News Pulse for June 4, 2018

A daily download of SME, startup, fintech and tax news from around Australia.

Wage rise excessive: business

The Fair Work Commission has awarded a $24.30-a-week increase in the minimum wage in its annual review.

The weekly minimum wage will rise by 3.5 per cent to $719.20. The new hourly rate is $18.93.

The commission rejected the ACTU claims for a record $50-a-week pay rise finding granting the claim would have adverse employment effects.

Workers, business unhappy with wage rise

Factory worker Jafet Montero is one of Australia’s lowest paid workers and is currently living in his car.

With the cost of food, rent and utilities continuing to rise, Mr Montero says he is struggling to survive, let alone make ends meet on the minimum wage.

Commission splits the difference

As is its habit, the Fair Work Commission has split the difference between competing union and employer claims. The 3.5 per cent minimum wage increase is the biggest since 2010, when the commission awarded a 4.8 per cent rise to compensate for the previous year’s pay freeze.

It is the ninth consecutive above-inflation minimum wage rise, prompting familiar complaints from industry groups that the “excessive” increase could, but not would, result in fewer job opportunities or reduced work hours for some.

Minimum wage increase appears fair and reasonable

The fact that neither employer groups nor unions are happy with Friday’s Fair wWrk Commission decision to increase the minimum wage by 3.5 per cent result indicates it’s probably about right.

The Australian Industry Group had been campaigning for what was a patently laughable $12.50 a week increase that came in well under two per cent.

Difference split on minimum pay

The Fair Work Commission has found the living standards of many low-income households has deteriorated over the past 12 months, granting a $24.30-a-week minimum-wage increase, the highest in eight years.

ACTU secretary Sally McManus said the increase — half the peak union body’s $50-a-week claim but double the amount wanted by employers — was a “step forward to a living wage but it’s not a living wage”.

ASIC feels heat over trickle-down regulation

The corporate regulator’s style of enforcement that sees it working with the big four banks and waiting for standards to be adopted more broadly has come under scrutiny by the Hayne royal commission.

It was also revealed that since 2008 the Australian Securities and Investments Commission has only commenced 10 proceedings against the big banks, with four of them relating to the BBSW rate rigging allegations and three relating to Storm Financial.

Banks largely in the clear on small business lending

The first two rounds of the banking royal commission delivered a daily news flow filled with outrageous revelations of egregious misconduct. Judged against its own expectations for sky-high scandal, the past fortnight has been, well, underwhelming.

This round of hearings on small and medium enterprise (SME) business lending, which wrapped up on Friday afternoon, aren’t going to lead to any executive scalpsAustralian Labor Party, such as the  resignation of AMP chair Catherine Brenner and chief executive Craig Meller, who fell on their swords after the previous round on financial advice.

Lending ‘breaches’ may lead to charges

THE big banks could be charged with engaging in misleading or deceptive conduct, unconscionable conduct and breaching responsible lending laws in their dealings with small businesses following the banking royal commission.

Closing the third round of the hearings on Friday, senior counsel assisting the commission Michael Hodge, QC, said the evidence aired in the past two weeks paved the way for the commission to find the nation’s biggest lenders had broken the law.

Royal commission hears more red tape for small business loans unnecessary

Banks have broken the law on thousands of occasions when dealing with small business borrowers but no new laws are needed to improve their lending to the sector, according to open findings delivered to the Hayne royal commission on Friday afternoon.

Senior counsel assisting Michael Hodge, QC said it was open to Commissioner Ken Hayne to find the banks had acted in ways that contravened the Code of Banking Practice, the Financial Ombudsman Service’s terms of reference, the ASICAustralian Securities and Investments Commission (ASIC) is Australia’s corporate, markets and financial services regulator. Act and the Corporations Act.

Banks likely to escape further small business regulations

Banks appear likely to escape more small business regulation following the closing submissions of round three of the banking royal commission on Friday.

However, counsel assisting the commission, Michael Hodge, has invited Commissioner Kenneth Hayne to make findings that the banks breached small business lending requirements.

Letters: Amazon tax, building cladding and super theft

Having reviewed the proposed process for the implementation of GST on imports, I am now of the opinion the declaration by Amazon that it will not allow Australian purchasers to continue to access its US website is disingenuous.

For an organisation with a massive global footprint in information technology to say this is too difficult is rubbish. The registration process is relatively straightforward, and requires the vendor to calculate and remit 1/11 of the purchase price to the ATO Australian Taxation Office as the GST on each purchase shipped to Australia.

RC lawyers against more SME regulation

The banking royal commission’s own lawyers have advised against extending regulations protecting consumers to cover loans to small businesses.

Barristers assisting Commissioner Kenneth Hayne QC have recommended no additional statutory obligations be imposed with respect to making loans to small businesses.

Senior counsel Michael Hodge QC said small business entrepreneurs are, by their nature, optimistic about the ability of a business to succeed.

Banks could tighten screws on small business after royal commission

Small businesses are tipped to face more hurdles in getting credit from a bank, with some marginal applicants at greater risk of being knocked back, following the royal commission’s scrutiny of lending to small enterprises.

Although counsel assisting the commission,  Michael Hodge, QC, did not call for extra regulation in his closing address on Friday, analysts say it is still likely the scrutiny of the past fortnight will make banks more conservative in lending to businesses.

Reckon’s race is run in the cloud accounting battle

Acquisition or no acquisition, the writing was already on the wall for struggling accounting software player Reckon.

With less than a month to go before the Australian Competition and Consumer Commission was due to make its decision on whether or not to approve the proposed $180 million acquisition of Reckon’s accountant group (which comprises software products that help accounting firms run their businesses) by MYOB, MYOB pulled the plug on Thursday, citing a mix of factors including the regulatory delay and increased confidence in the “excitement” of accountants about its practice management software as the main motivators for the decision.

SMEs to get independent review of ATO verdicts

The ATO Australian Taxation Office has bowed to public pressured and announced it will look to extend the independent review process over tax disputes to small SMEs, in a move that has been welcomed by the industry.

Speaking at a Senate Estimates hearing, ATO Australian Taxation Office commissioner Chris Jordan said the tax office would be looking to give small businesses greater scope for review into any tax disputes, starting from 1 July 2018.

Fair Work Commission 2018 annual wage review decision | Ministers’ Media Centre, Australian Government

The independent Fair Work Commission has today announced its decision to increase the national minimum wage by 3.5 per cent from 1 July 2018.

For about 200,000 workers who are paid the national minimum wage, base wages will increase from $18.29 an hour or $694.90 per 38-hour week to $18.93 an hour or $719.20 per week.

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