Friday 21 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”….
Labels:
Abbott Government,
ICAC,
investigation
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."
Labels:
Abbott economics,
Abbott Government,
asylum seekers
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
Thursday 20 March 2014
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:
______________
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.
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.
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.
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