Welcome to Edition 68 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.
KEY BOARDROOM BRIEF
ASIC releases guidance for its oversight of the AFCA. On 20 June 2018, ASIC released Regulatory Guide 267on its oversight of the Australian Financial Complaints Authority (AFCA). The AFCA, which will start accepting complaints on 1 November 2018, will provide a one-stop shop for resolving disputes with banks, insurers, super funds and certain credit providers. All financial firms that are required to have a dispute resolution system to deal with complaints from consumers and small businesses must become AFCA members by 21 September 2018. The purpose of the guidance is to provide policy certainty for stakeholders and support an efficient transition to the new single scheme. Directors should note that the AFCA will be required to refer to APRA, ASIC or the ATO any serious contraventions of law of which it becomes aware through the complaints scheme. Financial firms remain nonetheless under an obligation to self-report any such contraventions to ASIC. ASIC’s existing Regulatory Guide 139 will remain in place until all complaints made under the existing approved schemes (i.e. the FOS and the CIO) have been resolved. See ASIC’s media release.
ASX releases Compliance Update for May 2018. On 20 June 2018, ASX released its Compliance Update for May 2018. This Update finalised the “go-live date” for the new functionalities to ASX Online. From 16 July 2018, listed entities will be able to indicate whether an announcement lodged for release to the market is market-sensitive or materially relates to or affects another listed entity such that it should be cross-released against that other entity. The Update also provides the presentation slides for ASX’s roadshow earlier this month regarding its proposed changes to the Corporate Governance Principles and Recommendations.
Government announces Black Economy Advisory Board. On 22 June 2018, the Government announced that it would establish a new Advisory Board to support its agenda to tackle the black economy. This refers to persons operating outside the tax and regulatory system as well as those who are known to the authorities but do not correctly report their tax obligations. Examples of black economy practices include the understatement of takings, the payment and acceptance of cash wages “off the books” and welfare fraud. The Advisory Board will provide advice on trends and risks in the black economy and advise the Treasury on its agenda to reform the ABN system and restrict government procurement to businesses with acceptable tax records. The Advisory Board will also contribute to a Government report every five years about the emerging risks in the black economy. This is yet another example of the Government’s efforts to protect communities by driving honest and ethical business practices through its initiatives. See the media release from the Minister for Revenue and Financial Services, the Hon Kelly O’Dwyer, here.
THE WEEK AHEAD
Row over trade intensifies between the US and its partners. US President Donald Trump’s steep duties on steel and aluminium imposed earlier this month have been met with a raft of retaliatory tariffs over the past few weeks with (i) Mexico putting tariffs on US$3 billion worth of US goods two weeks ago; (ii) the EU launching counter measures affecting €2.8 billion worth of US goods last Friday; and (iii) Canada announcing tariffs on US$12.5 billion worth of US goods from 1 July. China also seems undeterred by President Trump’s threat of extending duties to a further US$200 billion worth of Chinese goods, fuelling fears of a full-blown global trade war.
JMEI application window for 2018-2019 closes this Friday. Applications to participate in the Junior Minerals Exploration Incentive (JMEI) for the 2018-2019 income must be made by 30 June 2018.
Productivity Commission Report into GST. Following a big victory for the Turnbull Government with the passage of its proposed $144 billion personal income tax cut package, tax reform is set to remain on the agenda this week with the release of the Productivity Commission’s report into the distribution of the GST. With Western Australia’s take of GST receipts increasing in 2018-19 to 47%, it will be interesting to see whether the Government risks the wrath of beneficiary states to implement a floor (tipped to be around 80%). One thing that seems certain is that tax reform will be front and centre of the forthcoming Federal election campaign.