 No mates, big or small, for competition review
 Superannuation system benefits unions more than members
 David Murray’s financial inquiry
 David Murray puts the super ball firmly in the
Coalition’s court
 Eight ways Murray could transform Australia
 Adopting Murray changes will benefit us all
 International Business
Council
Activities/Information
 A landmark year for the
SBDC.pdf
 Training Matters magazine Dec
2014.pdf
 BEC Belmont News.pdf
 TCF News.pdf
One of the more contentious recommendations of Ian Harper's
Competition Policy Review is winning few friends on either side of the supermarkets divide. Small business and independent grocers had lobbied for an "effects" test as a new bastion against the misuse of market power by big business.
The review panel duly listened, in September recommending legislative changes that would potentially penalise businesses engaging in conduct which has the effect of lessening competition.
There are a few outs, however, for offending businesses under the draft recommendation. They wouldn't be penalised if the suspect conduct was the result of a "rational business decision", if they weren't big enough to wield substantial market power or if their actions benefited the interests of consumers.
Naturally, the big supermarket chains aren't impressed, slamming the proposed "effects" test as unworkable, unrealistic and anticompetitive. But the independents have their concerns also, as highlighted by the latest batch of submissions filed in response to
September's draft recommendations.
Masters Grocers Australia and Liquor Retailers Australia, whose combined membership includes IGA supermarkets, Cellarbrations and
Bottle-0, believe the "effects" test doesn't go far enough. But they also share some common ground with the supermarket majors.
Both the MGA and LRA believe the defence provisions lack clarity and need to be better defined. In their joint response to the draft report, they describe them as "riddled with unknown variables" and attack the panel's notion of a "rational" business decision" as "a nebulous concept".
The WA Independent Grocers Association is more unequivocal. It questions why there should be a need for an approved defence, arguing the emphasis should be on eradicating anti-competitive behaviour. "Is that not the purpose of competition law?" And then there is the
Australasian Association of Convenience Stores. It urges the reduction of the legislative barriers preventing its members from selling alcohol.
Welfare and health groups will disagree, but the association claims
"there is no credible reason why convenience stores should not be permitted to sell alcohol". It says selling booze will help address the retail "imbalance" by enabling them to better compete with Coles and Woolworths. The two chains control an estimated 57.5 per cent of
Australia's liquor retailing market.
The association estimates liquor deregulation would generate nearly
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$500 million of additional sales for its members from beer alone. Its numbers reflect the experience in the US, where convenience stores account for nearly 8 per cent of all beer sales. ( SOURCE: The
Weekend West , 6.12.14)
HOW many times have you heard the claim that Australia’s system of compulsory superannuation is the envy of the world? When you hear this assertion next time, take note of who is doing the talking.
Invariably it will be someone who works for a superannuation fund or for an organisation that makes its living from superannuation. Or Paul Keating.
In fact, there are some serious criticisms that should be levelled at our “world best practice” super­annuation industry, including excessive fees, poor governance and dubious practices. While members of superannuation funds are dudded, a coterie of organisations and individuals are able to run off with the booty, often derived from longstanding political connections hidden from members.
When it comes to the vast superannuation industry (assets approaching $2 trillion), there are essentially five types of funds: industry, retail, corporate, public sector and self-managed. SMSFs are the largest sector in terms of number of funds and total assets. Retail and industry super funds have been losing out from the growth of SMSFs.
A story that has gone under the radar for many years is the suspect and unsavoury arrangements that operate within the industry super funds, where non-disclosure and secrecy have been key characteristics. Jobs have been given to people lacking suitable qualifications, luc­rative contracts have been awarded to related parties without any competitive tendering and fortunes have been made by extracting excessive fees from ­members.
As a result of the Royal Commission into Trade Union Governance and Corruption, we have now learned of examples of industry super funds providing funds to employ union superannuation officers and leaking confidential information about members to unions. The Murray inquiry into the fin­ancial system has also been taking a look at the superannuation industry, concluding that the level of fees and governance arrangements are problematic.
And these two inquiries follow the tactfully worded Cooper review on superannuation commissioned by the Labor government and released in 2010, which called for some significant changes to the governance arrangements of industry super funds. When it comes to government policy, it is absolutely imperative that the legislation be enacted to ensure a majority of trustees are independent. The equal representation model has had its day and it’s time to move on.
It also may be necessary to legislate to unpick the insidious and uncontested relationships between the industry super funds and various service providers, some of which are owned in part or in full by the funds themselves. In some instances, these relationships are stipulated in the funds’ constitutions. The government also has to break the logjam in respect of the default funds in modern awards and to remove the monopoly status of industry super funds in enterprise agreements.
By international standards, Australian superannuation funds offer a high-cost product that shaves up to 15 per cent off payouts relative to internationally comparable fees. What we need is a vibrant, competitive super industry in which all the players have a chance to secure and retain members based on low fees and superior returns. Just saying our superannuation system is one of the best in the world doesn’t cut it. (Read full report and weep, see attachment: Superannuation system benefits unions more than members .docx. SOURCE/EXTRACT: The Weekend Australian , 6.12.14)
REFORMS to limit the role of ­unions in superannuation are ­likely to head the government’s ­response to the first comprehensive review of the financial system in almost two decades, with less enthusiasm for its calls to raise bank capital standards and give fresh powers to the corporate regulator.
Joe Hockey asked for bipartisan support in implementing recommendations from the inquiry, headed by former Commonwealth Bank chief and founding chairman of the Future Fund David Murray, but said the government would consult over the next three months before deciding which of the 44 policy reforms it would adopt. While the Treasurer said the inquiry had “laid out a blueprint for the financial system over the next decade”, he emphasised that it was a report to the government, not by the government, and did not yet reflect official policy.
ACTU officials flagged that recommendations on super­annuation would face a political battle, but Mr
Hockey said suggestions for improving competition in the $1.8 trillion superannuation industry would be “a very key focus” for the government in its consultations. ( SOURCE/EXTRACT: The Australian ,
8.12.14)
THERE are both challenges and losses for those involved in superannuation arising from the recommendations of the Murray Financial System Inquiry’s final report. There are no clear winners, apart from the members themselves. This is how it should be.
David Murray quite rightly points out that there should be more clarity about the objectives of our system of superannuation, to be focused on providing income in retirement. It is not about feathering the nests of the superannuation industry and the various sub-industries that feed off it. It is clear

from the report that the panel considers our superannuation fees are too high, that many of the funds
all member funds have a majority of independent directors, something the union-dominated industry super funds will strenuously resist.
The proposed restriction on self-managed superannuation schemes borrowing to purchase property makes sense — this option has been allowable for only a short time — and the SMSF sector would probably be well-advised to quietly accept this change. It looks as though the Murray inquiry has landed in nearly all the right places on superannuation. It is now the time for the government to act. When assistant treasurer, Bill Shorten squibbed on the big superannuation issues; it is time to complete the task.
( SOURCE/EXTRACT: The Australian , 8.12.14)
IF THE government adopts most of the Murray recommendations the nation will be fundamentally changed, because the thrust of the changes go way beyond banking and superannuation fees. [For example]
2.
Murray has taken a vital step in reducing income inequality in Australia by going out of his way to specifically endorse the government’s proposal to extend unfair contract protection to small businesses. This change is, if anything, as big as any other proposed by Murray and it will be opposed with more vigour than any other Murray change.
At the moment the lawyers for large organisations (government and corporate) draft into contracts with small enterprises, as a matter of course, horrendous unfair provisions. That needs to be stopped. The public service hates the idea, but it will create a huge rise in small business activity and employment. It was a cornerstone of the Abbott government’s election but, along with avoiding duplication in education and health expenditure, the public service has done everything it can think of to bury it. The plan was originally proposed in Kevin Rudd’s first election campaign, but again the public service buried it. This Murray recommendation (number 33) can be endorsed by Bill Shorten because it’s an ALP idea. (Read full report, see attachment: Eight ways Murray could transform
Australia .docx ( SOURCE/EXTRACT: Business Spectator , 8.12.14)
IF the government adopts most of the Murray recommendations the nation will be fundamentally changed, because the thrust of the changes go way beyond banking and superannuation fees. And I [ Robert
Gottliebsen ] believe the Murray changes if adopted will be for the better, but they will require the
Abbott government to alter its whole approach. I want to list ways in which our nation could be transformed, and you will notice that I leave banking and super fees until last, not because they are unimportant, but because they tend to obscure other big issues.
● First and foremost, it gives the Abbott government the opportunity to act in a way which the nation desperately wants. In issues like this, the nation yearns for its elected government to consult with the Opposition rather than talking to ragbags on the Senate cross-benches seeking the lowest common denominator.
● Murray has taken a vital step in reducing income inequality in Australia by going out of his way to specifically endorse the government’s proposal to extend unfair contract protection to small businesses. This change is, if anything, is as big as any other proposed by Murray and it will be opposed with more vigour than any other Murray change. At the moment the lawyers for large organisations (government and corporate) draft into contracts with small enterprises, as a matter of course, horrendous unfair provisions. That needs to be stopped. (Read full report, see attachment:
Adopting Murray changes will benefit us all .docx ( SOURCE/EXTRACT: Business Spectator , 9.12.14)
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