INTERVIEW

By Thomas Hage,

Defence Writer, WA DEFENCE REVIEW

WA DEFENCE REVIEW spoke with RSM Australia’s West Australian defence industry team - Simon Harcombe, Tom Huberli and Riaan Bronkhorst - to explore the trends they are seeing across the sector, and to talk about the services RSM offers the defence sector.

Tom: Firstly, RSM is a people business. When you’ve been around almost 100 years, outside of expecting a letter from Her Majesty, you’d also expect to have developed a pretty good and comprehensive service line, which we have.

Services we can provide include the expected financial

reporting, tax and other regulatory reporting compliance requirements. However, we also get in at ground-level to help with your data processing day-to-day, cloud data solutions, as well as the management reporting and dashboarding that comes from that. This along with budgeting and planning support helps you keep clear sight on your performance and helps you stay compliant.

To be a part of Defence’s supply chain, you need to be really clear and succinct on what you can offer. We can help you piece this together as part of your business case or plan, as well as line you up with the right people to take you further on that journey.

Simon: RSM as a large mid-tier firm has also developed the specialist capabilities that you would typically only see in the larger firms. We recognise the value adds that these specialist areas can bring to our clients and include R&D tax and grants, risk, IT, and cyber security as part of the service. The ability to scale service offerings and bring in the specialists to ensure the right service is delivered at the right time, we believe, is of critical value.

RSM Australia has over 30 offices nationally including in Perth, Rockingham, Wagga Wagga, Canberra and Albury. © RSM Australia.

Tom: We love working with SMEs, be family run businesses or larger groups. If we get a feel for what you’re doing in your business, we’ll be of more value to you and that’s why we like doing it that way. We translate financial information in an understandable manner, hence RSM’s tagline, ‘The Power of Being Understood’. That’s not just a slogan, we live it. Why wouldn’t we? With a large network of professionals from other services all over the country - not to mention our international RSM member firms - you can expect local and global expertise delivered hands-on, at your doorstep.

Tom: It’s going to sound funny and a bit contradictory, but I am Swiss by birth, and despite Switzerland being a famously neutral country, they invest a lot of time and money into their armed forces. They have a compulsory military service for all males found to be suitable from age 19 to 34, and later if desired. It’s a bit genderist unfortunately, females can play too, but only on a voluntary basis. Conscription and volunteers make up the majority of the Swiss armed forces, so most of the adult males in my family’s history, as with any Swiss family, have military service experience, whether they liked it or not! I missed out on this as my family migrated to Australia in 1980 when I was just three years old. Hence I’m trying to make up for it by consulting to defence-related businesses with RSM instead!

RSM Australia can help you navigate R&D tax incentives and government grants including the Modern Manufacturing Initiative. © RSM Australia.

Simon: I have worked in policy and strategic areas previously and understand that Australia is in a period where it’s facing some real risks for the first time in a long time. Assisting Australian defence technology companies to access the benefits available to them to best develop their sovereign capabilities is my interest and also my way of contributing. Also, the types of projects and technologies that can be developed in Australia is impressive, improving and something that I believe we all should be proud of.

Simon: We have a dedicated national R&D tax incentives and grants specialist team. Many of our WA-based clients are from technology industries including defence, cyber security, and software development. Typically, a defence technology business that’s undertaking R&D in developing its products will look to access the R&D tax incentive, the government’s flagship program to support R&D in Australia. In comparison to similar programs worldwide it’s a very generous program that provides significant support.

As the R&D tax incentive is accessed through the tax system it’s something that can be considered on an annual basis, where the defence technology company continues to undertake eligible R&D. There are a range of grants available from different organisations whether through the Centre for Defence Industry Capability, Defence West, or AusIndustry, with grants available such as the Modern Manufacturing Initiative.

We’re happy to assist companies apply for grants but are also able to use our network to connect companies with government grant advisors who are able to have an initial discussion with the company and give them an indication of the availability of funding and likelihood of success. Essentially, we assist companies with grant applications where they are seeking this service, but also want the company to have an honest understanding of the program, availability of funding and competitiveness before an application is made.

Tom: First of all, good clean and consistent data. Being financially transparent allows you to prove your viability to potential partners but also it gives you a far better idea on where you’ve been and where you’re heading for strategic planning. If you have picked up a defence contract or are angling for one, you need to know your cost structure to work out how you’ll make money but be competitive at the same time.

Second, eligible financial reports. Forecasts and budgets rely on clean and consistent data. If you’re sitting next to your advisor wondering why your monthly reports look wildly different to the prior months when nothing has actually changed, nine times out of 10 it’s probably due to inconsistencies in the way processing has been done.

Third, being up-to-date with your lodgements and payments to the ATO, ASIC and any other regulatory body is just a fundamental requirement. If we can’t get that right, it’s a pretty clear indicator that there might be other issues with the business or its operators.

Lastly, planning - again, understand your cost structure and how this fits in with dayto-day operations. Cash flow forecasting and monitoring is, at least, a monthly exercise. So having a nimble and clear business plan with a rolling cashflow is vital.

Riaan: We provide a range of different services across many sectors and the team also have a healthy mix of skills and experience. This gives us a unique umbrella viewpoint of the ever-changing cyber threat landscape which in turn means we can pull from that experience to offer the best solutions available. Current trends we’re seeing include: artificial intelligence and integration with cyber security, mobile and remote security, cloud and potential security concerns, Internet of Things and integration within IT infrastructure, targeted ransomware and insider threats, and state-sponsored cyber warfare and espionage.

For further information please contact:

(Principal, R&D Tax): simon.harcombe@rsm.com.au

(Principal, Business Advisory): tom.huberli@rsm.com.au • Riaan Bronkhorst (Senior Manager,

Security & Privacy): riaan.bronkhorst@rsm.com.au