Australian personal investment portfolio profiles reveal a sjgnificant lack of diversification and a fondness for shares

“This is indeed the wealthiest retired generation ever in Australian history…. Self-funded or partly self-funded retirees appear to enjoy a significantly higher standard of living than those who rely on the Aged Pension”  [Australian Centre for Australian Studies, August 2016]

According to the Australian Stock Exchange in 2017 there were over 11 million investors across the country.

Given the many words being written on the subject of share dividend imputation and franking credits here is a broad breakdown of the investment types these people hold.

Sources of income during retirement

In 2016–17, there were 3.6 million persons, aged 45 years and over, who reported that they were retired from the labour force. This group comprised 1.7 million men and 1.9 million women. Just over half of all retired persons were aged 70 years and over (56% of retired men and 52% of retired women).

Approx. 49% of male and 45% of female retirees stated main source of income was 'government pension/allowance'. In total this represents an est. 1.6 million individuals retired from the labour force.

Approx. 33% of male and 17% of female retirees stated their main source of income was 'superannuation/annuity/allocated pension' (37% of females state ‘partners income’ as main source of income). In total this represents an est. 884,000 individuals retired from the labour force.

Est. 30% of all retirees appeared to be eligible to claim a government part-pension.

Australian retirees (60 years and older) investment portfolio profile:

68% hold cash

58% hold shares

26% hold investment property

18% hold other on-exchange investments.

Retirees on average expect an 8 per cent return on investment.

Australian all adult (18 years of age & older) investment portfolio profile:

60% hold investments

Up to est. 42% hold investment property

31% hold shares

Up to 25% hold other on-exchange investments, including derivatives

10% hold family trusts

15% hold self-managed super funds (SMSFs), with the majority held by individuals over 45 years of age

Est. 44% of SMSFs contain shares and over 50% hold cash.

Adult investors on average expect an 8.2 to 9.2 per cent return on investment.

Only est. 5% of investors borrow money in order to invest.

Overall less than half (46%) of all investment portfolios are diversified to lessen financial risk.

Currently, most investors in Australia are self-directed, choosing to conduct their own research.

[See https://www.asx.com.au/documents/resources/2017-asx-investor-study.pdf
& http://www.abs.gov.au/ausstats/abs@.nsf/mf/6238.0]

Excess Franking Credits derived from Share Dividends

The average annual cash refund for unused franking credits is thought to be in the vicinity of $5,000 per shareholder, while the average unused credits cashback payment for people in the top 1% of self-managed super funds is an est. $83,000 a year.

Social media opinion

A terrific example of the irrational, ill-considered investment "strategy" that the imputation tax rort encourages. People invest on the basis of the rort with no consideration of underlying corporate fundamentals https://t.co/6mswyubE0E

— Stephen Koukoulas (@TheKouk) March 15, 2018

Tim Lyons at Revielle 

Case studies mentioned in mainstream media

Case Study 1

via @GraemeEtt

It has been pointed out that with income from other sources being $130,000, "Jean" would have income producing assets possibly valued at est. $3.2 million. She appears to own her own home.

Case Study 2 - Stjepan has retired with what appears to be a self-managed super fund. As his fund is in the pension phase he pays $0 tax. He and his wife have a combined annual income of $89,000 and own shares valued at $200,000. He states that he will lose "several thousand dollars a year" if he no longer receives cash back for excess franking credits.
Stepan owns his own home plus a holiday unit.
If this couple's combined income is $89,000 then they would possibly have income producing assets valued at around $1.7 million.

Case Study 3 - "Peter" has a self-managed super fund. As his fund is in pension phase he pays $0 tax. Peter has an income of $60,000 a year. Dividends from his share portfolio see him receiving franking credit cashback payments of over est. $8,000 per annum which he lodges in his SMSF account to grow his balance.
His income producing assets are possibly valued at est. $1.2 million.

Case Study 4 - Margaret and her husband have a self-managed super fund. As their fund is in the pension phase they pay $0 tax. The SMSF appears to solely invest is shares - 85% of which are Telstra and big bank shares. 
Currently National Australia Bank shares are worth in the vicinity of $29.51 with an annual dividend yield of 6.71%, Westpac shares are worth in the vicinity of $29.52 with an annual dividend yield of 6.37%, Commonwealth Bank shares are worth in the vicinity of $75.34 with an annual dividend yield of 5.71% and, Telstra shares are worth in the vicinity of $3.35 with an annual dividend yield of 6.8%.
No income is stated but what is asserted is that the abolition of payment for excess franking credits will see their annual income reduced by 30%.
Margaret and her husband own their own waterfront residence in Sydney.

The bottom line is that investors who structured their portfolios to take maximum advantage of excess franking credit cash payments do not appear to have considered the relatively short history of this cash payment scheme or the possibility that a political push might occur to eliminate the 'value' of unused franking credits - given that current owners of these credits who had no tax liability were claiming refunds for tax they had never paid in the first place.

Looking for all those vacant residential dwelling being deliberately kept out of the Australian housing market

In the 2011 Census there were 2,297,460 rented private dwellings recorded. This was 29.6 per cent of the 7,760,322 private dwellings declared covering an est. 8,420,000 households.

By December 2016 the total number of private dwelling stood at 9,802,700 properties, for an est. 9,268,700 households.

Simple maths shows there was possibly around 534,000 private dwellings for which there were unlikely to be tenants and which were potentially available for sale.

Given these excess dwellings are likely to be unevenly spatially distributed, a number of metropolitan suburbs and regional urban areas would still be experiencing limited availability of housing stock for rent or sale and therefore demand may be unmet.

However, according to BIS Sharpnel; In 2017After a record breaking building boom in most capitals, Australia will have 24,039 extra homes above what are needed and will be oversupplied for the first time in more than a decade, a new report shows.

So why is it so hard to find a place to rent in large metropolitan areas and why is housing for sale so expensive?

It appears there is an artificial drought which can only be explained by the high percentage of investment properties in the housing stock mix which had reached 23 per cent by 2015, comprising one quarter of all house stock and two-thirds of apartment stock.

Domain.com.au released a ball park estimate of all vacant properties on 4 April 2017, based on Prosper Australia  research:

QUEENSLAND

An estimated 59,000 properties are standing empty in Queensland.

NEW SOUTH WALES

There are an estimated 121,000 properties vacant across New South Wales (with up to 90,000 properties standing empty in Sydney suburbs).

VICTORIA

The president of Prosper Australia, Catherine Cashmore, who has collected data on water usage to show there are 80,000 empty homes in Melbourne, said an empty home tax was an intuitively appealing policy that could pave the way for greater reforms.

SOUTH AUSTRALIA

There are an estimated 23,000 properties vacant in South Australia.

WESTERN AUSTRALIA

An estimated 21,000 vacant properties.

NORTHERN TERRITORY

There are an estimated 2,000 vacant properties in the Territory.

AUSTRALIAN CAPITAL TERRIOTORY

An estimated 5,000 vacant properties.

TASMANIA

An estimated 7,000 vacant properties.

The Sydney Morning Herald reported on 28 March 2016:

Vacant properties were among the "perverse outcomes" of tax incentives that encouraged some investors to favour capital growth over rental returns, according to the analysis by the UNSW's City Futures Research Centre.

"Leaving housing empty is both profitable and subsidised by government," researchers Bill Randolph and Laurence Troy said. "This is taxation lunacy and a national scandal."

The ANU Centre for Social Research and Methods analysed Australian Taxation Office data and found at least 4,204 “legislators” who owned investment properties of which more than 13.87 per cent appear to negatively gear their properties.

By 2017 226 of these “legislators” were federal MPs and senators who owned 525 properties between them and about 48 per cent of these parliamentarians own investment properties.

So it is not hard to see why the Turnbull Government is dragging its heels when faced with the “perverse outcomes” arising from negative gearing and capital gain tax concessions.

Or why a Coalition state government like the NSW Government would decide that the best way to address a perceived housing shortage is to give its political supporters free rein.

Sky News, 9 January 2017:

The NSW government will be able to fast-track developments under a massive shake-up of the state's planning system aimed at tackling Sydney's chronic housing shortage.

Councils will determine fewer development applications under the proposed changes but will be responsible for devising more planning strategies with local communities.

Other proposals include providing incentives for developers if they consult with neighbours and the community before lodging development applications and simplifying building regulations.

It defies belief that the NSW Coalition Government would believe that just building more private housing for investors to warehouse for financial gain is a solution to rising house prices and limited availability.

In December 2016 the average annual full-time adult wage/salary of an individual was est. $79,721 or $1,533 per week before tax and in an employment field of 12.06 million workers only 8.30 million had full-time jobs. An estimated half the workforce would probably have earned below $56,000 per annum.

Realestate.com.au calculates that it requires at least one person in a marriage/
partnership, presumably without children, to be in full-time employment - and earning more in wages each week than half the current workforce - for the couple to have any hope of saving for a deposit within a reasonable time period:

[http://www.realestate.com.au/news/how-long-does-it-take-to-save-for-that-first-home]

So if our multimillionaire prime minister, Malcolm Bligh Turnbull, and his parliamentary fellow travellers won’t act to ease housing affordability by removing taxation loopholes which allow the greedy to manipulate the housing market to their advantage, then it is up to voters to apply a cattle prod to their privileged haunches – and vote them out in 2018-19.

And if state governments won’t move to penalise investors who deliberately leave residential dwellings vacant for a trouble-free capital gain as well as a tax deduction, then voters with an eye to the future of their children and grandchildren might consider letting them know how they feel about the situation.

Ninety-six per cent of Australian federal parliamentarians own a property

ABC News, 20 April 2017:

There's no housing affordability crisis in the ranks of Federal Parliament's members and senators.

The politicians charged with tackling the thorny issue of spiralling house prices are among the nation's most aggressive property investors, an analysis by the ABC has revealed.

The 226 individuals own 524 properties between them and about half of them own investment properties.

That means many of our politicians have a very personal interest in any changes to negative gearing and the capital gains tax discount……

Ninety-six per cent of parliamentarians own a property. Only 10 out of our 224 elected officials aren't in the game.

Compare that to the rest of Australia, where home ownership is expected to dip below 50 per cent sometime this year.

Register of Members’ Interests for 45th Australian Parliament.

Although a number of investment properties are listed in the members’ register this does not necessarily mean that additional property is not owned as part of superannuation schemes (other than that operated by the Commonwealth of Australia) or included in the assets of a private corporation in which a member has a significant shareholding.

GREED Inc: rental income & negative gearing in Australia

The Guardian, 12 April 2017:

The ATO stats also show the number of landlords with an interest in six or more rental properties has grown quickly in the last three years, up 8.6%, from 17,671 to 19,198 individuals.

Landlords with an interest in five rental properties have grown even faster, up 9.8%, from 16,600 to 18,231. Those with an interest in three or four properties have also grown quickly, up 7% each.

By comparison, the largest number of landlords are those with an interest in a single rental property, at 1.5 million. Their number increased by just 2% over the last three years.

The Conversation, 13 April 2017:

The latest data from the ATO is consistent with what we’ve seen in the past. It shows that people with high-income occupations – doctors, lawyers, and others – are more likely to use negative gearing than the nurses and teachers on whom Treasurer Scott Morrison focuses when he tries to justify retaining negative gearing. It also shows that negative gearing is typically worth four to five times more for doctors and lawyers than nurses and teachers.

The Guardian, 13 April 2017:

The release of the taxation statistics for 2014-15 reveals that, while the number of people negative gearing has levelled in the past three years as interest rates have fallen, the greatest share of the benefits of negative gearing goes to above average earners – and the biggest growth is to those owning multiple properties.

With housing affordability and negative gearing the hot topic in the run up to the May budget, the annual release of the taxation statistics by the ATO on Wednesday served to reinforce how greatly negative gearing figures in people’s tax affairs.

In 2014-15, 1.27 million people recorded a rental net loss. This was down slightly from the 1.3 million in the years before and meant that 12.8% of taxpayers were negative gearing.

Again that was down from the previous year and the peak of 2012-13 when 13.4% of taxpayers were recording a rental loss…..

The reason for the drop is mostly because the main way to achieve a loss on your rental investment is through payments on the interest of the mortgage. But, as interest rates fall, that cost also falls, which means it is actually harder to record a loss.

Over the past four years, the number of people claiming a deduction for payments of interest on a rental property have increased but the total amount claimed has fallen…..

The median rent in NSW in the December Quarter of 2014 for housing ranging from 1 bedroom to 4 or more bedrooms was $420-$500 per week. With the median rent being $450-$600 in Greater Sydney, $230-$433 in the Greater Metropolitan Region and $230-$245 in the rest of NSW.

During the same quarter median rents across the NSW Northern Rivers region ranged from $180-$580 per week.

In 2014 the gross rental yield for apartments in Sydney CBD, Paddington, Darling Point, Double Bay, Kirribilli, Rose Bay, Tamarama, Bellevue Hill, Point Piper, Potts Point, and Vaucluse, i.e., the gross return on investment in a apartment if fully rented out, ranged from 2.8 per cent to 5.0 per cent according to Global Property Guide.

Want to know the average rental loss claimed for taxation purposes by landlords in your postcode? Then use this interactive map.

Australian National University divests itself of certain mining shares

The Australian 4 October 2014:

THE Australian National University has become the first local high­er-education institution to announce that it will divest its holdings in seven companies — in­cluding Santos, Newcrest Mining­ and Iluka Resources — which it says have a poor record on environmen­tal responsibility.

ANU vice-chancellor Ian Young said yesterday that the value of the divestment was about $16 million of ANU’s $1 billion endowment.

The decision was based on principle but he hoped it would draw attention to companies that “do harm”. “We are saying we don’t want to invest in companies that are not socially responsible and are doing harm,’’ Professor Young said. “That is different from saying we won’t invest in any ­mining companies.”

The other affected stocks are Independence Group, Sandfire Resources, Oil Search and Sirius.

Julian Poulter, the executive director of the Asset Owners Disclosure Project, said the ANU’s gesture was largely symbolic but was also very “helpful”. “We are seeing people starting to hedge their portfolios against potential stranded assets, including divesting of the very worst,” he said.

In August, the University of Sydney called a halt to investments in Whitehaven Coal until it had completed a review of its investment strategy over environmental concerns on Whitehaven’s Maules Creek project.

The Australian National University (ANU) is attempting to establish its green credentials.

This is not the first time that ANU has divested itself of mining shares.

In 2012 the university was the 17^th largest shareholder in coal seam-tight gas miner Metgasco Limited holding 2,500,000 shares as of 21 September that year.

By February 2013 after pressure from its student body and individuals in the Northern Rivers (including the Clarence Valley) ANU announced it had sold all of its Metgasco shares.

Uniting Church in Australia Assembly to sell-off all fossil fuel investments

Uniting Church in Australia Assembly media release 29 August 2014:

Assembly to divest from fossil fuels

Friday, 29 August 2014

The Uniting Church in Australia Assembly has resolved to divest from investments in corporations engaged in the extraction of fossil fuels.

Uniting Church President Rev. Professor Andrew Dutney has welcomed the resolution of the Assembly Standing Committee, calling the decision an important act of public witness.

“As Christians we are called to respect and care for the whole of creation,” said Rev. Prof. Dutney.

“Wth national governments reluctant to take difficult decisions, it falls to us as members of the body of Christ to show leadership in taking action to reduce damaging pollution.”

“To avoid damaging climate change we must move quickly to a clean energy economy. The Uniting Church recognises that continued investment in fossil fuel industries does not support the change needed.”

The Intergovernmental Panel on Climate Change (IPCC) says the effects of climate change are already occurring on all continents and across the oceans.

A recent IPCC report concluded that there are still opportunities to respond to the risks of climate change, although these risks will be difficult to manage with high levels of warming.
“The future depends on countries like Australia making a strong, unequivocal commitment to reduce greenhouse gas emissions,” said Rev. Prof. Dutney.

“Our partner churches in the small island states have been calling on Australia to take seriously the threat to their futures. We simply must act. This is a matter of social, environmental, and intergenerational justice.”

The Assembly Standing Committee resolution follows similar decisions on divestment by the Synod of NSW and ACT in April 2013 and the Synod of Victoria and Tasmania in February 2014.

Rev. Professor Dutney has congratulated these councils of the Uniting Church in Australia for their leadership.

“We commend this course of action to other Uniting Church entities as they make their investment decisions as well as to our ecumenical partners,” said Rev. Prof. Dutney.

Watching your superannuation fail to perform as promised?

It will only get worse, because this is what Abbott Government Senator Arthur Sinodinos had organised (before he stepped aside as Assistant Treasurer for the length of the NSW ICAC Operation Credo-Spicer Investigation) in order to facilitate the gouging of workers’ superannuation by financial advisers and banks:

• remove the need for clients to renew their ongoing fee arrangement with their adviser every two years (also known as the 'opt-in' requirement);

• remove the requirement to provide an annual fee disclosure statement to clients in ongoing fee arrangements prior to 1 July 2013;

• remove the 'catch-all' provision from the list of steps an advice provider may take to satisfy the best interests obligation;

• facilitate the provision of scaled advice;

• clarify the meaning of ‘intrafund advice’;

• clarifying the operation of the 'mixed benefits' provisions; and

• amend the application of the ban on conflicted remuneration including:

– exempting general advice;

– exempting monetary benefits paid in relation to certain life risk insurance

offerings inside superannuation;

– amending the exemption for execution-only services to provide that only

advice provided by the party receiving the benefit is considered;

– broadening the exemption for training and education that relates to

operating a financial services business; and

– broadening the existing exemption for basic banking products to allow an

agent or employee of an authorised deposit-taking institution to access the

exemption in a broader range of circumstances.

______________

Documents:

Corporations Amendment (Streamlining of Future of Financial Advice) Bill 2014

Explanatory Memorandum

______________

The Abbott Government cannot pretend that it doesn't understand that this is a retrograde step.

In February 2003 the Australian Securities and Investment Commission released a report on a survey on the quality of financial planning advice which found:

A common observation by several judges was that clients’ interests did not appear to be the sole factor in the plan strategy or product selection. They characterised this practice as “commission-driven product selling, not impartial advice”.

“… like many others, [this plan] is just another ‘selling tool’ for managed

funds” – Judge 4

“This generic pro-forma style plan is [a] financial needs analysis / sales

justification document. “ – Judge 2

These plans often gave no reason why the recommended course of action was

preferred, or the reasons appeared skewed to justify the product recommendation.

“Plan seemed to focus straight to wealth accumulation via the advisor’s

company master trust. No explanation as to why, the pros and cons, and

how this recommendation was going to fully meet the client needs and

objectives.” – Judge 9

Recommendations frequently overlooked options that may be more cost-effective:

  • adviser elects to waive product entry fee — rarely recommended;

  • low cost superannuation funds — never recommended;

  • pay off mortgage rather than invest cash — rarely recommended;

  • salary sacrifice — recommended in a minority of plans.

About half the plans recommended selling at least some of the client’s existing

investments.

The combination of commission-based remuneration and management sales

targets sits uncomfortably with good practice and professional advice.

“The main recommendation was to rollover client’s superannuation into a

fund [master trust] from which the advisor receives commissions. No

analysis or discussion to justify this. ‘Churning’ in a newer guise.” –

Judge 7

“This plan is unusual in that it exhibits some degree of advice integrity, a

characteristic not commonly evident in many other plans reviewed. “ –

Judge 4

There appears to be a mismatch between what the consumers thought they were

getting and what they actually received. Our consumer volunteers asked for a

comprehensive financial plan....

Nor can the Abbott Government pretend that weakening or dismantling consumer protections found in the Corporations Amendment (Future of Financial Advice) Act 2012 does not have potential negative consequences.

One only has to look back at the 2009 $3 billion collapse of Storm Financial Ltd to see the personal and financial devastation for an estimated 3,000 investors left in its wake.

Retirees who lost money in the collapse of financial institutions are becoming angry about the Abbott Government's plans. However Abbott himself is insouciant.

The Guardian 18 March 2014:

Victims who lost billions in the collapse of financial advice firms such as Storm Financial are joining consumer groups, superannuant and seniors associations and industry superannuation funds in an angry backlash against the government’s plan to wind back new consumer protection laws.

The Coalition’s much-vaunted “repeal day” on Wednesday will include the Corporations Amendment (Streamlining of Future of Financial Advice) Bill to implement the windback – once again allowing advisers to earn sales commission and other so-called “conflicted remuneration” from providing general financial advice and removing the requirement for financial advisers to tell customers how much they are receiving in commissions every year and give them the chance to opt out of the arrangements every second year.

With the legislation certain to be blocked by Labor and the Greens in the existing Senate, which sits until 30 June, and many of the existing requirements set to take effect from July, the government is also planning to rush through regulations to try to implement its windback in the meantime.

The opposition leader, Bill Shorten, said the government’s proposed changes were “bad laws” and would mean “the wholesale dismantling of oversight to protect our consumers”.

But Tony Abbott said on Monday the former Labor government’s legal protection laws – which his government is seeking to water down – were “a classic case of regulatory overkill” because it was already an “ethical given” that professional advisers would take into account the best interests of their clients….

Any readers who may be thinking of lobbying against repeal of the Corporations Amendment (Future of Financial Advice) Act 2012 might like to view this new website, Save Our FOFA, which states that as part of our campaign to protect consumers, we want to help them lobby local MPs and senators.

Metgasco Limited, Trevor Close and the Githabul Nation

WrestlingNewsMedia.com Trevor Close seated on the right

The Northern Star 21 February 2014:

MEMBERS of the local Githabul tribe have distanced themself from calls by the chairman of their native title corporation to join forces with the gas industry.

The dispute follows years of infighting within the Githabul Nation Aboriginal Corporation (GNAC) which administers 1120 sq km of native title land along the Queensland border surrounding Woodenbong.

GNAC chairman Trevor Close this week identified Metgasco's planned well at Bentley as suitable for a joint venture with the native title corporation.

Mr Close declared in a statement that the "the potential of this new gas well will deliver millions back to the Githabul people".

Under a so-called "farm-in" agreement, GNAC would become a co-investor in the drilling project and take a percentage stake in any future profits.

Metgasco chief Peter Henderson said farm-in agreements were common in the oil and gas industry, with up to two, three, and even four parties taking stakes in some projects.

Mr Close said the Githabul people were "happy to share gas" with NSW in the "spirit of reconciliation", and to stop the state's interstate gas dependency.

But Githabul elder Gloria Williams said no one in her tribe supported the gas industry, and that Mr Close lived in Sydney and ran a mining consultancy.

She said GNAC had been hijacked by a group "intent on doing mining deals", which didn't have local support.

"We live in the heart of Githabul and have been trying to address this issue with GNAC, and they have been avoiding us for two years," she said.

"All these deals he [Mr Close] is talking about, we have never sat down as a tribe and spoken about."....

ABC North Coast NSW 20 February 2014:

Githabul Elder Aunty Gloria Williams told ABC North Coast that the Githabul Nation Aboriginal Corporation was under investigation by the Office of the Registrar of Indigenous Corporations (ORIC).

ORIC issued a statement to ABC North Coast: " ORIC's practice is not to confirm or deny whether a complaint has been received or if a corporation is under investigation. ORIC only comments on outcomes of regulatory action, which is available on our website at www.oric.gov.au."

A document posted on the ORIC website shows two auditors were appointed in December 2013 to investigate the finances of the corporation.

TNR Financial Services were to conduct the financial investigation in question.

In December 2013 the Delegate of the Registrar wrote; I note the corporation has not held its AGM for the year ended 30 June 2012. I further note previous advice was received from the corporation that it would be able to hold its 2012-13 AGM before 30 November 2013. In the circumstances, I am not in a position to grant an extension of time for holding the AGM.

GNAC chairman Trevor Close mentioned in the first article quoted has resided in South Australia, West Australia and in the Sydney metropolitan area of New South Wales.

In 2008 the Australian Institute of Aboriginal and Torres Strait Islander Studies described Trevor John Close as an Indigenous commercial lawyer currently working in the resources industry.

In 2010 the Office of the Registrar of Aboriginal Corporations listed him as having registered the United Githabul Tribal Nation Aboriginal Corporation in 1997. It was deregistered in 2010.

The Australian Securities and Investments Commission (ASIC) lists another company Bonalbo Developments Pty Limited as being registered in 2007 and deregistered in in 2009.

In one of a number of Linkedin current entries Trevor Close is listed as a lawyer for Bonalbo Developments and as the chief executive officer of Yelgun Djaru Oil and Gas. Business.gov.au lists Yelgun Djaru Mining & Gas Services as a business name used by Trevor Close since 2010;

Mr. Close appears to have a troubled relationship with Githabul people.

On 22 March 2010 The Northern Star journalist Alex Easton reported on an incident which saw Mr. Close appear in court:

Trevor Close, 48, a Githabul man now living in Perth, appeared in Lismore Local Court where he pleaded not guilty to a charge of punching Robert Williams outside a Kyogle meeting on the local native title process on April 8 last year.

Close denies the charge, saying Mr Williams took the first swing....

Close said, once in the hall, he was knocked to the ground and set upon by '20 to 30 people' and feared for his life.

He later amended his account of the attackers to include only the Williams men.

"They nearly killed me," he told the court. "Blows started coming from everywhere. I was in fear of my life."

Close told the court he saw people breaking off chair legs to use in the attack on him, but his elderly aunts intervened by 'throwing their bodies over me'.

The aunts told a slightly different story.

They had been in various parts of the hall when Close, Mr Williams and two or three of Mr Williams' sons brawled into the hall.

The Williams men were throwing punches at Close, and he was throwing punches back.

None of them saw Close fall to the ground and they certainly didn't 'throw their bodies' over him - although they put themselves between Close and the Williams men.

None of them saw anyone breaking off chair legs to join the fray either - although one of the aunts later broke a broom handle and pointed it at Robert Williams as she told him it was time for the fighting to stop.

It was the vast difference in accounts that brought Close undone in court.

Magistrate Robyn Denes noted there were no witnesses able to say who threw the first punch outside, beyond Close and Mr Williams, meaning, for her, it came down to who gave the most reliable evidence in court.

Mr Williams' evidence and that of other witnesses had been delivered honestly, she said.

However, Ms Denes said Close continually exaggerated his own evidence.

Ms Denes accused Close of being arrogant and of taking 'every moment he could to place himself in a position of importance over and above the Williams family' and others in the Githabul community, 'even by throwing in that he was the only person in that community to receive a tertiary education'.

On that basis, Ms Denes said she could not accept Close's evidence over Mr Williams' and so found he had thrown the first punch and was guilty of assault.

Ms Denes convicted Close and released him on a section 9 bond.

However, Close later said he was lodging an appeal on all grounds 'including severity', saying he had been convicted because he was arrogant.