THE Australian Small Business and Family Enterprise Ombudsman Kate Carnell said she was disappointed by a Labor Party media statement that inappropriately politicised her Insurance Inquiry final report.

Ms Carnell said although the report recommendrd a number of reforms that require government action, it was in no way critical of the Federal Government.

“I’m very disappointed by the Labor Party’s media statement regarding our Insurance Inquiry because it detracts from the real issues that are impacting small businesses every day,” Ms Carnell said.

“Our Inquiry found widespread market failure in regards to the availability and affordability of essential small business insurance products. The report does not politicise this issue and I believe it is inappropriate to do so.

“The fact is the local insurance market has been hardening for years, with insurers adapting their risk weightings to increasing threats. The natural disasters, such as the catastrophic bushfires that happened earlier this year, have brought this issue to a head," Ms Carnell said.

“Our comprehensive report made a suite of recommendations designed to rebalance the risks taken on by insurers and make small business insurance produces more accessible.

“This is a critical issue that is sending far too many small businesses to the wall and what they really need right now is solutions – not a political bung fight.

“For the sake of Australian small businesses, I hope that all sides of politics can work together on this issue to ensure small businesses have access to the insurance products that are essential for their operation.”

www.asbfeo.gov.au

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FINDINGS of a new report by the Federal Government’s Productivity Commission into mental health were shocking and horrifying, with widespread failures extending beyond Australia’s health system, according to presiding commissioner Stephen King.

In an exclusive interview with Monash Business School’s podcast, Thought Capital, Dr King has discussed how the estimated cost of mental health to the economy was “understated”; how insurers use mental health to discriminate; and how he had himself been unaware of how stigmatising mental health issues continue to be in Australia.

The 1250 page report found one in five Australians experienced mental ill-health in any year, with the annual cost of treatment, suicide, and under-performance of the mentally ill as much as $180 billion.

Dr King, an Adjunct Professor at Monash University and a former Dean of the Faculty of Business and Economics, said the estimated annual cost was  “conservative”, as it did not take into consideration the additional emotional, social and financial strain of the COVID-19 pandemic.

The report, tabled on June 30 and released publicly by Prime Minister Scott Morrison on November 16, 2020, made 21 recommendations and more than 100 actions to transform the Australian mental health system and reduce the risk of youth mental ill-health through early intervention strategies. 

“It’s not just the health system; it is the broader system, which includes community, sports, housing, education and so on. The failures going on across the system to deal with mental health were quite shocking,” Dr King told Thought Capital.

“Almost any adjectives I come up with are going to understate the problem. There is an incredible stigma problem with mental illness in Australia. People will hide mental illness. They’ll hide it for social reasons; they fear discrimination. They fear, not just social, but also economic discrimination, for good reason.”

In his interview, Dr King highlighted how insurers used outdated attitudes to mental health to deny people coverage.

"If you go for, say, income protection insurance and you mention that you've seen a psychologist at any stage in your life... you could be 60 and you saw the psychologist when you were 20... you'll, in general, be refused that insurance," he said.

"If you go for travel insurance, again, they're asking questions which relate to issues that can no longer be relevant for your health, but are normal in considering mental health."

Dr King's report reveals a dearth of services for people with mild anxiety or mild depression, with an over-reliance on medication, sometimes leading to tragic consequences.

"There is some evidence suggesting we should be concerned about our level of prescribing mental health medication in Australia," he told Thought Capital.

Dr King admitted he had misunderstood aspects of the issue before embarking on the report.

"It has been a very challenging inquiry. It's been quite confronting. Understanding my own ignorance that I went into this inquiry with has been part of a personal journey, and I think all of the inquiry team had a similar experience,” he said.

However, Dr King said he heard stories of "great courage", including harrowing evidence from a husband whose wife died by suicide, leaving their two children, after experiencing side-effects that had not been made clear by medical practitioners. 

"Just the courage to come forward, understanding that the system had fundamentally failed them," he said.

While Dr King acknowledged COVID-19 was perhaps the wake-up call Australia needed to improve its delivery of mental health services, he argued it’ was not the bedrock upon which a new strategy could be formed.

“We know that the pandemic has significantly increased psychological distress, but you can’t design a mental health system just for a pandemic, nor can you design it for a bushfire emergency or the next drought,” he said.

“We need to make sure we design a mental health system that has the flexibility to be able to ramp up and down as needed. Our system needs to be flexible so that we can respond to the various crises that will occur in the future.”

Launched in 2018, the Thought Capital podcast is produced by Monash Business School and covers topical and thought-provoking issues that prove that business is for everyone. 

Hosted by highly respected finance commentator Michael Pascoe, Season 3 takes a look at the COVID-19 pandemic, aiming to "connect the dots of COVID-19" including working from home, mental health, the economy, how small business has fared, the effects on the property market and Australia's global trade prospects.

Download the latest edition of Thought Capital to hear this interview with Dr Stephen King.

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I A MAJOR vote of confidence in the South Australian economy, Mas, part of national workforce solutions provider IntoWork Australia, has invested millions of dollars to create over 50 new permanent jobs within a state of the art employment and training contact centre in central Adelaide.

Minister for Innovation and Skills, David Pisoni, through a State Government initiative, Skilling South Australia, has supported the establishment of the centre. Skilled staff will deliver apprentice and trainee support services to existing and future workers across South Australia and nationally, and will ensure workers in training are supported through to permanent employment.

“Adelaide stood out as the ideal location for this centre due to Mas' strong existing presence in South Australia and also because of the commitment and support of the South Australian State Government,” IntoWork Australia Group CEO Poul Bottern, Group said. 

“As part of our role as an Australian Government funded Apprenticeship Network Provider, this new employment and training contact centre will ensure that thousands of apprentices and trainees are supported into employment and enjoy a meaningful and productive career,” Mr Bottern said. 

“We are confident the South Australian economy will bounce back strongly from the economic shock of 2020 and that there will be demand for employment and training services to get people into jobs in the coming months and years,” he said.

Among the new starters employed at the contact centre are re-deployed workers from travel specialist Flight Centre – one of the South Australian businesses that took a major hit from the COVID-19 pandemic through border closures. 

“Like many people this year, I have struggled personally and financially as a result of losing work when the travel industry was hit by travel restrictions,” said Max Ford, newly employed consultant at the IntoWork National Contact centre. “I’m very grateful to now have a job where I can assist others to overcome their struggle and obtain meaningful employment.”

Mr Bottern said the centre would play an important role in assisting South Australian businesses by supporting thousands of skilled workers. 

Minister Pisoni said, “the decision by IntoWork Australia to establish the state-of-the-art employment and training contact centre in Adelaide dovetails perfectly with the State Government’s $280 million investment in making South Australia a centre of excellence in skills development.

“With the South Australia economy roaring back to life and the Marshall Government leading the nation in supporting opportunities for apprentices and trainees, IntoWork Australia’s investment in the new facility comes at the perfect time.”

About IntoWork Australia

IntoWork is a people focussed not-for-profit organisation delivering specialist recruitment, employment and training services, as well as support for apprentices and trainees, to individuals, businesses and government. IntoWork is the parent body for a group of businesses that promote workforce participation in communities across Australia.

About Mas

Mas is part of the IntoWork group and is an Australian Apprentice Support Network Provider, providing support services for job seekers, apprentices, trainees and employers across Australia. Mas also provides advice and support on career transition, career counselling, mentoring and networking to equip Australia’s diverse workforce with the skills they need to grow and prosper.

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MACQUARIE TELECOM Group (ASX: MAQ), has welcomed the publication of the Security Legislation Amendment (Critical Infrastructure) Bill, introduced to Parliament on December 10  by Minister for Home Affairs, Peter Dutton.

The Critical Infrastructure Bill will recognise telecommunications and data centres as critical national infrastructure for the first time.

“The COVID-19 pandemic and sudden lockdowns have highlighted the economy’s dependence on telecommunications and data services, and Australians’ expectation that these services will be accessible even in the worst of circumstances," Macquarie Telecom Group CEO, avid Tudehope said.

"But the lockdowns also highlighted that these industries were not actually officially recognised as being essential or critical to the functioning of society," he said.

“This new legislation will rectify this as it recognises the infrastructure that enables our digital economy to function as critical infrastructure that needs to be secured from all hazards just as our water, energy and other vital national assets are.”

Mr Tudehope said Macquarie Telecom believed the legislation would help ensure the resilience and security of Australia’s digital and physical infrastructure in the face of growing risks. The company believed this was a shared responsibility, with government "providing the leadership and intel needed to guide critical infrastructure owners and operators".

“As a provider of cloud, data centre and telecommunications services to governments and businesses, we understand the risks to data security and networks,” Mr Tudehope said.

“These risks are significant and underscore the importance of a comprehensive approach to national security. Securing government and critical business data involves more than just protecting the physical infrastructure from unauthorised access.  It requires stringent compliance with internationally recognised standards and the application of best-in-class technology and operational frameworks.”

He said while welcoming the new framework, Macquarie believed that the new security expectations in relation to critical business data should apply more generally across all critical infrastructure sectors. 

“A critical infrastructure operator’s data should be treated as a critical asset regardless of whether it is kept inhouse, hosted by a third-party cloud or data centre, or located offshore. It should be subject to the same security expectations and standards regardless of who is storing it or where it is located," Mr Tudehope said.

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THE Business Council of Co-operatives and Mutuals has congratulated Australian Unity on becoming the first mutual organisation in Australia to begin trading Mutual Capital Instruments (MCIs) on the Australian Stock Exchange

Mutual Capital Instruments are a new form of bespoke investment designed specifically to recognise the characteristics and intrinsic nature of member-owned firms.
 
BCCM CEO, Melina Morrison said this landmark event should be a moment of celebration, not only for Australian Unity but for Co-operative and Mutual Enterprises (CMEs) and their members across Australia.
 
“The significance of this milestone should not be underestimated.” Ms Morrison said. “This is a truly transformative moment for co-ops and mutuals in Australia bringing our jurisdiction up to world standard by creating an enabling environment for mutual capital. It’s fitting that Australia’s oldest mutual is the first to take advantage of this enhanced regime for mutuals.
 
“The investor response to the Australian Unity Offer has shown that there is a healthy appetite for investments that make an impact in our communities. Now, more than ever, we need to support the businesses that are helping our regions to thrive.
 
“Following a year in which many CMEs have deployed their capital reserves in order to continue delivering to the needs of their members and their staff, the potential that MCIs represent for these businesses is to grow, transform, innovate and compete in newer and broader markets is immense,” she said.
 
“The acquisition of capital will allow for digital transformations for businesses looking to support new ways of working for their staff; it will provide opportunities to research and develop better product offerings to their members, and it will support Australia’s advancement in manufacturing industries integral to our economic recovery and resilience.
 
“Importantly, this capital will also benefit Australian communities, small and large. CMEs have long played a role in safeguarding regional economies through times of crisis; by facilitating their access to capital, we can ensure that they can continue to protect and grow community prosperity for years to come.” Ms Morrison said.
 
In recent months, more than 30 CMEs have indicated their intention to amend their constitutions to allow them to pursue MCIs and at least 17 members have already made the necessary changes.

KPMG has estimated that if mutuals were able to hold capital levels consistent with their larger competitors, loans could increase by as much as $25 billion to generate additional profits of $375 million, assuming a 1.5 percent spread. This would equate to a 25 percent increase in size and 60 percent increase in profitability.
 
“Lack of awareness about the CME contribution to the economy, which last year was more than $34 billion, drove the establishment of BCCM, the first peak national body representing member-owned businesses across all industries. The significant potential for growth in this sector should not be overlooked as we strive to recover from the economic devastation of the past year,” Ms Morrison said.
 
A campaign led by BCCM and funded by its members resulted in legislative amendments to the Corporations Act allowing co-operatives and mutuals to issue equity instruments without demutualising.

The changes were passed into law by the Morrison Coalition Government in April 2019. The changes had bipartisan support and came after four years of BCCM led industry advocacy starting with the 2016 Senate inquiry into Co-operatives, Mutuals and Member-Owned Firms, and culminating in the 2017 Hammond Review into access to capital for mutuals and co-operatives.

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THE INTERIM recommendations of a Parliamentary Inquiry into Juukan Gorge have confirmed HESTA’s view that without an independent review of agreements between mining companies and Traditional Owners, investors cannot be confident this clear financial risk is being appropriately managed.

The Joint Standing Committee on Northern Australia’s Interim Report recommended all mining companies operating in WA conduct independent reviews of their agreements with Traditional Owners, and publicly commit to not using ‘gag orders’ to prevent Traditional Owners protecting their rights.

“The work of this Parliamentary Inquiry has shone an invaluable light on how mining companies are negotiating agreements and engaging with Traditional Owners,” HESTA CEO Debby Blakey said.

“The finding that the tragedy at Juukan Gorge was ‘inevitable’ given current mining industry practices and inadequate legal and regulatory frameworks is extremely concerning to investors.

“Mining companies failing to negotiate fairly and in good faith with Traditional Owners represents a clear systemic risk to investors. Only an industry-wide independent review will provide certainty to investors that this risk is properly managed.”

Ms Blakey said HESTA would continue working with other large global investors to engage with Australian mining companies on how they are responding to the Inquiry’s recommendations.

“The inescapable findings of the Inquiry are that Aboriginal heritage sites remain vulnerable to destruction. It would be unacceptable to investors that boards of mining companies are not actively and transparently seeking to understand their exposure to this risk,” Ms Blakey said.

“After all that has occurred at Rio, the boards of mining companies need to show investors that they have appropriate oversight and effective governance frameworks in place to ensure respectful, fair and ongoing engagement with Traditional Owners.”

The Inquiry’s recommendations that Rio Tinto pay restitution and implement a moratorium on mining across the Juukan Gorge area highlight to companies and investors alike the financial costs from actions that damage a company’s social licence to operate.

Ms Blakey said mining companies could start by publicly stating they will not enforce gag orders in the current agreements, allowing Traditional Owners to raise heritage concerns.

She said HESTA strongly supported the Inquiry’s recommendation that companies with current ‘Section 18’ permissions halt all operations unless it can be established and verified that there is current, free, prior and informed consent obtained from Traditional Owners.

“This Inquiry’s important work is ongoing and represents a significant turning point in how the mining industry and Government manage heritage issues in this country,” Ms Blakey said.

“I’d like to commend all Committee members for their work on this issue during this very difficult time, and particularly Chair Warren Entsch.

“The comprehensive and bipartisan findings of this Inquiry have revealed glaring gaps in the protection of Indigenous Heritage, and we have a responsibility to all Australians and the world to ensure the tragedy of Juukan Gorge never happens again,” Ms Blakey said.

About HESTA

HESTA is the largest superannuation fund dedicated to Australia’s health and community services sector. An industry fund that’s run only to benefit members, HESTA now has over 870,000 members (more than 80% are women) and manages more than $56 billion in assets invested around the world. As a responsible steward of their members’ retirement savings, HESTA focuses on achieving strong, sustainable, long-term returns while making a positive difference to the world members will retire into. HESTA is the acronym for Health Employees Superannuation Trust Australia.

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RYAN, a global tax services and software provider, has acquired TCF Services (TCF), a research and development (R&D) tax incentive and government grants consulting firm in Australia.

The acquisition expands Ryan’s international market position and service offering in Australia for companies engaged in R&D activities and adds significant relationships to Ryan’s client portfolio, who will benefit from Ryan’s comprehensive suite of global tax solutions.

With offices located in Sydney and Melbourne, TCF offers a suite of services focused on the delivery of benefits under the R&D Tax Incentive and other state and federal government grant programs. This strategic transaction adds a team of highly qualified tax professionals to Ryan’s Asia-Pacific team.

“TCF’s unique, market-leading R&D tax credits practice greatly benefits our clients doing business in Australia,” Jon C. Sweet, Ryan’s president of European and Asia-Pacific operations said.

“We share a common goal of maximising value for our clients and improving the efficiency and effectiveness of their tax function. The addition of the TCF team builds on Ryan’s plans to expand its R&D tax credit capabilities globally and further establishes the firm as the global leader in tax."

TCF managing director Gerry Frittmann said “The TCF team is excited to join Ryan and bring our R&D tax credit services to their portfolio of clients in Australia. Ryan’s exceptional reputation for client service and results is well known throughout the industry. Our team is also drawn to the dynamic culture Ryan offers and the ability to provide a more diverse offering of tax solutions to our clients. We are thrilled to join such a talented group of professionals.”

The acquisition of TCF follows Ryan’s recent acquisition of Sydney-based Australian firm Indirect Tax Solutions, an indirect tax services firm with deep specialisations in goods and services tax and fuels tax credits.

Mr Sweet said, combined, these two transactions greatly expanded the services offered to Ryan’s Australian clients and demonstrated Ryan’s commitment to investing in the Australian market.

About Ryan

Ryan, an award-winning global tax services and software provider, is the largest firm in the world dedicated exclusively to business taxes. The firm provides an integrated suite of international tax services on a multijurisdictional basis, including cost management, compliance, consulting, and technology services. Ryan is an eight-time recipient of the International Service Excellence Award from the Customer Service Institute of America (CSIA) for its commitment to world-class client service. Empowered by the myRyan work environment, which is widely recognised as the most innovative in the tax services industry, Ryan’s multidisciplinary team of more than 2,800 professionals and associates serves over 16,000 clients in more than 50 countries, including many of the world’s most prominent Global 5000 companies. www.ryan.com/asia-pacific.

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A NEW parliamentary report highlights the importance of faster rail investment in Australia’s economic recovery and proposes a fairer and more sustainable funding approach.

John Alexander OAM MP, Chair of the House of Representatives Infrastructure, Transport and Cities Committee, last month tabled the report for the committee’s inquiry into options for financing faster rail.

"Before COVID-19, this committee saw funding faster rail using value capture as an opportunity. Today, it’s an imperative," Mr Alexander said.

Value capture is a means by which governments can more fairly fund part, or all, of the costs of rail infrastructure projects and provide relief for taxpayers now and in the future, the report said.

"When government funded infrastructure is clearly linked to significant property value uplifts, or rezoning, governments have a duty to taxpayers to secure just, equitable and fair portions of these increases in property values," Mr Alexander said.

The report makes three recommendations which focus on value capture and value sharing, addressing the missed opportunities where property values rise dramatically as a result of taxpayer funded rail infrastructure.

"During the inquiry the committee considered the issue of fairness: Is it fair for the taxpayer to fund infrastructure that creates great wealth for landowners, speculators and developers? Should the taxpayer receive a return when their money is invested? Is it fair that we leave future generations to pay for our spending today?" Mr Alexander said.

The report builds on the committee’s work in the 45^th Parliament. In two previous reports, the committee recommended a value capture model be designed and utilised in Australia, with the Australian Government, state and territory, and locals governments working together in a coordinated approach to value capture.

The report and further information about the inquiry is available on the committee’s website.

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