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It’s that time of year again when tens of thousands of investors from around the globe descend on Omaha, Nebraska, to hear billionaire Warren Buffett dole out his investment wisdom.
Along with Buffett’s <a href="https://www.smartcompany.com.au/leadership/35872-five-pearls-of-wisdom-from-warren-buffett-s-2014-letter-to-berkshire-hathaway-shareholders" target="_blank">annual letter to shareholders</a>, the annual shareholders’ meeting for Buffett’s investment group Berkshire Hathaway is one of the biggest events on the investment calendar, with the “Oracle of Omaha” always generous in his comments and advice.
Buffett is also not shy on speaking on issues that are important to him and in the lead up this year’s meeting <a href="https://online.wsj.com/news/articles/SB10001424052702303948104579536184228959734" target="_blank">caused a stir when he took aim at the Omaha hotel industry for “price gouging” his visiting shareholders</a>. He even went one step further and suggested his fellow investors could save a few bucks by booking accommodation through online startup Airbnb.
This year, more than 30,000 shareholders were <a href="https://dealbook.nytimes.com/2014/05/03/live-blog-berkshire-hathaways-2014-shareholder-meeting/?_php=true&amp;_type=blogs&amp;_r=0" target="_blank">keen to hear</a> Buffett speak about Berkshire’s first-quarter earnings, in which net income was down, and the investment guru’s decision to abstain from voting against Coca-Cola’s controversial executive compensation plan.
Here’s five pieces of wisdom from this year’s meeting.
<ol>
<li>
On playing nice around the board table Buffett said there is a need for board directors to be diplomatic, and that trying to force change amounts to rude corporate behaviour. “I’ve voted for compensation plans in various places that are far from what I would have designed myself. That is the way boards work. You keep belching at the dinner table, you’ll be eating in the kitchen.” 
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<li>
On the nature of corporate boards “The nature of boards is that they are part business and part social and people behave sometimes with their business brain and sometimes with their social brain”. 
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<li>
On climate change “I don’t think in making a decision on Berkshire and other companies that climate change should be a factor in the decision-making. A lot of people are over-climbing that they know the impact. We are agnostic. It’s not there isn’t global warming because there is, but those that say they know its impact are talking out of their hats”. 
</li>
<li>
On managing Berkshire’s culture “Managers, when they work, are joining a business that is unlike anything else. It’s a huge corporate asset and we want to maintain that message well beyond my lifetime.” 
</li>
<li>
On concerns about Berkshire Hathaway’s growing cash stockpiles “We are finding things to do that tend to sop up the cash. We will always have around $20 billion around Berkshire; we will never be dependent on the kindness of strangers, which didn’t work well for Blanche DuBois. We cannot depend on anybody else to keep our own strength and maintain our operations.”
</li>
</ol>
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
Picture courtesy of Flickr/<a href="https://creativecommons.org/licenses/by/2.0/" target="_blank">Creative Commons</a>.
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Five gems from Warren Buffett’s annual shareholders’ meeting

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The federal government and opposition are at loggerheads over when Australians should be allowed to access their superannuation.
Following the government’s decision to <a href="https://www.smartcompany.com.au/growth/41788-fast-lane-getting-ready-to-work-until-i-m-70">raise the age at which retired Australians will be able to receive the age pension</a>, Treasurer Joe Hockey said on Monday changes to the super preservation age is “on [his] mind and on Tony Abbott’s mind”.
However, Opposition Leader Bill Shorten has vowed to vote against any changes to the superannuation preservation age, <a href="https://www.afr.com/p/national/labor_vows_to_block_rise_in_superannuation_aQkZWm68JPXCzck0rZpZqL">reports Fairfax</a>.
“Where does Joe Hockey get off saying to Australians, nine million Australians with superannuation, ‘I am going to make you wait until you get your money’,” said Shorten.
“First of all he wants pensioners to pay more, secondly he wants people to work until 70. But on superannuation, it’s not even the government’s money,” he said.
Under current arrangements, Australians born before June 30, 1960 can dip into their super savings at the age of 55, while those born between July 1, 1960 and June 30, 1964 can gain access between the ages of 56 and 59. The preservation age for Australians born after July 1, 1964 is 60.
As <a href="https://www.smartcompany.com.au/legal/politics/41533-are-you-ready-to-work-until-you-re-70-hockey-flags-plans-to-raise-retirement-age">previously reported by SmartCompany</a>, the government wants to lift the pension age to 70 from 2035. The previous Labor government legislated to life the pension age from 65 to 67 by 2023.
While the government has said there will be “no adverse changes” to superannuation in its first term, Fairfaxreports it will take any proposed changes to the next federal election, scheduled for 2016.
“I think it’s something that we need to have a proper process to discuss with all the affected stakeholders,” said Hockey.
“We’re thinking about how we’re going to make sure that the quality of life for Australians into the future is sustainable,” he said.
Martin Parkinson, the outgoing Treasury secretary, backed up the government in his post-budget speech on Tuesday, telling the audience at an Australian Business Economists event that a change in the preservation age is “inevitable”.
While Parkinson did not specify the age at which he thinks retirees should gain access to their savings, he called for a more “sensible” debate on superannuation.
Michael Davison, senior policy adviser at CPA Australia, told SmartCompany while CPA Australia sees “merit in ensuring that the preservation age remains aligned to the pension age”, it is important there are provisions for people to access their super sooner “if their personal circumstances make waiting impossible”.
“But before we start ruling options in or out, we also think it is vital to articulate a long-term vision for our retirement savings policy which clearly spells out its purpose and goals and ensure, as compulsory super matures, that the age pension shifts back from supplementing retirement savings to being a genuine safety net,” said Davison.
“That means developing a retirement income stream culture that encourages income streams and discourages lump sums. We do accumulation well, we don’t do decumulation well at all,” he said.
The Australian Institute for Superannuation Trustees has previously backed calls by the National Commission of Audit to tie the preservation age to the pension age, but warned the government against making “piecemeal changes” to retirement income policies.
“When it comes to fair and sustainable retirement policy, we need to think about all the policy levers that can be adjusted, not just one or two,” said chief executive Tom Garcia.
Garcia said many Australians are forced out of work early and do not get to choose when they retire.
“Policies are meant to improve people’s lives so any changes affecting access or eligibility to the age pension or superannuation shouldn’t be about punishing disadvantages and vulnerable Australians,” he said.
This article first appeared on <a href="https://www.SmartCompany.com.au" target="_blank">SmartCompany</a>.
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Political battlelines drawn over when retired workers should be allowed to access their super

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An Australian women’s fashion retailer with annual turnover of $62 million has collapsed.
The directors of Grace Fashion, the parent company of retail chain SES Fashions, appointed Stewart Free, Bradd Morelli and Sule Arnautovic of Jirsch Sutherland as administrators on 22 April.
SES Fashions currently operates 44 retail stores across the country, employing approximately 300 workers. The chain specialises in affordable women’s fashion items, including clothing, shoes and accessories.
Free told SmartCompany that Jirsch Sutherland has had nine parties register interest for the business ahead of the first meeting of creditors, which will be held in Sydney on 2 May.
Free said the administrators are still investigating the state of the company’s books but its debts are believed to be around $12 million.
Free said a “very lacklustre” retail market in the first few months of this year is the main factor in pushing the company into administration, along with “some pressure from suppliers”.
Colin Porter, managing director of Creditwatch, told SmartCompany that it is “definitely a tough environment” for retailers in Australia.
Porter said the collapse of SES Fashions is a prime example of the need for wholesales and suppliers to “be really vigilant” and understand their clients and the market they are supplying.
SES Fashion’s administration follows the <a href="https://www.smartcompany.com.au/finance/cashflow/35295-creditors-line-up-after-fashion-retailers-collapse-dion-lee-ellery-and-mercedes-benz-fashion-week-all-owed-cash" target="_blank">collapses earlier this year</a> of fashion retailers Jasu and UnderCoverWear. 
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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$62 million fashion retail chain collapses

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Restaurant and café owners around the country are celebrating today following a landmark decision by the Fair Work Commission to reduce the 75% penalty rate for casual employees on Sundays to 50%.
John Hart, chief executive of the Restaurant and Catering Industry Association, said this morning his association had been flooded by calls from its 35,000 members restaurant who said “loud and clear” they will now consider trading on Sundays when the reduced rate comes into effect on 1 July.
Hart says many businesses have been waiting on the decision, which is the result of the association’s long battle to have the penalty rates introduced by the 2010 Restaurant Industry Award amended.
The association had made an application for changes to penalty rates, classification structures and payment of wages under the Modern Awards Review Process in 2012, which was <a href="https://www.smartcompany.com.au/people/industrial-relations/34103-fair-work-commission-denies-changes-to-penalty-rates-hospitality-industry--small-business-furious" target="_blank">rejected in October 2013</a>.
The association subsequently <a href="https://www.smartcompany.com.au/people/industrial-relations/34432-restaurateurs-appeal-penalty-rates-decision-industry-body-calls-weekend-rates-commercially-unviable" target="_blank">lodged an appeal</a> with the full bench of the Fair Work Commission, which <a href="https://www.fwc.gov.au/documents/documents/summaries/2014fwcfb1996_summary.pdf" target="_blank">accepted</a> on Wednesday the association’s argument that there is a direct link between penalty rates and employment prospects.
“It’s a good first step and it’s enough for businesses to reconsider opening on Sundays,” says Hart.
“This decision really resets the operating environment for the weekend as we now have a penalty rate structure for casuals that is the same as for Saturdays.”
Hart says the majority of businesses operating in the industry are small businesses and the ruling “applies to them almost exclusively as the large companies have different arrangements”.
“This is great news for operators and for staff as there will now be more hours of work available,” says Hart. “And it is great news for consumers, who will have more restaurants to choose from on Sundays. It’s a win for everyone.”
Peter Strong, executive director of the Council of Small Business of Australia, <a href="https://www.smartcompany.com.au/people/industrial-relations/34103-fair-work-commission-denies-changes-to-penalty-rates-hospitality-industry--small-business-furious" target="_blank">previously told SmartCompany</a> he heard several tales of businesses being closed on Saturdays and Sundays because they could not afford to pay penalty rates.
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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Landmark decision by Fair Work cuts restaurant Sunday penalty rate by 25%

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<h3>1. Deficit</h3>
It should come as no surprise this year’s budget will deliver a deficit.
The government has used the lead-up to the budget to lay the blame for the shape of the country’s finances with the previous government, warning the electorate that immediate sacrifices are needed for <a href="https://www.smartcompany.com.au/legal/politics/41701-abbott-reveals-budget-plan-no-changes-to-age-pension-for-three-years" target="_blank">long-term gain</a>.
The most recent estimates place the expected deficit in the arena of $47 billion, with future budgets also expected to show the government’s accounts in the red until at least 2019-20.
Hockey has <a href="https://www.smartcompany.com.au/legal/politics/41665-hockey-s-budget-roadmap-industry-assistance-age-pension-and-welfare-payments-on-treasurer-s-hit-list">said in pre-budget speeches</a> that the government will aim to reduce real spending growth by 1.75% over the next five years to turn things around.
<h3>2. A debt levy of some kind</h3>
The government’s so-called debt levy has gone through a number of guises since it was <a href="https://www.smartcompany.com.au/growth/economy/41721-how-the-government-s-debt-tax-targeting-top-earners-will-hit-your-business" target="_blank">first leaked</a>, but cabinet has signed off on the tax increase, so we know it is coming.
The government looks likely to impose a 2% increase on the highest income tax rate, which will <a href="https://www.smartcompany.com.au/legal/politics/41840-budget-2014-debt-levy-could-hit-650-000-australians-abbott-prepares-10-billion-infrastructure-fund">affect around 650,000 taxpayers on incomes above $180,000</a>.
Unsurprisingly, the debt levy is one of the more controversial measures to be included in the budget, with accusations the government has broken pre-election promises not to change existing taxes or introduce new taxes being hurled at the government, even from within its own ranks.
Hockey and Prime Minister Abbott have both said the levy will be temporary, but as most people know, once a tax is introduced it is very difficult to undo.
<h3>3. Less money for corporate welfare</h3>
In one of the more recent pre-budget leaks, the government has said it will <a href="https://www.smartcompany.com.au/federal-budget-2014/41892-budget-2014-10-billion-cut-to-industry-assistance-asic-corporate-registry-to-be-privatised">reduce the amount of money available to struggling companies by $10 billion</a>.
Hockey flagged the move a <a href="https://www.smartcompany.com.au/legal/politics/41665-hockey-s-budget-roadmap-industry-assistance-age-pension-and-welfare-payments-on-treasurer-s-hit-list">few weeks ago</a>, using a speech about the economy to outline the government’s position when it comes to corporate welfare. However, there is little information about what shape the cuts will take at this stage.
Hockey said on the weekend “those who depend heavily on government support will not necessarily receive the same support into the future”. 
“Business has a responsibility to manage itself in the same way we expect (others to do so), other than those most vulnerable in the community,” he said.
<h3>4. A raise in the retirement age</h3>
Australians will need to start preparing to work for longer, with the government <a href="https://www.smartcompany.com.au/legal/politics/41533-are-you-ready-to-work-until-you-re-70-hockey-flags-plans-to-raise-retirement-age" target="_blank">set to raise the retirement age to 70 within coming decades</a>.
While Prime Minister Abbott has <a href="https://www.smartcompany.com.au/legal/politics/41701-abbott-reveals-budget-plan-no-changes-to-age-pension-for-three-years" target="_blank">ruled out</a> making changes to the eligibility or indexation of the age pension for the next three years, the government is widely tipped to proceed with plans to change the age at which Aussie workers can retire.
“With four or five seniors on the pension, the number of workers per retiree dropping from five to three by 2050, and more than 1000 people becoming eligible for the age pension every single week, long-term reform is essential and unavoidable,” said Abbott recently.
<h3>5. Paid parental leave</h3>
Voters can also expect to see Abbott’s paid parental leave in the budget, although in a scaled-back form.
The scheme, first proposed by the Coalition when it was in opposition, is expected to cost $5.5 billion each year, with the aim of encouraging more Australian women to return to work after having children.
The eligibility threshold for the scheme was originally set at $150,000, but faced with growing concerns about the affordability of the scheme from opposition parties and within his own party ranks, <a href="https://www.smartcompany.com.au/growth/economy/41720-what-will-abbott-s-scaled-back-paid-parental-leave-scheme-look-like-a-smartcompany-q-a" target="_blank">Abbott has cut the threshold to $100,000</a>.
The scheme will continue to pay six months of 26 weeks parental leave based on the recipient’s full-time salary, but the maximum payouts from the scheme will now be capped at $50,000 instead of $75,000.
This article continues on the next page. Please click below.
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<h3>6. Extending unfair contract protections for small business</h3>
Small Business Minister Bruce Billson has advocated for the extension of unfair contract protections for small business for some time and small business owners can expect to see this policy in tonight’s budget.
The policy would grant small business the same unfair contract protections currently available to consumers under the Australian Consumer Law.
Billson <a href="https://www.smartcompany.com.au/people/industrial-relations/30184-coalition-s-unfair-contract-provisions-move-could-lead-to-uncertainty-for-small-business--legal-expert-warns" target="_blank">previously said</a>  he finds small businesses often have to negotiate with big business on a take it or leave it basis under standard form contracts which place a disproportionate burden on one party over the other.
“What happens with standard form contracts is businesses use them irrespective of the scale or legal status of the person they are contracting with, consumers have certain protections but small businesses have no more power to negotiate and no access to those unfair contract provisions,” he said.
<h3>7. A higher level of fuel excise</h3>
In a bid to improve the budget’s bottom line, the government will use the budget to increase petrol tax by reintroducing the twice-yearly practice of indexing fuel excise in line with inflation.
It’s been 13 years since the fuel excise was indexed to inflation and in that time motorists have paid 38.1 cents per litre in fuel excise. According to news reports, unfreezing the indexation will add up to three cents a litre in the first year.
It’s bad news for small businesses, which will be faced with rising costs and therefore tougher competitions from the big end of town.
Peter Strong, executive director of the Council of Small Business of Australia, <a href="https://www.smartcompany.com.au/growth/economy/41868-government-s-petrol-tax-hike-to-slug-small-business?utm_source=SmartCompany&amp;utm_campaign=0bed38ffe7-Friday_9_May_201409_05_2014&amp;utm_medium=email&amp;utm_term=0_234118efee-0bed38ffe7-93985385">previously said</a> it’s important for small business owners to start planning for the change now.
“The costs of goods will go up everywhere because the cost of transport is going up,” said Strong. “If you’re in a business where you’re using your car a lot, you’re going to have to think about what this means.”
<h3>8. Cash for infrastructure</h3>
Hockey said this week that a higher level of fuel excise will <a href="https://www.smartcompany.com.au/federal-budget-2014/41892-budget-2014-10-billion-cut-to-industry-assistance-asic-corporate-registry-to-be-privatised" target="_blank">help fund a massive investment in roads</a>, worth a total $82 billion.
The government plans to commit $40 billion to its roads package, with the remaining $42 billion to come from state governments and the private sector.
“If we are going to make any changes to fuel excise, it will go into roads, and we are laying out a plan for the biggest increase in road expenditure in Australian history,” said Hockey.
However, at least some of the government’s contribution will come from re-announcing projects earmarked by the previous Labor government, and opposition infrastructure spokesperson Anthony Albanese has raised concerns the spending will come at the expense of investment in public transport.
<h3>9. Privatisation of the ASIC register</h3>
Media reports have put the number of government agencies to be abolished, merged or sold in this year’s budget at somewhere between 50 and 70.
One agency which appears to be in the confirmed table is Australian Securities and Investments Commission’s corporate register, which the government <a href="https://www.smartcompany.com.au/federal-budget-2014/41892-budget-2014-10-billion-cut-to-industry-assistance-asic-corporate-registry-to-be-privatised">will seek to privatise</a>.
As <a href="https://www.smartcompany.com.au/legal/41549-privatisation-of-asic-corporate-registry-on-the-table" target="_blank">previously reported</a>, the register is estimated to generate more than $625 million in revenue and has annual costs of around $140 million.
<h3>10. Health co-payments and welfare cuts</h3>
The introduction of co-payments for GP visits and cuts to welfare payments have been <a href="https://www.smartcompany.com.au/legal/politics/41665-hockey-s-budget-roadmap-industry-assistance-age-pension-and-welfare-payments-on-treasurer-s-hit-list" target="_blank">expected for some time</a>.
While the introduction of a GP co-payment may not appear to have an obvious impact on small businesses, SmartCompany blogger Bri Williams says there are some <a href="https://www.smartcompany.com.au/people/41875-a-behavioural-perspective-on-the-budget-s-6-gp-fee">important behavioural and business lessons to take from the policy</a>.
This article first appeared on <a href="https://www.SmartCompany.com.au" target="_blank">SmartCompany</a>.
Picture courtesy of Flickr/<a href="https://creativecommons.org/licenses/by/2.0/" target="_blank">Creative Commons</a>.
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10 things to expect from the federal budget

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International cosmetics retailer Sephora will arrive in Australia in time for Christmas, with the retailer confirming on Thursday that it will open a stand-alone store in Sydney’s CBD in December.
After <a href="https://www.smartcompany.com.au/marketing/sales/41469-sephora-tipped-to-open-in-australia" target="_blank">reports earlier this year</a> that the retailer would enter the Australian market in the first half of 2015, <a href="https://www.afr.com/p/business/companies/sephora_to_open_first_australian_PzbdFGr3eLfG9vgtnaKtUN" target="_blank">Fairfax reports</a> Sephora has secured a three-level 800 square metres store in Pitt Street Mall which is currently occupied by clothing retailer Esprit.
It’s just the first step in the retailer’s ambitious plans to shake up the local beauty and cosmetics market, with Ravi Thakran, group president for Asia and the Middle East for parent company LVMH, telling Fairfax there is room for around 20 Sephora stores to launch in Australia in coming years.
Sephora is the fastest growing brand within the LVMH group, which includes other brands such as Louis Vuitton, Givenchy and Bulgari.
The retailer will be hoping to secure a share of Australia’s cosmetic and toiletry sector, which according to the latest figures from IBISWorld generates annual revenues of $5.5 billion, and is projected to grow at an annual rate of 3% over the next five years.
Senior IBISWorld analyst Caroline Finch told SmartCompany the local cosmetics market is “big bikkies”, with local shoppers choosing to spend their cash with a variety of retailers, including David Jones and Myer, Priceline, and speciality retailers such as Aesop and the Body Shop.
As the latest <a href="https://www.smartcompany.com.au/growth/economy/33935-uniqlo-to-open-first-australian-store-in-melbourne" target="_blank">international retailer to set its sights on the Australian market</a>, we’ve pulled together three quick pieces of information you probably didn’t know about Sephora.
1. European market leader
Sephora has a long history in the European beauty and cosmetics market, having been founded in in 1969. The retailer is now the market leader in Europe, as well as holding a large portion of the United States cosmetics market.
The business was acquired by LVMH in 1997 and now operates more than 1,400 stores in 30 countries.
2. A wide range of premium products
According to Finch, Sephora will opt for a “targeted approach” to the Australian market that will be based on offering an extensive range of premium beauty products, including high-end brands such as Marc Jacobs not currently distributed locally.
For this reason, Finch believes the retailer will pose the biggest threat to DJs and Myer, rather than Priceline, which competes on everyday low prices. In fact, Finch says Sephora may complement Priceline’s strategy, with customers choosing to buy high-end products from Sephora but continuing to visit Priceline for basics.
3. More bang for your buck
Finch says the biggest challenge for the department stores will come from Sephora’s customer service strategy, with the retailer’s sales staff able to sell across brands.
While sales staff at DJs and Myer work on commissions, customers visiting Sephora stores will be shown products from more than one retailer at a time. Finch says this is likely to please shoppers, who will see value in the approach.
Internationally, Sephora is also known for providing free samples to its customers, another feature of the retailer’s strategy likely to impress local shoppers.
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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International cosmetics giant Sephora to open first Australian store in December

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As the Abbott government inches closer to <a href="https://www.smartcompany.com.au/legal/politics/41665-hockey-s-budget-roadmap-industry-assistance-age-pension-and-welfare-payments-on-treasurer-s-hit-list" target="_blank">delivering its first budget on 13 May</a>, the Prime Minister has today signalled some changes to his proposed paid parental leave scheme.
The scheme, first proposed by the Coalition when it was in opposition, is expected to take a $5.5 billion chunk out of the government’s coffers each year, with the aim of encouraging more Australian women to return to work after having children.
While Abbott and Treasurer Joe Hockey have continued to defend the <a href="https://www.smartcompany.com.au/legal/33217-small-business-divided-on-coalition-s--5-5-billion-parental-leave-policy---where-s-the-money-coming-from" target="_blank">controversial policy</a>, some members of the Coalition have been <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2014-02-27/government-senator-warns-parental-leave-scheme-too-costly/5288208" target="_blank">signalling their unease over the policy to the media</a> and the Greens have raised concerns about the cost of the policy in light of the government’s slated plans to cut welfare payments in next month’s budget.
So what will the new scheme look like? And who will be affected by the changes? We’ve pulled together a SmartCompany Q&amp;A to provide some answers.
What has the Prime Minister actually said?
<a href="https://www.theaustralian.com.au/news/latest-news/abbott-to-reduce-parent-leave-cut-off/story-fn3dxiwe-1226900421459" target="_blank">According to The Australian</a>, the Prime Minister will cut the threshold for the scheme from $150,000 to $100,000.
The change does not introduce a means-test for the scheme, but instead caps the amount of money that women can receive at a lower level.
The $100,000 threshold is in line with <a href="https://www.theaustralian.com.au/national-affairs/tony-abbotts-100000-welfare-test-for-families/story-fn59niix-1226898879439" target="_blank">Abbott’s recent comments</a> about the income limit at which families should stop receiving welfare payments.
And how is this different to what was on the table before?
The scheme will continue to pay six months or 26 weeks parental leave based on the recipient’s full-time salary, but the maximum payouts from the scheme will now be capped at $50,000 instead of $75,000.
The government has not proposed any other changes to the scheme, with existing features such as the payment of superannuation still included.
How many new parents will be affected?
Diversity strategy and compliance consultant Prue Gilbert told SmartCompany that less than 2% of Australian women of childbearing age earn above $100,000 and so the change would only affect a small percentage of workers.
“It’s a pretty minimal change and is more symbolic than anything else,” said Gilbert.
And if the government is making the change to save money, does it mean other measures rumoured to be included in the budget such as the “debt levy” will be scrapped?
Probably not. Gilbert says the change will have a “negligible impact on the budget bottom line” and so the government will proceed with its plans to reduce the current budget deficit by dramatically reducing its spending and potentially introducing a temporary increase to personal income tax levels.
So if the change is minimal, what’s Abbott thinking?
Gilbert says the change is “aimed at getting more support” for the scheme, which is now attracting <a href="https://www.smh.com.au/federal-politics/political-news/nervous-liberal-mps-beg-prime-minister-tony-abbott-to-rethink-paid-parental-leave-scheme-20140428-zr0vo#ixzz30J8LG5iV" target="_blank">criticism from within the Coalition’s own ranks</a>.
“The Greens have previously said that they will support the scheme at $100,000,” said Gilbert, who believes the change will mean that the scheme will almost certainly gain the Senate’s tick of approval.
Would the government be better off spending more on affordable and accessible childcare?
Media reports this week have <a href="https://www.theaustralian.com.au/national-affairs/childcare-shortage-anbsphurdle-for-paid-parental-leave/story-fn59niix-1226898789564" target="_blank">focused on the paid parental leave versus childcare debate</a>: that is, that women would be more likely to return to work if they have better access to more affordable and higher quality childcare.
However, Gilbert says that on average, Australian women take a mixture of 32 weeks in paid and unpaid leave from their jobs after having a child, and a paid parental leave scheme that allows mothers to spend the first year of their child’s life at home is in the best health interests of the mother.
It’s also much more expensive for childcare centres to care for children under the age of one, says Gilbert, who will be looking at the legislative detail of the government’s policy to see if it will be possible for women to take 12 months leave at half-pay under the scheme. “It would be a very positive thing,” she says.
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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What will Abbott’s scaled-back paid parental leave scheme look like?

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Residents in the Sydney suburb of Mosman paid the most income tax in 2011-12, according to <a href="https://www.ato.gov.au/About-ATO/Research-and-statistics/In-detail/Tax-statistics/Taxation-statistics-2011-12/" target="_blank">data released by the Australian Tax Office</a> today.
The wealthy suburb topped the ATO’s list of postcodes that paid the highest level of <a href="https://www.smartcompany.com.au/legal/politics/41685-debt-levy-on-income-tax-would-hit-small-business-the-hardest" target="_blank">income tax</a>, with a tax bill of close to $874 million. According to the data, 15,300 people in Mosman and Spit Junction paid tax in 2011-12, with a mean taxable income of $164,484.
Other suburbs to record high tax bills include Mackay in north Queensland’s, where residents paid $757 million in 2011-2012, and the affluent Melbourne suburb of Brighton, where locals paid taxes worth $569 million.
At the other end of the scale, the 90 taxpayers in the Gippsland towns of Baw Baw and Icy Creek recorded a tax bill of just $485,495.
According to the data, the Queensland town of Bundaberg is home to the most number of welfare recipients, with locals receiving $15 million in Centrelink payments during the period, while Toowoomba is home to the largest number of pension recipients.
Professor Chris Evans from the Australian School of Business at the University of New South Wales toldSmartCompany the results are “not at all surprising”.
“These suburbs record the highest level of tax because they generate the highest levels of income, and disproportionately so,” said Evans, who said these locations also have high levels of capital.
Evans said that income inequality has been steadily increasing in Australia, with the rich getting richer. The same suburbs and cities have been topping these lists for a long time and the income tax system “is not as progressive as it once was”, he said.
“There has been no spreading of wealth in Australia and, in fact, there has been a concentration,” he said.
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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Which suburbs and towns pay the most tax? 

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A Melbourne man who claimed to be a financial planner faced the Magistrates’ Court this week, charged over his involvement in a <a href="https://www.smartcompany.com.au/legal/42108-business-group-swindled-out-of-800-000-through-fraud" target="_blank">fraud</a> scheme said to be worth $100 million over 10 years.
<a href="https://www.theage.com.au/victoria/poker-pro-faces-142-charges-over-100m-fraud-20140528-394ev" target="_blank">Fairfax reports</a> Bill Jordanou, 55, faces 142 charges relating to 40 incidents between 2004 and 2013, including more than 100 charges of “obtaining a financial advantage”, often in the form of home loans and electronic transfers into home loan accounts.
Jordanou is also facing charges related to obtaining property by deception, conspiring to defraud the Commonwealth Bank, ANZ Bank, Bankwest, Bank of Melbourne and Bank of Queensland, conspiring to pervert the course of justice, and the theft of a Mercedes-Benz.
Prosecutor Luke Excell told Fairfax Jordanou is “alleged to have drawn funds using false client approvals and invoices … then used it across various property developments as well as maintaining a lifestyle.”
Excell said Victoria Police became aware of Jordanou’s activities, and those of his associates, when the Commonwealth Bank discovered a number of loan applications lodged on behalf of Jordanou’s clients were supported by false documents, including ATO documents, letters of employment and financial statements.
The bank lodged complaints against accounting firm Zaia Arthur &amp; Associates, where Jordanou was working as a “financial adviser” at the time.
SmartCompany attempted to contact Zaia Arthur &amp; Associates this morning but the phone number listed for the firm has been disconnected.
Jordanou’s lawyer, George Defteros, told Fairfax his client has “been waiting for these charges for two-and-a-half years … and we welcome these charges because Mr Jordanou wants to get on with his life”.
Mark Rantall, chief executive of the Financial Planning Association of Australia told SmartCompany there are a number of rules individual investors and small business owners should follow to safeguard themselves against unsound financial advice.
Rantall says the "golden rule" is to always check the qualifications of the person giving the advice and to make sure they are a member of the FPA, which is the national professional association for financial planners.
“The second golden rule is that if something sounds too good to be true, it usually is,” says Rantall. “If you are being offered a get-rich-quick scheme, the risk associated with that scheme will be extraordinarily high.”
“The third rule is that your financial planner should spend more time talking about you and your investments, than themselves and the products they may be offering,” says Rantall.
Rantall says it is also important to make sure your financial plan matches your own personal risk profile, and that your investments are diversified across different products and different asset categories.
“The final thing would be to make sure you keep you to date with your portfolio and that you always feel comfortable with the investments being recommended,” says Rantall. 
A spokesperson for the FPA told SmartCompany individuals and business owners who are concerned about receiving sound financial advice can use the <a href="https://fpa.com.au/find-a-planner" target="_blank">“Find a Financial Planner” function</a> of the FPA’s website to find an expert, as FPA members are held to higher professional standards. 
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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Melbourne financial planner faces court over $100 million fraud charge

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State Treasurer Michael O’Brien has billed Victoria’s 2014-15 budget, handed down yesterday, as “a terrific budget for business”, but experts aren’t so sure. 
The budget projects an operating surplus of $1.3 billion in 2014-15, which will grow to $3.3 billion in 2017-18.
The big ticket item in this year’s budget is the promise to <a href="https://www.smartcompany.com.au/finance/tax/32073-payroll-tax-fights-continue-across-the-country-as-south-australian-businesses-demand-permanent-change" target="_blank">cut payroll tax</a> by 0.05%, from 4.9% to 4.85%, from 1 July, which will affect an estimated 39,000 employers.
However, Crowe Horwath tax specialists Adam Mallabone and George Psarrakos, told SmartCompany the cut is “more a headline” than a fundamental structural change to the state’s payroll tax.
Mallabone said while the tax rate is being reduced, there are no planned changes to the tax-free threshold for companies paying payroll tax, which would have been more beneficial for small and medium-sized business.
“The real catch with payroll tax is that it kicks in once a company’s payroll exceeds $550,000 a year,” says Mallabone. “We would have liked to have seen an increase in the threshold so as to exclude a higher number of employers.”
Likewise, Psarrakos says Crowe Horwath does not want to see “employers penalised for hiring more people”.
Mallabone says payroll tax is “the most regressive tax you can get”, and while Victoria’s payroll tax rate has been declining in recent years, it is still higher than other states.
However, the Victorian Employers’ Chamber of Commerce welcomed the move, saying in a statement on Tuesday the cut “keeps Victoria’s taxes competitive against other states and reduces the cost of doing business”.
Elsewhere in the budget, Mallabone and Psarrakos say SMEs and individuals will be affected by an increase in motor vehicle registration fees. Car stamp duty will rise by $0.40 per $200 and light vehicle registration costs will rise from $25 to $270.  
Meanwhile, individuals are expected to save $16 million over four years as a result of the government’s decision to scrap duties payable on life insurance in Victoria.
<a href="https://www.dtf.vic.gov.au/Publications/State-Budget-publications/2014-15-State-Budget/2014-15-Budget-Papers" target="_blank">According to the budget papers</a>, Victorian property investors are also set to pay more land tax in 2014-15 as housing prices in Victoria continue to rise. The value of land tax paid by Victorians is projected to increase by $275.8 million to $1.9 billion, although Mallabone says there will be no actual increase in the land tax rate.
Infrastructure is the big ticket item in the budget, with the government outlining plans to spend up to $27 billion on the state’s road and rail networks, including a remodelled Melbourne Rail Link that will include a train line to the airport.
VECCI chief executive Mark Stone welcomed the infrastructure boost outlined in the budget, which he said will create jobs and stimulate economic growth.
“The budget provides important funding for East West Link Stage 2 as well as funding to progress the Melbourne Rail Link project, both of which will create jobs and are key to enhancing the capacity of Melbourne’s transport system,” said Stone.
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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