TWO superannuation bills which passed the Senate overnight, with extensive amendments, will help curtail super balances being eroded by unnecessary fees and signal the beginning of the end for underperforming, fee gouging super funds according to Industry Super Australia.

Industry Super Australia deputy chief executive, Matt Linden said after a tortuous eventual vote, one of the most important changes was the automatic consolidation of inactive accounts under $6000 from July 1 this year.

“Although the technology to automatically consolidate accounts has been available for many years without requiring members to do the legwork legislators have dragged the chain," Mr Linden said. “Coupled with fee caps for accounts under $6000 these measures will have to do the heavy lifting to prevent erosion of small account balances.

“It was disappointing explicit changes intended to protect young and low balance members from unnecessary insurance were completely dropped from the final bill."

While additional safeguards were definitely required removing the provisions completely was not necessary, he said.

“Regardless, Industry super funds will strive to ensure default insurance arrangements remain cost effective and matched to the insurance needs of members taking into account age and other factors such as occupational risk," Mr Linden said.

The other Bill passed by the Senate, Member Outcomes 1, benefited significantly from Labor and Green amendments supported by most of the cross bench which will place greater scrutiny on costly and poorly performing, non-default ‘Choice’ superannuation products, Mr Linden claimed.

As a result of the amendments the fees, costs, and returns of choice superannuation products will be scrutinised, and new reporting standards should now shine a light on billions in undisclosed investment fees and profits gouged from the system.

“Trustees who fail to operate in the best interest of fund members will now have little place to hide,” Mr Linden said.

MINING companies Anglo American and QCoal have increased donations from resource companies to flood recovery efforts to more than $3 million.

Anglo American has donated $200,000 to GIVIT, while the QCoal Foundation has committed $100,000 to support local initiatives in Townsville and across North Queensland.

Queensland Resources Council (QRC) chief executive Ian Macfarlane said resource companies were responding with financial support, in-kind donations and labour to help Queenslanders get back on their feet from floods.

“I would like to thank Anglo American and the QCoal Foundation for adding their support to the flood recovery efforts. Every dollar helps with a strong recovery for North Queensland,” Mr Macfarlane said.

“The Government announced yesterday that more than $4.4 million has been donated. I am proud the resources sector has contributed more than $3 million – or almost three quarters – of those donations.”

Including the donations from Anglo American and the QCoal Foundation, QRC members have donated $3.25 million to flood relief charities with Glencore and South32 donating $1,000,000 each, the BHP Foundation, MMG Dugald River and Aurizon contributing $250,000 each, and Adani Australia and Incitec Pivot contributing $100,000 each.

Mr Macfarlane said Glencore and South32 were assisting efforts to support the cattle industry devastated by floods in the state’s north west.

Glencore has supported hay drops by providing access to its Ernest Henry site for the RAAF to conduct their operations. It has also provided heavy equipment (loaders and forklifts) and people power to assist in the hay drops for stranded cattle and for the removal of dead cattle.

South32 Cannington has also provided heavy equipment for near neighbours in the disposal of dead cattle and has been on standby to help with refuelling at its airport if needed as part of the hay drops.

South 32 has been working with the Mayors of McKinlay and Cloncurry Shire Councils on how it can provide support to the region to deal with the flood crisis and recovery efforts.

Premier Annastacia Palaszczuk started the appeal with a $200,000 donation and her Government listed The Australian Red Cross, UnitingCare, Salvation Army and St Vincent de Paul Society Queensland as the non-government partners and said people can also donate to GIVIT.

www.qrc.org.au

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THE Queensland Resources Council (QRC) has welcomed the decision by the State Government to award a petroleum facility licence which will lead to a new gas processing plant in the Surat Basin.

QRC chief executive Ian Macfarlane said the plant would be built by Jemena and process gas from Senex Energy’s Project Atlas west of Wandoan.

“This project is part of the Government’s domestic only gas supply initiative designed to help ease the east coast gas squeeze,” Mr Macfarlane said.

“The processing plant will be part of Jemena’s $140 million Atlas gas pipeline which will connect gas from Project Atlas to the Wallumbilla Gas Hub in south west Queensland and create 150 jobs.

“It’s another flagship example of industry and Government working together to produce more natural gas, with benefits for Queensland," he said.

“Queensland’s resources industry has a proven track record of attracting new investment and creating new jobs because of the clear and stable regulatory environment in which it operates. It is essential that we have stable and reliable regulation for our resources sector to continue to attract the investment that builds our State and delivers for every Queenslander.”

www.qrc.org.au

 

About QRC

QRC is the peak representative body for Queensland ‘s resource sector. The Queensland resources sector provides one in every five dollars in the Queensland economy, sustains one in eight Queensland jobs, and supports more than 15,400 businesses and community organisations across the State, all from 0.1 percent of Queensland’s land mass.

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THE Coalition’s Protecting Your Super package has been stalled for far too long in the Senate and should be supported to help secure Australians’ retirement funding, according to the Institute of Public Accountants (IPA).

“Fee-gouging, particularly by the large superannuation entities, has to be dramatically wound back if we are to encourage a culture of superannuation contributions and savings as part of retirement planning,” IPA chief executive officer, Andrew Conway said.

“The Bills that form this package were announced in last year’s Federal Budget in May and yet it has not progressed.  The package starts to address some of the flaws in our superannuation system.

“It is staggering to think that the youngest superannuation members and others with the smallest balances will be hit with hundreds of millions of dollars in fees just over the next six months.

“Exorbitant fees erode faith in the superannuation system and discourages young people from voluntarily contributing more into future retirement funding.

“If the Protecting Your Super package goes ahead, fees charged to small superannuation accounts (less than $6,000) will be capped at 3 percent per year which is a far cry from what is being paid currently.

“The package also stops default charging of life insurance with an opt-in option for people under 25 while the current default process erodes super balances with unnecessary insurance," Mr Conway said.

“Australia must encourage people to build their superannuation retirement funds to alleviate the pressures that will exist on government paid pensions in the future.

“Too many Australians have multiple superannuation accounts. It is therefore, encouraging to see the work by the ATO to educate the public over lost and unclaimed superannuation with promising results of $860 million found and consolidated just in the last quarter of 2018.  The worry is that there is $17.5 billion reportedly, still in the lost and unclaimed category,” said Mr Conway.

www.publicaccountants.org.au

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THE Coalition Government has today released the Naval Shipbuilding Strategic Workforce Discussion Paper.

While the Government has already taken many actions to build the workforce, it is important to hear if there is more that we can and should do to support workforce growth. 

Minister for Defence, Christopher Pyne MP, said the Government is therefore seeking submissions on the Discussion Paper, including any pertinent data, to help guide further actions and initiatives to support the development of the naval shipbuilding workforce. 

“The Government’s investment in establishing the National Naval Shipbuilding Enterprise will create thousands of direct and indirect jobs across Australia,” Mr Pyne said.

“In order to meet the future demands of the Naval Shipbuilding Enterprise, we must ensure we have the right people, at the right time, with the right skills.

“By providing a submission on the Naval Shipbuilding Strategic Workforce Discussion Paper, businesses and other interested parties will help inform the continuous workforce planning being undertaken in support of the National Naval Shipbuilding Enterprise.”

Submissions are open until March 29, 2019.  The Naval Shipbuilding Strategic Workforce Discussion Paper is available at http://www.defence.gov.au/NavalShipBuilding/. 

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THE House of Representatives Standing Committee on Economics will hold public hearings in Carlisle and Guildford, Western Australia, and Norwood, South Australia, for its inquiry into the implications of removing refundable franking credits.

The chair of the committee, Tim Wilson MP, said, "The committee continues to gather evidence about how the removal of refundable franking credits would affect investors, particularly senior Australians whose financial security could be compromised."

The SMSF Association, who will appear in Adelaide, have called the ALP’s franking credits policy ‘flawed’ because it "proposes that refunds from dividend imputation are appropriate for almost all investors except for SMSF investors and those shareholders with low taxable incomes".

Also appearing in Adelaide, National Seniors Australia said in its submission that many self-funded retirees "feel they are being penalised for doing the right thing by saving for their retirement and not being a burden on the taxpayer by relying on the age pension".

Mr Wilson said, "These hearings will provide an opportunity for Australians impacted by a change to refundable franking credits to address the committee directly with a three minute statement, and we welcome their contributions and participation."

Public hearing details:

Carlisle, 9.30am to 11am, Community statements, Monday, 25 February 2019, Harold Hawthorne Community Centre, 2 Memorial Ave, Carlisle, Western Australia.

Guildford, 1:30pm to 3pm, Community statements, Monday, 25 February 2019, Guildford Town Hall, 97-99 James St, Guildford, Western Australia

Adelaide, 9.30am to 12pm, Tuesday, 26 February 2019, Osmond Terrace Function Centre, 97 The Parade, Norwood, South Australia: 9.30am to 10am, SMSF Association; 10am to 10.30am, National Seniors Australia; 10.30am to 12pm, community statements.

Further public hearings will be announced as the inquiry progresses. The hearings will be webcast live (audio only).

A number of submissions have been received and are available on the committee’s webpage at: www.aph.gov.au/economics. A number of submissions are currently being processed and will be published over the coming months. Submissions can be made online or by emailing This email address is being protected from spambots. You need JavaScript enabled to view it..

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THE Australian Retailers Association (ARA) today condemned the use of dirty tricks by the opposition parties in the Senate to prevent regulations that protect casual employees from taking effect.

The Fair Work Amendment (Casual Loading Offset) Regulations 2018 (Regulations) were made by the Government in December to address uncertainties created by a case in the Federal Court during 2018 regarding casual employee entitlements. However, the Australian Labor Party (ALP) is using tactics in the Senate to play games with casual employment, threatening their job security and costing retailers millions in false entitlement claims, according to the ARA.

The ARA said while casual employees were already compensated with a casual loading in their ordinary wages for the absence of annual leave and sick pay entitlements, the Federal Court’s Decision in the Workpac v Skene Case last August potentially gave casual employees the opportunity to pursue back-pay claims for annual leave and sick pay entitlements. The Regulations made by the Government in December 2018 were intended to address the issue by clarifying these entitlements.

Russell Zimmerman, executive director of the ARA, said that if the ALP was successful in coercing the independents on the Senate’s crossbench to overturn the Regulations on April 2, retailers could be liable for millions of dollars in back-pay to casuals who were never entitled to annual leave or sick pay.

“These Regulations are crucial to providing certainty to retailers and their casual employees, and without them, the confusion around entitlements will only get worse and small and family-run retailers will be crippled by the financial cost. The ALP will destroy casual employment by making it completely insecure, with businesses being forced to cut shifts or shut their doors entirely,” Mr Zimmerman said.

“Retailers really care about their casual employees and want to provide them with the best opportunities that they can. However, constantly shifting the goalposts and adding millions of dollars to the industry’s wage bill means many retailers may have to make the heartbreaking decision to say goodbye to casual employees who rely on their jobs.”

As the retail industry employs over 10 percent of the Australian working population and many small to medium enterprises employ this populous, this manoeuvre brought forward by the ALP will have a direct impact on the retail industry. To protect the future of retail employees and the industry, the ARA will continue to advocate on behalf of its members on key policy and advocacy issues, Mr Zimmerman said.

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 7,700 independent and national retail members throughout Australia. Visit www.retail.org.au or call 1300 368 041.

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THE Parliamentary Standing Committee on Public Works announced that it will scrutinise two new proposals from the National Museum of Australia and CSIRO.

These projects include a consolidation of CSIRO’s presence in Sydney and a major redevelopment of the galleries at the National Museum of Australia.

It is anticipated that the Committee will conduct public and in-camera hearings for the inquiries later in 2019.

Details of the projects:

  • Commonwealth Scientific and Industrial Research Organisation Sydney Consolidation Project - $113.7 million – Sydney, New South Wales; and
  • National Museum of Australia Proposed Gallery Redevelopment Stage 1: Life in Australia - $20.5 million – Canberra, Australian Capital Territory.

The Committee would like to hear from all individuals or organisations interested in the inquiries. Submissions will be accepted until March 14, 2019.

The Parliamentary Standing Committee on Public Works is not involved in the tendering process, the awarding of contracts or details of the proposed works. Enquiries on those matters should be addressed to CSIRO and the National Museum of Australia.

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"THE LABOR Party policy to cease Franking Credit refunds severely disadvantages retirees who miss out on qualifying for a part age pension,” said Association of Independent Retirees acting president, Wayne Strandquist.

He said in the lead up to the Federal Election, there would be strong advocacy to the Australian electorate by the Association of Independent Retirees (AIR) on behalf of partly or fully self-funded retirees who have low to moderate retirement income.

Many of these retirees just missed qualifying for a part government age pension and will not receive Franking Credit refunds under the Labor policy.

Retirees who planned their finances, according to the rules at the time they retired, invested in Australian shares that attract Franking Credits.

"Now the Labor Party wants to “shift the goalposts” leaving self-funded retirees with no ability to make up the income they will lose if Franking Credit cash refunds cease," Mr Strandquist said.

As well as not supporting the removal of Franking Credit refunds, AIR will be advocating against other policies that impact on retirees such as restrictions on Negative Gearing and increases in the Capital Gains Tax.

“To support the advocacy leading up to the Federal election, AIR has adopted a new look logo that reflects the importance of the 'independence' to members of our organisation that represents partly and fully self-funded retirees," Mr Strandquist said.

“Today, more than ever independence matters for retirees – independence in the approach to retirement income and investments, independence in lifestyle and housing options, independence in health and aged care choices," Mr Strandquist said.

To strengthen advocacy for its membership, AIR joined the Alliance for a Fairer Retirement System in March 2018. AIR has made many submissions at a national, branch and member level to the House of Representatives Inquiry into the implications of removing refundable Franking Credits. AIR representatives have also made statements at public hearings held by the Inquiry.

“Over the past few years, successive governments have amended legislation for superannuation and retirement savings that have adversely impacted on retirement income which could not have been anticipated when financial plans were made for retirement. Whilst grandfathering has been a principle we recommend be applied to legislation changes, it has not always been used by governments in amending rules that affect fully and partly self-funded retirees,” Mr Strandquist said.

www.independentretirees.com.au

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THE ATO has said it understands that the pressure of meeting tax and super obligations can contribute to mental health issues for small business owners and is now offering a range of support to struggling businesses.

Deputy Commissioner Deborah Jenkins attended the Small Business Mental Health roundtable chaired by Senator Michaelia Cash, Minister for Small and Family Business, Skills and Vocational Education at Parliament House yesterday. Ms Jenkins said the ATO was committed to working with government and community organisations to address the issue.

“More and more small businesses are telling us that they are under stress. We understand that long hours, cash flow pressures, endless paperwork, staff issues and the blurring boundaries between work and family life can take a toll on mental health,” Ms Jenkins said.

“That’s why we are working together with organisations such as Beyond Blue, ASBFEO, small businesses and their associations as well as tax practitioners to develop initiatives to better support small business owners with their tax and super obligations when they are experiencing mental health issues.”

"We have rolled out training for all of our frontline staff to assist them to better understand mental health issues and show empathy for taxpayers who are struggling. Nearly 6,000 staff have already undertaken the training.

"We also offer a range of services aimed at helping businesses stay on track.

"Because we know that managing debt can be a big contributor of stress for small businesses, we have been making it easier for small businesses to negotiate and enter into payment plans if they need them. In 2017–18, we negotiated 790,000 payment plans with small businesses.

“Payment plans allow small businesses to manage their tax debts and take the pressure off when other bills are due. But our primary focus in 2019 will be on early engagement and support before debts are due,” Ms Jenkins said.

The ATO has a small business live chat service and an after-hours call back service available from Monday to Thursday. Small business owners can also subscribe to the Small Business Newsroom to get all the latest information and alerts.

The ATO's website has more information for people running small business experiencing mental health issues - ato.gov.au/smallbizmentalhealth

Resources available for small business owners on the website: ato.gov.au/SBsupport.

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THE HAYNE Royal Commission’s recommendation to create a new independent ‘super-regulatory’ body to oversee ASIC and APRA to drive accountabilities of the two regulatory bodies may have some merit but some fundamentals have to be addressed, says the Institute of Public Accountants (IPA).

“The IPA has long advocated for the need to appropriately fund and resource the regulators to enable them to do their job,” IPA chief executive officer, Andrew Conway said.

“While on face value, having a regulatory body regulating the regulators may appear a regulatory overkill, if it achieves the desired accountability outcomes, it may have merit.

“One may question if something is broken, why not fix it before funding yet another layer of regulation," he said.

“Regardless, what we do not want to see, is further regulatory burden being filtered down on the shoulders of small business operators.

“Our Small Business White Paper points to the need to look at regulator culture and adjust behaviours that do not inflict unnecessary burden on SMEs. 

“In particular, research shows that an increasing number of small businesses continue to be concerned with the impact of laws and regulations on their ability to run their businesses and innovate," Mr Conway said.

“We also do not want to see the targeting of small targets due to additional pressure placed on ASIC to enforce, while there are more complex and yet, bigger fish to fry.

“The Royal Commission findings point to many cases where prosecution should have applied and all must be done to support those that have been aggrieved through the unscrupulous behaviour of the banking, mortgage brokerage and insurance industries.

“Up until recent times, ASIC has had the regulatory teeth on paper but not the resources and funding to actually bite so they should be given the good grace to prove themselves,” Mr Conway said.

www.publicaccountants.org.au

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