Newsletter – May 18 2018

“Now, I’ve indicated a couple of days ago that really, if people thought they have seen the worse of the Royal Commission so far, what you’re going to see in small business will curl your hair,  because the stories that we have heard over the years from small business really have horrified me in the behavior of banks towards their small business customers, some in small business lending.” (Listen here)

Newsletter – May 18 2018

Next Week the Royal Commission begins again, this time focusing on small businesses.

If you thought the allegations of ripping people off, charging dead people fees and lying to the corporate regulator were bad…just wait.

I have a feeling, what will be uncovered in this round, will make the hair on the back of your neck crawl.

It was only last week I mentioned the Royal Commission were calling for submissions from Small Business who claim they have been mistreated to come forward. Now, one thing to remember is confidently agreements, say between a small business and a bank, are basically null and void. People do not face repercussions or legal action from breaking that confidently agreement in a Royal Commission.

Basically – nothing can kept swept under the rug. It’s going to come out.

Now, over the years we have heard some horrific stories of small businesses being mistreated by the banks, in particular in regards to small business lending. I mean, they have really horrified me and as I said, if you think the worst has come out of the Royal Commission…it’s only going to get worse.

Last week I spoke to Small Business Ombudsman Kate Carnell. Kate has heard all these stories, and more.

Kate says “At least consumers have the protection of consumer law which requires the banks to do a whole range of things to protect their rights.

“There are no protections in the small business space, or very, very few unless you have the money to go to court….or you can convince ASIC”

You’re really out there on your own if you’re a small business” (Listen here)

It’s because of this banks have been able to, essentially, take advantage and in some cases, destroy small business and even ruin peoples livelihoods.

The use of unfair contracts, recalling loans when people haven’t missed payments, recalling loans where there might be some worry over the sector you might be trading in even if you are perfectly fine and trading well – really just taking small businesses for a ride.

“We’ve seen case and case where businesses could’ve survived, sent to the wall by behaviour of banks.” Kate says.

Basically, because of the attitudes of banks – not because of missed payments, not because of bad investments- because of the attitude of the banks…family businesses have been destroyed.

And not just a couple of cases, thousands.

“We’ve seen thousands”.

Just one example is back from Commonwealth Bank acquired BankWest back during the Global Financial Crisis. Kate says there were some near 2000 preforming loans, loans which were being repaid and not missing payments just recalled or changed conditions.

Now, as you can imagine, the CBA and BankWest will be appearing before this round in the Royal Commission. As will the AZN, Bank of Queensland, Westpac, Suncorp and the NAB.

Before I move on – just think of it like this – imagine if the bank just rocked up to your door in the morning and said ‘Ah, we know you haven’t missed a payment and you still have a full time job, and really you’ve been a great customer…but we’re going to need our home loan back in a week’s time because we think you might be a risk’.

Could you make that repayment? I know many who couldn’t.

And you can’t go looking elsewhere for finance because you can’t get a loan if it appears you’ve gone into default, even if you technically haven’t. And that’s not even mentioning the higher interest and penalties heaped on top of you as a result.

As I said, some of the allegations that are going to come out next week…it will make your hair curl.

Tune in 9News and Money News for all the details next week.

Now, I also want to discuss an  interesting concept I thought of this week – which tax plan are we better off under? The coalitions or Labor?

Now, I told you last week about how the Coalition are planning on introducing a three step plan for their income tax cuts, along with their company tax cuts.

Labor have said they will double the tax cuts but for only those middle and lower income.

Now, claims by people saying, under the Coalition tax plan, its not fair a person will pay the same amount of tax on $50,000 and $180,000. Well, now we have proof that is not true at all.

This week I spoke to the Senior Counsel at the Tax Institute Bob Deutsch – we go through the numbers.

“It clearly is not correct to say that the same tax is paid by someone on $50,000 and someone on $180,000. The most that can be said is that they have the same marginal tax rate which is a very different thing,” he says. (Listen here)

Following this interview, an article I saw this week – ‘Coalition Better for Well-Paid Unionist’ in The Australian on Tuesday – caught my eye.

Now, this article basically says workers earning six-figure salaries would be worse off by 2022 under Bill Shorten’s tax proposals when compared with the Coalition’s tax plan.

Well, I went back to trusty Bob Deutsch, and again we crunched the numbers to see if well-paid unionists would actually be better off under a Coalition Government tax plan.

According to Bob, those on a six-figure salary are better off. I suppose this is a tricky situation given Labor’s and the Unions long held association…can’t image that would go down a treat.

For all this and more, visit www.moneyaction.com.au

9News –

Your energy bills could see a price drop in the near future – Watch here

Money News –

Energy companies gouging customers to pay their tax bill – Listen here

Highlight –

Medicinal Cannabis hit a milestone in Australia this week – Listen here

Interviews during the past two weeks

Government left red-faced after blackmail charges dropped .

ATO facing investigations over dodgy debt recovery .

Medicinal Cannabis milestone .

Why are Aussie’s dumping private health insurance? .

Should you be expecting a wage rise soon? .

Queensland welcomes its 5 millionth resident .

Does the Power Market need more regulation? .

Australians forking out more for transport than gas and electricity .

Insurance giant removes itself from comparison websites .

Google accused of cashing in to sell out user data .

Aussie households receiving more in benefits than dishing out in taxes .

Newsletter – May 11 2018 .

Budget reply | Opposition claims it can double government’s income tax cuts .

Interviewed  Nathan Rees, Deputy Leader, Finance Sector Union titled ” Furious shareholders launch attack .”

9News: Investor Anger .

Interviewed  Andrew Leigh, Shadow Assistant Treasurer titled ” Why Labor is committing to ‘progressive taxation’ .”

Interviewed  James Pearson, CEO, ACCI titled ” Budget needs ‘bigger buffer’ to get through tougher times on the horizon .”

Interviewed  Kelly O’Dwyer, Financial Services Minister titled ” Big banks commit millions to new consumer protection fund, yet to pay a cent .”

9News: Deal Reached .

9News: Budget Breakdown 2018 .

Federal Budget 2018 wrap: ‘It’s an election budget’ .

Interviewed  Kate Carnell, Small Business Ombudsman titled ” Small businesses the silent victims in Royal Commission .”

Interviewed  Daniel Smith, CGI Glass Lewis, General Manager titled ” AMP directors resign after shareholder outburst .”

Interviewed  Shayne Elliot, ANZ, CEO titled ” ANZ to enforce strict ‘no exceptions’ policy following Royal Commission revelations .”

Interviewed  Sharad Jain, Director, S&P Global Ratings titled ” Commonwealth Bank ratings downgraded to negative following damning report .”

Worst is yet to come as Royal Commission investigates lending to small business .

Interviewed  Andrew Thorburn, CEO, NAB titled ” ‘I’m ashamed’, NAB boss disappointed by fraudulent conduct in the company .”

Interviewed  Kath Anderson, Assistant Commission, ATO titled ” 3.5 million Aussies claim work-related car expenses annually. Here are the most common mistakes .”

Newsletter – May 4 2018 .

Interviewed  Angus Sullivan, Acting Group Executive, Retail Banking Services titled ” Fear of ‘undue concern’ stopped CBA from notifying customers of mass data breach .”

9News: Security Breach .

Interviewed  Alan Joyce, QANTAS, Chief Executive titled ” How did QANTAS change its image? .”

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