CONSUMERS will once again be left vulnerable to raids on their super accounts by financial advisers if a government proposal to allow grandfathered conflicted remuneration to continue goes ahead, according to Industry Super Australia.

Industry Super Australia has strongly opposed the move in its submission to the Exposure Draft Treasury Laws Amendment (Ending Grandfathered Conflicted Remuneration) Regulations 2019.

Despite a clear recommendation by the Royal Commission that grandfathering arrangements should cease, the government’s draft regulations effectively give an exemption for financial institutions to continue provisions for conflicted remuneration by allowing a rebate or monetary benefit scheme to be established.

Industry Super Australia chief executive Bernie Dean slammed the proposal and called on the provisions for conflicted remuneration to be repealed as soon as possible – "in line with Commissioner Hayne’s recommendation".

“Let’s not forget that grandfathered commissions remove money from consumers' accounts without their express consent. This is akin to stealing money,” Mr Dean said.

“This is money that would otherwise have been maintained, in a consumer’s account, and instead was siphoned off to pay financial advisers for nothing.

“To claim administrative inconvenience as an excuse to try and water down what should be a blanket ban on grandfathered commissions, is astounding given the disgraceful conduct that was exposed during the Royal Commission.”

Mr Dean said this was not the first time the retail fund sector had tried to persuade the government – previously through the FoFA legislation – to put in place a backdoor arrangement that would have seen grandfathered commissions allowed into perpetuity.

“While some parts of the super sector will fight tooth and nail to keep grandfathered conflicted remuneration provisions – at the expense of consumers – our position is clear," Mr Dean said.

“We do not support a watering down of the blanket prohibition on grandfathered commissions. Any attempt to provide exemptions for conflicted remuneration will only erode consumer protections and leave consumers worse off.”

Industry Super Australia’s full submission can be found at https://www.industrysuper.com/media/ending-grandfathered-conflicted-remuneration/

THE Queensland Resources Council has welcomed Federal Labor’s commitment to new resource discoveries as a boost for the state’s mining industry, but it has urged Labor to be clear on its position for the future role of coal.

QRC chief executive Ian Macfarlane said Queensland had a huge potential, particularly through the North West Minerals Province, to develop the new economy minerals so essential for the global growth in renewable energy technology, electric vehicles and battery storage.

“Prior to the election, the QRC urged the Coalition and Labor to embrace this opportunity, and we welcome the announcement by Opposition Leader Bill Shorten today,” he said.

“Any investment in additional investigation for resources, like $75 million for a road map for a new generation of mines, will help deliver new discoveries, new investment, new exports and new jobs for Queensland.”

Mr Macfarlane said in 2017-18, metals contributed $9.3 billion to Queensland’s gross regional product and supported more than 50,000 full-time equivalent jobs or the equivalent of 2 percent of Queensland’s workforce. The metals sector also contributed $370 million in royalties.

“Through policy and infrastructure – and fittingly the Townsville to Mount Isa rail line that is so important to that region reopens today after devastating floods earlier this year – we can grow that contribution to Queensland and Queenslanders,” he said.

Mr Macfarlane said he welcomed the role of CSIRO and Geoscience Survey in Federal Labor’s commitment, and he hoped there would be a prominent role for the State Government’s Queensland Geological Survey.

“CSIRO and Geoscience Australia are internationally renowned, so I welcome their planned role in Labor’s initiative. It dispels some of the criticism of their role in assessing the Carmichael Coal project’s Groundwater Management and Monitoring and Groundwater plan,” he said. 

Mr Macfarlane said the contribution of metals continued to be dwarfed by the role of coal in the Queensland economy – coal contributed $43.4 billion to the Queensland economy and more than 215,000 full-time equivalent jobs or 9 percent of the state’s workforce.  Coal royalties paid to the Queensland Government were $3.8 billion in 2017-18 and are expected to exceed $4 billion this financial year.

“During this Federal election campaign, where winning Queensland seats is so crucial, no Party should be vague about their commitment to coal,” he said. 

“All parties, vying for Queensland support, should be clear on their own support for the development of new coal mines, particularly in the Galilee Basin, and the continuation of existing mines producing both thermal and metallurgical coal.”

www.qrc.org.au

QRC report on 2017-18 economic contribution of metals: https://www.qrc.org.au/wp-content/uploads/2018/11/2018_Metals_Contributions.pdf

QRC report on 2017-18 economic contribution of coal https://www.qrc.org.au/wp-content/uploads/2018/11/2018_Coal_Contributions.pdf

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THE Queensland Resources Council has urged the Palaszczuk Government to focus on moving the multi-billion-dollar pipeline of resource sector projects from planning to purpose.

QRC chief executive Ian Macfarlane said while he welcomed the Government’s advertisement promoting the fact $20 billion worth of resource projects had been approved with the creation of 7000 jobs over the last four years, there was in excess of $60 billion of resource project investment in the pipeline.

“We are competing with the world for investment in the development of our resources -— coal, gas and metals. Our resources are first class. We have dedicated and skilled workers. We need the confidence that stable policy settings from government gives to secure the new projects and new jobs for Queensland,” he said.

“It’s great to celebrate the investment secured over the last four years, but no one won a race running backwards. We are in a race — commodity prices and demand is strong.

“Abrupt and unpredictable government policy and decision-making from government is our biggest threat.

“With Queensland’s unemployment rate now back over 6%, there is no better time to give the resources sector the renewed confidence to invest, employ and export for all Queenslanders.”

Mr Macfarlane said since the 2017 State election, full-time equivalent jobs in the Queensland resources sector had grown at the rate of one every 57 minutes.

www.qrc.org.au

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INDUSTRY super fund, Vision Super, announced today they have hit $10 billion in funds under management.

Vision Super CEO Stephen Rowe said that while it was nice to achieve milestones, the number wasn’t really the focus.

“We’ve doubled our funds under management, from $5 billion to $10 billion in just five years, through organic growth and strong returns,” Mr Rowe said. “We’ve achieved this at the same time as paying out $1.25 billion worth of lifetime pensions and defined benefit lump sums to our retiring members.

“Hitting $10 billion is testament to the hard work and principled approach of our Investment team and our growth team, but it’s really just another number – what we’re focused on is returns for Vision Super’s members.

“Our default Balanced growth option has top quartile returns over the medium-term and has beaten the median over one, three, five and seven years – those are the really important numbers that mean more money in members’ accounts when they retire.

“Our members trust us to with the incredibly important role of looking after their retirement savings – and that trust is reflected in strong contributions and roll ins, which have contributed to us achieving $10 billion.

"We’re looking to grow significantly over the next few years - $10 billion is a nice milestone, but I’m hoping we hit some even bigger ones in the near future.”

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THE Australian Taxation Office (ATO) is collecting bulk records from Australian cryptocurrency designated service providers (DSPs) as part of a data matching program to ensure people trading in cryptocurrency are paying the right amount of tax.

Data to be provided to the ATO will include cryptocurrency purchase and sale information. Deputy Commissioner Will Day said the data will make up a key element in the ATO’s compliance program.

“The ATO uses third party data to improve the integrity of the tax system by identifying taxpayers who fail to disclose their income details correctly," Mr Day said. "We also use third-party data to assist taxpayers in meeting their tax obligations through pre-filling of tax returns.

“This data will be collected under notice from the DSPs on an ongoing basis,” he said.

There has been significant growth in participation of crypto-assets in recent years. It is estimated that there are between 500,000 to one million Australians that have invested in crypto-assets.

Cryptocurrency and blockchain technology is seen as an enabler of existing risks for the ATO. Cryptocurrency has been used to move funds within the black economy, hide money offshore, and is sometimes linked to risks with unexplained wealth and undeclared taxable capital gains.

The ATO will be working with other regulators, in particular the Australian Transaction Reports and Analysis Centre (AUSTRAC) and the Australian Securities and Investment Commission (ASIC) to ensure that tax law requirements align with a whole of system approach.

“The ATO is also working in a joint international effort as part of the Joint Chiefs of Global Tax Enforcement (J5), aimed at investigating cryptocurrency-related tax evasion and money laundering,” Mr Day said.

Following the data matching exercise people may be contacted by the ATO and given the opportunity to verify the information collected, before any compliance action is undertaken. People will be given at least 28 days to clarify any information that has been obtained from the data provider.

“We want to help taxpayers to get it right and ensure they are paying the correct amount of tax,” Mr Day said.

“Where people find that they have made an error or omission in their tax return they should contact the ATO as soon as possible. Penalties may be significantly reduced in circumstances where we are contacted prior to an audit.”

People can correct a mistake by requesting a self-amendment or making a voluntary disclosure, and can also contact us if they need help paying their tax.

Details of the ATO’s data matching strategies are published at www.ato.gov.au/datamatching

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“THE PROPOSAL by the Labor Party to increase capital gains tax by 50 percent is an unjustified slug on retirees who have invested in growth assets to fund their living expenses,” said Mr Strandquist, acting president of the Association of Independent Retirees.

“Self-funded retirees rely solely on returns from their investments to provide income to live. These returns can come from interest, share dividends, franking credits, property rents and the sale of investment assets,” said Mr Strandquist.

He said when retirees sell shares or other growth assets, the discounted net capital gains are added to their income for the year in which they sold the investment. They pay tax on this income for the year even though the capital growth of the assets may have been realised over 20 years or more.

“The Labor Party’s proposal to increase tax on capital gains by 50 percent will mean a substantial reduction in the investment returns for retirees who have saved their entire working lives so that they don’t have to rely solely on the government aged pension,” Mr Strandquist said.

The purchase and sale of assets is an important process for retirees, he said, as most investment strategies rely on adjusting portfolios to minimise risk and maximise the growth of investments. In addition, during the retirement years, it is necessary to sell down assets such as shares and property to provide income for living expenses and to fund aged care accommodation.

“Unlike the loss of franking credit refunds, there will be no pensioner exemption for the 50 percent hike in capital gains tax. All individual investors who purchase investment assets like shares and property after January 1, 2020 will pay 50 percent more tax on their future capital gains,” Mr Strandquist said.

“Together with the loss of franking credits refunds, no negative gearing for pre-owned properties and other proposed tax changes, it is clear that the Labor Party thinks retirees are a soft target. But, with the increase in capital gains tax, retirees won’t be the only group funding the many spending initiatives the Labor Party has announced,” Mr Strandquist said.

www.independentretirees.com.au

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THE Queensland Resources Council has commended Queensland Rail (QR) on today's (April 29) opening of the vital economic rail link between Mount Isa and Townsville after it was severely damaged by the north Queensland floods. 

QRC chief executive Ian Macfarlane said QR CEO Nick Easy and his team "worked tirelessly to not only repair the rail but lifted its end of run times". 

“I personally thank Nick and the 400-person QR team who were immediately tasked to rebuild the rail and carry out widespread improvements from remote temporary accommodation camps,” Mr Macfarlane said. 

“As a result of the 11-week operation the opening is ahead of schedule and will result in reduced transport times by around 50 minutes.

“This rail line is a key transport corridor for Queensland’s metals industry which contributed $9.3 billion to the state’s economy last financial year, supported more than 50,000 full-time jobs and paid $1.3 billion in wages.

“Additionally, the metals industry pays royalty taxes to the Queensland Government which are on target to reach a new record of $5.2 billion this year which pay for schools, hospitals and roads." 

QR said the record monsoonal event damaged 200 sites across the 300km  track including repairs to 38 bridge abutments, the replacement of 47 km of rail and 120,000 tonnes of ballast. 

The Queensland resources sector provides one in every six dollars in the Queensland economy, sustains one in eight Queensland jobs, and supports more than 16,400 businesses and community organisations across the state all from 0.1 percent of Queensland’s land mass, according to the QRC.

www.qrc.org.au

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IN THE WAKE of the Hayne Recommendations, the Global Compact Network Australia (GCNA) is hosting 250 delegates from some of Australia’s leading businesses at its inaugural conference from April 30 to May 1, to discuss how to rebuild trust in corporate Australia.

GCNA executive director Kylie Porter said the expectation for leadership has shifted away from government institutions to business, and more specifically business leaders.

“It is crucial that businesses come together to discuss how they will demonstrate that they have a social licence to operate while simultaneously acting in the best interest of their shareholders,” she said.

“At the conference we will discuss how companies have the opportunity to rebuild trust through sustainable and responsible business practices, and how businesses can shift their culture to be one founded on ethics and purpose over profit.”

Participants will hear from renowned speakers including Gillian Triggs (former president of the Australian Human Rights Commission), Professor John Ruggie (former special adviser to UN General Secretary Kofi Annan and author of the UN Guiding Principles on Business and Human Rights) and Emmanuel Lulin (chief ethics officer of L’Oreal).

The speakers will address the need for business leaders to speak out on social and environmental issues and challenge existing business norms; rebuilding trust through a human rights lens and the social component of ESG; and what the ethics revolution means for businesses in Australia and globally.

Trust will also be explored through the lens of businesses becoming leading authorities on policy debates, such as anti-corruption regulation and climate change, and on topics such as trust in digital technology, the role of the circular economy and the power of Indigenous reconciliation.

“Australian corporates need to demonstrate how they are shifting their focus to building robust cultures that drive purpose and enable organisations to thrive. We hope that the GCNA’s conference will allow business leaders to understand what levers they can pull to balance the pillars of responsible business and ethics with the expectations of profit to regain trust in corporate Australia,” said David Cooke, chair of the GCNA.

Venue: The Arts Centre, 100 St Kilda Road, Melbourne

Date: 12pm on April 30 to 5.30pm on May 1, 2019.

http://www.unglobalcompact.org.au/2019conference

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