THE Financial Services Council (FSC) today welcomed the inaugural Industry Data and Compliance Report, prepared by the Life Code Compliance Committee (LCCC) which provides independent oversight and monitoring of the Life Insurance Code of Practice (The Code).

FSC senior policy manager, Nick Kirwan said Australia is the only nation in the world to compile and collect data in this field and the report provides evidence of work being done to strengthen the Life Insurance sector.

“The LCCC report shows life insurers made decisions on 89 per cent of all income related claims and 92 per cent of all lump sum claims within the required timeframes,” Mr Kirwan said.

“APRA data has previously shown the overwhelming majority of all claims received are paid (92 per cent), and now we also know, thanks to this report that those claims were made in a timely manner, helping customers when they need it most.

“We don’t shy away from the fact that there is more to be done. The LCCC’s inaugural report provides an important baseline to measure the industry against in future years, and insights into areas that the industry should focus its attention,” Mr Kirwan said.

“The FSC is pleased to see the high level of support from industry, with all Code subscribers providing data that underpins the LCCC report. The willingness of the sector to be transparent shows how seriously the Life Insurance industry takes the issue of building trust with consumers.”

Following the announcement of a radical overhaul of the Code in November 2018, the FSC has been working with ASIC, consumer advocates, mental health groups, GPs and geneticists to develop the next iteration of The Code, and has proposed more than 30 significant additional protections for consumers to lift standards.

The Life Insurance Code covers every individually assessed and group life insurance cover that can be taken out in Australia today. 

About the Financial Services Council

The Financial Services Council (FSC) has over 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 14.8 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. The FSC promotes best practice for the financial services industry by setting mandatory Standards for its members and providing Guidance Notes to assist in operational efficiency. www.fsc.org.au

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THE Hayne Royal Commission reinforced the importance of trust and seeking appropriate advice from professionals and this sentiment has been echoed by the ATO acknowledging there is a gap between ‘full financial advice and smaller matters’. 

For people looking for a solution to this gap, the Institute of Public Accountants (IPA) believes they should be able to get genuine advice and support from their trusted adviser; the accountant.

“The Productivity Commission observed that 48 percent of Australian adults indicated having unmet financial advice needs.  So, obviously there is an advice gap in Australia which needs to be addressed,” IPA chief executive officer, Andrew Conway said.

“Other research indicates that there is a gap between the fees that most consumers are prepared to pay and the average fees being charged by financial planners, with the majority of consumers being open to having reviews with someone else if it meant a reduction in fees.

“To address these gaps the IPA has developed a revised financial services licensing regime for qualified accountants, which recognises their existing qualifications and experience.

“Members of the three professional accounting bodies are answerable to high levels of professional and ethical standards, subject to ongoing quality assurance evaluations, and must maintain currency of knowledge through committed and continuous professional development and training” Mr Conway said.

About the Institute of Public Accountants

The IPA, formed in 1923, is one of Australia’s three legally recognised professional accounting bodies.  In late 2014, the IPA acquired the Institute of Financial Accountants in the UK and formed the IPA Group, with more than 36,000 members and students in over 80 countries.  The IPA Group is the largest SME focused accountancy organisation in the world. The IPA is a member of the International Federation of Accountants, the Accounting Professional and Ethical Standards Board and the Confederation of Asian and Pacific Accountants.   www.publicaccountants.org.au

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THE RECENT Organisation for Economic Cooperation and Development (OECD) Value Added Tax/Goods and Services Tax (GST) Global Forum hosted by the ATO in Melbourne displayed the leading role Australia is taking in adapting the GST to respond to the online marketplace, both within Australia and globally.

Deputy Commissioner Tim Dyce said latest revenue figures show that digital marketplaces and lower value international online sales were not an impossible nut to crack.

“The digital services measure has already achieved $272m GST in the first year or 180 percent ahead of forecast," Mr Dyce said.

"We’ve collected $81 million from the low value imported goods measure in the first three months of operation, already above our full year revenue estimate of $70 million. We’re tracking at over 300 percent of forecast.

 “There was a lot of discussion prior to their introduction about whether these kinds of measures could possibly work, and in many ways it is the most significant change in the way we have collected GST since its inception almost exactly 20 years ago.

“Thanks to the right consultation and design, led by Treasury along with the ATO, and with important input from business, the measures have clearly been effective, which shows we can provide a level playing field for online and physical businesses and between domestic and foreign businesses.

“Not only have we had high levels of registration for these measures and well above forecast revenue, we’ve even had feedback from some online sellers that the registration has improved their business processes and given them greater insight into their sales performance,” Mr Dyce said.

The ATO and OECD representatives welcomed officials from over 100 countries last week to the Global Forum to hear their views on a range of GST/VAT issues facing revenue authorities. The interest in our reforms from other countries means that the ATO can look forward to increased international cooperation as more jurisdictions follow this, or similar, models.

“I’d like to thank everyone, from across six continents, who came to talk about next steps last week” Mr Dyce said. "The ATO looks forward to working with both members of the OECD and non-members to build a system that is fit for purpose as we continue to see rapidly evolving and entirely new digital marketplaces.

“International cooperation across all aspects of tax administration remains one of the most important tools we have for ensuring everyone is paying the right amount of tax and that we are protecting honest businesses from unfair competition,” Mr Dyce said.

Further information on the GST measures and other advice on international tax for business is available on the ATO website.

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THE CHANGES to Right of Entry (ROE) regulations announced on March 26 are a positive step towards achieving a stronger and fairer approach to rules about union officials entering workplaces, according to Master builders Australia.

Denita Wawn, CEO of Master Builders Australia said, “It is important to ensure worker representatives can access work sites, but it is equally important that the Right of Entry system is strong and rigorous, to make sure it is not abused by union officials who try and get on site to bully and harass small businesses.

“The building and construction industry is plagued by a history of unions breaching ROE rules, with the list of court cases and penalty decisions growing longer every day,” she said.

Since 2015, there have been breaches of ROE rules on construction sites, Ms Wawn outlined:

• By 58 individual CFMEU officials.
• At least 189 times.
• Resulting in penalties of almost $3 million, with three further penalty hearings already set for 2019. 

“Master Builders is pleased that the Government has heard the voice of the building industry, small business, and sub-contractors. Something has needed to be done for a long time to protect workers on sites who, day in day out, face the threat of bullying and abuse by construction union officials.” Ms Wawn said.

“However, more needs to be done and we will be asking both major parties to ensure they close the remaining loopholes that building unions regularly exploit, Denita Wawn said.

www.masterbuilders.com.au

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THE Queensland Resources Council wants the upcoming Federal Government’s Budget and the Opposition’s Budget Reply to commit to reinvesting back into Queensland the extra $1 billion in company tax that will flow into Canberra due to higher metallurgical coal prices. 

QRC chief executive Ian Macfarlane said based on Federal Treasury’s calculations, the higher than projected metallurgical coal price would provide an extra $1.2 billion for the balance of this financial year and next financial year (2019-20).

Mr Macfarlane said he urged Prime Minister Scott Morrison and Opposition Leader Bill Shorten to ensure they committed the extra $1 billion to a Maroon Fund.

“Queensland produces the lion’s share of Australia’s metallurgical coal. Queenslanders deserve this billion-dollar unbudgeted windfall reinvested back into their State, where the coal was produced and exported from,” Mr Macfarlane said.

“For every Queenslander, that extra $1 billion counts. Indeed, that extra revenue is the equivalent of $200 for every man, woman and child living in Queensland.”

Prior to Christmas last year, Mr Macfarlane said Federal Treasury projected: “If the metallurgical coal price remained elevated for two quarters longer than currently assumed, before falling immediately to US$120 per tonne FOB, nominal GDP could be around $2.5 billion higher than forecast in 2018-19 and $3.5 billion higher in 2019-20. This would have a flow on impact to company tax receipts estimated at around $0.2 billion in 2018-19 and $1.0 billion in 2019-20.”*

The average metallurgical coal price this year has been US$204 per tonne.

“I am urging community groups, charities, local councils and other industries to nominate their project and cause for the Maroon Fund,” Mr Macfarlane said.

“The continuing drought and recent flooding rains have demonstrated the steely resolve of Queenslanders, but it has created a lot of need.  That should be a priority for the Maroon Fund.

“So should important services such as health and education to support the work in our hospitals and in our classrooms.”

Mr Macfarlane said QRC would forward all Maroon Fund funding requests received by Budget Day on April 2 to both Mr Morrison and Mr Shorten.

“QRC will have no role in their selection, but we will ensure both leaders have these funding requests.  I’m sure Queenslanders will be interested before the upcoming Federal election to know where the $1 billion goes,” he said.

“Perhaps the Palaszczuk Government will fill out a form," Mr Macfarlane said. "This $1B would be on top of the more than $5 billion the Qld Government collects from royalty taxes from the resources sector this financial year.”

The Maroon Fund initiative form can be downloaded at https://www.qrc.org.au/nominations/maroon-fund/ 

Mr Macfarlane said the resources sector was already doing its bit to keep Queensland strong – making a contribution of more than $62 billion to the State’s economy or one in five dollars, supporting more than 316,000 full-time equivalent jobs or one in eight jobs in the Queensland workforce, generating more than 80 percent of the State’s record $80 billion annual export sales and working with 1260 community organisations.

www.qrc.org.au

*See page 33 of Link to the 2018-19  Mid-Year Economic and Fiscal Outlook https://budget.gov.au/2018-19/myefo/myefo_2018-19.pdf

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THE Australian Small Business and Family Enterprise Ombudsman, Kate Carnell today welcomed the Telecommunications Industry Ombudsman’s (TIO) announcement that it will form a Small Business Team.

“From April 1, 2019, small businesses who are in dispute with their telephone, mobile or internet services provider will have a specific team to contact,” Ms Carnell said.

“Connectivity is key to a business’ success. With 95 percent of small businesses online, a disruption or complete lack of connection can affect their sales, marketing, ordering and invoicing processes.

“It’s not acceptable for small businesses to lose customers due to problems with phone or internet connections, which is why this new small business team within TIO is needed.

“For example, we recently helped a Canberra-based chemist whose phone line had been disconnected for 59 days. The telecommunications provider had cut the lines while redirecting to the NBN. The chemist then had their fax line disconnected which caused, among other issues, critical concerns regarding doctors being unable to fax prescriptions for palliative care medication.

“Once my Assistance team stepped in, the telecommunications provider reconnected both the phone and fax lines.

“We will continue to support measures that assist small businesses to maintain and grow their digital connectivity,” Ms Carnell said.

www.asbfeo.gov.au

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THE Telecommunications Industry Ombudsman has announced the formation of a Small Business Team, commencing April 1, 2019.

In 2017/18, complaints from small businesses increased 8.7 percent to 20,433. This increase was largely driven by issues including no action or delayed action by their service provider to resolve their phone or internet issue, followed by complaints about disputed charges for a service or equipment.

In announcing the Small Business Team, Ombudsman Judi Jones said, “Small businesses are relying more than ever before on phone and internet services to be accessible, be informed, and to do business. It is critical they are able to rely on the phone and internet services they sign up for, and to have access to a free, independent, and effective complaint resolution service when their complaint is unresolved.”

Assistant Ombudsman of Dispute Resolution Jillian Brewer is looking forward to the delivery of this specialised service.

"Resolving small business complaints can involve complex phone, internet and equipment setups, and an understanding of how these issues impact business loss," Ms Brewer said. "The Small Business Team will deliver a dispute resolution service that is responsive to the high impact phone and internet problems can have on the day to day operations of small businesses.”

About the Telecommunications Industry Ombudsman

The Telecommunications Industry Ombudsman provides a free and independent dispute service for small business and residential consumers who have an unresolved complaint about their telephone or internet service in Australia. Residential consumers and small businesses should contact www.tio.com.au or 1800 062 058.

The Telecommunications Industry Sector

The Telecommunications industry regulators are the Australian Communications and Media Authority (ACMA),http://www.acma.gov.au  and the Australian Competition and Consumer Commission (ACCC) https://www.accc.gov.au.

Government and the regulators set policy and regulations for the telecommunications sector. Communications Alliance is the peak body for Australian communications industry http://www.commsalliance.com.au

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THE Australian Retailers Association (ARA) has condemned the proposal put forward by the Andrews Labor Government to enshrine public holiday penalty rates for Easter Sunday, Christmas Day and Grand Final Friday into law.

Russell Zimmerman, executive director of the ARA said this suggestion put forward by the Labor Government will have a direct effect on retailers who are already struggling in the current retail climate.

“While the Andrews Government are focused on the interests of the employees, they are failing to acknowledge the hardworking retailers who are trying to stay afloat in the unpredictable retail environment,” Mr Zimmerman said.

“Retailers are feeling the pinch of rising rental costs and poor consumer sentiment and this proposal put forward by Mr Andrews will only heighten the strain already placed on retailers who are operating within such an overwrought market.”

According to recent trade figures published by the Australian Bureau of Statistics (ABS), retail is trading at 3.02 percent nationally, with January trade figures for Victoria in particular trading at 4.23 percent well-below the outstanding 6.39 percent year-on-year high recorded in October. The ARA believes that if public holiday penalty rates are embedded into law, it will have a devastating impact on not only retailers but staff as well.

“The Labor Government’s proposition shows complete insouciance for retailers, especially those operating within shopping centre precincts who may be slapped with hefty fines for not opening their doors on public holidays,” Mr Zimmerman said.

“In addition to this, retailers will be forced to reconsider their rostering procedures to compensate for the increased wages for public holiday rates, which will have a direct impact on retail staff who want to work. If retailers are unable to open on these days, they will lose valuable business as consumers will turn to online instead.”

Australia has seen the closure of many retail stores over the last few months and the ARA believes the Andrews Labor Government’s announcement will only add to this sepulchral inclination.

“As a result of financial difficulties, Australia has already bared witness to the closure of many beloved retail stores and we do not wish to see this trend disseminate across the retail sector,” Mr Zimmerman said.

“The ARA disagrees with the Andrews Labor Government’s stance and will continue to advocate on this behalf of its members to protect the integrity and sustainability of the $320 billion-dollar retail sector.”

About the Australian Retailers Association:

Founded in 1903, the Australian Retailers Association (ARA) is Australia’s largest retail association, representing the country’s $320 billion-dollar sector, which employs more than 1.3 million people. As Australia’s leading retail peak industry body, the ARA is a strong pro-active advocate for Australian retail and works to ensure retail success by informing, protecting, advocating, educating and saving money for its 7,800 independent and national retail members throughout Australia. For more information, visit www.retail.org.au or call 1300 368 041.

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