text:
March 10, 2008
Money: Apr 05, AU Edition
They've done it again, says Peter Higgins: banks have figured out a new set of tricks to turn your plastic into their gold
You've just finished paying off the overseas holiday and the Christmas presents but the credit card bills don't quite add up. Why? The answer is simple, but the rationale is complex. The burgeoning credit card debt that we Australians are accumulating is due not just to interest rates but also to fees.
You see, the banks have divided us into two groups of credit card users. If you are the sort that pays off your credit card in stages – possibly even just paying the minimum amount each month – then you have been the bank's friend for a long time. After all, you've been using your credit card as one of the most expensive forms of bank loan allowed by law.
On the other hand, there are those of us who pay off our credit cards in full each month and, until recently, we have evaded the clutches of our "service provider". Up until recently using a credit card this way has been smart because it effectively used someone else's money for cash flow while avoiding compound interest rates of 18.5% or more.
It did not take our financial institutions and credit providers long to work all this out, and now there are a number of new fees that are designed to catch we 'cash flow card' users. A good way to illustrate this is to recount a real-life story that occurred to someone I know who went on holiday over Christmas.
Mr J's BIG NEW PURCHASE
Mr J had not purchased a 'good' camera for around twenty years and decided that he wanted one to suit his needs for the next twenty. He researched many cameras and eventually decided on a state-of-the-art modern digital camera. Mr J spent three months doing his homework – not just on the technology, but also on prices. On an overseas trip in Japan he haggled, negotiated, and did lots of walking. Indeed, he spent almost a full day figuring out where to buy a camera for the best price. Finally, after all this time and effort he purchased his dream camera. Mr J was pleased with all this effort because, at the end of the day, he calculated that he saved about $500.
But he paid for his purchase using a credit card, and his decision on which card to use was based on loyalty: loyalty to his bank, NAB, which he has been with for many years. Feeling pleased with himself he goes off and takes many memorable photographs with his new toy.
Yet a few weeks later when he receives his statement, he sees that the camera cost him almost $500 more than he expected. There is nothing on the statement to explain this – not even an exchange rate listed. Not even the original amount in local currency is stated, just the Australian dollar equivalent. He quickly emails his bank asking, "Why is this so?" The answer comes in a fashion that is becoming increasingly more common these days, a mixture of bureaucracy and arrogance mingled with a tincture of attitude that says,"This would be a great job if it weren't for the customers".
The bank's response is that Mr J should have read his 52-page booklet of terms and conditions. If he had, he would have known that the bank chooses when to exchange currencies, and therefore what
exchange rate is used. And of course there is that fee of 1.5% (soon to rise to 2.5%) on the full Australian dollar equivalent.
Mr J sends more emails asking what all this means in normal language and could he have a breakdown of the figures that relate to his specific case. At time of writing, these exchanges have been continuing for over three months and he still does not have his answer. He does have more quotes from the corporate complaint manual about 'escalating this to the next level', but no real answers.
There are three lessons in Mr J's story for all of us. The first is: Don't choose a credit card on loyalty: it is misguided and not reciprocated. Choose a card that has the lowest fees, or no fees, and ask them before you go overseas when they will exchange currencies.
Secondly, force yourself to read the voluminous pages of legal gobbledygook that are sent to you. Whilst they may not make
immediate sense, these documents are what your financial institution uses to make all their decisions, and these decisions are not always in your best interests.
Finally, if you do have a legitimate complaint, do not expect a response that places customer service as the motivating drive of your credit provider. In fact, you will need to be persistent and have a hide as thick as a Credit Card Terms and Conditions Manual.
When I look at Mr J's story, it seems to me that fees for international transactions come awfully close to double or even triple dipping. There is a fee for the privilege of using their credit card and buying something with it. On top of that, the credit provider chooses the most advantageous rate of exchange for them. Then, finally, they charge interest on everything.
So are financial institutions punishing loyalty? Have the financial institutions that we have stuck with and stood by for years traded customer service for profits? It's an old chestnut I know, but it seems more relevant to ask the question now than ever before. Let's look at a list of fees that are being charged by some financial institutions:
* Annual card fee from $25 to $99 per year.
* Late payment fee from $10 to $35 per month, and in some case per fortnight as well as interest repayments.
* International transaction fees – 1.5% (most banks will soon raise this to 2.5%) of the purchase amount.
* Cash advance fees by some banks including Westpac and ANZ 1.5% of amount of cash advance.
* Annual reward scheme fee - $15 up to $69 per year.
* Exceeding your credit limit - $4 to $25.
* Issuing a secondary card - $4 to $40.
* Refusal of periodical payment - $4 to $10.
* Replacing a lost card - $4 to $30.
* Duplicate statements – $4 to $10.
All in all, you could be up for hundreds or even thousands of dollars in fees each year if you don't manage your credit card correctly.
We are all in the hands of credit providers but credit card usage can still be a smart way to buy goods and services. The playing field has changed dramatically over the past twelve months – and it is still changing – but as long as you know the rules you can still benefit financially. When you finish reading this magazine do an audit on your current credit card situation. How many do you have? What types? What financial institutions are providing you with credit cards? What rates are you being charged? What fees? Do you have an interest-free period? When you have completed your audit do some research on the Web. It should take no longer than thirty minutes. What available cards are better than yours? Which ones have the best rates or no fees? After your audit and research cut up your existing cards and send them back to your credit provider. If nothing else, it will empower you and make you feel great. Apply for no more than three credit cards from the providers that you have researched. Within three months, you will be in a better position than you are now. Remember that you are in control of your finances; our financial institutions are not in control of what we do. You will not only be better off financially if you regain or improve your control, but you will also feel empowered and revitalised. Go for it, you have nothing to lose except your Terms and Conditions Manuals. See you around the traps.
1. If you want to avoid paying interest on your credit purchases you must pay the full outstanding balance on your statement by the due date. If you don't, you will be charged interest right back to the date of purchase on each item – this means you will forfeit the interest-free period on those purchases. What's worse is that you must pay the balance off in full before you will get another interest-free period on any purchases. And if you don't pay your balance off in full you will be charged interest on your full balance for that month and not what is left after your payment.
2. Say no to cash advances! Why? I am a bit surprised to hear that people still don't realise that interest-free periods do not apply to cash advances. In fact, with the majority of credit providers you pay interest from the time you withdraw the money regardless of when you pay it off.
3. See if you are entitled to relationship partner discounts. If you have multiple accounts at your financial institution they may discount your credit card fees because of your other
accounts. If you have a mortgage and your bank secures all its accounts against your house, why are you still paying an interest rate as if your credit card is an unsecured high-risk loan for the bank? It is worth the ask.
4. Don't be conned by marketing tricks. These are developed to appeal to your emotions. Reduced introductory interest rates and reward programs may not suit your financial situation or your spending pattens. Decide on a card based on logic and understand you purchase behaviours.
5. Know what you want.
6. Do you really want a reward program? These may seem attractive, but most institutions charge a hefty fee to be a member of their reward program. Have you also noticed that you now need more points to claim the same reward compared to a few years ago. In many cases you have to spend more to accumulate the same number of points compared to a few years ago. In most circumstances people are better off using a credit card with a low rate and little or no fees rather than joining a 'loyalty' program that sometimes costs more than it rewards.
7. Always pay off more than the minimum. Many credit providers are only asking for payments of 1.5% per month, which can be a trap because it is likely that you will take 2 years or more to pay off your purchase and accumulated interest bill.
8. Consolidate debt. If you owe large amounts on many cards it is in your best interest to consolidate debt and put all outstanding monies onto one loan, preferably a personal loan rather than a credit card, because the rates will be almost half that of most credit cards.
Posted by InvestigateDesign at 10:48 PM | Comments (0)
FINANCE: Dec 05, AU Edition
New breeds of community banks are getting customers out of queues and into high interest, says Todd Parker
Australians love to hate their banks. It's a constant staple of talk-back radio; one of the most popular Aussie films of all time was a ludicrous piece of work about a bank that drives small businesses under and (it is implied) kills their children for sport; and who hasn't seen a battered ute with a kelpie cross in the back and a bumper sticker reading, "Which bank? They're all bastards!"
Of course, one of the golden rules of capitalism is that when the big guys aren't able to get it done any more, smaller and more nimble competitors, using new technology, are able to step into the service gap, win over new customers, and make the old establishment institutions take notice. That sort of revolution is quietly taking place in Australia's banking sector, where a new breed of entrepreneur is taking advantage of the widespread dissatisfaction created when the Australia's big four banks closed local branches – in some cases leaving whole suburbs and towns without a physical branch office. One new banking network has, in partnership with local communities, set up over a hundred "community banks" across the country, and as part of that has pledged to plow money and profits back into local areas – something that the big banks, with their eyes on maximizing yield for shareholders, pay lip service to in principle but in practice are loathe to do.
But in the Internet age, there is no reason why one even needs to go into a physical branch to do one's banking. Australia is more advanced than many other countries when it comes to electronic payments, and on-line banks are able to compete on both fees and interest rates by avoiding the expense of brick-and-mortar operations all together. One bank that is making great strides in this area is Community First Credit Union, which is powering a new online financial services operation called Easy Street Financial Services (http://www.easystreet.com.au). Based in Sydney, Easy Street has over $500 million in assets and some 57,000 members – and because it doesn't need to pay dividends to shareholders, that means that it can offer higher rates of interest and better service.
The company's EasySavings plan, for example, offers a 5.65% interest rate, 24/7 internet banking, and (unlike the big guys) no fixed terms, minimum deposit, or bank fees. In fact, the EasySavings account has been awarded "Best paying E-account" by Money magazine three years in a row.
Account holders can also take out personal loans up to $35,000 simply by applying online, with no application fee or early repayment penalties and convenient redraw facilities.
And for those looking to invest long term, or just have a little flutter on the share market, their EasyBroking service provides flat-fee $26 trades on the ASX and a full suite of on-line trading tools. So far, Easy Street's business model seems to be working. Unlike big banks that have to entice customers with "bonus interest" schemes and other incentives to stay with them, Easy Street "feels loyalty is built by providing our customers with consistently good returns on their at call savings.
"What consumers will need to be aware of with a bonus interest offer is that at the conclusion, they could end up with an interest rate that is below what's on offer in the marketplace", says spokesperson Kerry McMorrow.
"We have found our funds to be sticky and enjoy a retention rate of approximately 95%".
Posted by InvestigateDesign at 10:17 PM | Comments (0)
Money, Dec 05, AU Edition
Who's getting rich off high gas prices? Hint: think ballot boxes, not bowsers
Let me take you back in time, to a land that existed long, long, ago. A time when life was vastly different, an era when we were more mobile, a time when petrol was around 85 cents a litre. I am, of course, talking about January 2005. They say that a year is an eternity in politics. Well, the same can be said for petrol prices. I recently heard an explanation from an "industry expert" about how the price of petrol is determined each day, indeed, each hour. It makes subjects like the structure of DNA and thermonuclear physics seem like kindergarten stuff.
Not surprisingly, the only person to lose out in all of this is the motorist. In my honestly held opinion, there are snouts in proverbial troughs everywhere when it comes to making a quid out of petrol. It is also a fact of life that we all depend on our cars for almost everything. Maybe, just maybe, cutting back on petrol, and not using the ol' chariot as much as we used to, is not such a bad thing. Do we really need to drive to the local shops when they are only a 5 minute walk anyway? Dropping children off at school can be a bit like a demolition derby, but with more emotion… so walking to school is maybe not such a bad thing.
In July 1969, when man landed on the moon, the number one hit was a cheerful little number called, "In the Year 2525", by Zager and Evans. Some of the lyrics of this song include, "Your arms are hanging limp at your sides. Your legs got nothing to do. Some machine, doing that for you". Perhaps they were predicting the way we would be going if we didn't stop using our cars for the most mundane tasks. Call me an eternal optimist but there has to be an upside in this whole price of petrol predicament. Conversely, maybe the more haunting lyrics from Messieurs Zager and Evans are, "I'm kinda wondering if man's gonna be alive. He's taken everything this old earth can give. And he ain't put back nothing..." So let's have a look how we can drive through to the other side of this petrol pricing tunnel: there is a light but we just need to look for it. And, no, it is not a train heading toward us.
Who gets what?
Let's look at a litre of standard unleaded petrol – say it costs $1.20 per litre. Where does your hard-earned go? Well, the refiner gets about 60 cents (this is called the "Terminal Gate Price"), and the government gets their bit (in fact its a large bite; around 41 cents goes to consolidated revenue, but only the government could get away with having a tax on top of a tax, because we have to pay GST on top of all these figures, so that makes another 11cents). Are you starting to see a bit of a trend here? We are paying $1.20 and approximately 52 cents of it is going to…drum roll…the government! The wholesaler gets about 5 cents out of all of this and by the time the poor ol' servo gets a cut they only wind up with about 3 cents a litre.
You don't have to be a mathematical genius to see that there is a 100% mark up on the refinery price, so the next time you are muttering under your breath about the petrol station owner, remember that the actual outlet itself is not getting that much from the petrol. (This is why they're always flogging Mars Bars and chewing gum and groceries and magazines). They make more money on a few chocolate bars than they do on your petrol.
Let's make these numbers dance a bit so that they are more meaningful: if we assume that the average car has about a 60 litre tank then a full tank would cost $72. The government gets $31, the refinery $36 and the servo gets $2. If you fill up once a week, that means that over the course of a year you are paying around $3,800 in total for petrol – including $1,650 extra in tax. Can you take that off your next income tax return? I don't think so… and once again the total that the petrol station retailer gets for your patronage is about $100.
Hopefully it is now a bit clearer about where the money goes but we still haven't looked at how the Terminal Gate Price is determined. Why have we seen such a big increase in the last 12 months and especially the last 3-4 months? This is where it is a real minefield and requires some unravelling of the facts.
How do they decide on a price?
The key point is that Australian refineries compete with Asia for petroleum products. Both oil and finished products (such as petrol and diesel) can be purchased at competitive prices from a number of locations in the region. Prices of fuel types such as diesel or petrol in this regional market are driven by supply and demand of each individual fuel type, resulting in fluctuations of the prices relative to each other. Australian refineries not only compete with imports of finished product in Australia but also export product to the regional market.
The Terminal Gate Price includes the import parity price plus tax (again), and a very small margin which covers some administration and marketing costs. It appears we are getting closer to the crux of all of this. We know what the terminal gate price is but what is the import parity price?
The import parity price is essentially the cost of importing, including freight and wharfage, finished product (as opposed to crude oil) to Australia. The import parity price is not regulated but instead determined by market forces. It now appears that the base price of the petrol we buy is directly linked to the importation of product. But in what way?
An international pricing benchmark is required for efficient operation of the petroleum products market in Australia and Asia. Singapore is a major refining centre and prices there are the best available reflection of prices in our region. For this reason, the Australian market uses Singapore prices as a benchmark, with actual prices negotiated relative to this benchmark. Changes in Singapore petrol prices or exchange rates typically take one to two weeks to flow through into either increases or decreases in pump prices. These changes are often masked by weekly cycles in pump prices in major capital cities.
What a revelation! It appears that the refineries pay for their imported product based on a calculation using the Singapore petrol price. This in turn is directly linked to the fluctuating cost of a barrel of crude. This changes daily and is determined by international supply and demand forces in the Middle East and the USA. This is globalisation in action. The next time you are in a country town like Wheelyabarraback or somewhere near the Black Stump, then realise that the petrol you are putting into your car is costing you what it costs because of what is happening in Singapore and Arabia… and don't forget the government taxes!
But why do they all go up at once?
A common question is that all petrol stations seem to put up their prices at the same time. This, in fact, is not collusion but rather the result of marketing forces. You see what happens is, as we have just discovered the price that refiners pay for their product is determined by international supply and demand, and what the Singapore price is…but there is still a lot of room to move for thee refineries. There is a time lag between when prices are agreed and when they are paid. There are also corporate marketing strategies that result in temporarily decreasing the margin for the oil company. In other words, instead of a refinery making a 20% margin on their terminal gate price they make a 10% margin but they sell a larger volume.
Now this is why we see petrol cheaper on certain days, usually Tuesdays and Wednesdays. It is marketing ploy to make us buy then rather than wait. And if one company moves in price the rest will follow to remain competitive. After a couple of days of not maximising profits (remember, they are still making a profit but it is just lower) then there is financial pressure on the oil companies to increase their prices again, hence higher prices toward the weekends. I suppose it is basic commerce really: there are two groups of factors which lead to higher petrol prices – higher costs, and different competitive environments. (And of course, taxes.)
So what do we do?
The aim, of course, is to minimise your petrol bill, and you can do this with push and pull strategies.
1. Firstly, think carefully each time you use the car. Do you really need to fire up the beast to go two blocks to pickup some milk?
2. Do you really need that milk in the first place or can it wait?
3. Can you use public transport? At least on a bus or a train you can relax, maybe read or do some work, and save money.
4. Cadge a ride with someone else. Car pooling works well overseas.
5. Think … and act about your driving style. Drag-track starts might get you away from the lights quicker but you just get to next set of lights before everyone else, and it costs a bundle in petrol. Also there is no need to rev a car's engine when you first turn on the ignition, unless you have a car built before 1960.
6. Plan when you buy your petrol. If you hear on the news that crude oil prices are going up then that means every part of Australia will be affected. Try and beat the oil companies to a price rise.
7. Watch for pricing cycles. If petrol is usually cheaper on Tuesday, well, buy on Tuesday.
8. Use coupons from supermarkets and other retailers to get a reduction in the pump price. Remember the old truism; look after the pennies and the pounds will look after themselves.
In case all of this fails…buy a horse. This used to work before, they are cheap to buy, and upkeep is more efficient than a car. Unfortunately, the price of cereal and hay is going up. Why? Because of petrol costs. Oh well, maybe it is better to just stay at home: at least we can't be taxed there…unless we do something.
Posted by InvestigateDesign at 06:16 PM | Comments (0)
Money: Mar 05, AU Edition
Owner or renter, boss or wage slave, the coming interest rate hike
Australians are famous for their love their credit and, according to the latest government fig-ures, currently hold a record $28.2 billion debt on their charge and credit cards alone. So it's no wonder that the mere mention of a rise in interest ratesis about as welcome in many quarters as, say, discoursing on the potential for shark attacks is on Bondi Beach.
Yet all signs point to the Reserve Bank of Australia lifting interest rates sometime this year, and possibly within the next six months, with the economy continuing to grow and the consumer price index edging ever closer to the government's outer-tolerance limit of three per cent per year. And when the rise comes, it's not likely to be that temporary a situation, either: economic forecaster BIS Shrapnel's senior economist, Matthew Hassan, has warned that an increasingly tight job market will push wages up over the next two years, leading to higher prices and, ultimately, interest rates that are "expected to peak at around 8 per cent in late 2006".
But there's no need to cue the Jaws theme just yet. Even if the cost of money – which is, in essence, what interest rates represent – is poised to poke skywards like the dorsal fin of a circling great white, there is no need to panic. For when it comes to both hungry sharks and rising rates, experts agree that a lot of panicky shrieking and splashing about will only make things worse.
Homeowners (who represent about seven out of every ten Australians) are obviously going to be the first to feel the pinch, and should make sure their home financing is structured properly: "We suggest that people have one-third of their mortgage on a honeymoon rate, with another third being fixed for five years and the last third being fixed for ten," advises Christine Davie, a certified financial planner with Melbourne-based Donohue Financial Planning. According to her, this is the best way to hedge one's bets as interest rates rise and fall over the period of the loan. "The banks have been giving away money as fast as they can for the last several years, and people who are highly-geared should think about this."
Davie adds that when it comes to interest rates, it's not smart to go crazy trying to find the lowest rate – "it's actually very hard to find the bottom of the market," she says – but that does not mean mortgage holders shouldn't try and at least do a deal with their individual bank. After all, notes Davie, everything's negotiable: "It's often worth asking your bank if that's the best they can do. But just because the sign in the front window says '6 per cent' doesn't mean they won't come down if you ask, or even threaten to take your business elsewhere."
Meanwhile, for those Australians who don't own their homes yet, but are looking to join the ranks of first-time homeowners, this is a critical time – one in which careful planning can pay off big.
The first thing to remember is, bide your time. In fact, with interest rates heading north, there is "no rush to get into the housing market right away," says Damian Cullen, Managing Director of Cullen Financial Planning in Sydney. Instead, put your money someplace smart: "When you're looking to buy within a twelve to twenty-four month timeframe, really the only place to be is in cash or fixed-interest investments," cautions Cullen, who adds that when it comes to that crucial down-payment nest egg, "don't even think of going near the share market". The second thing to keep in mind (especially for young buyers) is that circumstances change. For example, says Christine Davie, just because a couple consists of two high-earning professionals today does not mean both parties will still be bringing home fat pay packets of five years ago. And the number one reason for this is kids.
"People get married and buy a house and never think about what might happen if they only had one salary coming in, or if one of them decided to take time off to care for a child" she says. Thus couples often wind up either putting off having children, or find themselves in tough circumstances when kids do arrive with a lot of hard choices to make. Davie adds that even if both mum and dad keep working, children are expensive, and childcare can eat up an awful lot of that second income. The old days of buying more home than one could afford may still make economic sense (though it's an old financial planning chestnut born in the days when one-income families were the norm, not the exception), but it can seriously interfere with one's work-life balance.
For both owners and renters then, rising interest rates can ultimately mean – either for direct or indirect reasons – less money in the kitty at the end of the week. Smart planning now, says Davie, can avoid a lot of pain later: "If you have personal debt and loans and credit cards, this is the time to consolidate things," she says. "And maybe, if you find that you keep getting into trouble, you should even think about cutting up the credit cards".
Meanwhile, companies as well as individuals are poised to feel the effect of an interest rate rise, according to George Etrelezis, Managing Director of Western Australia's Small Business Development Corporation, and business owners will feel it in a variety of ways.
"First of all, there is the straight bottom-line effect that interest rates have on the cost of borrowing, whether for purchasing equipment or obtaining working capital, and interest rates also factor in to leasing costs and replacement costs," says Etrelezis, who adds that "there's certainly an effect that rates have on the dollar coming in the door of a business. And as consumer sentiment dips as they have less money to spend, this means that various industries like the building trades will suffer as people decide to, say, put off building an extension to their home".But there are other and more pernicious ways in which businesses may feel the pinch as well, and this is where Australian entrepreneurs need to keep a close eye out in coming months. Unless their business is a bank, they need to make sure their customers don't treat them like one.
"Debtors will quickly start to become an issue for businesses," says Etrelezis, "and there will be more and more of them who will try and extend their terms of credit. And it makes sense: with the cost of money going up from the banks, they will try and get cash somewhere else," even if it means stepping on your goodwill.
As a result, the mantra that (especially for small businesses) "cash flow is king" becomes ever more important. Etrelezis says all business owners must start to think like the big boys, who are very strict about their payment terms and are not afraid to enforce them. "Be disciplined, and if someone goes too far beyond their 30 days, don't be afraid to turn away their business. Remember: you can't afford to let a regular customer slide for 60 or 90 or 120 days, and if they go down they will take that cash flow down with them".
Finally, as tempting as it is to focus solely on interest rates at home, smart planning means keeping an eye on what's happening beyond Australia's shores as well. According to Geoff O'Neill, Managing Director and CEO of Advantage One, a financial planning and investment counseling firm which caters to high net worth clients in Adelaide, interest rates in the United States are about to make a move as well – something to bear in mind when making investment decisions.
"If you look at the U.S., their rates are at a historic low, while their economy is moving into a period with improved economic fundamentals. And as their economy expands, we'll start to see American interest rates edge up to keep a lid on growth", says O'Neill, who adds that this will probably knock some value off the Australian dollar. "Our dollar looks strong right now, but that's really a reflection of the weakness of the U.S. Dollar," he points out. "As we see an improving economy in the States leading to an increase in rates, then we can also see the Australian Dollar falling back closer to the .70 mark," something that will affect our balance of trade and the performance of exporting versus importing companies.
While those two sectors will likely balance themselves out on the equity markets, O'Neill cautions that when it comes to the share market in general, it's time for investors to get realistic and says that "this current rate of growth is not sustainable, and we must get more focused on achieving the real rate of return out of equity markets, which should be something like 10 percent or less – and certainly not 18 to 25 per cent."
It can be easy in Australia to get used to living in a place where low interest rates and virtually full employment rule the day, and where the economy regularly weathers storms that lay low the finances of other countries. But while a rise in interest rates might be unpleasant – especially for the unprepared – it's also the sort of medicine that can keep other more unpleasant numbers (like inflation and unemployment) down as well.
Posted by InvestigateDesign at 05:23 PM | Comments (0)
Money: Mar 05, AU Edition
Owner or renter, boss or wage slave, the coming interest rate hike
Australians are famous for their love their credit and, according to the latest government fig-ures, currently hold a record $28.2 billion debt on their charge and credit cards alone. So it's no wonder that the mere mention of a rise in interest ratesis about as welcome in many quarters as, say, discoursing on the potential for shark attacks is on Bondi Beach.
Yet all signs point to the Reserve Bank of Australia lifting interest rates sometime this year, and possibly within the next six months, with the economy continuing to grow and the consumer price index edging ever closer to the government's outer-tolerance limit of three per cent per year. And when the rise comes, it's not likely to be that temporary a situation, either: economic forecaster BIS Shrapnel's senior economist, Matthew Hassan, has warned that an increasingly tight job market will push wages up over the next two years, leading to higher prices and, ultimately, interest rates that are "expected to peak at around 8 per cent in late 2006".
But there's no need to cue the Jaws theme just yet. Even if the cost of money – which is, in essence, what interest rates represent – is poised to poke skywards like the dorsal fin of a circling great white, there is no need to panic. For when it comes to both hungry sharks and rising rates, experts agree that a lot of panicky shrieking and splashing about will only make things worse.
Homeowners (who represent about seven out of every ten Australians) are obviously going to be the first to feel the pinch, and should make sure their home financing is structured properly: "We suggest that people have one-third of their mortgage on a honeymoon rate, with another third being fixed for five years and the last third being fixed for ten," advises Christine Davie, a certified financial planner with Melbourne-based Donohue Financial Planning. According to her, this is the best way to hedge one's bets as interest rates rise and fall over the period of the loan. "The banks have been giving away money as fast as they can for the last several years, and people who are highly-geared should think about this."
Davie adds that when it comes to interest rates, it's not smart to go crazy trying to find the lowest rate – "it's actually very hard to find the bottom of the market," she says – but that does not mean mortgage holders shouldn't try and at least do a deal with their individual bank. After all, notes Davie, everything's negotiable: "It's often worth asking your bank if that's the best they can do. But just because the sign in the front window says '6 per cent' doesn't mean they won't come down if you ask, or even threaten to take your business elsewhere."
Meanwhile, for those Australians who don't own their homes yet, but are looking to join the ranks of first-time homeowners, this is a critical time – one in which careful planning can pay off big.
The first thing to remember is, bide your time. In fact, with interest rates heading north, there is "no rush to get into the housing market right away," says Damian Cullen, Managing Director of Cullen Financial Planning in Sydney. Instead, put your money someplace smart: "When you're looking to buy within a twelve to twenty-four month timeframe, really the only place to be is in cash or fixed-interest investments," cautions Cullen, who adds that when it comes to that crucial down-payment nest egg, "don't even think of going near the share market". The second thing to keep in mind (especially for young buyers) is that circumstances change. For example, says Christine Davie, just because a couple consists of two high-earning professionals today does not mean both parties will still be bringing home fat pay packets of five years ago. And the number one reason for this is kids.
"People get married and buy a house and never think about what might happen if they only had one salary coming in, or if one of them decided to take time off to care for a child" she says. Thus couples often wind up either putting off having children, or find themselves in tough circumstances when kids do arrive with a lot of hard choices to make. Davie adds that even if both mum and dad keep working, children are expensive, and childcare can eat up an awful lot of that second income. The old days of buying more home than one could afford may still make economic sense (though it's an old financial planning chestnut born in the days when one-income families were the norm, not the exception), but it can seriously interfere with one's work-life balance.
For both owners and renters then, rising interest rates can ultimately mean – either for direct or indirect reasons – less money in the kitty at the end of the week. Smart planning now, says Davie, can avoid a lot of pain later: "If you have personal debt and loans and credit cards, this is the time to consolidate things," she says. "And maybe, if you find that you keep getting into trouble, you should even think about cutting up the credit cards".
Meanwhile, companies as well as individuals are poised to feel the effect of an interest rate rise, according to George Etrelezis, Managing Director of Western Australia's Small Business Development Corporation, and business owners will feel it in a variety of ways.
"First of all, there is the straight bottom-line effect that interest rates have on the cost of borrowing, whether for purchasing equipment or obtaining working capital, and interest rates also factor in to leasing costs and replacement costs," says Etrelezis, who adds that "there's certainly an effect that rates have on the dollar coming in the door of a business. And as consumer sentiment dips as they have less money to spend, this means that various industries like the building trades will suffer as people decide to, say, put off building an extension to their home".But there are other and more pernicious ways in which businesses may feel the pinch as well, and this is where Australian entrepreneurs need to keep a close eye out in coming months. Unless their business is a bank, they need to make sure their customers don't treat them like one.
"Debtors will quickly start to become an issue for businesses," says Etrelezis, "and there will be more and more of them who will try and extend their terms of credit. And it makes sense: with the cost of money going up from the banks, they will try and get cash somewhere else," even if it means stepping on your goodwill.
As a result, the mantra that (especially for small businesses) "cash flow is king" becomes ever more important. Etrelezis says all business owners must start to think like the big boys, who are very strict about their payment terms and are not afraid to enforce them. "Be disciplined, and if someone goes too far beyond their 30 days, don't be afraid to turn away their business. Remember: you can't afford to let a regular customer slide for 60 or 90 or 120 days, and if they go down they will take that cash flow down with them".
Finally, as tempting as it is to focus solely on interest rates at home, smart planning means keeping an eye on what's happening beyond Australia's shores as well. According to Geoff O'Neill, Managing Director and CEO of Advantage One, a financial planning and investment counseling firm which caters to high net worth clients in Adelaide, interest rates in the United States are about to make a move as well – something to bear in mind when making investment decisions.
"If you look at the U.S., their rates are at a historic low, while their economy is moving into a period with improved economic fundamentals. And as their economy expands, we'll start to see American interest rates edge up to keep a lid on growth", says O'Neill, who adds that this will probably knock some value off the Australian dollar. "Our dollar looks strong right now, but that's really a reflection of the weakness of the U.S. Dollar," he points out. "As we see an improving economy in the States leading to an increase in rates, then we can also see the Australian Dollar falling back closer to the .70 mark," something that will affect our balance of trade and the performance of exporting versus importing companies.
While those two sectors will likely balance themselves out on the equity markets, O'Neill cautions that when it comes to the share market in general, it's time for investors to get realistic and says that "this current rate of growth is not sustainable, and we must get more focused on achieving the real rate of return out of equity markets, which should be something like 10 percent or less – and certainly not 18 to 25 per cent."
It can be easy in Australia to get used to living in a place where low interest rates and virtually full employment rule the day, and where the economy regularly weathers storms that lay low the finances of other countries. But while a rise in interest rates might be unpleasant – especially for the unprepared – it's also the sort of medicine that can keep other more unpleasant numbers (like inflation and unemployment) down as well.
Posted by InvestigateDesign at 05:23 PM | Comments (0)
Money, Feb 05
Had your email inbox fill up with Nigerian scams lately?
Well, now there's a new scam doing the rounds called 'watch this stock'…
Jim rang his financial adviser to place an order for some shares. He had just received an amazing tip. He had run into his old friend Neville down at the club and found out that he had been making a lot of money on the stock market. This came as a surprise to Jim as he had known Neville for many years and had come to learn that Neville could not be described as the sharpest knife in the drawer. He was one of nature's plodders, a real battler who never seemed to attract good luck. Well, it seemed that good fortune recently took a liking
to Neville.
It started about seven months ago. He received a personalised letter marked private and confidential. The letter introduced a fail safe system of selecting individual shares that were due to increase in value. It did not ask for money, only privacy. The letter was unsigned and Neville had no idea who sent it. It suggested that Neville watch the share price of ABC Ltd as it was about to go up. On the first of the following month a similar letter arrived, again unsigned, suggesting that the share price of DEF Ltd was about to decrease in value. Now Neville was not a fan of the share market, however he did note the prices of the shares highlighted and sure enough ABC Ltd went up in price and DEF Ltd went down. At the start of the next month he received another letter suggesting that GHI Ltd was due to increase in value. Well this had gone on for eight months and each time the information was correct. The anonymous share tipster had grabbed Neville's attention and by the end of the fourth month Neville had opened an account at the local broker.
Neville's problem was that he could never keep a secret and was happy to share his good fortune with anybody prepared to listen. Jim thought that it would be a crime not act on such a sure fire tip and promptly phoned his investment adviser to place an order. He also shared his enthusiasm and source of the information. If someone could get eight tips in a row correct, surely they must have some insider knowledge or superior skill. Jim was tempted to find out more about this mysterious tipster and was seriously thinking about changing permanently to this new adviser.
Jim thought that it was too good to be true and listened patiently while his adviser explained the scam. The scammer would source large mailing lists of like-minded individuals, preferably greater than 20,000 which was typically an industry trade list. The first letter is simply one of introduction, in the second he splits the list in half.
He tells one half that ABC Ltd's share price is going to go up, the other that it is going to go down. The next month he would only write to the half which received the correct information. He would select a different share and advise half of the (reduced) data base that the share would increase in price, the other half that it would decrease.
Typically by the eighth letter he offers to sell them a share trading system for a grossly inflated price and then leaves the area before they discover that it is a scam. Neville's only luck was in being part of the surviving group. A cynical person would suggest that Neville's bad luck streak was continuing as he was likely to pay the $35,000 asking price for the useless software and become the victim yet again.
Jim's adviser always says that punters should always be wary of schemes that appear too good to be true and be especially alert if secrecy is actively encouraged. He went on to explain to Jim that although scams were important, he should be aware that larger issues were requiring attention. He suggested that personal debt levels for New Zealanders could be the next warning sign that investors need to take heed of.
A study undertaken by the Ministry of Social Development in 2004 titled "When Debt Becomes a Problem" suggests that one in six New Zealand households have negative net worth. It goes on to suggest that 17% of the population believed they could not obtain $1,500 in an emergency (51% for those on income-tested benefits) and 36% could not obtain $5,000 (76% for beneficiaries). This includes sourcing it from credit cards and extended family. The study indicates that the above figures are about average for the rest of the western world.
If one in six households are experiencing trouble meeting their debt obligations, then punters have to question if the recent increase in house prices is sustainable. The average income for most New Zealanders is still between $40 and $50 thousand per year. Where the average debt level for an Aucklander is in excess of $73,000. In the USA the figures are similar. In Denver, Colorado mortgage foreclosures are up 30% on the previous year. Experts indicate that risky loan strategies such as no-money-down loans and a year of low housing appreciation contributed to the rise.
Parents have an obligation to teach their children that the first step to financial security and independence is to spend less than they earn. It is common for the financially unskilled to cross this line during the festive season at Christmas. Recent reports from the USA show that January is peak season for those registering with financial counsellors. Courses supported by churches have attracted unprecedented demand.
Those in debt have turned to religion for support. In New Zealand, Citizens Advice Bureau is filling that gap. They cover a wide range of legal, personal, housing and vehicle topics, however they are more commonly known for their budgeting skills.
When it came to selecting share market winners, Jim wanted to believe that some one else had an inside edge and was disappointed to hear that Neville's secret adviser was just another scam artist. For Jim and his faithful companion Moira, the figures about those in financial hardship came as a surprise. They had learnt sound financial practices from their parents and were excellent students. They did everything within their power to pass these skills onto their children. They were unaware that almost 20% of the population were close to, or suffering, financial hardship. People should be in a position of telling their money where to go, rather than spend time wondering where it got to.
Posted by InvestigateDesign at 04:17 PM | Comments (0)
MONEY: Mar 05
Can a market keep growing? Peter Hensley reckons commentators aren't factoring in the looming retirement of the baby-boomers
The past five years has witnessed the US authorities conduct a huge economic experiment. In an effort to avoid an economic calamity they have reduced interest rates to a point where they have virtually been giving money away to institutions. That is, banks could borrow funds at 1% interest (from the Federal Reserve) and lend it out to punters for mortgages at 4 and 5%. President Bush and the US Government instituted massive tax rebates whilst at the same time encouraging punters to borrow against the value of their houses (with home mortgage interest being tax deductible in the US). These factors combined ensured that the buying public had enough liquid cash to keep the economy running at full steam.
The side effect of this massive experiment of providing oceans of liquidity has meant that the country (USA) and its buying public have gone further and deeper into debt than ever before. The US budget deficit (difference between income tax and government spending) is the biggest ever recorded. Consumer spending has also created the largest trade deficit ever seen. In the short term the experiment has worked. The stock market has not crashed, people have felt wealthier and the enthusiasm (fuelled by the debt drug) has spilled over into real estate with people holding the mistaken belief that property never decreases in value.
The US Government and the American consumer have been spending beyond their means. Foreign Governments have been buying US Treasuries (ie loaning the US Government money) in an effort to keep them afloat. The saying goes, if a person owes the bank $10,000 and cannot pay it back, the person has a problem. However if a person owes the bank $10,000,000, and cannot pay it back, the bank has a problem. Foreign Governments and institutional economists are watching the situation closely. Generally, if a country's deficit stretched over 5% of their GDP (Gross Domestic Product), their currency was devalued and their government debt (bonds) was placed into junk bond status. The US deficit is projected to reach 7% of GDP this year and foreign Governments are still queuing up to lend them money. We live in interesting times.
It is obvious now that the US authorities have another problem. They have successfully avoided a stock market crash, but have created a debt bubble that now presents its own problems.
Too much money in an economy typically translates into inflation. The US now has an excess of money in its system with its money supply (ie dollar bills on issue) effectively more than doubling in the last decade. To compound their problem, the 77 million baby boomers have not started saving for their retirement, expecting to either sell their shares or property (or both) to fund their later years. It does not take the brains of a rocket scientist to imagine what could happen next. The first baby boomers start to retire in less than 5 years.
The man on the street is either blissfully unaware or doesn't care about his nation's economic problem. He or she is acutely aware of the size of their mortgage payment and has been watching it increase steadily over the past twelve months. Sooner or later they will either make an effort to pay off their mortgage or choose to walk to away from it altogether. Individually, this decision will not impact the community (or nation) however collectively it might be a different story.
The Great American Consumer accounts for over 70% of GDP. If they stop going to the malls or stop paying their mortgage, then all hell is likely to break loose. With the national saving rate close to zero, it is likely that 77 million baby boomers are likely to reduce their spending in an effort to start saving for their pending retirement. A likely scenario is that the average greying American Consumer will alter their spending habits in order to save some ready cash for their pending retirement. They will possibly combine this with reducing their mortgage or debts in general. This change in consumer spending is likely to affect the wider economic landscape in ways they possibly could not imagine. In the words of Rachel Hunter, It won't happen overnight, but it will happen.
Posted by InvestigateDesign at 01:35 PM | Comments (0)
Money, May 05, AU Edition
Most financial advisors are here to help. Here's how to pick the right one
Can you remember the days when financial advice came from a trusted accountant or bank manager? Things were simpler then: cars had bench seats in the front; we went to drive-ins; we ate meat pies and not Macca's; we played sport for fun and not money; sex was safe and rugby was dangerous; and we had a father figure for a Prime Minister.
Well, perhaps not everything has changed.
But it's a different world today, and there's a whole new breed of people out there who want to tell us what to do with our money. Along with accountants and bankers, Australians now have to contend with guidance from such people as financial advisors.
I understand where the cynics are coming from when they say that the burgeoning financial advice industry is a self-made one. But in point of fact, I have spoken to many accountants, and their general consensus is that they are pleased that financial advisors exist.
Accountants say advisors take the heat off and allow them to focus on what to do with customers' profits, rather than trying to make them in the first place. So let's agree on one thing: love them or hate them, financial advisors are here to stay, and we have to learn how to manage them and assimilate them into our financial strategies. We need to better understand who they are, what they can do for us, what they can't do, and what we can do if we are not happy with their service.
The first question has to be, just what exactly is a financial advisor? Greg Tanzer from the Australian Securities and Investments Commission (ASIC) explains that 'financial advisors are qualified, and allowed under the law to give advice on shares, managed investments, superannuation, even insurance: really [any] financial type investments'. ASIC is the federal government authority responsible for the licensing, registration and monitoring of financial advisors. Importantly, ASIC is also responsible for the complaint process and legal ramifications if you, as a customer, believe that you have been inappropriately advised.
What do financial advisors need to do to become licensed? A prospective applicant has to fill in a 58-page licence application form which not only questions his or her qualifications but also delves into their personal financial situation, risk management skills, and knowledge of compliance policies and dispute resolution mechanisms.
ASIC has a register that lists training courses and individual assessment services that have been approved by ASIC authorised assessors as meeting ASIC's training requirements in relation to their Policy Statement No. 146, which governs this sort of thing.
Once a financial advisor is registered, he or she is listed on the ASIC website (www.asic.gov.au) and it is a simple matter of doing a search to ensure that they are correctly qualified.
A requirement of their licence is that every financial advisor must have a 'Financial Service Guide'. This is a document which outlines the range of services that they offer, who they work for, and any associations they might have with financial institutions. You should be aware that almost all financial advisors have some sort of association with a large bank or other financial institution such as a managed fund provider. Is that a conflict? Is it a problem? According to Tanzer, 'It is not providing that you know about it. The issue is that they can still give you advice from these institutions. Many customers actually want advice on the products available from these institutions because they do bank with them.'
Adds Tanzer, 'They also have to tell you about commission arrangement and how they are being paid. They have to tell you up front'.
Financial advisors also have to be a part of some sort of external dispute resolution scheme. These schemes are put in place to save you time and money so that you don't have to go to court. They are neutral, objective, non-associated schemes that go through certain procedures to ensure that disputes are managed fairly, openly, and equitably. One of the most common is the Finance Industry Complaint Service (FICS). All financial advisors have to be part of one of these schemes and you should ask them about this before you sign up with them.
Financial advisors also have their own industry group, the Financial Planning Association. This organisation sets ethical industry standards and has its own complaint resolution procedures.
If after all of this preparation you find yourself in a position where you have some major issues with your financial advisor, then your first step is to contact ASIC. ASIC has powers to take disciplinary action against financial advisors, which could include banning them or initiating criminal proceedings.
ASIC's current acting chairman, Jeremy Cooper, succinctly explains that 'clients seeking advice about how to invest their money to secure their financial futures, like all people, have a right to feel that the guidance and information they are receiving is genuine'.
This organisation is not a paper tiger, either. Just a couple of months ago, a NSW financial advisor was sentenced to an eight-year jail term with a non-parole period of five years after pleading guilty to fifteen counts of misappropriating client funds and three more counts of dishonest conduct. ASIC also took civil action in this matter in 2002 when they obtained an immediate injunction against the financial advisor in question, and later obtained orders from the Supreme Court of NSW to permanently restrain the person in question from providing financial products and financial advice, or dealing with client funds. In 2003, ASIC also permanently banned this particular financial advisor from acting as a representative of a securities dealer or of an investment advisor, and from providing any financial services.
This particular financial advisor had got himself in this position because he defrauded nine clients over a two-and-a-half year period of over $1.7 million. He advised each of his clients to invest their funds into certain investment products or term deposits. They all assumed their money was being placed into legitimate investments. But contrary to his clients' directions, the money was used to meet various business and personal expenses. ASIC has made it clear that stealing clients' money will not be tolerated. Cooper sums it up, stating: 'The prison term imposed … is a reminder to all financial advisors that ASIC will pursue those who defraud the community and abuse their clients' trust, and that they will get caught and punished'.
I should make it very clear that these sorts of proceedings are very rare because disputes are settled before court action is required, and of course, the vast majority of financial advisors are doing the right thing. Like any industry, it is the small handful of individuals that give a bad name to the hard-working ethical majority. You should also be aware that in many cases it is actually the client that is at fault for not fully understanding or investigating what is being offered. As in real estate, the financial planning is very much one of caveat emptor.
We are charging through the 21st century with a sort of millennium madness that is producing many changes. Like any change, some is good and some is not necessary. Regardless of your own personal opinion about financial advisors, they are here to stay. In the most part financial industry professionals see this as a good thing, but what about we that require their advice. For mine, as a prospective client, I see their role as a value added service that should help me manage and maximise my financial situation, but like most things in this life I am responsible for what I do and the decisions I make.
I do not want to be a part of a society full of whingers that is always looking for someone else to blame, or something else to fix self created problems. It is up to me to fully understand and investigate what an individual financial advisor is offering and what regulatory requirements they have met. If I research correctly and ask the right questions, I will be in a better financial position. It may sound a paradox, but if I were to be in the middle of a dispute I would prefer it was the result of something that my advisor had done rather than my inability to be proactive.
Tips for you to use before you hand over your hard-earned to a financial advisor:
* Search the ASIC website to ensure that they are licensed.
* Ask to see their Financial Service Guide.
* Ask what areas in which they are qualified to advise you.
* Question their commission and payment arrangements.
* Understand fully their associations with any financial institution.
* Be fully aware of what services they can offer.
* Ask them to explain, and sight, the external dispute resolution scheme that they are a part of, i.e. FICS. This is important in case you do have a dispute with them.
* Ask if they are a member of the Financial Planning Association.
* If in doubt contact ASIC at www.asic.gov.au or call their hotline number: 1300 300 630.
Posted by InvestigateDesign at 12:30 PM | Comments (0)
Money, Nov 05, AU Edition
…or we'll call ADMA. Everything you need
to do to parry the assault of the telemarketers
Quiz time: You've just arrived home after a busy day and are starting to prepare dinner. You've met the challenges of reading the mail, making sure the food doesn't burn, winding down from work, making sure that others in the house are organised, and changing into something more comfortable. Your about to finally relax when the phone rings. Who is it?
You rang?!
When you answer the phone you are greeted by a detached, shall we say scripted, voice that asks, 'May I speak to so-and-so?', or sometimes simply. 'the householder'.
Now so far you don't know who this person is or what they want, but before you know it they have become quite persistent. Intrigued, you play along, and once your name is established, the voice on the other end of the line is using it in as if they are a long lost friend or relative. In fact, it seems that every second word is now your first name. You are now caught up in a web of what are known as 'presumptive close' questions. Things like, 'You would like to spend more time with you family... wouldn't you?'; 'Would you like to be debt free?'; 'We all want to earn more money, you agree with that don't you?'.
Meanwhile, back at the ranch: your dinner is burning, the water has dried up in the pot, the hot food is getting cold, the cold food is getting hot, your partner is feeling dejected and unloved and you are not sure who's more feral – the kids or the dog. Your attempts to politely get out of the conversation are met by more open-ended questions. Finally you announce, 'I'm not interested!', but this has no effect either… except to bring on more open ended questions.
Almost everyone has been rung by a telemarketing call centre of some sort. Whether it is to sell them banking products, investments schemes, mobile phone accounts, time shares, wine club memberships, or anything else, it is a very common form of direct marketing. Despite the jokes, annoyances, and threats of legislation that surround the practice, outbound telemarketing is an industry that is still growing – especially with the advent of cheap call centres in places like India. Think about this for a minute: an organisation is attempting to establish or build a positive relationship with you, yet they not only intrude uninvited into your private life but they are also sending vast sums of money out of the country for the privilege.
What rights do I have?
You might well ask: 'Can I prevent any of this?'. The answer is, of course you can.
The Australian Direct Marketing Association (ADMA) has developed a Code of Practice in consultation with the Ministerial Council of Consumer Affairs (MCCA), the Australian Competition and Consumer Commission (ACCC), and consumer and business groups.
This Code of Practice focuses on five key principles that underlie any direct marketing activity including of course, call centres. All members of ADMA agree and must adhere to these principles. What are they?
The first is Privacy Protection. An integral part of the Code is the National Privacy Principles (NPPs). The NPPs give consumers some control over their personal information by limiting the amount of information that companies can collect about individuals. In addition, marketers are required to tell consumers who is collecting the information, how the company can be contacted, and the intended use of the personal information – including whether it will be disclosed to third parties. Consumers must be given the opportunity opt-out of future direct marketing approaches and block transfer of their contact details to any other marketer.
There is also a compulsory Do Not Mail/Do Not Call service. Under the Code, use of the ADMA Do Not Mail and Do Not Call Consumer Preference Services are mandatory for all ADMA members. This requires members to purge from marketing campaigns the names and contact details of consumers who have registered with the service. This ensures that individuals that have indicated they do not wish to be approached are not contacted.
There has to be a mandatory 'cooling off' period. When supplying goods or services at a distance, ADMA members must provide a seven-day 'cooling off' period during which a customer is entitled to cancel the contract with the direct marketer. In addition, ADMA members must ensure the customer's right to cancel the contract is specified in any contractual documents.
Additionally, there is an agreement that compliance requirement extension to suppliers and non-members. Members are responsible for the conduct of their agents, subcontractors, and suppliers. This broadens the scope of the Code beyond the membership of ADMA, thus raising standards throughout the direct marketing industry.
And you might find it hard to believe but there are Telemarketing Standards of Practice. Direct marketers who use the telephone must ensure they identify themselves to the person they are calling and state the purpose of the call, among other things.
What happens if they break the code?
If there is a breach of the Code of Practice by an ADMA member, it is authorised by the ACCC to impose a variety of sanctions. These include requiring a formal apology for the breach, requiring corrective advertising or the withdrawal of offending advertisements or statements, and ecommending a refund or replacement of goods or services where appropriate.
What if they are not a member of ADMA?
The privacy of every Australian is protected by the Privacy Act (1988). This is administered and adjudicated by the Federal Privacy Commissioner. Interestingly, the Privacy Commission released a report in May, 2005, which analysed and made recommendations on the way that the private sector conducted itself when it came to the privacy of you and me. The Privacy Commissioner, Karen Curtis, explains: 'The Report contains 85 recommendations stemming from a balanced and pragmatic examination of the Privacy Act, within the terms of reference set by the Attorney General. The recommendations in the report relate to improving the operation of the private sector provisions and are written as actions the Australian Government should consider doing, or as measures the Office could undertake.' All well and good but what about normal individuals having control over our own privacy?
'Consumer control over personal information, a key feature of the private sector amendments to the Privacy Act, was addressed in the Review. I have recommended that the control that individuals have over their personal information be strengthened, particularly in relation to information collected about them indirectly or used or disclosed for other purposes such as direct marketing. Simple steps that could be taken to make this happen include measures to promote clearer and more easily understood privacy notices and a general opt-out right for all direct marketing approaches.'
What can I do to stop this?
Clearly, in the case of outbound call centres you can let off some steam when they ring you but abuse might make you feel better but it is only a short term fix and you could possibly be charged under the Telecommunications Act. You could do what one of my friends does and simply says: 'I'll get the head of the home now', and promptly leaves the phone off the hook for an hour, but this is also short-term fix that forces him to change his habits. Ultimately you can complain to the Privacy Commissioner or the ACCC. There are also possible breaches of the Trade Practice Act especially section 60 – Harassment and Coercion, which could result in separate civil action. However, I would like to suggest that before you make a formal complaint you should attempt to resolve the matter with the organisation in question. What should you do?
1. Write a letter or email to the organisation, explain the situation and what you would like to see happen.
2. Give the organisation an opportunity to rectify the situation, 30 days is a reasonable time frame in which they should respond to your initial enquiry.
3. If you are not satisfied with the outcome then you can complain to the Privacy Commissioner by phoning the Hotline on 1300 363 992, or write to GPO Box 5218 SYDNEY NSW 2001. You should ALSO complain to the ACCC, especially if you feel the marketing material may be, or is connected to a scam or other breach of the consumer protection laws, by calling ACCC's Infocentre on 1300 302 502. Note that 1300 calls cost the price of a local call.
Where to now?
And what about the future, or even the present with the new technology that is available to call centres and other direct marketing activities? Karen Curtis outlines that: '…privacy and new technologies warrant further debate. The main recommendation on these issues is that they should be considered in the context of a wider review of the Privacy Act. During the review, it became apparent that while the private sector provisions work well, it may be appropriate for the Government to undertake a wider review of privacy for Australians in the 21st century.'
So if you are sick of the antics of call centres, then take control of your life. Don't be apathetic do something! Let the relevant organisations know and demand your rights. Simply whingeing will only result in less leisure time, more frustration, less control of your life, and more cold dinners. See you around the traps.
Posted by InvestigateDesign at 11:29 AM | Comments (0)
Money, June 05, AU Edition
Playing the market is still a good move – if you have your priorities in order
You would be forgiven for thinking that we are in the middle of a depression if you read the headlines on the newsstands: to hear the papers tell it, the share market is crashing and we all should be hording gold under our beds. Being a glass half-full sort of person, I wanted to investigate this a bit further and see if things are as bad as others are making out. Could the media possibly be talking the market down further? Perish the thought!
Over half of all adult Australians own shares either directly or indirectly through managed funds. This is a staggering figure when you think about it: more Australians own shares than don't. It is not a secret club anymore and that means that share ownership now seems much more safe and secure given the wide spread of equity within Australian families. More importantly, Australian Stock Exchange (ASX) research reveals that most small investors remain loyal to the shares that they own. So, in racing parlance, it seems that shares, in general, are a safe bet. The question remains, of course, as to how exactly to place one's bets. I'm no Clarence the Clocker but let's look at the share market race.
The first step you need to take to take before you even open the finance pages of your newspaper is to be SMART. Get a paper and pen…go on, do it now while you are reading this. Now write down your own personal vision, mission, and goals. I am not trying to sound like some sort of American motivational speaker, but all successful people in all walks of life will tell you they write down their goals – and no, keeping them in you head does not count. So let's remind ourselves about what I am talking about:
Vision: This is a written statement of your fundamental aspirations, and purpose. Your vision usually appeals to your heart and not just your mind. This is your dream of where, and what, you want to be.
Mission: Your current purpose or reason for existing. Your raison d'etre, so to speak.
Goals: What you are committed to achieving? Your goals should enable the achievement of your mission and vision. More importantly, your goals must be Specific, Measurable, Achievable, Realistic and Time-constrained (SMART). If your goals are not SMART then they are not goals.
Your written goals will set a framework and give you direction on how to approach your investment decisions. Do you want long term capital growth? How long term is long term? Do you want regular cash flow? Do you want positive or negative gearing? Do you want to be a million dollars richer in three, five or ten years? Remember, goals should be realistic. How speculative do you want to be? Do you want security or to live on the edge? Do you want to access cash in an emergency?
These are only some of the questions you need to answer in order to write down your SMART goals. Now if you think this is all a bit silly, remember: the common link between all successful and professional investors is that they write down their goals. It also requires you to better understand yourself and what your priorities are at the moment. If you already have a vision, mission, and goals written down, remember, it doesn't stop there. They need to be reviewed and rewritten at least every twelve months.
The share market at the moment is going through a 'correction', which is marketese for 'it went too far in one direction and now it's coming back a bit'. This is what I call the Pendulum Principle. Another definition of a 'correction' is 'losing money quickly'. Always remember that you do not lose any money at all until you actually sell your shares. Until you sell, it is all just lines on paper.
So if we look at the current state of the All Ordinaries it is fair to say that we are on a downward tend – i.e., we are in a bear market.
So does that mean that times are grim and we head to the door screaming out 'sell, sell, sell'? Well no, not really. In reality it means that there are bargains to be bought if you are careful and thoughtful in your selection of shares. Indeed, many people have made their fortunes as a result of their buying during a bear run.
Let's look at things on a wider perspective: if you look at the All Ords going back to 1980 you will see that there have been many corrections, but also that the general trend is upward. Furthermore, after every downward spiral there has been a subsequent upward trend.
The trick with all of this is the selection of shares that you buy, and this is where I must cut out of this particular dance. There are many methods and many 'experts' that can advise on selection of specific shares. My own approach is methodical, mathematical, and painfully drawn out, but it has served me well. I will spend weeks or even months researching specific shares before I part with my hard-earned. In my opinion, the only way to select and build a share portfolio is to understand and look at all the performance indices and build a mixed portfolio that represents all sectors.
The one method that I can actively discourage is the 'My uncle/friend/boss/milkman/second cousin twice-removed knows of a sure thing'.
As with horse racing, there is no such thing as a sure thing in the stock market. And like horse racing, for every hundred tips from people in the know only one usually comes good. Finally, like horse racing, you only hear about people's winners and never their losses. The sharemarket is partly a gamble but that should not be the main driver in your decision process. The real secret is hard work and research.
My approach to the current climate is, first, don't panic. And definitely don't sell shares that you already own, unless there is a good reason to do so. My own opinion is that the harbingers of doom that declare the dream run is over and warn that we must prepare for a bumpy crash are looking exceptionally short term and have not fully evaluated the opportunities.
More importantly, treat a bear market as an opportunity. Do what the big boys do: look for bargains and analyse scientifically. John Mars (owner of the Mars Corporation, which claims to be the largest privately-owned company in the world) once said to me over dinner, 'Son, if you want to be rich don't do what everyone else does. When they buy, you sell. When they sell, you buy. And don't waiver.'
A bit of an update. For those that read my column in the April edition on the latest tricks used by credit card providers to turn your plastic into their gold: I gave a real life example of a Mr J who had been corresponding with the National Australia Bank to try and get some answers to some very reasonable questions about a problem with a credit card transaction. At time of writing he had exchanged twelve emails since last January, at a rate of about one a week. Most said that his questions were being escalated to the next level. The last email he received stated, 'I have no details as to what your enquiry is about. Should you have any further queries do not hesitate to contact us'. Looks like he was escalated right out of the bank.
We will keep following the plight of Mr J because he himself is not going to let bureaucratic chicanery stop him from getting basic customer service. Watch this space. But have you had similar experiences to Mr J? Have you got so fed up with the run-around from your bank that you just gave up? Mr J's experience with bureaucracies going into their corporate shell was with the National Australia Bank. What institutions have you dealt with that sacrificed basic customer service in favour of an attitude that says, 'Work would be fulfilling if it weren't for the customers'? If you do have any experiences that you would like to discuss, aired publicly, or investigated a bit more, send me a letter with your story. Address it to: Peter Higgins, Money Editor, Investigate Magazine. PO Box 602 Bondi Junction NSW 1355, or e-mail firstname.lastname@example.com.
Remember, you have nothing to lose except your Terms and Conditions Manuals.
See you around the traps.
The index is made up of the weighted share prices of about 500 of the largest Australian companies. Established by ASX at 500 points in January 1980, it is the predominant measure of the overall performance of the Australian sharemarket. The companies are weighted according to their size in terms of market capitalisation – i.e., the total market value of a company's shares. The All Ords, therefore, is a good measure of how capital growth of the overall market is performing.
Posted by InvestigateDesign at 10:50 AM | Comments (0)
Money, July 05, AU Edition
Customer service is an ugly joke in Australia.
Here's what you need to know to not give up the fight
When I was a young lad, there was corner shopkeeper on our street that looked after our family. His name was Mr Cooley. He would see me (or my mother) and provide our family with the groceries, tell us about new products, order in specialised needs for us and simply update us on gossip. He provided exemplary customer service and treated everyone as an individual and as if each person was his only customer. In today's jargon, that's called 'one-to-one marketing'.
Back in the 1990s, 'one-to-one' was all the rage. Very few people understood it, but most organisations and associations wanted to do it, somehow. And there are still a number of companies who claim that is happening today, but overall, I do not believe that Australians are currently getting good customer service. What's worse is the concept of one-to-one marketing is now all but extinct.
Corner stores used to do one-to-one marketing consistently – they had no choice. Understanding the uniqueness of each customer was what kept them in business. They knew the difference between customers who had a large or a small family. Those who worked longer than others. Those that ate more meat than others and so on. Sadly, large companies seem not to want, or perhaps are not equipped, to practice these philosophes of customer service.
Over the past six months I have been keeping a log of bad customer service stories that have come across my desktop; they include everything from run-ins with bureaucratic overseas call centres to companies that require someone be home sometime between 9am and 5pm to take a delivery or let in an installer. Perhaps somewhat surprisingly, loyalty seems to count for next to nothing in the corporate customer service stakes. Regular readers of this column will know of the plight of a Mr J who had been corresponding with the National Australia Bank to try and get some answers to some very reasonable questions about a problem with a credit card transaction. After more than three months of e-mailing back and forth, each one sending Mr J's complaint up to a higher level of management, he finally got a note stating, 'I have no details as to what your enquiry is about. Should you have any further queries do not hesitate to contact us'. Looks like Mr J, a long-time and loyal customer of the NAB, was escalated right out of the bank.
A similar thing has happened to another gentleman, one Mr P, who has been a long-term, card-carrying 'preferred customer' with AVIS Car Rental. On a recent trip to the United Kingdom he hired a car for two weeks, and dutifully filled it with petrol and cleaned out the inside before returning the car. The AVIS employee who received his car at Birmingham Airport even remarked what good condition the car was in, stating, 'I wish they were all returned like this one'. They jointly went over the outside and inside of the car and gave it a very clean bill of health.
So imagine the surprise that Mr P received when he received his credit card statement and found that the rental was about $500 more than the agreed price – with no explanation why it was so much over the contractual amount. And, you guessed it: the monies had already been deducted automatically.
Mr P quickly rang and wrote to AVIS Australia. His complaint was escalated from Australia to the USA, then to New Zealand, on to the UK, back to NZ, and back to Australia. Three weeks later he found out that there had been some sort of damage to the car. Now this was a real surprise. Mr P knew that the car was in showroom condition and asked what the damage actually was, and could it have possibly happened after he returned the car. Again: Australia to the USA, then to New Zealand, on to the UK, back to NZ, back to Australia, and then off the planet. Six months later and he still doesn't have an answer. It is still unresolved! Needless to say, he doesn't like the way AVIS prefer their customers.
Why is this so?
If a customer goes to the effort of making a complaint it is because they care. They are committed and involved with that organisation. They are loyal and they are probably the company's most valued customers. So why lose them? A customer who is handled correctly will become the biggest advocate instead of the biggest detractor of an organisation, providing the sort of priceless viral marketing no money can buy. We all respond viscously if we believe our loyalty is being abused. I believe that currently our loyalty with many organisations is misplaced – it is not reciprocated and the customer is not rewarded. And, marketers please note: reward points do not automatically buy loyalty.
I am an adjunct lecturer at Sydney University and I teach my students that the gap between reality and expectation equals anger. The bigger the gap the more anger there is. Organisations cannot promise something that they cannot deliver. It sounds simple, but it is rarely practiced. Why?
Richard Batterley is a thirty-year veteran in what is now called relationship marketing. He is the chairman of Relationship Alliance, a Sydney-based firm which helps companies build stronger relationships with their customers. I asked him what should companies be doing to better service their customers?
'It is important that all big organisations have customer feedback loops', says Batterley. Instead, he says, 'most large organisations have procedures in place to block you and your complaint.'
'Bad customer service affects the brand and reduces integrity, and destroys brand essence. This has serious financial implications. Yet the easiest way for big organisations to behave is to ignore complaints', explains Batterley.
Interestingly, Batterley had his own recent run in with bureaucracy. When ringing Telstra he asked to be put through to their complaints department. The call centre said they could not do that because the Privacy Act required him to give his full name and the number he was calling from before he could be transferred. He said that he would be more than happy to give his details to the complaints department but not the call centre, but he was still not put through. He researched this and according to him, there is nothing in the Privacy Act that prevents someone from being transferred to a complaints department. It seems that customers of all sorts are being managed out of existence.
What can they do?
Even if it takes more effort – and maybe causes a short-term hit on the bottom line – it is to the benefit of an organisation if they provide stellar customer service. If one organisation does it better than another then they will grow at the expense of their competitors. They will reduce churn, increase retention, and attract new customers.
So what do companies need to do?
1. Practice active listening. Reading from a script and a page of a standard-operating-procedure manual is the worst type of customer service there is, yet most organisations do exactly this to their customers.
2. Say sorry. This means the most to most people. But this is only true if it is a real apology and not a scripted, condescending, patronising way of getting someone off the phone.
3. Understand what is being said and be empathetic.
4. Respond in an understanding manner which treats the
customer as a human being and a loyal person with whom they have a relationship.
5. The simple question a service person needs to ask is: "Would I treat my mother/father/son/daughter/brother/sister/wife/husband like this?"
6. And a radical suggestion: If a small amount of money is in question, say anything up to $200, just give it back to the customer. This will strengthen a loyal relationship beyond belief. It turns a negative into a positive and, really, in the greater scheme of things, for most large companies it is a fraction of a fraction of a decimal point somewhere in an annual report.
What can we customers do?
1. Firstly, you must complain to the organisation. Even if they block you, at least you have started the process. Don't be apathetic and just take it, you will feel better if you take control.
2. Don't pay the bill. Yes, this is fraught with danger and could get you on the list of a debt collector or in court. Strangely though, many accounts departments provide better customer service in this instance than front line customer service staff. But I would not recommend this action unless you have an agreement from the organisation that they will not act on you not paying.
3. Write to the ombudsman. In the case of banks and tele-
communications companies, there is a specific ombudsman that investigates these complaints. It is time consuming but is usually
fully investigated.
4. Tell the media. This is becoming increasingly more popular and unfortunately in many instances the only way that customers can get noticed. Be warned though, some companies close up tighter than Scrooge's wallet if the press is involved.
5. Take your business elsewhere. This will make you feel better but most large organisations don't really care.
6. Send them a bill and be prepared to follow it through. If you believe you have given an undue amount of your time and your own service to an organisation then send them a formal invoice requesting that you be paid. It may not work, but I have heard of people getting positive responses to this sort of action.
7. The action I have had the most luck with is to write to the CEO or even Chairman. Mark your letter (not email) private and confidential. Be factual, honest, objective, and admit if you have made a mistake yourself, but explain to him how the poor service of his organisation has displaced your loyalty and damaged their good name.
But it's a big company...
In the 1976 milestone movie "Network", evening news anchor Howard Beale, played by Peter Finch in his Oscar-winning performance, felt the same way that many of us are feeling now about how we are being treated by large organisations. His response?
'You've got to say, 'I'm a human being, Goddammit! My life has value!' So I want you to get up now. I want all of you to get up out of your chairs. I want you to get up right now and go to the window. Open it, and stick your head out, and yell, 'I'm mad as hell, and I'm not going to take this anymore!'
Have we seen the death of customer service? Being a glass half full kind of person I am hoping that large organisations learn how we want, and need, to be treated. But as Howard Beale said, we have to get out of our chairs. We cannot let good old Australian apathy get in the way of what we deserve. Be as mad as hell and let organisations know that you are not going to take this any more. Perhaps they could learn from the corner shopkeeper. The spirit of Mr Cooley must live on as a benefit to all of us. See you around the traps.
Posted by InvestigateDesign at 01:10 AM | Comments (0)
Money, Sep 05, AU Edition
Big brother is watching – here's how to keep him from taking too much away
Australians tend to like to push the envelope when it comes to authority figures. This is an historical quirk of the Australian ethos and is reinforced by the fact that one of our national heroes is an Irishman who robbed from the rich and was finally caught because he was wearing so much metal that he couldn't move.
Some of our great Australian traditions include: doing that extra 5 kilometres an hour on the freeway and then claiming no knowledge if pulled over by the police; taking home those few extra pens and maybe a stapler or six from the office supply cupboard at work; and lying about the age of children so that you can still pay half-price at the movies or on the train.
And of course there's the age-old favourite: embellishing the facts when reporting on your income and expenses at the end of each taxation year. 'Tax embellishment' is neither evasion nor avoidance; it's just…well, it's just Australian. Now I hate to be the messenger of doom, but it looks like the 2004/2005 taxation year could bring us that much closer to the end of the age of embellishment.
The Australian Tax Office has recently issued some sombre, and unprecedented, warnings to all Australian taxpayers. In fact, large- and medium-sized businesses, property-related tax issues, those who fail to lodge returns, and people with outstanding debt will all come in for close attention from the Tax Office
this year.
It is true that the vast majority of people do the right thing, more or less, and that tax embellishment, as opposed to out-and-out tax avoidance schemes, really doesn't do all that much harm. Or does it? Tax Commissioner Michael Carmody declared recently that 'by setting out the risks faced when engaging in particular activities I want to influence the decisions people make about their tax affairs'. But what does that actually mean? And what do we need to do? Well, when speaking to the ATO a few clear directives have come out.
Firstly, people who habitually fail to lodge tax returns, or don't pay their tax, will come under increased scrutiny this year. In most cases, this is not done with malicious intent, rather it is reflective of another great Australian pastime – apathy! But the ATO does not care one little bit about why you have not lodged a return for five years. 'I didn't get around to it' will probably keep you out of jail but it won't stop thousands of dollars worth of fines. Oh, and one old wives tale that needs to be untold is: just because you are entitled to a refund does NOT mean that you won't be fined. It is the act of not lodging, not just the financial consequences, that is frowned upon. The rationale for this is quite logical when you think about it. If everyone in the country lodged a return only every 5 years or so, imagine the financial drain on the nation's purse strings if huge amounts of money had to paid unexpectedly.
1984 has come and gone and Big Brother is watching us now. The debate over national ID cards is, in many ways, futile. It is a fact that we are already on more than one database, and most of us are on dozens. It is also a fact that many of these databases are cross linked and cross matched – and the ATO will be taking full advantage of this technology. In other words, correct reporting of income and deductions must be a focus for all of us. Carmody explains that 'ensuring the correct reporting of rental deductions, such as claims of capital expenses, will be a focus again this year', but then this clear warning as well: 'We will also expand our use of data-matching to check that income from property and share sales is declared, and capital gains tax is paid.'
Remember also that the ATO can prosecute to ensure that defaulters meet their obligations. The latest example of this occurred in August 2005, when the Parramatta District Court jailed a NSW man for 18 months for his role in an income tax fraud totalling $350,000. The man was found guilty on eight charges of defrauding the Commonwealth and aiding and abetting to dishonestly obtain a financial advantage. It appeared that he produced false payment summaries and lodged a number of income tax returns for the 1999 to 2001 financial years resulting in $147,248 in refunds.
This year the ATO will especially be looking at people in the construction, food preparation and processing industries; dance, drama and music instructors; healthcare professionals; and teachers and academics to ensure that they are getting their work-related deduction claims right. If you are not sure about claims around motor vehicles or self-education then talk to an expert because they are the areas that will be examined.
The Tax Office will also focus on deductions for work related expenses, rental property expenses and on capital gains from the sale of property and other assets.
It is clear that the ATO is toughening up on tax reporting which is not quite ridgy-didge. Deputy Tax Commissioner Michael Monaghan makes it clear that taxpayers who defraud the Commonwealth are involved in criminal activity. 'As well as using our own intelligence and controls, we work very closely with law enforcement agencies to detect and deal with those who commit fraud', he says. The extent of this is surprising; according to Monaghan; 'In the 2004-05 financial year 102 people received prison sentences for tax fraud'. That means courts sit two to three people every week on such charges. Our great Australian pastime looks like it will be lost forever because those who continue to 'embellish' are not being larrikins so much as fools.
Now you might be thinking that you are pretty safe when it comes to PAYG tax, especially safe if you work for a large company. But think again. Last year the compliance activities of the ATO raised more than $8.7 billion in additional liabilities, and collections approached $6 billion – the bulk of this coming from big business. Carmody explains: 'The value of our efforts in the large market is reflected in these results and it will continue to be the area of most intense scrutiny this year.'
So say you are involved in a medium-sized business. The pressure is off, right? Wrong. Medium-sized businesses, particularly those with turnovers of between $50 million and $100 million, will face
increased scrutiny this year. There appears to be no respite because Carmody explains: 'Our audits in this market have confirmed risks around profit-shifting, capital gains tax, and GST.'
The gatekeepers of our taxation system also think that small business debt continues to be an issue. Michael Carmody has repeatedly said that the ATO does not want to send viable businesses to the wall. However, an official statement from the ATO seems to cover all bets because, 'out of fairness to others who meet their tax
responsibilities on time, we will be taking firm action against those who fail to work with us to pay their tax debts'. So if you are a small business owner reading this then double-check exactly what your commitments are for this financial year.
And a general warning for all employers: any organisation, regardless of its size, which fails to meet its superannuation guarantee obligations WILL hear from the ATO this year. They will be devoting resources to ensure that all superannuation responsibilities are fully honoured.
1. If you are unsure of your personal position, see an expert. Visit an accountant or tax agent and don't hide anything from them. Lying to your tax agent is like hiding an injury from your sports coach. Eventually you will be caught out and it won't effect the agent one little bit.
2. When you do choose a tax agent, make sure they are registered. Only a registered tax agent can charge a fee to prepare and lodge your return.
3. If you are using a tax agent for the first time, or are going to use a different agent this year, you must contact them by Monday 31st October 2005.
4. There are also more than 1,700 volunteers trained by the Tax Office who are now available at 1,000 community centres around Australia to help low-income earners prepare their tax returns free of charge. These volunteers have been trained to help people with straightforward tax returns, baby bonus applications and those eligible for franking credits who don't have to lodge a return. This free service is in it 17th year and the ATO has to be complimented for this initiative that helps about 70,000 people a year. If you think that these volunteers could help you then this service is available until the end of October. Call the Tax Office on 13 28 61 for further details.
5. The ATO has a website (http://www.ato.gov.au) which I think accountants will keep secret for as long as possible. The site hosts a do-it-yourself personal tax return and does almost everything for you. Even if you have a reasonably complex tax return, this site steers you through ever step of the way. It advises, it calculates, it explains the sort of deductions you are entitled to and even gives you hints on how to claim extras that you wouldn't have thought about yourself. It offers advice on subjects like capital gains and losses, work-related expenses, and provides links to Tax Office rulings. You can also download welfare payment data provided by Centrelink which you may need to include in your return. Finally, it tells you what you owe, or what you will get as a likely return. It is similar to the software what most tax agents use themselves and it is free to download. Simply go to www.ato.gov.au follow the prompts to download 'e tax 2005'. Once you have finished, simply lodge your completed return online and you are off the hook. If you are lodging your own return it must be lodged by 31st October 2005.
6. If you are claiming deductions for donations to charity, you must ensure the organisation is a registered deductible gift recipient (DGR) which can be checked on the Tax Office website.
7. If you are really worried, ring the Tax Office itself. They are not as scary as people think, and will generally do as much to help as possible. Call 13 28 61 between 8.00am and 6.00pm weekdays with any questions about income tax.
The larrikin days of snubbing our noses at authority are one step closer to vanishing. Rationally speaking this is a good thing, but I can't help thinking that it is another part of our Australian lifestyle to add to the 'vanishing Australian', and an Australia that is quickly becoming long gone. Nevertheless, don't do anything silly with your tax this year. Big Brother is watching and you WILL be seen. See you round the traps.
Posted by InvestigateDesign at 12:17 AM | Comments (0)