Showing posts with label Finance. Show all posts
Showing posts with label Finance. Show all posts

Thursday, 19 April 2018

None of the financial institutions are coming away from this Royal Commission covered in glory

The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry was established on 14 December 2017, is due to hand down an interim report no later than 30 September 2018 followed by a final report by 1 February 2019.

As of 13 April 2018 the royal commission has received 3,433 public submissions - 69% of these were Banking, 8% Superannuation 8% and 7% Financial Advice.

Round 2 public hearings finish on 27 April 2018.

View the live webcast or previous hearings.

Yesterday was the Commonwealth Bank of Australia's turn to reluctantly admit systemic fraud ....

The Guardian18 April 2018:

Counsel assisting the royal commission, Mark Costello, asked Linda Elkins, from CBA’s wealth management arm Colonial First State, to confirm CBA’s poor record of charging fees for no service.

“It would be the gold medallist if [the corporate regulator] was handing out medals for fees for no service, wouldn’t it?” Costello asked.

Elkins replied: “Yes.”

The commission was told that from July 2007 to June 2015 clients of CBA’s Commonwealth Financial Planning, BW Financial Planning and Count Financial businesses were routinely charged ongoing fees for financial advice where no advice services were provided.

CBA has had to refund $118.5m to customers – more than half the $219m in compensation paid by the big four banks and AMP over the past decade – to more than 310,000 financial advice customers.

ABC News, 18 April 2018:

Michael Hodge QC observes that Commonwealth Financial Planning has had a 100 per cent increase in clients over the past decade but a 25 per cent drop in the number of advisers.

He asks CBA's Marianne Perkovic whether the bank had any concerns that clients were not receiving adequate attention because of the decline in advisers, while client numbers doubled.

This is in the context of ASIC's concern that some firms were taking on too many clients for the number of planners. 

Ms Perkovic struggles to provide a clear answer.......

After disputing the meaning to be attributed to internal memos between the bank's senior managers in early 2012, Ms Perkovic eventually had to admit that a Deloitte report handed to CBA in July 2012 revealed systemic problems in ensuring that customers weren't being charged for financial advice they did not receive.

Deloitte had found that at least $700,000 in ongoing service fees were being charged to more than 1,050 clients that were allocated to more than 50 inactive financial planners who had left the business before 2012.

It appears that Ms Perkovic was finally ground down by relentless questioning from Michael Hodge QC, warnings from Commissioner Kenneth Hayne and the irrefutable evidence of the Deloitte report.

Wednesday, 14 February 2018

Shock, Horror! A Liberal minister finally makes a stab at lessening gouging by payday lending and rent-as-you-buy companies and Liberal MPs have a conniption

According to the Australian Securities & Investments Commission (ASIC) this bill has merit.

2. We support the financial inclusion objectives of the Exposure Draft of the National Consumer Credit Protection Amendment (Small Amount Credit Contract and Consumer Lease Reforms) Bill 2017 (the Bill). The consumer harms that can be associated with payday loans and consumer leases are a longstanding and systemic feature of these sectors and often fall on financially vulnerable and disadvantaged consumers. We consider that the Bill will provide an effective suite of protections commensurable to the risk of harm to consumers from these products, balanced against the need to ensure that the industry can remain viable.

3 In particular, we support the level of the cap on costs for consumer leases proposed in the Bill. We expect a cap set at this level will address the excessive costs some lessors charge consumers, while still allowing a viable and sustainable consumer lease sector.

4 We also support the introduction of the Bill’s comprehensive anti-avoidance regime, which will benefit both consumers and compliant businesses. These measures will be essential to address the increased risk of avoidance activity following the introduction of the reforms.

Yet this is the response from Liberal Party backbenchers.........

The Courier Mail, 12 February 2018:

IRATE backbenchers have revolted over Financial Services Minister Kelly O’Dwyer’s tough payday lending draft laws and have successfully enlisted Treasurer Scott Morrison to reverse Cabinet’s support of the Bill.

As the Turnbull Government desperately searches for a circuit breaker from Barnaby Joyce’s sex scandal, frustrations have spilt over against Ms O’Dwyer’s original handling of new laws targeting payday lenders and rent-to-buy businesses, with backbenchers complaining to the Prime Minister.

A bloc of about 20 backbenchers, including several in Queensland, are warning Ms O’Dwyer’s reforms will send some businesses broke and are an affront to Liberal values.

In a move that will be pilloried by consumer groups angry over rent-to-buy lenders charging up to 800 per cent interest, a group of MPs, labelled by some in the Government as the “Parliamentary Friends of Payday Lenders” – a title that is angering the bloc – has convinced Mr Morrison to retreat on parts of the draft laws.

It would be an embarrassing move for Cabinet, which ticked off on the reforms last year.

Friday, 24 February 2017

Company tax rate cuts in Australia and the banks that benefit

There has been some finger pointing in mainstream and social media of late over Labor’s use of $7.4 million as the amount banks would be able to retain under the Turnbull Government’s progressive cuts to the company tax rate included in the 2016-17 Budget.

According to the Australian Tax Office on 3 January 2016:

The government announced a reduction in the small business tax rate from 28.5 per cent to 27.5 per cent for the 2016–17 income year. The turnover threshold to qualify for the lower rate will start at $10 million and progressively rise until the 27.5 per cent rate applies to all corporate tax entities subject to the general company tax rate in the 2023–24 income year.

The corporate tax rate will then be cut to 27 per cent for the 2024–25 income year and by one percentage point in each subsequent year until it reaches 25 per cent for the 2026–27 income year.

ABC News reported in May 2016 that Treasury Secretary John Fraser told Senate Estimates: The cost of these measures to 2026-27 is $48.2 billion in cash terms.

So where did the $7.4 billion for banks come from?

Australia is thought to have four big banks – the National Australia Bank (NAB), Commonwealth Bank (CBA), Australia and New Zealand Banking Group (ANZ) and Westpac (WBA) and it appears that this amount is based on projections done with regards to these banks by think tank, The Australia Institute.

The Australia Institute, media release 2016:

Big 4 banks $7.4 billion budget gift

The Coalition Government’s business tax plan would deliver $7.4B to the big 4 banks.

“Cutting company tax rates delivers a massive windfall to an already highly profitable banking sector,” Executive Director Australia Institute, Ben Oquist said.

“It makes no economic or budget sense to deliver the big 4 banks a multi-billion dollar tax break when Australia already has a revenue problem.

“If your agenda is jobs and growth, targeted industry assistance would deliver a much greater return on investment,” Oquist said.

The value of company tax provisions was derived from 2015 full year annual reports for the big four banks. That figure summed to $11,123 million. That figure was projected forward to 2026-27 to give the no change scenario.

The projection assumed bank profit and hence tax payable would increase in line with nominal GDP. The nominal GDP projections used the figures in the 2016-17 budget papers which give nominal increases of:

2.5 per cent in 2015-16,
4.25 per cent in 2016-17, and
5 per cent in 2017-18 and subsequent years.

Company tax cuts do not affect the big banks until 2024-25 when the current 30 per cent rate will fall to 27 per cent for all companies with further reductions of one per cent per annum until they reach 25 per cent in 2026-27.

The results of this are presented in the following table:

Table 1. Benefit of company tax cuts for big four banks, $million
Savings on company tax

KPMG stated in Major Banks: Full Year Results 2015 that the Australian major banks reported another record earnings result in 2015 - a combined cash profit after tax of $30 billion.

By year’s end 2016 the major banks were reporting a combined cash profit after tax of $29.6 billion.

The Federal Government’s underlying cash balance for the 2016-17 financial year to 31 December 2016 was a deficit of $33,025 million and the fiscal balance was a deficit of $31,143 million. While net government debt for 2016-17 stood at an est. $326 billion.

There is an increasing global perception that banks put shareholders’ and executives’ interests ahead of their customers and the community. This perception is more real for banks than for other corporates as they are seen to rely not only on compliance with strict regulation, but increasingly on the goodwill of the community and government to continue to operate in their current form.

We are seeing heightened scrutiny of Australian banks, including through the recent Standing Committee on Economics (the Committee) inquiry, becoming a regular feature of media and political commentary, notwithstanding eight separate inquiries since 2009. There are many reasons for this increased level of oversight, with terms such as “trust deficit” and “trust gap” often cited as the root cause.

It has been argued that the financial services industry has lost touch with the core proposition customers are seeking by forgetting its real purpose in society and becoming too inwardly focussed. These themes were repeated in testimony to the Committee.

Readers can make their own minds up as to whether banks have lived up to the historic social licence granted them by community (see bank scandals since 2009 and alleged superannuation owing in 2017) and, if they actually need any further tax relief or if that $7.4 billion would be much better in the hands of the Commonwealth Treasury.

Monday, 13 February 2017

Make no mistake - Trump is placing all national economies in jeopardy once more

In the midst of The Great Depression (a decade long severe global economic downturn triggered by the 1929 Wall Street stock market crash) the U.S. Government enacted the 1933 Glass-Steagall Act which tightened banking and financial sector regulations.

At the urging of the same financial and banking sector in 1999 a bipartisan agreement saw the introduction of the Financial Services Modernization Act which repealed large parts of the Glass-Stegall Act and the Bank Holding Company Act.

In the wake of another crisis generated by the American sub-prime mortgage melt-down, aptly titled The Global Financial Crisis, the U.S. Government in July 2010 enacted the Dodd–Frank Wall Street Reform and Consumer Protection Act to reimpose stricter regulations.

Now we hear that Donald Trump is moving to roll back the Dodd-Frank reforms. In particular the Volker Rule against banks using depositor funds for speculative bets on their own account and from acquiring or retaining ownership interests in, sponsoring, or having certain relationships with a hedge fund or private equity fund - practices thought to have exacerbated The Global Financial Crisis.

The Sydney Morning Herald, 4 February 2017:

US President Donald Trump moved to chisel away at the Obama administration's legacy on financial reform, announcing a series of steps to revisit the rules enacted after the 2008 financial crisis and setting the stage for a showdown with Democrats over the future of Wall Street regulation.
After a White House meeting with the executives, Mr Trump signed a directive calling for his administration to identify potential changes to provisions of the Dodd-Frank Act, crafted by the Obama administration and passed by Congress in response to the 2008 meltdown….

Most Australian families have memories of The Great Depression which hit this country hard and all will be able to recall the ripple effects from The Global Financial Crisis, so it is not unreasonable to fear that what this erratic and ignorant American president does in relation to U.S. banking and financial sector legislation has the potential to send the world spinning into yet another American-generated global economic crisis.

Forewarned is forearmed and this time around everyone would be wise to closely follow reputable newspapers and economic commentators to see which way the wind blows as the United States once more enters dangerous waters.

Monday, 2 January 2017

Adani Group in hot water on two continents?

In debt for billions, refused additional finance, under investigation in India and still before the courts in Australia – the rather suspect Adani Group is not starting the year on a high.

The Hindu,  8 May 2016:

Adani group (Gautam Adani)

The billionaire Gautam Adani’s Adani group, with Rs 96,031 crore debt, is under pressure to sell its stake in the Abbott Point coal mines, port and rail project. The Adani Group’s debt stands at Rs. 72,000 crore. Last year, Standard Chartered bank had recalled loans amounting to $2.5 billion as part of its global policy of reducing exposure in emerging markets. Global lenders have backed out from funding the $10-billion coal mine development project. State Bank of India has also declined to offer a loan despite signing an MoU to fund the group with $1 billion. An Adani spokesperson declined to offer any comments on the issue.

Times of India, 13 September 2016:

DRI has been investigating 40 power generating companies and traders for the past couple of years. According to DRI, some prominent public and private sector companies inflated the import value of coal beyond that prevailing in the international market. Some companies are also being probed for allegedly inflating the value of imported capital goods. According to DRI, power tariffs were fixed based on the inflated values, which resulted in consumers paying higher charges.

DRI has alleged that Adani Group and Essar have imported capital goods through intermediaries in tax havens. It claims that the companies' objective was to siphon off money abroad while availing higher power tariff compensation based on artificially-inflated costs of imported coal or capital goods.

While the coal was directly shipped from Indonesian ports to importers in India, the import invoices were routed through one or more intermediaries based in a third country such as Singapore, Dubai, Hong Kong and British Virgin Islands. These intermediary firms appear to be either subsidiaries of Indian importers or their front companies. This was the modus operandi used in the import of capital goods too. Investigations into overvaluation by other companies are still in progress.

Meanwhile, the Supreme Court has stayed an order of Appellate Tribunal for Electricity (APTEL) that directed the Central Electricity Regulatory Commission to award compensatory tariffs to Adani Power and Coastal Gujarat Power (Tata group) based on power purchase agreements for their power plants in Mundra. APTEL has also disallowed compensatory tariff to Adani Group's power plant at Tiroda in Maharashtra and Kawai in Rajasthan.

ABC News, 7 December 2016:

Traditional owners are set to launch further legal action against Adani's Carmichael coal mine slated for central Queensland.

The Wangan and Jagalingou people claimed the $22 billion project impinges on their native title rights, and would extinguish their interests over 28 square kilometres of land if it goes ahead.

Spokesman Adrian Burragubba said the group was running four separate legal challenges to the project, and vowed to continue fighting.

"We will continue to pursue all legal avenues, Australian and international, and put a stop to this disastrous project," he said.

"Our rights are not protected, and we will test the limits of the law in this country if need be, including all the way to the High Court."

Courier Mail, 11 December 2016:

Questions remain over how the Carmichael project will be funded.

Mr Buckley says the Adani group is among the most highly leveraged companies in India with net debt across the group of about $15 billion.

More than a dozen major international financiers have ruled out providing funds for the project.

ABC News, 22 December 2016:

The business behind the planned Carmichael coal mine in North Queensland is facing multiple financial crime and corruption probes, with Indian authorities investigating Adani companies for siphoning money offshore and artificially inflating power prices at the expense of Indian consumers.

Companies under scrutiny for the alleged corrupt conduct include Adani Enterprises Limited — the ultimate parent company of the massive mine planned for the Galilee Basin.

Two separate investigations into allegations of trade-based money laundering by Adani companies are underway — one into the fraudulent invoicing of coal imports and the other into a scam involving false invoicing for capital equipment imports.

"They are very serious allegations and they are being conducted by the premier Indian government agency investigating financial crime," Australia's foremost expert on money laundering, Professor David Chaikin of the University of Sydney, told the ABC.

"The allegations involve substantial sums of money with major losses to the Indian taxpayer."

Adani denies wrongdoing.

The "modus operandi" of the claimed fraud is outlined in a circular issued by India's Directorate of Revenue Intelligence, which was obtained by the ABC.

"Intelligence obtained by the Directorate of Revenue Intelligence indicated that certain importers of Indonesian coal were artificially inflating its import value as opposed to its actual value," Professor Chaikin said.

"The objective … appears to be two-fold: (i) siphoning off money abroad and (ii) to avail higher power tariff compensation based on [the] artificially inflated cost of the imported coal."

Five Adani Group companies are among a number of power companies named in the circular as under investigation.

These include Adani Enterprises Ltd, the ultimate parent company of the Adani entity, which holds the environmental approvals for the planned Carmichael Coal Mine and a railway to the mine.

Adani Enterprises Ltd has also been accused of involvement in large-scale illegal iron ore exports and bribery of public officials.

According to a 2011 report by the ombudsman of the Indian State of Karnataka, obtained by the ABC, police seized documents from Adani Enterprises in raids "which indicate that money has been regularly paid to port authorities, customs authorities, police department, mines and geology and even to MLAs/MPs".

The revelations come as the Federal Government considers granting Adani a $1 billion subsidy to build a railway from the Abbot Point Coal Terminal to the mine site 400 kilometres inland.

Sunday, 18 December 2016

Just the sheer size and reach of the Trump Organisation's business interests has implications for U.S. foreign policy

For the last eighteen months in particular there has been media comment on the extensive business interests of U.S. president-elect Donald John Trump.

Since the November 2016 presidential election focus has intensified.

However, the U.S. Constitution drawn up in a simpler century teflon coats presidents - never having envisioned the likes of  Donald Trump.

The reach of Trump’s business interests are said to reach as far as Australia.

Given the man doesn’t seem to understand that the only ethical course would be to divest himself entirely of his business interests by placing them in a genuine blind trust not run by family members, close friends or business partners, so that both America and the world can have a measure of confidence in the his decision making as president, one can only look aghast at the potential for these business interests to fatally infect his presidency and U.S. foreign policy.

In July 2015 Donald Trump disclosed 515 U.S. and foreign corporations or partnerships in which he was either president, partner, chair, director, secretary, member and/or shareholder.

Forbes, 17 August 2015:

Under “Our Hotels” on the Trump Hotel Collection website, it lists six domestic hotels and six international hotels…..
The other hotels abroad are in Toronto, Doonbeg, Ireland, Vancouver, and Baku, Azerbaijan. (Toronto and Vancouver also have a Trump Tower.)
On the website for the Trump Real Estate Collection, nine international properties are listed, including two Trump Towers in India and one in Istanbul, another in Uruguay and another in the Philippines, as well as a Trump World in South Korea, among others.

Donald Trump has an interest in more than 30 U.S. properties, roughly half of which have debt on them according to The New York Times on 20 August 2016:

Debt on properties Mr. Trump owns or leases
40 Wall Street
Trump International Hotel*
Trump National Doral golf resort
Trump Tower
Trump International Hotel
167 East 61st Street
Trump Park Avenue
Trump National Golf Club
Colts Neck, N.J.
4-8 East 57th Street "Niketown"
Seven Springs estate
Mount Kisco, N.Y.
Trump National Golf Club Washington
Potomac Falls, Va.
Trump International Hotel and Tower
Trump International Hotel**
Las Vegas
1094 South Ocean Boulevard
Palm Beach, Fla.
124 Woodbridge Road
Palm Beach, Fla.
*This construction loan was for $170 million. The Trump Organization and Times sources confirm roughly $127 million has been drawn down on.
**This loan was worth $110 million in 2010. The Trump Organization says a Trump entity is responsible for $3.2 million of the debt outstanding. The Times could not confirm this.
Debt associated with Mr. Trump's limited partnerships/investments
1290 Avenue of the Americas
555 California Street
San Francisco
Starrett City / Spring Creek Towers
An internal Trump Organization corporate loan, which Mr. Trump says is worth more than $50 million.
Sources: RedVision Systems, Securities and Exchange Commission, New York Times, Bloomberg data, Trump Organization.
The New York Times compiled these debt estimates using bank documents, public filings and through interviews with the Trump Organization and people familiar with the debt who asked not to be identified because they were not authorized to speak on the record about it.

The bulk of these liabilities appear to consist of mortgages maturing between 2016 and 2029.

The Washington Post, 16 September 2016:

U.S. Customs and Border Protection records, compiled by since 2007, give us a look at what has been imported by many of the businesses that are owned by Trump or use his name via licensing deals.

Trump has imported from the countries coloured red and many of the products bearing Donald Trump’s name appear to come from low-wage countries in East Asia.

Trump licensed his name to the Israeli vodka after a 2011 legal battle. Unlike the original Trump vodka made in Holland, the new version was popular as one of the few liquors that’s kosher for Passover.
Made by a crystal company in a small town in Slovenia, its first entry into the U.S. market.
Made in countries such as China and sold on in nearly 200 patterns and sizes.
Made in China.
Including cuff links, belts and eyeglasses made in China and other countries.
Trump’s cologne has been manufactured in and out of the United States.
Trump makes his clothing line abroad. The manufacturers are generally scattered throughout East Asia and Central America.
Chandeliers and lamps
Some of these products retail for more than $4,000. Made in China.
Trump Home sells furniture to consumers made in Germany and Turkey, but his own hotels often get furniture from massive distributors such as the multinational IHS Global Alliance.

Thursday, 8 December 2016

How the Clarence Valley council rates and charges fight played out at the end of 2016

It would be foolish to think that the issue of Clarence Valley Council rates and charges has been permanently settled since the local government election in September this year.

The constant pressure of cost-shifting by state and federal governments means that regional councils in particular are prone to financial stress.

The fact that during previous elected terms Council in the Chamber appears to have agreed to expenditure which exacerbated this situation is regrettable but remains something that has to be faced. 

I await the beginning of the 2017 local government year with interest.

The current state of play……

The Daily Examiner, 19 October 2016:

NEW Clarence Valley Mayor Jim Simmons has used his casting vote twice to ensure his council applied for a special rate variation.

At Tuesday's council meeting a Mayoral Minute calling for an organisation review of the council and a general manager's report outlining a Fit for the Future Improvement Plan and Special Rate Variation were fiercely debated.

The Mayoral minute ostensibly called for the appointment of a consultant to review the council's organisation, but quickly moved to debate on the SRV.

In his minute the mayor said the council needed make an application for an SRV in case it becomes necessary once the review was completed.

In debate he repeatedly stressed this was not an application for an SRV. He said this could only happen at budget time in June next year.

But for some councillors the SRV was totally off limits.

Councillors Peter Ellem and Greg Clancy said they would not vote in favour of any motion in favour of an SRV.

And Cr Andrew Baker said an SRV was an admission the council was not prepared to do the hard work in balancing the budget.

The voting was Crs Jason Kingsley, Richie Williamson, Arthur Lysaught and Jim Simmons in favour.
Against: Crs Baker, Ellem, Clancy and Debrah Novak.

The Daily Examiner, 1 December 2016:

CLARENCE Valley Council has missed its State Government-imposed deadline to submit a plan to show it will become Fit for the Future.

At an extraordinary meeting in Maclean yesterday, councillors voted down a staff-prepared proposal which included an application for a 9% special rates variation.

The deadline for the council to submit its proposal to the Office of Local Government was midnight last night, which the council general manager Scott Greensill said could not be met.

The gallery was filled with council staff, who came to see the outcome, which according to information in the report to the meeting could result in the loss of 63 jobs at the council over the next nine years.

Mayor Jim Simmons, who spoke in favour of the plan, used his casting vote to defeat the proposal.

His reasoning was that a councillor missing from the meeting, Cr Greg Clancy, was a strong opponent of the SRV proposal.

"This proposal would only be voted down at the next meeting in December, so I will vote against it now," he said.

Cr Andrew Baker foreshadowed a lengthy nine-point motion during question time. An amendment from Cr Karen Toms reduced this to eight points when he agreed to remove a section relating to council's tourism services.

This became the motion on the defeat of the officer's recommendation……

Cr Peter Ellem supported Cr Baker's motion.

He said the opposition to it was coming from a rump of the former council and council staff who had failed to listen adequately to the new members of council and the public.

He said the job losses and figures in the report were designed to scare councillors into voting in favour of an SRV, which he said the community could not afford.

That final Council resolution set out below is one that was amended by Williamson/Lysaught during the preceding motion vote which occurred sometime between 3.10pm and 4.06pm.

The Mayor adjourned the meeting at 4.06 pm and resumed at 4.13 pm.


That Council:
1. Adopt a Fit for the Future Continual Compliance Policy for immediate implementation and a Nil-Deficit General Fund Budget Policy for 2017/18 and subsequent years with each General Fund Budget to encompass at least:
a. Operating Performance Ratio at or better than breakeven to satisfy Benchmark 1.
b. Building and Infrastructure Renewal at or better than 100% to meet or exceed Benchmark 3.
c. Infrastructure Backlog Ratio of 2% or less to satisfy Benchmark 5, after an initial utilization of
$17.7 million of own Capital Reserves is applied to infrastructure backlog reduction by the
actions required at 3 and 4 below.
d. Asset Maintenance Ratio of 100% or more to meet or exceed Benchmark 5.
e. Already-adopted efficiency measures, revenue increases, expenditure reductions and other
measures adopted for financial sustainability purposes.

2. Commence Fit for the Future Continuing Compliance immediately by:
a. Adjusting the 2016/17 adopted budget deficit by any amounts realised from the adoption of
this resolution and,
b. Adjusting current budget projections to include the results of a Business Case review of the
Depot Rationalisation Project that is to include current known costs and projections together
with the items at 7a, 7b and 7c below and with this revised business case to be reported to
Council February 2017 and,
c. Implementing the actions required in following Sections 3 to 8 inclusive.

3. Adopt a Fleet Financing Policy that requires all fleet renewals and acquisitions to be financed by external commercial financing where item cost is prorated monthly over the planned economic life of the asset.

4. Create an Infrastructure Backlog Accelerated Reduction Reserve of $17.7 million by the transfer of all of the Fleet Reserve Fund of $10 million or such other final amount when calculated and by additional capital to emerge from the adoption of the Fleet Financing Policy and:
a. Apply Internal Fleet Hire funds emerging from this Fleet Financing Policy estimated: $3.53m
remaining 6 months 2016/17, $3.33m 2017/18, $1.1 million 2018/19, $0.41 million 2019/20,
$0.14 million 2020/21 for an estimated total $8.6 million over 54 months and subject to final
calculation amount to be inserted here to firstly reach the $17.7 million required for the
Infrastructure Backlog Accelerated Reduction Reserve amount and then to apply to other
Benchmark shortfalls and,
b. Apply fleet disposal income funds emerging at end of economic life disposal of fleet items
estimated at $8 million over 48 to 60 months and subject to final calculation amount to be
inserted here to firstly reach the $17.7 million required for the Infrastructure Backlog
Accelerated Reduction Reserve amount and then to apply to other Benchmark shortfalls.

5. After accounting for the adopted forecast reductions that will result from depot rationalisation  natural attrition and other adopted efficiency savings measures, develop a workforce model that results in no nett reduction of adjusted workforce numbers with such model to be developed by inclusion of selected reductions to consultant and contract engagements in favour of maintaining at least current Council FTE workforce numbers.

6. Receive a report to the February 2017 Ordinary meeting and to subsequent meetings as necessary with such report to include:
a. Options and variations available for delivery of this resolution and,
b. Effects of implementation on subsequent budget forecasts and,
c. The capability and constraints of this resolution being implemented by existing Council
management expertise alone and,
d. The likely cost and benefit of further resolving the implementation of this resolution by the
engagement of external administration services.

7. Adopt a Business Case Reporting to Council Policy for pre-acquisition reporting on all proposed capital acquisitions of $100,000 or above to show all financial costs and benefits and alternatives if any with each report to include:
a. The Cost of Funds using best commercial borrowing rates available to Council at the time
b. The Cost of Funds using best commercial investment rates available to Council at the time
c. Any depreciation amounts attributable to the expected life of the acquisition.

8. Make a Fit for The Future Submission to the Office of Local Government showing the amended budget results and forecasts resulting from adoption of this resolution Sections 1 to 7 inclusive together with any other already-adopted future savings and revenue-increase measures to be implemented by Council to achieve financial sustainability.

Cr Williamson and Cr Lysaught left the meeting at 4.41 pm prior to the voting taking place. [my red bolding]

Voting recorded as follows
For: Simmons, Ellem, Novak, Toms, Baker
Against: Kingsley