Welcome to Edition 90 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.
YOUR KEY BOARDROOM BRIEF
More steps to address black economy issues. Last week, the Government released a consultation paper on strengthening the enforcement regime for black economy activities as well as draft guidelines for increasing the integrity of government procurement. Examples of black economy practices include understating takings, paying and accepting cash wages “off the books” and welfare fraud. Both steps form part of the Government’s response to the Black Economy Taskforce Final Report. The consultation paper envisages a more targeted, stronger and more visible enforcement strategy to reduce black economy behaviours, with enhancements to prosecution processes and tailored black economy offences. The draft guidelines envisage that, from 1 July 2019, businesses seeking to tender for Commonwealth Government procurement contracts over $4 million (inclusive of GST) must provide a statement from the ATO to show they have a satisfactory tax record. These steps are yet another example of the Government’s efforts to protect communities by driving honest and ethical business practices through its initiatives. Submissions can be made until 21 December 2018.
ACCC approves Santos deal. Last week, the Australian Competition and Consumer Commission (ACCC) cleared the sale of WA’s Quadrant Energy to Adelaide-based Santos. On completion of the transaction, Santos will become a major player in the WA gas market.
ASIC issues fines for breaches of market integrity rules. Last week, ASIC fined both UBS Securities and State One Stockbroking for unrelated failures to comply with ASIC’s Market Integrity Rules. The fines underline ASIC’s continuing efforts this year to bolster its enforcement activity.
Brexit deal pushes out Britain - Australia free trade agreement. Yesterday, EU member states signed the Brexit treaty which could see Australia waiting longer for a free-trade agreement (FTA) with Britain. The final deal – which now has to go through the painful process of ratification - keeps Britain in a customs union with the EU after Brexit day, 29 March 2019, until the two sides hammer out a longer-term FTA - expected to take around two years. Meanwhile, Britain cannot sign any other FTAs with other countries. Whilst Australia might be near the front of the queue for an FTA with Britain, the inability of British trade officials to progress negotiations while the Brexit uncertainties prevail is bad news for Australian exporters and investors, and Directors with businesses exposed to the British economy and British trade need to be especially wary.
THE WEEK AHEAD
Whistleblower Update. Following significant delay in consideration of the Treasury Laws Amendment (Enhancing Whistleblowers Protections) Bill 2017, the Senate has now tabled it for discussion this Thursday. Whilst the timing is tight, it is possible the Bill could become effective before Parliament closes for the summer break. The reforms are intended to standardise and bolster cross-sectoral protections available to whistleblowers.