INDUSTRY Super Australia (ISA) said the Banking Royal Commission has shone a welcome light on serious conflicts within the financial services system and validated the important role industry and other profit-to-member super funds play in safeguarding Australians’ retirement savings.

ISA said the Royal Commission’s final report had correctly diagnosed the root causes finding: “in almost every case the conduct in issue was driven by the relevant entity’s pursuit of profit but also by individuals’ pursuit of gain…” (p1 Volume 1).

ISA said the structure of industry and other profit-to-member super funds has avoided such conflicts resulting in scarce evidence of misconduct or conduct falling below community expectations.

"However in assessing the recommendations they appear to stop short of systemic reforms suggested by some to address conflicts of interest at the heart of most misconduct," the ISA said.

"Instead, the report has opted for a series of changes to existing laws and stronger enforcement.

"Taken as a whole the proposed changes should in most cases lead to better outcomes for consumers but only time will tell whether ongoing conflicts of interest and remuneration settings will result in problems re-emerging.

"Turning to the specific recommendations on super, ISA agrees they should improve outcomes by prohibiting unsolicited sales of super, stronger penalties for trustees, annual renewal of advice fees and ceasing grandfathered commissions to stop fee for no service gouging.

"Industry super funds also support steps to reduce multiple accounts and development of mechanisms such as automatic rollover to prevent more than one default account being created for members.

"Surprisingly the final report does not appear to recommend any specific prosecution action arising from the evidence and case studies it explored. It would appear it is in the hands of ASIC to determine if misconduct is pursued through the courts."

ISA deputy chief executive, Matt Linden, said that by shining a light on the system’s deeply entrenched problems, the findings could prove the vital catalyst for long overdue reform. 

“That not-for-profit industry superannuation funds have emerged from the process relatively unscathed, is vindication of our governance structure and member-first ethos,” Mr Linden said.

“As a whole, the system must be more transparent and more accountable – it shouldn’t take a Royal Commission for workers to see whether their retirement savings are in safe hands or not.

 “The onus is now on the Parliament and industry to ensure superannuation works in the best interest of fund members – not that of shareholders or bank executives,” Mr Linden said.

Industry Super Australia provides policy, research and advocacy on behalf of 16 not-for-profit industry superannuation funds with around six million members.

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GREATER consumer protections, increased penalties for law breakers, expanded enforcement powers for regulators and industry-wide legislative simplification are among sweeping changes recommended by the Royal Commission into the Banking and Financial Services Industry.

The Law Council of Australia has welcomed the recommendations, which will have a far-reaching impact on the banking and financial services sector, ensuring consumers are treated fairly and honestly, in accordance with key principles of the law.

Law Council President, Arthur Moses SC, said the Royal Commission had shone a light on misconduct – some potentially criminal – in the banking and financial sectors, providing a unique and important opportunity for reform and renewal.

“Australians were rightly shocked by some of the stories heard during the extensive Royal Commission hearings – of profit being put before people and in some instances the rule of law,” Mr Moses said.

“The recommendations put forward by Commissioner Kenneth Hayne have placed consumers first and established a roadmap with the potential to set the path straight into the future, ensuring banks and those providing financial services are held to account.

“Central to the Law Council’s submission was the call for simplification of complex laws, making them easier to understand and administer and we are pleased by the recommendations supporting this shift.

“The ‘clear need’ for the disadvantaged to access financial and legal assistance to deal with disputes on equal footing with large financial entities was highlighted in the final report.

“Many of the cases before the Royal Commission involved matters where individuals were unable to pursue their rights because of an inability to access legal assistance. This resulted in injustices occurring and wrongdoers going undetected.

“We reiterate our calls for the Federal Government to ensure predictable and stable funding for the legal assistance sector, so all Australians can access justice,” Mr Moses said.

The Law Council summed up the recommendations as:

Changes designed to protect consumers, meaning

• banks would be prohibited from paying commissions to mortgage brokers, which would be paid by home loan borrowers;
• brokers failing to 'act in the best interests of the intending borrower' would be liable to civil legal action;
• prior to giving advice financial advisers will be required to disclose conflicts of interest in a written statement; and
• a compensation scheme of last resort for those with a 'viable claim' would be established in congruence with a government-appointed panel reviewing external dispute resolution and complaints arrangements. 

Increased penalties for those breaking the law, including

• criminal penalties for financial services and credit licensees for failure to report a contravention as and when required;
• the introduction of additional civil penalties for financial services and credit licensees for failure to report a contravention as and when required;
• breaches of industry codes of conduct would constitute breaches of law; and
• civil penalties for breaches of superannuation trustees’ and directors’ covenants set out in the Superannuation Industry (Supervision) Act 1993.

Expanded enforcement powers, meaning

• ASIC should first consider the viability of court action before other enforcement tools such as infringement notices or enforceable undertakings;
• the establishment of a new disciplinary body for financial advisers, requiring registration, reporting of “serious compliance concerns”, and allowing reporting by clients and other stakeholders;
• ASIC would become the conduct regulator for the superannuation industry; and
• ASIC enforcement staff would be required, where possible, to avoid informal contact with members of the banking and financial services industry.

The Law Council noted that measures to simplify existing law require clearly definition of generally applicable norms of conduct to ensure the removal of exceptions and qualifications in law are appropriate. 

"We reiterate our recommendation for a referral to the Australian Law Reform Commission to develop propositions for simplification and related matters," a Law Council spokesperson said.

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“THE VOLUME of new apartment building is smaller than at any time since July 2012,” according to Master Builders Australia’s chief economist Shane Garrett. 

Just released figures from the ABS show that new home building approvals lost another 8.4 percent during December 2018. Detached house approvals were down by 2.1 percent but approvals for new apartments/units dropped by 18.6 percent during the month. 

“Today’s ABS figures complete the full 12-month picture for 2018. For the year overall, the volume of new home building approvals was pretty strong with over 212,000 permits issued for new dwellings. This was down only modestly (-5.6%) compared with the 2017 total,” Shane Garrett said. 

“More worrying is the pace at which approvals have been falling back over more recent months. During the final three months of 2018, total approvals were 23.7 percent lower than a year earlier – with apartment approvals suffering a 40.1 percent reduction over this period.

“Faltering new home building activity has been occurring against the backdrop of falling house prices, the Royal Commission’s work and uncertainty about what housing policy will look like after May’s Federal Election,” Mr Garrett said. 

“Clearing up some of these uncertainties would help get the housing market back on its feet." 

During December, new dwelling approvals increased in three markets including South Australia (+5.6%), the Northern Territory (+1.7%) and Western Australia (+1.1%).

The largest reduction in approvals hit Tasmania (-24.3%) followed by the ACT (-21.3%). The volume of approvals also declined in New South Wales (-8.6%), Victoria (-8.1%) and Queensland (-5.8%).

www.masterbuilders.org.au

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THE HOUSE of Representatives Standing Committee on Communications and the Arts will hold a public hearing in Brisbane on Wednesday, February 6, and a public hearing in Canberra on Wednesday, February 13 for its inquiry into the Australian music industry. 

The chair, Luke Howarth MP, said that the committee is continuing to examine the potential for continued growth and the factors affecting the success of the Australian music industry, both domestically and internationally. 

"Artists are the heart and soul of the industry. Without Australian artists there would be no Australian music industry. Australians are known for pushing the boundaries of music in their fields, combining musical excellence with fresh, bold, and innovative ideas," Mr Howarth said.

The committee will hear from a range of Australian songwriters, composers, and performing artists. 

Mr Howarth explained that, "As Australian band AC/DC famously put it, 'it’s a long way to the top if you want to rock and roll'. At this hearing, we will hear from Australian artists regarding their experiences and the challenges they face during that climb to the top."

On Wednesday February 13, the committee will hear from the Department of Communications and the Arts. 

The public hearings will be broadcast live on the web (audio only).

Public hearing details:

BRISBANE
Date: Wednesday, 6 February 2019
Time: 9.30am to 12.45pm
Venue: Undumbi Room, Queensland Parliament House, Crn George and Alice Streets, BRISBANE

CANBERRA
Date: Wednesday, 13 February 2019
Time: 12.40pm to 1.20pm
Venue: Committee Room 1R6, Parliament House, CANBERRA

Programs for the hearings are available on the committee’s website.

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THE Department of Defence has awarded $8.719 million (exclusive of GST) in grants over three years to fund projects by think tanks and academic institutions that contribute to the national security debate in Australia.

Minister for Defence, Christopher Pyne said the annual Strategic Policy Grants Program was designed to support original initiatives that help inform Defence’s strategic policy advice, as well as support more public discourse on defence and security issues.

“Australia’s security can be strengthened by more rigorous debate between policy‑makers, think tanks, scholars and the broader public. Defence’s Strategic Policy Grants Program helps ensure that our best minds make valuable contributions to that debate,” Minister Pyne said. 

The competitive selection process attracted 59 applications from Australia and overseas. This year’s grant recipients are:

• · Australian Member Committee of the Council for Security Cooperation in the Asia Pacific (Aus-CSCAP), Canberra
• · Center for Strategic and Budgetary Assessments (CSBA)
• · The Center for Strategic and International Studies, Washington
• · China Matters
• · Flinders University, Adelaide
• · The Institute for Regional Security, Canberra
• · The International Institute for Strategic Studies, Singapore
• · L21, Sydney
• · The Lowy Institute
• · Macquarie University, Sydney
• · The National Bureau of Asian Research, Washington DC
• · National Security College, Australian National University, Canberra
• · RAND Australia, Canberra
• · The Royal Institute of International Affairs (Chatham House), London
• · Royal United Services Institute for Defence and Strategic Studies Australia, Canberra
• · SAGE International Australia, Adelaide
• · The Strategic and Defence Studies Centre, Australian National University, Canberra
• · The United States Studies Centre, University of Sydney, Sydney
• · The University of Adelaide, Adelaide
• · The University of New South Wales, Canberra.

"I offer my congratulations to the successful applicants and look forward to their valuable contributions to strengthening Australia’s national security," Mr Pyne said.

www.defence.gov.au

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THE Queensland Resources Council (QRC) has welcomed the Palaszczuk Government’s decision to award tenders for the exploration of coal in the Bowen and Surat basins and minerals in the North West Province.

QRC chief executive Ian Macfarlane said the announcement by Mines Minister Dr Anthony Lynham showed the strength of the resources sector, and the opportunities that are literally at Queenslanders' feet, including through a new higher estimate of the extent of Queensland’s coal reserves.

“The Queensland resources sector powers our economy. It adds $62.9 billion to the Queensland economy, supports more than 316,000 jobs across the state, and directly pays $5.2 billion this year in royalty taxes to the State Government. Those royalty taxes build roads, schools and hospitals and pay the wages of nurses, teachers and police,” Mr Macfarlane said.

“Queensland has always been a resources powerhouse, but there is no room for complacency.  It’s essential that we continue to encourage new exploration which will lead to the next round of investments. Our jobs of the future depend upon it.

“Our annual QEC Exploration Scorecard in 2018 found coal exploration had increased for the first time since 2011-12, going up by 27 percent and mineral exploration expenditure rose 35 percent, and petroleum exploration expenditure was up by 5 percent.

“The most fundamental part of our future resources strength is investment in new prospects and by responsibly developing our resources we’ll give all Queenslanders access to the opportunities of working in the our great sector.

“Only stable and predictable policy will ensure investment in exploration leads to new investment, new jobs and new exports for Queensland.”

The State Government said junior explorer Red Metal Limited will explore for zinc, lead, copper and silver deposits across 400 square kilometres of land located 250km north of Mount Isa. And four companies – Denham Coal (a wholly owned subsidiary of Pioneer Coal), Queensland Coal Investments Pty Ltd, Enex Togara Pty Limited and Wandoan Holdings Pty Limited will soon be able to commence exploratory work over 369 square kilometres of land in the Bowen and Surat basins. These areas are located near Moranbah, west of Mackay,  Blackwater west of Rockhampton and Taroom, west of Maryborough close to existing mines or mining leases.

Separately, a new geological report found Queensland’s untapped coal deposits were almost double than was last reported with 63 billion tonnes of raw coal which is an increase of close to 29 billion from the previous estimate. 

“Our cities and our regions have been built by the resources sector, and there’s still so much potential,” Mr Macfarlane said.

“Despite activists claiming Queensland is running out of coal the facts prove the opposite with tens of billions of tonnes of coal in reserve including more than 14 billion of coking coal which is used to make steel needed for building the world’s infrastructure.

“We must ensure that Queensland has consistent, transparent and stable regulations that give all projects a fair go, in order to turn our enormous potential into a reality.”

ww.qrc.org.au

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THE VALUE of Australia’s resources and energy exports have helped drive a 4.4 percent increase in the price of export for the December quarter, with strong growth in coal and LNG exports said the Queensland Resources Council (QRC).

Queensland Resources Council chief executive Ian Macfarlane said the data released by the Australian Bureau of Statistics showed the export price index for national coal exports increasing by 3.7 percent while LNG soared by 8.6 percent. 

“This should come as no surprise after Queensland coal and LNG exports broke records in calendar year 2018,” Mr Macfarlane said. 

“Total coal exports reached 223 million tonnes (mt) surpassing the last record by 2mt set in 2016 while Queensland LNG from the Port of Gladstone set a new export record of 20.58mt.

“Every tonne of coal and all resources exported brings in royalty taxes, which help pay for Queenslanders’ roads, schools and hospitals, and pay for the teachers that educate our children, the nurses and doctors who look after our health and the police force that keeps us safe.

“Combined royalty taxes from resources will pour a record $5.2 billion into the Palaszczuk Government’s coffers this financial year.

“It’s more good news for jobs in resources with the latest data showing 10,200 roles were created nationally over the November quarter which is more than a 4 percent increase -  the highest total employment since May 2014.

“The Queensland resources sector has created 10,000 jobs over the past year – that’s a new job every 40 minutes.”

www.qrc.org.au

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TAE AEROSPACE will develop its Turbine Engine Maintenance Facility (TEMF) in Bundamba, South East Queensland, to support in-country sustainment of Australia’s fifth-generation F-35 Joint Strike fighter jets.

The TEMF will enable deeper-level maintenance, where JSF F135 engine modules are disassembled, repaired and reassembled for testing, according to Minister for Defence, Christopher Pyne. 

“TAE Aerospace’s new facility will support maintenance, repair, overhaul and upgrade (MRO&U) activities for not only Australian F135 engines but also engines from around the Asia Pacific region and the world,” Mr Pyne said.

“TAE Aerospace is 100 percent Australian-owned with 237 employees at several sites across Australia, with contracts to support Classic Hornet, Super Hornet, Growler and M1 Abram tank engines. 

“The addition of the F135 engine MRO&U activities will add a minimum of 15 aerospace technician jobs to its workforce and up to 85 additional jobs as part of the future F-35 Global Support Solution.”

The Australian Government has approved the acquisition of 72 F-35A JSF aircraft to replace the current fleet of 71 ageing F/A-18A/B Classic Hornets. 

“The global F-35 Program has had a positive impact on Australia’s growing defence industry, which has collectively been awarded in excess of $1 billion in production contracts and will support up to 5000 Australian jobs by 2023,” Mr Pyne said.

www.defence.gov.au

www.defence.gov.au/casg/AboutCASG/OurStructure/Air/JointStrikeFighterDivision/

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