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Economics committee to probe insurers’ response to 2022 floods

THE RESPONSE of the insurance industry to major flood events across Australia in 2022 will be the focus of a new inquiry by the House Standing Committee on Economics.

The inquiry will take a whole-of-economy view of the ongoing challenges caused by intense and frequent flood events.

In particular, the inquiry will look at insurers’ responses to the 2022 flood events in south-east Queensland and northern NSW during February and March; the floods in greater Sydney and the Hunter in July; the October floods in Victoria, NSW and Tasmania; and the floods in November and December in the central west of NSW.

The inquiry will focus on a range of issues, including:

  • Timeframes for resolving claims;
  • Obstacles to resolving claims;
  • Communication with people lodging claims;
  • The effectiveness of internal dispute resolution processes;
  • The accessibility and affordability of hydrology reports and assessments;
  • The affordability of insurance cover; and
  • The preparedness of insurance companies for future major floods.

The chair of the committee, Daniel Mulino MP, said, “The aftermath of intense natural disasters continues to have a huge impact on the lives of Australians - in rural and regional communities and in metropolitan areas.

“People in my electorate of Fraser were devastated when the Maribyrnong River flooded in October. I spent the following days door knocking, making sure residents were safe and that they had been able to claim disaster payments from Services Australia. I will never forget the despair of the families and local business owners who lost everything.

“My staff are still advocating for affected residents who have outstanding claims with their insurance companies. Meanwhile, they are also trying to rebuild their lives, which is difficult when claims haven’t been settled.”

To kick off the inquiry, an online survey has been launched to hear from people who were affected by the major floods. “It is really important that people participate in the survey,” Dr Mulino said.

“Committee members need to have a good understanding of people’s experiences with their insurance companies. Their evidence will inform our discussions throughout the inquiry and help guide our recommendations.”

From an insurance perspective, the 2022 floods were some of the costliest in the nation’s history.

“This is why it is also critical that we engage with the insurance industry and understand the effect of supply chain issues, skills and labour shortages on responding to claims; how insurers communicate with their policy holders in difficult times; and their preparedness for future events,” Dr Mulino said.

In addition to the online survey, available here, the committee will also accept submissions that address the Terms of Reference until October 31, 2023. Submissions can be made online.

Further information about the committee’s inquiry, including the full terms of reference, details on how to participate in the survey or make a submission, are on the inquiry’s website.

 

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Unpaid carers, national peak bodies and support organisations to appear before parliamentary committee

THE House of Representatives Standing Committee on Social Policy and Legal Affairs will hold public hearings on Thursday, August 24, and Tuesday, August 29, as part of its inquiry into the recognition of unpaid carers to shed more light on the challenges faced by unpaid carers and inform recommendations to amend the Carer Recognition Act 2010 (the Act).

Chair of the Committee, Peta Murphy MP, said, "On Thursday, we will hear from carer support groups and organisations, national peak bodies, and four individual carers. This hearing will be an opportunity for diverse voices to contribute to discussions about the value of unpaid care and the unique requirements of specific cohorts.

"Hearing from individual carers will also offer a closer look into the daily realities of unpaid carer responsibilities and highlight the emotional, financial, and logistical aspects of their roles," Ms Murphy said.

On Tuesday,  the committee will hear from carer support organisations from various states and territories, as well as organisations dedicated to assisting specific groups of unpaid carers, including young carers and those tending to children with cancer.

Ms Murphy said, "Not all unpaid carers are expressly identified or recognised in the Act. Hearing from these support organisations will help inform the Committee make its recommendations to government on how the Act can be more inclusive and better recognise the needs and challenges of unpaid carers."

Programs for the committee’s upcoming hearings will be made available on the inquiry website here.

Public hearings details

Date: Thursday, 24 August 2023Time: 10am to 3:30pm AESTLocation: via videoconference

Date: Tuesday, 29 August 2023Time: 10am to 4pm AESTLocation: via videoconference

The hearings will be live streamed on the APH website: www.aph.gov.au/live.

Further information about the inquiry, including published submissions, hearing dates and transcripts, are available on the inquiry webpage.

 

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Economics committee to hear from aviation industry and former ASIC chair

THE House Standing Committee on Economics will next focus on the aviation industry as part of its inquiry into promoting economic dynamism, competition and business formation.

Greg Medcraft, former Australian Securities and Investments Commission (ASIC) chair, will also discuss dynamism in the financial industry.

At the next public hearing in Sydney on August 23, the committee will hear from Rex Airlines, the Australian Airports Association, and the Sydney Airport Corporation.  

The committee will also hear from Greg Medcraft, chair of the Australian Finance Group and former chair of ASIC, to better understand competition and economic dynamism in the financial industry.

Committee Chair Daniel Mulino said, "Mr Medcraft also has extensive experience with the OECD in Paris and he has spoken regularly about how the dominance of Australia’s major banks has eroded competition in the banking sector.

"Mr Medcraft has also discussed ways to improve competition in the residential mortgage market and the role that digital disruption, particularly blockchain, will have in improving the efficiency of global capital markets, so the committee looks forward to hearing from him," Dr Mulino said.

More details about the inquiry, including the full terms of reference, are available on the committee’s website.

Public hearing details

Date: Wednesday 23 August 2023Time: 10am to 1.45pm AESTLocation: Corinthian Room, Sydney Masonic Centre

The public hearing will be broadcast live at https://www.aph.gov.au/live.

 

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ATO firm on deadline for contractor reporting

THE Australian Taxation Office (ATO) is reminding businesses who are required to lodge a taxable payments annual report (TPAR) to do so by  August 28.

ATO Assistant Commissioner Tony Goding said the taxable payment reporting system helps maintain a level playing field "by ensuring all businesses pay their fair share of tax".

"While most businesses do the right thing, not reporting payments to contractors and deliberately under reporting income makes it unfair for honest businesses,” Mr Goding said.

"It may also be seen as a red flag and could prompt closer scrutiny from the ATO."

Around $400 billion in payments made to almost 1.1 million contractors were reported in the taxable payment reporting system in the last financial year.

"The taxable payments reporting system is just one tool in the ATO’s toolbelt helping expose missing income and keeping things fair for businesses doing the right thing," Mr Goding said.

"We use a range of information in the TPAR to check for red flags, like not including income, not lodging tax returns or activity statements, overclaiming GST credits or mis-using Australian business numbers," Mr Goding said.

Businesses in the building and construction industry, as well as businesses that provide cleaning, courier and road freight, information technology and security, investigation or surveillance services and have paid contractors in relation to these services need to lodge a TPAR.

The ATO recently issued more than 16,000 penalties for businesses who didn’t lodge their TPARs for previous years, despite receiving multiple reminders. The average penalty for not lodging was about $1,110.

"It is getting harder for businesses to hide from the ATO, like using cash payments to avoid tax, as the TPAR data gives the ATO the extra puzzle pieces it needs to catch-out dodgy behaviour," Mr Goding said.

"We know there are some who deliberately don’t report or under-report their income, making it unfair for honest businesses.

"Dodgy businesses doing 'cashies' are being put on notice as the ATO continues to crack down on shadow economy behaviour."

Mr Goding said the shadow economy was estimated to cost the Australian economy $12.4 billion every year in unpaid taxes.

"If you are asking for cash and not declaring it to the ATO, you will receive a 'please explain’ from the ATO and you will be penalised. It’s not a matter of ‘if’, it’s a matter of when," Mr Goding said.

He gave as an axample how TPAR data recently enabled the ATO to investigate a cleaning company which chose not to be ‘squeaky clean’ in their tax return.

A sole trader providing cleaning services reported $6,892 of income from government allowances, but no business income or expenses. The data showed they received payments of more than $80,000 from three different companies. An audit confirmed no activity statements had been lodged and the payments were never reported. As a result, their tax return was adjusted for the omitted income, and penalties were applied.

"Every dollar of tax dodged is a dollar that can’t be used for vital services like health and aged care. The TPAR program helps to prevent billions of dollars being lost to the shadow economy," Mr Goding said.

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ATO firm on deadline for contractor reporting

THE Australian Taxation Office (ATO) is reminding businesses who are required to lodge a taxable payments annual report (TPAR) to do so by  August 28.

ATO Assistant Commissioner Tony Goding said the taxable payment reporting system helps maintain a level playing field "by ensuring all businesses pay their fair share of tax".

"While most businesses do the right thing, not reporting payments to contractors and deliberately under reporting income makes it unfair for honest businesses,” Mr Goding said.

"It may also be seen as a red flag and could prompt closer scrutiny from the ATO."

Around $400 billion in payments made to almost 1.1 million contractors were reported in the taxable payment reporting system in the last financial year.

"The taxable payments reporting system is just one tool in the ATO’s toolbelt helping expose missing income and keeping things fair for businesses doing the right thing," Mr Goding said.

"We use a range of information in the TPAR to check for red flags, like not including income, not lodging tax returns or activity statements, overclaiming GST credits or mis-using Australian business numbers," Mr Goding said.

Businesses in the building and construction industry, as well as businesses that provide cleaning, courier and road freight, information technology and security, investigation or surveillance services and have paid contractors in relation to these services need to lodge a TPAR.

The ATO recently issued more than 16,000 penalties for businesses who didn’t lodge their TPARs for previous years, despite receiving multiple reminders. The average penalty for not lodging was about $1,110.

"It is getting harder for businesses to hide from the ATO, like using cash payments to avoid tax, as the TPAR data gives the ATO the extra puzzle pieces it needs to catch-out dodgy behaviour," Mr Goding said.

"We know there are some who deliberately don’t report or under-report their income, making it unfair for honest businesses.

"Dodgy businesses doing 'cashies' are being put on notice as the ATO continues to crack down on shadow economy behaviour."

Mr Goding said the shadow economy was estimated to cost the Australian economy $12.4 billion every year in unpaid taxes.

"If you are asking for cash and not declaring it to the ATO, you will receive a 'please explain’ from the ATO and you will be penalised. It’s not a matter of ‘if’, it’s a matter of when," Mr Goding said.

He gave as an axample how TPAR data recently enabled the ATO to investigate a cleaning company which chose not to be ‘squeaky clean’ in their tax return.

A sole trader providing cleaning services reported $6,892 of income from government allowances, but no business income or expenses. The data showed they received payments of more than $80,000 from three different companies. An audit confirmed no activity statements had been lodged and the payments were never reported. As a result, their tax return was adjusted for the omitted income, and penalties were applied.

"Every dollar of tax dodged is a dollar that can’t be used for vital services like health and aged care. The TPAR program helps to prevent billions of dollars being lost to the shadow economy," Mr Goding said.

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