Fringe benefits tax (FBT) is payable on certain benefits you provide to your employees or their associates. These benefits are in addition to, or part of, your employees' salary or wages package.

FBT is separate from income tax and is calculated on the taxable value of the benefits provided to employees.

Examples include providing your employee (or someone close to them) with:

  • vehicles for private use
  • holiday accommodation
  • concert tickets
  • memberships.

Some benefits are exempt or receive concessional treatment, so it's good to brush up on what benefits attract FBT.

When to report?

The FBT year ends on 31 March.

If you've provided any fringe benefits since 1 April 2018, you need to:

  • calculate your fringe benefits taxable amounts
  • lodge and pay your FBT return by 21 May (or lodgment may be later if you use a tax agent).

Remember, we can assist you with fringe benefits tax requirements and as a complicated area of taxation it is best to get advice from a professional.

#FBT2019 #trustaprofessional #CPAs #clarkemcewan #fringebenefitsaccounting #bookkeepingforsbes

A snapshot of the ALP key tax policies

The Federal Election will be the primary focus over the next few months, with many commentators predicting a possible change in Government. 
As usual, tax policy is a focal point of the political debate.  The table below outlines some of the key ALP tax policies of interest.

#federalelection #alptaxreforms #laborpartytaxreforms #coalitiontaxpolicies #taxpolicies #2019election
#2019federalelection #federalelection  #fasttracksuperguaranteeincrease #clarkemcewan #keytaxpolicies
 #treasurermediarelease #limitnegativegearing #reduceCGTdiscount  #australianinvestmentguarantee



Key ALP Tax Policies              Comparable Coalition

                                                             Tax Policies

1. Restrict deductions on personal tax-related expenses to a $3,000 cap per individual, per year

Ref: Shadow Treasurer's and Assistant Shadow Treasurer's joint media release, 13 May 2018

No cap on personal tax-related expenses has been proposed, although the ATO has made adjustments to Item D10 – Managing tax affairs to obtain a more detailed breakdown of what is being claimed by taxpayers at this label from the 2018 'I' returns.

2. Reduce the maximum general CGT discount from 50% to 25%, with exceptions for:

*  grandfathered investments;

*  investments made by
funds   (which are effectively taxed
  at 10% after the CGT 
  discount); and

*  assets of small business

Ref: 'A fair go for Australia', paragraph 135 and ALP website: Labor factsheet, 'Positive plan to help housing affordability'

The Coalition has not indicated a desire to change the current maximum general CGT discount from 50% for eligible taxpayers

3. Limit negative gearing to investments in new housing, with grandfathering for pre-existing investments.

Labor has proposed any losses from new investments in shares and existing properties (which we assume includes commercial property) will still be permitted to be used to offset investment income tax liabilities (but not against salary and wages).

Any deferred losses can then be carried forward to offset the final capital gain on the investment.

Ref: 'A fair go for Australia', paragraph 135 and ALP website: Labor factsheet, 'Positive plan to help housing affordability'

The Coalition has not indicated a desire to change the current negative gearing rules.





Key ALP Tax Policies                  Comparable Coalition

                                                            Tax Policies

4. Remove the ability for certain taxpayers to claim excess imputation credits as cash refunds

Ref: Leader of the Opposition's media release, 13 March 2018

The Coalition has not indicated a desire to change the current ability for eligible taxpayers (including individuals and SMSFs) to receive cash refunds for excess imputation credits

5. Apply a minimum tax rate of 30% to all distributions from discretionary trusts (non-fixed trusts) to mature individual beneficiaries (i.e., those over 18)

Ref: 'A fair go for Australia', paragraph 131 and

Leader of the Opposition's media release, 30 July 2017

The Coalition has not indicated a desire to change the current rules in relation to the taxation of discretionary trust beneficiaries at their applicable marginal tax rate

6. Introduction of an Australian Investment Guarantee from 1 July 2020

This accelerated depreciation for business proposes to immediately allow a 20% write-off for eligible depreciating assets

Ref: Shadow Treasurer's media release, 13 March 2018

The Coalition has announced that from 29 January 2019, the instant asset write-off threshold for SBE taxpayers will increase to less than $25,000 and this will apply until 30 June 2020 (at which time the immediate write-off threshold presumably goes back to less than $1,000)



Key ALP Tax Policies Comparable Coalition Tax Policies

1. Lower the non-concessional contributions ('NCCs') cap to $75,000 (down from the current $100,000). Ref: 'A fair go for Australia', paragraph 41

The Coalition has not indicated a desire to change the current $100,000 NCCs cap (indexed)

2. Lower the Division 293 tax threshold to $200,000 (down from the current $250,000)

Ref: 'A fair go for Australia', paragraph 41

The Coalition has not indicated a desire to change the current $250,000 Division 293 tax threshold

3. Repeal the newly introduced concessional contributions ('CCs') catch-up rules

Ref: 'A fair go for Australia', paragraph 41

Retain the new CCs five-year catch-up rules for eligible members if they have a total superannuation balance of less than $500,000

4. Repeal the recent reforms allowing all eligible individuals to claim a tax deduction for personal superannuation contributions.

Ref: 'A fair go for Australia', paragraph 41

Retain the recently legislated relaxation of the personal superannuation deduction rules (i.e., the removal of the '10% test' from 1 July 2017)

5. Prospectively restore the prohibition on direct borrowing by SMSFs on housing investments via Limited Recourse Borrowing Arrangements ('LRBAs'). Ref: 'A fair go for Australia', paragraph 136

The Coalition has not indicated a desire to change the current LRBA rules

6. End the freezing of the Superannuation Guarantee rate at 9.5% and fast track the employer compulsory contribution percentage to 12% - although firm dates have not been provided. Ref: 'A fair go for Australia', paragraph 39

The Coalition has not indicated a desire to change the current 9.5% Superannuation Guarantee rate until the first increase in 2022 (to 10%) begins the gradual progression to 12% by 2026

Minutedock - A Time Tracking Tool


Promoted as a "Loveable time tracking software" MinuteDock helps track how people use time. There are several ways to define time: client, billable, unbillable, projects and tasks. 
Compiled time recordings can generate a single detailed client invoice within MinuteDock. Or the solution can push invoices through to Xero, QBO, or MYOB.

Features and benefits

Included is the ability to define default client, task or project hourly rates. Plus, it has a default client currency, which is useful for overseas clients. Its goal setting features can help you track staying under budget, or achieving and exceeding a target. For refined tracking you can filter the goals to users, contacts, tasks, or projects and period.

Once created, goals sit on the time log dashboard.  The bar indicator reflects time logged against goals. Colours reflect what you're trying to achieve. For example, when it turns red, it's flagging concern. There are also extensive reporting options.

MinuteDock is a handy tool for tracking goals and deadlines. Set up as a task, then set up a monthly goal. You can run a report of tasks for a full year. Export a csv file and submit the details to your professional association.

Where it fits in the workflow

There's a desktop and mobile (android and iOS) version so you've got the flexibility to log time, wherever you are – and logging time only takes a few seconds. For businesses that bill hourly, logged time accumulates to create detailed client invoices. Some clients appreciate a comprehensive summary of work they are paying for. For businesses that bill on a retainer basis, it's important to track time to complete client work.

Along with normal activities, you can track lost time, late lunches and outside hour client calls. These capabilities mean you can address ineffective time and measure and analyse business time. This tracking means you're better placed to manage schedules and make informed decisions with accurate data.

Another year Another scam

While data driven crime is more sophisticated and difficult to address than ever, human error and judgement remains one of the major problems.


The latest data breach report from the Office of the Australian Information Commissioner (OAIC) is surprising for the simplicity of the problems - 37% of data beaches resulted from human error not malicious attack. In over 20% of reported cases, personal information was simply sent to the wrong recipient. Another 6% of complaints were attributed to system faults.

Since 22 February 2018, businesses covered by the Privacy Act need to report unauthorised access to or disclosure of personal information or loss of personal information that your business holds under the Data Breach Scheme. The rules impact organisations with an annual turnover of $3 million or more, businesses 'related to' another business covered by the Privacy Act, or if your business, regardless of size, deals with health records (including gyms, child care centres, natural health providers, etc.,), is a credit provider, or holds Tax File Number information (see the list). 


Organisations are required to take all reasonable steps to prevent a breach occurring, put in place the systems and procedures to identify and assess a breach, and issue a notification if a breach is likely to cause 'serious harm'.


What the statistics from the OAIC demonstrate is that procedural integrity in your business is paramount – train your team to not only be wary of scams but ingrain best practice for the day to day management of personal data. Privacy protection is not just an 'IT' issue.

While not the only factor, protecting your systems remains a priority as Marriot Hotels discovered when the Starwood guest reservation database was breached.

According to the latest announcement, up to 383 million records were potentially impacted. Of those, there were approximately 5.25 million unique unencrypted passport numbers. On 30 November 2018, the company announced that unauthorised access to the database may have been occurring since 2014. 


Similarly, Cathay Pacific released a statement notifying that up to 9.4 million members of their Marco Polo Club, Asia Miles or a Registered Account holder have potentially had their data breached including passenger name; nationality; date of birth; phone number; email; address; passport number; identity card number; frequent flyer programme membership number; customer service remarks and historical travel information.


Remember, hackers can gain access to your business's data simply by a staff member clicking on a link.


While not impacting personal data, according to the ScamWatch, a common scam is where hackers gain access to a business' email accounts, or 'spoof' a business' email so their emails appear to come from the company. The hacker then sends emails to customers claiming that the business's banking details have changed and that future invoices should be paid to a new account. These emails look legitimate as they come from one of the business's official email accounts. Payments then start to flow into the hacker's account. The average loss from these scams is around $30,000.


A variation is where the hacker sends an email internally to a business' accounts team, pretending to be the CEO, asking for funds to be urgently transferred to an off-shore account. Hackers can also request salary or rental payments be directed to a new account.


In 2018, these scams cost Australian business $30 million in 2018. 

Simple measures you can take:

·         Have strong and enforced processes in place for the management of personal client information.

·         Strong authorising procedures for payments – two-step authority.

·         Change passwords often and use two-step authentication where available.

·         If a client's bank details have changed, phone them and check the details.

·         If contacted by the ATO, contact us to verify the information if you are concerned.

·         Train your team on cyber security:

o    Check requests for payments that arrive electronically from other team members and management.

o    Check email addresses are legitimate – look for slight variations.

o    Be suspicious of poorly written emails.

o    Don't click on links from email – always use your account with the supplier or Government department to check details.

Editor's note: 
Clarke McEwan utilises strong security measures to protect data.  We encourage our clients and associates to use the 2StepAuthentication system when accessing organisations records. This step is part of our commitment to support tighter security requirements and recommendations from the Australian Tax Office.   2SA has been adopted by many of the software providers that we and our clients utilise. For instance, it is now compulsory to use two-step authentication (2SA) when logging into a Xero account.  Xero will be changing the passwords for all users from 12 February 2019, so in order not to be delayed the next time you want access software or banking details is it imperative that you set up 2SA when it is offered to you. If you need more information, contact us. #clarkemcewan #2SA #cybersecurity #authentication





Help secure your capital with fixed income ETFs

Australian investors have not traditionally been big users of fixed income, but the asset class is increasingly coming to the fore. Investors are becoming more aware of the need for diversification in their portfolios, the income flow, stability and certainty that bonds can provide, and how crucial these attributes can be when planning a self-funded retirement. 

Steady and reliable income

Bonds are classified as 'income assets' as they provide a steady and reliable stream of income. Fixed income is generally considered to be a defensive asset class, but bond values can fluctuate due to changes in interest rates. Bonds have a lower risk profile than shares, which means they don't offer the same capital growth potential.

The spectrum of bonds available ranges from practically risk-free (if held to maturity) Commonwealth government bonds, to semi-government bonds (issued by state governments) to corporate bonds (issued by companies). This bond menu offers a wide range of yields, and therefore meets a range of investor needs and risk appetites.

Corporate bonds do not have as high a credit rating as Australia's sovereign credit rating – or those of the states – so they are higher-yielding than government bonds, but consequently riskier. However, investing in investment-grade rated corporate bonds in both the Australian and global markets is generally safer than investing in the same companies' shares, as they are higher up the capital structure.

Easy, cost-effective access to the broad Australian bond market can be established by buying the iShares Core Composite Bond ETF (ASX code: IAF), or the investor can target only the "sovereign" (that is, commonwealth government bond) sector using the iShares Treasury ETF (ASX code: IGB). Income-oriented investors unwilling to accept the risk of inflation eroding their returns can specify their bond allocation into the Australian inflation-linked bond sector using the iShares Government Inflation ETF (ASX code: ILB). 

Fixed income securities can give an investment portfolio an element of capital stability and a consistent flow of interest income. Moreover, bonds typically show a low correlation with shares, meaning that they can protect a portfolio against capital loss.

Simple diversification through ETFs

Historically, fixed income has been a difficult asset class for Australian retail investors to use. Most bonds were sold in prohibitively large minimum investment parcel sizes, which effectively locked retail investors out of the market, confining them to unlisted bond funds. But in 2012, the first fixed income exchange traded funds (ETFs) were listed in Australia. These gave local investors the ability to lock-in exposure in one ASX listed stock to a fixed income portfolio comprising investment-grade securities, Australian commonwealth government bonds and state government bonds. 

As has happened in the equity space, the addition of global fixed income ETFs has allowed Australian investors to gain exposure to international sovereign bonds, bonds from 'supra-national' issuers (for example, the World Bank) and foreign companies. The global bond ETFs also add high-yield bonds (corporate bonds that are not rated investment-grade) and emerging market bonds to the local menu.

For example, the iShares Core Global Corporate Bond (A$ Hedged) ETF (ASX code: IHCB) offers a simple, low-cost exposure to global investment-grade corporate bonds, spanning multiple countries and sectors. The iShares JP Morgan US$ Emerging Markets Bond (A$ Hedged) ETF (ASX code: IHEB) does the same for the US$-denominated global emerging markets bond market.

Some hedged international bond exposure can potentially reduce a portfolio's overall volatility. Like shares, investors have the choice of hedging the currency exposure of global bonds back into the Australian dollar. If hedged, this allows the investor to earn foreign market income and take advantage of potential foreign bond price appreciation, without being affected by currency fluctuations. (All of the iShares international fixed income ETF range is hedged to Australian dollars, to remove the currency risk for the Australian investor).

Redressing equity bias

Historically, Australian investors have shown a strong bias towards shares, particularly domestic shares. This has been cemented over the last few decades by the strong attraction of the dividend imputation system (introduced in 1987) – stemming from the subsequent boost to returns provided by franking credits – as well as a series of government privatisations and de-mutualisations of large insurance companies that served to swell the ranks of shareowners.

This bias towards shares has extended into retirement funding portfolios. According to the Australian Association of Super Funds (ASFA)¹, Australian super funds hold 48% of their assets in listed investments, with Australian shares their single largest allocation, at 23% of assets, followed by international shares at 21%. (Real estate investment trusts, or REITs, fill out the listed portion, accounting for 4% of total assets.)

However, this predilection for shares puts Australia out of step with international practice. In most of Australia's peer group of developed countries, bonds are by far the dominant asset class in retirement funding.

According to data from the 2015 OECD Pensions in Focus² report, the average pension fund (in a sample of 31 developed countries) holds 51.3% of its assets in bills and bonds, and 23.7% of its assets in shares. The same report puts Australian pension funds' allocation to bills and bonds at 8.8%, while 50% of the assets are held in shares.

Australia's growing army of self-managed super funds (SMSFs) diverges even further from the normal preponderance of bonds in pension funds. According to Australian Taxation Office (ATO)³ statistics, as at March 2016, Australian SMSFs held $6.7 billion in debt securities, or just 1.2% of the $570.6 billion in SMSF assets. In contrast, SMSFs own $172.1 billion worth of shares, or 30.2% of their assets. 

The upshot of these statistics is twofold. Firstly, the asset allocation of the Australian pension system, being much lower in bonds, is not as conservative as that of its OECD peers – that is, it is arguably more risky. This applies particularly to Australian SMSFs.

Secondly, Australian SMSFs' minuscule collective holding in bonds means that these funds are not well-diversified as a group. Using selected domestic and global bond ETFs can redress this asset allocation anomaly by cost-effectively establishing a portfolio holding in fixed income.

¹ Source:

² Source:

³ Source: 

Disclaimer: This is a sponsored article by BlackRock Investment Management

Australian accountancy has been a special interest of accounting scholars, not only because of its lively academic influence upon the development of accounting thought, but also for its recognizable differences compared to that of the USA and the UK. 

The early growth of the profession was fragmented by state. Australian accountancy was influenced by British accountancy until 1970 and by American since then. Except in Victoria, it was unregulated until the early part of this century. It has also been characterized by some innovative attempts to improve accounting reporting. Therefore, Australian accountancy has been a world leader in accounting theory contributions,  particularly since the 1960s.

During the first forty years of European settlement in this continent, there was no legal currency; therefore, barter transactions were dominant. In the barter economy, accountancy took a role to make such transactions easier by "using money as a unit of account even if money is not available as a means of payment".  Even so, according to a survey published in 1953 no instance was found of a set of double-entry records among the accounting records of this period.

The development of corporate accountancy in Australia passed through a number of phases such as the introduction of minimum standards of disclosure, the extension of statutory requirements, and the challenging problem of accounting measurement.  Then in the 1880s, the "Land Boom Case" played an important role in the regulation of company financial reporting in Victoria.  Meanwhile, in New South Wales, disclosure requirements for banks and mining companies had the major influence as corporate disclosure was, until then, substantially unregulated. For further reading, see Accounting in Australia - Historical Essays *.

One of Australia's earliest accountants remains one of the country's greatest historical figures. John Macarthur arrived in Sydney in 1790, a military officer determined to prosper in the new colony.

Macarthur and his wife Elizabeth are famous for introducing merino sheep to Australia and he is cited as the father of the Australian wool industry, but it was Macarthur's accounting skills that set him on his way. As one of the few people who knew how to prepare a statement of account, he gained insights into trends and the growth of commerce in the new colony.


Another notable Australian accountant is Edwin Flack.  He was the first Australian to compete and win at the 1896 Athens Olympics. He was an accountant who was working for PriceWaterhouse.


Sir Arthur Fadden was the Prime Minister of Australia for only a short stint (29 August to 7 October 1941), but he was first a successful accountant with offices in Brisbane and Townsville for more than a decade before being elected to local office. After The Lodge however, his political career did continue in various capacities, as well as his accounting skills.  Fadden was also Treasurer twice in a span of 20 years.


*some content adapted from a review by H. Manao of Accounting In Australia - Historical Essays

Happy Australia Day from Clarke McEwan
#australiaday #clarkemcewan #australianaccountants


Smart and Effective Media Marketing

Social media should be an intrinsic part of your marketing campaign as it ensures you reach your target audience, however there are things you should avoid doing.  Consider the following tips improved productivity across the platforms and trigger better results.

1.     Publish on the Desk-Top version as well as your Smartphone !

While apps on our phones have made it easy to access social media, posting all your business content from your smartphone is not the wisest thing to do–unless the social media platform can only be fully utilised from a mobile device, as is the case with Instagram.

Each of the platforms offer slightly different features and functionality between their web-based and mobile app systems, and in particular, the area of security.  As an example, take Facebook:  if you browse the publishing options on your Facebook Business Page from a desktop computer, you'll see that there are more options with a greater reach that aren't always accessible on a smartphone.

Choose your platforms wisely !

Avoid being "out there" on every single social media platform.  You could waste a great amount of your time by using every single social media channel.  Certain industries tend to gravitate more toward one than the others.  Do some research, find out which ones are more active in your industry and then concentrate your energies on those.

Your exposure can expand quickly if it is strategically marketed.  To make the best use of your time and to be effective, you should put a social media strategy in place that will ensure you don't waste valuable hours of your time. When used correctly and strategically, social media has the power to generate more leads and sales for your business, but it can also be a major time-waster in subtle ways.

3.  Create connections by following people back !

While the Facebook Business Page itself doesn't allow you to follow individuals back, it's advisable to follow your clients and prospective members on Instagram if you can find their public account. Effective marketing on social media is about creating connections, so make the effort to connect with clients and prospective members by showing interest in their posts where relevant.  With the way many of the algorithms work, you will show up more in their network, making it easier for them to recommend you to their connections.

4. Don't overlook social advertising

Your followers are overcrowded with hundreds of posts on a daily basis, so you can't guarantee that they will see all your posts. Through advertising you can reach a wider audience, and potentially get more leads or sales. Consider the "pay to play" strategy at times – a smallish investment could expand your reach in a platform like Facebook, and you'll reap the rewards.

New Year's resolutions are habitually put in place in order to improve our lives or reach a particular goal. It's all about aspirations. And who's more aspirational than a business owner? The ones who seize the opportunity to make themselves and their businesses great. If you have that entrepreneurial spirit – you'd know that planning is key in reaching your goals.

But first, let's talk timing

The start of a new year can actually be pretty quiet for some small businesses. Making it the ideal time to pause, think and plan. You probably already believe your business could benefit from cost saving and new systems. Making it reasonable that you carve out some time to give it the once-over. So what should you have in your 2019 toolkit?

#1. An up-to-date business plan

One of the most important tools you can have in your arsenal is a strategic business plan. This is your roadmap for the year ahead. It helps all parties get on the same page. Ensuring that visions are aligned, budgets are available and pitfalls are anticipated. Make sure yours is still relevant by comparing year-on-year actuals and variables. Then cross-reference these with new plans and fresh goals.

#2. Available cash-flow

Now you have a plan in place. Make sure you have the cash-flow to make this happen. Cash-flow is like air for your business. It doesn't matter how cutting-edge your plans are, without working capital to finance it, it's all theory. The good news is that there are ways to facilitate this. One way would be to get your overdraft facility in place. The other way is to apply for finance. A cash advance can be a great way to get access to quick funding. In as little as 48 hours in fact. This should be a priority at the start of your working year.

#3. A clear marketing and communications strategy

No matter how good your product or service is if nobody knows about it you are won't sell very much. It is vital that you come up with a communications strategy that clearly explains your product. And creates a convincing argument to compel customers to use it. It's likely that as the small business owner you spend most of your time on operational issues. But bear in mind that having a marketing strategy in play will ultimately drive sales and help you do your job better.

#4. A consolidated calendar

Now that you have a business plan and communications strategy in place, one of the most important small business tools is a calendar. Think about how quickly the year moves. So as tedious as the process is, it is well worth syncing calendars with all the micro-activity that will make up your long-term wins. Then stick to them.

 #5. Strong small business tools rest on relationships

Quiet periods are a great time to touch base with your customers in a personal way. Don't rely solely on your staff to give you feedback on customer experience. There is no better way to understand what your customer thinks then by asking them yourself. The personal contact will be a welcomed interaction. And you can only benefit from the experience.

#6. A good IT infrastructure

The systems that worked for you last year, may not work for you now. Take the time to do a consolidated audit of all your IT systems. Consider if there is a way to pool resources, upgrade your Wifi or backup your office devices. This is often a place you can save costs, so its definitely worth investigating.

A new year holds the potential for so much. Often this is exciting. But it can also be daunting. The key to your success (and sanity) rests in careful planning and baby steps to help it all happen. With these key small business tools in place, hopefully, 2019 can be one for books!

Business-friendly AI innovations emerging en masse

While there is plenty of hype - and some fear - around artificial intelligence, an array of businesses are showcasing cutting-edge uses of the technology to resolve real-world business problems.

While a recent study suggested that half of Australians are not convinced that automation and AI are a good thing - for more on this, see previous article,  the other half of the population are eagerly embracing the technology and the efficiencies it is capable of delivering.

At a recent event in Sydney to launch its report Artificial intelligence: A starter guide to the future of business, ACS profiled three start-ups implementing AI to take data analytics to new heights, across areas as diverse as product sales data to file storage and image analytics.

The report sought to dispel fears that AI poses an existential threat to humanity - at least in its current capabilities - while outlining some of the real-world business benefits being explored or implemented by the technology.

"Artificial intelligence - as the phrase is often used today - is a bit of a misnomer," the report said.

"We tend to think of intelligence in human terms: self-awareness, the capacity for independent thought, the capability to reason and autonomous decision making, among other traits.

"These capabilities are far beyond the implementation of artificial intelligence that we have today."

What can AI really do?

According to the report, AI currently combines three key capabilities:

  • cheap and powerful networked computing power
  • computer science developments in machine learning algorithms
  • unprecedented volume of data

In essence, AI is capable of processing much larger volumes of data than humans can, and does so in much shorter periods of time.

It is also able to take this data to determine trends, make recommendations based on past outcomes or behaviours, and learn through repetition.

Examples are spam filtering, vehicle autopilots, recommendation engines and even fraud prevention.

Current applications and uses are being offered by start-ups through to large corporations, each aiming to solve different business constraints.

Accounting software provider MYOB recently announced a partnership with The ai Corporation to roll out a new payments gateway that incorporates fraud detection and prevention with payment compliance.

Job management company simPRO uses complex algorithms to draw information from a variety of sources - PDFs, Excel documents and so on – and translates the information into purchase orders, job requests and client updates.

Australian start-up Hyperanna, meanwhile, allows retailers to take data analytics to new levels, consolidating data across different product lines, store departments and locations to identify trends in product sales in real time.

And as My Business sister publication Nest Egg reported recently, students at the University of Queensland are investigating the application of AI to create smart homes - which could easily move into workplaces too.

These studies are looking into a range of applications, including front doors that incorporate facial recognition and height/size measures for enhanced security, as well as smart fridges that scan products being taken out and put back to monitor shortages and expiry dates.

Limitations of AI

Most developers agree that there is plenty of hype around the technology, significantly overstating the scope and powers of AI.

A great example highlighting the basic limitations of AI is the so-called "muffin puppies".

As the report highlights, a series of Twitter posts in 2017 went viral after comparing animals with similar-looking inanimate objects and putting them through various image recognition tools to test their accuracy.

The technology struggled to tell the difference between close-ups of chihuahuas and blueberry muffins, sheepdogs and mops, as well as kittens and ice cream.

Case study: Sortal

Speaking with My Business, Sortal co-founder Majella Edwards said that AI is about having machine learning do the heavy lifting of manual and time-intensive tasks for people. In her instance, that task is searching, storing and cataloguing photos.

"Digital photography is such a phenomenon that people don't even think about now, and it's because of the smartphone… it's part of our everyday life.

"[But] we have a problem that has gone undiagnosed… what do people do with their photos?"

Ms Edwards said that people and businesses alike are being overwhelmed with an onslaught of photos, and how to sort, catalogue and access images on demand with ease.

"The big giants - you've got Google, you've got Microsoft, you've got Amazon - a lot of them have already invested heavily in computer vision. So we're standing on the shoulders of giants; we're taking what they've done any we're pushing it further," she said.

"A lot of the machine learning models we have already can recognise 'wedding', they can recognise 'christening', so they've already got the data and they've got billions of photos that they have been analysing for the last five years."

According to Ms Edwards, her business launched earlier this year as "a form of enhancement" to remove the burden on people of remembering where images are saved, under what name and what date, by having its application "do that thinking for you".

One of Sortal's next steps will be to explore word recognition within photos as an additional layer of searchability within a photo library or catalogue.

Ms Edwards said that one of the struggles for any new AI or data-driven business is conveying value of the technology in the early days, because the value enhances over time with the addition of more data rather than from the outset.

"In tech land, it's called a release candidate. We have to be really disciplined with what's in and what's out, so at the moment we've had to build in maybe five key features that are going to deliver the biggest bang for buck," she said.

"But later, we'd like to implement more features that deliver greater value."

It is very much a partnership, Ms Edwards admitted, between early customers and partners testing the technology to identify pain points and educate users on how the technology can be used to solve them.

"Sometimes people can't see past what they already know," she said.

"AI does get sloshed around a lot and people do think it is capable of doing all these amazing things and that it can be really scary.

"But I really believe we are solving a first-world problem, the likes of which we have never seen before."


Automation and AI - Half of Australia remains unconvinced

Many businesses are now embracing automation and artificial intelligence, but the benefits of these technologies are getting lost on many customers and staff.

The research, conducted by Nature on behalf of SEEK, found that less than half of Australians view automation and artificial intelligence (AI) as being "probably a good thing" (48 per cent and 46 per cent, respectively).

Of those that do, the main benefits were identified as increased efficiencies (47 per cent), less repetitiveness (46 per cent) and freeing up people's time (35 per cent).

Surprisingly, it was not just younger adults who are more receptive to these technologies and more positive about their impacts: Baby Boomers (those aged 55 to 64 years), combined with Generation Z (those aged 18 to 24) were more receptive than any other age groups.

Attitudes towards AI and automation were also split by gender, with males much more accepting of the technologies and the belief they deliver greater free time for individuals as well as broader efficiencies for the overall economy than females.

According to the research, a major barrier to even greater uptake of these technologies in business is simply education: people are aware that the technologies exist, but they know little about how they work and what they can be used for. And it is this lack of awareness that is driving a reluctance to accept them.

While 93 per cent of those polled had heard of both AI and automation, three in 10 said they are not welcoming of AI into the workplace.  In fact, a quarter of respondents (26 per cent) believe that AI will actually do more harm than good and can't understand the hype about it. That was more than double the 11 per cent who said they love it and think it should be embraced as much as possible.

Job security fears drive concerns about tech

Aside from education, the research found that fears around job security are a major factor in distrust or apprehension of automation and AI.

Despite being among the greatest believers in these technologies, members of Generation Z are also most concerned about their impacts on the availability of future employment opportunities.

That was despite just 6 per cent of respondents having been made redundant or forced to change jobs as a direct result of either AI or automation. These fears are seeing many people turning to training and education, with 41 per cent believing they will need to learn new skills as a direct result of technological advancements.

Fears 'understandable'

Commenting on the findings, Inna Wahlberg, general manager at payroll software provider Ascender Asia Services, said that "it's understandable employees are nervous about advancements when it comes to AI".

"The technology will introduce incredible technical efficiency and get smarter over time, with many suggesting it will replace humans," Ms Wahlberg told My Business.

"However, it could not possibly replace humans completely. For example, while AI may give you the data and analytics to justify a pay increase, would you want to negotiate salary with a robot? When employees have sensitive inquiries, such as queries around payroll, they want to talk to a real person. We are emotional beings and require support from other humans. No matter how sophisticated a chatbot is, we will never truly relate to them."

According to Ms Wahlberg, businesses looking to embrace AI and automation need to understand their core function, which is to "make independent decisions to achieve a goal without continued human input".

"This will put them in a good position to use AI software (when it does become available) to further streamline mundane tasks, and to ensure problems within the organisation that will always require a human touch are identified as soon as possible," the GM said.

Ms Wahlberg agreed that education about the technologies, as well as their benefits and limitations, is the key to driving uptake and usage.

"It is a case of being informed but not alarmed. Businesses will inevitably become more automated and AI will enhance the technological capabilities of software. But it is still a long way off from replacing humans," the GM said.

"For managers and businesses looking to take advantage of AI, it is crucial to build it up gradually. That means learning what tasks AI could help us to achieve in the future and understanding where we can add further value to the business."

The SEEK-Nature research was conducted by interviewing 400 Australian adults aged 18 to 64 currently in the workforce, whether employed or looking for work.