Journalist John Birmingham asks "Will you miss us when we're gone?"

Brisbane Times 18 March 2014:

When protesters do emerge in significant numbers, however, it is the job of the news media to report them. It is indeed one of our most basic functions and one which we abjectly failed to perform on the weekend, first ignoring the twenty-thousand citizens who rallied across rural and regional Australia, before ignoring or underreporting the much larger numbers who rallied in the state capitals on Sunday.

Again, these were not mass protests of the size and style of the Vietnam era. They weren’t as large and certainly not as violent and disorderly as civil rights protests in Queensland in the 1970s and 80s. But they were large enough to be worthy of more basic news coverage than they received. They were arguably more important to community record keeping than a bit of colour and movement on Paddy’s Day. And inarguably more important than the other 'top' stories which enjoyed more prominence; the 'attack' of a body boarder by a dolphin, the "Real Housewife's Toy-boy All-Nighter", and Lara Bingle's insta-boob shot.

This is not a reflection on the politics of the events. If they had been organised by, for instance, a conservative talkback radio demagogue to protest a progressive government’s re-engineering of traditional social values, they would have been just as important to record.

The total disconnect between what might be termed citizen-initiated reportage on social media and mainstream coverage of the weekend’s protests was in no way mitigated by the scramble of the MSM on Monday to play catch up.

Stepping away from the all of the issues captured by a thousand different placards on Saturday and Sunday, the systemic failure to recognise the significance of the story speaks to a deeper fear I have about the news media, which is not that we might die out as Google gorges itself on the last scraps of our advertising based business model… but that it won’t matter.

That you won’t care, and that there will be no reason to care.

Because we failed you, long before we failed to do our jobs. There's a case to be made that new media, in the form of professional blogs and even some of the better amateur sites, have already embarrassed us in a dozen different specialist areas that used to compromise the various desks of the old metro dailies; sport, fashion (the 'ladies pages'), entertainment, science and tech, international politics, maybe even national politics. But the meat and potatoes of local coverage? No, that still belonged to us. Or I thought it did. Increasingly, however, I wonder whether the question, "Will you miss us when we're gone", is one which answers itself.

Read more: http://www.brisbanetimes.com.au/comment/blogs/blunt-instrument/will-you-miss-us-when-were-gone-20140317-34xtk.html#ixzz2wG98yKdQ

Another Liberal MP runs afoul of media scrutiny of parliamentary entitlements

The Telegraph 11 March 2014:

POLITICIANS have been given the green light to hide the identities of family members who spend millions of taxpayer dollars annually flying around Australia in business class.

In a case that may set a precedent, the Abbott government has hidden records of taxpayer-funded family travel for a Liberal MP Jane Prentice after her family members racked up $20,000 worth of airfares, including business class, between Brisbane and Canberra in her first term in parliament.

The ruling is a different to the disclosure regime for the government's VIP jet flights, in which family members on the publicly-funded flights are identified and reported.

It also comes after Mrs Prentice's spouse, ex-Queensland Liberal MP Ian Prentice, attempted to distance his financial woes from her 2010 election campaign, saying at the time that voters were not electing him.

In 2006, Mr Prentice was forced into bankruptcy over a $1.062 million bill alleged by the Australian Tax Office, later saying he disputed it but could only pay less than $100,000 because of his meagre assets. The couple's Brisbane home was in Mrs Prentice's name only.

Family members are allowed to travel under parliamentary entitlements to help MPs ‘‘balance their work and family responsibilities’’ but the names are not released in the six-monthly travel reports detailing the flights and costs…

The Courier Mail 18 March 2014:

A LIBERAL MP whose ­husband once failed to pay a $1 million tax bill will be forced to show what taxpayer-funded expenses she claimed for him after an embarrassing backdown by the Federal Government.

The Finance Department has backflipped on a ruling that politicians could hide the names of family members who enjoy taxpayer-funded travel after The Courier-Mail appealed the move to block expenses relating to Ryan MP Jane Prentice and her husband Ian.

The agency also admitted its initial freedom of information ruling was wrong ­because its scope was too ­narrow and will now release other travel by Mr Prentice ­beyond just airfares.

In a further embarrassment, the department has admitted it was told by the Information Commissioner that such information should not be hidden.

Mrs Prentice claimed thousands of dollars worth of family expenses during her first term in parliament but ­declined to provide the identity of family travellers in travel reports to parliament…

Quote of the Week

The best way to get a picture of what is going on is to look at all the polls together.

When you do there is no doubt the Abbott government is continuing to have the worst start, at least in its ­polling, of any new government over the last 40 years.

[John Stirton,  Nielsen research director, writing in the Financial Review, 17 March 2014]

Why did Australian Water Holdings Pty Ltd owe $20,000 to the Liberal Party in 2010?

 

Political donation, lobbyist fee or yet something else again?

One of the questions asked and answered at the NSW Independent Commission Against Corruption (ICAC) Operation Credo-Spicer investigation public hearing on 20 March 2014:

MR O’MAHONEY( counsel assisting ICAC): Did you reference the, I think you referred to them as soft costs but the discretionary costs and you’re concerns about them with Mr Sinodinos?---

RODERICK XAVIER DE ABOITIZ (AWH shareholder): Yes, I did. With Nick I went into more specific detail because I sent him the email with my comments against the accounts that he mentioned.

MR O’MAHONEY: Can you remember any of the specific costs that you took issue with?---

DE ABOITIZ: Look, you know, it seemed like, I just said to him, for a start if you’re 20 paying lobbyists, just stop it, you can’t afford it, so at that time there was $20,000 that I think was owing to the Liberal Party and so these amounts were I believe payables that were “overdue”….

Abbott Economics

In Australian Prime Minister Tony Abbott's throw-away economy taxpayers are funding the return of asylum seekers to Indonesia by orange lifeboats.

The Sydney Morning Herald 20 March 2014:

The Abbott government has tripled the amount of money spent on the large orange lifeboats used to tow back asylum seekers breaching Australian waters to Indonesia to $7.5 million as part of its tough border control policy.

The figure, to be revealed at an estimates hearing on Friday, is $5 million more than the initial $2.5 million allocated to purchase lifeboats in January.

It is believed each lifeboat costs about $200,000, which means the lifeboat fleet has increased from 12 boats to about 37 boats, each of which are only used once...

Some of the more persistent intercepted asylum seekers will have been twice returned in these expensive lifeboats.

"When I saw the orange boat, I understood that all of that will be repeated again. ... I was just screaming. I kept saying, "This boat of yours is not suitable for me to board again." 

In answer to Kevin Hogan's comfortable assumptions....

NSW North Coast Nationals MP for Page, Kevin Hogan, making comfortable assumptions about the March In March: Australians United For Better Government, The Northern Star, 17 March 2014:

"I get that there are a lot of Labor and Greens voters who are cranky with the result of the last government…

We're just implementing the politics we said we would and the Australian public overwhelmingly gave us a mandate to do so in September."  

The reality was that marchers came from politically diverse backgrounds:

@bigemlilorgan

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.