The International Monetary Fund report recommended the Reserve Bank of Australia (RBA) to keep monetary policy simulative, given that risks to the economy and inflation remained on the downside.

Ensuring the return to full employment under weak global conditions will need continued accommodative monetary policy and quality infrastructure spending, which will also boost long-term growth potential, While Australia was transitioning from a mining boom with strong growth and relatively low unemployment, it had not been immune to symptoms of the “new mediocre”, the report said.

Business investment outside of mining had disappointed, underemployment remained high and wage growth sluggish, said the Washington-based organisation.

The report recommended the conservative government of Malcolm Turnbull slow efforts to balance its budget on a five-year horizon. Plans to tighten fiscal policy aggressively in 2017-18 could prove counter-productive, the report said. Rather, the government should consider spending more on infrastructure, a hot-button topic in Australia.

A more sustained, multi-year increase in spending on efficient infrastructure would be desirable, considering that Australia has infrastructure needs and fiscal space, the funding environment is favourable, and that the expected return to full employment is gradual according to IMF.

In banking, there is an argument that more sharing of information such as electronic payments or account balances between businesses could benefit customers, because it would boost competition and cut prices. However, commercial interests to hand over their customers’ financial data to rivals doesn’t suit big banks. It is just one example of the growing fight between businesses over consumers’ financial data. Not only does this fight involve commercial rivalry, but also challenging questions about privacy, and how much consumers are prepared to trade away for cheaper financial products.

A Recent Commission’s report fell short of saying banks should be forced to share more of the information they hold about customers, but left little doubt that we can expect greater sharing of our financial information in the future.

Even if the banks don’t want to share much of the data they hold, the huge amount of public online information about people is opening up other ways for lenders to assess borrowers.

The report says that new data sources and increased technical capacity to analyse existing and new data is transforming the financial sector, bringing with it innovation, competitive pressures, more efficient decision making by financial service providers and more empowered consumers. However the benefits of cheaper finance need to be weighed against the clear risks from financial corporations analysing ever-growing piles of data on their customers. One risk is that more financial data leads to “spamming” of customers with unsolicited credit offers that are not in customers’ interests. Another obvious risk is the potential for privacy breaches.

The report presents a growing dilemma for consumers as they are forced to trade off lower prices with their own privacy and it says this will test how much we value “efficiency benefits compared to privacy considerations”. These costs of big data’s growing role in financial services need to be weighed up against the promise of cheaper products.

The governor of the Reserve Bank has warned that policymakers should not be encouraging Australians to take on higher levels of debt, even though most households seem to be managing at the moment.

Dr Philip Lowe  remained optimistic about the health of Australia’s economy, because low interest rates were still supporting growth and the rise in the terms of trade would boost incomes and government revenues however he said that an eye should be kept on the rising levels of debt.

He said the economy was also adjusting better than many predicted to the unwinding of the mining investment boom but it would be prudent to use this time to build some buffers into the system against future economic shocks.

“Debt levels, relative to income, are high in Australia and are much higher than they once were,” he said. “Currently, household debt is equivalent to 185% of annual household disposable income, a record high and up from around 70% in the early 1990s.”

Over recent years more households in all income brackets have got ahead on their mortgages. “This more prudent behaviour is a positive development. Given the high and rising levels of debt, though, we need to watch things carefully.

“It is unlikely to be in the public interest, given current projections for the economy, to encourage a noticeable rise in household indebtedness, even if doing so might encourage slightly faster consumption growth in the short term.”

The Reserve Bank of Australia sees a better short-term outlook for key trading partner China and a commodity-price windfall for the economy, while acknowledging a renewed rise in some local property prices. The bank made few changes in its quarterly forecasts update: growth of 2.5 to 3.5 per cent to June 2017, rising to 3 to 4 per cent thereafter; with core inflation increasing to 1.5 to 2.5 per cent by end-2018. Headline inflation was revised up due to higher tobacco prices.

The downside risks to Chinese growth in the near term appear to have diminished according to the central bank. The forecasts assumes that the terms of trade will remain above the low point reached earlier this year. In part, this reflects the expectation that Chinese demand for steel will remain resilient in the near term.

The unexpected injection of income from higher commodity prices and record residential building approvals will help underpin growth and suggests interest rates may remain unchanged from the current record-low 1.5 per cent. But the labour market is looking a little weaker, with the RBA lowering forecast employment growth, and uncertainty remains over how heavily indebted households will consume and save.

The RBA again pointed to the reversal of Australia’s former two-speed economy, as the eastern states strengthen at the expense of the west that was at the heart of its mining investment boom. This is reflected in the property market.

“Housing price growth has picked up noticeably in Sydney and Melbourne, where auction clearance rates have also increased to high levels,” the RBA said. “Housing market conditions remain weak in Perth, where prices of both apartments and detached dwellings have declined further over the past year.”

The RBA noted Australia had now passed the largest subtraction to gross domestic product growth from the unwinding of mining investment. “That makes the revival of iron ore and coal prices all the more advantageous. The outlook for commodity prices, particularly coal prices, is more positive than previously thought”, the central bank said, while adding that the current levels of spot prices are unlikely to be sustained. The price of coking coal has soared about 240 per cent this year and iron ore is up 50 per cent.

The Australian Taxation Office executed warrants in Victoria seizing illegally grown tobacco with a potential excise value of more than $10 million.

More than 123,000 tobacco seedlings were seized at a property in Eurobin, in north-eastern Victoria, which were growing in a large hot house on site.

ATO Deputy Commissioner Michael Cranston said the ATO will continue to act decisively to deal with illegal tobacco growing in Australia. “The illegal tobacco trade is not only harmful to people’s health but is harmful to the community through the loss of excise,” Mr Cranston said. “Those who support the trade in illicit tobacco are putting money into the hands of organised criminals.”

It has been illegal to grow tobacco in Australia since 2006 and there have been no commercial tobacco licences granted by the ATO since that time. Currently, there are no licensed commercial producers or dealers in Australia. Mr Cranston said the ATO worked with Victoria Police for the purposes of executing the warrants, demonstrating the value of cross-agency collaboration in detecting and dealing with offenders.

The community can also play a role in reducing the illegal tobacco trade by remaining aware of their surroundings. “It’s important for property owners to remain vigilant and consider what could be growing on nearby properties. If something looks suspicious, contact the police.”

As of 1 October 2016, some transactions between Australian and overseas businesses are no longer subject to Australian GST.

What are the changes?

  • GST-registered importers no longer need to identify the exact amount paid or payable for international transport, insurance and other costs to calculate the value of the taxable importation for GST purposes.
  • More supplies of services by Australian businesses to non-resident businesses will now be GST-free.
  • Overseas businesses supplying or acquiring goods from Australian businesses may no longer need to be registered for GST and may cancel their ABN (after considering other Australian tax obligations).


Looking for a new Apple product this Christmas for the Apple fan in your life? Want to keep the spending under the price of a new Apple Watch, iPhone, iPad or MacBook?

It isn’t a gadget. It’s a photo book.

Taking its name from the phrase found on every Apple product, designed by Apple in California is perfect for the Apple lover.

As with most Apple products, it will be available in two sizes: a “small” for $US199 ($265) and a “large” version for $US299 ($395).

Both will feature linen-bound hardcovers with the pages “printed on specially milled, custom-dyed paper with gilded matte silver edges, using eight colour separations and low-ghost ink”. The goal of the Apple-published book is to chronicle the company’s past 20 years of product design, from 1998’s iMac to 2015’s Apple Pencil.

There are 450 photographs of past and present Apple devices as well as photos that document the company’s design process and techniques.

Apple dedicated the book to its late founder, Steve Jobs.

Google Australia has moved the provision of the vast majority of its products out from Singapore and back into Australia following a restructure that is likely to have a big impact on its local tax bill.

The company was forced to restructure its local operations in January to count revenue generated from Australia in the country, or face penalties of double tax under new laws that target tax avoidance and profit shifting.

The Australian business had previously existed to provide sales and marketing services to Google Singapore and Google Ireland, and research and development for Google globally.

Google Australia had traditionally booked its lucrative advertising profits through its Singapore operations in order to pay less tax.

However, following the restructure and new legal obligations, the company last month started informing customers that management of their Adwords and newly-rebranded G Suite (formerly Google Apps) services would move from Singapore to Australia this month. The move has also meant the Australian goods and services tax (GST) will be added to local customers’ bills. “With effect from 1 November 2016, SG [Singapore] is assigning your agreement for the [G Suite/Adwords] services to Google Australia Pty Ltd,” Google informed customers last month. “This means that from that date, Google Australia Pty Ltd will be providing the [G Suite/ AdWords] services to you and will be invoicing you for those services.”

The change is likely to have a big impact on Google Australia’s financial results for the 2016 financial year.

Its advertising revenue in Australia alone is widely understood to sit at around $2 billion. Last year – before the restructure – the company posted Australian net profit of $47.1 million on revenue of $502 million. Its tax bill was $16 million.

As Competition ramps up in Australia’s mobile market in 2016, Vodafone and Optus look to gain back ground Telstra has won in the last five years.

The shareholders and investors want to know how chief executive Andy Penn, Telstra plans to fill an up to $3 billion earnings hole and how a further $3 billion, earmarked for network upgrades, will be spent.

The telco’s shares are close to a two-year low. Telstra shares are down 11 per cent at $4.71 this year. The space is still dominated by Telstra, which has a total retail mobile subscriber base of 17.2 million. But, its competitors are eyeing customers off.

At the end of June 2016, technology research firm Telsyte estimated that of the more than 25 million handheld mobile services in operation, more than 12 million were not on contracts. “Over the last few years, mobile has been the driver of Telstra’s revenue … now mobile has become very competitive. In 2015-16, mobile accounted for 40 per cent of Telstra’s revenue, or $10.4 billion. Ten years ago, Telstra’s mobile revenue was just under $5 billion, or close to 22 per cent of total revenue. However in the recent times Vodafone and Optus has given tough competition to the Telecommunication giant.


The use of big data will enable institutions and regulators to pinpoint problem areas in financial services before they become systemic and harmful on a large scale, according to the Financial Services Institute of Australasia (Finsia).

Speaking to financial observer ahead of the group’s Regulators Summit in Melbourne new Finsia chief executive Chris Whitehead said the availability of data on a wide scale would produce a regulatory toolkit for ASIC to use.

“Regulators are increasingly looking to take advantage of technology, and with the extra resourcing that’s being applied by more government funding will ultimately be used.” Whitehead said the ability for regulators to spot systemic issues would be greatly increase by improving their data analytics capabilities, similar to the way businesses in the financial services industry were using data to focus more closely on a customer’s individual needs.

If you put that in a regulatory context, it will allow regulators to drill down on concerning or suspicious behaviours more quickly, so it should dramatically improve productivity in regulation,” he said. Rather than relying to a great extent on self-reporting or looking for a body of customer complaints in order to drive an investigation, there is an ability to be much more proactive in looking for concerning patterns across the industry.

However, the industry also had to play its part and self-regulate by improving both educational and cultural standards in major institutions. “Professional standards encompass both skills and culture and you have to get them right. You have to get people wanting to do the right thing and having the ability to do the right thing, so we would encourage the industry to focus on both” he said.

Australian financial services licensees (AFSLs) and Australian credit licensees lodging license applications to the corporate regulator can expect a more rigorous approach to assessing applications but guidelines on the exact requirements are not available yet, according to the Fold Legal.


Senior consultant, Sonia Cruz, wrote in a blog that the Australian Securities and Investments Commission (ASIC) would reject applications after the initial check if any component was missing in the licensing applications, which could take up to four weeks. This would then need to be resubmitted, causing significant delays in having applications assessed.

“So before lodging your application, carefully check all the material you submit in support of your application to ensure everything required by ASIC’s AFS licensing kits is included,” Cruz wrote. Since 2013, ASIC had been able to reject applications if it believed the applicant could contravene the financial or credit services laws in the future.

Applicants can also expect ASIC to conduct rigorous background checks to look for past misconduct, particularly deliberate or willful disregard of financial or credit services laws.

However, Cruz noted that while ASIC said it May it would update the AFS Licensing Kit (RG 1-3) to specify its new approach to assessing applicants on if they contravened the law, it had not yet released any guidance.

ASIC’s timeframe was currently 60 days for simple applications but Cruz said it could take four months.

“And the situation seems unlikely to improve. In ASIC’s 2016—17 Corporate Plan, only four per cent of the total budget of $400 million has been allocated to licensing and professional registrations,” Cruz said.

ASIC may also ask for materials applicants may use under the licence include a financial services guide or statements of advice.

“It’s difficult to predict what they might ask for, so it’s advisable to have your operating procedures and disclosure documents ready when applying for your licence,” Cruz said.


AIA has enhanced its online claims functionality in an effort to reduce delays around the assessment of claims made by employees covered by group life policies.

The insurer stated the enhancements were also designed to assist employees gain earlier access to occupational rehabilitation and intervention. AIA said the current batch of improvements would allow employees to access employer company data from a central repository and would pre-populate all relevant employer related fields when making a claim, which is then sent to the relevant contact at the employer for their processing of the claim.

Employees have also been given centralised access via interactive employer logon page providing them with a ‘one to many’ relationship with claims with the need to only log into the eClaims system once.

This saves considerable time for the member in lodging a claim and means that employers will get claim information quickly in one centralised place rather than members sending claims forms to different people. The employer is alerted to the claim at the start of the claims process and can also work with their employee to start appropriate rehabilitation, if applicable,” AIA Australia Chief Group Insurance Officer, Stephanie Phillips said.

“The employer also receives an online employer statement so they can track all claims in one place rather than having to go through emails. Again, this means that the employer can be across members’ claims and provide the right help and guidance when needed.”

In a research house’s latest super fund performance report, the median growth fund (61 to 80 per cent) was 0.7 per cent down for the month, bringing the return for the first 10 months of 2016 to 4.1 per cent. While listed share markets were the main drivers of growth fund returns, they were down in October as Australian shares fell 2.2 per cent, international shares fell 0.6 per cent and 1.4 per cent in hedged and unhedged terms respectively.

Listed property suffered on rising bond yields, with Australian real estate investment trusts (REITs) plummeting 7.7 per cent and global REITs retreating 4.5 per cent.

The nervous mood that continued in October were the concerns on the outcome of the US election, the future of global interest rates, and the consequences of Brexit that still preyed on investors’ minds.

So far, stock markets around the world have, for the most part, taken Trump victory in their stride. Defying predictions of a major slump, shares fell as a result became clear but then reversed direction and rose strongly, However, bond markets have taken a hit, based on expectations that the Trump administration will follow through on its promises to spend significant amounts on infrastructure, and we already seen significant falls in the value of REITs and listed infrastructure.

Closer to home, Trump’s victory leaves Australia and China quite vulnerable given their reliance on international trade. Trump has canvassed protectionist policies that, if enacted, have the potential to set off a trade war that could be damaging to both economies.

The report also found industry and retail funds both returned -0.8 per cent in October but industry funds continued to hold the advantage over the longer term with a 5.6 per cent per annum return against 4.8 per cent for retail funds over the 10 years to October 2016.


Financial planners and financial planning dealer groups are no longer the super-switching bogeymen of the industry superannuation funds, with Industry Super Australia (ISA) now pointing the finger squarely at the banks and general advice.

The ISA’s submission to the Productivity Commission (PC) review into alternative default models strongly urges retention of the current default funds under modern awards model and it has urged the PC to be careful in assessing the arguments of the banks.

Referring to the “sales-driven switching”, the ISA submission stated that “among those who do intentionally switch funds, this is substantially attributable to the sales efforts of vertically integrated for-profit providers”.

“This was initially undertaken via financial planning networks. Since the Future of Financial Advice Reforms, for-profit providers are increasingly using “general advice” direct institutional sales (i.e., cross-selling of superannuation by bank staff),” the submission said.

It said that while various legislative protections were in place to promote the best interests of members and prevent inappropriate behaviour such as inducement or misleading conduct by providers toward employers, there was little evidence to suggest such protections were routinely enforced.

“That the processes by which most workers join and contribute to a default fund does not function as a ‘market’ is evidenced by the fact that while retail funds have on average underperformed relative to most not-for-profit industry funds in terms of net returns to members, they continue to secure a substantial part of the industry, and charge significantly higher fees or margins,” the ISA submission said.