music – Fiscal Artisans

June 7, 2023

As a creative artist, your focus is on making the best use of your talents and skills, and turning this into a viable, income-earning activity.

And sometimes, this means that your income and cash flow are ‘lumpy’, with periods of low or no income, followed by ‘the great years’. Years of effort, that result in a large cash payment in one year – and a large tax bill as a result.

For this reason, it’s important that you can understand the concept of Income Averaging. This tax treatment offers significant concessions, and knowing how to make the most of them can save you a lot of money.

It is ok if you are not familiar with this particular area of taxation, we’re here to help. This is a highly specialised field that only a select few have expertise in. Many accountants, unless they have a specific focus on creative industries, may not be aware of it. Moreover, if you typically handle your tax returns on your own, it is improbable that this benefit has come to your attention. This is why you need to utilise an accountant that understands and specialises in the creative industries (as Fiscal Artisans does!) to assist you in your accounting and taxation matters.

Here’s how it works: your Special Professional income from creative sources (such as writing, performing, or inventing) is isolated and taxed at a concessional or reduced rate based on a rolling 5-year average. This means you pay less tax in years where your income from these sources is significantly above average. In years where your income is below or in line with your average, you are taxed at normal marginal tax rates. Keep in mind that income from other sources is always taxed at normal rates, and income averaging may not benefit you in years where your income is below average. However, years of lower income will affect your rolling average, and reduce your tax rate in future periods when you earn above-average income.

To qualify for income averaging, you must be classified as a “Special Professional.” This encompasses authors, artists, composers, inventors, performers, production associates, and sportspersons. In some cases depending on the circumstances, you may be designated as such if you are in a “creative decision-making role” such as a director. Eligibility is assessed on a case-by-case basis, so it’s wise to seek advice from a knowledgeable tax professional to determine if you meet the criteria.

One of the reasons these jobs are included in income averaging is due to the inconsistent nature of income. For example, a composer may spend years developing a project before receiving any income, resulting in large peaks and troughs of income year to year. Income averaging helps to spread this income over the entire development process, resulting in lower overall tax payments.

In simple terms, Income Averaging allows you to smooth out your taxable income over a few years, minimising the impact of any one high-earning period. By doing so, you can reduce your overall tax liability and free up funds to invest back into your creative pursuits.

In the first 4 years, the benefit can be even greater! It is quite common for the first year of averaging to result in little or no tax needing to be paid – at least on the earnings up to $90,000 (assuming no other income has been earned on salary from areas like school teaching, waiting tables or other non-artistic employment)

Keep in mind that income averaging is an opt-in system, and once you opt-in, you remain in the system. You can start using income averaging once you’ve earned more than $2,500 from creative work, and it only considers the income generated from creative activities to calculate your average. Other income, such as non-creative activities or investments, is not included.

Ok, you say, so what sort of benefit can this provide?

Case Study 1

Brian Eno(1) is a successful composer, musician and recording artist. They have a stream of income coming from local and international royalties from Film and TV compositions, Gigs and CD sales annually, as well as investment and non-Artist income.

In 2021, they lodged their Income tax return without claiming Artist Averaging, as they had done in all prior years of their career.

On a total taxable income (after all deduction claims) of $219,830, they incurred a total tax liability of $67,399.81. After the tax instalments were paid through the year, they were left with a net tax liability of $12,236.30.

However, on review of their return, and implementing Artist Averaging on their Professional Income, the Total Tax payable was reduced to $21,746.80, resulting in a net benefit of $45,653 to the Artist.

This also subsequently reduced the amount of PAYG tax instalments that were needed for the following tax year.

Case Study 2

Mariah Carey(1) is a professional writer.

On their Tax year professional income of $91,500, and a net taxable income (after all deductions, and including non-business income) they paid tax on a Taxable income of $57,746.

Before using the Artist Averaging provisions, they are liable for tax totalling $9,460.65.

Artist Averaging was then applied to this return, and with the provisions for the first year of averaging, their total tax liability was reduced to $1,154.92 – a saving of $8,305.73 on the same taxable income.

It’s important to remember that you cannot opt-out of income averaging once your income normalises. Also, the concession only applies in “good” years – you will not be taxed more in years where you earn less than the rolling average.

I.e. if your income has been consistently around $80,000 p.a. but then drops in one year to under $40,000, you will pay the ‘standard’ tax you would normally pay on $40,000 for that year. Subsequently, if the following year jumps up to $120,000 (as the project you have been working on is completed and you are paid a lump sum on completion, or the unit sales happen in the following year) then Artist Averaging may reduce the tax payable on the amount ‘over’ $80,000, so your tax rate payable does not jump up significantly.

To show how this works over the years, let’s consider the following case study.

Freddy McQueen, the lead singer of a hard rock band called Mercury, has income over a 5 year period that has ebbed and flowed as CD sales, royalties, writing and recording over new material and concerts were undertaken.

His Net taxable income after all costs and deductions are as follows:

Year 1 – $50,000

Year 2 – $75,000

Year 3 – $120,000

Year 4 – $40,000

Year 5 – $130,000

The tax payable – with and without Artist Averaging over this period would look like this:

	1	2	3	4	5
Taxable income	$50,000.00	$75,000.00	$120,000.00	$40,000.00	$130,000.00
Tax on normal rates	$6,717.00	$14,842.00	$29,467.00	$4,142.00	$33,167.00
Tax on averaging	$ –	$9,625.40	$22,042.00	$4,142.00	$32,717.00
Net Tax Benefit / Savings	$6,717.00	$5,216.60	$7,425.00	$ –	$450.00

Income averaging is a specialised area of taxation that can be incredibly advantageous for those in creative professions. However, it’s crucial to enlist the help of a tax professional like Fiscal Artisans to determine eligibility and maximise benefits.

Talk to us for further information, and let’s see if Income Averaging applies to you.

We may even be able to look at your past tax returns and reclaim tax that you may have overpaid. Contact us for further information and a review of your past tax lodgements.

Stuart C Smith CPA

Director

Fiscal Artisans

Of course, these are not their real names. The facts in the first two case studies are real, but the names have been changed to maintain confidentiality.
Note that the tax payable amounts do not include the Medicare levy and other related offsets.
As the Income for the year is below the average over the prior years, there is no rebate claimable for the year, but also, no additional tax is payable on Total Taxable Income.

by Fiscal Artisans

August 26, 2021

I’ve got the Lockdown Blues – cause I can’t play to a crowd!

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With the series of lockdowns and curfews occurring in Victoria since May 27, 2021, one of the most affected areas, is the performing arts industry.

Singers, musicians, writers, actors, and also the associated crew and support, including technical, retail and merchandise, and event promotion staff and businesses have been shut down throughout the strate, with little or no support. Even as venues open, density limitations have meant that many places have cancelled performances that had been booked months in advance.

Many of the people affected have not qualified for the various business support grants, usually because they are not GST registered, are subject to more casual or intermittent work, and may not be as ‘structured’ as many other business operations. (We can do something about that – but that is the subject of a separate discussion that we are happy to have one on one with you)

The Victorian Government has provided a level of support – for both the individual performers and crew, as well as venues who have had gigs and performances shut down by the metropolitan or regional lockdowns.

There are two Support funds currently available to assist those affected:

1. Live Performance Support Program (Suppliers) Round Two

This provides support to ‘contracted suppliers’.

Who is a contracted supplier?
This is defined in the program as:
A contracted supplier to a live performance event is a business whose primary activity is the delivery of a featured or advertised performance or other goods and services to support the delivery of a live performance event. This may include performers, crew, venues, merchandise sellers, technicians and engineers, as well as the ‘on stage’ performers.

And it is not limited to music performances. It is a “Live Performance Event”, which presents creative/cultural content and may include but is not limited to music, singing, theatre, opera, dance, comedy or arena event. It does not include sporting, business, private or educational events in this grant scheme. (Some of those businesses are covered in other Support funds currently being offered)

A Payment of $200 or $500 per event is possible (based on what the fee for the cancelled performance would have been) with payment for up to 20 gigs (to a maximum of $4,000) possible within the funding round.

The performance will need to have been planned as follows:

To be delivered or performed between May 28 and September 2, 2021;
Live, in-person audience (i.e. not ‘just’ a streamed performance)
Held indoors or outdoors
With an expected audience of at least 75 people or a series of performances over multiple days at the same location with an expected minimum audience of 200 or more. (I am seeking clarification on how this is impacted by density limitations that were in place prior to, and during, the lockdown periods)

This funding also applies for interstate gigs – i.e. Victorians who were meant to ‘cross the border’ and perform or work interstate in the same way, would be eligible for this support grant.

Where costs incurred / claims are between $200 – $500 per gig, then a grant of $200 is applied. For costs of over $500, then a $500 grant is paid.

2. Live Performance Support Program (Presenters) Round Two

In a similar way, there is a support fund for the ‘venues’ that have been impacted by the lockdowns and suffered losses as a result.
The terms and conditions of this grant are similar to the ‘suppliers’ grant, regarding dates, type of performance and estimated attendances. For the Presenters, a funding claim is possible for up to $7,000 for one event, with a further claim for a second event for up to $5,000 also possible.
This grant is also available to performers who were intending to promote their own show as well – i.e. it is not limited ‘just’ to established venues (pubs, clubs, etc)

For this grant, it may be necessary to identify ‘key suppliers’, from whom the presenter intended to receive goods or services, with up to 10 suppliers identified. This of course, could be food and beverage suppliers, performers, venue hire and crew.

Closing date for applications – and estimated payment timelines

The final date (currently) for lodgement of the application is September 8, with payment ‘anticipated’ to occur within 15 days of the closing of applications – so it would be expected to be paid by September 23.

A number of items must be included within the application, and a few background checks on items like ANZSIC codes, ABN, and related registrations must be confirmed before an application is lodged. This reduces the possibility of delay or rejection of the claims.

We can assist you with the process, prepare and lodge the claims on your behalf, and monitor the claim process with Business Victoria after it has been lodged.

If you – or anyone you know – may be eligible for these support funds, please call me on 0409 788 399, or email me at stuart.smith@fiscalartisans.com.au to discuss your situation and work on your application.

I look forward to hearing from you!

Rock on!

Stuart

For more information on Fiscal Artisans, please go to our website

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by Fiscal Artisans

March 29, 2021

The Art of the Non-Fungible:

How Creativity and Technology makes Art pay

What is this about?

For many artists and creative professionals, maintaining control over their work and generating a reasonable income from their work has become harder in the digital world.
New uses of Blockchain Technology can create opportunities to overcome these issues and ensure a fair revenue for Visual artists, digital artists, photographers, musicians and other creative professionals
Protection against ‘knock offs’ and asset fraud or theft can also be enhanced.
New opportunities to create content, creative product, etc. and develop a professional opportunity from your creative skills and talents
We are only at the tip of the iceberg with this, and there is a lot to discuss on this topic. The applications are not ‘just’ in the arts or creative areas, but this is a field where the greatest initial impact may be seen.
We are entering a phase where Parallel Ecomonies are being developed – The digital and the analogue. in time, the Digtial will overtake more and more of the analogue – the traditional way things have been done.

Depending on your reading and internet habits, you may have heard about several modern artists getting huge amounts of money selling ‘digital art’ – short videos, graphic images (that don’t exist in any form on canvas or paper) and the like, using something called an NFT.

The obvious question is – what is an NFT?

NFT stands for non-fungible tokens. It’s easiest to think of NFTs as a file format.

When you download music to your phone, or a photo from your digital camera to Instagram, or Facebook, or your computer, the details are stored in a specific file format so that your computer system (or mobile device) knows how to read it and display or play the content.

NFTs are a file format that transfers data and value on blockchain networks like Ethereum. Since NFTs exist on blockchains, these tokens (or files) contain properties similar to bitcoin – namely – primarily digital ownership (a token in a person’s wallet) and transparency (all activity is recorded on a blockchain).

So what does ‘fungible’ mean?

No, it’s not something soft and squishy!. Nor is it a mushroom recipe.

Put simply. Something is fungible if it is easily interchangeable. E.g. You and I could swap $20 notes with different serial numbers, and they would be treated exactly the same. Or I could borrow a kilo of sugar from you (It’s jam-making time again!) and then go to the supermarket and buy a replacement bag of sugar, and they would be interchangeable. In both cases, you could say that the items given and received are ‘fungible’.

In comparison, an item is said to be non-fungible if it is unique. Lots of items are non-fungible, including diamonds, houses, and baseball cards. No two of these items are the same; e.g. diamonds have different colours and cuts, while two apartments with the same floor plan in a block of apartments are different because they are on different floors or have different vistas.

So an NFT is simply a token (or piece of information) that is unique. A common example of an NFT might be a digital trading card or piece of digital art.

Characteristics of NFTs

NFTs are simply a way to transfer information (data) that provide various benefits because they are created on blockchain networks. While Blockchains in themselves are a whole separate, detailed discussion, a blockchain is essentially a digital ledger of transactions that are duplicated and distributed across the entire network of computer systems on the blockchain. This distributed network makes it difficult, if not impossible, to duplicate, forge, or defraud the system’s records.

While the value of an NFT can vary depending on how it’s used, generally speaking, NFTs provide the following characteristics:

· Unique – The key trait of non-fungible tokens is that they are unique, and this can be verified on a blockchain. i.e. if you only create ‘one’ version of an item, it cannot be truly duplicated, as the token itself cannot be duplicated.

· Permanent – NFTs have permanent information and data that is stored within the token. This information can include a message, image, music, signature, or any other piece of data.

· Programmable – An NFT is just a piece of code on a blockchain. This means it can be programmed to have various qualities. One of the most useful qualities of NFTs to date is that royalties can be programmed (or built-in) to the tokens. This means an artist obtains a royalty on all secondary sales of their artwork. (Unlike the situation artists have now, where they may see their work selling for tens or hundreds of times the original sales price, and they receive no additional benefit from these sales.

· Permissionless – NFTs can be used multiple ways if they exist on a ‘permissionless’ blockchain like Ethereum (not all NFTs are on Ethereum). For example, Sorare – a sports trading card game – has third-party games, i.e. (not built by the Sorare team) that use Sorare trading cards. Again, this creates opportunities to on-use and on-sell or licence products for additional activities. Imagine purchasing a Lionel Messi trading card and using this in your gameplay in Fifa21, or a Nick Riewoldt AFL trading card and using this in an AFL game on the Playstation – but also knowing that the ‘card’ has an inherent trading and collectors value (and could also be used in other game systems). It’s not just ‘tied’ to one console game!

· Digital Ownership – whoever possesses an NFT in their Digital wallet owns and controls the NFT. Digital assets like domain names (Google.com) aren’t actually owned by Google, but instead by middlemen like GoDaddy or Verisign, even though they control the rights to the asset.

These qualities empower various new use cases for NFTs, some of which are outlined below.

Typical Use Cases For Non-Fungible Tokens

Art

Digital art has taken the world by storm over the past several months. Digital art, combined with the digital property rights of NFTs (verifiable ownership) and perpetual royalties for artists, makes NFTs a 10x improvement upon the current system. Most recently, the global auction house Christie’s auctioned an NFT-based work of art created by Beeple for over $69 million, the top NFT artist by sales volume.

And, don’t think it is just ‘young new artists on the cutting edge of technology’ that are heading in this direction. Look at this for an example by someone caling themselves The Unknown Artist. Its all just a little bit pythonesque!

Digital Trading Cards

Sorare and NBA Top Shots are two of the most popular sports trading card collectibles. Sorare cards can be used in Sorare’s fantasy football (soccer) leagues while NBA Top Shots by Dapper Labs is developing a game that uses their NBA NFTs. Other digital trading card games include GodsUnchained, which resemble strategy games like Magic the Gathering or Yu-gi-oh.

Provenance Tracking and Digital Certificates of Authenticity

Various items, especially collectibles and high-value items come with digital certificates. For e.g. if you spend $5,000+ for a Luis Vuitton Handbag, and received a NFT ‘certifying that this is a genuine product, insurance and re-sale issues could be reduced because you could certify the item’s true value.

These certificates are currently often either stored as paper records or digital pdf copies. The benefits of digitizing these certificates and issuing them as NFTs means that any can verify the authenticity of the digital certificates and nobody can alter the information or misplace the document.

There is already a pilot program with the NBA that would authenticate memorabilia, such as in-game worn jerseys that are sold during an NBA game via live auctions. While there’s always the possibility of a physical object being tampered with, digital NFTs can act as a better and more automated certification than existing practices, giving buyers greater surety that what they are buying at an auction is ‘genuine’ and collectible.

Gaming items

Gaming assets are already digital in nature, so creating them as digital assets that individuals can own presents various benefits. There are multiple game studios building games that run on blockchain rails. Also, there are several platforms like Enjin which are building their own platforms that facilitate game development including the issuance, or minting of gaming assets.

One of the first uses of NFTs was in an online game called Cryptokitties, where you collect and breed ‘furrever friends’ online. Each kittie created is unique, collectable, and can be bred with other kitties in order to create more kitties – and (in pure monetary terms) increase the value of your initial investment in the process. The more you work on it, the more kitties you can create, and look to resell depending on popularity, rarity etc. What sounds like a trivial online game for little children, or a 21^stcentury Tamagotchi experience, has generated over $32 million in re-sales and has almost 100,000 players. (NBA topshot has generated over $300 million in re-sales.) Over $250 million has been traded in NFT’s in the last 12 months – not including the Christies Art Auction!

Domain Names

Blockchains inherently make for great asset registries, and one of the largest digitally native assets are domain names. Domain names are digital assets that map IP addresses to more human-readable names (e.g. 13.57.64.34 to Messari.io). Ethereum Name Service, Unstoppable Domains, and Handshake are three projects taking different approaches to enable domain names on blockchains.

Ticket sales / Countering Scalping and counterfeiting.

Concert tickets or ‘major event tickets’ could be put onto the Blockchain via NFT’s, creating a situation where re-sales have a price restriction on them so that they cannot be resold for a higher price (or that any excess funds paid are automatically paid to the artist, not the NFT holder).

Another option is that the ticket attached to the NFT is not activated until the holder approaches the event venue, to diminish the possibility of re-sale / scalping or ticket theft. I believe that the Euro 2021 Football championships are looking at this for ticket sales, using a QR code to ‘activate’ the ticket within proximity of the venue.

Content

Music, blogs, tweets, memes, and other digital content can all be issued as NFTs. While that doesn’t in itself make the content valuable, it does present unique opportunities for digital ownership and on-chain royalties. Although the distribution of content may remain free for blogs or music, NFTs present unique monetization opportunities for crowdfunding content or selling a blog/song similar to how one might buy vinyl records or old edition books. Decentralized publishing platform, Mirror is enabling writers to crowdfund blogs and sell them as NFTs. Other experiments include the Kings of Leon selling albums as NFTs that provide additional value including lifetime concert tickets or exclusive experiential artwork for an album.

For aspiring recording artists, the presents the possibility of not just ‘preselling’ an album via preorder facility or crowdfunding the recording sessions, but adding the enticement of ‘ownership’ of the recorded material for future royalties or fees generated from licensed use of the material via the NFT.

So why is this any different? And what is the point?

The nature of NFTs mean that the token can be programmed in a number of ways. One aspect is that the original creator of the token (i.e. the artist that created the original work) could program the token to continue to receive royalties on each ‘re-sale’ or transfer of the token. So, if it is tied to an artwork that is sold and resold numerous times, the Artist can continue to receive royalties in the repeated ongoing sales of the artwork. Or they can provide a perpetual royalty to a charity or other third party of their choosing.

Another possibility is the opportunity for a gallery to raise funds for the purchase of a specific artwork, and ‘tie’ the donations or funds raised with that specific artwork. The gallery may choose to sell the artwork in the future (or lease it to other galleries for exhibition) – but only with the approval of a set majority of the token holders. This gives the donees’ ownership’ status over the work (perhaps more for ego or philanthropic purposes – saying that ‘I own a piece of a Picasso hanging in the national gallery for instance) while the Gallery gets to acquire an artwork that it would otherwise not be able to do. Orchestras could use this method to purchase instruments like Stradivarius Violins – and link the token to certify its value and authenticity.

This could also be done by private investors in a consortium or investment fund – investing in high quality musical instruments or key artworks, and ‘renting’ these works to major galleries, or enabling a far wider ownership of significant works of art – imaging saying you own a ‘share’ in a Picasso on the same way that people own a ‘share’ in a racehorse!

For musicians, who have seen revenue from music sales battered by the streaming of music (Gary Numan is quoted as receiving only 37 pounds from Spotify for 1 million streams of his music) the ability to create a tangible product of worth to fans that they will pay ‘good money’ for, is invaluable.

Creating a NFT with items from the Artist embedded in the token like limited edition videos (like Kings of Leon), limited edition vinyl pressings, merchandise rights etc.can create new revenue streams that are in the direct control of the artist, and not subject to the ‘ticket punch’ of a Spotify, Apple, Google or the like on the way through.

We are only at the tip of the iceberg with this, and there is a lot to discuss on this

If you have a creative idea that you think could benefit from being ‘Tokenised’, lets talk about it, and see what can be done.

Who knows, you might have the next multi-million dollar artwork, ready to take the world by storm!

by Fiscal Artisans

February 25, 2021

2020 Vision

I can see clearly now the year has gone.

(with apologies to Jimmy Cliff)

Lessons from a year in lockdown

As we move into 2021 and the end of summer, let’s look back at the realisations that came from the year that was 2020.

Yes, the headings are song titles. Let’s have some fun with this.
(Artists listed at the end. Can you guess them all without peeking?)

1. If you want it, here it is, come and get it…

Twelve months ago, we could see that the virus was going beyond being a ‘small problem somewhere overseas’ and could disrupt us on more than just a personal scale. But we were being told to ‘keep calm and carry on’. What really needed to be said was that we all had to be ready for substantial changes and that everything could and would shift in a moment.

While Federal government support was promised and eventually provided, it was always after the event. It was not provided to help businesses and individuals deal with the coming problems, but rather to try to ‘rectify the problem’ after the event.

JobKeeper, cashboost etc., were all contingent on businesses being ‘prepared’ in advance – if you did not have all of your ‘paperwork’ in order before the assistance was announced, it was too late to step up. You had to pay staff before the funding was provided. And the support was going to be paid a month or more in arrears – and in some cases up to 6 months later.

The State government support was very much the same. The early rounds of support were released with little information and explanation, and no recourse for later follow up. In some cases, payments took six months from application to payment. This was not what was needed – help was needed right away, not ‘on the never never’. If you were not able to cover your needs upfront, you either had to borrow the money or dip into reserves to survive until the cavalry arrived.

It’s easy to say that the support was arranged in a way that favoured larger businesses, but in my experience, that was the case. Cashflow management is crucial in small businesses (and it’s important in all businesses!), and the support of banks was lacking at the small business level but was far more possible with a business ‘of size’. In our experience, larger organisations found the banks were more willing to “extend credit”, but the same arrangements were not there for the “solo operator” or any business with less than $1 million in turnover. This often meant that business owners were struggling or had to make employment choices that were not beneficial to them or their staff. The ability to rebound was also affected as a result. The catch-up process to recover from this could take years for some people.

In virtually all cases, the government support was contingent on a business (or sole trader) being correctly registered – all tax registrations, Super, WorkCover etc., in place before the problems started. (For many small businesses, these registrations were often considered voluntary and somewhat unnecessary and costly). And accounting and financial systems all need to be in place so that the data needed was on hand at all times. The difference between having this in place and not doing so (and hence qualifying for support) could be measured in the tens of thousands of dollars for most small businesses in Victoria. In some cases, this was the sole factor between survival and bankruptcy, and business income fell by 75 – 100%. As we move out of lockdown and into a post-vaccine economy, the lessons to be learned from this are to have your business arrangements in order from the start – the proper business structure, accounting, payroll and reporting in place – and understanding what the numbers mean for you and your business. And be in regular contact with your advisors, so you know what you need to do, then take action quickly, as the opportunity to rebuild stronger and better in 2021 and beyond become more evident.

The lesson from this – be prepared. Structure your business as if it is ten times the size it is today. And get some help in doing this!

2. I get by with a little help from my friends

For many in business, the only way through the tangle of support was hand-in-hand with their advisers – accountants, lawyers, planners and mentors. Over the last 12 months, the reality that all our businesses do not ‘operate alone’ – even when you think you ARE in a one-person business – has never been more true.

There is an old saying is that it takes a village to raise a child. In the same way, I believe that you need a ‘village’ to help grow your business. Legal, financial, corporate, tax advice is usually turned to at various times, but you also need to look at assistance in the way that you manage the business, balance your personal and business time and life, and how you keep the focus on the important things. How do you market and promote? Having gone back into a coaching process with a trusted business coach and taken some time to review and refocus on the important elements of health, family, as well as business values and goals, I can only highly recommend to you that, as you plan to grow your business, don’t think you have to try to do it ‘all on your own’. (And I can highly recommend my coach to you!)

One focus I have this year is to provide you with a team of people that can help in key areas – of course in accounting and financial (bank and finance) aspects, but also with financial planning, legal, and business development sides. These are people that I trust with what I do, and I am sure that they can help you in the same way.

Why have ‘just’ one superhero on your side, when you can have the whole Marvel Universe?

3. I am, you are, we are… dependant on each other

Its always interesting – and a bit of fun – to debate the role of Government and taxation in modern society. How as a population, we are overtaxed, or undertaxed, should all fend for ourselves, should look (or not look) to the Government to provide basic essentials to us, etc.

And just what is ‘essential’ these days? Besides air, that is – as everything else has a ‘price’ on it now and can be obtained from ‘non-government sources’. But is that the way it should be? Does this provide an opportunity for ‘everyone’ to achieve their fullest potential or only the fortunate few?

At a minimum, health and education services should be a high priority for all of us, just like roads and communication (Internet / NBN access). None of these should be left purely ‘to the market’ as the market will always favour some over others,and value profit over service or access. And in a society that promotes equality and opportunity, that is unfair.

Post-Covid, what do we see as being important now – wealth or health? Individual success or collective achievement?

With Covid, the people we have come to depend upon the most are the front-line people: Medical services to test and treat us; security, cleaning and protective staff to keep things managed in such a way as to protect the affected and minimise the impact on everyone else in society.

And the demands on retail staff, hospitality staff, drivers, delivery people etc. has never been greater. We need them to feed us, clothe us, bring things to us and protect us. And yet, these people have often been maligned, underpaid, and put into temporary positions with little or no security, training or respect. This needs to change on many levels.

I have always suggested to clients that tax is an expense of business – not something to be avoided, rather, to be minimised but accepted as being a cost of business and a societal cost of living. It is a cost of business operations that is necessary to provide services that would otherwise have to be paid for anyway – and may otherwise be completely unaffordable.

For me, the Government’s role has always been to provide the base on which our society can survive, grow and prosper (you cannot have an economy without a society unless that is an economy of machines). No matter who you are, what family you were born into, what abilities you have in your head, hands, face, voice, body or feet, your success is as a result of not just what you have done individually, but also the support you have got from the society and the government-funded or supported schools, health services, roads, police and all the rest that is provided by the taxes that we all pay. Paying tax is not a ‘burden’. It’s a contribution towards providing all of that to you and everyone else around you.

How the Government uses that money to support us – now that is another topic altogether!

4. Ch-Ch-Changes

When action needs to be taken, do you do nothing and hope it goes away, or do you make a change quickly?

Over the year, there has been plenty of debate about how soon action needs to be taken, how much action, and for how long. We saw this ‘post-GFC’ as well as with Covid.

Looking back over the last 12 months, I believe that this is what should have happened:

a) Lockdown of the economy should have happened earlier, minimising the risk of spread, and continued until a full eradication happened. This could have been done in the same timeline as New Zealand did.

b) Government financial support needed to start in February, not announced to start in April and paid in May. Yes, people should have been paid to ‘stay at home’ on a substantial percentage of their salaries, not just a basic ‘supplement’ to help businesses maintain employment. And this should have been done in a way that was equitable and supported small businesses, sole traders and creatives, especially those in itinerant roles and positions.

c) Front line staff needed to be employed directly and paid and trained properly. Covid and quarantine should have been treated as a medical problem, not a security one.

d) There is an opportunity in every crisis. Facilities should have been built (and should be now) to house those at risk or needed quarantining or return to Australia, manage them safely and protect them and everyone around them. These facilities could then be used for other ‘relief matters’ – be it post a natural disaster, support for displaced people, or for cross border quarantining of itinerant workers for the agriculture and mining industries. The construction of these facilities would employ many trades during construction and operation and redeployment of the facilities on an ongoing basis.

The current use of ‘hotel quarantine’ should be stopped, and as the lockdowns ease, hotels can return to their normal corporate and tourism-based activities. Use these facilities for the role where they are ‘fit for purpose.’

There has been a great reluctance to make ‘large changes’ to how things have been done, and planning always seems to have been an afterthought instead of a forward-looking, confident process. There was little leadership shown in taking the country forward together with a cohesive process to overcome the problems. It was more a reaction than taking action.

In the same way, in our businesses and our personal lives, we need to look at what we are doing and identify what changes we need to make – and make them now!

a) How important is it for us to be ‘in the office’? Can we operate from anywhere else to do our work? This won’t apply to everyone, but what changes can or must be made to simplify the processes for all?

b) Is your business set up in the right way? Is it able to grow or change as needed in the future?

c) Is your information (accounting, financial, data services, ideas, materials etc.) up to date, accurate and relevant to what you are doing?

d) How do you promote what you do? How well do you use the Digital environment to tell the world what you do? It’s not just ‘social media’ – It’s a new way of promoting and doing business.

Let’s talk about what you need to do and set up a plan for your future.

5. Are ‘Friends’ Electric?

The way that we ‘connect’ with friends, family, and business changed for many of us in 2020. The ongoing lockdowns of last year and the ‘snap’ actions seen a few times already in 2021 point to the fact that much will change in the future.

How will this affect what you do – and how you do it?

For many years, we have been told that the internet will be the backbone for almost everything in our lives – communication, entertainment, information, etc. I think that what 2020 has done more than anything else is accelerate that realisation (and implementation) for many of us.

From home-based primary, secondary and tertiary education, to on-line music, art or language lessons, telehealth appointments, endless Zoom meetings, Houseparty dinner gatherings and drinks with friends and family around the country and the world, our world has expanded while it has been consigned to a 24 inch (or phone sized) screen. We truly do have the world in our pockets, so why are we limiting our opportunities to our local suburb, region, state or country?

Office spaces are coming home – or out of the CBD sprawl, and the need to commute has diminished. How does that affect what you do and how you do it? What opportunities does it open up for you, and what you can do? Are there benefits from establishing ‘community hubs’ with flexible workspaces for people to go in and out of (with appropriate social spacing and health requirements) that facilitate both ‘office /creative work’ and remote work options? Would larger employers use these facilities instead of towers full of employees in the future?

And what does this ‘new world’ mean for infrastructure – do we need a new model for ‘home development’? e.g. apartment or residential developments with dedicated ‘workspaces’ available for periodic use? How does retail change – and will there be more “Uber deliveries” instead of bricks and mortar retail. What does that do to the shopping centre environment? The Amazon experience could grow, reducing the need for ‘the Chadstone experience’, replaced by a flotilla of flying delivery drones (or a fleet of star track vans) instead.

For many, 2020 is the year that the world has changed, and the need to adapt to a “Brave New World” has become significantly clearer. Is work our main focus?

6. Crushed by the Wheels of Industry

Is work our sole focus and the most important thing in our lives?

Really, is that it?

Just how much do we need, how fast do things need to be?

For many, the ‘extra’ time at home and with the family has been a good opportunity to review what the priorities in life truly are. To walk the streets in our limited exercise hours, read those books, watch those movies, and talk with friends and family and reconnect. And to reflect and think.

The pause may have allowed you to revisit your priorities and perhaps let go of what was once ‘so important’ to you and focus instead on what is ‘truly’ important.

2021 can (and perhaps should) be the year to look at what your priorities are – business and personal – and perhaps work on the truly important things, not just the things that ‘need to be done’. Find the “Why” you do “what” you do.

No-one gets this all ‘100% right’. Over the life of my business, I know I have not done so! But the process of doing something, getting the results, seeing the errors, correcting and doing again is all part of the process.

And the more we understand the “why”, and the more we do it, the better we get at it (hopefully!).

No one really gets it right without effort, and practice, and repeated action.

We do it, stumble, dust ourselves off (or have our team help us dust ourselves off) and ‘get back in the fight’.

So, let’s talk about your ‘fight’ for 2021 and beyond – and let’s get on achieving your goals!

Comment here, or email or call and lets talk about what the year looks liek for you, and how we can take action.

Stuart Smith

Director

Fiscal Artisans

And the arists are:

1. 1. Badfinger

2. 2. The Beatles

3. 3. The Seekers

4. 4. David Bowie

5. 5. Gary Numan & Tubeway Army

6. Heaven 17

music – Fiscal Artisans

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