to minimise transmission risk of COVID-19.
One of the (few?) positives of the lockdowns is that they have given people downtime to reflect and think about ways to improve their business models and adapt to the new and changed environment – things that may not have come to mind in pre-COVID times because everyone was flat out.
For example, you might recall last year there was a shortage of hand sanitiser at the start of the pandemic. In response, Australian liquor distilleries stepped up to the plate (hand sanitisers are alcohol-based!) to fill the market gap.
The last 18 months have also seen the rise of ‘contactless’ and ‘click and collect’ services, which existed before COVID, but have become second nature to us now. Ditto online shopping …
Other businesses have been more innovative, like the ‘hatted’ restaurants who offered in-home fine dining during lockdowns, with curated menus that people could enjoy at home.
In the About Investing series, we learned how to identify interesting stocks that might be worth buying. To refresh your memory, there were a few ideas in Invest 2.0. The more we read, observe, network, and ask questions, the more we’ll learn. While the series focused on the sharemarket, this advice applies equally to business owners, who need to be able to respond to the market in which they operate.
The pandemic has been incredibly tough on all of us. As we move into the ‘living with COVID’ phase, none of us are quite sure what the future holds, but one thing is certain: there will always be opportunities in the market for those who are brave enough to look for them!
Please join me next time, when I’ll talk about the economic impact of the virus in more detail.