In the last week we've witnessed New Zealand taking on the world in sport and in international politics. In each case we've needed sponsors, collaborators, partners and alliances to even get to the start line. It's clear to me that if we are to continue to punch above our weight, New Zealand must look offshore and work collaboratively in order to achieve in a global economy.
This week members of the New Zealand Institute of Chartered Accountants (NZICA) commence voting on the proposal to create a new trans-Tasman Institute with the Institute of Chartered Accountants in Australia (ICAA).
The proposal has been a long time in its gestation. We've been talking with members about the prospect for almost two years, and completed an extensive two month consultation period in July. During consultation 88 per cent of independently surveyed members indicated that the new Institute proposal should go to a full member vote.
So why One New Institute? The proposal has been driven by the changing needs of our memberships, increasingly global designations and diverse competition. The implication of these changes goes to the heart of the pre-eminence of the Chartered Accounting (CA) designation.
The pre-eminence of the CA designation is the bedrock of its continued success and a source of great pride and value to CAs all round the world - whether they're small public practitioners in Hamilton or working for a large corporate in Canada. The designation is their meal ticket and the Institutes' primary role is to reinforce the designation in the eyes of Government, business, employers, academia, the public and future generations of CAs.
At its core the proposal is for a new Institute that is attractive to current and future members, progressive and relevant and as cost efficient as possible.
Because we are creating a genuinely new organisation, not just rolling one into the other, the cost savings from the proposed New Institute are significant at almost $18m. Members stand to benefit from the activities of the New Institute through increased financial capacity and delivery of enhanced services. If the New Institute proposal gets the green light, the majority of members would see a decrease in annual membership fees with the base CA fee dropping by 19 per cent.
In the last week all voting members have received an Explanatory Memorandum (EM) on the One New Institute proposal. The EM has spurred feedback from a small number of members suggesting that we're rushing things, and that the proposal is just for the top end of town, not our smaller public practice members.
I make no apologies for the EM being detailed; it includes information on the vision and strategy, expected cost savings, transaction costs, benefits and risks of creating One New Institute.
The first 20 pages covers all the significant aspects of the proposal and then further sections provide detail in the form of graphs, financial tables, the independent expert's and investigating accountant reports. Members have almost six weeks to digest the information in this document before voting closes on 1 November. The consultation process and voting period go well beyond what is normal for a transaction of this nature.
With regard to member benefits, the new institute will be better positioned to meet the needs of members in all sectors. Members in rural New Zealand have as much to gain as their colleagues in the large cities.
We'll be able to provide greater marketing support and brand development that builds clients', the public's and employer's appreciation and preference for the Chartered Accountant designation.
We'll be able to expand our current technical education offering into a genuine lifelong learning programme that is relevant to all members. And for those smaller practitioners, who seem most concerned about the proposal, we'll be able to provide better support to embrace the changes that are currently affecting their practices -because small practitioners in Australia are facing the same challenges.
This is a once in a generation chance to transform the accounting profession as we know it in this country. I'm extremely excited by the proposal and the potential it has to enable us to create something special. Please go to www.onenewinstitute.com if you want more information.
Craig Norgate FCA NZ