Australia must have no place in law for incompetent Judges

MD Charles Figallo

Basetec Services MD Charles Figallo previously told The Australian Business Executive (The ABE) how some companies are legally able to conduct business in a manner which can create great difficulties for sub-contractors, who can struggle to receive payments due.

Chevalier Charles Figallo, MD, who last year received an Order of Australia Medal for promoting Australian businesses, recently received a lot of positive feedback and support for speaking to The ABE about a corrupt legal system which is totally against SMEs.

“Legal representation is disproportionately expensive, and the Courts decide issues which can be baffling even to those within the legal profession. Trials can end up being a deliberately drawn-out legal conundrum designed to totally bankrupt you.”

“It is in the interests of some companies to bankrupt SME’s and the Courts have this totally wrong to such a degree, showing bias in favour of companies with deep pockets.”

“In my opinion the 2014 legal reforms designed to extend protection to small businesses against unfair contract terms do not go far enough, and how some judges interpret the law leads to results which can undoubtedly be biased.”

“We need a legal system which is objective and treats businesses equally, rather than one which is easily manipulated by parties with the most resources, such as when a small company is made to put up financial security in the way of cash. The defendant who counter-claims should also have to put up security to the Courts for the work done, or at best to the value of the signed contract.”

“Judges are taking far too long to hand down their decisions, and this is a major problem. Strong indications are coming to me, supported by a recent letter from the court, that the judges junior associate may be actually writing the decisions. There is undoubtedly something going wrong here. And as a year or two goes by, prior to judgement, has the judge lost all reasoning or knowledge of what took place in the courtroom? As an example, our QC tore a strip off the judge clearly stating ‘where has the $800,000 gone that you yourself awarded?’ Further to this, 23 grounds of appeal were submitted. This alone is evidence that something has gone wrong. Another important issue is that the trial judge pulled the defendants’ witness up for committing perjury. When I queried this, the Federal Court has refused to answer. I would call this biased and contempt of Court.”

“I am receiving very favourable comments on the need for a fair court system from the business community and including the judiciary. I am told time and time again to keep up the fight for our country.”

“Judicial decisions depend largely on the individual biases and social situation of the judge. Law is not neutral or objective. The logic and structure attributed to the law grow out of the power relationships within the business community, and can be dominated by certain companies who regard themselves as beyond the scope of the law of any one country. ”

“What’s happening is that smaller contractors aren’t getting paid. People are depressed, even committing suicide due to a lack of honesty and transparency in business dealings, and a legal system which protects the rights of certain companies who are able to manipulate the system.”

“SM businesses need an avenue to make official complaints and for these to be investigated independently of the legal and court systems, as I strongly believe that some judges are not carrying out their duties correctly.”

“Another thing I have noticed in our courts, and this is extremely important, that SMEs should not have to disclose their financials or their personal assets. This goes totally against SMEs, and is extremely biased.”

“There are great business opportunities in Australia and for Australian businesses overseas. What Australian business needs is a fairer, unbiased legal system which delivers speedy and affordable justice. This is becoming apparent in the courts overseas.”

Mr Figallo campaigns tirelessly to extend Australian business opportunities overseas whilst raising money for charities supporting the disadvantaged, such as children with cancer.

The Canberra Quarterly presented by Inside Canberra’s Michael Keating

Inside Canberra Michael Keating

Inside Canberra’s Editor-in-Chief Michael Keating provides a summation of Canberra’s political landscape for the last quarter of 2017.

September

Labor has been promising that it would challenge the legitimacy of Barnaby Joyce remaining on the front bench. The argument became a trifle confused when they also challenged the legitimacy of the Coalition to form government because of the doubts over the Deputy Prime Minister’s eligibility to sit in Parliament. The matter was put to the test when the Leader of Opposition Business in the House, Tony Burke, moved for a suspension of standing orders so that Barnaby Joyce’s right to be a minister could be debated. The motion lost by one vote, presumably Mr Joyce’s, because the crossbenchers voted for the motion. The crossbenchers’ position was that he should stand down.

However the crossbenchers’ patience wore thin later in the week and by Wednesday they were voting against Tony Burke’s third motion to suspend standing orders. They were clearly concerned that the Parliament should get back to its core business and were happy to leave Mr Joyce’s future to the High Court.

Anthony Albanese developed a new approach for Labor on Wednesday when he asked a number of questions of Infrastructure Minister, Darren Chester, about projects that had recently been started in Mr Joyce’s electorate of New England. He asked whether the Deputy Prime Minister had already started campaigning for the inevitable by-election that would follow an adverse High Court decision. Mr Chester unashamedly delivered a campaign speech for his National Party leader.

A Senate committee released a Labor majority report that recommended an import ban on flammable building materials. Government representatives opposed the ban, a view that was supported by the fire authorities who appeared before the committee. The view of the experts was that cladding had considerable advantages and the risk could be managed. Labor Senators, led by Senator Kim Carr, said that the flammable materials were the equivalent of asbestos.

October

This week the political circus visited the precincts of the High Court, sitting as the Court of Disputed Returns, for the dual citizenship applications related to six Senators and Barnaby Joyce. The hapless politicians were represented by a gaggle of lawyers who were said to be costing the Commonwealth a cool $2 million for the three days of hearings.

When the Solicitor General, Dr Stephen Donaghue QC, opened proceedings the Chief Justice Susan Kiefel asked the obvious question: why did the Court have to deal with this problem when Parliament had been aware of it for 25 years? Dr Donaghue said that there were matters of ambiguity in section 44(1) of the constitution that the Court needed to resolve. The Solicitor General said that the applicants had to be divided into two groups: those who were born overseas and acquired foreign nationality at birth and those who were born in Australia and acquired citizenship by descent. He argued that the latter group should not have to take measures to revoke their foreign nationality because it was not incumbent on them to be aware that they held dual citizenship.

Former Solicitor General Justin Gleeson SC, representing Tony Windsor, argued that this would lead to instability within Parliament because there would be no certainty as to who was eligible to be members and who wasn’t and that the state of parties on the floor of the House of Representatives would be unclear. He argued that it was incumbent on members to undertake the appropriate due diligence.

The lawyers for Malcolm Roberts argued that it was unAustralian for there to be a distinction between people born in Australia and those who were not because Australia was a multicultural country. The Court seemed to lose patience with this argument and his lawyers were repeatedly told to hurry up with their submissions. At the present time there is no indication as to how the court will rule.

Jennifer Westacott at the Press Club

During her address to the National Press Club, Jennifer Westacott, CEO of the Business Council of Australia (BCA), announced a major reform to tertiary education that her organisation wants implemented. She framed the need for the reform in the context of the requirement for Australia to improve productivity if it was to remain competitive within the global economy. This enabled her also to call for energy and tax reform as productivity enablers.

Ms Westacott acknowledged the reform that had taken place in the schools sector as a result of the Gonski initiatives. She said that, while the schools system had received a lot of funding recently, the reform of that sector was still a work in progress. The key was getting students to enjoy school while at the same time acquiring the necessary learning. Mathematics is a key component of that learning and we need to change the way that maths is taught. Ms Westacott added that we need to support and empower teachers in particular through developing an approach that allows good teachers to be paid more without swapping teaching for administration. However she said that before we do more to reform schools we need to settle on the objectives for education. One key objective should be that no child should leave school without a knowledge of reading, writing and mathematics.

When it comes to tertiary education there’s a need to value university and vocational education (VET) equally. At the moment there is a cultural bias in favour of university education. Funding is distorted. University students get substantial subsidies whereas VET students get much less assistance which means that students are more inclined to go to university than to undertake skills based learning. Universities are responding by credentialing more and more courses that are of limited value when it comes to national productivity.

The government spends $20 billion a year on higher education but it has no idea whether it is getting value for money. The BCA has produced a report which recommends measures that would lead to better economic returns from the expenditure. The report suggests that funding should belong to the learner. It proposes that every individual should have a lifelong learning account that would be funded by the government on an assisted loan basis and which could be applied at the owner’s discretion for courses that are deemed to contribute to economic productivity by an independent statutory authority established by the Commonwealth and the states.

The report also proposes the establishment of an independent platform that would list eligible courses, their prospects in the job market and the likely income that would they lead to in comparison with the cost of the course. Ms Westacott argues that this would lead to both a better allocation of educational resources and better economic outcomes.

In the meantime the BCA argues that no more money should be removed from the VET sector and TAFE should be reformed so that it can compete in the education market on the same terms as the private sector. At the same time there should a cost benefit analysis of the tertiary sector to ensure that the government is getting value for money.

Inside Canberra asked Ms Westacott whether a lifelong learning approach should include a reinstitution of the technical colleges first introduced by the Howard government so that secondary students could acquire high level technical skills prior to making career choices. She replied that the priority should be accorded to mature workers who needed to retrain.

Ms Westacott concluded with the observation that big reform was not beyond Australia but that it required leadership from both sides of the political divide and a focus on what was needed for the economy. It is not a case of trade-offs: tax cuts for big business will drive business investment which will lead to higher wages and stronger productivity. Higher tax revenues could support income tax cuts for those coming under pressure from bracket creep. It is not a case of one or the other.

November

Malcolm Turnbull had problems coming at him from all directions: the Libs and the Nats were fighting over the Senate presidency; more Coalition members were under threat of exposure as dual citizens; there were stories appearing that backbenchers are discussing leadership change; and Tony Abbott was talking of a resurgent conservative movement. With Labor threatening to create chaos on the floor of the House of Representatives when Parliament resumes for the last two sitting weeks before the summer break, there were questions about whether the government can hold it together until the end of the year.

The first issue was whether the government can keep control of the parliamentary process until Barnaby Joyce returns after his by-election. In normal circumstances this shouldn’t be a problem: in order to get a bill, say to establish a bank royal commission, voted on, the opposition would have suspend standing orders which requires an absolute majority of 76 votes. With all the Labor members and the crossbenchers it can muster 74 votes at the most so they need two government backbenchers to cross the floor. There are rumours that George Christensen and Warren Entsch are prepared to do that on banks but that remained to be seen. The position is less clear on the other bill that Labor wants to get up, the reversal of the Fair Work Commission (FWC) decision to cut penalty rates. George Christensen had indicated that he was unhappy with the FWC decision and earlier this year he crossed the floor to vote with Labor on a motion to have the issue debated. Labor will target him and Warren Entsch, both of whose electorates have suffered because of the cuts in penalty rates.

The dual citizenship issue is a festering sore for the government. Then over the last few days Josh Frydenberg and Alex Hawke have been outed as potential dual citizens and Labor has called for a process of universal disclosure whereby all Members and Senators will produce any material they have that’s relevant to their citizenship, presumably to the clerks of the House and the Senate who will open them for public inspection. Greens leader Richard Di Natale had a proposal that went further. He wanted to establish a parliamentary committee that would review the citizenship status of all Senators and Members and to refer all those that can’t be completely vindicated to the High Court. Presumably they would be asked to stand aside while their cases were pending. This proposal has hallmarks of Robespierre, St Just and the Committee of Public Safety during the French Revolution. It would be surprising if the parliamentary committee was not dominated by Labor, the Greens and the crossbenchers while the Liberals would be the party in the frame.

The rumours about leadership threats were raised with Tony Abbott’s offsider Kevin Andrews when he was interviewed on Sky News at that time. Mr Andrew’s insisted that he had confidence in the Prime Minister despite being at odds with him over citizenship. He said that he was unaware of any moves against Mr Turnbull at the moment. There are reports circulating that a group within the Liberal Party is trying to destabilise the leadership. This group is said to be behind the allegations over Josh Frydenberg’s citizenship and possibly the story about Alex Hawke. However this doesn’t mean that there is a plot to replace the Prime Minister before the election. At that moment it seemed as if he will lead the Coalition to a calamitous loss.

December

We are approaching the killing season, the time when weak leaders are put to the sword. Malcolm Turnbull is now a leader without authority, unable or unwilling to honour his promises. On same sex marriage he promised religious protections but would not support amendments that were supported by the majority of his party, a majority of his cabinet, and a majority of Liberal voters. The public has stopped listening to him and he can’t get the polls to move in any direction except down.

‘The Australian’s’ Dennis Shanahan says that in the circumstances a party has three options: change the leader; change the ministry; or change the conversation. At the moment the government’s leadership group appears not to want to take any of these options and seems to prefer to lose government. The problem is that, in these circumstances, a substantial number of Liberals will lose their seats. This prospect is making the backbench extremely nervous and causing the Nationals to adopt a separate political identity which is leading to support for a commission of inquiry into the financial sector.

At the end of this week the government will know how many by-elections it is likely to face next year. At the moment it’s reckoned to be at least six which is enough to bring about a change of government. Seen through this prism the Prime Minister will be matched with Bill Shorten in what is a proxy for a general election. If he loses government then he’s finished in politics so jeopardy is closer than ever. At the moment the Liberal Party is not ready for a major political stoush. It’s possible that John Alexander will win the Bennelong by-election because of issues that are peculiar to the electorate but it’s unlikely that these factors will come into play with other by-elections next year which Labor will represent as a referendum on the government and its leader.

And now we see the Prime Minister engaging in major reversal of his long-standing position opposing a royal commission to examine the several wrongdoings of the big four banks, apparently at the direct request of those big four banks although, at least around the water cooler, there seems to be a measure of scepticism about just who prompted who to ask for what.

Oh and another thing: Malcolm Turnbull announced that he’d vote in the Reps in favour of Attorney General George Brandis’ proposed amendment to the same sex marriage bill to protect the position of religious charities.

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Smartgroup on providing employee benefits through salary packaging

SmartGroup

Dave Adler, is the Chief Executive of Leasing and Fleet for Smartgroup. Smartgroup is amongst Australia’s leading providers of employee benefits and workplace optimisation services. Their services are available to government, health and corporate sectors, and draw strength from continual improvement in their people, customer-service, and technology.

Amongst the key services Smartgroup offer is salary packaging. Also known as salary sacrifice, the process of salary packaging allows employees to take a portion of their salary as non-cash benefits, the bulk of which can be paid for with their pre-tax income. Salary packaging was born in 1986 when Fringe Benefits Tax (FBT) was introduced. In modern use, it is one of the most effective ways that not-for-profits and public sector organisations can offer earnings to their employees that are competitive with those available within the private sector. It also allows those in the private sector to increase their take home pay.

Since 2002, Mr Adler has taken on a variety of roles at Smartgroup including operations, client services, business development, marketing, and has been part of the company’s key executive team since 2006.

The Australian Business Executive (The ABE) spoke to Mr Adler about Smartgroup’s customer-centric viewpoint, innovation, and the services they provide.

The ABE: How would you describe how Smartgroup came about and what it has evolved into today?

Dave Adler: Smartgroup began as Smartsalary Pty Limited in 2001. We were fairly late entrants into the salary packaging market, the major players had been around since the mid-90s and were doing a good job capturing market share. The Fringe Benefits Tax (FBT) legislation was relatively new and quite complex. Organisations didn’t really understand salary packaging and so immediately looked to outsource.

A couple of Melbourne-based providers took most of the market, but didn’t excel at providing good levels of service, thus encouraging a number of their clients to look for alternatives. This allowed Smartsalary to win a number of hospital clients and gain a solid presence in the market. Our journey and growth essentially commenced in 2002 when we won a large hospital contract in Victoria.

Since day dot, our focus has been on serving our current clients as best we can.

The ABE: In over 15 years with the business, what have you learned is important to its success?

Dave Adler: Number one is making sure our customers are looked after. We’ve managed to retain the vast majority of our clients by focusing on providing and maintaining great service. Customer loyalty is at the pinnacle of our capability triangle.

We’ve measured net promoter score since 2010. This gives us a very clear understanding of customer loyalty-who is promoting us and talking to their friends about us, and what we need to do about the few customers who may be on the detractor side. But that core principle of looking after our clients and our customers, the end users, has been in place throughout our entire history.

The ABE: The term salary sacrifice is bandied around but a lot of our readers may not fully understand how it works. Could you give us a grounded explanation of this and who uses the service you provide?

Dave Adler: It’s basically an employee benefit based on Fringe Benefits Tax legislation in Australia. It’s a way for people, rather than taking their entire salary as cash, to take a combination of cash and specific benefits that can be primarily paid with pre-tax dollars.

While the users range from not-for-profits and government employees to corporates, the main group that it benefits are employees of not-for-profits, often called Public Benevolent Institutions (PBIs). The idea is that they get a portion of their salary tax-free, and they can allocate that tax-free cap to pay for a range of benefits. Knowing that the public sector or the not-for-profit sector cannot compete with the private sector in terms of actual salaries, these tax concessions are a way to even it out so employees in all sectors are earning similar amounts.

 

The ABE: How did you roll out these services across different industries?

Dave Adler: Two services are available to all sectors regardless of whether they are for-profit or not-for-profit, or whether they are a public benevolent institution. The first being additional superannuation contributions over and above the super guarantee that is paid by the employer.

The second is novated leasing. Novated leasing is the car leasing benefit. It has become one of the fastest forms of vehicle financing in Australia as a result of not only tax concessions, but some additional savings in the form of discounted vehicles, not paying GST on the purchase price of the vehicle, competitive finance rates and insurance rates that are lower than what the employee could source themselves. There is a combination of savings, plus the convenience of outsourcing car leasing management to us, that makes this benefit very attractive.

As a result of these two opportunities, employees in a number of sectors have started to salary package. Today, for example, the offering of salary packaging is in many of the enterprise bargaining agreements, so it’s something that organisations must offer their employees as part of the remuneration program.

The ABE: Why are salary packaging and novated leasing important benefits in the corporate sector? In the government sector?

Dave Adler: In many cases employers see salary packaging as an extension of their overall remuneration and benefits offering to staff. We typically see the highest levels of employee participation at organisations that view these benefits as a critical part of their remuneration and benefits program, so when the HR department truly believes salary packaging employees can improve their financial wellbeing and increase their take-home pay. These companies are supportive of us educating their staff about the benefits available to them. It’s important to make employees aware that besides their cash salary there are other legal ways that allow them to increase their take-home pay, often significantly.

There’s a misconception that novated leasing is for those earning six-figure salaries. Really, it works for employees on a middle income. 70% of users are employed in Health, Education, Charities, Government and Emergency Services and the annual salary range for most users of novated leasing is $80,000-$89,999. And lastly, the average purchase price of a novated lease vehicle is around the $37,000 mark.

The ABE: Smartgroup has won several awards for innovation, including being named on the Australian Financial Review’s Most Innovative Companies list for 2017, how does innovation feed into your company philosophy?

Dave Adler: We represent our key capabilities as a triangle. At the base of that triangle is employee engagement. We believe if staff are not engaged, it’s really hard to motivate them to do the right thing. At the pinnacle of our triangle is customer loyalty. Without loyal customers, you’re not able to grow over time.

In many ways the salary packaging industry is no different to other industries. The product we offer is highly legislated, and the product and the benefits that we offer are also offered by all of our competitors. In our case, differentiation of product is not really an option – it’s all about how we differentiate our service. We introduced innovation to the core of our triangle to encourage positive change that adds value to our customers’ experience. We were first recognised for innovation in 2012. At the time it was known as BRW’s most innovative companies list, but over the last couple of years it’s been know as the Australian Financial Review 50 most innovative companies list. We’ve been recognised in those rankings four times in the past 5 years. It’s all about innovation that delivers a better outcome for our customers and our suppliers.

The ABE: You recently received the highest audit score ever recorded by the Customer Service Institute of Australia (CSIA), can you comment on the Smartgroup approach to customer service?

Dave Adler: The CSIA is the peak body for customer service in Australia. We’ve been accredited with them since 2008, and when we initially gained accreditation, we really saw it as a stamp of approval. The real meaning comes from the feedback we get as a result of the audit.

CSIA visit our office and they actually talk to people, not to the management team, but they talk to staff who are in customer facing roles to make sure that what we said in our submission is in fact what we’re doing – that we are living by our principles. It’s not only customer service staff they speak to (as in people who are answering the phone and having a direct conversation with the customer) CSIA also talk to people in marketing who are communicating with the customer, and the sales team who are educating and signing people up for services. In the past three years we’ve had the highest score issued in the history of the CSIA. In 2015, 2016 and again 2017.

The ABE: What is the benefit of outsourcing employee remuneration and benefits administration?

Dave Adler: If you’re offering a novated leasing program, it is really hard to do in-house because of the intricacies and number of providers that are necessary to put a novated leasing program in place. For example: in order to have an attractive cost-effective program, you need to have access to a network of car dealerships to source vehicles. You also need to have access to funding or financiers in order to finance those vehicles. You need a range of different insurance options, whether it’s comprehensive or CTP insurance, and other more specific insurances like redundancy insurance.

When an employee’s package is built, they go through the credit application process. Payments are bundled into a monthly lump sum. Pre-tax and after-tax deductions on that vehicle need to be managed and payments need to be made to the various suppliers for the term of the lease. Then at the end of the lease, employees often want to trade in or purchase their vehicle outright.

There’s a layer of technology that we offer in terms of online calculators and models to help people to understand how much money they can save. They have the ability to apply for credit online and claims for out-of-pocket expenses for that vehicle can be made through our app or mobile-friendly website. They can also change their deductions for some of their expenses online. We have fuel cards, which are a critical part of the program, and people can order or cancel these online. There’s a layer of technology that employers don’t have.

There’s also the management. The financial and the tax management should be outsourced so you’re not taking on any potential liability or financial risk. If you do it yourself and you have the wrong calculation, you might end up with liabilities.

Most organisations don’t really have the time or skills to carry out this whole function. They need an outsourced provider to do it for them because to offer novated leasing without a third party is practically impossible. We’ve found some hospitals and not-for-profits who do manage salary packaging in-house and outsource their novated leasing.

We’ve seen not-for-profits thinking “I want a lower cost program, I don’t want to do the admin, I want to partner with an organisation that can help me increase the participation rates for better service and better technology.” The benefits are significant.

Since establishment as Smartsalary Pty Limited in 2001, Smartgroup has achieved business success through their attention to customers, workforce and technology, putting their efforts into serving their loyal customer base. They are thoroughly engaged in the improvement of their systems and services, and welcome external scrutiny.

The team at Smartgroup has done an excellent job of demystifying the many services Smartgroup offer, and you can find out more including how their services can suit you or your business by visiting www.smartgroup.com.au

CQR on the importance of certification in an increasingly interconnected world

CQR online digital security

When they were first invented as business structures, companies tended to operate as stand-alone entities. Each would carry out all the activities required to create the goods or services provided to their customers.

During the 1980s, this situation started to change. The concept of ‘outsourcing’ became popular and companies began to offload elements of their operations to external parties. The rationale was that they could do it faster, better and more cost effectively while the company itself focused on its core competency.

As a result, organisations found they no longer operated in isolation but instead had a web of links to other companies. These links became vital for their ongoing operation and growth. Any disruption in one area could have rapid and significant flow-on effects in others.

The importance of trust

As this outsourcing trend grew, the importance of inter-company trust came to the fore. Companies realised they needed to be able to trust their chosen third parties to carry out functions professionally and securely.

This was particularly the case when it came to outsourcing the IT function. A company needed to be sure the selected third party had the qualifications and knowledge required to ensure systems were maintained and secure at all times.

Today, this subject of trust is particularly acute when a company opts to make use of a cloud service provider. The company must be confident the provider has in place the necessary systems and processes to ensure the service is reliable and resilient to cyber attacks.

Certification is key

One of the most effective ways of creating trust between companies is through the use of certifications. A potential provider must be able to demonstrate that they have been reviewed by an independent party and found to be operating in accordance with industry best practices.

Unfortunately, there is currently no legal requirement for such certification. Indeed, anyone can hang out a shingle and call themselves a cyber security expert. There are companies offering security services without any qualifications or certifications at all, and this should be a very real concern for anyone making use of their services.

Before establishing links with any external party, a company should carefully review its certifications and ensure they are operating efficiently, effectively and securely. A failure to do this could result in business disruption and loss.

Inter-company trust has never been more important and it has now become the bedrock of the modern economy. That bedrock needs to be hardened with proper certifications.

CQR are a Cyber Security Service provider. Working with our clients to produce high quality outcomes throughout the globe from our offices in Adelaide, Brisbane, Melbourne, Sydney, Oxford (UK) and New York (USA).

CQR was founded with the mission of MAKING THE WORLD A SAFER PLACE. We exist only to ensure our clients’ businesses and people are protected so they can thrive.

To learn more of CQR and our services visit www.cqr.com or contact us directly on 1300 277 001.