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.
A short week again this week due to the Queens Birthday holiday.
In this edition, we consider the release of ASIC’s draft Cost Recovery Implementation Statement for 2021-22, the ACNC Charity Report and legal proceedings commenced by the ACCC against Airbnb.
In Over the Horizon, we consider the significance of Australia’s Deputy Prime Minister meeting with China’s Defence Minister over the weekend and developments in the cryptocurrency markets.
GOVERNANCE & REGULATION
ASIC releases draft Cost Recovery Implementation Statement for 2021-22. ASIC’s budget is set by the Australian Government and each year ASIC is required to detail, in the form of a draft Cost Recovery Implementation Statement (CRIS), an explanation of the cost recovery model, a forecast of ASIC’s regulatory costs, its focus areas in each regulated subsector and estimates of the levies they will pay, the actual costs incurred by ASIC in the previous year, and a risk assessment of the industry funding model. ASIC released its CRIS for 2021-22 last week setting out its estimated regulatory costs and how it proposes to recover those costs as levies under the industry funding model, however the final industry levies will be based on ASIC’s actual regulatory costs and the business metrics submitted by entities in each sub-sector. The final levies will be published at the end of this year and invoiced between January and March 2023. ASIC welcomes feedback on the draft CRIS until 28 June 2022. See media release.
ACNC Report shows a major rise in total sector revenue and expenses. The latest Australian Charities Report illustrates the major contribution of Australian charities to the Australian economy and to thousands of communities. The charity sector displayed resilience, experiencing growth even during the COVID-19 pandemic, employing more than 10% of Australia’s workforce in 2020, receiving $12.7B in donations and expenses mounting to $10.2B. The devastating bushfires experienced in many parts of Australia were a key area for charitable donations and support, and the JobKeeper payments helped around 331,000 individuals working for charities between April and September 2020 to stay afloat. Many charities experienced disruption and were forced to cease, reduce or change operations for varying periods of time during 2020, which accounts for a large part of the increase in expenses. See Australian Charities Report.
ACCC commences legal proceedings against Airbnb. The ACCC has commenced proceedings against Airbnb in the Federal Court of Australia alleging that the accommodation website misled thousands of customers between January 2018 and August 2021 into believing accommodation prices were in Australian dollars, when in fact they were in US dollars. The statement filed with the Court stated that the prices displayed to users did not disclose they were in US dollars. The ACCC alleges that the misleadingly low prices conveyed made booking with Airbnb seem more attractive than booking with competing accommodation platforms and deprived consumers of the opportunity to make an informed choice. See media release and Concise Statement filed in the Federal Court.
OVER THE HORIZON
Are steps being made towards the repair of Australia’s relationship with China? Over the weekend, Deputy Prime Minister Richard Marles met with China’s Defence Minister, Wei Fenghe in Singapore and engaged in an hour-long ‘frank discussion’. The meeting marked the highest level in-person communication between Australia and China in almost three years. Chinese officials have repeatedly stated that Canberra must display a “better mood” as a prerequisite to communication restarting. Marles said the meeting with Wei was a critical first step, but that Australian officials will be viewing the relationship and its historical complexities in a ‘sober and deliberate manner’. Repairing the relationship represents a significant challenge for the new Government, as it attempts to balance Australia’s economic interests with the Chinese Government’s increased assertiveness in the region.
Cryptocurrencies: beginning of the end or just the end of the beginning? Bitcoin and a swathe of other leading crypto currencies have collapsed by more than 50% in the current calendar year, undermining their touted benefit as a hedge against inflation. The plunge has occurred despite the number of use cases for the underlying blockchain technology continuing to grow. As an example, we are now seeing blockchain technology brought to bear on one of the most pressing challenges of the day: climate change. The technology can be used in the energy sector to provide de-centralised energy trading, smart metering and billing and enhanced grid management, utilising the Ethereum platform. When coupled with artificial intelligence-based prediction, this could reduce energy wastage. Read more in our recent article. Perhaps we are not witnessing the end of cryptocurrencies, as some have suggested, but the beginning of a new era of innovation in which the focus is more on the end use of the underlying blockchain technology than speculation over the value of tokens, the combined market capitalisation of which has shrunk from over US$3 trillion at its peak to a little under US$1 trillion at the time of writing.