March, 2019

Daughter of immigrants taking community leadership role

Cultural change: Margaret Tran has been named this year’s winner of the Newsboys Foundation’s new $5000 youth leadership award. Photo: Meredith O’SheaIt was five years ago at a school in Melbourne’s west that 16-year-old Margaret Tran saw the less-savoury side of multiculturalism.
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“There was a lot of racist name-calling and bullying,” she says. “Especially to the darker-skinned kids.”

Tran, daughter of Vietnamese migrants, says Asian children copped it too. “I told a teacher but it didn’t stop,” she says.

However, it was a catalyst that has driven her to become a student and community leader at a precociously young age.

As one of 15 students on Victoria’s Student Representative Council executive, she has presented to teachers at workshops, organised regional conferences and consulted the state education minister on student matters. High on the list has been that same schoolyard problem, bullying, but maturity has opened her eyes to the fact that many community problems are hard to resolve. “It is difficult to tackle bullying on a state-wide basis,” she concedes. “Bullying happens with adults too.”

This week Tran was named this year’s winner of the Newsboys Foundation’s new $5000 youth leadership award, which is a happier example of cultural change. The foundation was formed 121 years ago in a largely Anglo-Saxon Australia to help impoverished young boys who sold newspapers. The foundation was financed by newspaper companies in their boom years but it is run now as a philanthropic organisation. Curiously, the foundation has ended up in a better financial shape in the digital age than many of the newspapers. Now it has given one of its first leadership awards to the daughter of Vietnamese migrants.

Tran’s grandparents, Tri and Hoang Le, came to Australia in 1983 with their four children. One of them, Quien Le, who cooks part-time for the church, is the mother of Tran. Her father Can Tran, a courier driver with 15 siblings, is a church leader proficient at public speaking. “That is probably where I learnt,” Margaret Tran says. “I do church readings in Vietnamese.”

She attends Vietnamese school for three hours each Saturday and a Vietnamese youth group on Sundays. Both are aimed at retaining some of the family’s homeland culture. “I think that is important but I know that it is slowly fading away,” she says. “Many of my cousins in Australia don’t want to go to Vietnamese school any more. A couple of them say that they were born in Australia and they are Australian, why should they speak Vietnamese?”

Tran, who aims for a career as a paediatrician, has Duke of Edinburgh gold and silver awards and is putting part of her prize money towards a three-week trip next year by MacRobertson Girls School students to Nepal, where they are repairing an orphanage. “Young people aren’t just the leaders of tomorrow, they are the leaders of today,” Tran says.    

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Jittery sellers making deals before auction

This five-bedroom home at 50 Brook Street, Coogee, sold prior to auction for $3.18 million. This house at 64 Cavendish Street, Stanmore sold before it’s scheduled auction for $1.4 million.
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This house at 64 Cavendish Street, Stanmore sold before it’s scheduled auction for $1.4 million.

This five-bedroom home at 50 Brook Street, Coogee, sold prior to auction for $3.18 million.

This five-bedroom home at 50 Brook Street, Coogee, sold prior to auction for $3.18 million.

This house at 64 Cavendish Street, Stanmore sold before it’s scheduled auction for $1.4 million.

This five-bedroom home at 50 Brook Street, Coogee, sold prior to auction for $3.18 million.

This house at 64 Cavendish Street, Stanmore sold before it’s scheduled auction for $1.4 million.

There are more than 1000 homes scheduled for auction on Saturday but buyers will be disappointed to hear that a large chunk of those properties have already sold.

Spooked by falling clearance rates and the prospect of competing with an unprecedented flood of listings, sellers are increasingly accepting offers prior to auction, new data from the Domain Group shows.

In November, there has been a dramatic jump in vendors selling prior, with almost half of all properties that have sold via auction campaign being snapped up without a hammer falling.

The senior economist for the Domain Group, Andrew Wilson, said the shift towards selling prior “was a sign of the turn of the market”.

“It’s no longer about buyers grabbing property, it is about sellers grabbing buyers,” he said.

According to the figures, 2765 properties have been reported sold via auction campaign this month with 1256 – 45 per cent – occurring before the scheduled auction date.

In October, just 37 per cent sold prior and  it was a similar scenario in September when 38 per cent sold before auction.

Unlike last year, which was consistent at about 40 per cent for all of spring, this year there has been a significant shift. Dr Wilson said that showed sellers were “getting nervous”.

Agents are reporting that in some parts of Sydney the lion’s share of auction campaigns is not eventuating in an auction.

“In the inner west and inner east Sydney I would suggest 70 per cent would be selling prior to auction,” said Matt Hayson of Cobden & Hayson.

“You have Christmas bearing down upon sellers, you’ve got a lot of stock on the market, you have agents fighting for buyers’ interest … there is definitely a shift towards selling prior,” he said.

Mr Hayson said during the past few months “a heap of property has sold, which has wiped out a huge pool of motivated ready-to-act buyers”.

“You would think the market has peaked.”

Despite this Mr Hayson said that sellers were “still getting good pre-sale offers”.

The agent with the most auctions on Saturday, Brent Courtney from McGrath Lane Cove, said more than half the auctions scheduled in his area were selling prior.

“Owners don’t want to take the risk of going to auction,” he said.

Shannon Whitney from BresicWhitney said it was a seasonal phenomenon with sellers typically more inclined to sell prior to auction in the final months of the year.

“If you don’t end up selling at auction you don’t have an after-sale period, you have Christmas,” he said.

Last weekend BresicWhitney sold one out of the six properties that went to auction on the Saturday, but five other properties scheduled for Saturday were snapped up beforehand.

The competition among sellers will also be fierce in December. Next weekend there are just shy of 1000 auctions scheduled and the following weekend there will be more than 800.

Dr Wilson said we are still in a sellers’ market but with so much stock coming up for sale, this December could “spell the end of the ball game”.

This story Administrator ready to work first appeared on Nanjing Night Net.

A week when directors did a bit of shopping

Skilled Group chief executive Mick McMahon Photo: Jesse MarlowDirectors doing a bit of buying dominated proceedings this week and for investors who like to see multi-director transactions it was an especially good week.
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The scorecard registered $6.7 million for buyers and $2.8 million for sellers.

Mick McMahon, who has been in the chief’s chair at Skilled Group for four years, was responsible for the lion’s share of the sellers’ tally.

Following the former Shell and Coles staffer’s appointment, the scrip enjoyed a terrific run, firming from $1.36 to close enough to $4.

That peak was reached last year and since then the shares have been in a pronounced down trend and are now fetching $1.94.

McMahon in recent days sold about $2.20 a share.

But earlier this year he did some very profitable option exercising and share selling.

In February, he exercised $2 million of options at $1.47 apiece and sold the resulting shares at $3.04 each, collecting a useful $4.2 million.

Elsewhere, there was multi-director buying of Seven Group Holdings shares.

Richard Uechtritz, former JB Hi-Fi mastermind, headed proceedings outlaying close enough to $700,000.

Other buyers from within the Seven boardroom were Ryan Kerry Stokes, Bruce McWilliam and Warwick Smith.

The shares have been falling for most of this year and recently hit $5.75 – the lowest level since 2010.

Other multi-director buying was done by directors of Sims Metal, Orica, Sundance Energy Australia, ALS, NEXTDC, Rubik, WDS, Champion Iron, Whitehaven Coal, Incitec Pivot, Patties Foods and Freelancer.

The Sustained Persistence Award goes to Simon Clausen, a non-executive director of Freelancer, self-styled as the world’s largest freelancing, outsourcing and crowdsourcing marketplace.

Freelancer scrip recently hit a 52¢ low – compared with $2.60 on the first day of listing last year.

Clausen has been a regular buyer this year.

This story Administrator ready to work first appeared on Nanjing Night Net.

Rio Tinto takes swipe at Glencore and promises shareholder returns like dividends and possible buybacks

Rio Tinto insists it can “materially” increase shareholder returns in the new year despite sliding commodity prices, and has indicated it is not afraid of striking a coal deal with Glencore at the right price.
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Rio chief executive Sam Walsh assured investors on Friday that he could keep his promise of returning cash to shareholders by slashing capital spending, reducing debt payments and continuing to lower costs.

Expected funding commitments for new mines in the iron ore, bauxite and coal divisions were overlooked on Friday and, after promising to spend around $US11 billion on projects at the start of the year, Rio is on track to spend just $US8.5 billion in 2014.

“Over the next five years we expect to generate strong free cash flow and we remain committed to materially increasing cash returns to shareholders in a sustainable way,” said Mr Walsh.

“I truly look forward to announcing this at our annual results in February next year.”

But with revenue sliding due to low commodity prices, Rio may need to use debt to fund its shareholder returns in February.

JP Morgan analyst Lyndon Fagan speculated on Thursday that Rio might not be able to fund its payout promise from cash generation alone.

“At spot prices, we estimate a small gap between free cash flow and dividend commitments,” he said, assuming Rio’s payout program was worth between $US200 million and $US700 million.

When asked on Friday if Rio would generate enough cash to cover the imminent round of shareholder returns, chief financial officer Chris Lynch said; “We do have both generated (cash) and balance-sheet capacity”.

Deutsche analyst Paul Young said Rio’s cash generation would accelerate in the second half of 2015, and the miner could cover the shareholder payout without using debt if it got the timing right.

“They could announce a buyback mechanism which allows treasury to buy back stock when free cash flow is available, which means the buyback will probably be weighted toward the second half of next year,” he said.

In the wake of Glencore’s unsuccessful bid to merge its Australian coal operations with Rio’s earlier this year, Rio used the briefing to showcase the quality of its Hunter Valley thermal coal business.

Energy boss Harry Kenyon-Slaney said every Rio coal mine in Australia was currently profitable, despite coking coal prices sliding by 16 per cent over the past year and thermal coal prices falling 25 per cent over the past year.

“We do have the best coal assets in the Hunter Valley,” he said, adding that Rio had up to 100 years of coal at its disposal in the region.

Under a new coal strategy called “Hunter Blend”, Rio will try to improve co-ordination between its various Hunter Valley mines rather than treating them like individual operations.

The move is expected to help boost exports while cutting costs.

Mr Walsh said Rio was not opposed to transactions with other companies in principle, and he pointed to the sale of the Clermont coal mine to Glencore and Sumitomo in 2013 as evidence.

“We have a total open mind if there is somebody out there that is going to offer us a price that offers more value than we see in an asset. But this is not market day at the bazaar,” he said.

In a veiled swipe at Glencore, which also approached Rio about a full merger in July, Mr Walsh said some offers were not worth consideration.

“There are other transactions, and there is a range of them, that didn’t pass muster; they didn’t make sense. There may be synergies and that is terrific, but if you lose your shirt going into a transaction like that, then it doesn’t matter what the synergies are,” he said.

Most analysts believe Rio’s Australian coal assets are better than Glencore’s, with one suggesting Glencore would need to pay an equalisation fee if a coal merger went ahead.

Rio will continue boosting  iron exports on the same schedule that attracted criticism this year, but will do so in a less expensive way.

Rather than commit more than $US1 billion on building a new iron mine at Silvergrass in the Pilbara, Rio has vowed to defer that spending by at least one year, and achieve its targets using extensions to existing mines.

Rio has vowed to export 350 million tonnes from its Pilbara business by 2017, and will need to develop Silvergrass to reach 360 before 2020.

The iron ore price was fetching $US69.98 on Friday, having fallen from above $US140 per tonne in the past 12 months.

This story Administrator ready to work first appeared on Nanjing Night Net.

ATO ‘cowboys’ culture ruined lives, inquiry told

Hard slog: Des Lyons has had a long battle with the Tax Office. Photo: Chris HydeAustralia’s justice system rests on the premise that the accused is innocent until proven guilty.
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But according to testimony after testimony given to the federal inquiry into tax disputes, this often isn’t the case when it comes to the tax system.

“In the tax system, it is the obligation of the taxpayer to prove their case,” Gold Coast lawyer David Hughes told the inquiry during a hearing in Brisbane last month.

“They bear the onus of proof. As soon as the assessment is raised, even if that assessment is all but plucked out of the air, that assessment stands and the Tax Office has the full power of the legislature to recover that tax debt.”

One of the cases where the Tax Office made an incorrect assessment involved a client of Mr Hughes, 67-year-old Des Lyons, whose plight was mentioned at the inquiry and who BusinessDay spoke to.

Mr Lyons said after a “school bully” auditor left him with an incorrect $1 million tax bill and the ATO issued garnishee notices to his bank, the institution withdrew all funding and Mr Lyons nearly lost his marriage and had to sell his business – which he has bought back – his investment property, and his home.

His case is typical of numerous others coming up before the inquiry, and like others predates the arrival of new leadership brought in to revamp the ATO’s culture. It’s a culture where young auditors take an aggressive “revenue-bias” approach. Numerous testimonies to the inquiry refer to ATO auditors as “ideologues”, “cowboys” and “zealots”.

The inquiry has heard of other businesses being ruined, and lives being damaged, because Tax Office auditors go on “fishing expeditions” and cases drag out for years. Advisers talked of how, despite their clients having genuine grounds for appeal, they often settled because the financial and emotional cost of disputing a tax debt was too high.

Tax Commissioner Chris Jordan, a former policeman and former KPMG consultant, and Second Commissioner Andrew Mills, a former tax lawyer, acknowledge the need to resolve disputes quickly.

Mr Mills told BusinessDay: “In the past there have been cases that were protracted and poorly handled, but we are changing our approach to ensure our staff training addresses those kinds of issues and to try to stop this happening in the future.”

One of the main ways the Tax Office had changed the way it interacted with taxpayers was by picking up the phone to engage with taxpayers earlier, at the audit and the objection stage, he said. The Tax Office submission to the inquiry noted the agency had made reductions in the time it took to resolve disputes, with a median of 52 days in 2011-12 dropping to 39 days in 2013-14.

The agency was also offering an internal mediation service for individuals and small businesses, where trained officers facilitated discussions between parties at the audit stage to assist in narrowing or resolving disputes, Mr Mills said.

While some tax advisers said auditors were still reluctant to try the ATOs new internal program, Mr Mills said either the taxpayer or the ATO could request the service. “This is another way we are attempting to resolve disputes earlier at the audit or objection stage and prevent them from ending up at the Administrative Appeals Tribunal,” he said.

They are promising signs, but changing the culture of an organisation with more than 21,000 staff takes time.

And as NSW barrister John Hyde Page told the inquiry, while companies such as Chevron were able to devote resources to fighting the ATO, smaller taxpayers could not. “It is appalling that somebody’s treatment under the law should be materially affected by whether or not they can afford an expensive firm of lawyers to write them a letter of advice,” he said.

Of the $18 billion in debt owed to the Tax Office, small-business taxpayers ac­count for more than 60 per cent.

For those who fight their case, the ability to then get compensation is limited. Mr Lyons knows that all too well.

His case, which started in 2011 and dragged on for two years, was sparked because of a simple and relatively small GST error.

It could have been settled quickly and without pain, he said. But the auditor decided Mr Lyons was hiding income from his Gold Coast restaurant and, based on what Mr Lyons said turned out to be incorrect calculations, issued him with the hefty bill that included interest and penalties.

Mr Lyons said early in the audit process, before issuing the bill, the auditor had made comments like, “I am the sheriff and I am the law”, and after discovering that Mr Lyons didn’t have a tinny boat, told him: “A tinny might be all you have left by the time I am finished with you.”

“His attitude was very demeaning,” Mr Lyons said. “He was very very aggressive.”

Once the assessment was issued, the auditor used a garnishee notice. This is a common method used by the Tax Office to recoup alleged debt but for a small-business person it’s a frightening prospect and, according to evidence given to the inquiry, is the main factor that is destroyed people’s lives during tax disputes.

It allows the ATO to demand the taxpayer – or any person or business that holds money for the taxpayer, including their employers, financial institutions, real estate agents and solicitors – make immediate payments to the ATO. It can be a percentage of their wages or a lump sum amount. Deciding how much and when they pay is up to the Tax Office.

Not only is a garnishee notice issued before the taxpayer has a right to lodge a formal objection to the assessment, but hefty penalties and interest charges can be attached. In a recent review the Inspector-General of Taxation Ali Noroozi recommended the ATO not require taxpayers to pay penalty amounts until the dispute on the primary tax is resolved.

As with Mr Lyons’ case, when the debt collectors come knocking people have to sell their homes, their businesses, their assets. For those who have built their business over 40 years or so, who have wives and families, it is all too traumatic, leads to mental breakdowns, and contemplation of suicide.

To address some of the concerns raised during the inquiry and previous reviews, Mr Jordan has injected new talent into the ATO, including staff that worked  formerly in business. But that’s mainly at the senior level and a friendly and commercially minded attitude takes time to trickle through the organisation. The fact that nearly one-quarter of almost 3000 job cuts at the ATO have come from its audit team also isn’t instilling confidence in the agency. “This is clearly putting pressure on remaining staff to protect government revenue,” Shadow Assistant Treasurer Andrew Leigh says.

Mr Hughes told the inquiry: “If the current commissioner stays for a long tenure, the culture will change over time.” But he said the executive had expressed concerns to him privately that the message was not getting through to the troops.

The inquiry has to decide whether to recommend to the government to change the law to allow taxpayers to get proper compensation if they have a genuine case against the Tax Office.

Inspector-General Noroozi has flagged introducing a taxpayer bill of rights that is legally enforceable and allows people to claim compensation if they are mistreated. But introducing such a change would need to be balanced against the potential loss of revenue that might result if more people made claims. The possibility of more claims is high, given that the Tax Office is the third-most complained about agency to the Commonwealth Ombudsman after Centrelink and Australia Post.

The inquiry is also looking at whether the Tax Office should be split, so that its policing and administrative functions are separate, something Treasurer Joe Hockey hinted could happen before the Coalition won government.

The ATO and Treasury both oppose a split. Mr Jordan told the inquiry the ATO’s independent review area ensured that if taxpayers had a gripe, they could go to someone in a separate area from the officers who did the audit to review the original decision.

But as it stands this independent review is available only for the big end of town, and in any case while the Tax Office thinks it is working beautifully, tax advisers don’t think it is independent enough.

Some want the review area to be taken out of the Tax Office and a new agency to be created. Others say it should stay within the ATO but have a separate commissioner.

Mr Lyons, who is considering whether to seek what limited compensation might be available to him under the system – and whether he is eligible would be at the discretion of Mr Jordan – said he was glad the Tax Office had brought in leadership with business acumen.

“Chris Jordan’s seen it from the other side of the fence and he says he is taking steps to fix things,” Mr Lyons said. “I hope that’s what he will do. I hope he will make a big change, so taxpayers are treated fairly and not treated like people that are criminals.”

This story Administrator ready to work first appeared on Nanjing Night Net.