The Australian, Australia, Business News, Monica Rule

Transcription

1 TUE 13 NOVEMBER 2018 Mediaportal Report Tread carefully with unit trusts The Australian, Australia, Business News, Monica Rule Page words ASR AUD 4,374 Photo: No Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 510 word(s), ~2 mins 94,448 CIRCULATION New reality emerges for SMSF property investing The Australian, Australia, Business News, WILL HAMILTON Page words ASR AUD 5,891 Photo: No Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 636 word(s), ~2 mins 94,448 CIRCULATION Negative polling for ALP housing The Australian, Australia, General News, Joe Kelly Page words ASR AUD 15,539 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 865 word(s), ~3 mins 94,448 CIRCULATION Tech billionaire fair dinkum about profiting from solar subsidies The Australian, Australia, General News, Graham Lloyd Page words ASR AUD 7,101 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 573 word(s), ~2 mins 94,448 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.

2 Double snub for private equity The Australian, Australia, Business News, Andrew White Page words ASR AUD 27,965 Photo: Yes Type: News Item Size: 1, cm² National Australia Industry Super Australia - Press ID: View original - Full text: 1121 word(s), ~4 mins 94,448 CIRCULATION Clever deals no substitute for higher prices in takeovers The Australian, Australia, Business News, John Durie Page words ASR AUD 18,626 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 955 word(s), ~3 mins 94,448 CIRCULATION Healthscope battle enters final stages Daily Telegraph, Sydney, Business News, John Dagge Page words ASR AUD 15,263 Photo: Yes Type: News Item Size: cm² NSW Australia Industry Super Australia - Press ID: View original - Full text: 422 word(s), ~1 min 232,067 CIRCULATION Don't abandon ship, PM urged Daily Telegraph, Sydney, General News, Rose Brennan Page words ASR AUD 45,268 Photo: Yes Type: News Item Size: cm² NSW Australia Industry Super Australia - Press ID: View original - Full text: 559 word(s), ~2 mins 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

3 No defence to security risk claims Daily Telegraph, Sydney, General News, Rose Brennan Page words ASR AUD 4,820 Photo: Yes Type: News Item Size: cm² NSW Australia Industry Super Australia - Press ID: View original - Full text: 175 word(s), <1 min 232,067 CIRCULATION Class war hurts poorest Daily Telegraph, Sydney, General News, Satya Marar Page words ASR AUD 26,887 Photo: Yes Type: News Item Size: cm² NSW Australia Industry Super Australia - Press ID: View original - Full text: 926 word(s), ~3 mins 232,067 CIRCULATION More Hayne fallout as Freedom bosses hit the road The Australian, Australia, Business News, Ben Butler Page words ASR AUD 4,657 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 366 word(s), ~1 min 94,448 CIRCULATION Word on the street The Australian, Australia, Business News, Richard Gluyas Page words ASR AUD 3,576 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 334 word(s), ~1 min 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 APRA names panel, deadline for review The Australian, Australia, Business News, Joyce Moullakis Page words ASR AUD 8,130 Photo: No Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 623 word(s), ~2 mins 94,448 CIRCULATION Double snub for private equity The Australian, Australia, General News, Andrew White Page words ASR AUD 28,531 Photo: Yes Type: News Item Size: 1, cm² National Australia Industry Super Australia - Press ID: View original - Full text: 1109 word(s), ~4 mins 94,448 CIRCULATION Ideal office space Adelaide Advertiser, Adelaide, Business Journal Page words ASR AUD 3,689 Photo: Yes Type: Real Estate Listing Size: cm² SA Australia Industry Super Australia - Press ID: View original - Full text: 226 word(s), <1 min 112,097 CIRCULATION DIARY Adelaide Advertiser, Adelaide, Business Journal Page words ASR AUD 1,235 Photo: Yes Type: Highlights Size: cm² SA Australia Industry Super Australia - Press ID: View original - Full text: 136 word(s), <1 min 112,097 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 Freedom overhaul as key figures quit Adelaide Advertiser, Adelaide, Business Journal, SAMANTHA BAILEY Page words ASR AUD 7,185 Photo: Yes Type: News Item Size: cm² SA Australia Industry Super Australia - Press ID: View original - Full text: 359 word(s), ~1 min 112,097 CIRCULATION Top brass falls on sword Herald Sun, Melbourne, Business News, SAMANTHA BAILEY Page words ASR AUD 13,604 Photo: No Type: News Item Size: cm² VIC Australia Industry Super Australia - Press ID: View original - Full text: 359 word(s), ~1 min 303,140 CIRCULATION Hospital admission for suitor Herald Sun, Melbourne, Business News, John Dagge Page words ASR AUD 19,712 Photo: No Type: News Item Size: cm² VIC Australia Industry Super Australia - Press ID: View original - Full text: 498 word(s), ~1 min 303,140 CIRCULATION Labor's gearing policy a risk to our prosperity Herald Sun, Melbourne, General News, Josh Frydenberg Page 21 ASR AUD 21,600 Photo: No Type: News Item Size: cm² VIC Australia Industry Super Australia - Press ID: View original - Read full text 303,140 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 Labor's poison pill for Aussie battlers Courier Mail, Brisbane, General News, Peter Gleeson Page words ASR AUD 15,526 Photo: Yes Type: News Item Size: cm² QLD Australia Industry Super Australia - Press ID: View original - Full text: 659 word(s), ~2 mins 135,007 CIRCULATION Sweet bid good for health Courier Mail, Brisbane, Business News, John Dagge Page words ASR AUD 3,706 Photo: No Type: News Item Size: cm² QLD Australia Industry Super Australia - Press ID: View original - Full text: 283 word(s), ~1 min 135,007 CIRCULATION Freedom Insurance chairman, CEO leave Courier Mail, Brisbane, Business News Page words ASR AUD 1,862 Photo: No Type: News Item Size: cm² QLD Australia Industry Super Australia - Press ID: View original - Full text: 206 word(s), <1 min 135,007 CIRCULATION Regulator spells out guidelines for review Courier Mail, Brisbane, Business News Page words ASR AUD 1,949 Photo: No Type: News Item Size: cm² QLD Australia Industry Super Australia - Press ID: View original - Full text: 186 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

7 Healthscope, Navitas deliver $6b snub to BGH-AusSuper Sydney Morning Herald, Sydney, Business News, Colin Kruger Page words ASR AUD 27,649 Photo: Yes Type: News Item Size: cm² NSW Australia Industry Super Australia - Press ID: View original - Full text: 553 word(s), ~2 mins 88,634 CIRCULATION CKI rejection the right move, says China expert Sydney Morning Herald, Sydney, Business News, Cole Latimer Page words ASR AUD 16,880 Photo: No Type: News Item Size: cm² NSW Australia Industry Super Australia - Press ID: View original - Full text: 470 word(s), ~1 min 88,634 CIRCULATION Banks on warpath over every dollar Sydney Morning Herald, Sydney, Business News, Elizabeth Knight Page words ASR AUD 26,412 Photo: No Type: News Item Size: cm² NSW Australia Industry Super Australia - Press ID: View original - Full text: 749 word(s), ~2 mins 88,634 CIRCULATION Culture key for companies to avoid wrath Sydney Morning Herald, Sydney, Business News, Mathew Dunckley Page words ASR AUD 16,080 Photo: Yes Type: News Item Size: cm² NSW Australia Industry Super Australia - Press ID: View original - Full text: 402 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

8 Healthscope, Navitas deliver $6b snub to BGH-AusSuper Age, Melbourne, Business News, Colin Kruger Page words ASR AUD 21,259 Photo: No Type: News Item Size: cm² VIC Australia Industry Super Australia - Press ID: View original - Full text: 599 word(s), ~2 mins 83,229 CIRCULATION Culture key for companies to avoid wrath Age, Melbourne, Business News, Mathew Dunckley Page words ASR AUD 12,252 Photo: Yes Type: News Item Size: cm² VIC Australia Industry Super Australia - Press ID: View original - Full text: 402 word(s), ~1 min 83,229 CIRCULATION Costello still boss of fund Daily Mercury, Mackay QLD, General News Page words ASR AUD 46 Photo: No Type: News Item Size: cm² QLD Australia Industry Super Australia - Press ID: View original - Full text: 77 word(s), <1 min 7,207 CIRCULATION Costello still boss of fund News Mail, Bundaberg QLD, General News Page words ASR AUD 40 Photo: No Type: News Item Size: cm² QLD Australia Industry Super Australia - Press ID: View original - Full text: 77 word(s), <1 min 6,176 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 WBC offer to raise $750m Geelong Advertiser, Geelong VIC, General News Page words ASR AUD 133 Photo: No Type: News Item Size: cm² VIC Australia Industry Super Australia - Press ID: View original - Full text: 70 word(s), <1 min 16,687 CIRCULATION Banks on warpath over every dollar Age, Melbourne, Business News, Elizabeth Knight Page words ASR AUD 20,755 Photo: Yes Type: News Item Size: cm² VIC Australia Industry Super Australia - Press ID: View original - Full text: 738 word(s), ~2 mins 83,229 CIRCULATION Costello still boss of fund Gladstone Observer, Gladstone QLD, General News Page words ASR AUD 35 Photo: No Type: News Item Size: cm² QLD Australia Industry Super Australia - Press ID: View original - Full text: 77 word(s), <1 min 3,301 CIRCULATION Healthscope favours $4.5b Canadian bid Hobart Mercury, Hobart, Business News, John Dagge Page words ASR AUD 2,053 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 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 Insurance CEO quits after a month Cairns Post, Cairns, General News Page words ASR AUD 537 Photo: No Type: News Item Size: cm² QLD Australia Industry Super Australia - Press ID: View original - Full text: 220 word(s), <1 min 13,896 CIRCULATION Costello still boss of fund Cairns Post, Cairns, General News Page words ASR AUD 191 Photo: No Type: News Item Size: cm² QLD Australia Industry Super Australia - Press ID: View original - Full text: 77 word(s), <1 min 13,896 CIRCULATION Healthscope, Navitas deliver $6b snub to BGH-AusSuper Canberra Times, Canberra, Business News, Colin Kruger Page 30 ASR AUD 9,682 Photo: No Type: Share Market Report Size: cm² ACT Australia Industry Super Australia - Press ID: View original - Read full text 17,579 CIRCULATION CKI rejection the right move, says China expert Canberra Times, Canberra, Business News, Cole Latimer Page 30 ASR AUD 5,789 Photo: No Type: News Item Size: cm² ACT Australia Industry Super Australia - Press ID: View original - Read full text 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

11 Banks on warpath over every dollar Canberra Times, Canberra, Business News, Elizabeth Knight Page words ASR AUD 9,298 Photo: No Type: News Item Size: cm² ACT Australia Industry Super Australia - Press ID: View original - Full text: 752 word(s), ~3 mins 17,579 CIRCULATION Culture key for companies to avoid wrath Canberra Times, Canberra, Business News, Mathew Dunckley Page words ASR AUD 5,584 Photo: Yes Type: News Item Size: cm² ACT Australia Industry Super Australia - Press ID: View original - Full text: 389 word(s), ~1 min 17,579 CIRCULATION Navitas rejects revised offer West Australian, Perth, Business News, Peter Williams Page words ASR AUD 4,891 Photo: No Type: News Item Size: cm² WA Australia Industry Super Australia - Press ID: View original - Full text: 446 word(s), ~1 min 147,676 CIRCULATION Carefree and careful future West Australian, Perth, General News, Meilin Chew Page words ASR AUD 16,760 Photo: Yes Type: News Item Size: cm² WA Australia Industry Super Australia - Press ID: View original - Full text: 383 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 Dirty four-letter elephant in room West Australian, Perth, General News, Nick Bruining Page words ASR AUD 4,611 Photo: No Type: News Item Size: cm² WA Australia Industry Super Australia - Press ID: View original - Full text: 457 word(s), ~1 min 147,676 CIRCULATION Never too young to plan for a better retirement West Australian, Perth, General News, Fabian Ross Page words ASR AUD 4,295 Photo: No Type: News Item Size: cm² WA Australia Industry Super Australia - Press ID: View original - Full text: 414 word(s), ~1 min 147,676 CIRCULATION PM rules out bank extension Morning Bulletin, Rockhampton QLD, General News, Michelle Gately Page words ASR AUD 304 Photo: Yes Type: News Item Size: cm² QLD Australia Industry Super Australia - Press ID: View original - Full text: 564 word(s), ~2 mins 9,376 CIRCULATION Canadians closing in on Healthscope Gold Coast Bulletin, Gold Coast QLD, General News, John Dagge Page words ASR AUD 2,773 Photo: No Type: News Item Size: cm² QLD Australia Industry Super Australia - Press ID: View original - Full text: 588 word(s), ~2 mins 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

13 Costello still boss of fund Gold Coast Bulletin, Gold Coast QLD, General News Page words ASR AUD 286 Photo: No Type: News Item Size: cm² QLD Australia Industry Super Australia - Press ID: View original - Full text: 77 word(s), <1 min 21,468 CIRCULATION Future2 Foundation grants to Coast charities will help disadvantaged young people Sunshine Coast Daily, Maroochydore QLD, General News Page words ASR AUD 195 Photo: Yes Type: News Item Size: cm² QLD Australia Industry Super Australia - Press ID: View original - Full text: 313 word(s), ~1 min 10,046 CIRCULATION Paid parental leave stagnating Australian Financial Review, Australia, General News, David Marin-Guzman Page words ASR AUD 8,414 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 639 word(s), ~2 mins 44,635 CIRCULATION Woolworths faces vote on labour rights Australian Financial Review, Australia, General News, Joanna Mather Page words ASR AUD 5,400 Photo: No Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 532 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

14 ESG sound, but check fine print Australian Financial Review, Australia, Special Report, Jason Clout And Alexandra Cain Page words ASR AUD 8,960 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 663 word(s), ~2 mins 44,635 CIRCULATION Industry braces for focus on fees Australian Financial Review, Australia, Special Report Page words ASR AUD 3,863 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 444 word(s), ~1 min 44,635 CIRCULATION Technology helps trustees deal with uncertainty Australian Financial Review, Australia, Special Report Page words ASR AUD 5,481 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 644 word(s), ~2 mins 44,635 CIRCULATION Cash provides security but little more in times of volatility Australian Financial Review, Australia, Special Report, Jason Clout And Alexandra Cain Page words ASR AUD 5,845 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

15 Stick to your route through market storm Australian Financial Review, Australia, Special Report, Jason Clout And Alexandra Cain Page words ASR AUD 10,538 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 1027 word(s), ~4 mins 44,635 CIRCULATION Two rebuffs to BGH with AusSuper Australian Financial Review, Australia, Companies and Markets, James Thomson Page words ASR AUD 11,023 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 1316 word(s), ~5 mins 44,635 CIRCULATION Housing regulation's soft underbelly Australian Financial Review, Australia, General News Page words ASR AUD 12,621 Photo: Yes Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 1226 word(s), ~4 mins 44,635 CIRCULATION 'Orwellian' liability waiver policy didn't mislead clients: Dover Australian Financial Review, Australia, Companies and Markets, Misa Han Page words ASR AUD 3,479 Photo: No Type: News Item Size: cm² National Australia Industry Super Australia - Press ID: View original - Full text: 405 word(s), ~1 min 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

16 Get into the minds of pollies Australian Financial Review, Australia, General News, Sally Patten Page words ASR AUD 9,223 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 PM rules out bank extension Morning Bulletin, Rockhampton QLD, General News, Michelle Gately Page words ASR AUD 310 Photo: No Type: News Item Size: cm² QLD Australia Industry Super Australia - Press ID: View original - Full text: 566 word(s), ~2 mins 9,376 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.

17 The Australian, Australia Author: Monica Rule Section: Business News Article type : News Item Classification : National : 94,448 Page: 23 Printed Size: cm² Region: National Market: Australia ASR: AUD 4,374 Words: 510 Item ID: Page 1 of 1 Tread carefully with unit trusts MONICA RULE I recently assisted a self-managed superannuation fund member who had approached his accountant for advice. He felt the advice was going to cost a lot of money if followed. The member wanted clarification from me on whether his accountant was leading him up the right path. The member s SMSF has an investment in a unit trust. The member is the sole trustee of the unit trust and the unit trust s only asset is a commercial property. His accountant told him he needed to get rid of the unit trust. My client was not confident his accountant understood the superannuation law. I explained that, as he is the sole trustee of the unit trust, he controls the trust and therefore the unit trust is treated as a related party to his SMSF under the superannuation law. The law permits his SMSF to invest up to 5 per cent of the total value of its assets in a related party. But it can invest more than 5 per cent if the related party is ungeared. My client said his SMSF was the only unit holder of the unit trust and that his unit trust was ungeared as it had no borrowings. So far so good. But when I looked at the trust s financial statements, I noticed it also held BHP shares. Under superannuation law, for a unit trust to be treated as an ungeared trust, the trust must not have invested in any other entity. The only exception is deposits with an authorised deposit-taking institution such as a bank. Also, the trust had not made any distributions to the SMSF for several years. My client was also supposed to be in the retirement pension phase but his SMSF has not made minimum pension payments to him for several years. I could understand why his accountant had advised him to get rid of the unit trust. My client had contravened several areas of the superannuation law. First, he had contravened the in-house assets provisions as his SMSF had invested more than 5 per cent of its total assets in a related party. My client was also not in the retirement phase, as his SMSF had not paid the minimum pension payments to him. This means any payments made from his SMSF will be treated as a lump sum superannuation benefit and his SMSF will not be entitled to the tax exemption on the earnings of its assets. The unit trust also had what could be considered a loan. The fact it had unpaid trust distributions may be treated by the tax office as borrowings So, how can my client bring his SMSF into compliance? He will need to either unwind the investment in the unit trust or reduce the unit holdings of his SMSF to 5 per cent or below. If the unit trust does not have cash to do this, it may have to sell the commercial property. Monica Rule is an SMSF specialist and author of the Self Managed Super Handbook Superannuation Law for SMSFs in Plain English.

18 The Australian, Australia Author: WILL HAMILTON Section: Business News Article type : News Item Classification : National : 94,448 Page: 23 Printed Size: cm² Region: National Market: Australia ASR: AUD 5,891 Words: 636 Item ID: Page 1 of 1 New reality emerges for SMSF property investing WILL HAMILTON For some years, holding property in a self-managed superannuation fund has become a popular strategy. More recently the subject has become more complex as the ability to buy property via an SMSF is approaching a perfect storm. This is due to a combination of factors, notably changes to superannuation introduced effective from July 1, 2017, the fact that nonrecourse lending is effectively being shut down by the large banks, and the correction presently being experienced in the residential property market. As investors we recognise all property: residential, industrial and commercial, as an illiquid asset. It is a big-ticket item involving large amounts of committed capital and planning. Whether to sell and when to sell is an even weightier decision when there is debt attached to the asset, through non-recourse lending agreements. One of the most common property accumulation strategies through an SMSF is for business owners to hold their commercial or industrial premises within their fund and for the business to pay the landlord SMSF rent. Many SMSF investors are therefore a landlord and a trustee; their business is a commercial tenant. Likewise, there has been a major increase in residential property being purchased through SMSFs as an investment by private investors who are not necessarily business owners In these instances, the SMSF is typically the landlord of a rental property with the aim of a return being provided as SMSF income. In both of the above instances, many investors have geared their SMSF property holdings. When investing in property via an SMSF it is vital to keep in mind that you, as a fund member, are also a trustee and the purpose of an SMSF is to eventually provide you with an income stream in retirement. Any property purchased must be lettable and the potential income stream must be considered at the time of purchase. The tax changes as introduced by the coalition effective on July 1, 2017 have also meant that investors should be aware of the possible impact of the new $1.6 million transfer balance cap per member. The $1.6m threshold is relevant when considering the stage an SMSF beneficiary has reached. For instance, if a superannuant is in pension phase, the pension may be purchased up to the cap value, but with the following provisos: Potential issues arise with large single asset pensions over the cap if there are insufficient other pension assets to enable a commutation to bring the pension under the cap. For pensions with a substantial single asset position, the pension must have sufficient yield to enable the annual minimum pension payment and associated pension costs. A large single asset drawing down on capital may not be possible to meet this minimum payment. The government provided protection for pension assets being moved to an accumulation account to use the market value of the asset at June 30, 2017, as the new cost base for CGT purposes. The government provides protection for pension assets above the cap being returned to accumulation to use the asset s market value at June 30, 2017, as the new cost base for CGT purposes. The big banks have also effectively shut down limited recourse lending arrangements. This does not preclude the holding of property via an SMSF but it does make debt attached to a property (it has to be positively geared via an SMSF) now out of the question. So if a property purchase is to be considered in an SMSF, it typically needs to be bought outright. If you hold property with an existing non-recourse lending arrangement, it was probably expensive to establish this arrangement in the first place, as well as the servicing costs looking at the interest rate payable versus what you would pay via other vehicles. Will Hamilton is the managing partner of Hamilton Wealth Management. will.hamilton@hamilton wealth.com.au

19 The Australian, Australia Author: Joe Kelly Section: General News Article type : News Item Classification : National : 94,448 Page: 1 Printed Size: cm² Region: National Market: Australia ASR: AUD 15,539 Words: 865 Item ID: Page 1 of 3 Negative polling for ALP housing EXCLUSIVE JOE KELLY Voter support for Bill Shorten s negative-gearing policy has dropped following a government campaign targeting Labor s housing tax policies, with one third of Australians now opposed to the crackdown on investors. An exclusive Newspoll conducted for The Australian revealed a seven-point fall in support for Mr Shorten s centrepiece housing policy amid a softening market, although ers of Labor s tax overhaul still outweigh opponents by 47 to 33 per cent. Of those surveyed, 42 per cent believed the policy would cause house prices to come down a little with a further 36 per cent saying that renting would become more expensive and 33 per cent saying property would be more affordable for first-home buyers. Despite growing public concern at Mr Shorten s push to halve the capital gains tax discount and limit negative gearing to new properties, Labor holds a commanding lead in relation to which party has the better approach to housing affordability. The Newspoll, based on 1802 interviews with voters across the nation, shows 47 per cent are in favour of reducing tax breaks for property investors, down from 54 per cent in April last year, while opposition has climbed from 28 to 33 per cent. A five-year boom in the Sydney and Melbourne property markets ended in mid-2017, after prices increased by about 70 per cent and 60 per cent respectively. Continued on Page 2 MORE REPORTS P2 LABOR 45 PLAN TO REDUCE TAX BREAKS FOR INVESTORS Apr 2017 Nov 2018 IN FAVOUR OPPOSED UNCOMMITTED FULL TABLES P2 Support for ALP investor hit slips Continued from Page 1 The Australian revealed last week that the softening of house prices since then would escalate by up to 5 per cent under Labor s negative-gearing policy, according to the November housing review of global investment manager Pendal Group. Labor Treasury spokesman Chris Bowen has argued that the heat coming out of the Sydney and Melbourne property markets will mean the negative-gearing shakeup can be implemented even more smoothly, although industry has fanned alarm it will further reduce prices. The Newspoll revealed 34 per cent of Coalition voters supported Mr Shorten s crackdown compared with 50 per cent who opposed it. By comparison, the policy is supported by 59 per cent of Labor voters while only 21 per cent view it unfavourably. Opposition is most heavily concentrated among those in the over-50 age group, at 39 per cent, with support being strongest among those in the age group, at 53 per cent. Michael Sukkar, former assistant minister to the treasurer, said yesterday there was no doubt Labor s negative-gearing policy was going to become an even bigger issue as house prices dropped in major markets. When pressed on which party was better placed to address housing affordability, 45 per cent nominated Labor compared with 35 per cent for the Coalition. A further 20 per cent said they were uncommitted. Almost half of Coalition voters said they believed Labor had the better approach to housing affordability. Only 40 per cent of government supporters said the Coalition had a superior policy. This compared with 48 per cent of Labor voters ing Bill Shorten s policy as offering the better approach to housing affordability compared with 35 per cent of Labor supporters who believed the Coalition had a superior approach. BETTER PARTY FOR HOUSING AFFORDABILITY Nov 2018 COALITION 35

20 The Australian, Australia Author: Joe Kelly Section: General News Article type : News Item Classification : National : 94,448 Page: 1 Printed Size: cm² Region: National Market: Australia ASR: AUD 15,539 Words: 865 Item ID: Page 2 of 3 BEST APPROACH TO HOUSING AFFORDABILITY Political support Total Coalition Labor Green One Nation SCOTT MORRISON AND THE COALITION BILL SHORTEN AND THE LABOR PARTY UNCOMMITTED Question: Thinking now about housing affordability. In your opinion, who has the best approach to improve housing affordability in Australia? REDUCE TAX BREAKS FOR INVESTORS Political support Nov Age Apr 20-23, 2017 Total Coalition Labor Green IN FAVOUR OPPOSED UNCOMMITTED Question: One approach to make housing more affordable is to reduce the tax breaks for investors. Are you in favour or opposed to curbing negative gearing and reducing capital gains tax deductions for investors? CONSEQUENCES OF LABOR POLICY Political support Total Coalition Labor Green One Nation PROPERTY PRICES WILL COME DOWN A LITTLE PROPERTY PRICES WILL FALL SUBSTANTIALLY RENTING WILL BECOME MORE EXPENSIVE PROPERTY WILL BECOME MORE AFFORDABLE FOR FIRST-HOME BUYERS UNCOMMITTED Question: The Labor Party has announced that it will curb negative gearing and reduce capital gains tax deductions for investors. What impact do you think this policy would have on the property market? These surveys were conducted in all states of Australia and in both city and country areas. The data has been weighted to reflect the population distribution. The latest survey is based on 1802 interviews among voters. The maximum sampling error is plus or minus 2.3 percentage points. Copyright at all times remains with Newspoll.

21 The Australian, Australia Author: Joe Kelly Section: General News Article type : News Item Classification : National : 94,448 Page: 1 Printed Size: cm² Region: National Market: Australia ASR: AUD 15,539 Words: 865 Item ID: Page 3 of 3 AAP Bill Shorten and Labor MP Tim Watts pack boxes at Foodbank in Melbourne yesterday

22 The Australian, Australia Author: Graham Lloyd Section: General News Article type : News Item Classification : National : 94,448 Page: 6 Printed Size: cm² Region: National Market: Australia ASR: AUD 7,101 Words: 573 Item ID: Page 1 of 1 EXCLUSIVE GRAHAM LLOYD ENVIRONMENT EDITOR Computer software billionaire Mike Cannon-Brookes has investments in solar farms in Queensland and Victoria that are aiming to profit from government subsidies and the squeeze in electricity prices due to the switch from coal to renewables. Since making the investment in the Solar Asset Fund in July, Mr Cannon-Brookes has become an outspoken champion for renewable energy and is planning a dramatic intervention in the federal election on the issue. The Solar Asset Fund, which has received $50 million in loans from the federal government s Clean Energy Finance Corporation, fell short of its initial fundraising target, securing $55m of a $70m-$110m target. The fund is expecting to open again this month to raise more capital. In its promotional material, the fund says its co-investors include ultra- and high-net-worth individuals, family offices, selfmanaged superannuation funds and the carbon-free retail superannuation fund, Future Super. The Cannon-Brookes family investment fund, Grok Ventures, is a cornerstone investor in Solar Asset Fund, which is chaired by former Clean Energy Regulator chair Chloe Munro. The fund said it expected to make an 8 per cent return for investors by selling electricity and subsidy certificates issued by the government directly to the spot market as a merchant rather than enter long-term agreements with power companies for its output. The fund has a 19MW solar farm at Swan Hill in Victoria, a 19.9MW Chinchilla solar farm under development in Brisbane and plans for a 34.6 MW solar farm near Pittsworth in southeast Queensland. Solar Asset Fund investors have been told to expect reliable cashflow from real assets and taxeffective returns, benefiting from high depreciation in the early years. After tweeting his displeasure with the Morrison government s commitment to coal, Mr Cannon- Brookes is gearing up to campaign for a carbon price and 200 per cent renewables to make Australia a clean-export superpower. He told the ABC last week he planned to use a lobby group, dubbed Fair Dinkum Power, to make renewable energy a major issue at the next election. Mr Cannon-Brookes said the initiative aimed to influence public debate and move the conversation to a pro-renewable stance. Personally, I have some investments in solar plants, solar farms. I m very bullish on that as a sector and you can see from the investment going in, that s not a unique view, he said. Bringing the price of power down, ironically, would actually hurt those investments, not help them. Mr Cannon-Brookes said the goal was to move Australia to 200 per cent renewable energy. This would get us both a lower cost of power in the country, and also a huge industry in terms of exporting power to the rest of the world, he said. Mr Cannon-Brookes said the government should lean in for the job-creation potential of renewable energy. It s factual that solar and wind are generating far more jobs than the coal industry ever has, he said. He cited Queensland figures for current in-progress and planned solar and wind projects that would create 35,000 jobs in construction and a few thousand jobs in the ongoing running of those plants. The Queensland Minerals Council has quoted Australian Bureau of Statistics labour force data that shows resource industry jobs increased from 56,705 in the May 2017 quarter to 65,180 in the May quarter this year. Jobs in coalmining rose by 34 per cent to 28,945 over the 12- month period and jobs in oil and gas increased by 25 per cent to Cannon-Brookes

23 The Australian, Australia Author: Andrew White Section: Business News Article type : News Item Classification : National : 94,448 Page: 17 Printed Size: cm² Region: National Market: Australia ASR: AUD 27,965 Words: 1121 Item ID: Page 1 of 4 SUPER GIANT UNDER PRESSURE OVER BGH CAPITAL TIES Double snub for private equity ANDREW WHITE Private equity boss Ben Gray and his super fund partner Australian- Super have come under intense pressure to secure a deal following a $6 billion double snub by separate takeover targets Healthscope and Navitas. The lock-up bidding approach by Gray s so-called BGH consortium has also come under criticism by education provider Navitas, which has lashed out at the tactic of signing up large investors before a bid, claiming it prevents shareholders from receiving higher offers. AusSuper, Australia s biggest superannuation fund with $140bn under management, has linked up with BGH to vote against any bid other than its own in order to secure control of publicly listed companies. Combined, the consortium has per cent of Healthscope and a 5.4 per cent stake in Navitas. The Navitas bid also has a partnership with founder Rod Jones, who has a 12.4 per cent stake. This would be enough to stop rival bids from securing full ownership of either company. The BGH-AusSuper partnership has bid $2.36 a share for Healthscope, valued at $4.1bn, and in a separate move, $5.50 a share for Navitas (valued at almost $2bn). The BGH partners were yesterday morning denied due diligence to support the bids after the target boards said the prices were inadequate. Indeed, Healthscope chairman Paula Dwyer yesterday granted rival suitor Brookfield due diligence after it lobbed a revised indicative offer of $2.42 a share for control and $2.585 a share for outright ownership of Healthscope. The rival bid puts pressure on AusSuper to break its partnership with BGH when the agreement expires on March 31 by offering a higher price, with the chance of ongoing direct equity exposure in a Brookfield-led, unlisted Healthscope. Navitas, however, said it had been canvassing alternatives to the BGH-AusSuper bid with a number of parties to see if they could offer superior value. The Navitas board is not inclined to provide due diligence to any party who places restrictions on Navitas shareholders from supporting a superior alternative proposal, Navitas said. A number of these parties have confirmed the board s view that the commitment by AustralianSuper and Mr Jones are potentially an impediment to proceeding with any competing proposal. AusSuper was believed to be considering its next moves, including any implications for the partnership agreement with BGH and the options for raising its bid to win board support, following yesterday s rebuffs. Its bidding partnership was renewed in late October and expires on March 31. The partnership marks a new twist in the battle for control of Australian companies, with Aus- Super a major holder of companies across the market and intent on generating long-term returns in line with the 45-year time horizons of its millions of members. But it has been reluctant to explain its justification for blocking higher bids from other parties. An AusSuper spokesman yesterday declined to comment. BGH executives could not be reached for comment. BGH, led by former TPG Australia head Ben Gray, former Macquarie banker Robin Bishop and former TPG executive Simon Harle, closed a $2.3bn capital raising for their first private equity Continued on Page 20

24 The Australian, Australia Author: Andrew White Section: Business News Article type : News Item Classification : National : 94,448 Page: 17 Printed Size: cm² Region: National Market: Australia ASR: AUD 27,965 Words: 1121 Item ID: Page 2 of 4 Ben Gray of BGH Capital $ $ $ Healthscope closed up Navitas closed steady at $ Source: Bloomberg Healthscope. has decided not to provide due diligence access to a consortium of financial investors HEALTHSCOPE CHAIRMAN PAULA DWYER The Navitas board is not inclined to provide due diligence to any party who places restrictions on Navitas shareholders from supporting a superior alternative proposal NAVITAS CHAIRMAN TRACEY HORTON Double trouble for private equity as targets snub offers fund in February, one of the largest on record. The fund includes a $200 million commitment from AustralianSuper, which also wants to invest directly in assets and companies, as it did with the NSW Ports privatisations in 2013 alongside IFM Investors. Capital raisings for private equity are running at their highest levels since the global financial crisis, with 10 PE and venture capital funds raising a combined $5.4bn in the first nine months of the year, according to the Australian Private Equity and Venture Capital Association. PE firms had $5.9bn in dry powder, AVCAL said. But BGH is yet to land a major acquisition. TPG under Mr Gray previously bought and sold Healthscope to the share market in Continued from Page 17 But after scaling a high of $3.14 in September 2016 the shares have languished as the company borrowed for a heavy capital investment program, including its flagship Northern Beaches hospital in Sydney. The shares had drifted to $2.08 ahead of yesterday s revised Brookfield bid below the $2.10 issue price of the TPGled float in July They jumped 3c to $2.38 at the close yesterday. Navitas shares have fallen sharply from highs above $5.50 in late 2017, and despite a bounce in the wake of the takeover approach, were unchanged yesterday at $5.21. Healthscope opened its books to Brookfield after the listed investment giant made a revised $4.5bn play for the private hospital operator, trumping a rival offer already on the table. Healthscope says Brookfield s new offer was superior to the bid it had rejected earlier this year, and is worth as much as $2.585 a share if it wins 100 per cent control of the company. Brookfield s two-pronged bid aims to secure at least 50.1 per cent of Healthscope scrip with a $2.42 a share bid. Brookfield originally offered $2.50 a share in May but was blocked by the refusal of AusSuper to break its agreement with BGH. Both Brookfield and BGH- AusSuper bids are conditional on Healthscope not completing a plan to spin off its property assets, which was conceived by management in response to the original, rejected bids earlier this year. We consider the Brookfield proposal to be attractive for shareholders, Healthscope chairman Paula Dwyer said yesterday. It is superior to the BGH-Aus-

25 The Australian, Australia Author: Andrew White Section: Business News Article type : News Item Classification : National : 94,448 Page: 17 Printed Size: cm² Region: National Market: Australia ASR: AUD 27,965 Words: 1121 Item ID: Page 3 of 4 traliansuper proposal and provides enhanced certainty. The board support for due diligence follows shareholder pressure that culminated in a first strike against the company s remuneration report at the annual meeting last month. AusSuper has previously said it would not support a superior, rival proposal because it wanted to retain a direct ownership stake in a privately held Healthscope, as would occur under the BGH proposal. Brookfield will have access to due diligence through to Christmas with a scheme meeting expected to be scheduled for April 1, the day after the exclusive bidding partnership between BGH and AusSuper is due to expire. Healthscope operates a portfolio of more than 40 hospitals in Australia and 24 pathology laboratories in New Zealand. In May, it closed two hospitals in southern Australia and in July it sold its Asian pathology division for $279 million. Healthscope was founded in 1985 and listed on the Australian Securities Exchange in 1994.

26 The Australian, Australia Author: Andrew White Section: Business News Article type : News Item Classification : National : 94,448 Page: 17 Printed Size: cm² Region: National Market: Australia ASR: AUD 27,965 Words: 1121 Item ID: Page 4 of 4 Healthscope has snubbed BGH, saying the rival Brookfield proposal is attractive for shareholders BLOOMBERG

27 The Australian, Australia Author: John Durie Section: Business News Article type : News Item Classification : National : 94,448 Page: 17 Printed Size: cm² Region: National Market: Australia ASR: AUD 18,626 Words: 955 Item ID: Page 1 of 3 Clever deals no substitute for higher prices in takeovers JOHN DURIE Private Equity fund BGH Capital yesterday learned that clever deals with large shareholders like AustralianSuper are no match for higher prices, with Navitas and Healthscope both rejecting their takeover bids. In both cases, BGH could come with a higher price and also actually launch a takeover bid but, given past rhetoric, that would be an embarrassing come-down. That doesn t mean it won t happen, because business is business. The two rejections, while featuring some of the same partners, were vastly different, given Healthscope has an actual competing proposal while Navitas chair Tracey Horton simply said no. That was a brave call by the Goldman Sachs-advised Navitas board, given company founder Rod Jones was supporting the bid. Horton used forecasts as far out as 2023, but neglected to tell shareholders what she thought might happen next year. Little wonder Allan Gray and others are not impressed. The company reported earnings before interest, tax, depreciation and amortisation of $144 million last financial year. While leaving out this year s performance, it has bravely forecast a 39 per cent increase in 2020 and 74 per cent to Such longterm confidence is a joy to see and a statement of belief in chief David Buckingham but, having knocked a potential takeover bid, shareholders may appreciate some more reasons to this judgment. Rod Jones owned 13 per cent of the stock and was happy to sell half that into the offer to collect $124m. He had other supporters like Peter Larsen who was happy Continued on Page 28

28 The Australian, Australia Author: John Durie Section: Business News Article type : News Item Classification : National : 94,448 Page: 17 Printed Size: cm² Region: National Market: Australia ASR: AUD 18,626 Words: 955 Item ID: Page 2 of 3 Double blow for BGH as Navitas, Healthscope reject bids Continued from Page 17 to sell down at $6.10 a share five years ago and some would think these guys had a fair view of long-term value in the stock. The stock has sold down from $5.59 last December to as low as $4.09 in July but at the end of the day if private equity wants special treatment then it must pay up for it. AustralianSuper said yesterday the consortium would consider all options, but the reality is BGH, ed by Australian- Super, tried to bully the Navitas and Healthscope boards and in both cases they were shown the door. Private equity has long favoured schemes of arrangement that give it 100 per cent control, which suits its bankers given that high debt levels are normally involved. This time Brookfield is taking a walk on the wild side by offering an alternative, if the scheme got knocked down but it will be hoping against hope that it doesn t come to that. The bid is aimed to maximise the pressure on AustralianSuper, which is setting a new norm in joining bids for direct equity in leveraged buyouts. The potential for conflict is enormous and one level was exposed by the Brookfield bid. Brookfield knocked on Healthscope chair Paula Dwyer s door after the market closed last Friday with an offer that broke those norms given it is prepared to pay $2.58 a share for a scheme or $2.45 for a takeover bid. Both offers are significantly above the BGH offer, laying an extra $392m on the table for a scheme, which in turn offers $226m more than the takeover bid. AustralianSuper also broke the mould on this bid by actually being part of the bidding consortium which meant, in the case of the Navitas offer, a claim that it would vote down a higher bid and in the case of Healthscope an implied threat that it owned a blocking stake. Australian Super has invested around $200m in the $2.6 billion BGH buyout fund, as it does with other private equity firms and has a stated objective of taking direct equity stakes in companies. This deal represented a change in strategy to reflect this desire. As a super fund it has an obligation to its members, which would mean unless BGH agrees to increase its bid on paper, it should accept the higher bids on the table from Brookfield. The Bank of America Merrill Lynch-advised Brookfield has come up with an innovative structure in which the scheme and the takeover offer are put to shareholders at the same time and if the scheme falls over then the takeover offer proceeds. This has a 50 per cent minimum acceptance condition so Australian Super can choose to stay as a minority investor in a Brookfield-controlled vehicle. Brookfield is staying friends with everyone, telling UBS it can continue to work up its sale and lease property and also remains open to any thoughts from fellow Canadian NorthWest Health. which has its foot on 10 per cent of Healthscope. It would surprise if Brookfield actually let the UBS property deal out the door because it is a debt-for-lease obligation swap that has dubious value and Brookfield would claim some expertise in the field. It has a break fee of around $300m, exclusive due diligence until Christmas, with the proviso that if BGH or another party comes up with a higher bid then that party gets into the room from mid-december. Its offer wouldn t take place until April 1 next year, which just happens to be after the expiry date for the AustralianSuper-BGH deal. In all, Brookfield has every option covered except for a higher price. Assuming Brookfield actually gets to the deal table, Healthscope s Paula Dwyer can claim some vindication for her delay in ruling on the Macquarie-advised BGH offer. Morgan Stanley advised BGH on the Navitas play. BGH has some of the smartest corporate minds in Australia on its team but, at the end of the day, the way to the cookie jar is by having the highest price on the table. Let s see if BGH accepts reality.

29 The Australian, Australia Author: John Durie Section: Business News Article type : News Item Classification : National : 94,448 Page: 17 Printed Size: cm² Region: National Market: Australia ASR: AUD 18,626 Words: 955 Item ID: Page 3 of 3 KRYGSMAN S VIEW Ben Gray of BGH Capital

30 Daily Telegraph, Sydney Author: John Dagge Section: Business News Article type : News Item Classification : Capital City Daily : 232,067 Page: 34 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 15,263 Words: 422 Item ID: Page 1 of 1 Healthscope battle enters final stages DEALS THE battle for Australia s second-biggest private hospital group appears to be entering the final stage, with Healthscope opening its books to Canadian suitor Brookfield Capital Partners. Healthscope has given Brookfield exclusive rights to scrutinise its accounts after the private equity group lobbed a sweetened $4.5 billion takeover offer. It also throws up a fresh hurdle to a rival bidder a consortium led by private equity house BGH Capital and superannuation titan AustralianSuper. The consortium s advances had been batted away as undervaluing the healthcare group, which operates more than 40 private hospitals. Shares in Healthscope surged more than 14 per cent yesterday. Brookfield is offering $2.585 for each Healthscope share through a scheme of arrangement that values the company at $4.5 billion. In case that approach fails, the Canadian asset manager has also lobbed an off-market takeover offer, where it will pay $2.45 a share provided its secures a stake of at least 50.1 per cent. Both offers include Healthscope paying a 3.5c interim dividend during the takeover process. A takeover structured as a scheme of arrangement only needs 75 per cent shareholder support to secure the bidder 100 per cent of the shares in the target company. Under an off-market takeover, Brookfield would need to get 90 per cent of the stock before it could compulsorily acquire the remaining shares. Complicating Brookfield s scheme of arrangement approach is that AustralianSuper, part of the rival bidding consortium, owns 19.1 per cent of Healthscope s shares. Ellerston Capital, which has a 9.4 per cent stake in Healthscope, is also part of the rival bidding consortium. viously said it will not consider any rival offers, even if they are superior, because it wants to keep an ownership stake in Brookfield s scheme of arrangement offer allows Healthscope shareholders to receive shares in an unlisted company that will own the hospital group following any transaction. AustralianSuper declined to comment yesterday. Healthscope chair Paula Dwyer said the Brookfield proposal was attractive for shareholders. It is superior to the BGH- AustralianSuper proposal and provides enhanced certainty, Ms Dwyer said. It also offers more options for Healthscope shareholders, including an option to retain an equity exposure to an unlisted Healthscope. Healthscope runs 43 hospitals in Australia and 24 pathology laboratories in New Zealand. The group, which employs 18,000 workers, generated $2.3 billion in revenue for the year to June but reported a 50 per cent drop in profit to $75.8 million. Listed private hospital operators have been sold down by investors over the past 18 months. Paula Dwyer.

31 Daily Telegraph, Sydney Author: Rose Brennan Section: General News Article type : News Item Classification : Capital City Daily : 232,067 Page: 12 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 45,268 Words: 559 Item ID: Page 1 of 3 SPECIAL REPORT Cruise chiefs push for new Navy negotiation ROSE BRENNAN STATE POLITICAL REPORTER rison has been told to live up to his tourism roots by standing up to the Navy and giving cruise ships access to Garden Island. The desperate plea to the former boss of Tourism Australia is just the latest episode in a tug of war battle over what should be a simple answer to solving a massive Sydney issue. Tourism industry leaders are calling on Mr Morrison to support the lucrative cruise industry, which injects $1.6 billion into the NSW economy each year. The Garden Island issue is such a hot topic because Sydney s current berths are nearing capacity during peak season as large and mega cruise ships over 51m increasingly replace small cruise ships. The biggest ships don t fit under the Harbour Bridge to reach White Bay. But the Prime Minister has indicated he won t be changing the federal government s position, which is to keep Garden Island exclusively for the Navy. Peter Collins, a former leader of the NSW Liberals and a decorated Navy captain, advised the state government this year on how to address the capacity issues. Garden Island is the solution, Mr Collins said. A shared facility with the Navy is entirely do-able. The one person who should be able to understand this better than any of us is Prime Minister Scott Morrison. And despite a series of sets for the cruise industry, Tourism & Transport Forum chief executive Margy Osmond said the fight for Garden Island was far from over. Sydney Harbour and Garden Island is still the best solution, Ms Osmond said. For ships coming to Sydney the money shot is the Harbour it s our crowning glory. She called on Mr Morrison to show initiative. It s an ideal opportunity for a Prime Minister who has a very significant tourism ground to step in and find a collaborative solution around Garden Island, Ms Osmond said. We need someone in federal government to take leadership and understand the value of the industry. In the face of the federal government s failure to facilitate access to Garden Island, the state government is forging ahead with a solution to the capacity issues and is set to receive a business case for building a cruise terminal at Port Botany by the end of the year. Port Botany, and Garden Island if allowed, would be used for overflow of ships during peak season from January to March. Our state has been the victim of its own success when it comes to cruise as more and more ships and passengers wish to visit our beautiful coastline and iconic Harbour City, Tourism Minister Adam Marshall (picture below) said. NSW Labor tourism spokeswoman Penny Sharpe also s the use of Garden Island which puts her at odds with federal Labor. The cruise industry is incredibly important, she said. Mr Morrison refused to comment, while Defence failed to outline why they needed sole use of Garden Island. Lulu Carter, 23, said she en-

32 Daily Telegraph, Sydney Author: Rose Brennan Section: General News Article type : News Item Classification : Capital City Daily : 232,067 Page: 12 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 45,268 Words: 559 Item ID: Page 2 of 3 joyed cruising holidays and thought we should really make the most of our most famous landmarks. They (tourists) definitely want to see this. This is beautiful. Sydney Harbour is what it is all about, she said. EDITORIAL PAGE 22

33 Daily Telegraph, Sydney Author: Rose Brennan Section: General News Article type : News Item Classification : Capital City Daily : 232,067 Page: 12 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 45,268 Words: 559 Item ID: Page 3 of 3 SPECIAL REPORT $5.3b 825,000 No.1 80% Sydney is the top cruise destination in Australasia Amount international travellers spent in Australia $1.6b Injected into the NSW economy Source: Cruise Lines International Australasia Passengers predicted by Domestic passengers who start a cruise in Sydney

34 Daily Telegraph, Sydney Author: Rose Brennan Section: General News Article type : News Item Classification : Capital City Daily : 232,067 Page: 12 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 4,820 Words: 175 Item ID: Page 1 of 1 Peter Collins. No defence to security risk claims ROSE BRENNAN A DECORATED Navy captain has rubbished claims by Australia s Defence Forces and the federal government that Garden Island can t be used by cruise ships because of security issues. Peter Collins, a former leader of the NSW Liberals, headed up the cruise industry reference group which this year advised the state government on how to deal with capacity issues in Sydney Harbour. Mr Collins said the security risk line had been peddled for years but was a standard excuse for not looking at issues. I would never propose anything which would in any way negatively impact on national security and nor has the six options identified by the cruise ship reference group, he said. If Garden Island is used more effectively so the eastern side of it is used by the Navy then there is plenty of room for whatever the navy has on its construction list or plans. Garden Island is between Woolloomooloo Bay and Rushcutters Bay. It incorporates the Royal Australian Navy s prime operational base on the east coast of Australia.

35 Daily Telegraph, Sydney Author: Satya Marar Section: General News Article type : News Item Classification : Capital City Daily : 232,067 Page: 23 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 26,887 Words: 926 Item ID: Page 1 of 2 Class war hurts poorest Middle-class investors and renters to be among the hardest hit by Labor s plan to scrap negative gearing SATYA MARAR There is a federal election on the horizon and housing fordability in our big citie on the agenda, with Short opposition announcing ne tive gearing reforms which, they will favour first-home buyers o wealthy property investors while de ering a revenue windfall for the gove ment. Although Labor presents its strat of limiting negative gearing tax con sions to newly constructed proper while grandfathering the arran ments of existing investors as a pr matic policy to mitigate any nega fallout from completely abolishing concession, the devil ultimately lie the details. And renters and retirees self-managed super funds are set to t the greatest hits. Recent months have already s slowdowns in Australia s major pr erty markets, with tighter controls credit and investor loans taking ef alongside price falls of 6 per cent an per cent in Sydney and Melbourne spectively compared with last y These outcomes call into question necessity of radical changes to property tax system like negative g ing reforms. Shadow Treasurer Chris Bowen responded by arguing that the reforms would be well timed cooling demand means that the impact of a change for investors now will be far less than if the market were in a stronger position. In theory, Labor s negative gearing changes, paired with cutting the Capital Gains Tax discount from 50 per cent to 25 per cent, favour owner-occupiers over property investors while encouraging investors to fund new construction projects, thereby broadening housing supply. In the meantime, fallxisting properties from annot negatively gear, er prices for those tryousing market. ng existing arrangeat investors who curgear can continue to er fund holders whose uch property investn new owner-occupiers er people need to rent, increase in rental priperties which can no negatively geared by ners. should also be mitiby the introduction of ental stock due to new tructions which can be negatively geared. practice, things are a d murkier. While existing invesors and super fund olders can still negaively gear their curent properties, the operties values will ajor hit on top of coolmand that is already perty markets. Owners and investors are often forced to sell their properties before they pay off the cost of their mortgage even with the benefit of negative gearing concessions which reduces their overall costs. These are the individuals who will be worst impacted. Contrary to Labor s spin, most of these are not wealthy investors. Those on taxable incomes of less than $80,000 a year are a vast majority of those currently benefiting from negative gearing including many professionals, teachers, firefighters and nurses who worked and saved to enter the property market in the hope of building long-term wealth for themselves and their families. Many are retirees who either own property through their super funds or who face bleak prospects when they downsize, with their limited earning capacity, limited super and low savings levels. Many of these lower or middle-class owners and investors would be left stuck with stranded assets, forced to service ongoing debts despite the benefit of negative gearing. They face a monumental loss if they try selling these properties to new owners or investors who cannot access negative gearing and are unlikely to offer a price which could pay off their mortgage when more lucrative investments can be made in new constructions or in non-real estate investments. Those who try selling before Labor s policy takes effect will face an already tepid property market flooded with properties like theirs. As for renters, it is unlikely that new stock from future constructions and the movement of many renters into home ownership will deliver immediate benefits. Rather, rents on properties no longer susceptible to negative gearing will rise to cover the costs incurred by the owners. Future constructions are likely to be concentrated in city fringes or recently rezoned areas for higher density housing. These properties may not be suitable for renters commuting to the city for work or those with larger families.

36 Daily Telegraph, Sydney Author: Satya Marar Section: General News Article type : News Item Classification : Capital City Daily : 232,067 Page: 23 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 26,887 Words: 926 Item ID: Page 2 of 2 New construction is also dependent on timely urban planning and rezoning by state governments and local councils who don t exactly have a good track record of doing so in tandem with rapidly expanding urban populations or in a way that mitigates the stress placed on our struggling urban transport infrastructure and services. Radical changes which threaten our rental markets and will slam middleclass property owners, including retirees and super fund holders, with devalued assets and the potential of catastrophic debt to banks, are unnecessary at a time when property values are already going through a landmark correction which is set to continue for some time. By contrast, wealthier investors who are better equipped to invest in new construction and development projects or other lucrative assets, will be the least affected by Labor s changes. Given that half the people in NSW benefiting from negative gearing tax savings on investment property live in Labor electorates, this is all the more reason for Shorten to drop the claim that his reforms would simply be a tax on the rich. Satya Marar is the director of Policy at the Australian Taxpayers Alliance Rents on properties... will rise to cover the costs incurred by the owners

37 The Australian, Australia Author: Ben Butler Section: Business News Article type : News Item Classification : National : 94,448 Page: 20 Printed Size: cm² Region: National Market: Australia ASR: AUD 4,657 Words: 366 Item ID: Page 1 of 1 More Hayne fallout as Freedom bosses hit the road BEN BUTLER Kenneth Hayne s financial services royal commission has claimed more scalps after the chief executive, chairman and a non-executive director of Freedom Insurance Group announced their resignations yesterday. The company is to hire the former chief executive of retirement savings industry peak body the Association of Superannuation Funds of Australia, Pauline Vamos who was most recently boss at governance researcher Regnan to replace outgoing chairman David Hancock. Chief executive Craig Orton, who has only been with the company nine months and was grilled over the company s high-pressure sales calls at royal commission hearings in September, is to leave Freedom before the end of the year for personal reasons, the company told the exchange. Mr Hancock is to resign at the end of the company s annual meeting on Thursday while nonexecutive director Katrina Glendinning didn t wait and resigned yesterday. Freedom s boardroom tumult comes as the life insurance company scrambles to find a business model after shutting down its call centres a decision it took in August, before it faced the commission and amid damning criticism of its business model by the corporate regulator. The Australian Securities & Investments Commission moved to restrict the sale through cold-calling of life insurance products and ban the sale of accidental death insurance after its investigation of the industry found dodgy pressure selling was rife and the products were often junk. Freedom staff hung up when customers tried to cancel their policies, and the company continued to charge people who tried to end their coverage, the royal commission heard. The regulatory reckoning obliterated Freedom s share price, sending it tumbling from about 40c to less than 10c in August. Freedom, which sacked most of its staff in October, said it now expected to record negative earnings of between $7 million and $8m for the six months to the end of the year. It said a strategic review conducted by Deloitte was nearing completion and it still wanted to buy Bank of Queensland s insurance division, St Andrews. A sale of its non-core Spectrum Wealth Advisers was also on the cards, it said. Freedom shares, which fetched as much as 89c in August last year, closed up 5.46 per cent at 5.8c Freedom Insurance Group closed up Source: Bloomberg

38 The Australian, Australia Author: Richard Gluyas Section: Business News Article type : News Item Classification : National : 94,448 Page: 21 Printed Size: cm² Region: National Market: Australia ASR: AUD 3,576 Words: 334 Item ID: Page 1 of 1 FOUR PILLARS RICHARD GLUYAS Word on the street The curious case of the Australian Securities & Investments Commission s dealings with the national law firm Corrs over the financial services royal commission just got curiouser. Back in August, this column reported that Johnson Winter & Slattery had replaced Corrs as ASIC s legal adviser for Ken Hayne s inquisition of the banks. JWS is close to ASIC. The regulator turned to the firm in May last year when it required an external opinion in the unconscionable conduct case against the four major banks over trading in the bank bill swap rate market. Last week, JWS was in the watchdog s corner for its disastrous Federal Court bid to lift the maximum penalty in Westpac s BBSW case from $3.3 million to $58m. But why the transition from Corrs to JWS midstream in the royal commission? This column has made two freedom of information applications to ASIC. The first, which asked for any documents referring to ASIC s decision to cease retaining Corrs, was rejected on the grounds there were no such documents. ASIC said its contract with Corrs for the provision of legal services in the royal commission continued, and it had varied the composition of its external legal team from round to round in the commission s hearings. The second application, which requested documents that recorded bills rendered by Corrs to ASIC, as well as fees paid by ASIC to Corrs, prompted the curious response. ASIC first consulted with Corrs and agreed that any release of the documents could hurt the firm by providing competitors with an understanding of Corrs business practices, pricing and resources. ASIC said its interests could also be jeopardised, with other firms adjusting their pitches for the regulator s legal work. In rejecting the application, however, ASIC revealed the dates of invoices it received from Corrs, as well as the dates of payments it made to the law firm. Beginning in late January, Corrs sent six monthly invoices. All of them were paid. The last invoice was sent on June 22. gluyasr@theaustralian.com.au

39 The Australian, Australia Author: Joyce Moullakis Section: Business News Article type : News Item Classification : National : 94,448 Page: 21 Printed Size: cm² Region: National Market: Australia ASR: AUD 8,130 Words: 623 Item ID: Page 1 of 1 APRA names panel, deadline for review JOYCE MOULLAKIS A sweeping review of the prudential regulator s enforcement strategy in the $6.5 trillion financial services industry is set to wrap up in March, after being expedited by scathing criticism during the Hayne royal commission. The Australian Prudential Regulation Authority yesterday said deputy chairman John Lonsdale and an advisory panel, including former NSW Supreme Court judge Robert Austin, would lead the enforcement review. It follows banking royal commissioner Kenneth Hayne s criticism in his interim report that the prudential regulator and the corporate watchdog had shied away from taking legal action against misbehaving financial institutions. APRA had never taken a bank, insurance company or super fund to court, the inquiry found. The APRA review will examine the regulator s current enforcement strategy, infrastructure and how that interacts with its core supervisory approach in the sector. The scope of the review will among other things assess APRA s approach to enforcement and any legal, practical or structural impediments to taking action. As well as Dr Austin, the independent advisory panel will include Sarah Court, a commissioner at the Australian Competition & Consumer Commission, and professor Dimity Kingsford Smith, director of the Centre for Law Markets and Regulation at the University of NSW. The review will also delve into areas including the regulator s resourcing, its approach to breach reporting and whistleblowers and decision-making processes. Mr Lonsdale said: The review will be a forward-looking examination of APRA s approach to the use of its enforcement powers to ensure that financial promises made by supervised institutions are met within a stable, efficient and competitive financial system. APRA has taken a range of supervisory actions over many years but it is timely to examine whether APRA s traditional approach, prioritising prevention and rectification, can be augmented by greater enforcement activity. This review presents an opportunity for APRA to strengthen its supervisory toolkit and reinforce sound prudential outcomes. In its statement, APRA said it had established the enforcement review in recognition of new regulatory responsibilities under the Banking Executive Accounting Regime, as well as case studies examined by the royal commission. The enforcement review will provide recommendations on areas including APRA s internal governance and strategy, whether it is holding entities to account and whether public enforcement and litigation would achieve general deterrence effects. It will also provide a view on the breadth of issues APRA addresses through public and nonpublic enforcement action. Ahead of APRA s terms of reference being announced, opposition treasury spokesman Chris Bowen yesterday told a UBS conference he was loath to push for a so-called capability review of APRA. We need to wait and see the recommendations of the royal commission, he said. The latest review is not the first time regulators have been in the firing line. Four years ago, David Murray s Financial System Inquiry called for a financial regulator assessment board to be established to measure the performance of regulators. The Australian Securities & Investments Commission was the subject of a capability review, which was completed in In its submission to the royal commission s interim report, APRA conceded the need for a review of its enforcement functions. Its submission said: Even without the use of formal enforcement powers, APRA s supervisory actions take a range of forms and escalate from routine supervision activities to more intrusive and punitive actions that have the impact of specific deterrence. These include heightened supervision actions, such as requirements of entities or increases in regulatory capital. However, APRA acknowledges that because they are not undertaken publicly they will not have a strong general deterrent effect. Draft recommendations for APRA s review are due by February 28. A final report will be presented to the regulator s members by March 31. Following consideration of its recommendations, APRA expects to release the final review and an enforcement strategy.

40 The Australian, Australia Author: Andrew White Section: General News Article type : News Item Classification : National : 94,448 Page: 17 Printed Size: cm² Region: National Market: Australia ASR: AUD 28,531 Words: 1109 Item ID: Page 1 of 4 SUPER GIANT UNDER PRESSURE OVER BGH CAPITAL TIES Double snub for private equity ANDREW WHITE Private equity boss Ben Gray and his super fund partner Australian- Super have come under intense pressure to secure a deal following a $6 billion double snub by separate takeover targets Healthscope and Navitas. The lock-up bidding approach by Gray s so-called BGH consortium has also come under criticism by education provider Navitas, which has lashed out at the tactic of signing up large investors before a bid, claiming it prevents shareholders from receiving higher offers. AusSuper, Australia s biggest superannuation fund with $140bn under management, has linked up with BGH to vote against any bid other than its own in order to secure control of publicly listed companies. Combined, the consortium has per cent of Healthscope and a 5.4 per cent stake in Navitas. The Navitas bid also has a partnership with founder Rod Jones, who has a 12.4 per cent stake. This would be enough to stop rival bids from securing full ownership of either company. The BGH-AusSuper partnership has bid $2.36 a share for Healthscope, valued at $4.1bn, and in a separate move, $5.50 a share for Navitas (valued at almost $2bn). The BGH partners were yesterday morning denied due diligence to support the bids after the target boards said the prices were inadequate. Indeed, Healthscope chairman Paula Dwyer yesterday granted rival suitor Brookfield due diligence after it lobbed a revised indicative offer of $2.42 a share for control and $2.585 a share for outright ownership of Healthscope. The rival bid puts pressure on AusSuper to break its partnership with BGH when the agreement expires on March 31 by offering a higher price, with the chance of ongoing direct equity exposure in a Brookfield-led, unlisted Healthscope. Navitas, however, said it had been canvassing alternatives to the BGH-AusSuper bid with a number of parties to see if they could offer superior value. The Navitas board is not inclined to provide due diligence to any party who places restrictions on Navitas shareholders from supporting a superior alternative proposal, Navitas said. A number of these parties have confirmed the board s view that the commitment by AustralianSuper and Mr Jones are potentially an impediment to proceeding with any competing proposal. AusSuper was believed to be considering its next moves, including any implications for the partnership agreement with BGH and the options for raising its bid to win board support, following yesterday s rebuffs. Its bidding partnership was renewed in late October and expires on March 31. The partnership marks a new twist in the battle for control of Australian companies, with Aus- Super a major holder of companies across the market and intent on generating long-term returns in line with the 45-year time horizons of its millions of members. But it has been reluctant to explain its justification for blocking higher bids from other parties. An AusSuper spokesman yesterday declined to comment. BGH executives could not be reached for comment. BGH, led by former TPG Australia head Ben Gray, former Macquarie banker Robin Bishop and former TPG executive Simon Harle, closed a $2.3bn capital rais-

41 The Australian, Australia Author: Andrew White Section: General News Article type : News Item Classification : National : 94,448 Page: 17 Printed Size: cm² Region: National Market: Australia ASR: AUD 28,531 Words: 1109 Item ID: Page 2 of 4 ing for their first private equity Continued on Page 20 Double trouble for private equity as targets snub offers Continued from Page 17 on record. The fund includes a $200 million commitment from AustralianSuper, which also wants to invest directly in assets and companies, as it did with the NSW Ports privatisations in 2013 alongside IFM Investors. Capital raisings for private equity are running at their highest levels since the global financial crisis, with 10 PE and venture capital funds raising a combined $5.4bn in the first nine months of the year, according to the Australian Private Equity and Venture Capital Association. PE firms had $5.9bn in dry powder, AVCAL said. But BGH is yet to land a major acquisition. TPG under Mr Gray previously bought and sold Healthscope to the share market in in September 2016 the shares have languished as the company borrowed for a heavy capital investment program, including its flagship Northern Beaches hospital in Sydney. The shares had drifted to $2.08 ahead of yesterday s revised Brookfield bid below the $2.10 issue price of the TPG- 3c to $2.38 at the close yesterday. Navitas shares have fallen sharply from highs above $5.50 in late 2017, and despite a bounce in the wake of the takeover approach, were unchanged yesterday at $5.21. Healthscope opened its books to Brookfield after the listed investment giant made a revised $4.5bn play for the private hospital operator, trumping a rival offer already on the table. Healthscope says Brookfield s new offer was superior to the bid it is worth as much as $2.585 a share if it wins 100 per cent control of the company. Brookfield s two-pronged bid aims to secure at least 50.1 per cent of Healthscope scrip with a $2.42 a share bid. Brookfield originally offered $2.50 a share in May but was blocked by the refusal of AusSuper to break its agreement with BGH. Both Brookfield and BGH- AusSuper bids are conditional on Healthscope not completing a plan to spin off its property assets, which was conceived by management in response to the original, rejected bids earlier this year. We consider the Brookfield holders, Healthscope chairman Paula Dwyer said yesterday. It is superior to the BGH-AustralianSuper proposal and provides enhanced certainty.

42 The Australian, Australia Author: Andrew White Section: General News Article type : News Item Classification : National : 94,448 Page: 17 Printed Size: cm² Region: National Market: Australia ASR: AUD 28,531 Words: 1109 Item ID: Page 3 of 4 The board support for due diligence follows shareholder pressure that culminated in a first strike against the company s remuneration report at the annual meeting last month. AusSuper has previously said it would not support a superior, rival proposal because it wanted to retain a direct ownership stake in a privately held Healthscope, as would occur under the BGH proposal. Brookfield will have access to due diligence through to Christmas with a scheme meeting expected to be scheduled for April 1, the day after the exclusive bidding partnership between BGH and AusSuper is due to expire. Healthscope operates a portfolio of more than 40 hospitals in Australia and 24 pathology laboratories in New Zealand. In May, it closed two hospitals in southern Australia and in July it sold its Asian pathology division for $279 million. Healthscope was founded in 1985 and listed on the Australian Securities Exchange in $ $ 2.60 Navitas closed 2.50 steady at $ $2.38 Healthscope closed up Source: Bloomberg Healthscope. has decided not to provide due diligence access to a consortium of financial investors Ben Gray of BGH Capital The Navitas board is not inclined to provide due diligence to any party who places restrictions on Navitas shareholders from supporting a superior alternative proposal

43 The Australian, Australia Author: Andrew White Section: General News Article type : News Item Classification : National : 94,448 Page: 17 Printed Size: cm² Region: National Market: Australia ASR: AUD 28,531 Words: 1109 Item ID: Page 4 of 4 Healthscope has snubbed BGH, saying the rival Brookfield proposal is attractive for shareholders BLOOMBERG

44 Adelaide Advertiser, Adelaide Section: Business Journal Article type : Real Estate Listing Classification : Capital City Daily : 112,097 Page: 45 Printed Size: cm² Region: SA Market: Australia ASR: AUD 3,689 Words: 226 Item ID: Ideal office space A GREAT opportunity to purchase your own office has opened in the heart of Morphett Vale says Commercial SA s Evan Florinis. The property consists of two ground floor strata units, that offer businesses the opportunity to secure their own home, in a high profile location. The offices combined provide a total area of 139sq m and have been updated to offer a modern corporate appeal. The units also offer strong signage opportunities, to market your new headquarters. The site has been home to Elders Insurance office for many years, and the property is now being offered for sale with vacant possession. The site offers ample parking at the front and with a large car park at the rear of the site too, with easy access off Main South Road and Bains Roads. The units offer the flexibility of being able to be converted into two tenancies, or kept as the one space as it is currently being utilised. This also offers buyers to secure a high profile commercial holding at the entry end of the commercial investment market. Also a great opportunity for investors looking to invest with their self managed super funds to own their own piece of commercial property. FAST FACTS MORPHETT VALE Address: Units 6 & 7, 230 Main South Road, Type: Offices Agent: Commercial SA, Evan Florinis Page 1 of 1

45 Adelaide Advertiser, Adelaide Section: Business Journal Article type : Highlights Classification : Capital City Daily : 112,097 Page: 30 Printed Size: 83.00cm² Region: SA Market: Australia ASR: AUD 1,235 Words: 136 Item ID: Page 1 of 1 DIARY TODAY CLEAN Seas AGM, Convention Centre. ABS chief statistician David Kalisch at CEDA data infrastructure event, EY boardroom. BUSINESS SA chief executive Nigel McBride at CEDA population event, The Science Exchange. POWERING the Change circular economy conference, Tonsley. ANZ-Roy Morgan consumer confidence survey. TOMORROW AGMs - Newcrest, Fortescue, Medibank, Ramsay Health Care, Nine Entertainment, Bionomics (Pullman Hotel). AUSTRALIAN Institute of Professor Anton van den Hengel and others at CEDA AI event, InterContinental. DULUX Group full-year results. FORMER Australian High Commissioner to the UK Alexander Downer at ASFA conference (day one of three), Convention Centre. THURSDAY AGMs - Wesfarmers, Northern (Pullman Hotel). ABS labour force data. FRIDAY AGMs - Mirvac, Lend Lease. MONDAY CORELOGIC capital city house prices. CEDA chief economist Jarrod Ball at CEDA lunch, UniSA Mount Gambier.

46 Adelaide Advertiser, Adelaide Author: SAMANTHA BAILEY Section: Business Journal Article type : News Item Classification : Capital City Daily : 112,097 Page: 51 Printed Size: cm² Region: SA Market: Australia ASR: AUD 7,185 Words: 359 Item ID: Page 1 of 2 Freedom overhaul as key figures quit SAMANTHA BAILEY FREEDOM Insurance says both its chief executive and chairman will leave the life insurer as it deals with the fallout from a damaging appearance before the financial services royal commission. Freedom has also upgraded the expected hit from a dramatic restructure of its business model and will consider the sale of its SpectrumWealth Advisers business. Chairman David Hancock will step down after the company s annual meeting on Thursday while chief executive Craig Orton has advised the board he intends to leave for personal reasons, Freedom said on Monday. Mr Orton will finish before the end of the calendar year, the company said. He will be replaced by former TAL executive Sean Williamson, who is currently consulting with Freedom. Mr Orton s departure follows his uncomfortable appearance at the banking royal commission in September, amid evidence the company sold policies to people who did not need them and went to extraordinary lengths to ensure customers retained their insurance. In one case, Baptist minister Grant Stewart said Freedom repeatedly rebuffed his attempts to cancel unwanted funeral insurance sold to his son, a 26-year-old man with Down s syndrome. Non-executive director Katrina Glendinning has also resigned effective immediately, Freedom said yesterday. Former Australian Superannuation Funds of Australia chief executive Pauline Vamos had been appointed to the board. Ms Vamos will assume the role of chairman if she is reelected by the company s shareholders at this week s meeting. In September, Freedom said it would launch a review of strategic options after the Australian Securities and Investments Commission told insurance companies to shut down outbound sales centres. Yesterday the company said it expected to absorb about $5 million in restructuring costs, up from an earlier forecast of $4.8 million. Freedom agrees with ASIC s view that life insurance plays a crucial role in helping consumers manage unexpected events and protect themselves and their families against financial difficulties, the company said. In this regard, the board believes there continues to be opportunities for the company to deliver shareholder value through servicing its existing customer base well and ongoing participation in the industry. THE AUSTRALIAN

47 Adelaide Advertiser, Adelaide Author: SAMANTHA BAILEY Section: Business Journal Article type : News Item Classification : Capital City Daily : 112,097 Page: 51 Printed Size: cm² Region: SA Market: Australia ASR: AUD 7,185 Words: 359 Item ID: Page 2 of 2 EXIT ROUTE: Freedom Insurance chief executive officer Craig Orton. Picture: DAVID GERAGHTY

48 Herald Sun, Melbourne Author: SAMANTHA BAILEY Section: Business News Article type : News Item Classification : Capital City Daily : 303,140 Page: 38 Printed Size: cm² Region: VIC Market: Australia ASR: AUD 13,604 Words: 359 Item ID: Page 1 of 1 Top brass falls on sword Freedom Insurance chair, chief executive exit SAMANTHA BAILEY BOARDROOM FREEDOM Insurance says both its chief executive and chair will leave the life insurer as it deals with the fallout from a damaging appearance at the financial services royal commission. Freedom has also increased the expected cost for a dramatic restructure of its business model and says it will consider the sale of its SpectrumWealth Advisers business. David Hancock, who chairs the board, would step down after the company s annual meeting on Thursday, while chief executive Craig Orton had advised he intended to leave for personal reasons, Freedom said yesterday. Mr Orton would finish before the end of next month, the company said. He will be replaced by Sean Williamson, a former executive at insurer TAL. Mr Williamson has been consulting with Freedom. Mr Orton s departure follows his uncomfortable appearance at the banking royal commission in September, amid evidence the company sold policies to people who did not need them and went to extraordinary lengths to ensure customers retained their insurance. In one case, Baptist minister Grant Stewart said Freedom repeatedly rebuffed his attempts to cancel unwanted funeral insurance sold to his son, a 26-year-old man with Down syndrome. Non-executive director Katrina Glendinning had also resigned effective immediately, Freedom said yesterday. Former Association of Superannuation Funds of Australia chief Pauline Vamos has been appointed to the board. Ms Vamos will become chair if she is re-elected by shareholders at this week s meeting. In September, Freedom said it would launch a review of strategic options after the nation s corporate watchdog, the Australian Securities and Investments Commission, told insurance companies to shut outbound sales call centres. Yesterday, the company said it expected to absorb about $5 million in restructuring costs, up from an earlier forecast of $4.8 million. Freedom agrees with ASIC s view that life insurance plays a crucial role in helping consumers manage unexpected events and protect themselves and their families against financial difficulties, the company said in a statement. In this regard, the board believes there continues to be opportunities for the company to deliver shareholder value through servicing its existing customer base well and ongoing participation in the industry. THE AUSTRALIAN

49 Herald Sun, Melbourne Author: John Dagge Section: Business News Article type : News Item Classification : Capital City Daily : 303,140 Page: 36 Printed Size: cm² Region: VIC Market: Australia ASR: AUD 19,712 Words: 498 Item ID: Page 1 of 2 Hospital admission for suitor Healthscope opens books to Brookfield JOHN DAGGE DEALS THE battle for Australia s second-biggest private hospital group appears to be entering the final stage as Healthscope opens its books to Canadian suitor Brookfield Capital Partners. Healthscope has given Brookfield exclusive rights to scrutinise its accounts after the private equity group lobbed a sweetened $4.5 billion takeover offer. It also throws up a fresh hurdle to a rival bidder a consortium led by private equity house BGH Capital and superannuation heavyweight AustralianSuper. The consortium s advances had been batted away as undervaluing the Melbournebased healthcare group, which operates more than 40 private hospitals. Shares in Healthscope surged more than 14 per cent yesterday. Brookfield is offering $2.585 for each Healthscope share through a scheme of arrangement that values the company at $4.5 billion. In case that approach fails, the Canadian asset manager has also lobbed an off-market takeover offer, where it will pay $2.45 a share, provided it secures a stake of at least 50.1 per cent. Both offers include Healthscope paying a 3.5c interim dividend during the takeover process. A takeover structured as a scheme of arrangement only needs 75 per cent shareholder support to secure the bidder 100 per cent of the shares in the target company. Under an off-market takeover, Brookfield would need to get 90 per cent of the stock before it could compulsorily acquire the remaining shares. Complicating Brookfield s scheme of arrangement approach is the fact Australian- Super, part of the rival bidding consortium, owns 19.1 per cent of Healthscope s shares. Ellerston Capital, which has a 9.4 per cent stake in Healthscope, is also part of the rival bidding consortium. AustralianSuper has previously said it will not consider any rival offers, even if they are superior, because it wants to keep an ownership stake in Healthscope. Brookfield s scheme of arrangement offer allows Healthscope shareholders to receive shares in an unlisted company that will own the hospital group following any transaction. AustralianSuper declined to comment yesterday. Healthscope chair Paula Dwyer said the Brookfield proposal was attractive for shareholders. It is superior to the BGH-AustralianSuper proposal and provides enhanced certainty, Ms Dwyer said. It also offers more options for Healthscope shareholders, including an option to retain an equity exposure to an unlisted Healthscope. Healthscope runs 43 hospitals in Australia and 24 pathology laboratories in New Zealand. The company has 15 hospitals in Victoria, including John Fawkner Private Hospital, Northpark Private Hospital, Frankston Private Hospital and the Melbourne Private Hospital, which is within the Royal Melbourne Hospital. The group, which employs 18,000 workers, generated $2.3 billion in revenue for the year to June but reported a 50 per cent drop in profit to $75.8 million. The move by Healthscope to open its books to Brookfield came as Navitas, which provides English-language and other courses, rejected a take-

50 Herald Sun, Melbourne Author: John Dagge Section: Business News Article type : News Item Classification : Capital City Daily : 303,140 Page: 36 Printed Size: cm² Region: VIC Market: Australia ASR: AUD 19,712 Words: 498 Item ID: Page 2 of 2 over bid from a consortium also led by BGH Capital and involving AustralianSuper. Navitas said the offer, worth almost $2 billion, undervalued the company and its board was exploring potential deals with other parties. john.dagge@news.com.au

51 Herald Sun, Melbourne Author: Josh Frydenberg Section: General News Article type : News Item Classification : Capital City Daily : 303,140 Page: 21 Printed Size: cm² Region: VIC Market: Australia ASR: AUD 21,600 Words: 0 Item ID: Page 1 of 2 Labor s gearing policy a risk to our prosperity JOSH FRYDENBERG ACCORDING to the latest data from the Australian Taxation Office, about 310,000 Victorians use negative gearing on their property, with the majority of those in Labor-held seats. For example, in Julia Gillard s former seat of Lalor, which takes in the suburbs of Werribee and Hoppers Crossing, nearly 13,000 people negative gear. Those who use negative gearing are not necessarily rich nor the owners of multiple investment properties. Rather, they are made up of 58,000 teachers, 41,000 nurses, 19,000 police and emergency personnel, and many other tradies and small business people who put aside a bit each month to save for their future. About two-thirds of those who negative gear have a taxable income under $80,000, with 71 per cent having only one property and 72 per cent using it for a tax deduction of less than $10,000 a year. In total, there are about 1.3 million Australians using negative gearing, a policy which until now has received bipartisan support for more than three decades. Other than for a brief period under the Hawke government, when Labor changed negative gearing only to flip two years later, neither political party has thought to abolish it. As then Labor treasurer Wayne Swan said on Melbourne radio in 2010, it would be economically disastrous to do anything on negative gearing. However Bill Shorten, desperately short of revenue to meet his huge spending promises, is promising to abolish negative gearing as we know it and increase the capital gains tax rate by 50 per cent on property investments and other assets. On Labor s own calculations, that is a $32 billion tax grab and it will hurt the economy by putting downward pressure on housing prices when the market is moving to what the Reserve Bank of Australia says is a more sustainable level. Prices have come down for 12 consecutive months across capital cities, and economic commentators say a significant fall from here could have a much broader negative effect. Citi s economic research said Labor s policy would accelerate the cyclical weaknesses of house prices by further limiting housing demand with spillovers to consumer spending. The Master Builders Association said Labor s policy would constitute a $11.8 billion hit to the construction sector, leading to 42,000 fewer dwellings being built and 32,000 fewer full-time jobs. Leading international credit rating agency Standard and Poors has warned that Australia s AAA

52 Herald Sun, Melbourne Author: Josh Frydenberg Section: General News Article type : News Item Classification : Capital City Daily : 303,140 Page: 21 Printed Size: cm² Region: VIC Market: Australia ASR: AUD 21,600 Words: 0 Item ID: Page 2 of 2 credit rating would come under pressure if house prices fall sharply and increase risks to fiscal accounts, real economic growth and financial stability. Were Australia to lose its AAA credit rating, the cost of borrowing, from banks to corporates, and governments to households would increase. What is more, a significant property price drop could see the equity families have in their homes disappear for some if the debt levels become greater than the value of their assets. But it is not only homeowners who are affected, but also the millions of people who rent. That is because investors with access to negative gearing tend to charge less rent in the expectation of an after-tax capital gain. These investors have helped stabilise the rental market, but Labor s destructive policy puts this all at risk and will send rents higher, according to the Centre for International Economics. Labor claims it is abolishing negative gearing as we know it in order to create more affordable housing. While both sides of politics are committed to that, we disagree on the best way to achieve this end. On the Coalition s watch over the past year, more than 100,000 first-home buyers had a loan approved, the highest number since seniors to downsize their home by contributing some of the proceeds of sale to their superannuation; put in place a First Home Super Savers Scheme enabling first-home buyers to build a deposit through their super; increased charges for foreign purchases of residential property; provided tax arrangements for investors in affordable rental accommodation; and established a new $1 billion national housing infrastructure facility, facilitating lower cost finance for community housing. We have also released land for housing development, including a 127ha defence site in Maribyrnong, with the potential for 6000 homes. In recent weeks, the front page of the highly regarded The Economist magazine praised the Australian economy under the heading, Aussie Rules: What Australia can teach the world. It was a reminder the policy settings, performance and direction of the Australian economy is sound. But there is also no room for complacency. With house prices on the decline, Australia can illafford Labor s big new property tax, which will hurt homeowners, renters and investors and threaten our economic prosperity. JOSH FRYDENBERG IS THE FEDERAL TREASURER THAT reflects our successful policies, with more initiatives being rolled out. We have legislated changes that enable

53 Courier Mail, Brisbane Author: Peter Gleeson Section: General News Article type : News Item Classification : Capital City Daily : 135,007 Page: 13 Printed Size: cm² Region: QLD Market: Australia ASR: AUD 15,526 Words: 659 Item ID: Page 1 of 3 Labor s poison pill for Aussie battlers PETER GLEESON peter.gleeson@news.com.au OF ALL the destructive policies to be implemented under a Bill Shorten-led People s Socialist Republic of Australia, there is one that stands out as the For that w all tha indust insani target throu forget smugg busine prove protec Th Austr to ref prope Th should Iro will m the ve says h from a negati Yo paren their l nest e don t pensio divest supera prope altern prope self-m Ala An benefi accum paren accum could You guessed it. The kids get the inheritance. And so the cycle continues where they can set themselves up to pass on their nest egg to their children, once again taking the burden off the average Australian battlers who are simply trying to break out of dependency on the Government and be self sufficient by providing for their own retirement. They would never be able to buy a homes or units. Bell says the untold story of abolishing negative gearing will be its social impact. He says, for example, it will drive investors away from buying in places

54 Courier Mail, Brisbane Author: Peter Gleeson Section: General News Article type : News Item Classification : Capital City Daily : 135,007 Page: 13 Printed Size: cm² Region: QLD Market: Australia ASR: AUD 15,526 Words: 659 Item ID: Page 2 of 3 like Ashmore, Southport and

55 Courier Mail, Brisbane Author: Peter Gleeson Section: General News Article type : News Item Classification : Capital City Daily : 135,007 Page: 13 Printed Size: cm² Region: QLD Market: Australia ASR: AUD 15,526 Words: 659 Item ID: Page 3 of 3 ab w

56 Courier Mail, Brisbane Author: John Dagge Section: Business News Article type : News Item Classification : Capital City Daily : 135,007 Page: 24 Printed Size: cm² Region: QLD Market: Australia ASR: AUD 3,706 Words: 283 Item ID: Page 1 of 1 Sweet bid good for health Shares surge as Brookfield boosts offer to $4.5b JOHN DAGGE CANADIAN suitor Brookfield Capital Partners has lobbed a sweetened $4.5 billion takeover bid for Healthscope, sending shares in the private hospital group surging more than 14 per cent. Healthscope has given Brookfield exclusive rights to scrutinise its accounts after the private equity group boosted its bid price. It throws up a fresh hurdle to a rival bidder, a consortium led by private equity house BGH Capital and superannuation titan AustralianSuper. The consortium s advances had been batted away as undervaluing Healthscope, which operates more than 40 private hospitals nationally, including the Brisbane Private Hospital and Sunnybank Private Hospital in Queensland. Shares in Healthscope surged 30 to $2.38 yesterday. Brookfield s two-pronged bid aims to secure at least 50.1 per cent of Healthscope scrip with an off-market bid at $2.455 a share, including a 3.5 -a-share Healthscope dividend. It has added a 13 -a-share sweetener worth $240 million in total taking the total price to $2.585 a share, if Healthscope shareholders approve a scheme of arrangement that would give Brookfield 100 per cent of the company. The BGH consortium had kicked off the takeover battle with a $2.36-a-share pitch in April. The following month Brookfield offered $2.50 a share. Healthscope chair Paula Dwyer said the Brookfield proposal was attractive for shareholders. It is superior to the BGH- AustralianSuper proposal and provides enhanced certainty, Ms Dwyer said. It also offers more options for Healthscope shareholders, including an option to retain an equity exposure to an unlisted Healthscope, she said. AustralianSuper owns 19.1 per cent of Healthscope. Also yesterday, education provider Navitas rejected an almost $2 billion takeover bid from a consortium led by BGH Capital and involving AustralianSuper.

57 Courier Mail, Brisbane Section: Business News Article type : News Item Classification : Capital City Daily : 135,007 Page: 24 Printed Size: cm² Region: QLD Market: Australia ASR: AUD 1,862 Words: 206 Item ID: Page 1 of 1 Freedom Insurance chairman, CEO leave FREEDOM Insurance says both its chief executive and chairman will leave the life insurer as it deals with the fallout from a damaging appearance before the financial services royal commission. Freedom has also upgraded the expected hit from a dramatic restructure of its business model and will consider the sale of its Spectrum Wealth Advisers business. Chairman David Hancock will step down after the company s annual meeting on Thursday while chief executive Craig Orton has advised the board he intends to leave before the end of the year for personal reasons, Freedom said yesterday. Mr Orton will be replaced by former TAL executive Sean Williamson. Mr Orton s departure follows his uncomfortable appearance at the banking royal commission in September, amid evidence the company sold policies to people who did not need them. In one case, Baptist minister Grant Stewart said Freedom repeatedly rebuffed his attempts to cancel unwanted funeral insurance sold to his son, a 26-year-old man with Down syndrome. Former Australian Superannuation Funds of Australia CEO Pauline Vamos has been appointed a Freedom director and will become chairman if re-elected at the AGM. Freedom yesterday said it expected to absorb about $5 million in restructuring costs, up from an earlier forecast of $4.8 million.

58 Courier Mail, Brisbane Section: Business News Article type : News Item Classification : Capital City Daily : 135,007 Page: 24 Printed Size: cm² Region: QLD Market: Australia ASR: AUD 1,949 Words: 186 Item ID: Page 1 of 1 Regulator spells out guidelines for review THE deputy chairman of the banking regulator will lead a review of its enforcement strategy. Working with an advisory panel, John Lonsdale will oversee the review of enforcement at the Australian Prudential Regulation Authority after it was criticised at the financial services royal commission. The authority yesterday released the terms of reference for the review, which will examine its enforcement strategy and infrastructure and how they interact with its core supervisory approach. It will assess any legal, practical or structural impediments to APRA taking enforcement action. The royal commission heard that APRA had never taken a bank, insurance company or superannuation fund to court. Meanwhile, it was a mixed day for Australian bank stocks yesterday. ANZ shares were trading ex-dividend, closing 80 lower at $ Macquarie Group also went ex-dividend, with its shares down $1.61 at $ NAB finished in the red, down 2 at $24.88, while the Commonwealth Bank and Westpac both finished higher up 82 to $71.77 and 4 to $27.74, respectively. The ASX200 index closed 19.5 points higher at , while the Australian dollar was trading at just above US72 late yesterday.

59 Sydney Morning Herald, Sydney Author: Colin Kruger Section: Business News Article type : News Item Classification : Capital City Daily : 88,634 Page: 24 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 27,649 Words: 553 Item ID: Page 1 of 2 TAKEOVERS Consortium may face rethink Healthscope, Navitas deliver $6b snub to BGH-AusSuper Colin Kruger The nation s biggest superannuation fund, AustralianSuper, might be forced to rethink its partnership with private equity firm BGH Capital after two landmark takeover bids by their consortium, worth more than $6 billion, were rejected. The private hospital group Healthscope spurned BGH-AustralianSuper s $4.2 billion bid yesterday morning and offered due diligence to a $4.5 billion rival bid from Canada s Brookfield Capital Partners. One hour later, education provider Navitas also rebuffed the BGH-AustralianSuper consortium after it returned with an unchanged $2 billion offer, saying the proposal would not be in the best interests of all Navitas shareholders. But the low offer price was only one of its concerns. The Tracey Horton-chaired Navitas board expressed its reluctance to deal with the consortium, which includes Navitas founder Rod Jones, and highlighted the agreement with BGH that compels AustralianSuper and Mr Jones to reject any higher offer from other potential suitors. The Navitas board is not inclined to provide due diligence to any party who places restrictions on Navitas shareholders from supporting a superior alternative proposal, Navitas said to the ASX yesterday. Navitas confirmed the issue was impacting potential rival offers. A number of these parties have confirmed the board s view that the commitments by AustralianSuper and Mr Jones are potentially an impediment to proceeding with any competing proposal. BGH and AustralianSuper declined to comment, but a source close to the consortium said it is considering all its options. Navitas investor, Spheria Asset Management, was pragmatic about the stand-off with the BGH consortium. In respect of the bid, we agree with the board of Navitas that the price is too low, said Spheria portfolio manager Matthew Booker. As we have seen with Healthscope, there are ways to work around a blocking stake. A scheme of arrangement is one such way. Eventually a bid at the right price will likely win Navitas. That may not be the BGH consortium, Mr Booker said. Navitas shares closed unchanged at $5.21. The BGH consortium was offering $5.50 a share. Healthscope shares rose strongly yesterday, up 14 per cent to $2.38. It is the highest the stock has traded since the private hospital operator rejected Brookfield s $2.50 a share offer in May. The latest offer could see the Canadian group bid up to $2.55 per share. After an initial bump when BGH and Brookfield first emerged as suitors, Healthscope s share price weakened substantially in the months after it rejected the proposals in May. Its shares have now jumped more than 28 per cent since the BGH- AustralianSuper consortium made its second approach last month. The Paula Dwyer-led board signalled its strong support for the proposed Brookfield offer, which included a two-pronged strategy to deal with BGH-AustralianSuper s potential reluctance to accept a higher offer. Brookfield is proposing a scheme of arrangement worth up to $2.55 a share, plus a 3.5 interim dividend. If the BGH-AustralianSuper consortium leads a rejection of the scheme with its 19 per cent stake, Brookfield is also offering a $2.42-a-share cash takeover offer, which is conditional on 50.1 per cent acceptance by Healthscope investors, as well as the scheme being rejected. We consider the Brookfield proposal to be attractive for shareholders, Ms Dwyer said to the ASX. It is superior to the BGH-AustralianSuper proposal and provides enhanced certainty. Brookfield has scheduled the scheme meeting for April 1.

60 Sydney Morning Herald, Sydney Author: Colin Kruger Section: Business News Article type : News Item Classification : Capital City Daily : 88,634 Page: 24 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 27,649 Words: 553 Item ID: Page 2 of 2 NAVITAS Share price $ Close $ J18 F M A M J J A S O N SOURCE: BLOOMBERG HEALTHSCOPE Share price $2.60 Close $ J18 F M A M J J A S ON SOURCE: BLOOMBERG

61 Sydney Morning Herald, Sydney Author: Cole Latimer Section: Business News Article type : News Item Classification : Capital City Daily : 88,634 Page: 24 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 16,880 Words: 470 Item ID: Page 1 of 1 CKI rejection the right move, says China expert INVESTMENT Cole Latimer A China expert says Australia has to push against China as Prime Minister Scott Morrison insisted the decision to knock Hong Kong-based CKI s bid for the country s major gas pipelines was not aimed at stopping Chinese Communist Party control. In June, CKI made a $13 billion offer for APA. The government rejected the deal last week on the grounds it would have given a single foreign company monopoly control of most of the country s pipelines. Despite the preliminary rejection by Treasurer Josh Frydenberg, the government gave CKI 1HERSA1 A024 two weeks to reapply with a renewed proposal. Richard McGregor, a China expert at independent foreign relations think tank the Lowy Institute, said the government s decision to leave the door open for a restructured proposal sends a message to China without damaging Sino- Australian relations. I think the Chinese understand a lot of the decisions we take, Mr McGregor said during the UBS Australasia Conference in Sydney yesterday. If we look at APA, would the Chinese allow a single foreign company to have a virtual monopoly of the energy distribution within China? Absolutely no way. If you re going to develop some kind of internal resilience in Australia you ve got to push against China. There s no nice way of doing it and you might pay a price at some stage. However, he said focusing on the concentration of ownership and monopoly rather than the company s nationality was the best way to push against the bid. The Treasurer seemed to go out of his way not to denigrate CKI, which I think was the right thing to do. The sorts of things that we re doing are the sorts of things that China is doing and we re just playing catch up. In China, foreign companies often have to relinquish major shares in their operations to local companies to comply with foreign ownership laws. CKI has made the only formal bid for APA but other groups, such as a consortium of superannuation funds including IFM, are rumoured to be waiting in the wings if CKI s bid fails. Prime Minister Scott Morrison yesterday reaffirmed that the government rejected the bid over monopoly concerns rather than fears over Chinese ownership of Australian energy infrastructure. That decision [on APA and CKI] was taken about the concentration and aggregation of a single owner, it wasn t about the nationality of the owner at all, Mr Morrison told Bloomberg TV. We went through a very disciplined process in explaining the decision so there were no surprises. Mr McGregor said the move was part of a broader global trend, as Germany, France and New Zealand push against Chinese investment. We have to remember it s not just Australia trying to renegotiate our relationship with China, Mr McGregor said. $13 billion CKI s bid in June for APA that the government rejected.

62 Sydney Morning Herald, Sydney Author: Elizabeth Knight Section: Business News Article type : News Item Classification : Capital City Daily : 88,634 Page: 25 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 26,412 Words: 749 Item ID: Page 1 of 2 Banks on warpath over every dollar COMMENT Elizabeth Knight Welcome to the postroyal commission era of borrowing. Heightened scrutiny by banks of the financial position of borrowers will be the new order and responsible lending will get a whole lot more responsible. ANZ was the latest of the banks to really dip its toe in the water. This week it told staff and mortgage brokers, who are responsible for selling its mortgage products, that enhanced verification will be introduced later in the month. Those applying for a mortgage will need to outline what they spend on everything from Netflix to nannies. With the rate of mortgage growth already easing across the board and investors looking for finance dropping precipitously, bank shareholders felt a shiver at the prospect of extra internal controls on lending contributing to a further slowdown in home loan growth. By lunchtime, ANZ had significantly bucked the trend of the flat broader market and was down around 3.7 per cent however much of this was attributable to the stock going ex-dividend. Indeed it would be incorrect to assume ANZ is the Robinson Crusoe of the banking world. The others have been working on similar changes to beefup their home lending parameters. To date, most of the focus has been on responsible lending and the banks use of the Household Expenditure Measure to determine a borrower s capacity to service a loan. During the royal commission much attention was devoted to whether this broad aggregated measure was sufficient to access individual customers, their spending patterns and their additional commitments. At ANZ the customer s income will also be measured and assessed more forensically with enhanced attention to potential changes in borrowers circumstances. In particular, it will more closely investigated the finances of those that will hit retirement during the course of the loan. Those within seven years of retirement will be asked to provide options on how they will be able to service the loan such as asset sales, savings, downsizing or a partner s income. Meanwhile, the inquiry into a borrower s expenses will be particularly granular. It will go well beyond loan repayments and credit card expenses. Customers will be asked to itemise outlays on everything from cosmetics and clothes, to childcare, gambling, alcohol, and pay TV subscriptions. The extent to which more emphasis on responsible lending will crimp banks ability to lend remains to be seen. Taking potential buyers out of the home market will certainly contribute in some way to the downward pressure on house prices. With auction clearance rates around the nation sitting at between 40 and 50 per cent there is a clear prospect the rate of decline will deteriorate. The most recent set of price markers, for the month of October, showed the annual decline across the national index was 3.5 per cent. CoreLogic said this signalled the weakest macro-housing market conditions since February 2012, with its home value index reporting a 0.5 Continued Page 27 Inquiry into a borrower s expenses will be particularly granular.

63 Sydney Morning Herald, Sydney Author: Elizabeth Knight Section: Business News Article type : News Item Classification : Capital City Daily : 88,634 Page: 25 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 26,412 Words: 749 Item ID: Page 2 of 2 From Netflix to nannies: Banks on warpath over every dollar spent From Page 24 per cent fall in dwelling values nationally in October and a fall in Sydney and Melbourne of 0.7 per cent that month. This has taken the annual rate of decline in Sydney to 7.4 per cent and in Melbourne to 4.7 per cent. While the push to improve the lending framework is under way and won t be reversed, the requirement for banks to undertake this work in order to adhere to laws on responsible lending will gain some clarity today when some direction will be given around the test case undertaken by the regulator ASIC against Westpac. In a bizarre twist, an agreed settlement between the two in which Westpac would pay $35 million for breaches of lending laws is now being questioned. Justice Nye Perram has the option of ratifying the settlement, increasing the damage payment due or throwing it out. Perram sought a legal opinion from an independent third party, also known as a friend of the court which in this case was former Commonwealth solicitor-general, Justin Gleeson. But Gleeson shredded the corporate regulator s case that Westpac lent irresponsibly by using a benchmark rather than declared expenses when issuing home loans. If Perram follows the advice of Gleeson, the Australian Securities and Investments Commission will need to decide whether to litigate the case and attempt to establish a favourable precedent or chalk it up to experience. There will be plenty of bankers waiting to see how this one plays out.

64 Sydney Morning Herald, Sydney Author: Mathew Dunckley Section: Business News Article type : News Item Classification : Capital City Daily : 88,634 Page: 27 Printed Size: cm² Region: NSW Market: Australia ASR: AUD 16,080 Words: 402 Item ID: Page 1 of 1 Culture key for companies to avoid wrath VALUES Mathew Dunckley Australian businesses that fail to improve their corporate culture have been warned to prepare for the financially damaging judgment of the crowd in the wake of scandals. Echoing business leaders and politicians who have spoken of a need to regain the public s trust after scandals and the banking royal commission, former Australian Securities and Investments Commission chairman Greg Medcraft said this was a time of corporate soulsearching in Australia. In a presentation to be delivered at the Maurice Blackburn Corporate Conduct and Class Actions Symposium next Monday, Mr Medcraft said many companies were questioning whether they were doing enough to promote the correct values and that came down to culture. A positive corporate culture is the foundation of a company s ability to do the right thing, he said, in a copy of his remarks provided to Fairfax Media. Poor culture creates a corporate environment where poor conduct can take root, and may even be rewarded, while good culture can help uncover and inhibit misconduct and reward and encourage good conduct. Mr Medcraft, who led ASIC from 2011 to 2017, said it was up to the leaders of companies to set the tone for their entire organisations. The tone from the top the C-suite and the board is critical. Companies also need to closely consider how people are held accountable, he said. Now head of the OECD Directorate for Financial and Enterprise Affairs, Mr Medcraft said numerous studies had shown companies with positive cultures also achieve better financial performance. When you think about it this makes perfect sense. Businesses are granted a social licence to operate by the crowd their customers, employees investors, suppliers and other stakeholders, he said. If they breach the conditions of the social licence they will lose the trust of the crowd. They will be deserted by customers, staff and investors and their businesses will suffer. ASIC has been criticised at the royal commission for its approach to enforcement in recent years, in particular its willingness to cut deals and apply enforceable undertakings rather than prosecute companies. Mr Medcraft as commissioner complained about the strength of available sanctions available and endured budget cuts and hinted at both in his remarks for the symposium. Fairfax Media, owner of The Sydney Morning Herald and The Age is media partner of the symposium. The 2018 Corporate Conduct & Class Actions Symposium November 19 Former ASIC chief Greg Medcraft.

65 Age, Melbourne Author: Colin Kruger Section: Business News Article type : News Item Classification : Capital City Daily : 83,229 Page: 22 Printed Size: cm² Region: VIC Market: Australia ASR: AUD 21,259 Words: 599 Item ID: Page 1 of 2 TAKEOVERS Consortium may face rethink Healthscope, Navitas deliver $6b snub to BGH-AusSuper Colin Kruger The nation s biggest superannuation fund, AustralianSuper, might be forced to rethink its partnership with private equity firm BGH Capital after two landmark takeover bids by their consortium, worth more than $6 billion, were rejected. The private hospital group Healthscope spurned BGH-AustralianSuper s $4.2 billion bid yesterday morning and offered due diligence to a $4.5 billion rival bid from Canada s Brookfield Capital Partners. One hour later, education provider Navitas also rebuffed the BGH-AustralianSuper consortium after it returned with an unchanged $2 billion offer, saying the proposal would not be in the best interests of all Navitas shareholders. But the low offer price was only one of its concerns. The Tracey Horton-chaired Navitas board expressed its reluctance to deal with the consortium, which includes Navitas founder Rod Jones, and highlighted the agreement with BGH that compels AustralianSuper and Mr Jones to reject any higher offer from other potential suitors. The Navitas board is not inclined to provide due diligence to any party who places restrictions on Navitas shareholders from supporting a superior alternative proposal, Navitas said to the ASX yesterday. Navitas confirmed the issue was impacting potential rival offers. A number of these parties have confirmed the board s view that the commitments by AustralianSuper and Mr Jones are potentially an impediment to proceeding with any competing proposal. BGH and AustralianSuper declined to comment, but a source close to the consortium said it is considering all its options. Navitas investor, Spheria Asset Management, was pragmatic about the stand-off with the BGH consortium. In respect of the bid, we agree with the board of Navitas that the price is too low, said Spheria portfolio manager Matthew Booker. As we have seen with Healthscope, there are ways to work around a blocking stake. A scheme of arrangement is one such way. Eventually a bid at the right price will likely win Navitas. That may not be the BGH consortium, Mr Booker said. Navitas shares closed unchanged at $5.21. The BGH consortium was offering $5.50 a share. Healthscope shares rose strongly yesterday, up 14 per cent to $2.38. It is the highest the stock has traded since the private hospital operator rejected Brookfield s $2.50 a share offer in May. The latest offer could see the Canadian group bid up to $2.55 per share. After an initial bump when BGH and Brookfield first emerged as suitors, Healthscope s share price weakened substantially in the months after it rejected the proposals in May. Its shares have now jumped more than 28 per cent since the BGH- AustralianSuper consortium made its second approach last month. The Paula Dwyer-led board signalled its strong support for the proposed Brookfield offer, which included a two-pronged strategy to deal with BGH-AustralianSuper s potential reluctance to accept a higher offer. Brookfield is proposing a scheme of arrangement worth up to $2.55 a share, plus a 3.5 interim dividend. If the BGH-AustralianSuper consortium leads a rejection of the scheme with its 19 per cent stake, Brookfield is also offering a $2.42-a-share cash takeover offer, which is conditional on 50.1 per cent acceptance by Healthscope investors, as well as the scheme being rejected. We consider the Brookfield proposal to be attractive for shareholders, Ms Dwyer said to the ASX. It is superior to the BGH-AustralianSuper proposal and provides enhanced certainty. Brookfield has scheduled the scheme meeting for April 1.

66 Age, Melbourne Author: Colin Kruger Section: Business News Article type : News Item Classification : Capital City Daily : 83,229 Page: 22 Printed Size: cm² Region: VIC Market: Australia ASR: AUD 21,259 Words: 599 Item ID: Page 2 of 2 NAVITAS Share price $ Close $ J18 F M A M J J A S O N SOURCE: BLOOMBERG HEALTHSCOPE Share price $2.60 Close $ J18 F M A M J J A S ON SOURCE: BLOOMBERG

67 Age, Melbourne Author: Mathew Dunckley Section: Business News Article type : News Item Classification : Capital City Daily : 83,229 Page: 25 Printed Size: cm² Region: VIC Market: Australia ASR: AUD 12,252 Words: 402 Item ID: Page 1 of 1 Culture key for companies to avoid wrath VALUES Mathew Dunckley Australian businesses that fail to improve their corporate culture have been warned to prepare for the financially damaging judgment of the crowd in the wake of scandals. Echoing business leaders and politicians who have spoken of a need to regain the public s trust after scandals and the banking royal commission, former Australian Securities and Investments Commission chairman Greg Medcraft said this was a time of corporate soulsearching in Australia. In a presentation to be delivered at the Maurice Blackburn Corporate Conduct and Class Actions Symposium next Monday, Mr Medcraft said many companies were questioning whether they were doing enough to promote the correct values and that came down to culture. A positive corporate culture is the foundation of a company s ability to do the right thing, he said, in a copy of his remarks provided to Fairfax Media. Poor culture creates a corporate environment where poor conduct can take root, and may even be rewarded, while good culture can help uncover and inhibit misconduct and reward and encourage good conduct. Mr Medcraft, who led ASIC from 2011 to 2017, said it was up to the leaders of companies to set the tone for their entire organisations. The tone from the top the C-suite and the board is critical. Companies also need to closely consider how people are held accountable, he said. Now head of the OECD Directorate for Financial and Enterprise Affairs, Mr Medcraft said numerous studies had shown companies with positive cultures also achieve better financial performance. When you think about it this makes perfect sense. Businesses are granted a social licence to operate by the crowd their customers, employees investors, suppliers and other stakeholders, he said. If they breach the conditions of the social licence they will lose the trust of the crowd. They will be deserted by customers, staff and investors and their businesses will suffer. ASIC has been criticised at the royal commission for its approach to enforcement in recent years, in particular its willingness to cut deals and apply enforceable undertakings rather than prosecute companies. Mr Medcraft as commissioner complained about the strength of available sanctions available and endured budget cuts and hinted at both in his remarks for the symposium. Fairfax Media, owner of The Sydney Morning Herald and The Age is media partner of the symposium. The 2018 Corporate Conduct & Class Actions Symposium November 19 Former ASIC chief Greg Medcraft.

68 Daily Mercury, Mackay QLD Section: General News Article type : News Item Classification : Regional : 7,207 Page: 13 Printed Size: 44.00cm² Region: QLD Market: Australia ASR: AUD 46 Words: 77 Item ID: Page 1 of 1 Costello still boss of fund FORMER Liberal treasurer Peter Costello has been reappointed as chair of Australia s sovereign wealth fund for another five years. Mr Costello will now remain chairman of the multibillion dollar Future Fund until 2024, Treasurer Josh Frydenberg and Finance Mathias Cormann announced yesterday. The former MP helped set up the fund which manages money to pay for the future superannuation payments of retired civil servants in 2006 when he was treasurer in the Howard government.

69 News Mail, Bundaberg QLD Section: General News Article type : News Item Classification : Regional : 6,176 Page: 12 Printed Size: 44.00cm² Region: QLD Market: Australia ASR: AUD 40 Words: 77 Item ID: Page 1 of 1 Costello still boss of fund FORMER Liberal treasurer Peter Costello has been reappointed as chair of Australia s sovereign wealth fund for another five years. Mr Costello will now remain chairman of the multibillion dollar Future Fund until 2024, Treasurer Josh Frydenberg and Finance Mathias Cormann announced yesterday. The former MP helped set up the fund which manages money to pay for the future superannuation payments of retired civil servants in 2006 when he was treasurer in the Howard government.

70 Geelong Advertiser, Geelong VIC Section: General News Article type : News Item Classification : Regional : 16,687 Page: 17 Printed Size: 40.00cm² Region: VIC Market: Australia ASR: AUD 133 Words: 70 Item ID: Page 1 of 1 WBC offer to raise $750m WESTPAC intends to raise about $750 million through an offering of capital notes. Each note will have an issue price of $100, and the distribution margin on the notes is expected to be between 3.70 per cent and 3.90 per cent per annum, the bank said in a statement. The move comes days after the Australian Prudential Regulation Authority flagged higher capital requirements for the country s four biggest lenders.

71 Age, Melbourne Author: Elizabeth Knight Section: Business News Article type : News Item Classification : Capital City Daily : 83,229 Page: 23 Printed Size: cm² Region: VIC Market: Australia ASR: AUD 20,755 Words: 738 Item ID: Page 1 of 2 Banks on warpath over every dollar COMMENT Elizabeth Knight Welcome to the postroyal commission era of borrowing. Heightened scrutiny by banks of the financial position of borrowers will be the new order and responsible lending will get a whole lot more responsible. ANZ was the latest of the banks to really dip its toe in the water. This week it told staff and mortgage brokers, who are responsible for selling its mortgage products, that enhanced verification will be introduced later in the month. Those applying for a mortgage will need to outline what they spend on everything from Netflix to nannies. With the rate of mortgage growth already easing across the board and investors looking for finance dropping precipitously, bank shareholders felt a shiver at the prospect of extra internal controls on lending contributing to a further slowdown in home loan growth. By lunchtime, ANZ had significantly bucked the trend of the flat broader market and was down around 3.7 per cent however much of this was attributable to the stock going ex-dividend. Indeed it would be incorrect to assume ANZ is the Robinson Crusoe of the banking world. The others have been working on similar changes to beefup their home lending parameters. To date, most of the focus has been on responsible lending and the banks use of the Household Expenditure Measure to determine a borrower s capacity to service a loan. During the royal commission much attention was devoted to whether this broad aggregated measure was sufficient to access individual customers, their spending patterns and their additional commitments. At ANZ the customer s income will also be measured and assessed more forensically with enhanced attention to potential changes in borrowers circumstances. In particular, it will more closely investigated the finances of those that will hit retirement during the course of the loan. Those within seven years of retirement will be asked to provide options on how they will be able to service the loan such as asset sales, savings, downsizing or a partner s income. Meanwhile, the inquiry into a borrower s expenses will be particularly granular. It will go well beyond loan repayments and credit card expenses. Customers will be asked to itemise outlays on everything from cosmetics and clothes, to childcare, gambling, alcohol, and pay TV subscriptions. The extent to which more emphasis on responsible lending will crimp banks ability to lend remains to be seen. Taking potential buyers out of the home market will certainly contribute in some way to the downward pressure on house prices. With auction clearance rates around the nation sitting at between 40 and 50 per cent there is a clear prospect the rate of decline will deteriorate. The most recent set of price markers, for the month of October, showed the annual decline across the national index was 3.5 per cent. CoreLogic said this signalled the weakest macro-housing market conditions since February 2012, with its home value index reporting a 0.5 Continued Page 25 Inquiry into a borrower s expenses will be particularly granular.

72 Age, Melbourne Author: Elizabeth Knight Section: Business News Article type : News Item Classification : Capital City Daily : 83,229 Page: 23 Printed Size: cm² Region: VIC Market: Australia ASR: AUD 20,755 Words: 738 Item ID: Page 2 of 2 From Netflix to nannies: Banks on warpath over every dollar spent From Page 22 per cent fall in dwelling values nationally in October and a fall in Sydney and Melbourne of 0.7 per cent that month. This has taken the annual rate of decline in Sydney to 7.4 per cent and in Melbourne to 4.7 per cent. While the push to improve the lending framework is under way and won t be reversed, the requirement for banks to undertake this work in order to adhere to laws on responsible lending will gain some clarity today when some direction will be given around the test case undertaken by the regulator ASIC against Westpac. In a bizarre twist, an agreed settlement between the two in which Westpac would pay $35 million for breaches of lending laws is now being questioned. Justice Nye Perram has the option of ratifying the settlement, increasing the damage payment due or throwing it out. Perram sought a legal opinion from an independent third party, also known as a friend of the court which in this case was former Commonwealth solicitor-general, Justin Gleeson. But Gleeson shredded the corporate regulator s case that Westpac lent irresponsibly by using a benchmark rather than declared expenses when issuing home loans. If Perram follows the advice of Gleeson, the Australian Securities and Investments Commission will need to decide whether to litigate the case and attempt to establish a favourable precedent or chalk it up to experience. There will be plenty of bankers waiting to see how this one plays out.

73 Gladstone Observer, Gladstone QLD Section: General News Article type : News Item Classification : Regional : 3,301 Page: 14 Printed Size: 38.00cm² Region: QLD Market: Australia ASR: AUD 35 Words: 77 Item ID: Page 1 of 1 Costello still boss of fund FORMER Liberal treasurer Peter Costello has been reappointed as chair of Australia s sovereign wealth fund for another five years. Mr Costello will now remain chairman of the multibillion dollar Future Fund until 2024, Treasurer Josh Frydenberg and Finance Mathias Cormann announced yesterday. The former MP helped set up the fund which manages money to pay for the future superannuation payments of retired civil servants in 2006 when he was treasurer in the Howard government.

74 Hobart Mercury, Hobart Author: John Dagge Section: Business News Article type : News Item Classification : Capital City Daily : 28,265 Page: 17 Printed Size: cm² Region: TAS Market: Australia ASR: AUD 2,053 Words: 338 Item ID: Page 1 of 1 Healthscope favours $4.5b Canadian bid JOHN DAGGE THE battle for Australia s second-biggest private hospital group appears to be entering the final stage, with Healthscope opening its books to Canadian suitor Brookfield Capital Partners. Healthscope has given Brookfield exclusive rights to scrutinise its accounts after the private equity group lobbed a sweetened $4.5 billion takeover offer. It also throws up a fresh hurdle to a rival bidder a consortium led by private equity house BGH Capital and superannuation titan AustralianSuper. The consortium s advances had been batted away as undervaluing the healthcare group, which operates more than 40 private hospitals, including Hobart Private and St Helens Private. Shares in Healthscope surged more than 14 per cent yesterday. Brookfield is offering $2.585 for each Healthscope share through a scheme of arrangement that values the company at $4.5 billion. In case that approach fails, the Canadian asset manager has also lobbed an off-market takeover offer, where it will pay $2.45 a share provided its secures a stake of at least 50.1 per cent. Both offers include Healthscope paying a 3.5c interim dividend during the takeover process. A takeover structured as a scheme of arrangement only needs 75 per cent shareholder support to secure the bidder 100 per cent of the shares. Under an off-market takeover, Brookfield would need to get 90 per cent of the stock before it could compulsorily acquire the remaining shares. Complicating Brookfield s scheme of arrangement approach is that AustralianSuper, part of the rival bidding consortium, owns 19.1 per cent of Healthscope s shares. Ellerston Capital, which has a 9.4 per cent stake in Healthscope, is also part of the rival bidding consortium. AustralianSuper has previously said it will not consider any rival offers, even if they are superior, because it wants to keep an ownership stake in Healthscope. Healthscope chairwoman Paula Dwyer said the Brookfield proposal was attractive for shareholders. It is superior to the BGH- AustralianSuper proposal and provides enhanced certainty, Ms Dwyer said. It also offers more options for Healthscope shareholders, including an option to retain an equity exposure to an unlisted Healthscope.

75 Cairns Post, Cairns Section: General News Article type : News Item Classification : Regional : 13,896 Page: 32 Printed Size: cm² Region: QLD Market: Australia ASR: AUD 537 Words: 220 Item ID: Page 1 of 1 Insurance CEO quits after a month FREEDOM Insurance Group has named Sean Williamson as chief executive officer, with current CEO Craig Orton leaving after only a month in the job because of personal reasons. The firm said it expected to post an underlying loss of between $7 million and $8 million for the six months to December 31 due to higher restructuring costs of about $5 million. The company has been struggling since the financial services royal commission heard it had used questionable direct-sales tactics including selling a complicated insurance policy over the phone to a man with Down syndrome. Its predicament underscores investors broader concerns about poor governance and unethical behaviour in local financial firms, amid calls for tougher regulation and stiffer penalties for wrongdoing. The insurer s stock price jumped 9 per cent yesterday following the announcement, but it is still down nearly 86 per cent since August 28, when it was listed to appear at the ongoing inquiry. There s a bit of a bounce with some bargain hunters thinking that hopefully the worst is over, said James McGlew, executive director of corporate stockbroking at Argonaut. It s going to take a long time for them to get to where they were, if they indeed can. The company gave no further details on Mr Orton s departure and a spokesman was not available to comment.

76 Cairns Post, Cairns Section: General News Article type : News Item Classification : Regional : 13,896 Page: 19 Printed Size: 38.00cm² Region: QLD Market: Australia ASR: AUD 191 Words: 77 Item ID: Page 1 of 1 Costello still boss of fund FORMER Liberal treasurer Peter Costello has been reappointed as chair of Australia s sovereign wealth fund for another five years. Mr Costello will now remain chairman of the multibillion dollar Future Fund until 2024, Treasurer Josh Frydenberg and Finance Mathias Cormann announced yesterday. The former MP helped set up the fund which manages money to pay for the future superannuation payments of retired civil servants in 2006 when he was treasurer in the Howard government.

77 Canberra Times, Canberra Author: Colin Kruger Section: Business News Article type : Share Market Report Classification : Capital City Daily : 17,579 Page: 30 Printed Size: cm² Region: ACT Market: Australia ASR: AUD 9,682 Words: 0 Item ID: Page 1 of 2 TAKEOVERS Consortium may face rethink Healthscope, Navitas deliver $6b snub to BGH-AusSuper Colin Kruger The nation s biggest superannuation fund, AustralianSuper, might be forced to rethink its partnership with private equity firm BGH Capital after two landmark takeover bids by their consortium, worth more than $6 billion, were rejected. The private hospital group Healthscope spurned BGH-AustralianSuper s $4.2 billion bid on Monday morning and offered due diligence to a $4.5 billion rival bid from Canada s Brookfield Capital Partners. One hour later, education provider Navitas also rebuffed the BGH-AustralianSuper consortium after it returned with an unchanged $2 billion offer, saying the proposal would not be in the best interests of all Navitas shareholders. But the low offer price was only one of its concerns. The Tracey Horton-chaired Navitas board expressed its reluctance to deal with the consortium, which includes Navitas founder Rod Jones, and highlighted the agreement with BGH that compels AustralianSuper and Mr Jones to reject any higher offer from other potential suitors. The Navitas board is not inclined to provide due diligence to any party who places restrictions on Navitas shareholders from supporting a superior alternative proposal, Navitas said to the ASX on Monday. Navitas confirmed the issue was impacting potential rival offers. A number of these parties have confirmed the board s view that the commitments by AustralianSuper and Mr Jones are potentially an impediment to proceeding with any competing proposal. BGH and AustralianSuper declined to comment, but a source close to the consortium said it is considering all its options. Navitas investor, Spheria Asset Management, was pragmatic about the stand-off with the BGH consortium. In respect of the bid, we agree with the board of Navitas that the price is too low, said Spheria portfolio manager Matthew Booker. As we have seen with Healthscope, there are ways to work around a blocking stake. A scheme of arrangement is one such way. Eventually a bid at the right price will likely win Navitas. That may not be the BGH consortium, Mr Booker said. Navitas shares closed unchanged at $5.21. The BGH consortium was offering $5.50 a share. Healthscope shares rose strongly on Monday, up 14 per cent to $2.38. It is the highest the stock has traded since the private hospital operator rejected Brookfield s $2.50 a share offer in May. The latest offer could see the Canadian group bid up to $2.55 per share. After an initial bump when BGH and Brookfield first emerged as suitors, Healthscope s share price weakened substantially in the months after it rejected the proposals in May. Its shares have now jumped more than 28 per cent since the BGH- AustralianSuper consortium made its second approach last month. The Paula Dwyer-led board signalled its strong support for the proposed Brookfield offer, which included a two-pronged strategy to deal with BGH-AustralianSuper s potential reluctance to accept a higher offer. Brookfield is proposing a scheme of arrangement worth up to $2.55 a share, plus a 3.5 interim dividend. If the BGH-AustralianSuper consortium leads a rejection of the scheme with its 19 per cent stake, Brookfield is also offering a $2.42-a-share cash takeover offer, which is conditional on 50.1 per cent acceptance by Healthscope investors, as well as the scheme being rejected. We consider the Brookfield proposal to be attractive for shareholders, Ms Dwyer said to the ASX. It is superior to the BGH-AustralianSuper proposal and provides enhanced certainty. Brookfield has scheduled the scheme meeting for April 1.

78 Canberra Times, Canberra Author: Colin Kruger Section: Business News Article type : Share Market Report Classification : Capital City Daily : 17,579 Page: 30 Printed Size: cm² Region: ACT Market: Australia ASR: AUD 9,682 Words: 0 Item ID: Page 2 of 2 NAVITAS Share price $ Close $ J18 F M A M J J A S O N SOURCE: BLOOMBERG HEALTHSCOPE Share price $2.60 Close $ J18 F M A M J J A S ON SOURCE: BLOOMBERG

79 Canberra Times, Canberra Author: Cole Latimer Section: Business News Article type : News Item Classification : Capital City Daily : 17,579 Page: 30 Printed Size: cm² Region: ACT Market: Australia ASR: AUD 5,789 Words: 0 Item ID: Page 1 of 1 CKI rejection the right move, says China expert INVESTMENT Cole Latimer A China expert says Australia has to push against China as Prime Minister Scott Morrison insisted the decision to knock Hong Kong-based CKI s bid for the country s major gas pipelines was not aimed at stopping Chinese Communist Party control. In June, CKI made a $13 billion offer for APA. The government rejected the deal last week on the grounds it would have given a single foreign company monopoly control of most of the country s pipelines. Despite the preliminary rejection by Treasurer Josh Frydenberg, the government gave CKI two weeks to reapply with a renewed proposal. Richard McGregor, a China expert at independent foreign relations think tank the Lowy Institute, said the government s decision to leave the door open for a restructured proposal sends a message to China without damaging Sino- Australian relations. I think the Chinese understand a lot of the decisions we take, Mr McGregor said during the UBS Australasia Conference in Sydney on Monday. If we look at APA, would the Chinese allow a single foreign company to have a virtual monopoly of the energy distribution within China? Absolutely no way. If you re going to develop some kind of internal resilience in Australia you ve got to push against China. There s no nice way of doing it and you might pay a price at some stage. However, he said focusing on the concentration of ownership and monopoly rather than the company s nationality was the best way to push against the bid. The Treasurer seemed to go out of his way not to denigrate CKI, which I think was the right thing to do. The sorts of things that we re doing are the sorts of things that China is doing and we re just playing catch up. In China, foreign companies often have to relinquish major shares in their operations to local companies to comply with foreign ownership laws. CKI has made the only formal bid for APA but other groups, such as a consortium of superannuation funds including IFM, are rumoured to be waiting in the wings if CKI s bid fails. Prime Minister Scott Morrison on Monday reaffirmed that the government rejected the bid over monopoly concerns rather than fears over Chinese ownership of Australian energy infrastructure. That decision [on APA and CKI] was taken about the concentration and aggregation of a single owner, it wasn t about the nationality of the owner at all, Mr Morrison told Bloomberg TV. We went through a very disciplined process in explaining the decision so there were no surprises. Mr McGregor said the move was part of a broader global trend, as Germany, France and New Zealand push against Chinese investment. We have to remember it s not just Australia trying to renegotiate our relationship with China, Mr McGregor said. $13 billion CKI s bid in June for APA that the government rejected.

80 Canberra Times, Canberra Author: Elizabeth Knight Section: Business News Article type : News Item Classification : Capital City Daily : 17,579 Page: 31 Printed Size: cm² Region: ACT Market: Australia ASR: AUD 9,298 Words: 752 Item ID: Page 1 of 2 Banks on warpath over every dollar COMMENT Elizabeth Knight Welcome to the postroyal commission era of borrowing. Heightened scrutiny by banks of the financial position of borrowers will be the new order and responsible lending will get a whole lot more responsible. ANZ was the latest of the banks to really dip its toe in the water. This week it told staff and mortgage brokers, who are responsible for selling its mortgage products, that enhanced verification will be introduced later in the month. Those applying for a mortgage will need to outline what they spend on everything from Netflix to nannies. With the rate of mortgage growth already easing across the board and investors looking for finance dropping precipitously, bank shareholders felt a shiver at the prospect of extra internal controls on lending contributing to a further slowdown in home loan growth. By lunchtime, ANZ had significantly bucked the trend of the flat broader market and was down around 3.7 per cent however much of this was attributable to the stock going ex-dividend. Indeed it would be incorrect to assume ANZ is the Robinson Crusoe of the banking world. The others have been working on similar changes to beefup their home lending parameters. To date, most of the focus has been on responsible lending and the banks use of the Household Expenditure Measure to determine a borrower s capacity to service a loan. During the royal commission much attention was devoted to whether this broad aggregated measure was sufficient to access individual customers, their spending patterns and their additional commitments. At ANZ the customer s income will also be measured and assessed more forensically with enhanced attention to potential changes in borrowers circumstances. In particular, it will more closely investigated the finances of those that will hit retirement during the course of the loan. Those within seven years of retirement will be asked to provide options on how they will be able to service the loan such as asset sales, savings, downsizing or a partner s income. Meanwhile, the inquiry into a borrower s expenses will be particularly granular. It will go well beyond loan repayments and credit card expenses. Customers will be asked to itemise outlays on everything from cosmetics and clothes, to childcare, gambling, alcohol, and pay TV subscriptions. The extent to which more emphasis on responsible lending will crimp banks ability to lend remains to be seen. Taking potential buyers out of the home market will certainly contribute in some way to the downward pressure on house prices. With auction clearance rates around the nation sitting at between 40 and 50 per cent there is a clear prospect the rate of decline will deteriorate. The most recent set of price markers, for the month of October, showed the annual decline across the national index was 3.5 per cent. CoreLogic said this signalled the weakest macro-housing market conditions since February 2012, with its home value index reporting a 0.5 Continued Page 33 Inquiry into a borrower s expenses will be particularly granular.

81 Canberra Times, Canberra Author: Elizabeth Knight Section: Business News Article type : News Item Classification : Capital City Daily : 17,579 Page: 31 Printed Size: cm² Region: ACT Market: Australia ASR: AUD 9,298 Words: 752 Item ID: Page 2 of 2 From Netflix to nannies: Banks on warpath over every dollar spent From Page 31 per cent fall in dwelling values nationally in October and a fall in Sydney and Melbourne of 0.7 per cent that month. This has taken the annual rate of decline in Sydney to 7.4 per cent and in Melbourne to 4.7 per cent. While the push to improve the lending framework is under way and won t be reversed, the requirement for banks to undertake this work in order to adhere to laws on responsible lending will gain some clarity on Monday when some direction will be given around the test case undertaken by the regulator ASIC against Westpac. In a bizarre twist, an agreed settlement between the two in which Westpac would pay $35 million for breaches of lending laws is now being questioned. Justice Nye Perram has the option of ratifying the settlement, increasing the damage payment due or throwing it out. Perram sought a legal opinion from an independent third party, also known as a friend of the court which in this case was former Commonwealth solicitor-general, Justin Gleeson. But Gleeson shredded the corporate regulator s case that Westpac lent irresponsibly by using a benchmark rather than declared expenses when issuing home loans. If Perram follows the advice of Gleeson, the Australian Securities and Investments Commission will need to decide whether to litigate the case and attempt to establish a favourable precedent or chalk it up to experience. There will be plenty of bankers waiting to see how this one plays out.

82 Canberra Times, Canberra Author: Mathew Dunckley Section: Business News Article type : News Item Classification : Capital City Daily : 17,579 Page: 33 Printed Size: cm² Region: ACT Market: Australia ASR: AUD 5,584 Words: 389 Item ID: Page 1 of 1 Culture key for companies to avoid wrath VALUES Mathew Dunckley Australian businesses that fail to improve their corporate culture have been warned to prepare for the financially damaging judgment of the crowd in the wake of scandals. Echoing business leaders and politicians who have spoken of a need to regain the public s trust after scandals and the banking royal commission, former Australian Securities and Investments Commission chairman Greg Medcraft said this was a time of corporate soulsearching in Australia. In a presentation to be delivered at the Maurice Blackburn Corporate Conduct and Class Actions Symposium next Monday, Mr Medcraft said many companies were questioning whether they were doing enough to promote the correct values and that came down to culture. A positive corporate culture is the foundation of a company s ability to do the right thing, he said, in a copy of his remarks provided to Fairfax Media. Poor culture creates a corporate environment where poor conduct can take root, and may even be rewarded, while good culture can help uncover and inhibit misconduct and reward and encourage good conduct. Mr Medcraft, who led ASIC from 2011 to 2017, said it was up to the leaders of companies to set the tone for their entire organisations. The tone from the top the C-suite and the board is critical. Companies also need to closely consider how people are held accountable, he said. Now head of the OECD Directorate for Financial and Enterprise Affairs, Mr Medcraft said numerous studies had shown companies with positive cultures also achieve better financial performance. When you think about it this makes perfect sense. Businesses are granted a social licence to operate by the crowd their customers, employees investors, suppliers and other stakeholders, he said. If they breach the conditions of the social licence they will lose the trust of the crowd. They will be deserted by customers, staff and investors and their businesses will suffer. ASIC has been criticised at the royal commission for its approach to enforcement in recent years, in particular its willingness to cut deals and apply enforceable undertakings rather than prosecute companies. Mr Medcraft as commissioner complained about the strength of available sanctions available and endured budget cuts and hinted at both in his remarks for the symposium. Fairfax Media, owner of The Canberra Times is a media partner of the symposium. The 2018 Corporate Conduct & Class Actions Symposium November 19 Former ASIC chief Greg Medcraft.

83 West Australian, Perth Author: Peter Williams Section: Business News Article type : News Item Classification : Capital City Daily : 147,676 Page: 54 Printed Size: cm² Region: WA Market: Australia ASR: AUD 4,891 Words: 446 Item ID: Page 1 of 1 Navitas rejects revised offer Peter Williams Navitas has given forecasts of strengthening earnings over the next five years as part of justifications for rejecting a $2 billion takeover bid without giving its suitor a look at the books. The Perth-based adult education provider said it was also exploring other potential deals. The Navitas board said it had denied due diligence to the BGH Capital-led consortium because of restrictions placed on shareholders Rod Jones and Australian Super, who are both part of the bid. Mr Jones, a co-founder of Navitas, and AusSuper have an agreement with private equity firm BGH not to support a rival bidder. The board said the pair s commitment to BGH was viewed by a number of parties who were in talks with Navitas as a potential impediment to any competing proposals. Mr Jones resigned from the Navitas board last week to manage conflicts with his role in the hostile takeover attempt. The consortium s second offer maintained the same $5.50-ashare price and Navitas said the terms and conditions were little changed. Naivitas in arguing the bid undervalued the company over the medium to long term, tipped $200 million earnings before interest, tax, depreciation and amortisation in fiscal 2021 and more than $250 million by fiscal The forecasts were based on earnings boosts from five new partner contracts signed in the past three years and eight others already or expected to be signed this financial year. Further details will be provided in a presentation to investors this morning. Navitas growth outlook in the medium and longer term is strong and the company is now at an earnings inflection point, chief executive David Buckingham said. There are multiple drivers already in place to create significant additional financial value. The BGH-led offer is being proposed under a scheme of arrangement, which requires a shareholder vote. The Navitas board left the door open for a more direct bid. It is open for the BGH consortium to present its proposal directly to Navitas shareholders by way of a takeover offer. This would provide those shareholders with a near-term investment horizon who do not wish to sell their shares on market the opportunity to sell their shares to the BGH consortium, the company said. Navitas chairwoman Tracey Horton said: The board believes it has given the BGH consortium every opportunity to put forward a proposal which the board could support, having regard to the best interests of Navitas and all its shareholders. The board is united in its view that the proposal the BGH consortium has put forward does not warrant proceeding to due diligence. Navitas shares closed unchanged at $5.21. The board believes it has given the BGH consortium every opportunity. Tracey Horton

84 West Australian, Perth Author: Meilin Chew Section: General News Article type : News Item Classification : Capital City Daily : 147,676 Page: 18 Printed Size: cm² Region: WA Market: Australia ASR: AUD 16,760 Words: 383 Item ID: Page 1 of 2 Carefree and careful future Meilin Chew Husband and wife John and Christine Hillan started paying closer attention to their superannuation a few years ago when the prospect of retirement was on the cards. Mr Hillan, 69, is still enjoying working full-time as a schoolteacher but has plans to retire in the next couple of years. Mrs Hillan, 63, is semiretired. The Mt Helena couple, who have been together for 20 years, had to start over again financially when their respective previous marriages ended. About 15 years ago, they bought two investment properties but the real estate downturn has thrown a spanner in the works. We felt at the time that it was going to be our superannuation, of being able to sell the investment properties and make some money there, Mrs Hillan said. In fact, the downturn has actually left us with less from the investment properties. The Hillans, who between them have four children and seven grandchildren, plan to use a mix of their investment properties and superannuation to fund their retirement. I think we re just going to have to be careful with our money and we ve never really had to kind of worry too much, because John s working full-time at the moment, Mrs Hillan said. And when he finally retires, I think we re going to have to pull in our haunches a bit. The couple say they are reasonably happy p y y y ppy with where they are sitting financially but in hindsight would have paid more attention to their super earlier. I think we ve always had the knowledge of money there, but it was never spoken about by our parents, they said. You didn t talk about money. And I really wish money was taught in schools. It s important to know how to budget and to live within your means. The West Australian s Who s the Boss? financial survey shows that baby boomers and pre-boomers have the highest rates of satisfaction when it comes to their finances. Baby boomers are also more likely to be living in the moment, choosing quality of life and spending the so-called children s inheritance. It is a notion the Hillans agree with. We re going to be enjoying life, they said. We ve told our kids that we know they re all going to be OK financially.

85 West Australian, Perth Author: Meilin Chew Section: General News Article type : News Item Classification : Capital City Daily : 147,676 Page: 18 Printed Size: cm² Region: WA Market: Australia ASR: AUD 16,760 Words: 383 Item ID: Page 2 of 2 Photo available at westpix.com.au Baby-boomer couple Christine and John Hillan are nearing retirement. Picture: Megan Powell

86 West Australian, Perth Author: Nick Bruining Section: General News Article type : News Item Classification : Capital City Daily : 147,676 Page: 19 Printed Size: cm² Region: WA Market: Australia ASR: AUD 4,611 Words: 457 Item ID: Page 1 of 1 Dirty four-letter elephant in room Nick Bruining When we start to pick apart the adequacy of superannuation to meet our retirement needs, we conveniently ignore the elephant in the room. It s that dirty four-letter word: D E B T. Australia can justifiably be proud of our retirement income system. Ranked at number three behind the Netherlands and Denmark, the combination of superannuation and a means-tested welfare system means we re right up there in terms of fairness and sustainability. But don t get too cocky. On the other side of the ledger is the fact that we re the fourth most indebted nation on the planet. And we re not talking about Canberra racking up the public slate with borrowings at a national level. We re talking about yours and my mortgage, our credit cards, our personal loans and those pesky store charge cards. It s possibly the price we will pay for sustained low interest rates following the global financial crisis that in part has fuelled ridiculous increases in house prices. Sure, WA has seen a decline. But while the prices have fallen, indebtedness has not. Just ask the Financial Counsellors Association, which deals with people in severe financial distress. It has never been busier. In part it s possibly because the wealth effect theory is real. As we saw our wealth improve, primarily through house-price growth, that sense of security meant we feel a little happier borrowing money to pay for the fun things the new car, the jet ski, the 43-day European getaway often buried in the all-too-easy line-of-credit mortgage. y g g But one day, the debts have to be repaid. My mate who is a mortgage broker tells me that about a year ago, lenders began to include the value of their super in their loan assessment models. In simple terms, they decided that it s fair enough to include the value of super as part of the loan exit strategy. Sure, you might glow in the knowledge your super is projected to be worth $700,000 at retirement. But if the mortgage is stuck at $500,000, tough decisions will need to be made. WA Super boss Fabian Ross agrees that this is a big issue and needs to be addressed. We in the superannuation sector should really look to improve overall financial education to make sure people are aware about the importance of repaying that debt as part of the total retirement plan, he said. Part of the problem might be convincing the Generation Ys that home loan interest rates under 5 per cent is not the norm. They re only that low because of the effects of the global financial crisis, and those days are coming to an end. As economic growth starts to pick up in the US, it s a lesson that might come sooner rather than later.

87 West Australian, Perth Author: Fabian Ross Section: General News Article type : News Item Classification : Capital City Daily : 147,676 Page: 19 Printed Size: cm² Region: WA Market: Australia ASR: AUD 4,295 Words: 414 Item ID: Page 1 of 1 Never too young to plan for a better retirement Fabian Ross When delving into generational differences, Generation Ys appear to be getting the most sleepless nights over financial woes. Despite typically being confident when it comes to the use of technology and digital applications, fewer than one-quarter rate themselves as having very strong knowledge in finances. It seems the older people get, the more likely they are to save regularly and follow a strict budget. But could that be too little, too late? Less than one-quarter of Gen-Y respondents are strict budgeters, compared with more than 40 per cent of preboomers. Perhaps their spendthrift nature is contributing to their lack of financial understanding. Or is it because Gen-Ys are expecting an inheritance payout to fund their financial futures, so aren t paying too much attention? Unfortunately for Gen-Ys, baby boomers have a different perspective with close to 80 per cent planning to spend their kids inheritance. So the windfall may never arrive. Ninety-three per cent of Gen-Ys are relying on superannuation for their financial future, so maybe it is time for them to pay a little more attention to their super. Although compulsory superannuation has been in place since 1992, it is still considered a wise move to put a little extra money into your super over your working life. Gen-Ys are often in the best financial position to do this. Since no one actually knows how much time they will spend in retirement, the more they save, the safer they ll feel when it comes to cutting the ties to their career. Plus they can take advantage of the government s generous tax concessions on contributions and investment earnings. The underlying message is that you re never too young to plan for your retirement and the earlier you plan, the better retirement you re likely to have. We know from last year s Retiree s Voice survey that many retirees wish they had started doing more with their super earlier in life.... Fabian Ross is chief executive of WA Super AGES OF SUPER 20s Check your insurance cover and start making extra contributions to take advantage of the government co-contributions. 30s Review your investment options, find lost super and start salary sacrificing to take advantage of the generous tax concessions for the First Home Save Scheme. 40s Review your insurance cover, risk profile and personal contribution. 50s Check that you are on track for a comfortable retirement. Get advice. 60s Maximise your retirement income by tapping into Government incentives, downsize your home or speak to a financial advisor.

88 Morning Bulletin, Rockhampton QLD Author: Michelle Gately Section: General News Article type : News Item Classification : Regional : 9,376 Page: 10 Printed Size: cm² Region: QLD Market: Australia ASR: AUD 304 Words: 564 Item ID: Page 1 of 1 PM rules out bank extension MICHELLE GATELY michelle.gately@capnews.com.au PRIME Minister Scott Morrison has acknowledged the enormous angst caused by banking misconduct in regional areas and promised that more than 9400 submissions to the Royal Commission would not be ignored. However, he ruled out an expansion to include regional hearings when speaking to The Morning Bulletin during his visit to Rockhampton last week. The interim findings of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry were released in early October. Among the 9400 people who have submitted their stories is Rockhampton businessman Peter Comino, who claims he was forced into bankruptcy in 2011 and believes the Royal Commission must be broadened to include regional hearings and wider terms of reference. Despite the thousands of submissions, only 27 people have been invited to give evidence at the Commission. Mr Morrison (pictured) reassured those who had submitted evidence to the inquiry that they would be listened to, even if they couldn t give testimony before the Commissioner. Every single one of their stories has been told in their submissions and every single one of those submissions has been carefully considered by the Commission, every single last one of them, he said. And they are framing and informing the work that is being done by the Royal Commission. It is not my job to second guess the conduct of an independent Royal Commission. The banks, I think, have copped quite a hiding so far and some of the regulators have copped quite a hiding as well. But equally I think some of the observations have been made that when you make investments in a market economy there are no guarantees either. Mr Morrison said he would act on the final recommendations of the inquiry. The Morning Bulletin also spoke to local politicians to gauge their support for an extension of the enquiry. Rockhampton MP Barry O Rourke said regional communities had not been heard adequately. There have been some very questionable practices uncovered and regional communities would be particularly susceptible, he said. We need as many chances to be heard and that should include regional hearings. Keppel MP Brittany Lauga said there should be an extension to regional hearings, saying the February deadline was too shallow. Capricornia MP Michelle Landry said the evidence provided to the commission so far had been shocking, serving as a wake up call for the entire finance sector. There would hardly be a region of the country that doesn t have its own case studies and thousands of these have been submitted to the Royal Commission, she said. The Federal Government has repeatedly said that if Commissioner (Kenneth) Hayne asks for more time he will get it. At this stage he has not done so. Commissioner Hayne has stated that he believes that the most effective way to run the Commission is through case study and each of the submissions that have been received by the Commission have been read and will be taken into account for the purpose of preparing the final report. Ms Landry said the Federal Government had also introduced the Banking Executive Accountability Regime, increased civil and criminal penalties for financial misconduct, established the Australian Financial Complaints Authority, appointed a new second deputy chair to prosecute misconduct and provided $70.1 million to implement new ASIC strategy. The next round of hearings, focused on public policy in the wake of revelations, begins on November 19.

89 Gold Coast Bulletin, Gold Coast QLD Author: John Dagge Section: General News Article type : News Item Classification : Regional : 21,468 Page: 32 Printed Size: cm² Region: QLD Market: Australia ASR: AUD 2,773 Words: 588 Item ID: Page 1 of 2 Canadians closing in on Healthscope JOHN DAGGE THE battle for Australia s second-biggest private hospital group appears to be entering the final stage, with Healthscope opening its books to Canadian suitor Brookfield Capital Partners. Healthscope has given Brookfield exclusive rights to scrutinise its accounts after the private equity group lobbed a sweetened $4.5 billion takeover offer. It also throws up a fresh hurdle to a rival bidder a consortium led by private equity house BGH Capital and superannuation titan AustralianSuper. The consortium s advances had been batted away as undervaluing the healthcare group, which operates more than 40 private hospitals. Shares in Healthscope surged more than 14 per cent yesterday. Brookfield is offering $2.585 for each Healthscope share through a scheme of arrangement that values the company at $4.5 billion. In case that approach fails, the Canadian asset manager has also lobbed an off-market takeover offer, where it will pay $2.45 a share provided it secures a stake of at least 50.1 per cent. Both offers include Healthscope paying a 3.5c interim dividend during the takeover process. A takeover structured as a scheme of arrangement only needs 75 per cent shareholder support to secure the bidder 100 per cent of the shares in the target company. Under an off-market takeover, Brookfield would need to get 90 per cent of the stock before it could compulsorily acquire the remaining shares. Complicating Brookfield s scheme of arrangement approach is that AustralianSuper, part of the rival bidding consortium, owns 19.1 per cent of Healthscope s shares. Ellerston Capital, which has a 9.4 per cent stake in Healthscope, is also part of the rival bidding consortium. AustralianSuper has previously said it will not consider any rival offers, even if they are superior, because it wants to keep an ownership stake in Healthscope. Brookfield s scheme of arrangement offer allows Healthscope shareholders to receive shares in an unlisted company that will own the hospital group following any transaction. AustralianSuper declined to comment yesterday. Healthscope chair Paula Dwyer said the Brookfield proposal was attractive for shareholders. It is superior to the BGH- AustralianSuper proposal and provides enhanced certainty, Ms Dwyer said. It also offers more options for Healthscope shareholders, including an option to retain an equity exposure to an unlisted Healthscope. Healthscope runs 43 hospitals in Australia and 24 pathology laboratories in New Zealand. The Melbourne-based company operates 15 hospitals in Victoria, including John Fawkner Private Hospital, Northpark Private Hospital, Frankston Private Hospital and the Melbourne Private Hospital, which is within the Royal Melbourne Hospital. The group, which employs 18,000 workers, generated $2.3 billion in revenue for the year

90 Gold Coast Bulletin, Gold Coast QLD Author: John Dagge Section: General News Article type : News Item Classification : Regional : 21,468 Page: 32 Printed Size: cm² Region: QLD Market: Australia ASR: AUD 2,773 Words: 588 Item ID: Page 2 of 2 to June but reported a 50 per cent drop in profit to $75.8 million. Listed private hospital operators have been sold down by investors over the past 18 months as people shun private health insurance over affordability and value concerns. Healthscope was put into play in April when BGH-AustralianSuper launched a $4.1 billion takeover offer priced at $2.36 a share. Brookfield trumped that bid in May with an offer of $2.50 a share. Healthscope rejected both deals, arguing they undervalued the business. BGH and AustralianSuper relaunched their offer late last month, and it was again rejected by Healthscope. The move by Healthscope to open its books to Brookfield came as Navitas, which provides English-language and other courses, rejected a takeover bid from a consortium also led by BGH Capital and involving AustralianSuper. Navitas said the offer, worth almost $2 billion, undervalued the company and its board was exploring potential dealswith other parties. IT IS SUPERIOR TO THE BGH-AUSTRALIANSUPER PROPOSAL AND PROVIDES ENHANCED CERTAINTY PAULA DWYER, HEALTHSCOPE

91 Gold Coast Bulletin, Gold Coast QLD Section: General News Article type : News Item Classification : Regional : 21,468 Page: 14 Printed Size: 39.00cm² Region: QLD Market: Australia ASR: AUD 286 Words: 77 Item ID: Page 1 of 1 Costello still boss of fund FORMER Liberal treasurer Peter Costello has been reappointed as chair of Australia s sovereign wealth fund for another five years. Mr Costello will now remain chairman of the multibillion dollar Future Fund until 2024, Treasurer Josh Frydenberg and Finance Mathias Cormann announced yesterday. The former MP helped set up the fund which manages money to pay for the future superannuation payments of retired civil servants in 2006 when he was treasurer in the Howard government.

92 Sunshine Coast Daily, Maroochydore QLD Section: General News Article type : News Item Classification : Regional : 10,046 Page: 10 Printed Size: cm² Region: QLD Market: Australia ASR: AUD 195 Words: 313 Item ID: Page 1 of 1 Future2 Foundation grants to Coast charities will help disadvantaged young people TWO Sunshine Coast charities, Smarts Pups and Sunny- Kids, have received sizeable grants from Future2 Foundation. Smart Pups Assistance Dogs is receiving a $10,000 grant from the Financial Planning Association of Australia foundation. The charity, nominated by local Certified Financial Planner Sara Stephens, has been given $10,000 one of 19 notfor-profit organisations Future2 Foundation has awarded a total of $181,000 to in new grants this year. Smart Pups Assistance Dogs was seen as making a positive contribution to the quality of life for children with special needs and their families across Australia. It raises and trains Autism Assist, Seizure Response, Mobility Assist and Medical Alert dogs with Full Public Access certification. The skills of a Smart Pup helps in reducing anxiety and social exclusion in public places, and maximises participation in life, boosting the potential for development, social and educational gains. SunnyKids has received a $5000 grant after being nominated by local Certified Financial Planner Greg Tindall. The organisation keeps atrisk children safe by ensuring they have food, shelter and a good sense of belonging in their community so they can become contributing citizens and reach their full potential. SunnyKids promotes the idea that it takes a village to raise a child and its model engages schools and communities in partnerships to identify and support vulnerable children. Schools are invited to enrol the 10 kids they are most worried about into the program. Professional support workers then join local and national sporting identities who deliver weekly programs at the schools, working through a series of activity-based programs with messages and disciplines that support young people to develop a strong sense of belonging. Future2 Foundation focuses on projects that give hope to 12 to 25-year olds who may be financially disadvantaged, homeless, juvenile justice offenders, drug or alcohol-dependent, disabled or otherwise disadvantaged. GRANT RECIPIENT: Smart Pups has received a much-needed boost. Photo: Warren Lynam

93 Australian Financial Review, Australia Author: David Marin-Guzman Section: General News Article type : News Item Classification : National : 44,635 Page: 3 Printed Size: cm² Region: National Market: Australia ASR: AUD 8,414 Words: 639 Item ID: Page 1 of 2 Paid parental leave stagnating David Mari n-guzman Workplace correspondent The gender pay gap has had its largest drop on record but benefits such as paid parental leave are stalling and may even be going wards. The latest data from the Workplace Gender Equality Agency released on Tuesday showed the average difference between men and women's total remuneration, including bonuses, had fallen from 22.4 per cent to 21.3 per cent in the past year or to a pay gap of $25,717. The 1.1 per cent drop was the largest single-year decline in the five years since records began and in line with the decline in the base salaries gap, which fell to 16.2 per cent WGEA director Libby Lyons said the change reflected employers addressing unconscious bias in discretionary payments and paying superannuation during parental leave. "It comes down to the fact that employers have taken action by doing gender pay gap analysis, by seeing they have problems and by addressing the problems," she said. However, while more employers are conducting pay gap analyses, more than 40 per cent are still not following them up with action. About 70 per cent of employers also had a flexible work policy in place but only 5.2 per cent set targets for its use in the workplace. Worse, despite increases over the past year, employers with paid parental leave had fallen over the past five years from 48.5 per cent to 47.8 per cent Ms Lyons said while the decrease was slight it was otherwise clear that access to paid parental leave had "ground to a hair. "That concerns me," she said. "A lot of employers are playing the shortterm game on costs rather than the long-term game that they are more likely to retain staff that go on paid parental leave and when staff do return they're far more engaged and loyal" Global engineering company Aurecon was an exception to the trend after it expanded its primary carer leave to 14 weeks and saw the number of men taking parental leave almost triple, from 7 per cent in 2017 to 20 per cent in Garry Graham, a technical director managing multimillion-dollar projects for Aurecon, is set to take 14 weeks off on full pay next year to care for his baby daughter as his wife, a principal at a competitor, returns to work: "It really helps us as a family because my wife has a career as well so if s better for her to go after nine months rather than after the full year." He said it was now more acceptable for men, even senior employees, to take parental leave. "I think its becoming more of a trend," he said. "Its all part of balancing home life and career aspirations." The WGEA data also suggested that a surprising blip in could be a longer-term trend, with the health sector's gender pay gap rising for the second year in a row. Ms Lyons attributed the increase, from 15.7 per cent to 16.1 per cent to more men in senior management as well as the industry's general inaction on gender issues. "Because they're a femaledominated industry they think they don't have a problem," she said. "But what they're forgetting is that gender equality is about gender balance. If you're female-dominated, you need more men... in those caring roles." Construction also rose to become the industry with the second-worst gender pay gap at 29.4 per cent behind financial services at 30.3 per cent Female CEOs increased only slightly, up by 0.6 per cent to 17.1 per cent as did female board members, up by 0.9 per cent to 25.8 per cent The health sector's gender pay gap rose for the second year in a row.

94 Australian Financial Review, Australia Author: David Marin-Guzman Section: General News Article type : News Item Classification : National : 44,635 Page: 3 Printed Size: cm² Region: National Market: Australia ASR: AUD 8,414 Words: 639 Item ID: Page 2 of 2 Garry Graham of Aurecon: "It really helps us as a family because my wife has a career as well." PHOTO: ATTILA CSASZAR

95 Australian Financial Review, Australia Author: Joanna Mather Section: General News Article type : News Item Classification : National : 44,635 Page: 3 Printed Size: cm² Region: National Market: Australia ASR: AUD 5,400 Words: 532 Item ID: Page 1 of 1 Woolworths faces vote on labour rights Joanna Mather Woolworths faces a shareholder resolution co-sponsored by industry superannuation fund LUCRF that would require union involvement in worker education and grievance resolution in response to alleged abuses by labour hire firms in the fruit and vegetable supply chain. The resolution will be put to a vote at the grocery giant's annual general meeting on November 21. The Australian Council of Superannuation Investors has advised members to vote "yes", while EFM Investors, the third-largest equities manager in Australia, confirmed it would also vote in favour of the resolution. "We take this matter of ensuring Australians have safe working conditions very seriously - principally as we consider it an investment risk," IFM executive director for responsible investment Chris Newton said. But the resolution is unlikely to be binding. This is because 75 per cent of shareholders would first have to vote in favour of changing the company's constitution. A majority "yes" vote for the resolution would have to follow. Woolworths has committed to publishing the result of the latter vote regardless. The resolution requires Woolworths to work with the National Union of Workers to vet labour hire providers. It comes after media reports of alleged abuse of foreign workers, including underpayment, unsafe working conditions and threats of retaliation should workers seek to raise grievances or become members of a trade union. Other elements of the resolution would "ensure trade union involvement in workers' rights education activities and grievance resolution procedures" and require reporting to shareholders about wages and working conditions in the supply chain. Woolworths argues it has already taken steps to deal with concerns, including the introduction of a responsible sourcing program in July. "We've worked couaboratively with the NUW since December 2017 towards the establishment of an agreed labour-hire program in our Australian horticulture supply chain, designed as an addendum on to the standards," general manager of quality, health and sustainability, Alex Holt said. "We support all workers in our supply chain being educated on workplace rights, including freedom of association, and having access to effective grievance mechanisms." The resolution is co-sponsored by the Australasian Centre for Corporate Responsibility, which has traditionally focused on environmental and governance issues but is ramping up scrutiny of workers' rights issues among ASX-listed companies. A similar resolution was put forward last year but withdrawn when Woolworms made a commitment to work with the NUW. LUCRF is a $6.4 billion fund with members employed in warehousing, food processing, poultry and dairy fanning and labour hire. A briefing prepared by ACSI says Woolworths management expressed concerns that "entering into agreements with a single union, the NUW, which would effectively give it access to [the company's] tier one and tier two suppliers, could endanger [the company's] relationship with key suppliers". ACCR and LUCRF filed the follow-up resolution because they believe the company's policies still fall short of its 2017 commitment They argue Woolworths is already party to agreements that mandate trade union involvement in providing education or worker grievance procedures, such as the Bangladesh Accord relating to apparel suppliers. Key points A resolution will be put to the grocery giant's AGM on November 21. It requires the company to work with the NUW to vet staff hire providers.

96 Australian Financial Review, Australia Author: Jason Clout And Alexandra Cain Section: Special Report Article type : News Item Classification : National : 44,635 Page: 3 Printed Size: cm² Region: National Market: Australia ASR: AUD 8,960 Words: 663 Item ID: Page 1 of 2 ESG sound, but check fine print Sustainability Look hard at disclosure and transparency. Jason Clout and Alexandra Cain Environmental, social and governance parameters are becoming increasingly important to SMSF trustees for their long-term benefits to a portfolio. A key reason ESG considerations have become top of mind for SMSF trustees has been the banking royal commission. Bell Direct equities analyst Julia Lee says, "We've recently seen through the royal commission into financial services the wealth destruction that can come when strong ESG principles are lacking." Lee notes there is a growing body of evidence that suggests stocks with high ESG scores perform better than those with low ESG scores. "If s about managing risk and avoiding catastrophes in portfolios but if s also about accessing better performing, more stable investments over time. Incorporate ESG into the investment process rather than invest in ESG-type assets," she says. Dan Israelstam, BetaShares' head of strategy, notes there are other underlying reasons why investing according to ESG principles makes sense. "Along with investment dollars, households are shifting their spending toward companies that are considered greener and more socially responsible. Innovation in the energy sector is also starting to favour companies that are less reliant on producing or using fossil fuels," says Israelstam. Research from the Responsible Investment Association Australasia shows the average return performance by both Australian and international responsible investment funds has generally tended to exceed that of the funds management industry average over the medium to long term. According to its 2018 benchmark report, "core responsible investment Australian share funds outperformed the average large-cap Australian share funds over three, five and 10-year time horizons". Leah Willis, head of client relationships, Australian Ethical Investments, agrees there is heightened demand from SMSFs for responsible investment products. There is a growing range of managed investments and exchangetraded funds incorporating varying degrees of social, environmental and governance considerations into their investment analysis," she says. Willis says SMSF investors need to understand the universe of opportunities when it comes to investing according to responsible investing principles. There are other choices such as sustainable, ethical or impact investments that go beyond ESG. For example, ethical investing excludes harmful sectors and includes more sustainable sectors, offering a more responsible option for SMSF investors looking for greater impact "However, SMSF investors need to be aware ESG integration doesn't prevent a fund investing in a harmful or controversial company or sector if there is an economic case to do so. This may mean investors are still exposed to significant long-term risks, for example, social licence risks associated with investing in environmentally unfriendly industries." By taking a broader approach to responsible investing beyond ESG, SMSFs can take positions in more forward-thinking and sustainable sectors and tap into global trends, such as demand for renewables, or the ageing demographics of Western society which is increasing innovation in medical solutions. "These are sectors in which an ethical portfolio will typically invest," says Willis. She notes, however, there are many so-called responsible investment funds whose investments look very similar to any mainstream portfolio. Says Willis: "It is important for SMSFs to consider the level of disclosure and transparency of an investment portfolio and review the top holdings to ensure the investment lines up with their expectations and values. Australian Ethical recommends people look beneath the bonnet of their investments and don't compromise on their values." Kathryn McDonald, head of sustainable investing, AXA Investment Managers Rosenberg Equities, recommends SMSF trustees seeking to achieve an ESG overlay on their portfolio should seek out companies that will be the green leaders of tomorrow. "Many of these businesses may not necessarily be high ranking from an environmental-efficiency perspective right now, but they are positioned well for a transition to a greener economy. Trustees should have an open conversation about the balance between avoiding big polluters today and seeking exposure to innovators who are poised to make a difference tomorrow." There is heightened demand from SMSFs for responsible investment products.

97 Australian Financial Review, Australia Author: Jason Clout And Alexandra Cain Section: Special Report Article type : News Item Classification : National : 44,635 Page: 3 Printed Size: cm² Region: National Market: Australia ASR: AUD 8,960 Words: 663 Item ID: Page 2 of 2 Leah Willis: there is an opportunity to tap into global trends, PHOTO: PETER BRAIG

98 Australian Financial Review, Australia Section: Special Report Article type : News Item Classification : National : 44,635 Page: 3 Printed Size: cm² Region: National Market: Australia ASR: AUD 3,863 Words: 444 Item ID: Page 1 of 1 braces for Some SMSFs with smaller balances may be paying higher costs than APRA-regulated funds, according to the Productivity Commission. to its draft report, Superannuation : Assessing Efficiency and Competitiveness, released in April, it said: "It appears that low-balance SMSFs report significantly higher costs (relative to assets) per member than APRAregulated funds." Net returns seem to be broadly similar, it says. The commission noted costs decline as SMSFs get larger. With market volatility making investment returns even harder to predict than normal, trustees are being urged to closely monitor the cost of running a fund. Some have questioned the methodology, but the draft report is still a timely reminder to SMSF trustees to pay close attention to the fees and costs their funds incur to ensure they are being run efficiently to optimise their retirement savings. All superannuation members, including SMSF members, should regularly review their fees as an essential part of overseeing their fund. Remembering that SMSF fees are usually applied as a fee-for-service rather than a percentage of a fund's balance, SMSFs can be extremely cost-effective compared to their counterparts as balances grow, SMSF Association CEO John Maroney says. Pete Pennicott, a director of financial advice firm Pekada, says: "Fees have a real impact on returns, so an annual cost audit of your fund is essential to have clarity on what you are spending your money on each year. Much like a personal budget there will be core expenses that are critical to running your fund and others that fall more into the discretionary category." Expenses where the product or service does not have a point of difference or add value to the fund should be the first to be reviewed. Pennicott warns the cheapest provider is rarely the best and fees are about value. "Spend wisely and in the right areas. If you don't care about certain features then don't pay for a solution with all the bells and whistles." Arnie Selvarajah, CEO Bell Direct disagrees with some aspects of the Productivity Commission's report The findings of the report were skewed towards services provided to SMSFs by accountants, which typically range from $2500 to $10,000 a year for accounting, audit and tax services," he says. Selvarajah says there are now many SMSF administration services that use new digital technologies to reduce the amount of money spent on services. "An average online administration solution costs around $1350 a year. These services take advantage of data and enable data-exchange between all necessary parties." Fees have a real impact on returns, so an annual cost audit of your fund is essential to have clarity on what you are spending your money on. Pete Pennicott, Pekada NR AFRGA1 S003

99 Australian Financial Review, Australia Section: Special Report Article type : News Item Classification : National : 44,635 Page: 3 Printed Size: cm² Region: National Market: Australia ASR: AUD 5,481 Words: 644 Item ID: Page 1 of 1 Technology helps trustees deal with uncertainty Digital technologies An array of emerging tools is available to help SMSF trustees better manage their assets, crucial in times of stockmarket volatility. These new, largely digital technologies are giving trustees and members quality information about how to optimise their funds' performance. Increasingly, self-directed SMSFs are able to access more asset classes via a joint online broker and online admin solution. For trustees this means increased simplicity - one sign-up process and one account holding all the fund's investments, feeding data directly to all necessary parties. "For an SMSF, time is your most valuable asset - so don't waste it on admin, paperwork or reporting," says Arnie Selvarajah, CEO of Bell Direct to the future, SMSFs will be able to access managed-accountstyle solutions tailored to meet their SMSFs and retirement lifestyle objectives. These will be able to be adjusted over time to reflect the life stage of the fund members and their risk profile. "SMSFs will also be able to benchmark their fund performance against other similar funds, to garner a better understanding of their performance over time," says Selvarajah. to recent years there has been a proliferation of new technologies and tools for financial advisers servicing the SMSF sector that specialise in one area, such as apps that model clients' savings and retirement needs, reporting tools, calculators and share trading tools. Now, more tools are being developed that use data interfaces to stitch these pieces of the puzzle together. For instance, HUB24 is rolling out a new technology called ConnectHUB, which allows financial advisers to integrate the reporting of a clienf s assets on the HUB24 platform with assets held off the platform, including direct equities, cash management accounts, term deposits and annuities. "We believe this new solution, which connects all the best-in-breed tools that SMSF advisers are using today, will enable them to run their businesses more efficiently and service their SMSF clients more effectively," says Andrew Alcock, CEO of HUB24 Group. About 25 per cent of HUB24's $9 billion in funds under administration come from SMSFs, and its focus on technological interconnectivity helps deliver SMSFs data in real time. "Being able to view all SMSF assets in one place will help to simplify the process of running an SMSF, meaning advisers and trustees will no longer have to go to multiple places to get a complete view of their position," says Alcock. Alcock believes this trend will help to break down barriers to investing in global assets and markets for SMSFs. "The existing technology of specialist platforms is increasingly providing greater access for SMSFs to international markets, providing the opportunity to directly invest and own global securities, which is shifting the dial away from the traditional focus on investing in Australia." Above all, new tech tools give SMSF trustees access to a plethora of different data points they can use to inform their decision making. The trick is to work out which data sets are the most important. "Data, coupled with a disciplined strategy, is essential to great portfolio management and in particular in choppy markets. But picking which data to pay attention to can often seem like a dark art Finding data is simple enough, there's too much of it, yet finding the right data to complement your investment strategy can be a confusing process. But it doesn't have to be," says Pete Pennicott a director of Pekada. Pennicott says when it comes to using data to support your investment strategy, asset allocation matters. "Analyse your portfolio to understand what you are exactly invested in. This is particularly important for SMSFs that invest in ETFs and managed investments. There are plenty of analyser tools available on the market which help you deep dive into your investment portfolio to understand how your investments complement, overlap or diversify from each other." Arnie Selvarajah says SMSFs will be able to benchmark their performance.

100 Australian Financial Review, Australia Author: Jason Clout And Alexandra Cain Section: Special Report Article type : News Item Classification : National : 44,635 Page: 1 Printed Size: cm² Region: National Market: Australia ASR: AUD 5,845 Words: 632 Item ID: Page 1 of 1 Casl Interest rates Jason Clout and Alexandra Cain Cash provides a buffer during volatile markets to trustees but the long-term impact on an SMSF can be to stifle returns. Current interest rates are low. Term deposit rates for some six-month products are 2.75 per cent Even with inflation at 1.9 per cent, returns from cash products provide little real return for SMSF trustees. BetaShares' chief economist David Bassanese says traditional global bond exposures are likely to produce low returns, as these mainly invest in lowyielding government bonds. "SMSFs may need to think outside the square when securing decent income returns in the local market given the likelihood interest rates on bank deposits are likely to remain quite low," he says. Another key consideration for trustees and their advisers is overseas interest rates, especially the US. While the Reserve Bank of Australia has left rates untouched for more than two years, its US equivalent has been progressively lifting interest rates. This divergence is one of the most important dynamics of which SMSF investors should be aware. "After a long period of extraordinarily low rates and quantitative easing programs, the US Federal Reserve has sought to normalise monetary policy through consistent but gradual interest rate increases. Given the health of the US economy we expect this process to continue in 2019," says Lazard portfolio manager Aaron Binsted. "Australia is likely to lag behind the US in terms of a rate tightening cycle. Given the issues surrounding Australia's low CPI, high household debt and cooling property market it is difficult to foresee rates rising in Australia in the near term," he says. Binsted expects rising rates in the US will be a challenge for SMSF investors exposed to equities. "Higher US rates could impact the discount rates investors apply irrespective of domestic growth prospects. They could also result in a weaker Australian dollar, which may aid some sectors but be a headwind for others." A problem for the Australian economy would be if the RBA were forced to raise rates. Australia is an interest-ratesensitive economy, given the consumer debt burden. Trustees need to think about how their assets would perform in higher interest rate environments. This is especially the case when it comes to companies' debt levels. Trustees should screen their investments to ensure debt ratios are not at extreme levels and the company's ability to service loans is high," says Julia Lee, equities analyst Bell Direct Lee says the longer the Reserve Bank remains on hold, the greater the chance the next rate move could be down rather than up. "Given the different outlook for interest rates in Australia and the rest of the world, trustees should consider diversifying across different regions," she says. Rising interest rates are typically negative for many investments. Usually interest rate rises will see money flow out of growth assets such as shares and property and into fixed income producing assets such as bonds, where a better income return can be achieved as rates rise. This puts downward pressure on many asset values. "Higher interest rates would reduce the value and returns of popular dividend-paying stocks, such as the banks and infrastructure assets, which borrow heavily. Low interest rates also cut into bank profit margins, which reduces profit and ultimately puts pressure on dividends," says InvestSMART portfolio manager Nathan Bell. "Keeping leverage low and owning a diversified portfolio of relatively stable stocks bought at sensible valuations is common sense, but you need to accept more modest returns." In the current low-interest-rate environment it is hard for SMSF trustees to derive strong income from their portfolios, says Nathan Lear, director and private client adviser at Hewison Private Wealth. Trustees need to source strong income from their investments without taking on too much risk." Aaron Binsted of Lazard doesn't see rates rising in the near term.

101 Australian Financial Review, Australia Author: Jason Clout And Alexandra Cain Section: Special Report Article type : News Item Classification : National : 44,635 Page: 1 Printed Size: cm² Region: National Market: Australia ASR: AUD 10,538 Words: 1027 Item ID: Page 1 of 3 Stick to your route through market storm Strategy Running for safety could jeopardise long-term prospects. Jason Clout and Alexandra Cain Self-managed super fund trustees have faced challenging times as volatile investment markets complicate the task of building retirement income. With market gyrations here and in overseas share markets, it has been a testing time for trustees and their advisers to decide whether to sit on the sidelines while markets recovered or - for those prepared to take greater risk - see the dips in the markets as buying opportunities. The S&P/ASX 200 was 6116 on May 11, rose to 6352 on August 29 but then dropped sharply to 5664 on October 25, before recovering in the past few weeks. The US Dow Jones has been on a similar rollercoaster ride, hampered by the ongoing trade disputes with China. Such market volatility can deter conservative trustees. But if a trustee's inclination is to stay in safer products such as cash, they jeopardise the longterm growth prospects of their SMSF fund due to low returns. The latest asset allocation figure in the SMSF sector was 23 per cent to cash and term deposits, compared to 36 per cent in direct shares, according to Investment Trends. However, the growth asset component like shares is also bolstered by allocations to some managed funds and ETFs. Experts caution against exiting equities altogether, even when markets are volatile. Aaron Binsted, portfolio manager at Lazard, is among those who suggest thinking carefully before abandoning equities. "Equities should remain part of most investors' overall asset allocation. The reality is that successfully timing equity markets is almost impossible. Many academic studies have shown just missing the five best days in equity markets over a year will have a dramatic impact on your overall return. In addition, history shows many of the biggest one-day upswings do occur in the midst of turbulence," he says. InvestSMART portfolio manager Nathan Bell recommends SMSF investors view volatility as an opportunity. "The more volatile an asset is, the more opportunities there are to buy low and sell high. It does require being more active, though, in a way that you haven't necessarily had to be since the financial crisis," he says. According to Bell, what most SMSF trustees are afraid of is not volatility, but losing their hard-earned money. The best way to protect against losing money is to buy undervalued assets. Even if they get caught in a general market fell, they'll likely be the first to recover." While it can certainly test investors' resilience, volatility also provides opportunities for investors to boost returns. Ben Smoker, CEO of Saxo Capital Markets Australia, says it makes sense to position an investment portfolio to profit from increased volatility. 'This can be done using derivatives such as options and CFDs to hedge or buy downside protection insurance over a portfolio," he says. When it comes to forming a view about how to manage volatility in a SMSF portfolio, it is essential for investors to draw on data and research to guide their thinking. 'This really comes down to four key indicators that move markets, namely employment, inflation, consumer activity and investor activity," says Smoker. While the first three are quite straightforward, it is investor activity that really counts. "Investor sentiment is key. Usually when everyone is bullish if s time to sell and when the sentiment is bearish, it's time to buy." Another important market indicator, says Smoker, is the overall market or index price-to-earnings ratio, which is a useful barometer of how expensive a stock market is. "The higher the overall market P/E is, the more fully priced the stock market is and the higher the potential for impending profit-taking." The VIX Index is another key indicator for SMSF investors to watch. Technically, a measure of expected price fluctuations in S&P 500 index options over the next 30 days, it is more colloquially referred to as the fear index as it measures the market's expectations of future volatility and risk. The higher the VTX, the greater the expected market volatility and hence the greater the probability for downside risk. "Investors should continually monitor these market barometers and adjust their portfolios accordingly. If the market's P/E ratio is historically high, and the VK Index is also creeping higher in tandem, then that"s a pretty good signal to take some risk off the table and potentially redefine asset allocation away from equities and into fixed interest and other lowercorrelated investments such as commodities," Smoker says. Jacob Mitchell, founder and chief investment officer of Antipodes Partners, says in the US there is a drop of relatively subdued inflation, and growth has been soaring. "While some indicators, such as the corporate profit cycle, industrial production, unemployment and consumer confidence suggest the economic cycle is maturing, residential and corporate investment and wage

102 Australian Financial Review, Australia Author: Jason Clout And Alexandra Cain Section: Special Report Article type : News Item Classification : National : 44,635 Page: 1 Printed Size: cm² Region: National Market: Australia ASR: AUD 10,538 Words: 1027 Item ID: Page 2 of 3 inflation is still at early- or mid-cycle levels," he says. But, says Mitchell, as trade tensions continue to build, the probability of a miscalculation or provocation rises. "Sustained confrontation could result in a further weakening of the yuan to offset tariffs or even damage to US commercial interests in China. US companies that are vulnerable to Chinese confrontation include those with China-dependent supply chains or that seu products in China with readily available substitutes such as Caterpillar, Apple and General Motors." Binsted says a key data point investors should look at when evaluating an investment fund is its performance in past downturns. "Some investment approaches are able to reduce participation in down markets and defend capital better than others. If you can avoid large drawdowns in choppy markets, you are positioned to compound off a higher base when markets begin to recover," he says. Binsted says as SMSF investors get nearer to retirement age, they should be mindful of drawdowns and volatility in their equity investments. Nathan Lear, director and private client adviser at Hewison Private Wealth, acknowledges working out which indicators to rely on can be overwhelming for trustees. "With access to so much data at our fingertips, I would encourage trustees to have a long-term investment strategy, and not get caught up in all the noise and short-term gyrations," he says. It is essential for investors to draw on data and research to guide their thinking.

103 Australian Financial Review, Australia Author: Jason Clout And Alexandra Cain Section: Special Report Article type : News Item Classification : National : 44,635 Page: 1 Printed Size: cm² Region: National Market: Australia ASR: AUD 10,538 Words: 1027 Item ID: Page 3 of 3 Number of SMSFs and total assets SOURCE: INVESTMENT TRENDS

104 Australian Financial Review, Australia Author: James Thomson Section: Companies and Markets Article type : News Item Classification : National : 44,635 Page: 30 Printed Size: cm² Region: National Market: Australia ASR: AUD 11,023 Words: 1316 Item ID: Page 1 of 3 James Thomson Two rebuffs to BGH with AusSuper What"s that tune about not liking Mondays? Private equity veterans Robin Bishop, Ben Gray, and Simon Harle - who collectively make up the new firm BGH Capital - could be forgiven for humming that old Boomtown Rats song, after their two most high-profiled takeovers were knocked within the space of less than an hour. First private hospital operator Healthscope announced it had not only refused BGH due diligence, but had also negotiated a fresh bid from Canadian giant Brookfield and would instead give the Canadian giant exclusive due diligence. Then, less than 10 minutes later, came a second rejection on the ASX, with education group Navitas announcing it too, had knocked a BGH takeover offer as being too low. The knocks don't just raise questions about how BGH fights. The fact the firm partnered on both deals with Australia's biggest superannuation fund, AustralianSuper, has again set the market alight with talk about the fund's strategy to provide its exclusive support to BGH in these public-toprivate deals. The $4.1 billion Healthscope rejection will likely sting most for BGH and AusSuper. When the pair lobbed their first takeover bid in late April at $2.36 a share, Brookfield was quickly on the scene with a $2.50 a share offer. Both parties were denied due diligence by chairman Paula Dwyer and her board in May, before she announced the company would push on with a plan for the sale and lease of about 20 private hospitals. BGH and AusSuper returned with the same offer on October 23 and then ratcheted up the pressure on Dwyer for a decision by increasing the size of the stake in Healthscope it controlled to 19.1 per cent But Dwyer demonstrated some stoic determination - some would say defiance - in the face of the BGH offer and a period of shareholder unrest which culminated in a first strike against the company's remuneration report Now we know why. Dwyer and her advisers, led by Kelvin Barry at UBS, have coaxed Brookfield into the fray, and working alongside Brookfield's advisers BAML have constructed a unique offer that combines a takeover offer of $2.42 a share and concurrent scheme of arrangement proposal that Healthscope says represents total value of$2.585ashare. This structure has been specially designed to get around the key booby trap that BGH and AusSuper had inserted into its deal - namely, that AusSuper would not support any takeover offer other than its own. Brookfield has created three ways AusSuper can get around its pledge to BGH. First its scheme of arrangement offer won't be put to a vote until April 2019, after the exclusivity agreement between BGH and AusSuper expires on March 31,2019. Secondly, Brookfield has offered to create an unlisted vehicle that would allow a certain percentage of current investors to effectively retain their stakes. If AusSuper is such a believer in the future of Healthscope, it can still go along for the ride by casting its lot in with Brookfield. Finally, if the scheme of arrangement gets blocked by BGH and AusSuper, Brookfield has set the conditions for its takeover at 50.1 per cent This creates the risk that BGH and AusSuper could get stuck in a relatively illiquid ASX vehicle alongside Brookfield. Clearly, Brookfield is betting AusSuper won't want to be left in that position. BGH and AusSuper could yet make an enlarged bid and give Dwyer something to think about But having

105 Australian Financial Review, Australia Author: James Thomson Section: Companies and Markets Article type : News Item Classification : National : 44,635 Page: 30 Printed Size: cm² Region: National Market: Australia ASR: AUD 11,023 Words: 1316 Item ID: Page 2 of 3 played hard ball by refusing to lift its offer between May and October bids, how likely is that outcome? AusSuper said the consortium was Continued p28 The $4.1 billion Healthscope rejection will likely sting most for BGH and AusSuper. From page 30 Two rejections for BGH, AusSuper offers considering its position on Monday, suggesting the band is very much together at this point And if s also worth noting that while Healthscope stockjumped 14.4 per cent on Monday, it closed at $2.38, well below the Brookfield bid price. The market certainly isn't declaring this one over. But the bigger question out of the Healthscope and Navitas deals is whether the BGH and AusSuper strategy of bidding in partnership will actually work. It should be noted that the rejection of the pair's offer at Navitas has failed mainly at the hurdle of price. Navitas released new, long-dated profit guidance on Monday, saying that a string of new university deals signed in the last few years, and a set of new ones it hopes to close shortly, will help boost earnings before interest, tax, depreciation and amortisation to $200 million in the 2021 financial year (well ahead, for example, of Macquarie's forecasts for $180 million) and towards $250 million in 2023 (Macquarie was at $205 million). The Navitas board says this mediumto-long-term growth simply isn't adequately priced into the BGH offer at this point Of course, by turning this deal away, there will be plenty of pressure on the company's chief executive, David Buckingham, to deliver on these aggressive numbers. And there was no shortage of talk on Monday about the fact that Navitas didn't reconfirm or update its guidance for the current financial year. This does make the new guidance provided on Monday even more of a giant "trust us" from a board that has seen its share price move sideways in the past 12 months. There was also a note of defiance from the Navitas board around the future of chairman Tracey Horton, who faces re-election at the coming annual general meeting and is said to be facing some pressure over the performance of the company. The company noted on Monday that vicechancellors at the universities it partners with had been "highly supportive of current management" and "have expressed concern in relation to any instability caused by the BGH proposal". But the most fascinating element of Navitas' rejection is the fact the board has specifically called out that its attempts to talk with parties about alternative bids were stymied by the fact that AusSuper and Navitas founder Rod Jones, both of whom own substantial shareholdings, had said they would support only BGH's offer. "A number of these parties have confirmed the board's view that the commitments by AustralianSuper and Mr Jones are potentially an impediment to proceeding with any competing proposal," the company said. That"s a very public criticism that could apply not just to this deal but also to AusSuper's new public-to-private strategy more generally. But AusSuper's willingness to stick with this strategy may come down to its views on the returns it can generate in partnership with a firm like BGH. For example, it could be argued that by supporting only BGH's inferior bid for Healthscope, AusSuper is denying its members a better return from the Brookfield offer. But the alternative view is that AusSuper could actually leave money on the table by supporting the superior offer, if it believes that even the higher Brookfield bid still offers less value than AusSuper and BGH could create by taking the company private. We've heard so little on AusSuper's strategy with BGH that if s hard to make an assessment Perhaps after two bid rejections and a board slap-down if s time for AusSuper chief executive Ian Silk and chief investment officer Mark Delaney to share a little more of their thinking. Expect this to happen when these deals are no longer live. The other question revolves around how the team at BGH react to these sets. While much will be made of the fact that the firm has $2.5 billion in funds and hasn't got a major deal over the line, Gray, Bishop and Harle are experienced campaigners who would have a view on the trajectory of asset prices in what is likely to be a period of increased volatility. With the bull market in equities looking distinctly tired, if s unlikely some of the smartest guys in the room will overpay just to get a deal done.

106 Australian Financial Review, Australia Author: James Thomson Section: Companies and Markets Article type : News Item Classification : National : 44,635 Page: 30 Printed Size: cm² Region: National Market: Australia ASR: AUD 11,023 Words: 1316 Item ID: Page 3 of 3 Defiant: Paula Dwyer demonstrated stoic determination. PHOTO: ELKE MEITZEL

107 Australian Financial Review, Australia Section: General News Article type : News Item Classification : National : 44,635 Page: 44 Printed Size: cm² Region: National Market: Australia ASR: AUD 12,621 Words: 1226 Item ID: Page 1 of 2 Chanticleer For crowing there was not his equal in all the land... Housing regulation's soft underbelly Mortgage borrowers unable to get a loan from a major bank were given clear instructions on how to take advantage of the soft under belly of Australian home loan regulation by a group of experts at the UBS Australasia Conference in Sydney on Monday. Jonathan Mott, the head of banking research for UBS in Australia and Asia, and Chris Joye, who manages $3 billion at Coolibah Capital and is a contributing editor at The Australian Financial Review, called out a gap in the market that allows borrowers to play regulatory arbitrage. It seems extraordinary that one of the most critical sectors of the Australian economy, which finances about $400 billion in new loans each year, is so being called outinsucha blatant way as being inadequately supervised. The essential claim made by Joye and Mott is that non-bank financial institutions are not applying the same strict lending criteria being imposed on the big four banks by the Australian Securities and Investments Commission., ASIC which enforces responsible lending standards, is putting pressure on banks to tighten their certification of the expenses of borrowers. Its pursuit of this enforcement has landed Westpac Banking Corp in court for allegedly relying too much on a household expenditure measure called HEM. A judgment on ASICs case against Westpac is due to be handed down at 9.30 on Tuesday. This will either provide some clarity or force ASIC and Westpac to square one and into another court to clarify the law on responsible lending. Mott and Joye say the natural outcome of ASICs crackdown has been to drive potential bank borrowers into the arms of those with less robust checking methods - the non bank lenders largely funded by capital markets. Joye is so confident of this view that RMBS markets are headed for an blow out in arrears that he has tried in vain to put in place a huge short of RMBS markets. The second leg of the Joye and Mott argument about lax lending standards among non bank lenders is that the RMBS market is being fuelled by the actions of the major banks who finance the warehouses that are used to house securities before they are packaged into AAA rated paper. Mott says this is crazy because the institutional businesses of the major banks are, in effect, cannibalising the consumer businesses by encouraging non-bank financial institutions with warehouse funding. Joye had a slightly different take on this by highlighting the fact that some banks had invested in RMBS paper and included it in portfolios of securities eligible to be included in repurchase agreements with the central bank. Chanticleer spoke to several industry experts who were not at the UBS conference about the claims made by Mott and Joye. They said it was rubbish that Australia's residential mortgage ed securities market was being populated with poorer quality loans that would ultimately have higher default rates. The moment there is a slight breath of competition, the banks start complaining," one expert said. Australian RMBS issuance this year has been about $22 billion, down $6 billion or 22 per cent on last year, according to the latest securitisation newsletter published by National Australia Bank. The current issuance rate suggests the total this year will be about $33 billion, just below last 1 s year's issuance of $35 billion. In the lead up to the global financial crisis Australia's RMBS market was running at issuance of about $50 billion a year. But there is no doubt the non-banks are growing faster than the banks. In the year to date, non-banks including Liberty, Pepper and First Mac have grown their mortgage loan books at 2.5 times system growth. Over the last three months the non-banks have grown at three times the system growth. This compares to one and half times system in 2017 and one times system in 2O16.Challenger banks including Macquarie Bank, HSBC and ING have grown two times system in 2018 and two and a half times system in the last three months. In 2017 it was 1.4 times and 0.9 times in 2016.The major banks grew their loan books at one time's system growth 2016, one time system growth in 2017 and 0.8 times in 2018 and 0.7 times over the past three months.. In a recent interview, Brian Hartzer, chief executive of Westpac Banking Corp, told Chanticleer that there appeared to be regulatory arbitrage. He said the differing growth rates between banks and non-banks highlighted this. Hartzer said it was time the regulator examined this discrepancy and created a level playing field. Of course, there will be those who are angered by these comments given that the big four banks have about 80 per cent market share in home lending. For example, while it is true that Macquarie has grown its owner-occupied loan book by 25.6 per cent over the past year, it is doing so off a very small base. Macquarie has about two per cent market share. To put its loan growth in perspective, it lifted its mortgage lending by about $3.5 billion in the past six months. Commonwealth Bank of Australia lends about that much every month. ASICs response to the claims made by Mott and Joye will be interesting given mat its chairman has called for more money to fulfil the community expectations of ASICs role. Those attending the UBS conference

108 Australian Financial Review, Australia Section: General News Article type : News Item Classification : National : 44,635 Page: 44 Printed Size: cm² Region: National Market: Australia ASR: AUD 12,621 Words: 1226 Item ID: Page 2 of 2 seeking clarity about the state of the home loan market in terms of movements in the valuation of properties would have been sorely disappointed. It was possible to leave the conference thinking that the market was headed for a severe crash based on the commentary of Martin North from Digital Finance Analytics. He regularly surveys about 4500 people each month and has a database of about 50,000 people to draw on. He repeated claims made last week that households facing mortgage stress now exceed 1 million. Another panellist pointed out that this amounts to about 20 per cent of all mortgage holders given there are only about 5 million Australians with home loans. North said the number of first-home buyers intending to buy had halved from three months ago because they expected further declines in house prices. He said the stressed households were now in higher income areas such as Bondi and the North Shore of Sydney. The implication from his comments was that families with several investment properties would have to contemplate selling properties in order to meet other commitments such as school fees. Those with a disposition towards a glass half-full would have listened to, and come away with the view that there is an orderly decline in house prices. Joye's message was not to panic. Even if the market were to really tank there were plenty of options for regulators and governments wishing to stabilise the situation. One of the disappointments of the panel discussion was that Joye and Mott, who have disagreed in print for years, did not have a feisty argument about their points of difference. Instead, they were in furious agreement about the apparent gap in the regulatory oversight TONYBOYD In a recent interview, Brian Hartzer, Westpac CEO, told Chanticleer that there appeared to be regulatory arbitrage. He said the differing growth rates between banks and non-banks highlighted this. Hartzer said it was time the regulator examined this discrepancy and created a level playing field.

109 Australian Financial Review, Australia Author: Misa Han Section: Companies and Markets Article type : News Item Classification : National : 44,635 Page: 17 Printed Size: cm² Region: National Market: Australia ASR: AUD 3,479 Words: 405 Item ID: Page 1 of 1 'Orwellian' liability waiver policy didn't mislead clients: Dover MisaHan Failed financial planning group Dover has denied any wrongdoing in issuing an inaccurate liability waiver to its clients, despite its owner Terry McMaster admitting in the banking royal commission the waiver was "Orwellian" minutes before he collapsed in the witness box. The Australian Securities and Investments Commission brought a civil penalty action against Dover and Mr McMaster in September, alleging Dover sought to avoid any responsibility for poor financial advice by using the contract to get around financial services law. At the core of ASICs civil penalty action is the allegation that Dover's liability waiver - ironically called the "Client Protection Policy" - misled clients about their rights. One clause stated: "Under the Corporations Act, Dover is not responsible for anything done by your adviser who is not within the authority provided by Dover in these circumstances." Minutes before Mr McMaster collapsed at the commission, he admitted the waiver was "entirely misleading" and it was "Orwellian" to describe the waiver as a client protection policy. ASIC is seeking declarations that Dover has breached the Corporations Act and the ASIC Act and wants it to pay fines. In a four-page response, Dover admitted its liability waiver was inaccurate because it did not set out the maximum client protection available to Dover's clients under the law. However, Dover said ASIC has failed to prove Dover's clients were in fact misled or deceived by the Client Protection Policy. "In the circumstances, [ASIC] bears the onus of proving that any individual or individuals who received statement of advice... were misled or deceived by the inaccuracy... in the Client Protection Policy, and suffered loss as a result of the inaccuracy in the Client Protection Policy," Dover said in a document filed in the Federal Court last Friday. Dover said it "denies that it engaged in conduct in relation to financial services that was misleading or deceptive". The response also said Mr McMaster "denies he was knowingly concerned" in Dover's breach of financial services laws, "there being no such contravention or contraventions". Dover closed its doors earlier this year and entered into an enforceable undertaking with ASIC As part of the undertaking, Dover's financial services licence was cancelled and Mr McMaster promised never to work in the financial industry again. Before its collapse, Dover had more than 400 advisers, making it one of the largest licensees in Australia. Mr McMaster declined to comment, as the matter is before the court

110 Australian Financial Review, Australia Author: Sally Patten Section: General News Article type : News Item Classification : National : 44,635 Page: 1 Printed Size: cm² Region: National Market: Australia ASR: AUD 9,223 Words: 614 Item ID: Page 1 of 2 Get into the minds of pollies Sally Patten Corporate leaders will need to understand how politicians think and act as governments become more interventionist one of Australia's most prominent executive recruiters says. Announcing her decision to retire as chief executive of Korn Ferry after eight years in the role, Katie Lahey said company chiefs would also increasingly need an understanding of social media to learn more about their customers and the competitive landscape. "You have to be able to manage up to the board and out to the community," Ms Lahey said yesterday. "Understanding the relationship with government is very, very Continued p2 Katie Lahey says an understanding of social media is essential, PHOTO: LOUIE DOUVIS

111 Australian Financial Review, Australia Author: Sally Patten Section: General News Article type : News Item Classification : National : 44,635 Page: 1 Printed Size: cm² Region: National Market: Australia ASR: AUD 9,223 Words: 614 Item ID: Page 2 of 2 From page 1 Get into the minds of politicians important as the banks have shown. That will be one of the things leaders will be assessed on. Community relationships [are important] and die government is part of that community. You need government contacts or an understanding of how government works, and knowing the key hot buttons to a politician will be essential." Pockets of corporate Australia have had a torrid time with the government over the past 12 months as ministers have become increasingly interventionist in an attempt to protect the interests of the community and shore up votes. The federal government has asked the national energy regulator to introduce a "default" tariff to ensure customers are not being exploited by being loyal to a service provider and earlier tiiis year tried to prevent energy com- AFRGA1 AM2 NR pany AGL from closing a coal-fired power plant The government has also announced royal commissions into the banking and aged care sectors, introduced a levy on bank profits and now requires die bank chiefs to appear before die House Economics Committee twice a year. Ms Lahey, who will assume the chairmanship in early 2019, by when it is expected a replacement will have been found, is also a director of casino operator Star Entertainment and is a former long-serving chief executive of the Business Council of Australia. Korn Ferry has begun a global search for a new CEO. The executive search specialist noted tiiat trust in corporate Australia was at a low ebb and business leaders needed to take company culture seriously to restore community confidence. But she pointed out that companies needed to manage a complex balancing act between providing a return on investment for shareholders and meeting community obligations. Focusing too much on die latter might hit profits and superannuation returns. "The dots haven't been joined yet That hasn't been well enough explained," she said, arguing that a thriving business environment was good for the whole community. "If the pie is not growing and there is lower profitability, everyone's share of that will shrink." The outgoing CEO said one of the biggest changes over the past eight years was the recognition of the importance of diversity at senior levels. In die early days of her role, companies had to be nudged to interview equal numbers of men and women, whereas now they demanded a diverse field of candidates. Companies were not as focused on cultural diversity, but that too was changing, Ms Lahey said. "As more big corporations are starting to realise the opportunities in Asia, they can't have a C-suite that looks so monodimensional," she said. Another big change was boards' desire to search globally for CEOs. "[Companies] want to make sure they've got die best of die best" Ms Lahey said. She dismissed suggestions that social media platform Linkedln would disrupt executive search firms, given the role they play as advisers to the board across areas such as company strategy and management structure. Ms Lahey plans to pursue more directorships and spend more time travelling. Katie Lahey: You have to "manage out to the community", PHOTO: LOUIE DOUVIS