THE screening of non-sensitive commercial real estate and internal reorganisation (restructure) foreign investment applications will be undertaken by the ATO from April 1, 2017.
This is an internal administrative change by the Australian Government and will not require any action by Foreign Investment Review Board (FIRB) applicants.
THE Australian Competition and Consumer Commission has issued a final determination denying authorisation to 16 insurance companies to agree to a cap of 20 per cent on commissions paid to car dealers who sell their add-on insurance products.
“The ACCC is denying authorisation because we believe this proposal is unlikely to change sales incentives or the quality of products, and consumers will still be sold products without being given adequate information or opportunity to make a considered decision,” ACCC Chairman Rod Sims said.
“While insurers would benefit from a cap at the expense of car dealers, this conduct is likely to lessen competition between insurers, including by creating greater opportunities for explicit or tacit collusion and greater shared knowledge between insurers of competitors’ costs.
“The ACCC is also concerned that these arrangements, if implemented, could significantly delay the development of more effective solutions to the problems that ASIC has identified,” Mr Sims said.
The ACCC published a draft determination in mid-February proposing to deny authorisation. Following the release of the draft determination the ACCC offered to extend the timeframe for consideration of the proposal to allow the insurers extra time to respond to the ACCC’s concerns. The insurers did not provide a submission in response to the draft determination.
Background
Add-on insurance products are products that may be sold at the time of purchasing a motor vehicle. The add-on insurance may be connected to finance associated with the motor vehicle such as consumer credit insurance, gap insurance, walk away insurance, and trauma insurance. Alternatively, it may relate to the vehicle itself, such as comprehensive insurance, extended warranty insurance, or tyre and rim insurance.
The Australian Securities and Investments Commission (ASIC) report, A market that is failing consumers: The sale of add-on insurance through car dealers, identifies issues such as a lack of price competition, poorly designed products, poor value for money relative to premiums, and a complex sales process that often does not disclose the total cost of the cover.
AUSTRALIAN Small Business and Family Enterprise Ombudsman (ASBFEO) Kate Carnell has refuted claims made by the Australian Bankers’ Association’s (ABA) chief executive Steven Münchenberg that eliminating all non-monetary covenants from small business loans under $5 million would raise the risk of lending to small business, saying the ABA – and the banks – are contradicting themselves in arguing against the reform.
“On the one hand the banks say they rarely use non-financial default clauses, but on the other, they say to remove them would increase risk for the banks. If you don’t use them, how on earth could it possibly increase the banks’ risk to get rid of the clauses?” Ms Carnell said.
“It is disingenuous to say that removing these clauses would drive up the cost of borrowing for small businesses, given the banks already take into account a higher level of risk in their small business loan costs.
“You can’t have it both ways; you can’t have a loan agreement that moves all the risk to the borrower, while also imposing a higher interest rate on small business customers.
“Over the last few days we’ve seen banks commit to implementing this measure in varying degrees, yet here we have the ABA claiming the sky will fall in if our recommendation is adopted,” she said.
During today’s House Economics Committee hearing, Westpac executives said they’re committed to removing non-monetary covenants from all small business loans under $1 million (secured against property), with the view to extending this to most loans under $3 million (total loan facility).
ANZ include – but don’t apply – non-financial default clauses in loans under $1 million and now say they’re going to consider the future use – but not removal – of such terms in agreements for loans of up to $3 million (total loan facility); CBA has committed to removing non-monetary default terms from agreements for loans up to $1 million, and may raise this to $3 million (total loan facility) with carve-outs; while NAB say they’re opposed to the removal of non-monetary covenants.
“Aside from NAB, these are all steps in the right direction, and we’re listening to what the banks are saying on carve-outs, but fundamentally non-financial default clauses must be removed from small business contracts under $5 million if we’re to ensure all small businesses are safeguarded against what can be the devastating impacts of these clauses,” Ms Carnell said.
THE Queensland Resources Council has backed a Federal Government report calling for a ban on foreign-funded donations to activist groups.
One of the recommendations in the report on foreign donations, tabled in Federal Parliament today, was to extend a foreign donations ban to all other political activist groups. This would include preventing foreign funds being channelled through organisations engaging in political activities that were not subject to regulation under current laws.
QRC Chief Executive Ian Macfarlane said it was high time that donations to the anti-development activists were put under the microscope in line with other politically-motivated groups.
“Funding from overseas donors to these groups is disrupting and delaying job creating projects in Queensland, while providing a sophisticated tax reduction scheme to their personal wealth,” Mr Macfarlane said.
“Our country must stop foreign groups interfering in our resources development projects that have undergone immense scientific and social scrutiny before being approved by democratically elected governments in Australia.
“It seems ridiculous that someone living in Manhattan can be the financial backers of green activist tactics that hold up a project in Moranbah and cost Queenslanders job opportunities.”
TO COINCIDE with International Women’s Day (IWD), the ACS – the professional association for Australia’s ICT sector – will today participate in the Women in Cyber event in Melbourne, an initiative of the Office of the Cyber Security Special Adviser within the Department of the Prime Minister and Cabinet.
Roundtable discussions will focus on the barriers to women choosing cyber careers, the reasons women leave the cyber industry and ways to address these problems.
The ACS has long been an advocate for advancing diversity in ICT to capture the full potential of the digital economy. Its 2015 Report, The Promise of Diversity, shows that Australia is a long way from filling the gender equality gap, particularly in ICT, where women comprise only 28 percent of the ICT workforce compared to 43 percent of the wider workforce.
The shortfall is particularly acute in technical roles in the cyber security area, which has risen to the top of the international agenda as high-profile security breaches raise concerns around the potential impact on the global economy. Data from SEEK Employment Trends Report suggest that the number of cyber security roles advertised in Australia grew by more than 57 per cent year-on-year in February 2016. The opportunities for women to forge a career in cyber are many.
Chair of ACS Victoria, Maria Markman said, “The ACS is pleased to support the Women in Cyber event and we congratulate the Office of the Cyber Policy Special Adviser on this important initiative.
“Addressing the barriers for women in ICT requires short and long-term initiatives, supported by genuine commitment by employers, educators and governments to collaboratively tackle these barriers. This event is a significant step forward.”
ACS vice president, Yohan Ramasundara said, “Through committed, outcome-focused leadership the ACS is working to address the ICT gender disparity at all stages of women’s education and careers towards a more gender balanced world.
“The ACS values the contribution of women and promote gender equality in the Australian ICT sector. On International Women's Day we celebrate the social, economic, cultural and political achievement of our female colleagues around the world. The theme for this year #BeBoldForChange is a call for everyone of us to stand up and do our bit to help achieve womens full potential for a more prosperous future for us all.”
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