THE Australian Retailers Association (ARA) said December trade figures released by the Australian Bureau of Statistics (ABS) represents a reputable Christmas trade with a 2.75 percent total year-on-year growth in 2018, compared to 2.49 percent in 2017. 

While media commentary will inevitably focus on the -0.38 percent drop in month-on-month figures, Russell Zimmerman, executive director of the ARA, said retailers focus on the more representative year-on-year numbers, which more accurately reflect the seasonality of retail trading. 

Mr Zimmerman said although the ARA and Roy Morgan predicted a 2.9 percent increase in pre-Christmas sales from November 9 to December 24, 2018, the year-on-year figures released today are close to the estimated sales forecasted in November for December. 

“Although the month-on-month figures from the ABS display a conservative December trade, retailers tend to focus on year-on-year growth for a more concise depiction of how their stores are faring,” Mr Zimmerman said.

“Each year the ARA and Roy Morgan work together to produce the only professionally industry researched Christmas predictions in Australia, and we believe the figures released today are broadly in line with the figures forecasted in November.”

December saw the industry record impressive year-on-year growth across the Food retailing category at (3.98%), while Cafes, Restaurants and Takeaway (2.92%), Clothing (3.21%), Pharmacy/Cosmetics (5.03%) and Other retailing (7.84%) also showed a substantial increase. 

“Food retailing performed exceptionally well this season, with specialised food in particular posting a 3.1 percent year-on-year growth, while Other retailing proved to be the real standout for this month,” Mr Zimmerman said. 

“Pharmacy and Cosmetics was a real highlight in the December figures as expected, fragrances, bath and body products and cosmetics gifts proving popular again in the lead-up to Christmas.”

While department stores recorded a 0.53 percent year-on-year jump, weakness in the Electrical (-2.9%), Newspapers and Books (-6.31%) and Recreational Goods (-4.81%) categories were sobering. 

“Although these figures are disappointing, it is important to note that there are a variety of factors that have contributed to these soft figures, including the decrease in consumer sentiment caused by rising household costs and low wage growth, which continues to plague the industry and overall economy.” 

Across country, Tasmania (4.66%), the Australian Capital Territory (4.61%) and Victoria (4.50%) led the charge with the strongest year-on-year growth, while Queensland (3.47%), New South Wales (1.73%) and Western Australia (1.23%) recorded respectable growth. Unfortunately, South Australia (0.87%) was flat and the Northern Territory (-1.50%) received negative figures in December.

“Tasmania, Victoria and Queensland have remained fierce contenders across the States and Territories, showing consistent and reliable year-on-year growth for the 2018 calendar year,” Mr Zimmerman said.

“It is pleasing to see that Western Australia has shown its strongest year-on-year growth this month since July 2017, which is a promising preview for trade into 2019, while the upcoming New South Wales election may have also contributed to their results.”

On a bright note, the retail industry recorded an average year-on-year growth of 3 percent for the 2018 calendar year, compared to 2.76 percent for the previous year, on the back of a significant improvement for the apparel category.

“Despite the ominous commentary announced by multiple media outlets regarding a subdued Christmas trade, today’s figures prove that there has been reasonable growth across some categories,” Mr Zimmerman said.

“The consumer-led nature of the Australian retail sector signals the importance of strong, accurate leadership and the ARA is the only retail association constantly working to move retail forward.”

Monthly Retail Growth (November 2018 – December 2018 seasonally adjusted) 

Cafés, restaurants and takeaway food services (1.07%), Food retailing (0.53%), Other retailing (-0.10%), Department stores (-1.09%), Clothing, footwear and personal accessory retailing (-2.36%) and Household goods retailing (-2.82%).

Western Australia (0.12%), Queensland (-0.15%), Tasmania (-0.16%), South Australia (-0.25%), Northern Territory (-0.35%), Victoria (-0.52%), New South Wales (-0.55%) and Australian Capital Territory (-1.80%).

Total sales (-0.38%).

Year-on-Year Retail Growth (December 2017 – December 2018 seasonally adjusted)

Other retailing (4.25%), Food retailing (3.98%), Cafés, restaurants and takeaway food services (2.92%), Clothing, footwear and personal accessory retailing (2.38%), Department stores (0.53%), and Household goods retailing (-0.54%).

Tasmania (4.66%), Australian Capital Territory (4.61%), Victoria (4.50%), Queensland (3.47%), New South Wales (1.73%), Western Australia (1.23%), South Australia (0.87%), and Northern Territory (-1.50%).

Total sales (2.75%).

About the Australian Retailers Association:
Founded in 1903, the Australian Retailers Association (ARA) is Australia’s largest retail association, representing the country’s $310 billion sector, which employs more than 1.2 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 7,500 independent and national retail members throughout Australia. For more information, visit www.retail.org.au or call 1300 368 041.

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SCOTTISH PACIFIC CEO Peter Langham has commented on the 76 recommendations of the Hayne Royal Commission that the Government has said it will implement, and their potential impact on the SME sector and brokers.

BROKER REMUNERATION

"We have real concerns over the drastic changes flagged for the residential broker sector," Mr Langham said. "We work closely with commercial brokers to organise funding for thousands of SMEs - while the Royal Commission recommendations focus on residential brokers, we are concerned about the impact this will have on the viability of the whole broker sector and consequently on small and medium business owners.

"Adding a broker fee for service is likely to be detrimental to anybody who can't get funding from the banks. Brokers play a major role in putting non-bank lending alternatives to their clients, providing real solutions for business owners when the banks can’t or won’t lend to them.

"Fee-for-service is likely to drive borrowers straight to those with the biggest advertising budget.

"Brokers have helped drive lending competition and increased the visibility of non-bank lenders – Australia’s ability to provide diverse lending options for consumers and SMEs could go backwards if the fee for service is implemented. Whatever happens to brokers will be critical to the whole consumer and SME lending space. 

"Brokers provide an essential service for anyone looking for help finding the right funding solution, whether they want a home loan, a way to finance a piece of essential equipment, or a working capital facility that allows their business to grow. Without the independent broker, the consumer might lack the ability to see all the options open to them and end up picking funding that isn’t right for them."

SME SECTOR

"Treasurer (Josh) Frydenberg points out that affordable access to finance is critical to the economy," Mr Langham said. "The success of the SME sector is vital for the economy. It’s important that the changes flagged in today’s Royal Commission report don’t negatively impact the flow of funding for SMEs.

"To keep SME funding flowing, there should be broad business and political sector support for promoting viable alternatives to the banks that are available for small business funding. Scottish Pacific has teamed with ASBFEO to work on a guide to small business lending to be widely distributed later this year, so that more business owners – and vitally, the accountants, brokers and business consultants who advise them – know where to turn to and what their options are. Ideally, we'd like the banks to hand out this guide to their business customers so that if the banks turn down a loan, the business owner knows their other options.

"Small business owners must be prepared to seek out alternative financiers to the banks - there are a range of funding options already available to them if they look beyond the banks. Interest in alternatives is already increasing – Scottish Pacific saw a doubling in SME funding enquiries in December 2018, compared to the previous year. Business owners are looking to do things differently, in light of the Royal Commission," he said.

"Australia’s cooling property market, along with more stringent lending conditions introduced due to the Royal Commission, will definitely impact SME owners who need to use their home as security for their business loan," Mr Langham said.

www.scottishpacific.com

About Scottish Pacific

Scottish Pacific is Australasia’s largest specialist working capital provider for SMEs. For more than 30 years Scottish Pacific has lent to small, medium and large businesses with revenues ranging from $500,000 to more than $1 billion.

AFCA chief executive and chief ombudsman, David Locke said, “AFCA welcomes the recommendations in Commissioner Hayne’s final report and the Government’s response. We believe these measures are critical to ensuring that consumers and small businesses are treated fairly.”

Specifically, AFCA noted Commissioner Hayne’s recommendation and the Government’s response on the establishment of a compensation scheme of last resort.

“AFCA and its predecessor schemes have long advocated for the establishment of a compensation scheme of last resort,” Mr Locke said.

“A compensation scheme of last resort is a really important back-stop that ensures that people who have been the victims of misconduct, and lost out through no fault of their own can finally be properly compensated. We look forward to working with the government to implement this important reform,” Mr Locke continued.

AFCA was established on November 1, 2018 and is a one-stop-shop that consumers and small business owners can use free of charge, for fair, independent and effective solutions to their financial disputes.

“The announcement from the Government today that AFCA will now be able to consider some of the legacy disputes excluded by the predecessor schemes going back to January 1 2008, means that many more people will be able to get access to justice and have their matters properly considered. This is a really positive step for consumers and we will be issuing guidance shortly to assist people to bring these disputes to us,” Mr Locke said.
 
AFCA also welcomed the Commissioner’s recommendation in respect of section 912A of the Corporations Act 2001, to require that Australian Financial Services Licence holders take reasonable steps to cooperate with AFCA in its resolution of complaints, by making available to AFCA all relevant documents and records relating to issues in dispute. This will enhance AFCA’s effectiveness as an independent external dispute resolution scheme for consumers and small businesses.

The Government announced that AFCA will also play an increased role in relation to remediation schemes that are run to compensate consumers. Mr Locke also welcomed this: “AFCA already has considerable experience of working on remediation schemes, and where we are involved at an early stage we are able to ensure that these are designed and implemented in a way that delivers fair outcomes for consumers. We welcome an increased role in this important work.

"AFCA will continue to work with our members to improve standards and minimise disputes, improving practices and achieving fair, timely outcomes for consumers and small businesses.

"AFCA is firmly on the side of fairness and we believe that ensuring fair outcomes for consumers is a critical first step to rebuilding trust and confidence in financial services."

A full statement can be found on the AFCA website: https://www.afca.org.au/news/latest-news/afcas-response-to-the-royal-commission-final-report/.

 
About AFCA
The Australian Financial Complaints Authority (AFCA) is a free and independent ombudsman service that resolves complaints by consumers and small businesses about financial firms. AFCA was established following the 2016 Ramsay Review into how Australia’s external dispute resolution framework could be improved to deliver effective outcomes for all Australian consumers and small business. On 1 November 2018, AFCA replaced the Financial Ombudsman Service, the Credit and Investments Ombudsman and the Superannuation Complaints Tribunal as the one-stop-shop for financial dispute resolution. Consumers and small businesses can lodge a complaint to AFCA online at afca.org.au, via email to This email address is being protected from spambots. You need JavaScript enabled to view it. or by phoning 1800 931 678.

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THE Financial Planning Association of Australia (FPA) is currently examining the findings of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, and intends on working proactively with the government to address its recommendations.

The final report highlights the need for strong consumer protection and oversight that build trust in the financial planning profession. The FPA acknowledged the examples of poor advice and misconduct identified by the Royal Commission were of deep concern and must be resolutely
addressed.

FPA CEO, Dante De Gori said, “The FPA is committed to a better outcome for people that have not received professional, sound and ethical financial advice. People want to know who they can trust with their money; they deserve trusted and transparent financial advice that is unequivocally in their best interests as the client.

“The FPA expects its 14,000-plus members to demonstrate the highest standards of conduct and ethical practice, and of course abide by every relevant letter of the law. We provide a wide range of ongoing opportunities for our members to learn, improve and advance in their
professional capabilities and knowledge for the benefit of their clients.

“We will continue working with our members towards further improving education and professional standards of financial planners. We have recently conducted a voluntary internal audit of our Conduct Review Commission disciplinary processes and made them more transparent.

"Reflecting Commissioner Hayne’s concerns, a separate legal entity has been established called Code Monitoring Australia to ensure true disciplinary independence.

“We believe change in the financial planning profession will ultimately result in better outcomes for all Australians,” said Mr De Gori. “It is our objective to help create the environment that will enable all Australians achieve a more secure financial future.

"It will take time to review and absorb the full implications of this final report, but in principle, the FPA is committed to working cooperatively with the government and its current and future representative bodies to support the growth of our profession for the benefit of consumers,” Mr De Gori said.

www.fpa.com.au

About the FPA

The Financial Planning Association of Australia (FPA) represents the interests of the public and Australia’s professional community of financial planners. The Association is unrivalled in its reach of the financial planning market, influence on government and regulators, standards set
through a world-class Code of Professional Practice, unique position as the certification body in Australia for the global Certified Financial Planner designation, and reputation for quality professional development. With a growing membership of more than 14,000 members and affiliates, the FPA is home to Australia’s 5,700 CFP® professionals. Building on a 20-plus year legacy, the FPA represents the changing face of the financial planning profession.

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