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The Department of Home Affairs has issued its draft guidance “Modern Slavery Act 2018: Draft Guidance for Reporting Entities” (Draft Guidance) for the new Modern Slavery Act 2018 (Cth) (the Act).
Welcome to Edition 28 of Boardroom Brief.
This is a service specifically targeted at the needs of busy non-executive directors. We aim to give you a “heads up” on the things that matter for NEDs in the week ahead – all in two minutes or less.
We noted last week that the banking sector continues to be a focus of regulatory attention. This is still the case, with ASIC now wading into the debate over CBA’s alleged transgressions of anti-money laundering rules.
Diggers round-up. There was a very positive atmosphere at this year’s Diggers & Dealers convention in Kalgoorlie, although “deals” were few and far between. Instead, there was a renewed focus on exploration and development activities, which perhaps bodes well for corporate activity in the future. Particularly encouraging was the exploration success of the gold industry over the last 12 months, albeit a common theme among attendees was that the industry now needs a new “monster” greenfield discovery after years of focus on near-mine exploration.
Open banking. As part of the 2017-18 Budget, following the release of a Productivity Commission report, the Government announced a plan to introduce a so-called “open banking regime” in Australia, beginning with an inquiry into implementation of such a regime. In simple terms, “open banking” require banks to share product and customer data with customers and third parties with the consent of the customer. It is seen as a means to encourage competition and efficiency in the provision of financial services. The Review into Open Banking in Australia has released an Issues Paper for public comment. The Issues Paper explains the context and background for the Government’s decision to introduce an Open Banking regime in Australia and outlines issues the Review will be examining, consistent with its terms of reference. Submissions are due by 22 September 2017. See Treasury’s media release. In their article Groundhog day: inquiries commence into open banking and competition in financial services, Gilbert + Tobin Partners Charles Coorey & Peter Reeves discusses the Open Banking inquiry’s terms of reference and the scope of its inquiry released in the Issues Paper.
SA Bank Tax. Who remembers the Bank Accounts Debit tax and its State counterpart, Financial Institutions Duty? FID was abolished in 2001, but with the States struggling with vertical fiscal imbalance, it isn’t surprising to see banks finding themselves in the State Treasuries’ crosshairs once again. Case in point: the Budget Measures Bill 2017 (SA) (Bill) has passed second reading stage in the South Australian House of Assembly. The Bill is for an Act to enact legislation in relation to the 2017 State Budget so as to impose a levy on major banks operating in the State; and to make amendments to various Acts for the purposes of the 2017 State Budget. We will have to wait until September 7 to see if a similar measure finds its way into the WA State budget.
Chinese buyers and Property risks. There has been considerable attention recently on the impact which regulatory and prudential measures, both in Australia and China, are having on the flow of property investment funds. Trying to understand the impact of Chinese investment on domestic property prices is devilishly hard, but directors with businesses leveraged to the sector should keep a close eye on trends moving into the traditionally busy spring selling season.
Wage “growth”. An interesting (and slightly concerning) graph recently published by Westpac Economics shows the reason why households are starting to feel the pinch of higher living costs. Wage price growth has been anaemic, to say the least, over the last three years, while employment has increased – suggesting households are working harder for less. With more of households’ income being swallowed by property-related expenses, it is hardly surprising that discretionary retail is struggling. We will see if the trend improves when the Q2 wage increase data is released on Wednesday.