E-tax: How putting an accountant out of work can make the world a better place

This year, I started using e-tax again.

The last few years I paid an accountant to do my taxes, partly because there was no e-tax for Mac, and partly because I perceived  there would be some great benefit of getting a professional involved.

Having now been on both sides it’s time to announce my conclusion.

E-tax is, for me, a million times quicker, easier and cheaper than using an accountant. (Even though last tax year my affairs were more complicated than ever, having an ABN and business income, a redundancy payment, etc to contend with).

All the information the accountant uses is provided by me – why not just enter it into a system myself? My accountant also bothered me with physical pieces of paper (ugh!) that I had to physically sign (so medieval!). Using an accountant also gave me no hard deadline on doing my taxes – unlike e-tax – so I let it hang over my head til the following May.

When I go to e-tax, the suburban accounting industry takes a hit. They used to make a few hundreds bucks a year from me ($451 last year, I think) but now they make nothing. Doubtless, this hurts.

But this is exactly how productivity increases – painfully. When I find a way to do something more cheaply, it means someone loses a revenue stream.

The money I used to send to the accountants, I can now spend in some other way. It might go on travel, a new bicycle or dinner out at a restaurant. Some other industry will see the upside of this efficiency increase.

The story of the accountant being pushed out of work by a computer program is extremely relevant right now.

“We are now in the second machine age where robots take on mental, as well as physical work, which does encroach on a vast number of jobs” – Erik Brynjolfsson, director at MIT Initiative on the Digital Economy.

Big names are sounding out the warning:

“Software substitution, whether it’s for drivers or waiters or nurses … it’s progressing. … Technology over time will reduce demand for jobs, particularly at the lower end of skill set. … 20 years from now, labour demand for lots of skill sets will be substantially lower. I don’t think people have that in their mental model.” Bill Gates

In their mental model, the jobs are lost and not replaced. That defies centuries of progress. Could this time be different? I doubt it.

What will happen is that people will specialise in doing things only humans can do, or things where having a human do them adds great value.

These will mainly be services, but then we have a strong history in services.

We will not cease to be a social species, so there will be lots of instances in which people are prepared to pay a premium to have a human provide for them. You’ll notice the Sushi train has not yet replaced the waiter and the vending machine has not replaced the barkeeper.

What this means as well is that more and more jobs will be fun and challenging, because they are human-facing. There will be fewer book-keepers and widget makers squirrelled away in the back room never seeing another human.

Instead there will be more barbers, life coaches, counsellors, nail artists, masseurs, tailors, troubadors, baristas, chauffeurs, etc. And that’s only the existing jobs. I bet things you never thought a person could or would outsource will turn into huge industries.

I can imagine a cooking coach in people’s homes, to bridge the gap between eating in and out.  A financial adviser on call in all manner of situations – perhaps you can set up your credit card so you have to dial them up and justify your purchase every time you try to spend more than $100.

There could be cycling leaders who organise a great ride through the best terrain for the day, and make sure you’re not stranded without a spare tube. Experts that come to you to help you “homebrew” beer or make your own yoghurt. Interior designers that help you custom craft your own furniture. Cleaners that do lots of value add, by say, bringing flowers. Dog trainers, cat groomers, budgie psychologists?

Many of these already exist at small scale. The possibilities are limited only by human ingenuity and the human desire to consume. Don’t bet against those forces.