FIVE of Australia’s largest financial advice industry associations have condemned an increase in financial adviser licence fees as “shameful” and called for an immediate review of the ASIC industry funding model.

Chartered Accountants Australia and New Zealand, CPA Australia, Financial Planning Association of Australia, Institute of Public Accountants and SMSF Association say the steep increase highlights serious issues with the funding model and will hasten the exodus of advisers from the industry.

The fee hike, published by ASIC yesterday, represents an increase of 160 percent over two years for financial advisers. Meanwhile, the number of financial advisers has fallen from around 25,200 in 2017-18 to about 21,200 now.

The total cost levied by ASIC is now $1,500 per retail advice licence, plus an additional $2,426 per authorised adviser under the licence. This means a sole practitioner holding a limited licence can expect to be hit with a $3,926 bill from ASIC within weeks.

The organisations' top five concerns are:

1. The model doesn’t account for changing industry dynamics.
2. The model is contributing to the decline in financial adviser numbers.
3. Remaining participants are left to shoulder a disproportionate cost burden.
4. ASIC’s preliminary cost estimates are often inaccurate and hence difficult to budget for.
5. Penalties and fines are diverted to consolidated revenue rather than off-setting ASIC’s costs.

The group noted that the industry funding model has not changed despite major shifts in the financial advice sector. For example, banks have largely ceased operating financial advice businesses. Yet ASIC’s budget to oversee financial advisers has increased from $25.6 million in 2017-18 to more than $56 million in 2019-20. This is largely due to supervision and remediation of historic deficiencies in the banks.

Declining adviser numbers mean that remaining participants must shoulder a heavier proportion of the total cost. This is impacting the viability of remaining businesses. Ultimately, this has flow on-effects for competition and the accessibility and affordability of financial advice.

a spokesperson said ASIC provides an estimate for each year’s industry levy about six months before the final amounts are invoiced.

"Experience has shown that these are often inaccurate," the spokesperson said. "This makes it difficult for financial advice businesses to budget for their operating costs.

"Fines and penalties go into consolidated revenue. Retaining these would help off-set ASIC’s operating costs and put a stop to the existing cycle of levy increases."

The group is calling for the following action in response to the fee increase:

1. The government should immediately review the industry funding model.
2. The government should reduce or remove the latest industry funding levy increase.
3. ASIC should be properly funded from consolidated revenue to undertake its functions.
4. ASIC’s industry funding levy must reflect the cost of regulation and not fund other budgetary measures.

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MUSWELLBROOK Shire Council should "reverse its bizarre opposition to an extension of Mangoola mine and back the hundreds of local jobs it will sustain"the Mining Union said today. 

CFMEU Northern Mining and NSW Energy vice president Jeff Drayton said coal miners had traditionally been able to rely on local government representatives to support their jobs because of mining’s contribution to the region.  

“Muswellbrook Council’s opposition to the mine was surprising and seems to be based on spurious grounds,” Mr Drayton said. 

“All mining proposals should of course meet the high environmental and regulatory standards required in NSW. Glencore’s proposal for Mangoola does this, while also creating jobs and delivering millions for the local and state economy.” 

The Mangoola Coal Continued Operations Project, which is currently being considered by the Independent Planning Commission of NSW (IPCN), would extend the mine’s operation until 2030. The mine would otherwise cease production in early 2025. 

The project would sustain 400 existing coal mining jobs, which would grow to 480 over the course of the project; create an additional 145 construction jobs; and provide a $92.6million net benefit to the Upper Hunter over the course of the project. 

Mangoola Mine has a highest proportion of local workers of any in the area, the union said, with 88 percent living in the Muswellbrook, Upper Hunter and Singleton Local Government Areas. 

The Mangoola extension should be considered on its merits and not on ideological grounds, Mr Drayton said. 

“I encourage all Muswellbrook Shire Councillors to reconsider council’s position and back local jobs,” he said. 

“And I urge Muswellbrook community members to make a submission to the IPCN showing their support for the jobs and economic activity the Mangoola extension will create.”

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THE Federal Government’s plan to boost processing of critical minerals needed for batteries, solar panels and wind turbines is a welcome step that can potentially strengthen our economy while tackling climate change, according to the Climate Council.

The 10-year Resources Technology and Critical Minerals Processing Roadmap, announced by Prime Minister Scott Morrison today, makes funding available to improve Australia’s resource processing and manufacturing expertise. 

“Boosting our processing capability of rare earth and other critical minerals can add value to our economy and support growth in our manufacturing sector,” Climate Council spokesperson and economist, Nicki Hutley said.

“Processing minerals domestically could give Australian manufacturers a major competitive advantage in manufacturing renewable energy technologies, batteries, and electric vehicle parts,” Ms Hutley said. 

“It could also drive much-needed jobs transition in mining regions like the Hunter Valley in NSW, Central Queensland and Western Australia. These areas already have the natural resources and significant skills and infrastructure, but will need additional investment.

“To help manufacturers be low-carbon as well as competitive, governments must increase the supply of affordable renewable energy to power new minerals processing operations.

“Ultimately, this roadmap is a promising step towards a self-reliant minerals manufacturing sector, the development of technologies that tackle climate change, and a prime position in the global minerals market,” Ms Hutley said.

“But the government’s support for a gas-led recovery instead of a plan to power Australia with clean, affordable renewable energy is a roadblock to its success."

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TAFE NSW workers are rallying in Newcastle over the loss of 678 frontline jobs and the sale of the Scone campus.

"The sale of the Scone TAFE is the latest in the Berejiklian Government's fire sale of state assets which will leave regional NSW worse off," CPSU NSW general secretary Stewart Little said.

"The sale of the Scone campus is incredibly shortsighted. The Hunter region has a youth unemployment rate of 18 percent but rather than investing in training opportunities the government is selling off campuses and cutting jobs."

News of the sale has come after TAFE NSW's own documents revealed 678 jobs were on the cutting block, via two restructures of student support services and facilities and management logistics. These job cuts include more than 470 jobs from regional areas, including 43 from Newcastle TAFE.

"Gladys Berejiklian and Dominic Perrottet are deliberately dismantling TAFE NSW piece-by-piece," Mr Little said. He was joined in the rally outside the Tighes Hill campus with Labor’s Shadow Minister for TAFE NSW, Jihad Dib and affected TAFE NSW workers.

"It's straight out of the privatisation playbook - under resource the system and then sell it off claiming the private market will do a better job. TAFE NSW should never be privatised."

Mr Little said the deliberate under investment in TAFE NSW was felt particularly in the regions.

"What do the people of NSW get from this gutting of critical training infrastructure? Fewer jobs and a hobbled education system. In the middle of the worst economic downturn the state has seen in a generation the Berejiklian government is closing pathways to prosperity."

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THE Queensland Resources Council (QRC) has welcomed the release of the Federal Government’s Resources Technology and Critical Minerals Processing road map as "an important next step in securing the investment needed for the next wave of Queensland resources projects".

QRC chief executive Ian Macfarlane said Queensland was a front-runner when it came to critical minerals, and a targeted strategy to develop the sector was essential to ensure we make the most of our resources.

Mr Macfarlane said the Morrison Government had recognised resources technologies and critical minerals processing as a focus of the $1.3 billion Modern Manufacturing Initiative.

“Queensland, and Australia, have a natural advantage when it comes to the development of these new economy minerals.  Not only do we have the reserves of the commodities, but we are leaders in the know-how and technology needed to reach their full potential,” he said.

“The Queensland Government has identified the resources sector as a major component of its economic recovery strategy through the Resources Industry Development Plan and 10-year METS Roadmap and Action plan. 

“The advancement of new economy and critical minerals will be an additional economic advantage for Queensland and will be an important focus for the Resources Industry Development Plan, alongside our high-quality coal, gas and minerals sectors.

“As Australia seeks to develop greater sovereign capability and the ability to process and manufacture more higher-value products onshore, Queensland’s vast resources can provide the building blocks across a range of sectors from Defence, to batteries and other renewable technologies," Mr Macfarlane said.

“Queensland’s resources sector has been a pillar of economic stability for the state through the uncertainty of the pandemic. We look forward to the Queensland and Australian Governments working together with industry to fully develop the opportunities in the critical minerals sector.”

Queensland Exploration Council Chair Kim Wainwright said the Australian Government’s critical minerals roadmap highlighted some of the projects currently under development in Queensland including vanadium, nickel, cobalt and scandium projects.

“A QEC Technical Forum last month showcased a number of these projects as well as leading collaborative research between the Queensland Government and University of Queensland," Ms Wainwright said.

“The grants announced today are a welcome support for this important emerging industry,” she said.

CLICK HERE to view and for more information about the Resources Technology and Critical Minerals Processing road map.

www.qrc.org.au

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THE Australian Small Business and Family Enterprise Ombudsman Kate Carnell has welcomed a Federal Court ruling that Megasave Couriers Australia Pty Ltd (Megasave) misled prospective franchisees.

Ms Carnell applauded the ACCC for taking action against Megasave, following a number of franchisee complaints to the Ombudsman’s office.

“I congratulate the ACCC for bringing proceedings against Megasave,” Ms Carnell said.

“This action taken by the regulator has resulted in the Federal Court’s judgement that Megasave breached Australian Consumer Law as well as the disqualification of Megasave’s sole director Gary Bourne from managing a corporation for five years.

“This outcome will be welcomed by the impacted franchisees who have suffered significant financial hardship and distress due to Megasave’s failure to fulfil its promises.

“More than 30 franchisees approached my office for assistance in late 2019, having spent as much as $27,500 to buy into the Megasave franchise.

“The franchisees raised a number of concerns including Megasave’s failure to pay guaranteed minimum weekly payments of around $2,000," Ms Carnell said.

“My office provided dispute resolution assistance to the franchisees under the Franchise Code of Conduct, including facilitating a group mediation.

“Aspects of the matter were referred by my office to the ACCC for its consideration and we assisted with the ACCC’s investigation.

“I encourage franchisees who believe they have been misled by a franchisor or in a franchise dispute to contact my office for assistance.”

Penalties and compensation for the affected Megasave franchisees is expected to be determined in a hearing next month.

www.asbfeo.gov.au

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A DEAL reportedly struck between unions and employer groups, that would allow retail business owners to offer part time workers more shifts without having to pay them overtime, will help generate more profit for businesses if approved by the Fair Work Commission (FWC).

Under the agreement led by the Australian Council of Trade Unions (ACTU) and Council of Small Business Organisations of Australia COSBOA), a part-time employee can be offered extra shifts beyond nine hours per week at their ordinary rate of pay without incurring penalty rates (up to a maximum of 38 hours a week). Currently, part-time workers are entitled to overtime if their boss makes them work beyond their normal contracted hours.

The deal, which will be submitted to the Fair Work Commission, contrasts with the Federal Government’s current proposal to allow part-time employees who work at least 16 hours a week to agree to work additional hours at their ordinary rate of pay subject to other overtime provisions in the relevant award. It also requires a shift be at least three hours long.

“This proposed change, if approved, will help employers keep their current staff on for longer, and eliminate the need to hire additional casual workers to do the same job at a slightly higher rate,” Employsure business partner Emma Dawson said. Employsure is Australia’s largest workplace relations advisor to more than 28,000 small and medium-sized enterprises.

“Currently, employers are hesitant to offer part-time workers more hours due to the overtime payable if a contract variation is not agreed. Along with benefiting the employer, this proposed change will also benefit those part time workers, who may not have previously been given those extra hours as a result.”

If passed by the FWC, the deal will greatly affect retail employers, who have had to carefully pick and choose the number and type of workers they can have on, due to the downturn caused by the COVID-19 pandemic.

The General Retail Industry Award has recently seen its final planned increase to casual weekday evening rates, giving casual workers who work hours after 6PM on Monday to Friday a minimum hour rate of 150 percent (inclusive of casual loading).

Employers looking to avoid paying those more expensive casual wages on a typical late-night shopping night, would be able to ask their current part time staff to work longer, while avoiding the extra penalty rates if the FWC approves the deal.

“Many employers who were hoping to take on extra casuals over the Christmas and summer period simply weren’t able to as a result of those increased penalty rates. Some were also stretched to breaking point due to having to pay overtime to part timers working beyond their contracted hours,” Ms Dawson said.

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THE Federal Government must seize on the recommendations of the Aged Care Royal Commission to establish a permanent and sustainable funding source, by increasing the Medicare levy, according to the Health Services Union (HSU).

The HSU first proposed the measure in a submission to the Royal Commission last August. The HSU commissioned economic modelling which showed a 0.65 percent rise in the Medicare levy would raise $20.4 billion over four years, funding a pay rise, an additional 59,000 aged care jobs and close to 90 minutes of additional resident care per day.

The Commission has now taken up the suggestion, but it requires the support of the Federal Government in the May Budget to become a reality. 

“A Medicare-style levy can transform aged care,” HSU national president Gerard Hayes said. “Just like Medicare this could make the system simpler, cheaper and fairer. 

“With a guaranteed and sustainable funding stream, we could increase the size of the workforce and pay them more so they stay in the industry. This would trigger a quantum leap forward in quality of care for residents.

“Everyone deserves dignity in their later life but it requires decisive action from Government to become a reality.

“This crisis has festered for years. Now is the time for action.”

Key facts:

Work value case:

• In November, the Health Services Union launched a landmark work value case in the Fair Work Commission to lift wages for the aged care workforce by 25 percent.

• If the case succeeds, over 200,000 personal carers, activities officers, catering, cleaning, and administration workers would see their pay rise by at least $5  an hour.

• The starting rate for a personal carer is currently $21.96 per hour, and the average carer retires with $18,000 in superannuation

• If the HSU claim succeeds a qualified personal carer would see their wages increase from $23.09 to $28.86 an hour. The HSU claim also seeks to build in career paths and to recognise specialist carers in areas like dementia or palliative care.

Funding reform:

• The HSU released economic modelling in September which showed a 0.65 percent rise in the Medicare levy would raise $20.4 billion over four years, funding a pay rise, an additional 59,000 aged care jobs and close to 90 minutes of additional resident care per day.

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