Pre-recorded interview with the Grattan Institute's Brendan Coates. Trioli says a new...

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1 WED 07 NOVEMBER 2018 Mediaportal Report Pre-recorded interview with the Grattan Institute's Brendan Coates. Trioli says a new... ABC News, Sydney, News Breakfast, Michael Rowland, Virginia Trioli and Paul Kennedy 07 Nov :40 AM Duration: 2 mins 30 secs ASR AUD 39,523 National Australia Industry Super Australia - Radio & TV ID: X Pre-recorded interview with the Grattan Institute's Brendan Coates. Trioli says a new Grattan Institute report suggests retirees are likely to be more than comfortable after they're done with their working life. Coates claims retirees will be able to enjoy 91% of their after-tax salary. He adds a higher super guarantee creates less income but help builds up a retirement balance. He notes people with a 9.5% super guarantee will have an income of 91%, which is higher than the benchmark set by the OECD. He suggests boosting rent assistance as rent is rising faster than inflation. 278,000 All, 134,000 MALE 16+, 141,000 FEMALE 16+ Interviewees Brendan Coates, Grattan Institute Vision Australian Super, IOOF Also broadcast from the following 22 stations ABC (Hobart), ABC (Darwin), ABC (Sydney), ABC (Brisbane), ABC (Adelaide), ABC (Melbourne), ABC (Perth), ABC (Canberra), ABC (Regional Queensland), ABC (Regional Victoria), ABC (Regional NSW), ABC (Albany), ABC News (Melbourne), ABC News (Regional NSW), ABC News (Brisbane), ABC News (Adelaide), ABC News (Perth), ABC News (Regional Queensland), ABC News (Hobart), ABC News (Canberra), ABC News (Regional Victoria), ABC News (Regional West Australia) COPYRIGHT This report and its contents are for the internal research use of Mediaportal subscribers only and must not be provided to any third party by any means for any purpose without the express permission of Isentia and/or the relevant copyright owner. For more information contact copyright@isentia.com DISCLAIMER Isentia makes no representations and, to the extent permitted by law, excludes all warranties in relation to the information contained in the report and is not liable for any losses, costs or expenses, resulting from any use or misuse of the report.

2 Interview with Grattan Institute senior fellow Brendan Coates. Coates and Kelly discuss... Radio National, Canberra, Breakfast (Early), Fran Kelly Duration: 8 mins 27 secs ASR AUD 332,584 National Australia Industry Super Australia - Radio & TV ID: X Nov :51 AM Interview with Grattan Institute senior fellow Brendan Coates. Coates and Kelly discuss the Grattan Institute's report called Money in Retirement: More than Enough, whose results suggest that most Aussies will actually be financially comfortable during retirement despite the many sentiments from the financial service industry saying otherwise. Coates explains how he and his co-authors arrived at this conclusion. He says they analysed the spending habits of retirees in relation to their age and found that spending fell substantially as people grew older due to declining health. Coates adds to this by saying most elderly don't need to use up their savings or access superannuation because the government is shouldering their medical expenses through Medicare. Coates also says that retirees in the study generally reported being less anxious about their finances compared to working-age people, however, Coates also says an exception to this would be if older people are paying for rent. Kelly asks Coates whether it's true that people need at least $1m to be comfortable in retirement. Coates debunks that by saying most of the financial comfort standards for retirees are inaccurate, such as the ASFA Retirement Standard by the Association of Superannuation Funds of Australia, which says a couple should be earning $60,000 a year to be comfortable in retirement. Coates explains this benchmark is only applicable to the top 20% of retirees. All in all, Coates believes the current Superannuation Guarantee is sufficient and does not have to be raised. He says people are focusing too much on saving up for retirement and not considering the tradeoffs with respect to working life. Coates says the data shows Australia's superannuation system is doing its job properly, except in the case of the renters. Kelly then mentions that ANZ and NAB are supporting the idea of allowing indigenous Aussies to access their superannuation early, given that data shows indigenous Aussies have a shorter life expectancy. Coates replies he believes there should be earlier access to super for both indigenous and non-indigenous Aussies, though he cautions there must be mechanisms to ensure the system is not taken advantage of. 125,000 All, 59,000 MALE 16+, 65,000 FEMALE 16+ Interviewees Brendan Coates, senior fellow, Grattan Institute Mentions Department of the Prime Minister and Cabinet OECD Royal Commission Also broadcast from the following 8 stations Radio National (Sydney), Radio National (Melbourne), Radio National (Brisbane), Radio National (Perth), Radio National (Hobart), Radio National (Adelaide), Radio National (Darwin), Radio National (Newcastle) Cricket and banks caught tampering with ethics Sydney Morning Herald, Sydney, Business News, Stephen Bartholomeusz 07 Nov 2018 Page words ASR AUD 66,721 Photo: Yes Type: News Item Size: cm² NSW Australia Industry Super Australia - Press ID: View original - Full text: 729 word(s), ~2 mins 88,634 CIRCULATION COPYRIGHT For the internal research use of Mediaportal subscribers only. Not to be provided to any third party for any purpose without the express permission of Isentia. For further information contact copyright@isentia.com

3 CBA in property tech play Herald Sun, Melbourne, Business News, Jeff Whalley 07 Nov 2018 Page words ASR AUD 20,600 Photo: No Type: News Item Size: cm² VIC Australia Industry Super Australia - Press ID: View original - Full text: 578 word(s), ~2 mins 303,140 CIRCULATION Betting on the Packer profit maxim Herald Sun, Melbourne, Business News, Terry McCrann 07 Nov 2018 Page words ASR AUD 24,987 Photo: No Type: News Item Size: cm² VIC Australia Industry Super Australia - Press ID: View original - Full text: 963 word(s), ~3 mins 303,140 CIRCULATION ASIC should not be a cash cow The Australian, Australia, Editorials 07 Nov 2018 Page words ASR AUD 5,943 Photo: Yes Type: Editorial Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 554 word(s), ~2 mins 94,448 CIRCULATION 'Low-paid the losers' if super levy lifts to 12pc The Australian, Australia, General News, Michael Roddan 07 Nov 2018 Page words ASR AUD 8,670 Photo: No Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 582 word(s), ~2 mins 94,448 CIRCULATION COPYRIGHT For the internal research use of Mediaportal subscribers only. Not to be provided to any third party for any purpose without the express permission of Isentia. For further information contact copyright@isentia.com

4 Grattan got it right: this idea is a stinker for ordinary Aussies The Australian, Australia, General News, Adam Creighton 07 Nov 2018 Page words ASR AUD 4,528 Photo: No Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 373 word(s), ~1 min 94,448 CIRCULATION 'Easy' living for retired Herald Sun, Melbourne, General News, Rob Harris 07 Nov 2018 Page words ASR AUD 13,770 Photo: No Type: News Item Size: cm² VIC Australia Industry Super Australia - Press ID: View original - Full text: 409 word(s), ~1 min 303,140 CIRCULATION Inequality here to stay Daily Telegraph, Sydney, Letters 07 Nov 2018 Page words ASR AUD 614 Photo: No Type: Letter Size: cm² NSW Australia Industry Super Australia - Press ID: View original - Full text: 138 word(s), <1 min 232,067 CIRCULATION Betting on the Packer profit maxim at Healthscope Daily Telegraph, Sydney, Business News, Terry McCrann 07 Nov 2018 Page words ASR AUD 7,041 Photo: No Type: News Item Size: cm² NSW Australia Industry Super Australia - Press ID: View original - Full text: 302 word(s), ~1 min 232,067 CIRCULATION COPYRIGHT For the internal research use of Mediaportal subscribers only. Not to be provided to any third party for any purpose without the express permission of Isentia. For further information contact copyright@isentia.com

5 LARA PUTS IN A BINGLE BUMBLE Daily Telegraph, Sydney, General News, Jonathon Moran 07 Nov 2018 Page words ASR AUD 69,792 Photo: Yes Type: News Item Size: 1, cm² NSW Australia Industry Super Australia - Press ID: View original - Full text: 453 word(s), ~1 min 232,067 CIRCULATION China market a heady mix of challenges and opportunities The Australian, Australia, Business News, Glenda Korporaal 07 Nov 2018 Page words ASR AUD 19,475 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 904 word(s), ~3 mins 94,448 CIRCULATION Smaller SMSFs may be surprise performers: PC The Australian, Australia, Business News, James Kirby 07 Nov 2018 Page words ASR AUD 5,634 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 501 word(s), ~2 mins 94,448 CIRCULATION CBA venture grabs e-property firm Pexa Courier Mail, Brisbane, Business News 07 Nov 2018 Page words ASR AUD 1,686 Photo: No Type: News Item Size: cm² QLD Australia Industry Super Australia - Press ID: View original - Full text: 213 word(s), <1 min 135,007 CIRCULATION COPYRIGHT For the internal research use of Mediaportal subscribers only. Not to be provided to any third party for any purpose without the express permission of Isentia. For further information contact copyright@isentia.com

6 Super idea to work to 70 Courier Mail, Brisbane, General News, Steven Scott 07 Nov 2018 Page words ASR AUD 3,706 Photo: No Type: News Item Size: cm² QLD Australia Industry Super Australia - Press ID: View original - Full text: 286 word(s), ~1 min 135,007 CIRCULATION The Great Super Lie exposed Sydney Morning Herald, Sydney, General News, Ross Gittins 07 Nov 2018 Page words ASR AUD 47,803 Photo: Yes Type: News Item Size: cm² NSW Australia Industry Super Australia - Press ID: View original - Full text: 934 word(s), ~3 mins 88,634 CIRCULATION Push to scrap super increase Sydney Morning Herald, Sydney, General News, Jessica Irvine 07 Nov 2018 Page words ASR AUD 29,904 Photo: No Type: News Item Size: cm² NSW Australia Industry Super Australia - Press ID: View original - Full text: 741 word(s), ~2 mins 88,634 CIRCULATION ASIC wants to be top cop on super beat Sydney Morning Herald, Sydney, Business News, Clancy Yeates 07 Nov 2018 Page words ASR AUD 19,354 Photo: No Type: News Item Size: cm² NSW Australia Industry Super Australia - Press ID: View original - Full text: 475 word(s), ~1 min 88,634 CIRCULATION COPYRIGHT For the internal research use of Mediaportal subscribers only. Not to be provided to any third party for any purpose without the express permission of Isentia. For further information contact copyright@isentia.com

7 Investor focus on fast food outlets Sydney Morning Herald, Sydney, General News, Carolyn Cummins 07 Nov 2018 Page words ASR AUD 23,647 Photo: Yes Type: News Item Size: cm² NSW Australia Industry Super Australia - Press ID: View original - Full text: 420 word(s), ~1 min 88,634 CIRCULATION Sharemarkets' turmoil plays on investors' nerves Age, Melbourne, Money, John Collett 07 Nov 2018 Page words ASR AUD 13,650 Photo: No Type: News Item Size: cm² VIC Australia Industry Super Australia - Press ID: View original - Full text: 477 word(s), ~1 min 83,229 CIRCULATION Five ways your finances may be in trouble Age, Melbourne, Money, Melissa Browne 07 Nov 2018 Page words ASR AUD 25,231 Photo: Yes Type: News Item Size: cm² VIC Australia Industry Super Australia - Press ID: View original - Full text: 861 word(s), ~3 mins 83,229 CIRCULATION My parents help me pay my mortgage Age, Melbourne, Money, Rakhee Ghelani 07 Nov 2018 Page words ASR AUD 23,552 Photo: Yes Type: News Item Size: cm² VIC Australia Industry Super Australia - Press ID: View original - Full text: 680 word(s), ~2 mins 83,229 CIRCULATION COPYRIGHT For the internal research use of Mediaportal subscribers only. Not to be provided to any third party for any purpose without the express permission of Isentia. For further information contact copyright@isentia.com

8 Sharemarkets' turmoil plays on investors' nerves Sydney Morning Herald, Sydney, Money, John Collett 07 Nov 2018 Page words ASR AUD 17,753 Photo: No Type: News Item Size: cm² NSW Australia Industry Super Australia - Press ID: View original - Full text: 476 word(s), ~1 min 88,634 CIRCULATION Five ways your finances may be in trouble Sydney Morning Herald, Sydney, Money, Melissa Browne 07 Nov 2018 Page words ASR AUD 32,742 Photo: Yes Type: News Item Size: cm² NSW Australia Industry Super Australia - Press ID: View original - Full text: 861 word(s), ~3 mins 88,634 CIRCULATION My parents help me pay my mortgage Sydney Morning Herald, Sydney, Money, Rakhee Ghelani 07 Nov 2018 Page words ASR AUD 31,505 Photo: Yes Type: News Item Size: cm² NSW Australia Industry Super Australia - Press ID: View original - Full text: 680 word(s), ~2 mins 88,634 CIRCULATION Behind the Great Super Lie Canberra Times, Canberra, General News, Ross Gittins 07 Nov 2018 Page words ASR AUD 16,034 Photo: Yes Type: News Item Size: cm² ACT Australia Industry Super Australia - Press ID: View original - Full text: 936 word(s), ~3 mins 17,579 CIRCULATION COPYRIGHT For the internal research use of Mediaportal subscribers only. Not to be provided to any third party for any purpose without the express permission of Isentia. For further information contact copyright@isentia.com

9 Axe super guarantee increase to boost wages: new report Canberra Times, Canberra, General News, Jessica Irvine 07 Nov 2018 Page words ASR AUD 11,014 Photo: No Type: News Item Size: cm² ACT Australia Industry Super Australia - Press ID: View original - Full text: 822 word(s), ~3 mins 17,579 CIRCULATION Turmoil plays on investors' nerves Canberra Times, Canberra, General News, John Collett 07 Nov 2018 Page words ASR AUD 5,584 Photo: No Type: News Item Size: cm² ACT Australia Industry Super Australia - Press ID: View original - Full text: 476 word(s), ~1 min 17,579 CIRCULATION ASIC wants to be top cop on super beat Canberra Times, Canberra, Business News, Clancy Yeates 07 Nov 2018 Page words ASR AUD 6,788 Photo: No Type: News Item Size: cm² ACT Australia Industry Super Australia - Press ID: View original - Full text: 475 word(s), ~1 min 17,579 CIRCULATION Cricket and banks caught tampering with ethics Canberra Times, Canberra, Business News, Stephen Bartholomeusz 07 Nov 2018 Page words ASR AUD 23,616 Photo: Yes Type: News Item Size: cm² ACT Australia Industry Super Australia - Press ID: View original - Full text: 729 word(s), ~2 mins 17,579 CIRCULATION COPYRIGHT For the internal research use of Mediaportal subscribers only. Not to be provided to any third party for any purpose without the express permission of Isentia. For further information contact copyright@isentia.com

10 Behind the Great Super Lie Age, Melbourne, General News, Ross Gittins 07 Nov 2018 Page words ASR AUD 34,294 Photo: Yes Type: News Item Size: cm² VIC Australia Industry Super Australia - Press ID: View original - Full text: 932 word(s), ~3 mins 83,229 CIRCULATION CBA and partners close in on $1.6bn Pexa deal Adelaide Advertiser, Adelaide, Business News, Jeff Whalley 07 Nov 2018 Page words ASR AUD 7,616 Photo: Yes Type: News Item Size: cm² SA Australia Industry Super Australia - Press ID: View original - Full text: 423 word(s), ~1 min 112,097 CIRCULATION Call to axe increase in super guarantee Age, Melbourne, General News, Jessica Irvine 07 Nov 2018 Page words ASR AUD 18,462 Photo: No Type: News Item Size: cm² VIC Australia Industry Super Australia - Press ID: View original - Full text: 650 word(s), ~2 mins 83,229 CIRCULATION ASIC wants to be top cop on super beat Age, Melbourne, General News, Clancy Yeates 07 Nov 2018 Page words ASR AUD 13,986 Photo: Yes Type: News Item Size: cm² VIC Australia Industry Super Australia - Press ID: View original - Full text: 466 word(s), ~1 min 83,229 CIRCULATION COPYRIGHT For the internal research use of Mediaportal subscribers only. Not to be provided to any third party for any purpose without the express permission of Isentia. For further information contact copyright@isentia.com

11 Cricket, banks caught out on ethics Age, Melbourne, Business News, Stephen Bartholomeusz 07 Nov 2018 Page words ASR AUD 20,867 Photo: Yes Type: News Item Size: cm² VIC Australia Industry Super Australia - Press ID: View original - Full text: 720 word(s), ~2 mins 83,229 CIRCULATION Retirees' finances set for rosy future Hobart Mercury, Hobart, General News, Rob Harris 07 Nov 2018 Page words ASR AUD 1,576 Photo: No Type: News Item Size: cm² TAS Australia Industry Super Australia - Press ID: View original - Full text: 338 word(s), ~1 min 28,265 CIRCULATION It ain't what you do, it's the way that you do it Northern Territory News, Darwin, Business News, Alan Kohler 07 Nov 2018 Page words ASR AUD 4,970 Photo: Yes Type: News Item Size: cm² NT Australia Industry Super Australia - Press ID: View original - Full text: 857 word(s), ~3 mins 11,279 CIRCULATION 'Fear factory' prompts cash flow to super West Australian, Perth, General News, Shane Wright 07 Nov 2018 Page words ASR AUD 4,067 Photo: No Type: News Item Size: cm² WA Australia Industry Super Australia - Press ID: View original - Full text: 316 word(s), ~1 min 147,676 CIRCULATION COPYRIGHT For the internal research use of Mediaportal subscribers only. Not to be provided to any third party for any purpose without the express permission of Isentia. For further information contact copyright@isentia.com

12 Ignore the fear factory - retirees have enough cash Australian Financial Review, Australia, General News, John Daley 07 Nov 2018 Page words ASR AUD 9,223 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 919 word(s), ~3 mins 44,635 CIRCULATION Impartial team puts your needs first West Australian, Perth, General News 07 Nov 2018 Page words ASR AUD 7,416 Photo: Yes Type: News Item Size: cm² WA Australia Industry Super Australia - Press ID: View original - Full text: 523 word(s), ~2 mins 147,676 CIRCULATION Ongoing service fees the next battleground Australian Financial Review, Australia, General News, James Frost 07 Nov 2018 Page words ASR AUD 8,212 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 565 word(s), ~2 mins 44,635 CIRCULATION APRA s insurers on surveillance option Australian Financial Review, Australia, General News, James Fernyhough 07 Nov 2018 Page words ASR AUD 5,785 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 632 word(s), ~2 mins 44,635 CIRCULATION COPYRIGHT For the internal research use of Mediaportal subscribers only. Not to be provided to any third party for any purpose without the express permission of Isentia. For further information contact copyright@isentia.com

13 Ex-Fair Work commissioner loses tax appeal Australian Financial Review, Australia, General News, Tom Mcllroy 07 Nov 2018 Page words ASR AUD 8,455 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 605 word(s), ~2 mins 44,635 CIRCULATION Bond investors like Labor's franking cut Australian Financial Review, Australia, General News, John Kehoe 07 Nov 2018 Page words ASR AUD 6,290 Photo: No Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 759 word(s), ~3 mins 44,635 CIRCULATION Dealing with crisis part of job for trusted partners Australian Financial Review, Australia, Special Report 07 Nov 2018 Page words ASR AUD 10,498 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 997 word(s), ~3 mins 44,635 CIRCULATION Advisory services revenue king as sectors open up Australian Financial Review, Australia, Special Report, Louis White 07 Nov 2018 Page words ASR AUD 8,556 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 763 word(s), ~3 mins 44,635 CIRCULATION COPYRIGHT For the internal research use of Mediaportal subscribers only. Not to be provided to any third party for any purpose without the express permission of Isentia. For further information contact copyright@isentia.com

14 Retirees far better off than they were 20 years ago Australian Financial Review, Australia, General News, Joanna Mather 07 Nov 2018 Page words ASR AUD 7,241 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 614 word(s), ~2 mins 44,635 CIRCULATION AustralianSuper wary of verdict on banks Australian Financial Review, Australia, General News, James Frost 07 Nov 2018 Page words ASR AUD 8,010 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 863 word(s), ~3 mins 44,635 CIRCULATION PEXA deal worries bankers Australian Financial Review, Australia, General News 07 Nov 2018 Page words ASR AUD 11,468 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 1222 word(s), ~4 mins 44,635 CIRCULATION Finance group closes on Pexa Gold Coast Bulletin, Gold Coast QLD, General News, Jeff Whalley 07 Nov 2018 Page words ASR AUD 1,907 Photo: No Type: News Item Size: cm² QLD Australia Industry Super Australia - Press ID: View original - Full text: 373 word(s), ~1 min 21,468 CIRCULATION COPYRIGHT For the internal research use of Mediaportal subscribers only. Not to be provided to any third party for any purpose without the express permission of Isentia. For further information contact copyright@isentia.com

15 BETTING ON THE PROVEN PACKER PROFIT MAXIM Gold Coast Bulletin, Gold Coast QLD, General News 07 Nov 2018 Page words ASR AUD 3,007 Photo: Yes Type: News Item Size: cm² QLD Australia Industry Super Australia - Press ID: View original - Full text: 980 word(s), ~3 mins 21,468 CIRCULATION Warning shot fired against PEXA rivals Australian Financial Review, Australia, General News, Jemima Whyte 07 Nov 2018 Page words ASR AUD 9,790 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 795 word(s), ~3 mins 44,635 CIRCULATION Retirees in sound finances Geelong Advertiser, Geelong VIC, General News, Rob Harris 07 Nov 2018 Page words ASR AUD 723 Photo: No Type: News Item Size: cm² VIC Australia Industry Super Australia - Press ID: View original - Full text: 399 word(s), ~1 min 16,687 CIRCULATION COPYRIGHT This report and its contents are for the internal research use of Mediaportal subscribers only and must not be provided to any third party by any means for any purpose without the express permission of Isentia and/or the relevant copyright owner. For more information contact copyright@isentia.com DISCLAIMER Isentia makes no representations and, to the extent permitted by law, excludes all warranties in relation to the information contained in the report and is not liable for any losses, costs or expenses, resulting from any use or misuse of the report.

16 Sydney Morning Herald, Sydney Author: Stephen Bartholomeusz Section: Business News Article type : News Item Classification : Capital City Daily : 88,634 Page: 24 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 66,721 Words: 729 Item ID: Page 1 of 3 Cricket and banks caught tampering with ethics COMMENT Stephen Bartholomeusz There are echoes of the banking royal commission and the Australian Prudential Regulation Authority s inquiry into Commonwealth Bank in the Ethics Centre s review of Cricket Australia s culture and governance frameworks that was issued to such destabilising effect last week. Cricket Australia chairman David Peever and long-serving chief executive James Sutherland have gone. Its highperformance manager, Pat Howard, is going. Its longest-serving board member, former Australian captain Mark Taylor resigned this week. That s not dissimilar to the turmoil that engulfed Commonwealth Bank and AMP and, to a lesser degree, other major financial institutions as a consequence of the revelations at the royal commission and, while CA is a not-for-profit sports organisation, it s not hard to see why it s not dissimilar. The destabilisation of CA stems from an incident in South Africa, the infamous Sandpapergate balltampering that resulted in suspensions for the team s captain, vice-captain and a junior batsman. From that incident came damning judgments on the culture of CA and Australian cricket broadly. The royal commission has shone a fierce light on what appears to be far more pervasive and more egregious misconduct, although the parallels between cricket and the financial services sector may go deeper than the scope of the Ethics Centre s review allowed it to probe. It did, however, put cricket s plight into that wider context when referring to the response of the community to the events in South Africa. That response, it said, was linked to a sense of shame that our society s ethical malaise had moved from politics, to business, to the churches... an everspreading stain that had finally tainted the wearers of the hallowed baggy green. When Commissioner Kenneth Hayne produced his interim report detailing the shocking instances of misconduct aired before him, he blamed the breakdowns in culture and governance within financial services largely on remuneration practices and policies. The core conclusion of the APRA panel that inquired into CBA s governance and culture was somewhat different. It concluded that the bank s financial success had dulled the senses of the institution. It is generally the case that what Continued Page 20

17 Sydney Morning Herald, Sydney Author: Stephen Bartholomeusz Section: Business News Article type : News Item Classification : Capital City Daily : 88,634 Page: 24 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 66,721 Words: 729 Item ID: Page 2 of 3 Cricket and banks caught tampering with ethics From Page 19 gets measured gets done and also that success breeds complacency. What s measured and rewarded in cricket, as in all sports, is wins and losses successes or failures. In cricket and business, success is measured and rewarded at the individual and organisational level. At a commercial level, CA has been extremely successful and the administrators and elite players have been handsomely rewarded. As Justice Hayne has said, when 1HERSA1 A026 an employee and others in an organisation, including the employee s supervisors and peers, are remunerated according to how much revenue or profit they contribute then sales, or revenue or profit or, for cricketers, winning is treated as the goal to pursue and how it is pursued is less relevant. The APRA-commissioned review into CBA said the focus on financial outcomes and the siloed nature of its structure, where executives were given considerable authority, allowed them and the board to believe the group was well run and across potential risks. It would seem the CA board and management s senses were dulled by the organisation s financial success and by the distance and layers between them and the team. Incentives structures are easy to change; changing cultures is not as straightforward. In financial services there are balanced scorecards, increasingly with conduct gateways to be negotiated before the incentives can be triggered. If, as the Ethics Centre concluded, a singular focus on performance produced, not surprisingly, a singular focus on performance then the response for CA is to develop its own version of a balanced scorecard, for management and players; one with an ethical dimension to it. It is also going to have to consider how it might generate cultural change, not just at the elite level, but down to the grassroots levels and the pathways within which its elite players originate. The federated nature of cricket the complex relationships between its head office and the states means it won t be as straightforward as the board and/ or executive laying down a new cultural framework. CA might, however, learn something from the ways in which the major banks and AMP are responding to their ethical breakdowns.

18 Sydney Morning Herald, Sydney Author: Stephen Bartholomeusz Section: Business News Article type : News Item Classification : Capital City Daily : 88,634 Page: 24 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 66,721 Words: 729 Item ID: Page 3 of 3 Australian cricketer Cameron Bancroft, right, is questioned by the umpires during the test cricket match between South Africa and Australia in March. Photo: AFP

19 Herald Sun, Melbourne Author: Jeff Whalley Section: Business News Article type : News Item Classification : Capital City Daily : 303,140 Page: 26 Printed Size: cm² Region: VIC Market: Australia ASR: AUD 20,600 Words: 578 Item ID: Page 1 of 2 CBA in property tech play Bank, partners win $1.6bn Pexa bid JEFF WHALLEY DEALS A GROUP of big finance companies including the Commonwealth Bank has seized control of a major technology business that plays a leading role in property settlements. The CBA, Link Administration Holdings and a division of US investment bank Morgan Stanley have secured a majority stake in Property Exchange Australia, or Pexa. It comes after the consortium tabled a revised bid for Pexa last week, still valuing the company at about $1.6 billion but, according to market speculation, carrying fewer conditions. The bank and Link already had major stakes in Melbournebased Pexa and are increasing their holdings significantly. An industry source said the CBA s move could be a precursor to a more such deals under chief executive Matt Comyn, who took the reins of the group in April. The bank, Australia s biggest, is poised for a windfall as it offloads about $8 billion worth of businesses in sectors such as wealth management and mortgage broking amid the fallout from the financial services royal commission. Any future acquisitions are likely to be in the group s core market of retail banking, or aimed at strengthening its online offering, Business Daily believes. An electronic property settlement exchange, Pexa was founded eight years ago in response to the Council of Australian Governments push for a single, national e-conveyancing service for the property industry. It allows members such as lawyers, conveyancers and financial institutions to lodge documents with land registries and complete property settlements electronically. Other key shareholders in the unlisted company include the Victorian, New South Wales and West Australian state governments, the other three major banks, investment bank Macquarie and Paul Little, the former head of logistics group Toll and Essendon Football Club chair. It was unclear last night which investors had agreed to accept the consortium s offer, enabling the CBA and Link, with Morgan Stanley Infrastructure Partners, to lift their combined holding above 50 per cent. The deal comes after Pexa abandoned plans for an initial public offering, amid choppy share markets and a lack of support among would-be institutional investors.

20 Herald Sun, Melbourne Author: Jeff Whalley Section: Business News Article type : News Item Classification : Capital City Daily : 303,140 Page: 26 Printed Size: cm² Region: VIC Market: Australia ASR: AUD 20,600 Words: 578 Item ID: Page 2 of 2 In a statement yesterday, Link said the deal gave Pexa an enterprise value a tally that includes debt of up to $1.6 billion. The CBA will invest a further $50 million in the exchange, taking its total investment to $100 million and increasing its stake from 13.1 per cent to about 16 per cent. Link s will lift its stake from 19.8 per cent to between 27 per cent and 44 per cent. Mr Comyn said the transaction was in line with the CBA s strategy of focusing on its core banking businesses and to create a simpler, better bank for our customers. The CBA, like most of the major banks, is retreating from the financial advice and wealth management industry after a series of scandals. Earlier this year, the bank completed the sale of its CommInsure life insurance operation to Hong Kong-based AIA for $3.8 billion. The CBA last week announced it had struck a deal to sell its Colonial First State Global Asset Management business to Japanese bank Mitsubishi UFJ Trust and Banking Corporation. Pexa chief Marcus Price yesterday noted his company played a role in more than half of all property settlements nationwide. The sale of the business comes at a natural time in the company s evolution, to both crystallise a return for shareholders and to transition to a new aligned ownership base, Mr Price said in a statement. jeff.whalley@news.com.au

21 Herald Sun, Melbourne Author: Terry McCrann Section: Business News Article type : News Item Classification : Capital City Daily : 303,140 Page: 26 Printed Size: cm² Region: VIC Market: Australia ASR: AUD 24,987 Words: 963 Item ID: Page 1 of 2 Betting on the Packer profit maxim TERRY McCRANN THERE S an old rule of thumb that tended to work very well. If the late Kerry Packer was selling it was unwise to be the buyer. The opposite also applied. Just as he was emphatically on the very public record that he was not inclined to overpay his taxes, he was certainly not inclined to overpay for assets. The most famous, but not the only, example of both was of course with the same asset: what used to be known as if the two were fused together as the Packers Nine Network when he sold it to the late Alan Bond and subsequently bought it. Well, the entrepreneurs of the 80s have all long since gone to the great trading room in the sky. But the rule of thumb is still very much alive in the 21st century; it now applies to private equity. If they are buying be exceedingly careful at selling at their offer price. If they are selling be even more careful at buying. Two graphic examples that spring to mind are Treasury Wine Estates and Myer. In 2014, the original and arguably still the best PE group, the famed KKR, launched a bid for TWE. It was even prepared to increase its offer after the first knock but the TWE board stood firm in rejection. KKR offered what to some seemed an attractive $5.20 a share. But TWE is now trading at more than three times that around $15.80 and that s after its share price has taken quite a hit in the recent market turmoil. The opposite example is Myer. In 2009, a private equity group sold it to public shareholders at a little less than double the price it had paid to take it private three years earlier. The PE Group sold the Myer shares at $4.10. The buyers, who were either unaware of that maxim or chose to ignore it, are now holding shares worth barely a tenth of that, around 47c. So now we have a PE group, BGH, wanting to buy private hospital group Healthscope at $2.36 a share. On the assumption that BGH is not Santa come early, shareholders should be wary. Further, BGH has joined with Healthscope s biggest shareholder, the industry super fund AusSuper, to make its play. Again, AusSuper only became a big shareholder because it self-evidently sees considerable upside in Healthscope shares. It has effectively stated that it believes they are still good buying at the $2.36 it and BGH propose or purport to pay. This is an absolutely critical point: BGH/AusSuper have not made an offer and do not intend to make an offer to Healthscope shareholders; they are asking the board of Healthscope to decide to sell the company to them (perhaps) at that price. They are asking the board to commit to a scheme of arrangement; something only a board can commit a company to do. They are also asking the board to abandon its own strategy, which self-evidently it believes is in the best interests of all shareholders and would deliver them the best value for their shares. They also want the board to allow them due diligence essentially, exposing its financial soul after which they might commit to the $2.36, but only by the scheme process, which has the board doing the takeover work for them. The board, led by Paula Dwyer, has, therefore, two separate decisions to make. First, will it allow due diligence? It refused to do so when BGH/AusSuper made its first play in April. The second is whether it would subsequently commit the company to go down the scheme route. On the surface allowing the first does not commit the board to also agreeing the second. But it would certainly put great pressure on the board, once expectations built up. The board is under no obligation to allow due diligence. It has to make a considered judgment of what s

22 Herald Sun, Melbourne Author: Terry McCrann Section: Business News Article type : News Item Classification : Capital City Daily : 303,140 Page: 26 Printed Size: cm² Region: VIC Market: Australia ASR: AUD 24,987 Words: 963 Item ID: Page 2 of 2 in the best interests of all shareholders. It has self-evidently concluded that separating the hospital properties into a partly owned and controlled property trust and the strategic and operating decisions it and management have made for the hospitals business will deliver better value over the long-term to shareholders than the $2.36 upfront, as it continued with that strategy after the first approach from BGH/ AusSuper. The problem it faces is that private hospitals have hit headwinds and investors have been underwhelmed by the strategy; that despite the clear continuing interest of the bidding group, the Healthscope shares fell sharply below the $2.36 and even now are struggling to stay above $2. It is entirely and properly the decision of the board to make, whether to allow due diligence and then subsequently whether to agree to recommend a scheme. It s both its right and its responsibility: that s exactly what directors are elected and paid to do. BGH/AusSuper can t complain because they chose to go this route. They are equally entirely entitled to launch a conventional takeover. Except that doesn t suit their purpose and they want to shift all the risk onto Healthscope shareholders. Shareholders are of course entitled to sack directors if they wish them to act differently. Last week they had the chance to do so; they chose not to voting 94 per cent to reelect Dwyer and 99 per cent to elect a board-nominated new director. AusSuper abstained. But even if it had voted against her, she would still have won comfortably with a majority well above 70 per cent. In the most explicit way, shareholders have voted to leave the decision to Dwyer and the board. The rule of thumb now applies to private equity. If they are buying be exceedingly careful at selling at their offer price

23 The Australian, Australia Section: Editorials Article type : Editorial Classification : National : 94,448 Page: 15 Printed Size: cm² Region: National Market: Australia ASR: AUD 5,943 Words: 554 Item ID: Page 1 of 1 FOR THE INFORMED AUSTRALIAN ASIC should not be a cash cow Businesses and customers expect regulation, not taxation Small business has every reason to feel ripped off by the high fees and poor service being delivered by Australia s corporate regulator, the Australian Securities & Investments Commission. In a case of bureaucracy gone mad, during the past two decades ASIC s profit margins have doubled as its performance as the regulator has sunk to a level that can be described only as an embarrassing scandal. The banking royal commission has exposed ASIC s dismal record when it comes to holding the big end of town to account. But while bankers have been getting away with continuing to bill dead clients and charge fees for services that were not provided, small business has been plundered for the funds to beef up general government revenues through an initiative-sucking regime of hidden taxation. Analysis by this newspaper s Anthony Klan has exposed how revenues raised by ASIC for the federal government have ballooned from 1.5 times the cost of operating in 1993 to more than 3.5 times the regulator s cost of doing business today. ASIC s annual report shows it raised $761 million in fees charged to business, mainly for its databases; $155m in fines (driven by penalties for late payments of those fees); and $64m charged to the public to access its public business registry databases. The total for those fees, which have been growing about three times the rate of inflation for the past decade, comes to $980m before accounting for new user-pays levies that were introduced last year and takes the overall tally to $1.227 billion. Simultaneously, as costs to business have been rising, the service delivered by ASIC has been in precipitous decline. During the past 20 years the number of white-collar criminals jailed by ASIC has fallen by almost 80 per cent, from 26 in 1998 to five this year. Investigations have halved across the same period from 215 to 126. It would be pleasing to think that the fall in the number of investigations and prosecutions might actually reflect the workings of a well-functioning and effective business regime. However, evidence from the banking royal commission gives little suggestion that this is the case. There is no comfort to be drawn from these statistics, and the apparent lack of concern from what is supposed to be a business-friendly Coalition government is equally worrying. Assistant Treasurer Stuart Robert appears to be satisfied with the profitdriven nature of ASIC s fee for service. Robert sees no nefarious intent in a system that appears to have proceeded largely unchecked as it has gone about raising funds while failing in its core duties. The community is right to demand that more be done to stamp out the illegal activity and market abuses exposed by the banking royal commission. The answer must lie not only in more investigations and a higher number of costly prosecutions but in clarity about the funding model and acceptance that business is getting good value for money. ASIC provides a necessary function but appears to have forgotten the key business lesson of delivering customer service. ASIC should be an aid to small business, not a burdensome cost impost. For government, cutting tax to boost the business sector should be the priority, rather than allowing new avenues to stifle enterprise, build bureaucracies and raise additional funds through hidden imposts.

24 The Australian, Australia Author: Michael Roddan Section: General News Article type : News Item Classification : National : 94,448 Page: 4 Printed Size: cm² Region: National Market: Australia ASR: AUD 8,670 Words: 582 Item ID: Page 1 of 1 Low-paid the losers if super levy lifts to 12pc MICHAEL RODDAN Forcing Australians to lock away 12 per cent of their wages into superannuation will cost the budget an extra $2 billion a year, hurt low-income workers and fail to drive a meaningful increase in retirement incomes, the Grattan Institute says. In a scathing review of the $2.7 trillion super sector, the Melbourne-based think tank urged the government and Labor to dump the planned increase in the super guarantee from 9.5 per cent to 12 per cent, arguing the financial services fear factory has overblown claims the current rate of nest-egg contributions is inadequate for a decent retirement. Analysis led by Grattan Institute chief executive John Daley and senior fellow Brendan Coates skewers the flawed assumptions used by the well-heeled funds management industry to convince politicians to force Australians to lock away more money in savings. The institute said retirees were not being left high and dry in their twilight years. Rather, the average retiree would receive an income of at least 91 per cent of their preretirement salary under current savings rates, well above the 70 per cent benchmark recommended by developed economies. Putting more wages away in super would mainly boost the retirement incomes of already wealthy Australians at a significant cost to the budget, it said. The report finds that ending feegouging and driving better fund performance, or increasing the retirement age to 70, would result in far higher retirement incomes for all workers at the same time as taking pressure off the budget. Low-income Australians who don t own their homes, a growing cohort who are failed by the way the current super system is set up, would also be best served by a 40 per cent increase in rent assistance rather than sidelining even more of their salary into super, where meagre contributions are swallowed up by fees. The findings are an attempt to derail bipartisan government plans to throw even more money at the system by raising the super guarantee to 12 per cent by The super sector, bludgeoned by the Productivity Commission for siphoning cash out of member savings through entrenched feegouging and sloppy performance, has been campaigning for an even higher rate of 15 per cent. The financial services industry fear factory should be shut down, Mr Daley said, as he called for super tax breaks and age-based concessions, which already cost about $35bn a year, to be reined in. While more money going into super funds would be a huge windfall for wealth managers, the government would lose significantly more amounts of revenue due to generous tax breaks built into the super system. Treasury modelling in 2013 found the government would continue to lose revenue through concessional tax breaks than it saved in keeping self-funded retirees off the pension. Increasing the super guarantee rate to 12 per cent will result in the total super tax breaks adding more than 10 per cent to the nation s debt by Unless governments have the courage to make these reforms, future budgets will not be able to fund aged care and health at the same level, Mr Daley said. The government would be better off making the super industry cut fees and boost returns. GOING TO 12 PER CENT How much lifting the super guarantee costs the budget Per cent of GDP Super guarantee was scheduled to increase 0.6 Expenses 0.4 saving Net annual fiscal effect Taxes lost Sources: Cooper Review, Treasury, Grattan analysis

25 The Australian, Australia Author: Adam Creighton Section: General News Article type : News Item Classification : National : 94,448 Page: 4 Printed Size: cm² Region: National Market: Australia ASR: AUD 4,528 Words: 373 Item ID: Page 1 of 1 Grattan got it right: this idea is a stinker for ordinary Aussies ADAM CREIGHTON COMMENT There s no government policy with more powerful ing than compulsory superannuation in Australia. In what other area are the union movement and financial services in lock step? The sheer number of bodies that exist to perpetuate the myth that lifting the superannuation guarantee from 9.5 per cent to 12 per cent is a good idea should ring alarm bells. For the ordinary Australian, it s the worst idea going around. The Grattan Institute deserves credit for calling out the some of the tendentious and outright falsehoods the industry peddles to trick the public into thinking forcibly diverting their wages into accounts to which they largely pay little attention is good for them. It s certainly good for the industry, those flows helping fund the Financial Services Council, the Association of Super Funds Australia, the Industry Super Network, the Institute for Superannuation Trustees, the SMSF Association, and the Australian Council of Trade Unions. Indeed, the wider law and accounting fraternity and countless academics with super research grants benefit from the fiendishly complex system. Grattan notes the oft-cited retirement savings crisis is rubbish. Arguments to the contrary typically ignore housing wealth amassed by retirement age, or assume ridiculously high rates of income for a comfortable retirement. Second, Grattan strongly advises against lifting the compulsory rate. It s extraordinary given the rational case against compulsory superannuation that both major political parties have agreed to legislate to increase the compulsory rate from 9.5 per cent to 12 per cent by Increasing the rate costs the government a rising number of billions each year in forgone tax revenue because super contributions, compulsory and voluntary, are taxed at a flat rate of 15 per cent. For higherincome earners the system is a form of relief from excessively high marginal income tax rates. But as Grattan points out, for low-income earners compulsory super is particularly damaging because it saps working-age consumption opportunities. Grattan shied away from the real elephant in the room though: whether compulsory super passes a cost-benefit analysis at all. The dirty secret of policy making is that the tax concessions cost the government far more than any forecast reduction in future Age Pension outlays, meaning income tax for everyone could be lowered significantly if the project were disbanded.

26 Herald Sun, Melbourne Author: Rob Harris Section: General News Article type : News Item Classification : Capital City Daily : 303,140 Page: 13 Printed Size: cm² Region: VIC Market: Australia ASR: AUD 13,770 Words: 409 Item ID: Page 1 of 1 Easy living for retired Push to limit tax breaks and pension payments ROB HARRIS RETIREES are likely to be much more financially comfortable than dire warnings suggest, a new report says. But it won t be so rosy for low-income-earners who rent a growing problem as home ownership rates decline among the young generation. The Grattan Institute s Money in retirement: More than enough found retirees are less likely than working-age Australians to suffer financial stress, such as not being able to pay a bill on time, and are more likely to be able to afford annual holidays. It found the average worker today can expect a retirement income of at least 91 per cent of pre-retirement income well above the 70 per cent benchmark used around the world. It forecasts the next generation of retirees were likely to be even better off because of a combination of compulsory super contributions, non-super savings, and the age pension. The financial services industry fear factory should be shut down, because it encourages Australians to worry unnecessarily about whether they ll have enough to retire on, Grattan Institute chief executive John Daley said. But he warned the retirement incomes system was not working for low-income Australians who rent a problem that will become increasingly troublesome as home ownership rates decline. To boost retirement incomes for the poorest Australians, the institute s report calls for: AN INCREASE of 40 per cent in the maximum rate of federal rent assistance, worth $1400- plus a year for a single retiree; SCRAPPING of the legislated and bipartisan plan to increase compulsory superannuation contributions from 9.5 per cent to 12 per cent, saving the Budget about $2 billion a year; REDUCING superannuation tax breaks and age-based tax breaks to ensure the retirement incomes system does not become an excessive burden on future budgets; and INCLUDING the value of a home above a threshold in the age pension assets test. Unless governments have the courage to make these reforms, future Budgets will not be able to fund aged care and health at the same level as today, Mr Daley said. Easing concerns over the building of huge nest eggs, the report found many low-income Australians would get a pay rise when they retired, through a combination of the pension and their super. He said Australians tended to spend less after they retired, and even less into old age. While their medical costs increase, these were still largely covered by the taxpayer, Mr Daley said. rob.harris@news.com.au

27 Daily Telegraph, Sydney Section: Letters Article type : Letter Classification : Capital City Daily : 232,067 Page: 24 Printed Size: 13.00cm² Region: NSW Market: Australia ASR: AUD 614 Words: 138 Item ID: Page 1 of 1 Inequality here to stay A reader states that Bill Shorten is out to divide Australians. But, is he? Once people bought a house to live in. Now, it s become an investment portfolio encouraged by the government and helped along by negative gearing, creating exorbitant rents to young families. We used to have permanent jobs with increased wages, not part-time work with wage cuts. Our electricity bills were low because the power distribution system was Australian owned. Superannuation and share portfolios exist because of full-time work. In almost six years, the Liberal government has not implemented any policies that will reduce social inequality, which is why we have more than 2.5 million Australians living in poverty. So is Mr Shorten really about divide-and-rule, which already exists, or is he just trying to create an even playing field? Kenny Butler, St Helens Park

28 Daily Telegraph, Sydney Author: Terry McCrann Section: Business News Article type : News Item Classification : Capital City Daily : 232,067 Page: 27 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 7,041 Words: 302 Item ID: Page 1 of 1 Betting on the Packer profit maxim at Healthscope TERRY McCRANN There s an old rule of thumb that tended to work very well. If the late Kerry Packer was selling it was unwise to be the buyer. The opposite also applied. Just as he was emphatically on the very public record that he was not inclined to overpay his taxes, he was certainly not inclined to overpay for assets. The most famous, but not the only, example of both was of course with the same asset: what used to be known as if the two were fused together as the Packers Nine Network when he sold it to the late Alan Bond and subsequently bought it. Well, the entrepreneurs of the 80s have all long since gone to the great trading room in the sky. But the rule of thumb is still very much alive in the 21st century; it now applies to private equity. If they are buying be exceedingly careful at selling at their offer price. If they are selling be even more careful at buying. So now we have private equity group BGH wanting to buy private hospital group Healthscope at $2.36 a share. On the assumption that BGH is not Santa come early, shareholders should be wary. Further, BGH has joined with Healthscope s biggest shareholder, the industry super fund AusSuper, to make its play. This is an absolutely critical point: BGH/AusSuper have not made an offer and do not intend to make an offer to Healthscope shareholders; they are asking the board of Healthscope to decide to sell the company to them (perhaps) at that price. The board led by Paula Dwyer has, therefore, two separate decisions to make. First, will it allow due diligence. The second is whether it would subsequently commit the company to go down the scheme of arrangement route.

29 Daily Telegraph, Sydney Author: Jonathon Moran Section: General News Article type : News Item Classification : Capital City Daily : 232,067 Page: 22 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 69,792 Words: 453 Item ID: Page 1 of 5 A-LIST ROCKS OUT WHILE WORTHINGTON SHOWS OLD-SCHOOL STYLE AS SHE DODGES MEDIA DESPITE MELBOURNE CUP VISIT FOR U.S. DATING APP Tover, but dried up just long enough for the big race yesterday although A-list guest Lara Worthington was still a dampener. Torrential rain caused flash flooding and transport delays but worse yet, left hair drenched and outfits soggy as bedraggled VIP guests flocked to the Birdcage for annual Melbourne Cup festivities at Flemington Racecourse. Sensible Sunrise anchor Sam Armytage swapped high heels for flats. I am an Adaminaby girl so I can handle the rain and the wind and the cold. It is a shame but it s OK. It is very wet though, Armytage said. Dating app Bumble s big celebrity guest Lara Worthington was also a bit of a damp squib minders keeping Sam Worthington s wife well away from media. Strange given her trip would have cost more than $100,000. Melbourne s Spring Racing Carnival has been lacking in star power this season which has lacked the wattage of previous years when the likes of superstars Chris Hemsworth, Hilary Swank and Nicole Kidman shone bright in the Birdcage. Still, legendary singer Dionne Warwick belted out a couple of tracks in the One Oak marquee and Sam Smith sang ahead of the big race. And Megan Gale, Edwina Bartholomew, Havana Brown, Rachael Finch, Jodi Anasta, Colin Fassnidge and Matt Preston were all on hand, as was Julie Bishop. Dhakota Williams, daughter of slain Melbourne gangland figure and drug dealer Carl Williams, was a surprise guest, spotted in the crowd as Havana Brown deejayed in the Birdcage. This year marked a change in the Birdcage, with Myer and Emirates out, and Lexus in, with Megan Gale as its guest of honour although her fouryear-old son River is no fan of his mum s glam look. when he sees me with makeup on. He prefers mummy with no makeup, and when I get home I ve got to take it off right away, she explained. He likes me au naturel, which is a lovely quality. I ll encourage him as a young man to always have that view. Also mingling in the Lexus marquee was Australia s richest woman, iron ore billionaire Gina Rinehart surrounded by security. While politicians were dotted about, there was an absence of financial sector powerbrokers. Observers said it would have been a bad look amid the rip-off revelations of the banking royal commission.

30 Daily Telegraph, Sydney Author: Jonathon Moran Section: General News Article type : News Item Classification : Capital City Daily : 232,067 Page: 22 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 69,792 Words: 453 Item ID: Page 2 of 5

31 Daily Telegraph, Sydney Author: Jonathon Moran Section: General News Article type : News Item Classification : Capital City Daily : 232,067 Page: 22 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 69,792 Words: 453 Item ID: Page 3 of 5 Jodi Anasta rocks out the Mumm Space Odyssey marquee at the Melbourne Cup yesterday. Picture: Alex Coppel

32 07 Nov 2018 Daily Telegraph, Sydney Author: Jonathon Moran Section: General News Article type : News Item Classification : Capital City Daily : 232,067 Page: 22 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 69,792 Words: 453 Item ID: Page 4 of 5 Lara Worthington. Nick Cummins. Sam Armytage. Elyse Knowles. Michelle Payne. Nadia Fairfax. Kris Smith. Rachael Finch.

33 Daily Telegraph, Sydney Author: Jonathon Moran Section: General News Article type : News Item Classification : Capital City Daily : 232,067 Page: 22 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 69,792 Words: 453 Item ID: Page 5 of 5 Julie Bishop & David Panton. Rachel Griffiths. Sam Smith. Lauren Phillips.

34 The Australian, Australia Author: Glenda Korporaal Section: Business News Article type : News Item Classification : National : 94,448 Page: 27 Printed Size: cm² Region: National Market: Australia ASR: AUD 19,475 Words: 904 Item ID: Page 1 of 3 China market a heady mix of challenges and opportunities GLENDA KORPORAAL It has been a big week for Australian business in China, with almost anyone who is anyone in the Australia-China business scene in Shanghai for President Xi Jinping s massive import expo. Trade Minister Simon Birmingham s first visit to China was given an added impetus with the unexpected news that it will be quickly followed by tomorrow s visit to Beijing by Foreign Minister Marise Payne, the first by an Australian foreign minister to China since February Executives in Shanghai this week include Fortescue Metals chief Elizabeth Gaines, Australia Post CEO Christine Holgate, Tourism Australia boss John O Sullivan, and Blackmores chief executive Richard Henfrey and director Marcus Blackmore. Queensland Premier Annastacia Palaszczuk is here, along with members of the Queensland Ballet, which begins a China tour in Shanghai on Friday night. Former Victorian premier John Brumby is here in his role as president of the Australian China Business Council and is also representing the Victorian government, which is now in caretaker mode given its upcoming election, as is a range of state government ministers. Add in representatives from a host of other companies including Coles, Woolworths, BHP, Rio, a2 Milk and Treasury Wine Estates, as well as Patrick Hutchinson, chief executive of the Australian Meat Industry Council, former Trade Minister Andrew Robb, who is now a China business consultant, Australia s Ambassador to China Jan Adams, and Longtable Group chief executive Laura McBain not to mention representatives from AFL teams Port Adelaide and St Kilda, which will clash in Shanghai next June and it has been a heady mix. The Australian also got to meet a Chinese-born beekeeper who is now living in Western Australia exporting his honey to China. And today Birmingham will witness several major memorandums of understanding between Australian and Chinese companies for deals estimated to be worth $15 billion. After more than a year of tensions in the political relationship, tensions that have concerned the Australia-China business community, there has been a sense of relief in Shanghai this week that Australian companies can get on with doing business. For those in the Australia- China business sector which is now worth more than $US180bn ($250bn) in two-way trade in goods and services the tone of the political relationship between the governments does matter. Business is now hoping that the visits by Birmingham and Payne could be followed one by Scott Morrison, hopefully fitting it into the Prime Minister s busy diplomatic schedule between now and the end of the year. The improving political relationship is welcome, although it is still apparent Beijing-Canberra ties will continue to face challenges given a more security-conscious new world order. There are many opportunities for business in China in a range of areas from mining, food and beverage, healthcare products, tourism and education. But it should not be forgotten that doing business in China still remains sheer hard work. The latest Doing Business in China report released yesterday by the Australia China Business Council and the China-Australia Chamber of Commerce in China (AustCham) should be read by any company doing business in China or thinking about it. Its survey of 165 companies doing business with China moves away from the 1.2 billion people, booming middle class rhetoric and drills down into the serious day-to-day challenges facing companies doing business in the world s second-largest economy. The report makes clear that business ties do have the potential to be affected by future political tensions. In addition to rising wages, increasing inflation, talent shortages, the prospect of a slowing economy, changing regulations and increasing attention from government authorities and the opaqueness of many upcoming legislative changes in China are all part of the challenges for anyone doing business here. The market is probably the most competitive in the world with world s best practice suppliers from North America, Europe and the rest of Asia all furiously pitching their wares to one of the world s biggest consumer markets along with increasingly sophisticated Chinese companies. It s a tough, stressful business, which needs close attention and serious boots on the ground. As AustCham Beijing chairman, KPMG China s Vaughn Barber, put it in the report: Sometimes it seems there are two stories about the Australia-China relationship. One is a story of promise and opportunity; the other a narrative of challenge and suspicion. Australian investors, executives and observers need to recognise that China is not a pot of gold at the end of a rainbow nor easy pickings. Along with its massive opportunities come serious business difficulties and the challenge of dealing with an opaque one-party government system that operates to the beat of its own drum. All that said, as the report shows, most of the companies surveyed see their China business as

35 The Australian, Australia Author: Glenda Korporaal Section: Business News Article type : News Item Classification : National : 94,448 Page: 27 Printed Size: cm² Region: National Market: Australia ASR: AUD 19,475 Words: 904 Item ID: Page 2 of 3 both an important source of potential growth and their most important offshore market. Things have moved on in the Australia-China relationship in a positive way this week, but Xi s massive import expo also highlights the fact that there are at least 80 other countries fiercely determined to do business in China that have also had country pavilions at the Shanghai expo. Xi has made it clear he intends to continue to open up the China market to foreign businesses. For Australia, developing a realistic understanding of both the challenges and opportunities of doing business with our largest trading partner in a more complex world political and economic order will be the key to the country s future economic success.

36 The Australian, Australia Author: Glenda Korporaal Section: Business News Article type : News Item Classification : National : 94,448 Page: 27 Printed Size: cm² Region: National Market: Australia ASR: AUD 19,475 Words: 904 Item ID: Page 3 of 3 KRYGSMAN S VIEW

37 The Australian, Australia Author: James Kirby Section: Business News Article type : News Item Classification : National : 94,448 Page: 26 Printed Size: cm² Region: National Market: Australia ASR: AUD 5,634 Words: 501 Item ID: Page 1 of 1 Smaller SMSFs may be surprise performers: PC JAMES KIRBY WEALTH EDITOR A move to impose a minimum balance on self-managed superannuation funds has been dealt a blow with new research from the Productivity Commission revealing SMSFs may be cheaper and better performing than previously suggested. A supplementary paper issued by the PC as part of its wider review of super has found that alternative measures of performance would lift the measured returns for funds under $500,000 by 1.2 per cent and by up to 17 per cent for funds under $50,000. Importantly, the PC has also allowed that individual funds can perform well with what are deemed as smaller balances of less than $500,000. In 2016, about 42 per cent (more than 200,000) of SMSFs appear to be in this category (older than two years and balances less than $500,000), says the report. That said, this need not imply that all SMSFs with balances under $500,000 are generating poor net investment returns. Averages conceal variation, and so some SMSFs within this group may well have lean costs and high net returns. The PC s re-examination of SMSFs included new framing of figures from the Australian Taxation Office and the Australian Prudential Regulation Authority along with data supplied by Class, the SMSF software specialist. Class rejected a draft PC report in April that said bigger funds were outperforming SMSFs. It suggests SMSFs outperform bigger APRAregulated funds. Although the picture for SMSFs has improved in the reexamined set of statistics, for investors looking at starting a SMSF it is clear from the original and supplementary PC report that less money in a fund means higher expenses that will drag on net returns. But there is little evidence yet that recent headwinds faced by SMSFs sparked any rush to close down funds. As the report explains: Wind-up rates are generally low, with about 1.9 per cent of SMSFs wound up in 2016 (ATO 2018), although rates are around 10 per cent for small SMSFs. The report also throws light on the wide range of investment performance that would be expected from a wide range of individual funds. The average amount used for starting up new funds has been $390,000 a figure that most likely may have served as a starting point for setting any new minimum level for SMSFs. (The Australian Securities & Investments Commission raised the idea of a minimum balance at a recent parliamentary committee.) The report also shows that SMSF operators are getting younger. The strongest category growth for those starting new funds has been in the age bracket, a pattern that has pulled the median age for trustees of new SMSFs down to 47.2 years, compared to 58 years for all SMSFs. Competing with the idea of a minimum balance for SMSF commencements is the notion of an investor-education test that would assess the ability of potential SMSF trustees to understand the basics of investment. ASIC and other regulatory agencies have been reviewing the potential credentials of SMSF trustees in tandem with a review of qualifications for financial advisers.

38 Courier Mail, Brisbane Section: Business News Article type : News Item Classification : Capital City Daily : 135,007 Page: 47 Printed Size: 96.00cm² Region: QLD Market: Australia ASR: AUD 1,686 Words: 213 Item ID: Page 1 of 1 CBA venture grabs e-property firm Pexa A GROUP of big finance companies including the Commonwealth Bank has seized control of a major technology business that plays a leading role in property settlements. The CBA, Link Administration Holdings and a division of US investment bank Morgan Stanley have secured a majority stake in Property Exchange Australia, or Pexa. It comes after the consortium tabled a revised bid for Pexa last week, still valuing the company at about $1.6 billion but carrying fewer conditions. The bank and Link already had major stakes in Pexa and are increasing their holdings significantly. An industry source said the CBA s move could be a precursor to more such deals under chief executive Matt Comyn. The bank is poised for a windfall as it offloads about $8 billion worth of businesses in sectors such as wealth management and mortgage broking amid the fallout from the financial services royal commission. An electronic property settlement exchange, Pexa was founded eight years ago in response to the Council of Australian Governments push for a single, national e-conveyancing service for the industry. It allows lawyers, conveyancers and financial institutions to lodge documents with land registries and complete property settlements electronically. Mr Comyn said the transaction was in line with the CBA s strategy of focusing on its core banking businesses.

39 Courier Mail, Brisbane Author: Steven Scott Section: General News Article type : News Item Classification : Capital City Daily : 135,007 Page: 18 Printed Size: cm² Region: QLD Market: Australia ASR: AUD 3,706 Words: 286 Item ID: Page 1 of 1 Super idea to work to 70 Report urges an increase in pay not nest eggs STEVEN SCOTT MOST Australians would be better off if the Government dumped plans to increase superannuation and lifted the retirement age to 70. The surprising findings are contained in a study of retirement incomes by the Grattan Institute, which warned employees would lose pay rises as super contributions increase to 12 per cent by 2025 when most full-time workers will already lead comfortable lives in retirement. Lifting the compulsory super guarantee would reduce wages today and do little to boost the retirement incomes of many low-income workers, the report said. It would effectively compel most people to save for a higher living standard in retirement than they enjoy during their working lives. The federal Budget faces a $2 billion-a-year hit once super contributions start phasing in from 2021 because of lower tax rates on retirement savings, the report warns. Tax receipts would be higher and employees would have greater spending power if the planned increases flow into pay packets instead of superannuation funds. Pensions are likely to rise by less if super contributions rise because the payments are linked to wage rises, the report found. The people who should be campaigning against an increase to the superannuation guarantee are pensioners, Grattan chief John Daley told The Courier-Mail. Using ABS and Treasury data, the report found that former prime minister Tony Abbott s plan to increase the pension age from 67 to 70 would make more difference than almost any other policy change to economic growth and to budget outcomes. But it called for a beefed-up pension for people aged over 60 who struggle to find work after losing their jobs or because they work in tough manual roles.

40 Sydney Morning Herald, Sydney Author: Ross Gittins Section: General News Article type : News Item Classification : Capital City Daily : 88,634 Page: 22 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 47,803 Words: 934 Item ID: Page 1 of 3 The Great Super Lie exposed Worried about retirement? Don t let the superannuation industry scare you, writes Ross Gittins. Some years ago I went to an investment adviser, gave him my financial details and asked if I had enough super to do me in retirement. He didn t answer, just laughed. I think he thought that someone with my amount of savings shouldn t have needed to ask. Truth is, no matter how high or low the standard of living we re used to, just about all of us worry that we haven t saved enough to keep it going in retirement. No matter how much we ve put away, it s only human to feel a twinge of guilt that we could have saved more. And how much is enough? The superannuation industry has spent decades convincing us that our savings are inadequate, and pressing the government to raise the rate of compulsory super contributions. The retail super funds run by the banks keep doing this, but so do the not-forprofit industry funds. It was they who persuaded the Rudd government to phase the rate up from 9 per cent of wages to 12 per cent by But now, at long last, a report by John Daley and Brendan Coates, of the Grattan Institute, has hit the headlines exposing the Great Super Lie. In the words of its title, Money in retirement: More than enough. The report s careful and detailed analysis finds that, contrary to everything we ve been told, the vast majority of retirees today, and in future, are likely to be comfortable financially. The institute s own modelling shows that, even after allowing for inflation, most workers today can expect a retirement income of at least 91 per cent of their pre-retirement income. This is way above the 70 per cent level that the Organisation for Economic Co-operation and Development recommends its member countries aim for. But how can reality be so at variance with our perception of it? Because the super and investment advice industries have laboured long and hard to convince us we should be saving more. Why have they done this? Because every extra dollar we save through super, whether voluntarily or compulsorily, is a dollar they get to take a small bite out of every year until we eventually take it and spend it. They call it clipping the ticket. The financial services sector abounds with people who ve thought of another reason to clip our ticket. That s why its top people are the highest paid of them all, the envy of medical specialists and barristers. How have they misled us? As the report explains, by exploiting our inability to anticipate how much we ll need to last us in retirement. ASFA the Australian Superannuation Funds of Australia is the chief offender. It publishes and updates a measure of the minimum amount you ll need at retirement to live at a comfortable standard. If you don t have that much then, by implication, you ll be un-comfortable. Trouble is, it s designed to reflect a lifestyle typical of the top 20 per cent of retirees today. So, in truth, it s telling the bottom 80 per cent they haven t saved nearly enough to have in retirement a standard of living far higher than they ever enjoyed while working. Obviously, when estimating how much you ll need, you have to allow for inflation over the likely period of your retirement. Some in the industry exaggerate this by using the expected growth in wages rather than prices as their inflation measure, knowing that wages grow faster than prices and living standards rise over time. After being misled for so long, you probably find it hard to believe your savings are or will be more than adequate, so let me explain. First, most people will have more income than they realise. Most people will be eligible for a full or part age pension, which is increased in line with wages rather than prices, meaning it grows faster than inflation over time. By now, most people are retiring with a significant amount of super saving. It was always envisaged that most people would retire with some combination of age pension and super. About 80 per cent of people over 65 own their own home (a huge saving) and most also have savings and investments outside the super system. Second, people spend less money in retirement than they used to, and than they expect to. That s why the OECD says you need only 70 per cent of your pre-retirement income to be comfortable. The retired pay less income tax on the same income, whatever it is. They don t make super contributions, they don t have mortgages (though those who rent privately are the big exception to the rule) and they don t

41 Sydney Morning Herald, Sydney Author: Ross Gittins Section: General News Article type : News Item Classification : Capital City Daily : 88,634 Page: 22 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 47,803 Words: 934 Item ID: Page 2 of 3 have kids to support. They eat out less (partly because they have more time to cook), drink less alcohol, spend less on transport (no trips to work) and replace clothing and furniture less often. Medical costs are a lot higher but are largely covered by the government. And it s not just that when you re retired you have less need to spend. It s also that you spend less as you get older. Spending tends to slow when you reach 70, and decreases rapidly after 80. Still not convinced? Get this: surveys show the retired worry less than the working about paying bills, many actually save some of their income and often leave a legacy almost as large as their nest egg on the day they retired. Sounds comfortable to me. Ross Gittins is the Herald s economics editor. The vast majority of retirees are likely to be comfortable.

42 Sydney Morning Herald, Sydney Author: Ross Gittins Section: General News Article type : News Item Classification : Capital City Daily : 88,634 Page: 22 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 47,803 Words: 934 Item ID: Page 3 of 3

43 Sydney Morning Herald, Sydney Author: Jessica Irvine Section: General News Article type : News Item Classification : Capital City Daily : 88,634 Page: 1 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 29,904 Words: 741 Item ID: Page 1 of 2 Push to scrap super increase Jessica Irvine Economics writer Opposition is growing to a looming policy that will force workers to put an extra 2.5 per cent of their salary into superannuation. Amid sluggish wages growth, a new report by the Grattan Institute calls on the federal government to scrap an increase in the existing 9.5 per cent super guarantee, which is scheduled to rise by half a percentage point a year from July 1, 2021, until it reaches 12 per cent in mid Raising the superannuation guarantee to 12 per cent will reduce wages today and do little to boost the retirement incomes of many low-income workers tomorrow, the report said. Despite widespread anxiety, many Australians are set to enjoy higher incomes in retirement than during their working lives, modelling by the Grattan Institute found. The conventional wisdom is that Australians don t save enough for retirement. But this belief, encouraged by the financial services industry fear factory, is mistaken. The vast majority of retirees today andinfuture are likely to be financially comfortable, it said. Current and future retirees on every income distribution rung are, according to the modelling, set to retire with income from superannuation, the age pension and other savings worth at least 70 per cent of their pre-retirement income a common international definition of adequacy. Australians in the bottom 10 per Continued Page 4

44 Sydney Morning Herald, Sydney Author: Jessica Irvine Section: General News Article type : News Item Classification : Capital City Daily : 88,634 Page: 1 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 29,904 Words: 741 Item ID: Page 2 of 2 Growing push to scrap increase in super guarantee From Page 1 cent of income distribution will retire with incomes at 160 per cent of their working-aged incomes. Many low-income Australians will get a rise in pay when they retire, because the age pension and the income they get from compulsory retirement savings will be higher than the wage they received during their working life, the Grattan report said. In the meantime, working-aged households are struggling to pay off their mortgages. Increasing the rate of compulsory super contributions to 12 per cent will simply take away more money from working-aged Australians that could be used to pay 1HERSD1 A004 down the mortgage, potentially leading to larger mortgage debts at retirement that will need to be discharged using superannuation savings at retirement, it said. The proportion of 55- to 64-yearolds who own their homes outright fell from 72 per cent in to 42 per cent in While workers often believe compulsory super contributions are paid by employers out of profits, there is no magic pudding when it comes to superannuation, the report said. Higher compulsory super contributions are ultimately funded by lower wages, which means lower living standards for workers today. Increasing compulsory contributions by suppressing wages growth also inadvertently hurt age pension recipients because their payments were indexed to wages. The main beneficiaries from a higher super guarantee will be high-income workers, who receive a much larger tax concession than low-income workers, the report said. For the bottom half of workers, retirement incomes will not rise materially because lower age pension payments would outweigh the increase in income from savings. Grattan estimates that axing the increase to 12 per cent would save between $2 billion and $2.5 billion a year. The chief executive of the Australian Council of Social Services, Cassandra Goldie, said it was time to revisit the policy. We agree that increasing the super guarantee is hard to justify given the forgone wages have their greatest impact on people with low incomes who need every dollar they earn and they receive little or no benefit from the current tax breaks, Ms Goldie said. We would give priority to fixing tax concessions so that the people who need the greatest help people on low and modest incomes get the greatest benefit. Business Council of Australia chief executive Jennifer Westacott said that at a time of slow wages growth any increases to the guarantee had to be considered carefully. The higher compulsory superannuation contributions are, the bigger impact they have on the living standards and wages of workers today, she said. The super industry is already fighting. A former Treasury official now working for Industry Super Australia, Phil Gallagher, said the Grattan modelling was deeply flawed in some respects, tending to overinflate retirement incomes for lower income workers. Getting the super guarantee to 12 per cent is vital to deliver a decent standard of living for working people who have little scope to save for their retirement outside super, he said. The Rudd government s measure to increase the guarantee has already been twice delayed by the Coalition government.

45 Sydney Morning Herald, Sydney Author: Clancy Yeates Section: Business News Article type : News Item Classification : Capital City Daily : 88,634 Page: 24 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 19,354 Words: 475 Item ID: Page 1 of 1 ASIC wants to be top cop on super beat REGULATION Clancy Yeates The corporate cop would take the lead in policing conduct in the $2.8 trillion superannuation sector under a proposed shake-up by the country s two top financial regulators, after the royal commission exposed gaps in the current system. Responding to the commission s public hearings on super, the Australian Securities and Investments Commission (ASIC) ed changes to the twin peaks model of financial regulation, in place since 1997, as it applies to super. In the current approach, the Australian Prudential Regulation Authority (APRA) is the main regulator on conduct issues under the Superannuation Industry (Supervision) Act. Unlike other parts of finance, such as banking and insurance, ASIC plays a secondary role in consumer protection in super, focusing on issues such as disclosure. APRA, which is mainly concerned with guarding institutions from getting into financial strife, has been criticised by the commission over its reluctance to take enforcement action against superannuation fund misconduct. Submissions from both ASIC and APRA to the commission, published this week, supported a change in the twin peaks model that would give ASIC the lead role in dealing with misconduct in super. ASIC is of the view that an adjustment of ASIC s role to provide ASIC with greater powers in respect of conduct regulation would be appropriate, while making sure not to diminish the ability of APRA to fulfil its role, its submission says. ASIC considers that it could assume an expanded role in the regulation of conduct in the superannuation sector. ASIC said it would need to be given appropriate powers if it had a broader mandate, and it argued current penalties under the SIS Act were inadequate and should be increased, including bigger fines and tougher maximum jail sentences for criminal offences. APRA had not entered into any enforceable undertakings with corporate super trustees in the past decade, it told the royal commission in August, and it had only been to court once since 2008, to disqualify a super director for not being a fit and proper person. APRA s submission also s changes to the law to sharpen and better focus the prudential and conduct mandates of APRA and ASIC in super, making ASIC the primary conduct regulator. ASIC, whose chairman James Shipton will appear before the royal commission this month, said the regulatory environment had evolved significantly since the twin peaks model was devised following the Wallis review of the financial system in Submissions from some of the country s biggest superannuation funds including the Commonwealth Bank s Colonial First State, National Australia Bank, and AMP, also ed greater clarity in the respective roles of ASIC and APRA in super. AMP said that since 1997, the roles of ASIC and APRA in super had become blurred, and this needed to be rectified. Key points Changes urged for the present twin peaks model. AMP seeks clarity on a blurring of regulatory roles.

46 Sydney Morning Herald, Sydney Author: Carolyn Cummins Section: General News Article type : News Item Classification : Capital City Daily : 88,634 Page: 27 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 23,647 Words: 420 Item ID: Page 1 of 2 LONG LEASES Strategic locations the drawcard Investor focus on fast food outlets CAROLYN CUMMINS In the current low interest rate environment, investors are showing considerable interest in fast food outlets that offer long leases and higher yields, according to agents. That attention will turn to the strong western Sydney market at the final Burgess Rawson investment portfolio auction of the year, to be held on December 4. At the October auction, some sites sold on tight yields of around 4.9 per cent as $29 million of commercial property in Queensland, New South Wales and the Australian Capital Territory sold under the hammer. In December, trophy brand named-investments are again a strong feature, with a rare brand-new BP service station and Oporto restaurant at the junction of Cowpasture Road and the M7 in Hoxton Park up for grabs. The property is being marketed by Burgess Rawson agents Michael Gilbert and Rhys Parker. Combined BP and Oporto produce net income of $440,561. Mr Gilbert said the area has seen considerable recent development with a new Bunnings warehouse, a new McDonalds just built and work about to start on a new Aldi supermarket as well as a new drive-thru Guzman y Gomez. Mr Gilbert said these style of properties are attractive to small to medium private individuals and self managed super funds as they offer solid long term leases with popular food chains and recurring rental income. All occupiers are looking to take advantage of the strategic location just metres away from the M7 motorway slip road, Mr Gilbert said. Buyers with residential development in their sights are also expected to compete for a high-profile service station in Sydney s city fringe, one of a portfolio of four Shell-branded service stations just launched to market. JLL has been appointed to sell a 3724sqm service station in Waterloo, along with two more service stations in Greenacre and one in Narellan, on behalf of Funds SA, the South Australian government-owned investment corporation. JLL s Nic Simarro, who is marketing the properties with JLL s Harry Sullivan, said service stations continued to appeal to investors for their long initial leases, strong lease covenants and fixed annual rental increases. A Shell/Coles service station on The Horsley Drive in Smithfield sold recently for $5.4 million on a yield of 5 per cent. Mr Gilbert said a mixed Shell and McDonald s in Northmead sold prior to auction in July but had received more than 150 inquiries.

47 Sydney Morning Herald, Sydney Author: Carolyn Cummins Section: General News Article type : News Item Classification : Capital City Daily : 88,634 Page: 27 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 23,647 Words: 420 Item ID: Page 2 of 2 The BP service station and Oporto restaurant at the junction between Cowpasture Road in Hoxton Park and the M7 is on the market.

48 Age, Melbourne Author: John Collett Section: Money Article type : News Item Classification : Capital City Daily : 83,229 Page: 1 Printed Size: cm² Region: VIC Market: Australia ASR: AUD 13,650 Words: 477 Item ID: Page 1 of 1 Sharemarkets turmoil plays on investors nerves Super & funds John Collett Volatility could be the watchword for sharemarkets around the world for the foreseeable future. And, if so, that would have big implications for not only the direct shareholdings on investors, but also for our retirement savings. About half of the money in the typical default superannuation fund investment option is invested in local and overseas shares. Such a big exposure to shares has worked well over the longer-term. It s the main reason the typical workplace default option has produced an average annual return of 7 per cent over the 10 years to September 30, 2011, figures from researcher Rainmaker Information show. That 10-year number will be lower after the drop on sharemarkets during October, but it will still be a very good number. While anything is possible, including further drops, or sharemarkets that track sideways for an extended time, there are a few things that should be kept in mind. First of all, the months of September and October have more than their fair share of big sharemarket crashes. On the other hand, November and December tend to be better months. Second, the volatility has little to do with Australia. It is mostly to do with the US sharemarket. What has investors in US shares rattled are rising US interest rates and fears of an escalation of the US-China trade war. There is also uncertainly over the outcome of the US midterm elections, the results of which will be known later on Wednesday. It should not be forgotten that the US market has had a terrific run with share prices going up almost in a straight line since the start of 2016 and was overdue for a correction. There are no signs the US is on the brink of recession quite the opposite. One of the reasons the US Fed is increasing interest rates is because the US economy is doing so well. But it is not all about the US. There some notable factors affecting the Australian market, not the least of which is our big four banks are entering a new era. After years of growing their profits the tide is turning, as credit growth is crimped. Their costs on the money they raise from overseas to lend domestically are rising as interest rates overseas rise. And while they are recovering much of those higher costs by increasing the interest rates on mortgages, that decreases the demand for mortgages and slows credit growth. For super fund members, there s no need to panic. Switching from a super fund s balanced investment option, where most people have their money, to an option with less exposure to shares, would convert paper losses into actual losses. Even older super fund members should be reasonably relaxed. And retirees still need to have a substantial exposure to shares to grow their savings in excess of rising prices. NATAGE N001

49 Age, Melbourne Author: Melissa Browne Section: Money Article type : News Item Classification : Capital City Daily : 83,229 Page: 2 Printed Size: cm² Region: VIC Market: Australia ASR: AUD 25,231 Words: 861 Item ID: Page 1 of 2 Five ways your finances may be in trouble Well Heeled Melissa Browne You might look at your bank account after this week and the shenanigans of the Melbourne Cup carnival and think someone stole your credit card. The truth is, our behaviour is not always financially smart. One week is unlikely to derail you financially, but what if you were behaving throughout the year in such a way that you could wind up in financial trouble? And didn t even realise it. This year s HILDA (Household, Income, Labour and Dynamics) report showed fewer than 50 per cent of Australians could answer the five basic financial literacy questions correctly. This suggests to me that we re not necessarily choosing to behave poorly financially it s because we re disinterested, we ve opted out or we re not sure where to start. There are many ways your finances might be in trouble but here are five common ones: 1. Easy access to credit: It s not simply credit cards but the ability to tap and pay, payday loans and the rise of other credit facilities such as Afterpay and Zippay that mean we re able to shop now and defer responsibility. Research consistently shows we spend more when we use credit (at least 10 per cent more) because we don t view it as our money and researchers suspect that percentage will be higher with other credit facilities because we subconsciously view it as monopoly money. If you have more than one card, if you rarely pay off your card every month or if you pay off your card with your savings each month because you ve overspent, then decide not to use credit. Cut up the cards and use a debit card instead. 2. Paralysis by analysis: This might seem like a strange one since when did not doing something mean your finances may be in trouble? There is often so much information when it comes to how we should invest and save that often we throw up our hands because it s too hard. Or if your money identity isn t a spender but rather a hoarder/saver then you may want the stability of money in your bank account and not want to invest it. To everyone else it may seem as though you have your financial life sorted, but you ll start to go wards if you re relying on bank interest only to secure your financial future. That s why I think we need to go to the basics to start understanding why we behave the way we do when it comes to money and to take the time to create a base of basic financial literacy. Once we understand our money story, our relationship with money, our money identity and start to think about what we want out of life we can start to design finances to suit us and our unique money personality. 3. Trying to keep up with the Joneses: The problem today is that the Joneses are no longer living next door but are an influencer on social media you haven t met who are receiving their products for free. Add in a dash of comparison culture, scarcity mentality and the ability to shop 24/7 from our phones and it can be a recipe for financial disaster. My solution? Be sure and excited about the path you are walking and create a financial plan you re motivated to follow for that. Then unfriend, unfollow and find people who inspire you in ways that don t involve you spending to make yourself feel better. 4. You re a wage slave: Too many of us are living off one source of income, spending most

50 Age, Melbourne Author: Melissa Browne Section: Money Article type : News Item Classification : Capital City Daily : 83,229 Page: 2 Printed Size: cm² Region: VIC Market: Australia ASR: AUD 25,231 Words: 861 Item ID: Page 2 of 2 of what we earn and starting again each pay day. Instead, set up your accounts so that you re not eating from the one large bowl but a bunch of smaller bowls. This might include an everyday account, a bills account, a savings account and a splurge account. Automate your income so that it is split between these accounts and then only spend what s in your everyday account on your everyday expenses. Then start figuring out where you can find more streams of income (you want to end up with about six). This might include a side hustle, a part-time job, share investments, super, property and more. 5. You believe the media hype: In a crowded 24-hour news cycle, the articles with the highest clicks sell advertising. Let s be honest good news doesn t sell. Now, if we all had high-levels of financial literacy and could see past the clickbait, we d be fine but that s not the case. That s why we need to cut out the noise much of the time, understand what we want out of life, what our money predilections are and create a financial plan to suit. Then do something about it. Should we be worried about peaks and troughs in the market? Of course. But if you have a long-term plan and you re not closing in on retirement then this shouldn t matter. If you are close to retirement, then find a great financial adviser who isn t tied to commissions and listen to them. Melissa Browne is CEO of A&TA and financial planning firm The Money Barre. Her latest book Unf*ck your Finances is in store now.

51 Age, Melbourne Author: Rakhee Ghelani Section: Money Article type : News Item Classification : Capital City Daily : 83,229 Page: 4 Printed Size: cm² Region: VIC Market: Australia ASR: AUD 23,552 Words: 680 Item ID: Page 1 of 2 My parents help me pay my mortgage Your Money & Your Life Rakhee Ghelani I ve always been fiercely independent, particularly when it came to money. At the age of 15, I got my first job making cappuccinos for the blue-rinse set at the cafeteria at Myer Southland in Melbourne. That job saw me right through my university years until I began full-time work as a graduate at Deloitte. I soon moved into a share house and started squirrelling away a little bit each month with the view to buying a home. Three years later at the age of 25, I did all my sums and decided it was time to take the plunge and get into the property market, but my bank wasn t as enthusiastic. They didn t believe that I could pay off a mortgage on my own and suggested I borrow less money. My parents came to the rescue with an alternative they offered to guarantee my loan. I didn t see this as being anything out of the ordinary or incompatible with my independence. This was just how Indian families supported their children. I was raised to believe the two most valuable assets you could have were a good education and a home to call your own. While education was largely an individual pursuit, the way to achieve the latter was to share the wealth. Before they migrated to Australia, my father s family had pooled its accumulated wealth. Houses were owned jointly and families lived and raised children together in the same household. Property was a communal asset that everyone contributed to so everyone s wealth grew. I thought this was just my family, but when I worked with recent migrants, I realised this was an ethos common to many Asian families. Recent research by Ipsos for Westpac found that Asian families in Australia are more likely to see home ownership as an important family asset than the general population. Asian Australians are also more likely to believe that it s fair that homeowners help their children out when it comes to matters of money. Now well into my 40s and with a much larger home and mortgage, my parents are still giving me a financial boost to help me own my family home quicker. Like many Baby Boomers, they re flush with cash thanks to years of hard work, large superannuation balances and the rules on a minimum pension from superannuation. Forced to withdraw about 6 per cent of their superannuation each year, my father recently complained that he had too much cash and low-interest rates left him at a loss at what to do with it. Knowing that my parents would always be willing to help me reduce my mortgage, I suggested they park their money in my offset account. Offset facilities were unheard of when they were paying off their mortgage so the idea had never occurred to them. After receiving a quick lesson in the benefits of an offset account, my parents transferred a significant sum of money to my account where it has sat for over two years. They ve even added more money to nudge me further down the path of home ownership. Thanks to my parents superannuation pension, the interest bill on my mortgage last month was just $ Now almost every cent of my repayments goes straight to paying off the principal amount. Soon I ll be ready to hand some of my parents hard-earned money. I feel incredibly grateful that my family has been willing and able to help me reduce the burden of my mortgage, but I also feel a twinge of guilt. Some of my friends, most in their 40s with young families, lament that home ownership is something that is still far out of their reach. Some struggle to save for a deposit, while others have resigned themselves to being life-long renters. I know I m one of the lucky ones because home ownership is now within my grasp, but I never would ve got here so quickly if it weren t for my parents and the values they were raised on.

52 Age, Melbourne Author: Rakhee Ghelani Section: Money Article type : News Item Classification : Capital City Daily : 83,229 Page: 4 Printed Size: cm² Region: VIC Market: Australia ASR: AUD 23,552 Words: 680 Item ID: Page 2 of 2 Rakhee Ghelani s parents have parked their savings in her offset account. Photo: Simon Schluter

53 Sydney Morning Herald, Sydney Author: John Collett Section: Money Article type : News Item Classification : Capital City Daily : 88,634 Page: 1 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 17,753 Words: 476 Item ID: Page 1 of 1 Sharemarkets turmoil plays on investors nerves Super & funds John Collett Volatility could be the watchword for sharemarkets around the world for the foreseeable future. And, if so, that would have big implications for not only the direct shareholdings on investors, but also for our retirement savings. About half of the money in the typical default superannuation fund investment option is invested in local and overseas shares. Such a big exposure to shares has worked well over the longer-term. It s the main reason the typical workplace default option has produced an average annual return of 7 per cent over the 10 years to September 30, 2011, figures from researcher Rainmaker Information show. That 10-year number will be lower after the drop on sharemarkets during October, but it will still be a very good number. While anything is possible, including further drops, or sharemarkets that track sideways for an extended time, there are a few things that should be kept in mind. First of all, the months of September and October have more than their fair share of big sharemarket crashes. On the other hand, November and December tend to be better months. Second, the volatility has little to do with Australia. It is mostly to do with the US sharemarket. What has investors in US shares rattled are rising US interest rates and fears of an escalation of the US-China trade war. There is also uncertainly over the outcome of the US midterm elections, the results of which will be known later on Wednesday. It should not be forgotten that the US market has had a terrific run with share prices going up almost in a straight line since the start of 2016 and was overdue for a correction. There are no signs the US is on the brink of recession quite the opposite. One of the reasons the US Fed is increasing interest rates is because the US economy is doing so well. But it is not all about the US. There some notable factors affecting the Australian market, not the least of which is our big four banks are entering a new era. After years of growing their profits the tide is turning, as credit growth is crimped. Their costs on the money they raise from overseas to lend domestically are rising as interest rates overseas rise. And while they are recovering much of those higher costs by increasing the interest rates on mortgages, that decreases the demand for mortgages and slows credit growth. For super fund members, there s no need to panic. Switching from a super fund s balanced investment option, where most people have their money, to an option with less exposure to shares, would convert paper losses into actual losses. Even older super fund members should be reasonably relaxed. And retirees still need to have a substantial exposure to shares to grow their savings in excess of rising prices. 1HERSA1 E001

54 Sydney Morning Herald, Sydney Author: Melissa Browne Section: Money Article type : News Item Classification : Capital City Daily : 88,634 Page: 2 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 32,742 Words: 861 Item ID: Page 1 of 2 Five ways your finances may be in trouble Well Heeled Melissa Browne You might look at your bank account after this week and the shenanigans of the Melbourne Cup carnival and think someone stole your credit card. The truth is, our behaviour is not always financially smart. One week is unlikely to derail you financially, but what if you were behaving throughout the year in such a way that you could wind up in financial trouble? And didn t even realise it. This year s HILDA (Household, Income, Labour and Dynamics) report showed fewer than 50 per cent of Australians could answer the five basic financial literacy questions correctly. This suggests to me that we re not necessarily choosing to behave poorly financially it s because we re disinterested, we ve opted out or we re not sure where to start. There are many ways your finances might be in trouble but here are five common ones: 1. Easy access to credit: It s not simply credit cards but the ability to tap and pay, payday loans and the rise of other credit facilities such as Afterpay and Zippay that mean we re able to shop now and defer responsibility. Research consistently shows we spend more when we use credit (at least 10 per cent more) because we don t view it as our money and researchers suspect that percentage will be higher with other credit facilities because we subconsciously view it as monopoly money. If you have more than one card, if you rarely pay off your card every month or if you pay off your card with your savings each month because you ve overspent, then decide not to use credit. Cut up the cards and use a debit card instead. 2. Paralysis by analysis: This might seem like a strange one since when did not doing something mean your finances may be in trouble? There is often so much information when it comes to how we should invest and save that often we throw up our hands because it s too hard. Or if your money identity isn t a spender but rather a hoarder/saver then you may want the stability of money in your bank account and not want to invest it. To everyone else it may seem as though you have your financial life sorted, but you ll start to go wards if you re relying on bank interest only to secure your financial future. That s why I think we need to go to the basics to start understanding why we behave the way we do when it comes to money and to take the time to create a base of basic financial literacy. Once we understand our money story, our relationship with money, our money identity and start to think about what we want out of life we can start to design finances to suit us and our unique money personality. 3. Trying to keep up with the Joneses: The problem today is that the Joneses are no longer living next door but are an influencer on social media you haven t met who are receiving their products for free. Add in a dash of comparison culture, scarcity mentality and the ability to shop 24/7 from our phones and it can be a recipe for financial disaster. My solution? Be sure and excited about the path you are walking and create a financial plan you re motivated to follow for that. Then unfriend, unfollow and find people who inspire you in ways that don t involve you spending to make yourself feel better. 4. You re a wage slave: Too many of us are living off one source of income, spending most

55 Sydney Morning Herald, Sydney Author: Melissa Browne Section: Money Article type : News Item Classification : Capital City Daily : 88,634 Page: 2 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 32,742 Words: 861 Item ID: Page 2 of 2 of what we earn and starting again each pay day. Instead, set up your accounts so that you re not eating from the one large bowl but a bunch of smaller bowls. This might include an everyday account, a bills account, a savings account and a splurge account. Automate your income so that it is split between these accounts and then only spend what s in your everyday account on your everyday expenses. Then start figuring out where you can find more streams of income (you want to end up with about six). This might include a side hustle, a part-time job, share investments, super, property and more. 5. You believe the media hype: In a crowded 24-hour news cycle, the articles with the highest clicks sell advertising. Let s be honest good news doesn t sell. Now, if we all had high-levels of financial literacy and could see past the clickbait, we d be fine but that s not the case. That s why we need to cut out the noise much of the time, understand what we want out of life, what our money predilections are and create a financial plan to suit. Then do something about it. Should we be worried about peaks and troughs in the market? Of course. But if you have a long-term plan and you re not closing in on retirement then this shouldn t matter. If you are close to retirement, then find a great financial adviser who isn t tied to commissions and listen to them. Melissa Browne is CEO of A&TA and financial planning firm The Money Barre. Her latest book Unf*ck your Finances is in store now.

56 Sydney Morning Herald, Sydney Author: Rakhee Ghelani Section: Money Article type : News Item Classification : Capital City Daily : 88,634 Page: 4 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 31,505 Words: 680 Item ID: Page 1 of 2 My parents help me pay my mortgage Your Money & Your Life Rakhee Ghelani I ve always been fiercely independent, particularly when it came to money. At the age of 15, I got my first job making cappuccinos for the blue-rinse set at the cafeteria at Myer Southland in Melbourne. That job saw me right through my university years until I began full-time work as a graduate at Deloitte. I soon moved into a share house and started squirrelling away a little bit each month with the view to buying a home. Three years later at the age of 25, I did all my sums and decided it was time to take the plunge and get into the property market, but my bank wasn t as enthusiastic. They didn t believe that I could pay off a mortgage on my own and suggested I borrow less money. My parents came to the rescue with an alternative they offered to guarantee my loan. I didn t see this as being anything out of the ordinary or incompatible with my independence. This was just how Indian families supported their children. I was raised to believe the two most valuable assets you could have were a good education and a home to call your own. While education was largely an individual pursuit, the way to achieve the latter was to share the wealth. Before they migrated to Australia, my father s family had pooled its accumulated wealth. Houses were owned jointly and families lived and raised children together in the same household. Property was a communal asset that everyone contributed to so everyone s wealth grew. I thought this was just my family, but when I worked with recent migrants, I realised this was an ethos common to many Asian families. Recent research by Ipsos for Westpac found that Asian families in Australia are more likely to see home ownership as an important family asset than the general population. Asian Australians are also more likely to believe that it s fair that homeowners help their children out when it comes to matters of money. Now well into my 40s and with a much larger home and mortgage, my parents are still giving me a financial boost to help me own my family home quicker. Like many Baby Boomers, they re flush with cash thanks to years of hard work, large superannuation balances and the rules on a minimum pension from superannuation. Forced to withdraw about 6 per cent of their superannuation each year, my father recently complained that he had too much cash and low-interest rates left him at a loss at what to do with it. Knowing that my parents would always be willing to help me reduce my mortgage, I suggested they park their money in my offset account. Offset facilities were unheard of when they were paying off their mortgage so the idea had never occurred to them. After receiving a quick lesson in the benefits of an offset account, my parents transferred a significant sum of money to my account where it has sat for over two years. They ve even added more money to nudge me further down the path of home ownership. Thanks to my parents superannuation pension, the interest bill on my mortgage last month was just $ Now almost every cent of my repayments goes straight to paying off the principal amount. Soon I ll be ready to hand some of my parents hard-earned money. I feel incredibly grateful that my family has been willing and able to help me reduce the burden of my mortgage, but I also feel a twinge of guilt. Some of my friends, most in their 40s with young families, lament that home ownership is something that is still far out of their reach. Some struggle to save for a deposit, while others have resigned themselves to being life-long renters. I know I m one of the lucky ones because home ownership is now within my grasp, but I never would ve got here so quickly if it weren t for my parents and the values they were raised on.

57 Sydney Morning Herald, Sydney Author: Rakhee Ghelani Section: Money Article type : News Item Classification : Capital City Daily : 88,634 Page: 4 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 31,505 Words: 680 Item ID: Page 2 of 2 Rakhee Ghelani s parents have parked their savings in her offset account. Photo: Simon Schluter

58 Canberra Times, Canberra Author: Ross Gittins Section: General News Article type : News Item Classification : Capital City Daily : 17,579 Page: 16 Printed Size: cm² Region: ACT Market: Australia ASR: AUD 16,034 Words: 936 Item ID: Page 1 of 2 Behind the Great Super Lie The super funds have got us all worried. Needlessly, it seems. Ross Gittins Some years ago I went to an investment adviser, gave him my financial details and asked if I had enough super to do me in retirement. He didn t answer, just laughed. I think he thought that someone with my amount of savings shouldn t have needed to ask. Truth is, no matter how high or low the standard of living we re used to, just about all of us worry that we haven t saved enough to keep it going in retirement. No matter how much we ve put away, it s only human to feel a twinge of guilt that we could have saved more. And how much is enough? The superannuation industry has spent decades convincing us our savings are inadequate, and pressing the government to raise the rate of compulsory super contributions. The retail super funds run by the banks keep doing this, but so do the not-forprofit industry funds. It was they who persuaded the Rudd government to phase the rate up from 9 per cent of wages to 12 per cent by But now, at long last, a report by John Daley and Brendan Coates, of the Grattan Institute, has hit the headlines exposing the Great Super Lie. In the words of its title, Money in retirement: More than enough. The report s careful and detailed analysis finds that, contrary to everything we ve been told, the vast majority of retirees today, and in future, are likely to be comfortable financially. The institute s own modelling shows that, even after allowing for inflation, most workers today can expect a retirement income of at least 91 per cent of their pre-retirement income. This is way above the 70 per cent level that the Organisation for Economic Co-operation and Development recommends its member-countries aim for. But how can reality be so at variance with our perception of it? Because the super and investmentadvice industries have laboured long and hard to convince us we should be saving more. Why have they done this? Because every extra dollar we save through super, whether voluntarily or compulsorily, is a dollar they get to take a small bite out of every year until we eventually take it and spend it. They call it clipping the ticket. The financial services sector abounds with people who have thought of another reason to clip our ticket. That s why its top people are the highest paid of them all, the envy of medical specialists and barristers. How have they misled us? As the report explains, by exploiting our inability to anticipate how much we ll need to last us in retirement. ASFA the Australian Superannuation Funds of Australia is the chief offender. It publishes and updates a measure of the minimum amount you ll need at retirement to live at a comfortable standard. If you don t have that much then, by implication, you ll be uncomfortable. Trouble is, it s designed to reflect a lifestyle typical of the top 20 per cent of retirees today. So, in truth, it s telling the bottom 80 per cent they haven t saved nearly enough to have in retirement a standard of living far higher than they ever enjoyed while working. Obviously, when estimating how much you ll need, you have to allow for inflation over the likely period of your retirement. Some in the industry exaggerate this by using the expected growth in wages rather than prices as their inflation measure, knowing that wages grow faster than prices and living standards rise over time. After being misled for so long, you probably find it hard to believe your savings are or will be more than adequate, so let me explain. First, most people will have more income than they realise. Most people will be eligible for a full or part age pension, which is increased in line with wages rather than prices, meaning it grows faster than inflation over time. By now, most people are retiring with a significant amount of super saving. It was always envisaged that most people would retire with some combination of age pension and super. About 80 per cent of people over 65 own their own home (a huge saving) and most also have savings and investments outside the super system. Second, people spend less money in retirement than they used to, and than they expect to. That s why the OECD says you need only 70 per cent of your pre-retirement income to be comfortable. The retired pay less income tax on the same income, whatever it is. They don t make super contributions, they don t have mortgages (although those who rent privately are the big exception to the rule) and they don t have kids to support. They eat out less (partly because they have more time to cook), drink less alcohol, spend less on transport (no trips to work) and replace clothing and furniture less often. Medical costs are a lot higher, but are largely covered by the government. And it s not just that when you re retired you have less need to spend than when you re working. It s also that you spend less as you get older. Spending tends to slow when you reach 70, and decreases rapidly after 80. Still not convinced? Get this: surveys show the retired worry less than the working about

59 Canberra Times, Canberra Author: Ross Gittins Section: General News Article type : News Item Classification : Capital City Daily : 17,579 Page: 16 Printed Size: cm² Region: ACT Market: Australia ASR: AUD 16,034 Words: 936 Item ID: Page 2 of 2 paying bills, many actually save some of their income and often leave a legacy almost as large as their nest egg on the day they retired. Sounds comfortable to me. Ross Gittins is Fairfax Media s economics editor. Spending tends to slow when you reach 70, and decreases rapidly after 80.

60 Canberra Times, Canberra Author: Jessica Irvine Section: General News Article type : News Item Classification : Capital City Daily : 17,579 Page: 4 Printed Size: cm² Region: ACT Market: Australia ASR: AUD 11,014 Words: 822 Item ID: Page 1 of 2 ECONOMY Axe super guarantee increase to boost wages: new report Jessica Irvine Opposition is mounting to a looming policy that will force workers to put an extra 2.5 per cent of their salary into superannuation. Amid sluggish wages growth, a new report by the Grattan Institute calls on the federal government to permanently scrap an increase in the existing 9.5 per cent Super Guarantee, which is scheduled to increase by half a percentage point from July 1, 2021, until it reaches 12 per cent in mid Raising the superannuation guarantee to 12 per cent will reduce wages today and do little to boost the retirement incomes of many low-income workers tomorrow, the report finds. Contrary to widespread anxiety, many Australians are set to enjoy even higher incomes in retirement than during their working lives, modelling by the Grattan Institute has found. The conventional wisdom is that Australians don t save enough for retirement. But this belief, encouraged by the financial services industry fear factory, is mistaken. The vast majority of retirees today and in future are likely to be financially comfortable. Current and future retirees on every rung in the income distribution are, according to the modelling, set to retire with income from super, the age pension and other savings worth at least 70 per cent of their pre-retirement income a common international definition of adequacy. Australians in the bottom 10 per cent of the income distribution will retire with incomes 160 per cent their working-age incomes. Many low-income Australians will get a rise in pay when they retire, because the age pension and the income they get from compulsory retirement savings will be higher than the wage they received during their working life. In the meantime, working-age households are struggling to pay off their mortgages. Increasing the rate of compulsory super contributions to 12 per cent will simply take away more money from working-aged Australians that could be used to pay down the mortgage, potentially leading to larger mortgage debts at retirement that will need to be discharged using superannuation savings at retirement. The proportion of 55-to-64-yearolds who own their homes outright has fallen from 72 per cent in to 42 per cent in While workers often believe compulsory super contributions are paid by employers out of profits, there is no magic pudding when it comes to superannuation, the report finds. Higher compulsory super contributions are ultimately funded by lower wages, which means lower living standards for workers today. Increasing compulsory contributions, by suppressing wages growth, also inadvertently hurts age pension recipients, because their payments are indexed to wages. The main beneficiaries from a higher Super Guarantee will be high-income workers, who receive a much larger tax concession than low-income workers, the report finds. For the bottom half of workers, retirement incomes will not rise materially, because lower age pension payments would outweigh the increase in income from savings. Grattan estimates axing the increase to 12 per cent would save between $2 billion and $2.5 billion a year. The chief executive of the Australian Council of Social Service, Cassandra Goldie, said it was time to revisit the policy. We agree that increasing the Super Guarantee is hard to justify given the foregone wages have their greatest impact on people with low incomes who need every dollar they earn and they receive little or no benefit from the current tax breaks, Ms Goldie said. We would give priority to fixing tax concessions so that the people who need the greatest help people on low and modest incomes get the greatest benefit. The chief executive of the Business Council, Jennifer Westacott, said that at a time of slow wages

61 Canberra Times, Canberra Author: Jessica Irvine Section: General News Article type : News Item Classification : Capital City Daily : 17,579 Page: 4 Printed Size: cm² Region: ACT Market: Australia ASR: AUD 11,014 Words: 822 Item ID: Page 2 of 2 growth, any increases to the guarantee had to be considered carefully. The higher compulsory superannuation contributions are, the bigger impact they have on the living standards and wages of workers today that s because, just as the Henry Review said, workers bear the cost of these contributions through lower wages growth. The super industry is already fighting. A former Treasury official now working for Industry Super Australia, Phil Gallagher, said the Grattan modelling was deeply flawed in some respects, tending to overinflate retirement incomes for lower income workers. Getting the Super Guarantee to 12 per cent is vital to deliver a decent standard of living for working people who have little scope to save for their retirement outside super, Mr Gallagher. The Rudd government measure has already been twice delayed by the Coalition government. But with enterprise agreements now being negotiated covering the 2021 period, a permanent decision is needed, Grattan says. Grattan is also calling for a 40 per cent increase to rent assistance to help the group most at risk of poverty in retirement: renters. Such an increase to the existing rate of $3531 for singles would cost $300 million a year if delivered only to age pensioners, or $1.2 billion if delivered to all recipients of government income support. Ross Gittins Page 16

62 Canberra Times, Canberra Author: John Collett Section: General News Article type : News Item Classification : Capital City Daily : 17,579 Page: 26 Printed Size: cm² Region: ACT Market: Australia ASR: AUD 5,584 Words: 476 Item ID: Page 1 of 1 Turmoil plays on investors nerves Super & funds John Collett V olatility could be the watchword for sharemarkets around the world for the foreseeable future. And, if so, that would have big implications for not only the direct shareholdings on investors, but also for our retirement savings. About half of the money in the typical default superannuation fund investment option is invested in local and overseas shares. Such a big exposure to shares has worked well over the longer-term. It s the main reason the typical workplace default option has produced an average annual return of 7 per cent over the 10 years to September 30, 2011, figures from researcher Rainmaker Information show. That 10-year number will be lower after the drop on sharemarkets during October, but it will still be a very good number. While anything is possible, including further drops, or sharemarkets that track sideways for an extended time, there are a few things that should be kept in mind. First of all, the months of September and October have more than their fair share of big sharemarket crashes. On the other hand, November and December tend to be better months. Second, the volatility has little to do with Australia. It is mostly to do with the US sharemarket. What has investors in US shares rattled are rising US interest rates and fears of an escalation of the US-China trade war. There is also uncertainly over the outcome of the US midterm elections, the results of which will be known later on Wednesday. It should not be forgotten that the US market has had a terrific run with share prices going up almost in a straight line since the start of 2016 and was overdue for a correction. There are no signs the US is on the brink of recession quite the opposite. One of the reasons the US Fed is increasing interest rates is because the US economy is doing so well. But it is not all about the US. There some notable factors affecting the Australian market, not the least of which is our big four banks are entering a new era. After years of growing their profits the tide is turning, as credit growth is crimped. Their costs on the money they raise from overseas to lend domestically are rising as interest rates overseas rise. And while they are recovering much of those higher costs by increasing the interest rates on mortgages, that decreases the demand for mortgages and slows credit growth. For super fund members, there s no need to panic. Switching from a super fund s balanced investment option, where most people have their money, to an option with less exposure to shares, would convert paper losses into actual losses. Even older super fund members should be reasonably relaxed. And retirees still need to have a substantial exposure to shares to grow their savings in excess of rising prices.

63 Canberra Times, Canberra Author: Clancy Yeates Section: Business News Article type : News Item Classification : Capital City Daily : 17,579 Page: 20 Printed Size: cm² Region: ACT Market: Australia ASR: AUD 6,788 Words: 475 Item ID: Page 1 of 1 ASIC wants to be top cop on super beat REGULATION Clancy Yeates The corporate cop would take the lead in policing conduct in the $2.8 trillion superannuation sector under a proposed shake-up by the country s two top financial regulators, after the royal commission exposed gaps in the current system. Responding to the commission s public hearings on super, the Australian Securities and Investments Commission (ASIC) ed changes to the twin peaks model of financial regulation, in place since 1997, as it applies to super. In the current approach, the Australian Prudential Regulation Authority (APRA) is the main regulator on conduct issues under the Superannuation Industry (Supervision) Act. Unlike other parts of finance, such as banking and insurance, ASIC plays a secondary role in consumer protection in super, focusing on issues such as disclosure. APRA, which is mainly concerned with guarding institutions from getting into financial strife, has been criticised by the commission over its reluctance to take enforcement action against superannuation fund misconduct. Submissions from both ASIC and APRA to the commission, published this week, supported a change in the twin peaks model that would give ASIC the lead role in dealing with misconduct in super. ASIC is of the view that an adjustment of ASIC s role to provide ASIC with greater powers in respect of conduct regulation would be appropriate, while making sure not to diminish the ability of APRA to fulfil its role, its submission says. ASIC considers that it could assume an expanded role in the regulation of conduct in the superannuation sector. ASIC said it would need to be given appropriate powers if it had a broader mandate, and it argued current penalties under the SIS Act were inadequate and should be increased, including bigger fines and tougher maximum jail sentences for criminal offences. APRA had not entered into any enforceable undertakings with corporate super trustees in the past decade, it told the royal commission in August, and it had only been to court once since 2008, to disqualify a super director for not being a fit and proper person. APRA s submission also s changes to the law to sharpen and better focus the prudential and conduct mandates of APRA and ASIC in super, making ASIC the primary conduct regulator. ASIC, whose chairman James Shipton will appear before the royal commission this month, said the regulatory environment had evolved significantly since the twin peaks model was devised following the Wallis review of the financial system in Submissions from some of the country s biggest superannuation funds including the Commonwealth Bank s Colonial First State, National Australia Bank, and AMP, also ed greater clarity in the respective roles of ASIC and APRA in super. AMP said that since 1997, the roles of ASIC and APRA in super had become blurred, and this needed to be rectified. Key points Changes urged for the present twin peaks model. AMP seeks clarity on a blurring of regulatory roles.

64 Canberra Times, Canberra Author: Stephen Bartholomeusz Section: Business News Article type : News Item Classification : Capital City Daily : 17,579 Page: 20 Printed Size: cm² Region: ACT Market: Australia ASR: AUD 23,616 Words: 729 Item ID: Page 1 of 3 Cricket and banks caught tampering with ethics COMMENT Stephen Bartholomeusz There are echoes of the banking royal commission and the Australian Prudential Regulation Authority s inquiry into Commonwealth Bank in the Ethics Centre s review of Cricket Australia s culture and governance frameworks that was issued to such destabilising effect last week. Cricket Australia chairman David Peever and long-serving chief executive James Sutherland have gone. Its highperformance manager, Pat Howard, is going. Its longest-serving board member, former Australian captain Mark Taylor resigned this week. That s not dissimilar to the turmoil that engulfed Commonwealth Bank and AMP and, to a lesser degree, other major financial institutions as a consequence of the revelations at the royal commission and, while CA is a not-for-profit sports organisation, it s not hard to see why it s not dissimilar. The destabilisation of CA stems from an incident in South Africa, the infamous Sandpapergate balltampering that resulted in suspensions for the team s captain, vice-captain and a junior batsman. From that incident came damning judgments on the culture of CA and Australian cricket broadly. The royal commission has shone a fierce light on what appears to be far more pervasive and more egregious misconduct, although the parallels between cricket and the financial services sector may go deeper than the scope of the Ethics Centre s review allowed it to probe. It did, however, put cricket s plight into that wider context when referring to the response of the community to the events in South Africa. That response, it said, was linked to a sense of shame that our society s ethical malaise had moved from politics, to business, to the churches... an everspreading stain that had finally tainted the wearers of the hallowed baggy green. When Commissioner Kenneth Hayne produced his interim report detailing the shocking instances of misconduct aired before him, he blamed the breakdowns in culture and governance within financial services largely on remuneration practices and policies. The core conclusion of the APRA panel that inquired into CBA s governance and culture was somewhat different. It concluded that the bank s financial success had dulled the senses of the institution. It is generally the case that what Continued Page 22

65 Canberra Times, Canberra Author: Stephen Bartholomeusz Section: Business News Article type : News Item Classification : Capital City Daily : 17,579 Page: 20 Printed Size: cm² Region: ACT Market: Australia ASR: AUD 23,616 Words: 729 Item ID: Page 2 of 3 Cricket and banks caught tampering with ethics From Page 20 gets measured gets done and also that success breeds complacency. What s measured and rewarded in cricket, as in all sports, is wins and losses successes or failures. In cricket and business, success is measured and rewarded at the individual and organisational level. At a commercial level, CA has been extremely successful and the administrators and elite players have been handsomely rewarded. As Justice Hayne has said, when an employee and others in an organisation, including the employee s supervisors and peers, are remunerated according to how much revenue or profit they contribute then sales, or revenue or profit or, for cricketers, winning is treated as the goal to pursue and how it is pursued is less relevant. The APRA-commissioned review into CBA said the focus on financial outcomes and the siloed nature of its structure, where executives were given considerable authority, allowed them and the board to believe the group was well run and across potential risks. It would seem the CA board and management s senses were dulled by the organisation s financial success and by the distance and layers between them and the team. Incentives structures are easy to change; changing cultures is not as straightforward. In financial services there are balanced scorecards, increasingly with conduct gateways to be negotiated before the incentives can be triggered. If, as the Ethics Centre concluded, a singular focus on performance produced, not surprisingly, a singular focus on performance then the response for CA is to develop its own version of a balanced scorecard, for management and players; one with an ethical dimension to it. It is also going to have to consider how it might generate cultural change, not just at the elite level, but down to the grassroots levels and the pathways within which its elite players originate. The federated nature of cricket the complex relationships between its head office and the states means it won t be as straightforward as the board and/ or executive laying down a new cultural framework. CA might, however, learn something from the ways in which the major banks and AMP are responding to their ethical breakdowns.

66 Canberra Times, Canberra Author: Stephen Bartholomeusz Section: Business News Article type : News Item Classification : Capital City Daily : 17,579 Page: 20 Printed Size: cm² Region: ACT Market: Australia ASR: AUD 23,616 Words: 729 Item ID: Page 3 of 3 Australian cricketer Cameron Bancroft, right, is questioned by the umpires during the test cricket match between South Africa and Australia in March. Photo: AFP

67 Age, Melbourne Author: Ross Gittins Section: General News Article type : News Item Classification : Capital City Daily : 83,229 Page: 16 Printed Size: cm² Region: VIC Market: Australia ASR: AUD 34,294 Words: 932 Item ID: Page 1 of 2 Behind the Great Super Lie Despite all we ve been told, most retirees today will be comfortably off. Ross Gittins Some years ago I went to an investment adviser, gave him my financial details and asked if I had enough super to do me in retirement. He didn t answer, just laughed. I think he thought that someone with my amount of savings shouldn t have needed to ask. Truth is, no matter how high or low the standard of living we re used to, just about all of us worry that we haven t saved enough to keep it going in retirement. No matter how much we ve put away, it s only human to feel a twinge of guilt that we could have saved more. And how much is enough? The superannuation industry has spent decades convincing us our savings are inadequate and pressing the government to raise the rate of compulsory super contributions. The retail super funds run by the banks keep doing this, but so do the not-for-profit industry funds. It was they who persuaded the Rudd government to phase the rate up from 9 per cent of wages to 12 per cent by But now, at long last, a report by John Daley and Brendan Coates, of the Grattan Institute, has hit the headlines exposing the Great Super Lie. In the words of its title, Money in retirement: More than enough. The report s careful and detailed analysis finds that, contrary to everything we ve been told, the vast majority of retirees today, and in future, are likely to be comfortable financially. The institute s own modelling shows that, even after allowing for inflation, most workers today can expect a retirement income of at least 91 per cent of their preretirement income. This is way above the 70 per cent level that the Organisation for Economic Co-operation and Development recommends its member countries aim for. But how can reality be so at variance with our perception of it? Because the super and investmentadvice industries have laboured long and hard to convince us we should be saving more. Why have they done this? Because every extra dollar we save through super, whether voluntarily or compulsorily, is a dollar they get to take a small bite out of every year until we eventually take it and spend it. They call it clipping the ticket. The financial services sector abounds with people who ve thought of another reason to clip our ticket. That s why its top people are the highest paid of them all, the envy of medical specialists and barristers. How have they misled us? As the report explains, by exploiting our inability to anticipate how much we ll need to last us in retirement. ASFA the Australian Superannuation Funds of Australia is the chief offender. It publishes and updates a measure of the minimum amount you ll need at retirement to live at a comfortable standard. If you don t have that much then, by implication, you ll be un-comfortable. Trouble is, it s designed to reflect a lifestyle typical of the top 20 per cent of retirees today. So, in truth, it s telling the bottom 80 per cent they haven t saved nearly enough to have in retirement a standard of living far higher than they ever enjoyed while working. Obviously, when estimating how much you ll need, you have to allow for inflation over the likely period of your retirement. Some in the industry exaggerate this by using the expected growth in wages rather than prices as their inflation measure, knowing that wages grow faster than prices and living standards rise over time. After being misled for so long, you probably find it hard to believe your savings are or will be more than adequate, so let me explain. First, most people will have more income than they realise. Most people will be eligible for a full or part age pension, which is increased in line with wages rather than prices, meaning it grows faster than inflation over time. By now, most people are retiring with a significant amount of super savings. It was always envisaged that most people would retire with some combination of age pension and super. About 80 per cent of people over 65 own their own home (a huge saving) and most also have savings and investments outside the super system. Second, people spend less money in retirement than they used to, and than they expect to. That s why the OECD says you need only 70 per cent of your pre-retirement income to be comfortable. The retired pay less income tax on the same income, whatever it is. They don t make super contributions, they don t have mortgages (though those who rent privately are the big exception to the rule) and they don t have kids to support. They eat out less (partly because

68 Age, Melbourne Author: Ross Gittins Section: General News Article type : News Item Classification : Capital City Daily : 83,229 Page: 16 Printed Size: cm² Region: VIC Market: Australia ASR: AUD 34,294 Words: 932 Item ID: Page 2 of 2 they have more time to cook), drink less alcohol, spend less on transport (no trips to work) and replace clothing and furniture less often. Medical costs are a lot higher, but are largely covered by the government. And it s not just that when you re retired you have less need to spend than when you re working. It s also that you spend less as you get older. Spending tends to slow when you reach 70, and decreases rapidly after 80. Still not convinced? Get this: surveys show the retired worry less than the working about paying bills, many actually save some of their income and often leave a legacy almost as large as their nest egg on the day they retired. Sounds comfortable to me. Ross Gittins is an Age columnist. How can reality be so at variance with our perception of it?

69 Adelaide Advertiser, Adelaide Author: Jeff Whalley Section: Business News Article type : News Item Classification : Capital City Daily : 112,097 Page: 27 Printed Size: cm² Region: SA Market: Australia ASR: AUD 7,616 Words: 423 Item ID: Page 1 of 2 CBA and partners close in on $1.6bn Pexa deal JEFF WHALLEY A GROUP of big finance companies including the Commonwealth Bank has seized control of a major technology business that plays a leading role in property settlements. CBA, Link Administration Holdings and a division of US investment bank Morgan Stanley have secured a majority stake in Property Exchange Australia, or Pexa. It comes after the consortium tabled a revised bid for Pexa last week, still valuing the company at about $1.6 billion but, according to market speculation, carrying fewer conditions. The bank and Link already had major stakes in Pexa and are increasing their holdings significantly. An industry source said CBA s move could be a precursor to more such deals under chief executive Matt Comyn, who took the reins of the group in April. The bank, Australia s biggest, is poised for a windfall as it offloads about $8 billion worth of businesses in sectors such as wealth management and mortgage broking amid the fallout from the financial services royal commission. An electronic property settlement exchange, Pexa was founded eight years ago in response to the Council of Australian Governments push for a single, national e-conveyancing service for the property industry. It allows members such as lawyers, conveyancers and financial institutions to lodge documents with land registries and complete property settlements electronically. Other key shareholders in the unlisted company include the Victorian, New South Wales and West Australian state governments, the other three major banks, investment bank Macquarie and businessman Paul Little. It was unclear last night which investors had agreed to accept the consortium s offer, enabling the CBA and Link, with Morgan Stanley Infrastructure Partners, to lift their combined holding above 50 per cent. The deal comes after Pexa, amid choppy sharemarkets and a lack of support among would-be institutional investors, abandoned plans for an initial public offering. The CBA will invest a further $50 million in the exchange, taking its total investment to $100 million and increasing its stake from 13.1 per cent to about 16 per cent. Link will lift its stake from 19.8 per cent to between 27 per cent and 44 per cent. Mr Comyn said the transaction was in line with the CBA s strategy of focusing on its core banking businesses and to create a simpler, better bank for our customers. Pexa chief Marcus Price yesterday noted his company played a role in more than half of all property settlements nationwide. More than 150 financial institutions and 6500 practitioner firms have used Pexa, in about 1.7 million transactions.

70 Adelaide Advertiser, Adelaide Author: Jeff Whalley Section: Business News Article type : News Item Classification : Capital City Daily : 112,097 Page: 27 Printed Size: cm² Region: SA Market: Australia ASR: AUD 7,616 Words: 423 Item ID: Page 2 of 2 DEAL-MAKER: Commonwealth Bank chief executive Matt Comyn. Picture: JAMES CROUCHER

71 Age, Melbourne Author: Jessica Irvine Section: General News Article type : News Item Classification : Capital City Daily : 83,229 Page: 1 Printed Size: cm² Region: VIC Market: Australia ASR: AUD 18,462 Words: 650 Item ID: Page 1 of 2 Call to axe increase in super guarantee Jessica Irvine Opposition is growing to a looming policy that will force workers to put an extra 2.5 per cent of their salary into superannuation. Amid sluggish wage growth, a new report by the Grattan Institute calls on the federal government to scrap an increase in the existing 9.5 per cent super guarantee, which is scheduled to rise by half a percentage point a year from July 1, 2021, until it hits 12 per cent in mid Raising the superannuation guarantee to 12 per cent will reduce wages today and do little to boost the retirement incomes of many lowincome workers tomorrow, the report said. Despite widespread anxiety, many Australians are set to enjoy higher incomes in retirement than during their working lives, modelling by the Grattan Institute found. The conventional wisdom is that Australians don t save enough for retirement. But this belief, encouraged by the financial services industry fear factory, is mistaken. The vast majority of retirees today and in future are likely to be financially comfortable, it said. Current and future retirees on every income distribution rung are, according to the modelling, set to retire with income from superannuation, the age pension and other savings worth at least 70 per cent of their pre-retirement income a common international definition Continued Page 6

72 Age, Melbourne Author: Jessica Irvine Section: General News Article type : News Item Classification : Capital City Daily : 83,229 Page: 1 Printed Size: cm² Region: VIC Market: Australia ASR: AUD 18,462 Words: 650 Item ID: Page 2 of 2 Call to axe increase in compulsory payments From Page 1 NATAGE A006 of adequacy. Australians in the bottom 10 per cent of income distribution will retire with incomes at 160 per cent of their workingage incomes. Many low-income Australians will get a rise in pay when they retire, because the age pension and the income they get from compulsory retirement savings will be higher than the wage they received during their working life, the report said. Meanwhile, working-age households struggle to pay off mortgages. Increasing the rate of compulsory super contributions to 12 per cent will simply take away more money from working-aged Australians that could be used to pay down the mortgage, potentially leading to larger mortgage debts at retirement that will need to be discharged using superannuation savings at retirement, it said. While workers often believe compulsory super contributions are paid by employers out of profits, there is no magic pudding when it comes to superannuation, the report said. Higher compulsory super contributions are ultimately funded by lower wages, which means lower living standards for workers today. Increasing compulsory contributions by suppressing wages growth also inadvertently hurt age pension recipients because their payments were indexed to wages. The main beneficiaries from a higher super guarantee will be highincome workers, who receive a much larger tax concession than lowincome workers, the report said. For the bottom half of workers, retirement incomes will not rise materially because lower age pension payments would outweigh the increase in income from savings. The Grattan Institute estimates that axing the increase to 12 per cent would save between $2 billion and $2.5 billion a year. The chief executive of the Australian Council of Social Service, Cassandra Goldie, said it was time to revisit the policy. We agree that increasing the super guarantee is hard to justify given the forgone wages have their greatest impact on people with low incomes who need every dollar they earn and they receive little or no benefit from the current tax breaks, Ms Goldie said. Business Council of Australia chief Jennifer Westacott said that at a time of slow wages growth any increases to the guarantee had to be considered carefully. The super industry is already fighting. A former Treasury official now working for Industry Super Australia, Phil Gallagher, said the Grattan modelling was deeply flawed in some respects, tending to overinflate retirement incomes for lower income workers. Getting the super guarantee to 12 per cent is vital to deliver a decent standard of living for working people who have little scope to save for their retirement outside super, he said. COMMENT Page 16

73 Age, Melbourne Author: Clancy Yeates Section: General News Article type : News Item Classification : Capital City Daily : 83,229 Page: 6 Printed Size: cm² Region: VIC Market: Australia ASR: AUD 13,986 Words: 466 Item ID: Page 1 of 1 ASIC wants to be top cop on super beat Clancy Yeates The corporate cop would take the lead in policing conduct in the $2.8 trillion superannuation sector under a proposed shake-up by the country s two top financial regulators, after the royal commission exposed gaps in the current system. Responding to the commission s public hearings on super, the Australian Securities and Investments Commission (ASIC) ed changes to the twin peaks model of financial regulation, which has been in place since 1997, as it applies to super. Under the current approach, the Australian Prudential Regulation Authority (APRA) is the main regulator on conduct issues under the Superannuation Industry (Supervision) Act. Unlike other parts of finance, such as banking and insurance, ASIC plays a secondary role, focusing on issues such as disclosure. APRA, which is mainly concerned with guarding institutions from getting into financial strife, has been criticised by the commission over its reluctance to take enforcement action against super fund misconduct. Submissions from both ASIC and APRA to the commission, published this week, supported a change in the twin peaks model that would give ASIC the lead role in dealing with misconduct in super. ASIC is of the view that an adjustment of ASIC s role to provide ASIC with greater powers in respect of conduct regulation would be appropriate, while making sure not to diminish the ability of APRA to fulfil its role, its submission says. ASIC considers that it could assume an expanded role in the regulation of conduct in the superannuation sector. ASIC said it would also need to be given appropriate powers if it received a broader mandate, and it argued the current penalties under the SIS Act were inadequate and should be boosted, including bigger fines and tougher maximum jail sentences for criminal offences. APRA had not entered into any enforceable undertakings with corporate super trustees in the past decade, it told the royal commission in August, and it had only been to court once since 2008 to disqualify a super director for not being a fit and proper person. APRA s submission also s changes to the law to sharpen and better focus the prudential and conduct mandates of APRA and ASIC in super, making ASIC the primary conduct regulator. ASIC, whose chairman James Shipton will appear before the royal commission later this month, said the regulatory environment had evolved significantly since the twin peaks model was devised following the Wallis review of the financial system in Submissions from some of the country s biggest superannuation funds, including the Commonwealth Bank s Colonial First State, National Australia Bank, and AMP, also ed greater clarity in the roles of ASIC and APRA in super. A recurring question during the public hearings was how trustees at for-profit funds handle the conflict between serving their members best interest and the interests of their shareholders. ASIC chairman James Shipton.

74 Age, Melbourne Author: Stephen Bartholomeusz Section: Business News Article type : News Item Classification : Capital City Daily : 83,229 Page: 19 Printed Size: cm² Region: VIC Market: Australia ASR: AUD 20,867 Words: 720 Item ID: Page 1 of 2 Cricket, banks caught out on ethics COMMENT Stephen Bartholomeusz There are echoes of the banking royal commission and the Australian Prudential Regulation Authority s inquiry into Commonwealth Bank in the Ethics Centre s review of Cricket Australia s culture and governance frameworks that was issued to such destabilising effect last week. Cricket Australia chairman David Peever and long-serving chief executive James Sutherland have gone. Its high-performance manager, Pat Howard, is going. Its longest-serving board member, former Australian captain Mark Taylor resigned this week. That s not dissimilar to the turmoil that engulfed Commonwealth Bank and AMP and, to a lesser degree, other major financial institutions as a consequence of the revelations at the royal commission and, while CA is a not-for-profit sports organisation, it s not hard to see why it s not dissimilar. The destabilisation of CA stems from an incident in South Africa, the infamous Sandpapergate ball-tampering that resulted in suspensions for the team s captain, vice-captain and a junior batsman. From that incident came damning judgments on the culture of CA and Australian cricket broadly. The royal commission has shone a fierce light on what appears to be far more pervasive and more egregious misconduct, although Continued Page 20

75 Age, Melbourne Author: Stephen Bartholomeusz Section: Business News Article type : News Item Classification : Capital City Daily : 83,229 Page: 19 Printed Size: cm² Region: VIC Market: Australia ASR: AUD 20,867 Words: 720 Item ID: Page 2 of 2 Cricket and banks caught out on ethics From Page 19 the parallels between cricket and the financial services sector may go deeper than the scope of the Ethics Centre s review allowed it to probe. It did, however, put cricket s plight into that wider context when referring to the response of the community to the events in South Africa. That response, it said, was linked to a sense of shame that our society s ethical malaise had moved from politics, to business, to the churches... an ever-spreading stain that had finally tainted the wearers of the hallowed baggy green. When Commissioner Kenneth Hayne produced his interim report detailing the shocking instances of misconduct aired before him, he blamed the breakdowns in culture and governance within financial services largely on remuneration practices and policies. The core conclusion of the APRA panel that inquired into CBA s governance and culture was somewhat different. It concluded that the bank s financial success had dulled the senses of the institution. It is generally the case that what gets measured gets done and also that success breeds complacency. What s measured and rewarded in cricket, as in all sports, is wins and losses successes or failures. In cricket and business, success is measured and rewarded at the individual and organisational level. At a commercial level, CA has been extremely successful and the administrators and elite players have been handsomely rewarded. As Justice Hayne has said, when an employee and others in an organisation, including the employee s supervisors and peers, are remunerated according to how much revenue or profit they contribute then sales, or revenue or profit or, for cricketers, winning is treated as the goal to pursue and how it is pursued is less relevant. The APRAcommissioned review into CBA said the focus on financial outcomes and the siloed nature of its structure, where executives were given considerable authority, allowed them and the board to believe the group was well run and across potential risks. It would seem the CA board and management s senses were dulled by the organisation s financial success and by the distance and layers between them and the team. Incentives structures are easy to change; changing cultures is not as straightforward. In financial services there are balanced scorecards, increasingly with conduct gateways to be negotiated before the incentives can be triggered. If, as the Ethics Centre concluded, a singular focus on performance produced, not surprisingly, a singular focus on performance then the response for CA is to develop its own version of a balanced scorecard, for management and players; one with an ethical dimension to it. It is also going to have to consider how it might generate cultural change, not just at the elite level, but down to the grassroots levels and the pathways within which its elite players originate. The federated nature of cricket the complex relationships between its head office and the states means it won t be as straightforward as the board and/ or executive laying down a new cultural framework. CA might, however, learn something from the ways in which the major banks and AMP are responding to their ethical breakdowns. Financial success can dull the senses of an institution.

76 Hobart Mercury, Hobart Author: Rob Harris Section: General News Article type : News Item Classification : Capital City Daily : 28,265 Page: 2 Printed Size: cm² Region: TAS Market: Australia ASR: AUD 1,576 Words: 338 Item ID: Page 1 of 1 Retirees finances set for rosy future ROB HARRIS RETIREES are likely to be much more financially comfortable than dire warnings suggest, a new report says. But it won t be so rosy for low-income earners who rent a growing problem as home ownership rates decline among the young generation. The Grattan Institute s Money in Retirement: More Than Enough found retirees are less likely than workingage Australians to suffer financial stress, such as not being able to pay a bill on time. And they are more likely to be able to afford annual holidays. It found the average worker today can expect a retirement income of at least 91 per cent of pre-retirement income well above the 70 per cent benchmark used around the world. It forecasts the next generation of retirees were likely to be even better off because of a combination of compulsory super contributions, non-super savings, and the age pension. The financial services industry fear factory should be shut down, because it encourages Australians to worry unnecessarily about whether they ll have enough to retire on, Grattan Institute chief executive John Daley said. But he warned the retirement incomes system was not working for low-income Australians who rent. To boost retirement incomes for the poorest Australians, the report calls for: AN INCREASE of 40 per cent in the maximum rate of federal rent assistance, worth $1400- plus a year for a single retiree. SCRAPPING the legislated and bipartisan plan to increase compulsory superannuation contributions from 9.5 per cent to 12 per cent, saving the budget about $2 billion a year. REDUCING superannuation tax breaks and age-based tax breaks to ensure the retirement incomes system does not become an excessive burden on future budgets. INCLUDING the value of a home above a threshold in the age pension assets test. Unless governments have the courage to make these reforms, future Budgets will not be able to fund aged care and health at the same level as today, Mr Daley said. He said Australians tended to spend less after they retired, and even less into old age.

77 Northern Territory News, Darwin Author: Alan Kohler Section: Business News Article type : News Item Classification : Capital City Daily : 11,279 Page: 30 Printed Size: cm² Region: NT Market: Australia ASR: AUD 4,970 Words: 857 Item ID: Page 1 of 3 It ain t what you do, it s the way that you do it ALAN KOHLER OVER the years we have unfortunately seen many boards allocate capital poorly, but we cannot recall a transaction as inept as this one. Hamish Carlisle and Neil Margolis of Merlon Capital Partners to the directors of AMP. It isn t whether you slim down and simplify, as Austratry is now doing en masse, but how you do it. And it s not just AMP and the banks that are doing it. Six of Australia s top 10 companies are slimming down and simplifying. This is a remarkable moment for corporate Australia. In quick succession this week ANZ s Shayne Elliott and CBA s Matt Comyn said they were creating a simpler, better bank by offloading divisions; NAB is doing likewise; BHP has completed the $US10.4 billion sale of its US onshore business; Wesfarmers is defenestrating Coles; and Telstra is doing project simplify, called Telstra And then there s AMP, a top 10 company once upon a time. The quote above was one of many impolite sentences in two tough letters by Carlisle and Margolis referring to the sale of AMP s wealth protection and mature businesses. AMP s board, led by David Murray, chairman of the Financial System Inquiry and former CEO of Commonvarious members of Australia s corporate elite, is now in an ugly fight with Merlon, and possibly more institutions, and it is far from over. Carlisle and Margolis started their first letter by observing that they own 25 million AMP shares (0.3 per cent of the capital) on behalf of clients. The directors collectively own 234,371 shares (0.008 per cent) valued at a small fraction of the $3.3 million in remuneration they got in 2017, and they ended the second one as follows: We continue to be approached by other investors encouraging us to convene an extraordinary general meeting calling for change if the unresolved matters are not adequately addressed. that the businesses being sold have been underpriced, and it makes no economic sense relative to simpler alternatives such as doing nothing. Speaking on Ticky Fullerton s TV show Ticky on Your Money on Thursday, David Murray sought the last ref-

78 Northern Territory News, Darwin Author: Alan Kohler Section: Business News Article type : News Item Classification : Capital City Daily : 11,279 Page: 30 Printed Size: cm² Region: NT Market: Australia ASR: AUD 4,970 Words: 857 Item ID: Page 2 of 3 uge of the beleaguered chairman: he s dressing the business up for sale, he implies. Market gossip points to Macquarie Group as the buyer. But will Macquarie, or anybody else, pay $10 billion for AMP ($3.35 per share, the price before the inept transaction was announced last week)? We should probably get comfortable with some popcorn to watch the AMP show, as the underinvested directors and overinvested institutions do battle. But what are we to make of the fact that six of the top 10 Australian listed companies, plus AMP, are all remaking themselves? We re talking about CBA, BHP, ANZ, NAB, Wesfarmers and Telstra. Apparently the other four CSL, Westpac, Macquarie and Woolworths are simple enough already, although I d say the last three of them are simply in denial. But this surely must be some kind of record: 60 per cent of the top 10 are in turmoil offloading businesses, battling shareholders, dealing with a collapsing share price, or all three. What is the common thread? It is that they are illprepared for the modern world: too complicated, too big and unwieldy, and sitting ducks for the nimbler global competitors coming at them, not to mention the regulators. CBA at least got a decent price for the Colonial Global Asset Management business this week, $4.1 billion from Mitsubishi UFJ Trust, whose share price went up instead of down. And BHP got the best price it could for the US shale assets and has stifled any dissent by promising to give the $US10.4 billion entirely to it on more bloody mines. Coles will result in the derecognising of about $12 billion in goodwill from the original overpriced $19 billion acquisition in 2007, which is a gobsmacking amount of capital to be vanishing into thin air. But dissent about that amazing disappearing act has been stifled by the fact that it will lift the return on equity Coles to 26 per cent and more than 30 per cent, respectively. In fact, it s probably a key reason for doing the demerger in the first place. Telstra got a share price kick in August from annual results that overdelivered on the under-promise that was made in a May guidance statement, but since then the boat has been taking on muneration. Chairman John Mullen has manned the pumps with letters and speeches to shareholders in which he has promised to pay them less on account of their underdelivering. But Telstra is still a long way from the nirvana of corporate simplicity, as is AMP, CBA, ANZ and NAB. BHP and Wesfarmers are simplicity, and for all six, the challenge will be to stay simple and to eschew the empire-building that pads executive paypackets, and most of all to use this newfound simplicity to fend off the predations of the modern world and simply survive. Alan Kohler is the publisher of The Constant Investor

79 Northern Territory News, Darwin Author: Alan Kohler Section: Business News Article type : News Item Classification : Capital City Daily : 11,279 Page: 30 Printed Size: cm² Region: NT Market: Australia ASR: AUD 4,970 Words: 857 Item ID: Page 3 of 3

80 West Australian, Perth Author: Shane Wright Section: General News Article type : News Item Classification : Capital City Daily : 147,676 Page: 12 Printed Size: cm² Region: WA Market: Australia ASR: AUD 4,067 Words: 316 Item ID: Page 1 of 1 Fear factory prompts cash flow to super Shane Wright Economics Editor Australians nearing retirement are being scared into believing they will face a life of penury when many will be better off than during their working lives, a report out today suggests. Compiled by the independent Grattan Institute, the report argues plans to lift the superannuation guarantee to 12 per cent should be abandoned and tax increased on superannuation accounts. The age pension is the single biggest expense in the Federal Budget, costing more than $46 billion this year, while the forgone tax on superannuation cost $40 billion in Last week, Prime Minister Scott Morrison said he would prefer to boost the age pension rather than the Newstart allowance. But the Grattan Institute found retirees today are less likely than working-age Australians to suffer financial stress, with the combination of the age pension and super giving older people a relatively strong financial position. Institute chief executive John Daley said the financial services industry pushed the argument that people had to have a vast amount to retire, ignoring that most retirees owned their own home and had much lower costs than someone of working age. Grattan modelling showed the average worker could expect a retirement income of at least 91 per cent of their pre-retirement income, well above the international benchmark of 70 per cent. Measures of a comfortable standard of retirement, now used by governments in developing retirement policy, suggest living standards higher than 80 per cent of the working-age population. Mr Daley said people were being scared into throwing money into retirement at a cost to their current living standards and to the overall Federal Budget. The financial services industry fear factory should be shut down, because it encourages Australians to worry unnecessarily about whether they ll have enough to retire on, he said. The institute argues retirement incomes would be bigger for most people by reducing superannuation fees rather than increasing the superannuation guarantee.

81 Australian Financial Review, Australia Author: John Daley Section: General News Article type : News Item Classification : National : 44,635 Page: 47 Printed Size: cm² Region: National Market: Australia ASR: AUD 9,223 Words: 919 Item ID: Page 1 of 2 Ignore the fear factory - retirees have enough cash Golden years The financial industry is very good at scaring people at the size of their savings. Policy support for super would be better spent elsewhere. John Daley Everywhere you turn, you see messages that most people aren't saving enough for their retirement So ifs curious that the group least worried about having enough money in retirement are people who are already retired. Far fewer of them suffer such severe financial stress that they skip a meal, can't pay the electricity bill, or the like. And fewer of them go without things like annual holidays. That" s not surprising when you look at the numbers. Most people aged today have more income in real terms than they did 20 years ago when they were of working age. They are spending on themselves about as much as they did 20 years ago (obviously they're spending less on their children). Many of them are net savers in retirement And this is true up and down the income distribution. Not surprisingly, the small minority of retirees who don't have enough money are renters, with no income other than the Age Pension, particularly those living in Sydney and Melbourne. And even they are no more likely to be financially stressed than workers who rent Much more vulnerable are renters under 65 on income support (remember - Newstart pays $550 a fortnight; the Age Pension pays $916). The current generation of retirees had a lot of lucky breaks. It benefited from rapid growth in real wages (which flowed through to the Age Pension), high home ownership for both rich and poor, a jump in asset prices as interest rates fell, and some one-off superannuation tax-giveaways to high-income earners. But future retirees are also likely to have more than enough money in retirement Grattan Institute has published new research. Money in retirement More than enough, which shows that most Australians will have enough income in retirement to deliver a lifestyle as comfortable as they enjoyed while working. So why are people so worried about retirement? The short answer is that they read the papers. And Twitter (there's an ad that routinely pops up in my feed from a financial services provider). And these are filled with messages churned out by the financial services fear factory that is dedicated to making you worried about not having enough money in retirement and convincing you to save more in their products. Often these messages are supported by analysis that makes a big assumption about retirement incomes that is widely divergent from reality. They assume that people will have enough money in retirement only if their living standards in retirement keep rising in line with the living standards of those who are still working. Implicitly, someone only has enough if their real income at age 90 is 22 per cent higher than when they were 70. In reality, however, people's inflationadjusted spending typically declines by aboutl5 per cent between 65 and 85, particularly on travel and recreation. Spending on health goes up a litde (not least because private health insurance tends to rise faster than inflation), but the government foots the vast bulk of seniors' health bills. Thus most people who save as much as they are told they "need" are effectively saving to leave even larger bequests. This has big implications for policy. First and foremost there is no case to increase the superannuation guarantee from 9.5 per cent to 12 per cent Given the interaction with the Age Pension assets test it won't increase retirement incomes materially for those in the bottom 50 per cent It will reduce everyone's income while working. (Employers are likely to pass on increases in super through lower wage rises.) It will reduce the Age Pension for both current and future retirees. (Lower wage rises flow through to lower increases in the Age Pension.) And ditching the increase in the super guarantee will save the budget about $2 billion a year. It is a myth mat savings on the Age Pension outweigh the tax concessions on superannuation. This is only true in the very long term: on the latest projections, Age Pension savings will be slightly greater than superannuation tax concessions for the first time in about and by then there will be 70 years of budget losses to pay off. That's $2 billion that could be much better spent If we're really worried about poverty in retirement an extra $300 million a year on Rent Assistance for retirees who rent would go much further - and another $900 million would boost Rent Assistance by 40 per cent for recipients of working age. And $1 billion a year could soften the asset taper for the Age Pension. There are currently significant groups who can save $100 while working, and get less than $100 in income in retirement (including using their capital). That 1 s because an extra $100 of assets reduces their Age Pension by $7.80 ayear, even though ifs unlikely to earn that much. You don't have to be a small government fanatic to be uncomfortable with tax rates over 100 per cent So we should all worry less about having enough money in retirement And government should set policy accordingly. John Daley is chiefexecutive of the Grattan Institute. Money in retirement More than enough isavailableatwwwgrattan.edu.au. It is a myth that savings on the Age Pension outweigh tax concessions on super.

82 Australian Financial Review, Australia Author: John Daley Section: General News Article type : News Item Classification : National : 44,635 Page: 47 Printed Size: cm² Region: National Market: Australia ASR: AUD 9,223 Words: 919 Item ID: Page 2 of 2 Those least worried about money for retirement are already retired, PHOTO: LEANNE HARTLEY

83 West Australian, Perth Section: General News Article type : News Item Classification : Capital City Daily : 147,676 Page: 19 Printed Size: cm² Region: WA Market: Australia ASR: AUD 7,416 Words: 523 Item ID: Page 1 of 2 Impartial team puts your needs first HIDDEN commissions, fees for no service, conflicts of interest the picture emerging from the Royal Commission into banking, superannuation and financial services isn t pretty. Above all, the hearings into misconduct in the industry have highlighted the need for independent advice. But finding an adviser who is truly independent can be harder than it looks. Scott Stanley, the managing director of Richmond Private Wealth, says an independent adviser is free from all outside influence. In our industry, this translates into being independent of the companies that issue financial products, which are the banks, superannuation funds, life insurance companies, managed funds and the like, he says. Part of the problem is that, although all advisers are required to be authorised through an Australian Financial Services Licence (AFSL), only a minority hold an AFSL in their own right. Many are licensed via a bank, bank subsidiary or other large institution. If the licence holder has financial products to sell, then it is not permitted for the individual adviser to call themselves independent, explains Stanley. He says an independent adviser should recommend simply what they believe is best suited to their client s needs, without restriction. But if you are licensed through an institution, then it s likely the list of superannuation and investment products you are able to recommend to clients will be tilted towards products issued by that institution. Stanley says there are some simple steps an investor can take to find an independent adviser. The Australian Securities and Investments Commission does not provide a register of independent advisers, but there is one available on a well-respected private website, superguide.com.au. Superguide lists only 124 independent advisers around Australia, so they can be hard to find, says Stanley. Ultimately, consumers need to ask any potential adviser some searching questions, including what financial institutions they are affiliated with (including ownership links), what they have on their Approved Product List and also how they are paid. Brad Martyn, our chairman, and I have nearly four decades of experience running our own AFSL, says Stanley. Being independent, we do not have any restrictions on the investments we are able to recommend. At Richmond, clients pay an annual fee for service based on the complexity and level of work required. The scope of the work and the service fees are clearly set out in writing for clients to review. Nothing is hidden. And we don t accept any form of commission or other benefits that could conflict our advice, he says. Each year we re-engage with our clients for the next 12 months. To survive we must provide top-quality, professional advice. If clients don t sign on with us again, we have no business. Stanley says Richmond s advisers have serviced many clients for decades and are now helping the next generation. If you deal with a large institution, adviser continuity is not the norm, he says. But for our clients, continuity is very important. They always know who they are dealing with. We don t accept any benefits that could conflict our advice. Scott Stanley, Richmond Private Wealth (pictured)

84 West Australian, Perth Section: General News Article type : News Item Classification : Capital City Daily : 147,676 Page: 19 Printed Size: cm² Region: WA Market: Australia ASR: AUD 7,416 Words: 523 Item ID: Page 2 of 2 Proudly independent, the Richmond Private Wealth team isn t restricted on the investments they recommend.

85 Australian Financial Review, Australia Author: James Frost Section: General News Article type : News Item Classification : National : 44,635 Page: 6 Printed Size: cm² Region: National Market: Australia ASR: AUD 8,212 Words: 565 Item ID: Page 1 of 2 Ongoing service fees the next battleground James Frost The Australian Securities and Investments Commission wants ongoing service fees scrapped along with grandfathered commissions, putting it at odds with the banks in its response to the Hayne royal commissioa While the major banks and AMP also accepted that grandfathering had passed its use-by-date, they argue that ongoing service fees are necessary to ensure that financial advice remained affordable. The banking royal commission revealed major problems with the imposition of ongoing service fees, such as widespread deduction of fees in return for no services, scandals that will cost the banks over $1 billion in customer refunds. And ASIC says these kinds of fees should be scrapped. "The reforms that are proposed will remove commissions - which are not related to the provision of advice - and ongoing service fees, which have been shown in many cases to be a flawed vehicle for providing advice," the regulator's submission reads. The Financial Services Council - which represents the big four banks and AMP - declined the opportunity to support the removal of grandfathered commissions in line with its member organisations. Instead the FSC chose only to say that if the commission did make such a recommendation it should give careful consideration to the "mechanism" and "timetable" for their removal. The FSC promised to "make further comment on this issue in its submission to the interim report". The FSC in line with its member organisations, staunchly defended the ability of super funds to charge ongoing service fees. The Financial Planning Association of Australia (FPA) which represents 14,000 financial planners has meanwhile supported the ban on grandfathering describing the payments of fees that provide "no, or unreasonably little, actual service" contravene its professional code of practice. The FPA does not however support a blanket ban on ongoing service fees saying it supports flexibility in how consumers choose to pay for financial advice, which could include either upfront payments or ongoing service fees. Industry super fund representatives Industry Super Australia has taken a more critical view arguing that grandfathering and ongoing service fees need to be banned. "In ISA's submission, legislative intervention to remove grandfathered commissions and ongoing service fees from superannuation accounts is appropriate" the submission from ISA reads. ISA also defended its involvement in the "fox and the henhouse" campaign that was described by ANZ Bank as scaremongering in its submission. ISA said political advertising was not incompatible with Section 62 of the SIS Act, which specifies that member funds are used for core and ancillary purposes. AustralianSuper CEO Ian Silk defended the fund's involvement with the campaign when he appeared at the hearings saying that the intention was to deter fund members from being lured into lower performing super funds. ISA in its submission to the royal commission, argued that if the reason for the use of funds was to maintain or improve retirement benefits for fund members, then it follows that the expenditure is consistent with the objectives of Section 62. The fox and henhouse campaign sought to inform fund members and elected representatives about the risks of various legislative and regulatory change being sought by the banking sector, and to prevent those changes from occurring" the ISA submission reads. 'To date, it has achieved that objective. It has therefore been to the considerable benefit of fund members."

86 Australian Financial Review, Australia Author: James Frost Section: General News Article type : News Item Classification : National : 44,635 Page: 6 Printed Size: cm² Region: National Market: Australia ASR: AUD 8,212 Words: 565 Item ID: Page 2 of 2 Ian Silk, chief executive of AustralianSuper, defended the fund's involvement with an advertising campaign, PHOTO: LOUIE DOUVIS

87 Australian Financial Review, Australia Author: James Fernyhough Section: General News Article type : News Item Classification : National : 44,635 Page: 6 Printed Size: cm² Region: National Market: Australia ASR: AUD 5,785 Words: 632 Item ID: Page 1 of 1 APRA s insurers on surveillance option James Fernyhough The Australian Prudential Regulation Authority has defended the right of life insurers to engage private investigators in cases of suspected insurance fraud, saying a ban on such surveillance would damage their ability to provide cover. Clandestine surveillance, including the use of private investigators, is an accepted method of testing suspected insurance fraud, with several paragraphs dedicated to the subject in the Financial Services Council's Life Insurance Code ofconduct However, the practice came under intense scrutiny in the last round of hearings at the financial services royal commission, and prompted the counsel assisting to ask whether surveillance should be banned outright In one of the most extreme cases, the commission heard Australia's largest life insurer, TAL, engaged a private investigator to spy on a claimant it believed was making a false claim. The investigator's reports included details of trips to the pool, describing the claimant's swimsuit and displays of affection with her partner. TAL admitted in this case its behaviour was "absolutely not acceptable". But in its submission to the royal commission, published last week, APRA dismissed the counsel assisting's suggestion surveillance should be banned outright "The commission has heard a number of case studies that demonstrated unacceptable behaviour from insurers. APRA does not defend or endorse that conduct," the regulator said. "Unfortunately, though, there are also examples of insurance fraud, which can, if not properly detected and managed, lead to higher premiums for insurance and, in extreme cases, the ability for insurers to provide cover." While APRA said investigations into mental health claims should be dealt with "sensitively", it said the FSCs existing code of conduct struck "the right balance". Mental health-related disability claims have skyrocketed in recent years, accounting for about 15 per cent of all claims according to SuperFriend, a joint venture between industry super funds and life insurers that aims to help people struggling with mental health issues get " to health" and to work. AIA reports mental health claims are the third most common type of disability claim, and are particularly high for people under 25 - accounting for 30 per cent of disability claims. The insurer said surveillance is used in less than 1 per cent of claims. TAL, meanwhile, put mental health disability claims at No. 2, accounting for $237 million of the $1.6 billion of total claims it paid out in A spokesman for TAL said the firm used surveillance only "where absolutely necessary", and had done so in only 0.42 per cent of mental health claims in the two years to June. While a tiny fraction of total claims, it was still twice as much as physical illness and injury claims, where surveillance was used in 0.2 per cent of cases. MLC said it had used surveillance only three times this year, and none of the investigated claims were mental health related. "Surveillance is only considered in rare instances where we reasonably believe that the claim appears to be inconsistent with information available to us, and only after we have exhausted all other alternative methods of verifying inconsistencies," an MLC spokesman said. Margo Lydon, CEO of SuperFriend, said surveillance was not an appropriate way of investigating mental health claims. "However, insurers do need to be able to determine the validity of a claim," she said. Nick Kirwan, senior policy manager, life insurance, at the Financial Services Council, ed APRA's position, saying the cases heard at the royal commission took place before the FSC published its Life Insurance Code of Conduct "The code makes it absolutely clear you would only use surveillance as a last resort If s never a diagnostic tool. You only use it to check if someone is actually working and telling you they are not" he said. Rowena Orr, QC, had suggested surveillance should be banned outright.

88 Australian Financial Review, Australia Author: Tom Mcllroy Section: General News Article type : News Item Classification : National : 44,635 Page: 7 Printed Size: cm² Region: National Market: Australia ASR: AUD 8,455 Words: 605 Item ID: Page 1 of 2 Ex-Fair Work commissioner loses tax appeal Tom McDroy Former Fair Work Commission vicepresident Graeme Watson has lost a bid to avoid $30,000 in tax after arguing he had the rank of a Federal Court judge and shouldn't be required to pay. Commissioner of Taxation Chris Jordan said Mr Watson was required to pay division 293 tax for the 2014 and 2015 income years, because of taxable super contributions higher than $300,000. Representing himself in the Administrative Appeals Tribunal, the former Freehills lawyer argued he was exempt because his role on the commission afforded him the same rank, status and precedence as "a justice or judge of a court created by the Parliament". Division 293 rules reduce the concessional tax treatment of certain superannuation contributions made for very high-earning individuals. Mr Watson previously wrote to then treasurer Scott Morrison in July 2016, seeking a clarifying regulation that would recognise Fair Work Commission members as having the status of a Federal Court judge. He said legislation clearly exempted them from paying the tax after retirement Lawyers for the Tax Office told the tribunal Mr Watson did not meet the definition established by legislation and he was required to pay tax of $15, for 2014 and $15, for Mr Watson challenged the tax bill in March 2017, shortly after quitting the Fair Work Commission in disgust over what he described as a biased workplace relations system and a "partisan, dysfunctional and divided" commission. In September, he joined Jobs and Industrial Relations Minister Kelly O'Dwyer's office as her senior IR adviser. The move by Ms O'Dwyer, the revenue and financial services minister in Malcolm Tumbull's government, was seen as a sharpening of the Coalition's focus on workplace reform under Prime Minister Scott Morrison. The ATO argued the Workplace Relations Act did not confer any equivalence between the position of a presidential member of the Australian Industrial Relations Commission with that of a judge of the Federal Court, adding the exemption applied only to individuals who were a justice of the High Court and of other courts created by Parliament not someone merely with the status of the positions. In a decision handed down last month, Administrative Appeals Tribunal deputy president Stephanie Forgie outlined differences between Mr Watson's position on the commission and that of a judge, including the Federal Court's mandatory retirement age of 70 - five years later than the retirement age of 65 for commissioners. Last year, Fair Work president Iain Ross told a Senate estimates hearing Mr Watson was one of 10 former members who retired early, within months of qualifying for a full pension at 60. Labor criticised Mr Watson over his concerns about tax treatment of his pension, a maximum of $272,544 a year. Opposition employment spokesman Brendan O'Connor said at the time the complaint "tells you everything you need to know about the former commission member". Since retiring, Mr Watson has called for the government to go beyond narrow, "piecemeal" industrial relations changes and address a "regulatory system that institutionalises conflict". He criticised the internationally high level of minimum wages and conditions as contributing to youth unemployment in Australia and called for a review of the entire safety net He has also called for cuts to red tape in enterprise bargaining. Mr Watson represented Patrick stevedores in the landmark 1998 waterfront dispute. He used a speech at the Centre for Independent Studies in 2017 to criticise his former boss, Mr Ross, suggesting he presided over marginalisation of commissioners with a ground in business in favour of those from union grounds.

89 Australian Financial Review, Australia Author: Tom Mcllroy Section: General News Article type : News Item Classification : National : 44,635 Page: 7 Printed Size: cm² Region: National Market: Australia ASR: AUD 8,455 Words: 605 Item ID: Page 2 of 2 Graeme Watson argued he was exempt from the tax because of his role on the commission, PHOTO: KATE GERAGHTY

90 Australian Financial Review, Australia Author: John Kehoe Section: General News Article type : News Item Classification : National : 44,635 Page: 5 Printed Size: cm² Region: National Market: Australia ASR: AUD 6,290 Words: 759 Item ID: Page 1 of 1 Bond investors like Labor's franking cut John Kehoe Bond fund managers have ed Labor's proposal to cut the generosity of franking credits, assessing the shakeup will reduce the tax bias for dividends and encourage retirees to put money into the debt market Fixed income portfolio managers said ending refunds of excess franking credits would make shares and hybrids relatively less attractive for low-taxed investors such as self-managed superannuation funds (SMSFs). Equity investment managers have lashed the policy for hurting owners of shares and hybrid securities, but debt investors anticipate it could nudge SMSFs to consider corporate bonds offering steady interest payments. FUG Securities director of education and research Elizabeth Moran said dividend imputation had caused many investors to be over-allocated to higher risk shares and underweight lower volatility bonds. "One of the things I see quite commonly is people investing in bank shares for the income and franking credits and not being worried about the falling capital value, which is really concerning," she said. "I do think Labor's dividend imputation proposal is good policy because I think overall we are over-allocated to higher risk assets and there is an inherent danger if you get a big downturn at the wrong time. "While a bond is lower yielding, the capital preservation is a big part of why you would invest in bonds." SMSFs had $207.8 billion invested in listed shares and $9.5 billion allocated to debt securities, as of March 2018, according to Australian Taxation office data. Realm Investment House cofounder Andrew Papageorgiou said limiting franking credits would help change the mindset of equity investors who had pressured company boards into paying franked dividends instead of reinvesting for future growth. "Franking drives conservatism at a board and management level because people don't companies to reinvest capital in their own businesses for growth," he said, noting the investor lash against Insurance Australia Group's move into Asia However, Mr Papageorgiou said ending franking refundability was a "bit rough" for retail investors who had invested in bank hybrids, because they were essentially providing an insurance buffer for banks and taxpayers in any future serious economic downturn. "We need to be fair and reasonable when moving the goalposts," he said. Domestic shareholders being paid dividends currently receive a refundable tax credit for the 30 per cent domestic corporate tax paid, even if their personal tax rate is zero. Labor's treasury spokesman Chris Bowen wants to scrap the cash refund of franking credits for low taxed investors like SMSFs, except pensioners, to save the budget about $5 billion a year. The OECD's Pensions at a Glance 2017 report notes that for Australia's superannuation funds, equities outweighed bonds by 5L1 per cent to 10.2 per cent, the inverse of most advanced economies which had a greater preference for bonds. Australian Securitisation Forum chief executive Chris Dalton said ending the refundability of franking credits would make shares a "little less attractive'' to SMSFs. "Combined with changes to negative gearing, at the margin it could start to change the thought process of rebalancing the portfolio away from property and shares to fixed income," he said. Bill Bovingdon, chief investment officer of Aln'us Asset Management, a specialist cash and bond manager, said Labor's franking policy could affect asset allocation at the margin, though some retirees may restructure their financial affairs to minimise the impact "It will have a marginal impact to take the gloss of shares and particularly hybrids for the cohort who do currently get a net refund," Mr Bovingdon said. A Plato Investment Management survey of 1400 clients, mainly SMSFs, found 81 per cent of respondents said they would reduce exposure to Australian shares in response to Labor's imputation policy. Of that some 46 per cent said they would increase exposure to global shares, but only 7 per cent said they would increase exposure to fixed income or cash. "So it seems like our investors won't be putting too much into cash or debt - probably because current interest rates are so low," said Plato managing director Don Hamson. The Australian Stock Report (ASR) has launched an online petition aimed at stopping Labor's planned changes to dividend imputation and says it has more than 14,000 signatures. "We want to make sure that investors who rely on franking credits will continue to get that income from their investments. And we can only do that if we can stop the proposed changes," said ASR's head of client services Rhys Williams. Key points Bond managers welcome Labor's plan to scrap the refund of franking credits. Limiting franking credits could help change the mindset of equity investors.

91 Australian Financial Review, Australia Section: Special Report Article type : News Item Classification : National : 44,635 Page: 5 Printed Size: cm² Region: National Market: Australia ASR: AUD 10,498 Words: 997 Item ID: Page 1 of 2

92 Australian Financial Review, Australia Section: Special Report Article type : News Item Classification : National : 44,635 Page: 5 Printed Size: cm² Region: National Market: Australia ASR: AUD 10,498 Words: 997 Item ID: Page 2 of 2

93 Australian Financial Review, Australia Author: Louis White Section: Special Report Article type : News Item Classification : National : 44,635 Page: 8 Printed Size: cm² Region: National Market: Australia ASR: AUD 8,556 Words: 763 Item ID: Page 1 of 2 Advisory services revenue king as sectors open up Growth Helping gain efficiencies continues as lucrative role. Louis White Advisory services continue to be the fastest growing area of revenue for accounting firms with 82 per cent (up 8 per cent from 2017) ranking it No. 1, according to data collected in the Top 100 Accounting Firms. Providing advice for self-managed superannuation funds, general superannuation and retirement was nominated by 46 per cent of firms (up from 43 per cent) and tax compliance by 41 per cent (up 10 per cent on 2017) as areas of greatest revenue growth in While growth in wealth management services, at No. 4, stayed about the same at 27 per cent (down 1 per cent), budget and cash flow projections at No. 5 showed a big jump from 4 per cent to hit 23 per cent in Perth-based Jamie O'Rourke, chairman of tax, audit and consulting firm RSM, which has offices in all the mainland states, confirms the ascendancy of advisory services in the accounting world. "Looking at ways to improve business practices and gain efficiencies for clients is at the core of what we do," says O'Rourke. Illustrating the range of those services, he points to RSM's creation of cloud-based accounting ecosystems for commercial flooring businesses and an energy provider, and the company's engagement by a not-for-profit early education provider to aggregate up to 50 regional childcare services in Western Australia "The main challenge there was to create an ERP [Enterprise Resource Planning] that could accommodate the technical needs of the group and provide an ecosystem to support a geographically dispersed management and operational team," O'Rourke says. The objective was a structure to attain economies of scale, consistent quality and strong governance. At Stewartfirown Business and Tax Chartered Accountants, which has offices in Sydney and Adelaide, it is Australia's burgeoning retirement sector and the growth in aged care residences that have sparked interest "Over many years we have developed a speciality in the aged care, disability and community services sectors," says senior partner Grant Corderoy. Reflecting the scope and complexity of the aged care sector, the Commonwealth government is investing $20 billion into the industry in the financial year, while launching a royal commission into quality and safety. An IBISWorld report, Aged Care Residential Services in Australia, released in July 2018, reveals that industry revenue is also about $20 billion per annum, growing at 5.4 per cent per year, and is forecast to rise to $25 billion by the financial year. StewartBrown produce quarterly financial benchmarking reports that incorporate detailed financial and supporting data across 950 residential aged care facilities and 500 home-care programs across Australia. It is the largest benchmarking survey of the industry, and provides insight into the trends and drivers of financial performance. It also offers analysis at the residential aged care facility and home-care package program level. 'This allows participants to compare their performance with that of their peers, including the top 25 per cent of performers, which has resulted in a significant improvement in accountability," Corderoy says. As well, the firm through its benchmark and consultancy services has worked with aged care clients to finandaily model proposed new builds or rebuilds that are environmentally sustainable and viable. "We have also assisted other clients through our benchmarking statistics to transition into solar energy to reduce electricity and related expenditure and implement organic foods into the catering diet" RSM and StewartBrown see significant future growth but in different areas which, in the bigger picture, means accounting firms do not really see any sector they cannot break into. "Data is one that we have been closely monitoring for some time," O'Rourke says. "The access to more and better data sets within all business models has increased the need for accounting firms to be able to interpret the data and provide management insights and guidance to clients of all sizes." Another potential area for growth is around the changing attitudes towards outsourcing, O'Rourke says. "The wage/cost benefits of outsourcing tasks to low-wage countries is being overtaken by the cost/efficiency benefits from technology improvements with Australian businesses now able to automate their processes to drive down costs and to collaborate across global markets," he says. While StewartBrown see increasing automation being vitally important, one significant aspect will always come first The human element "Nothing will replace the aspect of our practice that our clients truly value - the adviser services," Corderoy says.

94 Australian Financial Review, Australia Author: Louis White Section: Special Report Article type : News Item Classification : National : 44,635 Page: 8 Printed Size: cm² Region: National Market: Australia ASR: AUD 8,556 Words: 763 Item ID: Page 2 of 2 Accounting firms do not really see any sector they cannot break into. Jamie O'Rourke of RSM points to the growing need to be able to interpret data.

95 Australian Financial Review, Australia Author: Joanna Mather Section: General News Article type : News Item Classification : National : 44,635 Page: 1 Printed Size: cm² Region: National Market: Australia ASR: AUD 7,241 Words: 614 Item ID: Page 1 of 2 They're on clover The Grattan Institute says plans to increase compulsory super contributions to 12 per cent should be dumped because most retirees are much better off than they were 20 years ago. Newsp3 Retirees far better off than they were 20 years ago Joanna Mather The Grattan Institute has urged federal Parliament to abandon plans to divert 12 per cent of wages to superannuation, arguing most people can already expect to live comfortably in retirement In a new report that heavily criticises the financial services industry for peddling fear about retirement income adequacy, Grattan says retirees today are much better off than they were 20 years ago. Moreover, future retirees can expect to receive at least 91 per cent of their pre-retirement income thanks to a combination of super savings and the age pension. That's well above the 70 per cent replacement rate advocated by theoecd. "The conventional wisdom that Australians don't save enough for retirement is wrong," the report says. "There's no need to boost retirement incomes further - the future looks comfortable." Low-income earners who do not own a home are the exception, the report adds, and this group should receive additional assistance. The super guarantee is 9.5 per cent of wages but is due to rise to 10 per cent in 2021 and 12 per cent by Grattan Institute chief executive John Daley lashed the super industry for bombarding people with suggestions of an impoverished retirement "The financial services industry fear factory should be shut down because it encourages Australians to worry unnecessarily about whether they have enough to retire on," he said. Mr Daley has long criticised the generosity of super tax breaks. Though tax breaks have been curbed in recent years, he insists the $2.7 trillion super system still resembles a "taxpayerfunded inheritance scheme". "Most retirees are net savers in retirement or pretty close, so they wind up leaving very large bequests." Grattan's modelling shows a 30-year-old who today earns an average of $120,000 over their working life can expect a replacement rate of 70 per cent or $84,000. Those at the lower end of the income scale will do better, achieving replacement rates of more than 100 per cent. That is, their income will be as high, if not higher, in retirement than during their working lives. It is a vastly different message to the one conveyed by most researchers, who predict major retirement savings shortfalls, especially for women. The Grattan report says plans to increase the super guarantee to 12 per cent should be dumped, increasing government revenue by about $2 billion a year. The only people who need more help are low-income earners who do not own a home, the report adds. The maximum rate of Commonwealth rent assistance should therefore be lifted by 40 per cent it says. Mr Daley said successive governments had not compiled or released any official guidance on the level of savings required to fund retirement The self-interested financial services industry had been only too happy to fill the information vacuum. According to the ASFA "retirement According to the ASFA "retirement standard", single home-owners in relatively good health need $545,000 in savings (and couples $640,000) to achieve a comfortable retirement ASFA defines "comfortable" as being able pursue leisure and recreational activities, private health insurance, a reasonable car, good clothes and occasional international holidays. A lump sum in this vicinity will allow for annual spending of $42,953 for singles and $60,604 for couples. In ASFA's benchmarking, these amounts increase in line with wages throughout retirement Mr Daley said the ASFA standard assumed retiree spending rose by 25 per cent between the ages of 70 and 90 when in fact spending over that period tended to fall by 15 per cent Opinion John Daley p47

96 Australian Financial Review, Australia Author: Joanna Mather Section: General News Article type : News Item Classification : National : 44,635 Page: 1 Printed Size: cm² Region: National Market: Australia ASR: AUD 7,241 Words: 614 Item ID: Page 2 of 2 Getting comfortable Replacement rates of pre-retirement income for various age groups in (%) EXISTING RETIREES OLDER WORKERS year-old singles : 40year-okls : year-old couples year-olds : : 1 S b 9a - i - rmi j i s - i a : I 1 9 I INCOME PERCENTILE m'. ' ' ' '. ' ' ' '. ' '. '. m m II i!{ Ii ft i-s 1 la f * r * i 1 i B I B i i! 8 i.b s I! 8 : EMPLOYMENT EARNINGS PERCENTILE rounger WORKERS : : 30year-okls i 70% replacement rate target ' I iljijl: 1 Jj_ 1ITTTT 1 ITT IT EMPLOYMENT EARNINGS PERCENTILE 200 i 180 : ; 120 : : 60 ; 40 i 20 SOURCE: GRATTAN

97 Australian Financial Review, Australia Author: James Frost Section: General News Article type : News Item Classification : National : 44,635 Page: 1 Printed Size: cm² Region: National Market: Australia ASR: AUD 8,010 Words: 863 Item ID: Page 1 of 2 AustralianSuper wary of verdict on banks Exclusive AustralianSuper will abstain from voting for or against the reelection of board members at any of the big four bank annual meetings, starting with Commonwealth Bank's Brisbane AGM today, until royal commissioner Kenneth Hayne delivers his final report on the sector early next year. The Australian Financial Review understands AustralianSuper is wary of endorsing any bank or person before the last round of hearings, which will explore misconduct within financial institutions, and the final report's findings and recommendations. - Companies pl5 AusSuper to avoid vote on bank directors Exclusive James Frost AustralianSuper will abstain from voting for or against the re-election of board members at any of the big four bank annual meetings until Commissioner Kenneth Hayne delivers his final report early next year. Starting with Commonwealth Bank's meeting in Brisbane on Wednesday, the industry fund powerhouse will sit on its hands when it comes to reelecting directors because it believes casting a vote ahead of the final report on February 1 would be premature. The Australian Financial Review understands AustralianSuper is wary of endorsing any bank or person before the last round of hearings, which will explore misconduct within financial institutions, and the final report that will contain Commissioner Hayne's findings and recommendations. The country's largest superannuation fund, with $140 billion under management, holds close to $7 billion of shares across the big four banks, including more than $2 billion of CBA shares. Westpac will hold its AGM on December 12, while ANZ and NAB hold their meetings on December 19. It is believed AustralianSuper is broadly satisfied with Commonwealth Bank's remuneration report and will vote in favour of it It voted against CBA'spayin2016. The vote against the 2016 remuneration report was part of a lash against non-financial or "soft" targets for the payment of executive bonuses, with 25 per cent attributed to "people and community" and another 25 per cent attributed to "customer satisfaction". The measures led to a historic first strike when almost 51 per cent of shareholders voted against the remuneration report A strike occurs when more than 25 per cent of votes are cast against the report The vote is not binding, but a strike two years in a row allows a vote to spill the board. Governance experts including Institutional Shareholder Services are expected to vote in favour of the remuneration resolution and the three other remaining resolutions. This AGM season has already thrown up strikes for high-profile ASXlisted names in Telstra, Tabcorp and Healthscope. Sixty-one per cent of shareholders voted against AMP's remuneration report in May, but CBA will be the first bank to test the mood of shareholders after Commissioner Hayne handed down his interim report that lambasted the sector for putting the pursuit of profits above customers. Last year AustralianSuper lodged a protest vote against the re-election of CBA director Andrew Mohl to show its dissatisfaction with how the bank handled the AUSTRAC money laundering debacle. AustralianSuper is now believed to be broadly supportive of the bank's response to the crisis and the independent review of the bank's governance, culture and accountability frameworks that found the bank's senses had been dulled by a long period of success.

98 Australian Financial Review, Australia Author: James Frost Section: General News Article type : News Item Classification : National : 44,635 Page: 1 Printed Size: cm² Region: National Market: Australia ASR: AUD 8,010 Words: 863 Item ID: Page 2 of 2 Commonwealth Bank was hit with a $1 billion capital charge by the regulator over the affair and would make a $700 million payment to settle with the financial regulator. Former CEO Ian Narev left the business, short-term bonuses of the entire group executive team were cancelled and director fees were slashed by the incoming chairman Catherine Livingstone as the bank embraced "shared accountability". On Monday ANZ unveiled similar measures when it revealed bonuses Continued p!8 From page 15 AusSuper to avoid vote on bank directors had been slashed by $124 million across the organisation as a result of failures highlighted by the royal commission. Executives at the bank lost more than $2 million with CEO Shayne Elliott forgoing more than $1 million. "It is important that accountability for these failures is reflected in the remuneration of our most senior team even though most are new to their roles and many are new to ANZ," the bank said. At CBA's meeting on Wednesday, when the bank will also deliver its operational update for the September quarter, there will be a total of four items addressed. Shareholders will vote on the re-elections of Ms Livingstone and director Anne Templeton- Jones, the remuneration report and the grant of securities to the bank's CEO Matt Comyn. The bank is proposing to grant Mr Comyn 54,364 rights to shares, which will vest over the next four years. At today's prices the shares are worth $3.7 million. Mr Comyn is not expected to make any up-front payments for the rights nor is he entitled to collect any dividends until they vest Mr Comyn is among those expected to appear in front of the royal commission's seventh round of hearings, which begin on November 19 in Sydney. They will focus on causes of misconduct by financial institutions and possible responses, including regulatory reform. On Monday the royal commission confirmed it would also call executives from AMP, Bendigo Bank and Macquarie alongside representatives from the corporate regulator ASIC and the prudential regulator APRA. Last week AustralianSuper opted not to vote at the Healthscope AGM because it was part of a consortium bidding for the healthcare company. Last year AustralianSuper lodged a protest vote against CBA director Andrew Mohl. Former Commonwealth Bank CEO Ian Narev. PHOTO: ALEX ELLINGHAUSEN

99 Australian Financial Review, Australia Section: General News Article type : News Item Classification : National : 44,635 Page: 48 Printed Size: cm² Region: National Market: Australia ASR: AUD 11,468 Words: 1222 Item ID: Page 1 of 2 Chanticleer For crowing there was not his equal in all the land... PEXA deal worries bankers The $1.6 billion sale of electronic property settlement company PEXA to a consortium including the Commonwealth Bank of Australia has raised concerns in the banking industry. The concerns are understandable given that CBA could gain a significant strategic advantage over its competitors from having a $100 million shareholding in PEXA. Chanticleer wonders what the industry regulator, the Australian Registrars' National Electronic Conveyancing Council (ARNECQ, thinks about one of the big four banks owning a 16 per cent stake in what is essentially an e-conveyancing utility. The CBA shareholding should give it privileged access to all sorts of sensitive information and that raises a number of pertinent questions. Will CBA make PEXA the default electronic settlement platform for all mortgages written by CBA? Will CBA have access to data on property transactions generated by PEXA? Will CBA's access to information on PEXA's national expansion plans give it an edge over other banks? These questions have added weight because PEXA is currently a monopoly. A competitor is in the wings called Sympli, which is a joint venture between the ASX and the Beck family controlled Australian Technology Innovators. Sympli has a lot of things going for it including access to the ASX"s relationship with banks and ASXs settlement technology platform for securities, Austraclear. But Sympli is starting from a long way behind PEXA, which has invested about $400 million over the past eight years. ASX and the Beck family plan on investing a total of $60 million in their electronic settlement platform. One of the strongest competitive advantages for Sympli is that it was created in response to industry frustration at the performance of PEXA. Solicitors and conveyancing companies around Australia forced to use PEXA because of mandated usage timelines imposed by state governments have been crying out for a competitor offering a simpler solution. It is feasible that Sympli will live up to its name and offer a simpler and cheaper option for electronic property settlement But its progress will be severely constrained if the CBA, the country's biggest issuer of mortgages, decides to give preference to PEXA. Until this week's $1.6 billion transaction PEXA was owned by the state governments of NSW, Victoria, Queensland and Western Australia, the big four banks, Macquarie Group, Link Group and Melbourne richlister Paul Little. The winning consortium that emerged from a dual-track sales process comprised Link, CBA and Morgan Stanley Infrastructure Inc. The trade sale option became more attractive than an initial public offering after extreme volatility in the US equity markets made local institutions nervous. The pressure for a sale before the end of this year came from the four state governments. The states told PEXA 18 months ago they wanted to sell out by the end of this year. The states will collect a total $500 million, which is an extraordinary return on their investment of tens of millions of dollars in CBA's commitment to PEXA was far greater than its rivals - ANZ Banking Group, National Australia Bank and Westpac Banking Corp. These three banks did not participate in successive rounds of funding and that meant their shareholdings in PEXA AFRGA1A048 NR gradually shrank to about half a per cent each. CBA kept topping up its shareholding by participating in each new funding round. ANZ, NAB and Westpac are selling out of PEXA in the knowledge that to be successful the platform will have to capture about 60 to 70 per cent market share of all electronic property transactions. PEXA is already processing about 84 per cent of all property transactions in Victoria, which mandated that all transactions must be electronic from October 1 this year. The mandating of full electronic transactions is happening in NSW in July next year and in Western Australia in December this year. Queensland has never issued any mandating of transactions but property transactions between banks operating in Queensland are virtually all put through PEXA's platform. PEXA processed about 154,000 property transactions in the month of October out of a total of 300,000 in Australia. The fact that it is now processing half of all property transactions is a tribute to a government reform that started with a Council of Australian Government meeting in Once the governments agreed to abandon piecemeal efforts to move to e-conveyancing and go with a national system they appointed Alan Cameron to lead the project The former head of the Australian Securities and Investment Commission started by employing Marcus Price, who had worked at Boston Consulting Group, been CEO of Veda and held senior roles at Dun & Bradstreet and NAB. When Price, who was found by a headhunter, turned up for the job interview he immediately told Cameron that the whole idea would fail without the support of the banks. He convinced Cameron to get the banks involved as shareholders. This led to the project becoming a public-private partnership. Macquarie Bank was the financial adviser to Cameron. But soon after Macquarie's appointment it came to Cameron and said it wanted to abandon its advisory role and become a shareholder alongside the big four, link and Paul Little joined the consortium during later rounds of funding. Cameron believes the success of PEXA is

100 Australian Financial Review, Australia Section: General News Article type : News Item Classification : National : 44,635 Page: 48 Printed Size: cm² Region: National Market: Australia ASR: AUD 11,468 Words: 1222 Item ID: Page 2 of 2 a tribute to the collaborative efforts of the state governments and the banking industry. The PEXA success story comes at an interesting time because the banks are pilloried for only looking after their own self interest and governments are under attack for failing to develop good policy. Cameron says there is a certain irony in the fact that the inter-governmental agreement that delivered PEXA was done without the involvement of the federal government That suggests there is a way of implementing policies that benefit all Australians without having to worry about federal politicians. Cameron says there are many parties who have made PEXA a success. At the very beginning Accenture was brought in to build the software. He says the land title offices in each of the participating states played an important role in moving from paper-based transactions to electronic settlement The shareholding structure of the winning consortium will depend on the decisions made by Macquarie and Little. They have an incentive to sell their shares because a clause in the shareholder agreement says that the more shareholders who sell the higher the price paid. Link told the ASX that its interest in PEXA will increase from its current shareholding of 19.8 per cent to between 27 per cent and 44 per cent "As Link Group will fund its increased investment through available cash and headroom under its existing debt facilities, Link Group is not required to raise any equity to complete the trade sale offer," Link said. CBA chief executive Matt Comyn told the ASX that CBA was lifting its shareholding in PEXA to show its "continued commitment to support the property industry as it transitions towards an innovative, fully digital, settlements process that aims to provide improved experiences for customers". He said the transaction "aligns with CBA's strategy to focus on its core banking businesses and to create a simpler, better bank for our customers". The deal comes at a time when CBA is selling minority interests in a range of companies. TONYBOYD The CBA shareholding should give it privileged access to all sorts of sensitive information. Disclosure: The author's self managed super fund owns shares in Link.

101 Gold Coast Bulletin, Gold Coast QLD Author: Jeff Whalley Section: General News Article type : News Item Classification : Regional : 21,468 Page: 22 Printed Size: cm² Region: QLD Market: Australia ASR: AUD 1,907 Words: 373 Item ID: Page 1 of 1 Finance group closes on Pexa JEFF WHALLEY A GROUP of big finance companies including the Commonwealth Bank has seized control of a major technology business that plays a leading role in property settlements. CBA, Link Administration Holdings and a division of US investment bank Morgan Stanley have secured a majority stake in Property Exchange Australia, or Pexa. It comes after the consortium tabled a revised bid for Pexa last week, still valuing the company at about $1.6 billion but, according to market speculation, carrying fewer conditions. The bank and Link already had major stakes in Pexa and are increasing their holdings significantly. An industry source said CBA s move could be a precursor to more such deals under chief executive Matt Comyn, who took the reins of the group in April. The bank, Australia s biggest, is poised for a windfall as it offloads about $8 billion worth of businesses in sectors such as wealth management and mortgage broking amid the fallout from the financial services royal commission. An electronic property settlement exchange, Pexa was founded eight years ago in response to the Council of Australian Governments push for a single, national e-conveyancing service for the property industry. It allows members such as lawyers, conveyancers and financial institutions to lodge documents with land registries and complete property settlements electronically. Other key shareholders in the unlisted company include the Victorian, NSW and West Australian governments, the other three major banks, investment bank Macquarie and businessman Paul Little. It was unclear last night which investors had agreed to accept the consortium s offer, enabling the CBA and Link, with Morgan Stanley Infrastructure Partners, to lift their combined holding above 50 per cent. The deal comes after Pexa, amid choppy sharemarkets and a lack of support among would-be institutional investors, abandoned plans for an initial public offering. The CBA will invest a further $50 million in the exchange, taking its total investment to $100 million and increasing its stake from 13.1 per cent to about 16 per cent. Link will lift its stake from 19.8 per cent to between 27 per cent and 44 per cent. Mr Comyn said the transaction was in line with the CBA s strategy of focusing on its core banking businesses and to create a simpler, better bank for our customers.

102 Gold Coast Bulletin, Gold Coast QLD Section: General News Article type : News Item Classification : Regional : 21,468 Page: 23 Printed Size: cm² Region: QLD Market: Australia ASR: AUD 3,007 Words: 980 Item ID: Page 1 of 2 BETTING ON THE PROVEN PACKER PROFIT MAXIM There s an old rule of thumb that tended to work very well. If the late Kerry Packer was selling, it was unwise to be the buyer. The opposite also applied. Just as he was emphatically on the very public record that he was not inclined to over-pay his taxes, he was certainly not inclined to over-pay for assets. The most famous, but not the only, example of both was of course with the same asset: what used to be known as if the two were fused together as the Packers Nine Network when he sold it to the late Alan Bond and subsequently bought it. Well, the entrepreneurs of the 1980s have all long since gone to the great trading room in the sky. But the rule of thumb is still very much alive in the 21st century; it now applies to private equity. If they are buying be exceedingly careful at selling at their offer price. If they are selling be even more careful at buying. Two graphic examples which spring to mind are Treasury Wine Estates and Myer. In 2014 the original and arguably still the best PE group, the famed KKR, launched a bid for TWE. It was even prepared to increase its offer after the first knock but the TWE board stood firm in rejection. KKR offered what to some seemed an attracti e $5 20 a share But attractive $5.20 a share. But TWE is now trading at more than three times that around $15.80 and that s after its share price has taken quite a hit in the recent market turmoil. The opposite example is Myer. In 2009, a private equity group sold it to public shareholders at a little less than double the price it had paid to take it private three years earlier. The PE Group sold the Myer shares at $4.10. The buyers, who were either unaware of that maxim or chose to ignore it, are now holding shares worth barely a tenth of that, around 47c. So now we have a PE group BGH wanting to buy private hospital group Healthscope at $2.36 a share. On the assumption that BGH is not Santa come early, shareholders should be wary. Further, BGH has joined with Healthscope s biggest shareholder, the industry super fund AusSuper, to make its play. Again, AusSuper only became a big shareholder because it self-evidently sees considerable upside in Healthscope shares. It has effectively stated that it believes they are still good buying at the $2.36 it and BGH propose or purport to pay. This is an absolutely critical point: BGH/ AusSuper have NOT made an offer and do not intend to make an offer to Healthscope shareholders; they are asking the board of Healthscope to decide to sell the company to them (perhaps) at that price. They are asking the board to commit to a scheme of arrangement; something only a board can commit a company to do. They are also asking the board to abandon its own strategy which selfevidently it believes is in the best interests of all shareholders and would deliver them the best value for their shares. They also want the board to allow them due diligence essentially, exposing its financial soul after which they might commit to the $2.36, but only by the scheme process, which has the board doing the takeover work for them. The board led by Paula Dwyer has, therefore, two separate decisions to make. First, will it allow due diligence. It refused to do so when BGH/AusSuper made its first play in April. The second is whether it would subsequently commit the company to go down the scheme route. On the surface allowing the first does not commit the board to also agreeing the second. But it would certainly put great pressure on the board, once expectations built up. The board is under no obligation to allow due diligence. It has to make a considered judgment of what s in the best interests of all shareholders. It has self-evidently concluded that separating the hospital properties into a partly-owned and controlled property trust and the strategic and operating decisions it and management have made for the hospitals business will deliver better value over the long-term to shareholders than the $2.36 upfront, as it continued with that strategy after the first approach from BGH/ AusSuper. The problem it faces is that private hospitals have hit headwinds and investors have been underwhelmed by the strategy; that despite the clear continuing interest of the bidding group, the Healthscope share price fell sharply below the $2.36 and even now are struggling to stay above $2. It is entirely and properly the decision of the board to make, whether to allow due diligence and then subsequently whether to agree to recommend a scheme. It s both its right and its responsibility: that s exactly what directors are elected and paid to do. BGH/AusSuper can t complain because they chose to go this route. They are equally entirely entitled to launch a conventional takeover. Except that doesn t suit their purpose and they want to shift all the risk on to Healthscope shareholders. Shareholders are of course entitled to sack directors if they wish them to act differently. Last week they had the chance to do so; they chose not to

103 Gold Coast Bulletin, Gold Coast QLD Section: General News Article type : News Item Classification : Regional : 21,468 Page: 23 Printed Size: cm² Region: QLD Market: Australia ASR: AUD 3,007 Words: 980 Item ID: Page 2 of 2 voting 94 per cent to reelect Dwyer and 99 per cent to elect a boardnominated new director. AusSuper abstained. But even if it had voted against her, she would still have won comfortably with a majority well above 70 per cent. In the most explicit way, shareholders have voted to leave the decision to Dwyer and the board. SO NOW WE HAVE A PE GROUP BGH WANTING TO BUY PRIVATE HOSPITAL GROUP HEALTHSCOPE AT $2.36 A SHARE. ON THE ASSUMPTION THAT BGH IS NOT SANTA COME EARLY, SHAREHOLDERS SHOULD BE WARY. TERRY MCCRANN

104 Australian Financial Review, Australia Author: Jemima Whyte Section: General News Article type : News Item Classification : National : 44,635 Page: 1 Printed Size: cm² Region: National Market: Australia ASR: AUD 9,790 Words: 795 Item ID: Page 1 of 3 Warning shot fired against PEXA rivals Link Group chief executive John McMurtrie has warned would-be competitors of PEXA saying they must invest up to $300 million to challenge the online property exchange network His comments come as a consortium of Link, Commonwealth Bank and Morgan Stanley Infrastructure outbid other buyers and a potential Pexa IPO in a deal valuing the company at $1.5 billion. PEXA, founded by the big banks and some state governments, owns a system including electronic lodgements of documents for property transactions. *' Companies p15 Chanticleer page Link consortium wins PEXA in $1.5b deal Jemima Whyte Link Group chief executive John McMurtrie has fired a warning shot to any would-be competitors of PEXA, saying they must be prepared to invest up to $300 million if they hope to challenge the online property exchange network. His comments come as a consortium of Link, Commonwealth Bank and Morgan Stanley Infrastructure finally outbid other buyers and a potential Pexa IPO in a deal valuing the company at $1.5 billion, which could ratchet up to $1.6 billion if all remaining shareholders sell into the deal. The transaction, which is expected to close in two or three months, was struck after months of negotiating, which included assessing an IPO, external bids and internal offers. It's unclear whether major shareholders Macquarie Capital, which owns 24 per cent of the business, and Paul Little's Namarong Investments, which owns 9.7 per cent will sell their shareholdings, while the Victorian government, which owns 7.5 per cent, is in caretaker mode before the state election on November 24. Among the investors that have already agreed to sell to the consortium are Western Australia's Landgate, which owns 7.83 per cent the NSW government which owns 6.7 per cent the Queensland government which owns 4 per cent and the three other major banks which all had shareholdings of less than 1 per cent Shareholders will have until Friday to decide whether to sell into the offer. The consortium's offer was conditional on receiving 50 per cent acceptances. PEXA, founded in 2011 by the major banks and some state governments, is a network business that owns a system including electronics lodgements of documents for property transactions, as well as settlements. In mid-2017, Link boosted its stake in PEXA by 8.3 percentage points to 19.7 per cent spending $64.7 million to do so. That gave the company an equity value of about $650 million. Continued p!8

105 Australian Financial Review, Australia Author: Jemima Whyte Section: General News Article type : News Item Classification : National : 44,635 Page: 1 Printed Size: cm² Region: National Market: Australia ASR: AUD 9,790 Words: 795 Item ID: Page 2 of 3 From page 15 link consortium wins PEXAin$L5bdeal The $1.53 billion equity value, or $1.6 billion offer including debt implies a revenue multiple of 12 times calender Link chief executive John McMurtrie said the company had been against an IPO, on the basis the company was still in its infancy and did not need the distraction and pressures of being a standalone listed company. In late October, Link told the sharemarket it would sell just under half its shareholding if the company floated at the mooted valuation of $1.88 billion to $2.18 billion by market capitalisation. "I think the IPO was always going to struggle," he said, noting that revenues were growing strongly quarter on AFRGA1 A018 NR quarter. "The investors who were looking at ing the IPO were scared off to a large extent in October. Some of them said if you had an exposure to PEXA, you might as well have it through Link." He added that link had disclosed its plans to sell a portion of its shareholding if the company floated. "That sent something of a signal about what we thought the business was worth." In August Paul Little told the Financial Review he hoped PEXA would list ontheasx "I am a substantial shareholder in PEXA and I think that it has many of the attributes that I like in a company." But Mr McMurtrie played down the risk of new entrants in the space. In addition to investing $200 million to $300 million, he said building the network of lawyers, conveyancers, banks and more took time. Rival Sympli, which is seeking regulatory approval by the year's end and is ed by the ASX, said it would be able to operate more cheaply than its rival, and warned the market is underestimating the impact competition will have on PEXA. In a statement to the exchange, Link said it will fund its investment through cash and existing debt facilities, and will not raise any additional equity to complete the sale. CBA will invest a further $50 million, totalling about y $100 million invested in PEXA to date, and increase its shareholding from 13.1 per cent to 16 per cent PEXA was advised by CLSA's Mark Dorney, who has advised the company on other shareholder sales in the past 9h years. Exchange PEXA revenue ($m) PEXA gross profit ($m) PEXA EBITDA ($m)! 1 r FY16 FY17 FY18 FY19f Existing shareholders (%) Westpac, ANZ, NAB 1.S5 -, Management 2.0 Paul Little FY16 FY17 FY18 FY19f Macquarie FY16 FY17 FY18 FY19f Link State governments CBA

106 Australian Financial Review, Australia Author: Jemima Whyte Section: General News Article type : News Item Classification : National : 44,635 Page: 1 Printed Size: cm² Region: National Market: Australia ASR: AUD 9,790 Words: 795 Item ID: Page 3 of 3 How Street Talk broke the story on Monday PEXAIPO unsuccessful; Link poised to sign deal Nov at 6:21pm Sarah Thompson, Anthony MacdonaW Signal of value: Link Group CEO John McMurtrie. PHOTO: BEN RUSHTON

107 Geelong Advertiser, Geelong VIC Author: Rob Harris Section: General News Article type : News Item Classification : Regional : 16,687 Page: 2 Printed Size: cm² Region: VIC Market: Australia ASR: AUD 723 Words: 399 Item ID: Page 1 of 1 RETIREES are likely to be much more financially comfortable than dire warnings suggest, a new report says. But it will not be so rosy for low-income earners who rent a growing problem as home ownership rates decline among the young generation. The Grattan Institute s Money in Retirement: More Than Enough found retirees were less likely than workingage Australians to suffer financial stress, such as not being able to pay a bill on time, and were more likely to be able to afford annual holidays. It found the average worker today could expect a retirement income of at least 91 per cent of pre-retirement income well above the 70 per cent benchmark used around the world. It forecasts the next generation of retirees are likely to be even better off because of a combination of compulsory super contributions, non-super savings and the age pension. The financial services Retirees in sound finances g industry fear factory should ROB HARRIS INCLUDING the value of a be shut down, because it home above some threshold in encourages Australians to the age pension assets test. worry unnecessarily about Unless governments have whether they ll have enough the courage to make these to retire on, Grattan Institute reforms, future budgets will chief executive John Daley not be able to fund aged care said. But Mr Daley warned the retirement incomes system was not working for lowincome Australians who rented a problem that will become increasingly troublesome as home ownership rates decline. To boost retirement incomes for the poorest Australians, the report calls for: AN increase of 40 per cent in the maximum rate of federal rent assistance, worth $1400- plus a year for a single retiree. SCRAPPING of the legislated and bipartisan plan to increase compulsory superannuation contributions from 9.5 per cent to 12 per cent, saving the Budget about $2 billion a year. REDUCING superannuation tax breaks and age-based tax breaks to ensure the retirement incomes system does not become an excessive burden on future budgets. and health at the same level as today, Mr Daley said. Easing concerns over the building of big nest eggs, the report found many lowincome Australians would get a pay rise when they retired, through a combination of the pension and their super. He said Australians tended to spend less after they retired, and even less into old age. While their medical costs increase, these were still largely covered by the taxpayer, Mr Daley said.