GLOBAL ETHICS Day is celebrated each year in late October, and it is a timely reminder of the importance of ethics in public, private and not-for-profit organisations. Ethics are the principles and values that guide and regulate an organisation’s behaviour and provide guidelines on the choices individuals within the organisation make.

In a year in which the COVID-19 pandemic has brought so many challenges to the economy, it is imperative that individuals and organisations behave ethically and not contribute any more damage to the already fragile economic environment. Unfortunately, impaired judgement and poor ethical decision-making result in sub-optimal outcomes for organisations and individuals.

The Accounting Professional and Ethical Standards Board (APESB) issued the restructured Code of Ethics for Professional Accountants (including Independence Standards) (the Code) in 2018 that sets out requirements on how to act in the public interest for accounting professionals who play a crucial role across public, private and not-for-profit organisations.

The five fundamental principles which underpin the Code: integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour, are supported by an enhanced conceptual framework that provides accountants with a systematic approach to identify, evaluate and address threats to the five fundamental ethical principles. The conceptual framework requires the individual to exercise professional judgement to determine whether their actions comply with the fundamental principles.

APESB chair, Nancy Milne said, “The Code of Ethics provides a robust framework for professional accountants to incorporate ethical considerations to their decision making. Individuals and firms that adhere to the Code's fundamental principles and adopt strong ethical practices will create stronger and healthier businesses.”

A recent Deloitte Access Economics study commissioned by the Ethics Centre, The Ethical Advantage (2020), found that better ethical behaviour and infrastructure were associated with improved financial outcomes. The report noted that by improving its governance score by one standard deviation, an Australian organisation could expect a 7 percent increase in its return on assets.

Ms Milne said, "As we work towards rebuilding the economy in the COVID-19 normal environment, the importance of behaving according to the five principles that underpin the Code takes on greater relevance and is critical in establishing exemplary ethical behaviour in the accounting profession.

“Now more than ever, we have the opportunity to embark upon a financial recovery that is both ethical and profitable. Organisations that take a measured and ethical approach in their recovery will perform better in the long run,” Ms Milne said. “It is vital that professional accountants recognise the importance of the Code of Ethics to govern all aspects of their professional conduct and behaviour.”

About APESB

APESB is the National Standards Setter that sets the Code of Ethics and professional standards by which members of Australia’s three major professional accounting bodies: CPA Australia, Chartered Accountants Australia and New Zealand and the Institute of Public Accountant, are required to abide.

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THE Financial Services Council (FSC) has launched a research report by Rice Warner which offers some radical ideas for restructuring the model for financial advice which will start a policy debate on how to make advice more affordable and accessible.

Rice Warner proposes a future financial advice model which includes:

• All advice to be one of two categories – strategic advice and financial product advice;
• New definitions of financial advice – general information; and personal advice separated into simple personal advice, complex personal advice, and specialised advice;
• New principles to refocus the system – simplification, affordability, accessibility, consistency, and quality of advice;
• Less documentation – for example, allowing a Fact Find and a Record of Advice for the provision of Simple Personal Advice;
• Realistic and less costly levels of compliance; and
• Tax deductibility for financial advice.

FSC CEO Sally Loane said, “Quality financial advice is needed now more than ever as the economic impacts of the coronavirus pandemic are felt by individuals right across the nation. The Rice Warner Future of Advice report starts an important policy debate on how we can re-build a simpler and more affordable advice industry.

“Rice Warner’s research examines both the need for advice, and the value of advice. It shows evident benefits of financial advice to the health and wellbeing of individual consumers, as well broader economic benefits such as reduced long-term expenditure on the age pension,” Ms Loane said.

The FSC will consider Rice Warner’s research as well as engaging extensively with stakeholders, including Australia’s financial advisers, ahead of launching a policy document or Green Paper on Financial Advice next year, a critical step in policy development.

“The aim is to build a new model for financial advice which not only makes professional quality advice more affordable and accessible for consumers, but also removes the mass of costly compliance and regulatory burden on the sector," Ms Loane said.

“With advisers leaving the industry in record levels –  Rice Warner reports 15 percent last year and an anticipated fall of a further 36 percent over the next five years – we need to act now to change the system.”

A full copy of the report can be downloaded here.

About the Financial Services Council

The Financial Services Council (FSC) has more than 100 members representing Australia's retail and wholesale funds management businesses, superannuation funds, life insurers, financial advisory networks and licensed trustee companies. The industry is responsible for investing almost $3 trillion on behalf of more than 15.6 million Australians. The pool of funds under management is larger than Australia’s GDP and the capitalisation of the Australian Securities Exchange and is the fourth largest pool of managed funds in the world.

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FINANCIAL RIGHTS has serious concerns that sweeping changes to the Consumer Data Right will allow highly sensitive consumer data to be accessed by unauthorised third parties.

Financial Rights director of casework, Alexandra Kelly said the new rules could enable companies which are not required to meet the regime’s higher security and safety standards for privacy, to access private and sensitive consumer data.

These concerns have been outlined in a submission to the Australian Competition and Consumer Commission (ACCC) as part of consultation concerning proposed changes to the Consumer Data Right Rules.

“The entire point of the Consumer Data Right (CDR)  is to build a secure data environment in which consumers feel confident and safe using and sharing their data,” Ms Kelly said. “This proposal will fundamentally undermine consumer trust and confidence in the CDR. 

“It is also likely to open the floodgates to non-accredited companies to obtain sensitive data without having to meet higher privacy standards. In some cases they won’t have to meet any privacy standards at all.”

According to Office of the Information Commissioner’s 2020 Community Attitudes to Privacy survey, 83 percent of Australians want the government to do more to protect the privacy of their data.

“There is scant evidence of any consumer demand for open banking services but there is real evidence of high levels of consumer demand for increased privacy protections,” Ms Kelly said.

“It is disappointing that the ACCC’s proposal places the finance sector’s interest in obtaining consumer data ahead of the consumer interest in a stronger privacy regime."

The ACCC also proposes to introduce new rules that allow more direct marketing to take place, and the sale of consumer data.

Other proposals include a raft of complexities to the regime including multiple tiers of accreditation, self-regulation with minimal oversight and a new set of confusing and contradictory consents that undermine the voluntary and informed nature of consent in the digital age.

“These proposals could result in financially vulnerable people being targeted by new open banking players and sold expensive credit and inappropriate debt and credit solutions they can’t afford,” Ms Kelly said.

“We urge the ACCC to reconsider these erroneous recommendations and instead put consumer interests at the heart of the new data regime.”

Background

Open banking is the ability for consumers to access and control their financial data and share it with other banks or third party financial services who may provide a range of services using the data – from account and credit card switching to budgeting and tax advice. 

The Consumer Data Right (CDR) is the broader right the government is introducing to enable people to access their data and provide it to an accredited business (an accredited CDR provider). 

The banking sector – via open banking – is the first sector to provide this access. It is expected to roll out to other sectors include telecommunication, energy, superannuation, insurance and others.

About Financial Rights

The Financial Rights Legal Centre is a community legal centre that specialises in helping consumers understand and enforce their financial rights, especially low income and otherwise marginalised or vulnerable consumers. It provides free and independent financial counselling, legal advice and representation to individuals about a broad range of financial issues. The Financial Rights Legal Centre operates the Insurance Law Service which provides advice nationally to consumers about insurance claims and debts to insurance companies. Financial Rights also operates the National Debt Helpline in NSW, assisting consumers experiencing financial difficulties. Financial Rights took over 25,000 calls for advice or assistance during the 2017/2018 financial year. 

• National Debt Helpline 1800 007 007
• Insurance Law Service 1300 663 464
• Mob Strong Debt Help 1800 808 488

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THE Queensland Resources Council has welcomed today’s commitment by the LNP that if elected it would work closely with the resources sector to get Queensland jobs and the economy back on track post-COVID.

As the peak body for Queensland’s coal, metals and gas explorers, producers and suppliers, the QRC has spent months seeking comprehensive commitments from both major parties and key crossbenchers in the lead-up to the state election this Saturday.

QRC chief executive Ian Macfarlane said the LNP had been very clear about its support for the resources sector during its election campaign and had acknowledged the key role resources has played during COVID to maintain production levels and keep tens of thousands of employees working and earning.

“New economic contribution data shows the mining, gas and energy sector supports one in five jobs across Queensland and has been a bedrock of financial support and stability for the state economy during COVID-19,” Mr Macfarlane said.

The QRC has welcomed the LNP’s commitment to:

• open the Galilee Basin to develop $50 billion worth of projects;
• a new Queensland Infrastructure Fund to collect and invest royalties from the Galilee Basin in new state infrastructure;
• maintain current royalty rates for coal, metals and gas for 10 years;
• grant approvals for New Hope’s New Acland Stage 3 project;
• appoint a Queensland Resources Industry Commissioner to promote the state to international investors;
• implement an industry development plan to support the sector’s future growth;
• encourage exploration to uncover new discoveries for coal, metals and gas;
• commit to a 12-week consultation period on regulatory changes that may impact on the sector;
• streamline assessment and approval processes for new and expanded projects;
• promote the development of the North West Minerals Province, particularly for critical minerals to support the growth of advanced manufacturing, battery storage and renewable energy; and
• progress the CopperString project in the state’s North West in partnership with the Federal Government.

Mr Macfarlane also welcomed the LNP’s commitment to not form a minority government or enter a power-sharing agreement with the Greens, whose policies would jeopardise the sector’s viability and push those Queenslanders who work in or because of the resources industry out of work. 

“The Greens believe it’s their job to cost hard-working Queenslanders theirs,” Mr Macfarlane said.

“The Greens have promised to increase royalty taxes imposed on the industry by five times, making the industry and those jobs unviable.”

Mr Macfarlane said the Katter Australia Party and its leader Robbie Katter had also been a strong advocate for the resources sector and had endorsed key elements of the QRC’s election agenda including the 10-year royalty freeze, streamlined approval and assessment processes and an industry development plan.

www.qrc.org.au

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AFTER A COVID-19 delay, the inquiry into the destruction of Indigenous heritage sites at Juukan Gorge will finally travel to Western Australia next week to see the damage first hand.

Northern Australia Committee Chair Warren Entsch said the visit to Western Australia would be an opportunity for the Committee to experience the fallout from the destruction from the perspective of those affected most directly, the Puutu Kunti Kurrama and the Pinikura peoples (PKKP).

"This will be the defining moment of this inquiry," Mr Entsch said.

"We need to see the scale of the devastation and feel the loss of the people to fully understand the significance of what has happened.

"The Committee will have a long yarn session with the PKKP in Karratha on Monday morning before flying to Juukan Gorge on Tuesday to see the sites for ourselves.’

The Committee will also hold a public hearing on Monday afternoon with the owner of Cheela Plains Station (Juukan Gorge was formerly located on the pastoral lease), and representatives of the Murujuga Aboriginal Corporation and the Robe River Kuruma Aboriginal Corporation.

In its submission, the Murujuga Aboriginal Corporation highlighted its positive engagement with a range of stakeholders, but also emphasised the constant struggle to protect heritage and the need for ongoing engagement by industry with Traditional Owners. It noted that Western Australia’s Aboriginal Heritage Act had "not prevented damage to, or the destruction or removal of, sites or cultural objects". 

For instance, during the construction of Woodside’s NW Shelf facilities during the 1980s, 1,828 pieces of rock art were removed from their cultural context and stored in a fenced compound for some 30 years – these were only returned to places agreed by Traditional Owners in 2014. The operation of the 1972 AHA did not prevent the removal of these objects from their cultural sites, nor the damage that occurred to some during their collection and storage.

Programs for the public hearing are available on the Committee’s website.

Public hearing details

Date: Monday, 2 November 2020
Time: 1pm to 3pm AWST
Location: Leisureplex, Karratha

The hearings will be broadcast live at aph.gov.au/live.

Further details of the inquiry, including terms of reference, can be found on the Committee’s website.

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A NEW REPORT into Australia’s mandatory data retention regime recommends the Federal Government implement a number of changes aimed to increasing transparency.

Andrew Hastie, chair of the Parliament’s Intelligence and Security Committee, said the report's 22 recommendations increase transparency around the use of the mandatory data retention and increase the threshold for when data can be accessed. In addition, the committee make recommendations that reduce the currently very broad access to telecommunications data under the Telecommunications Act.

"Our recommendations are aimed at improving mandatory data retention in a way that does not have a great effect on law enforcement and ASIO’s ability to do their very important work," Mr Hastie said.

"Importantly, the committee has not recommended any change to the existing two year period of data retention."

The report’s 22 recommendations include:

• access to data kept under the mandatory data retention regime will only be available under specific circumstances;
• the Department of Home Affairs develop guidelines for data collection including an ability for enforcement agencies and Home Affairs to produce reports to oversight agencies or Parliament when requested;
• the repeal of section 280(1)(b) of the Telecommunications Act which allows for access where ‘disclosure or use is required or authorised by or under law.’ It is the broad language in this subsection that has allowed the access that concerned the committee.

Mr Hastie said the review, conducted in accordance with Section 187N of the Telecommunications (Interception and Access) Act 1979, is the seventh full inquiry the Intelligence and Security Committee has completed in 2020.

"Despite the challenges of 2020 I am pleased with the high volume of work completed by the committee," Mr Hastie said.

"As the security environment continues to change, the scope and the role of the committee has expanded, as has the workload. I look forward in particular to the publication of the Richardson review, which will shape the framework of both the Australian intelligence community and its oversight bodies, including this committee."

The full report can be read or downloaded from the committee’s website.

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THE MINING and gas industry of Queensland today expressed its disappointment at Premier Annastacia Palaszczuk’s refusal to guarantee it will not increase royalty rates on coal, metals and gas over the next four years if Labor is re-elected to govern Queensland.

Queensland Resources Council chief executive Ian Macfarlane said while the QRC had welcomed Labor’s pledge not to increase taxes, fees and charges, the industry was very uneasy about the failure of the Premier to commit to not raising royalties in the next term of government if elected.

In contrast, the LNP has provided a guarantee for a 10-year hold at current levels on royalty rates on these commodities.

Mr Macfarlane said Queensland’s resources companies already pay Australia’s highest royalty rates and contributed $82.6 billion to the Queensland economy in the last financial year, an increase of $5 billion on the year before.

Labor has previously committed to a three-year freeze for coal and metals, and a five-year freeze for gas, but the QRC has repeatedly asked the Labor Government to extend this to make the Queensland resources industry more competitive globally.

“The amount of time it takes to approve new projects in Queensland - Adani’s Carmichael Project took nine years and New Hope’s New Acland mine still isn’t approved after 14 years – means a longer royalty timeframe is essential for Queensland companies to attract new investors,” Mr Macfarlane said.

“Existing resources companies also need royalty stability to keep their operations competitive and maintain the jobs of the 420,000-plus men and women who rely on the resources sector to support their families and businesses.”

Mr Macfarlane said the QRC had asked the Palaszczuk Government to offer the same commitment to resources provided by the LNP to stimulate a resources-led economic recovery for Queensland.

“It’s just bad economic policy to tax a wealth-creating industry out of existence, especially an industry like resources that has demonstrated its value and resilience to Queensland during COVID,” he said.

“Resources has kept the Queensland economy financially stable and continues to support the jobs of hundreds of thousands of people in spite of the enormous and costly challenge of maintaining our operations during this pandemic.”

Mr Macfarlane said Labor’s refusal to commit to keeping royalty rates at current levels until at least June 2025 shows a short-sighted approach to growing the state economy, and a lack of understanding about how to stimulate growth and jobs.

“This doesn’t bode well for the next four years in the event of a Palaszczuk Government because resources is one of the key industries right now that can help Queensland produce, work and earn its way out of COVID,” he said.

“It’s now up to voters to decide on Saturday which candidates from which parties provide the most certainty and support for jobs in the resources sector.

“This is particularly important for voters in regional areas, who understand the value of the resources industry to jobs and the economy.”

www.qrc.org.au

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THE 50 most influential financial advisers in Australia for 2020 have been named by financial services trade publication, Financial Standard, in its annual FS Power50 guide.

The list, comprising 31 men and 19 women, is a diverse group of professionals nominated by readers of the Financial Standard for their unique efforts to create a blueprint for the future of financial advice.

“The Power50 exemplify the best aspects of the advice industry and how it is set to change," Jamie Williamson, editor of Financial Standard, said. "Some are influencing the advice industry, be it through regulatory bodies or peer groups, others are influencing the delivery of advice and the client experience through technology and innovative business models.”

"And others are leveraging their role as an adviser to make a meaningful difference in their community or communities abroad,” Mr Williamson said.

“To make it on to this list is no mean feat and all that are featured should be proud of their achievement.”

The purpose of the guide is to raise awareness, in the eyes of the Australian public and the advice industry itself, for the advisers who are playing a key role in shaping the future of financial advice.

Financial advisers have managed to deliver value of 5.2 percent or more each year to clients, according to new research from Russell Investments.¹

Furthermore, twice as many Australians are seeking financial advice as they were five years ago, according to research from Investment Trends.²

“Highlighting the talent within the advice industry is more important than ever in an environment where trust in the sector remains low despite the growing need for quality advice,” Mr Williamson said.

“The FS Power50 badge is synonymous with the best the industry has to offer.”

Nominations for the list are sourced from the Financial Standard audience, as well as the Financial Standard editorial team.

A shortlist is selected by Financial Standard before industry voting begins. This year hundreds of nominations were considered and almost 6000 votes determined the final list.

Both the Financial Planning Association of Australia (FPA) and Association of Financial Advisers (AFA) screened the list before it was published.

2020 saw plenty of change in the list of the most influential advisers, with 23 advisers appearing in the FS Power50 for the first time.

Similarly, the movement within the advice industry was reflected in the FS Power50, with 32 percent of this year’s list belonging to an advice group with more than 100 advisers, down 22 percent in two years.

This aligns with the trend of advisers moving away from larger, institutional groups, into non-aligned groups, with the number of institutionally aligned advisers falling by 25 percent in the year to June 2020, according to Rainmaker Information.³

“At a time when so much focus is on the impact of industry change and diminishing adviser numbers, Financial Standard is proud to showcase excellence in advice and celebrate just how bright the future of advice is,” Mr Williamson said.

“Congratulations to the 2020 FS Power50.”

Click here to view more on the 2020 FS Power50.

1. Russell Investments' Value of an Adviser Report 2020, www.financialstandard.com.au/news/through-good-and-bad-advisers-add-value-175803481
2. Investment Trends Financial Advice Report, www.financialstandard.com.au/news/demand-for-advice-rises-172546141
3. Rainmaker Information Financial Adviser Report, Volume 01, Issue 02.

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