Master Builders appoints Denita Wawn as first female chief executive in 127 years

The blokey glass ceiling at one of Australia's male dominated business lobby groups has been smashed with the appointment of a female chief executive.

Denita Wawn's appointment at Master Builders Australia marks the first national female chief executive in the association's 127 year history.

Mrs Wawn, a former chief executive of the Brewers Association of Australia and New Zealand, replaces Wilhelm Harnisch who was at the helm for fifteen years.

Master Builders chose International Womens Day to announce Mrs Wawn's appointment citing her leadership qualities and success in driving industry campaigns at the National Farmers Federal and the Australian Hotels Association.

Mrs Wawn told The World Today her appointment represented a new era in terms of cultural change at Master Builders and across the building and construction industry.

"We need to ensure that women in the industry are recognised for their efforts just as much as men particularly in large, medium and small sized businesses," Mrs Wawm said.

But Mrs Wawn rejected a suggestion that the timing of today's announcement could be perceived as tokenistic.

"Not at all. My appointment was certainly a rigorous and merit based selection process that just happened to find a female in the role," Mrs Wawn said.

"It was a great opportunity to highlight on International Womens Day that women can strive for excellence and they can be leaders in their field including in male dominated area in building and construction but also in the political world."

Building and construction remains the domain of men with less than one percent of women in building trades and slightly more in professional roles like site and project management.

But on the gender pay gap, Mrs Wawn said she was "absolutely" happy with her negotiated pay deal compared to her predecessor.

"Women can undertake these roles. It doesn't matter if you have kids or not we do have the confidence and we do have the capacity to take leadership roles in Australia," Mrs Wawn said.

On broader policy challenges, Mrs Wawn said she would would be tacking housing affordability and developing the right messages to ensure the campaign for a corporate tax cut over ten years succeeds.

Mrs Wawm is an internal appointment having been general manager of operations at Master Builders Australia for the past year.

Seven worries Amber Harrison cross claim could be "scurrilous and scandalous"

Senior Business Correspondent Peter Ryan

Amber Harrison's planned counter claim against the Seven West Media could contain "scurrilous and scandalous material", the NSW Supreme Court has been told.

Counsel for Seven Sandy Dawson SC told Justice John Sackar that a court filing from Ms Harrison the night before the next hearing in two weeks time was a risk to his client.

"We have had some bitter experience," Mr Dawson told Justice Sackar.

Amber Harrison - one time mistress of Seven West chief executive Tim Worner - has been silenced with an interim injunction won by Seven which prevents her from leaking more confidential documents.

While agreeing to expedite the case to a hearing, Justice Sackar said he was reluctant to suppress the details of Ms Harrison's counter claim against Seven.

"This is not a censorship issue. I am not going to sit here as a censor," Justice Sackar told Mr Dawson.

However, Justice Sackar reminded counsel for both Seven and Ms Harrison not to breach privilege or the terms of the interim injunction in place against Ms Harrison.

Amber Harrison's cross claim will be heard on March 17 with a four day hearing set down from July 10.

Justice Sackar said he hoped Seven and Ms Harrison would use the time to explore mediation while saying he would not impose it until all efforts had been exhausted.

CBA to repay superannuation to part timers, says "we want to do the right thing"

The Commonwealth Bank has agreed to repay employer superannuation to part time workers that was not applied to extra hours or overtime over the past eight years.

The review of super guarantee payments follows complaints from six part time CBA employees brought to the attention of the bank by the Finance Sector Union and reported by the ABC last week.

In a statement to the ABC, a CBA spokeswoman said: "we agree these hours worked should have superannuation applied and we want to do the right thing by our people".

"If we identify an employee who is owed superannuation, we will reimburse it."

The CBA will repay super to all part time workers since 2009 including those who have switched to full time positions or have since left the bank.

The bank is yet to put a number on the staff set to be repaid, though last week the FSU said it could exceed 7,000 staff.

The average payment is $180 per year on average according to the CBA although in some cases the figure could be as low as four dollars.

While the reimbursements are tiny compared to the value of Australia's biggest home lender, the FSU had threatened to take the complaints to Fair Work Australia which could further harm the CBA's battered reputation.

The CBA is currently in constant damage control amid fallout from scandals at its financial planning division and life insurance arm CommInsure.

However, the CBA maintains is was not breaking the law by only paying superannuation on ordinary hours rather than extra hours or overtime.

The statement says the bank's policy was based by a superannuation guarantee ruling issued by the Tax Office in 2009.

The superannuation backdown comes as Australia's Big Four bank chief executives prepare for their six month grilling by the House Economics Comittee in Canberra.

Commonwealth Bank chief executive Ian Narev is scheduled to face the committee on Tuesday.

Separately, a senate committee is investigating claims by Industry Super Australia and Cbus that around a third of Australian workers are being ripped off by rogue employers who are holding back some or all of their superannuation entitlements.

Amber Harrison, Jeff Kennett in Twitter war as Seven West Media wins court injunction

An extraordinary war of 140 characters has erupted on Twitter between between former Seven West Media employee Amber Harrison and Seven West board member Jeff Kennett.


An fiesty Twitter exchange between Ms Harrison and the former Victorian premier escalated late Monday after Seven West won an interim court injunction preventing Ms Harrison from using social media to publish confidential documents.


"You have bombarded me .. with threats if I tell my story. The only thing I have taken back here is my voice. And I intend to keep using it," Ms Harrison told Mr Kennett in a tweet.


"What you do not like is being called out for being hypocrites."


Mr Kennett hit back saying "what we do not like is you releasing commercial documents that have nothing to do with you claim and is not your property."


"We have respected the confidentiality (that) SWM and Ms Harrison signed up to twice. Time to correct the record."


Ms Harrison, former executive assistant and lover to Seven West chief executive Tim Worner, has been using Twitter to leak documents in recent days to counter legal action by Seven West lawyers.


The 39 year old has been threatening to expose what she calls the "truth" about internal matters at Seven West despite Tim Worner being cleared by an internal inquiry of wrongdoing including claims of drug use and credit card fraud.

Seven West obtained an injunction from the Supreme Court of NSW to prevent Ms Harrison from releasing documents or property of the company.

"It has became clear late last week that Ms Harrison is now releasing or divulging commercial in confidence emails and other documents that she has no right to hold," Seven West Media said in a statement.

Amber Harrison has accused Seven West of an orchestrated campaign to spin the scandal of her affair with Mr Worner which was known to the Seven West board three years ago.

"Jeff, your team leaked the tale they needed to protect your CEO in March 2015 - and then blamed me for it."

With the injunction hearing scheduled for tomorrow, Mr Kennett's public comments on Twitter are seen as unusual given the high stakes nature of the case and the reputational damage already done to Seven West.

Mr Kennett, who is also chairman of the mental health initiative Beyond Blue, has become Seven West's unofficial spokesman on the case when looks certain to descend into an murky, expensive and highly personal legal battle.

Billions wasted on bad infrastructure spending, global report warns

Infrastructure has been a buzzword on financial markets ever since US President Donald Trump promised to "rebuild America" with massive spending projects.

But a global report out today says billions of dollars are wasted on infrastructure projects because of bad planning, bureaucracy and the failure to retain good staff.

Listen to my interview with PMI chief executive Mark Langley

The US-based Project Management Institute (PMI) says Australia fares worse than the global average with $108 million wasted for every billion dollars spent on infrastructure.

Globally, the PMI study says organisations on average wasted $97 million for every billion dollars invested according to the responses of 187 project managers.

However, the outcome shows that for the first time in five years more projects are being completed more efficiently with waste down by 20 percent.

PMI chief executive Mark Langley told The World Today that a failure to retain good project staff was a key contributor to waste.

"Champion organisations do this very well. One of the key things that they do that Australia lags in is defined career paths  for project and program managers," Mr Langley said.

"They've identified a role in an organisation just like accountancy, law and engineering. In Australia, they do that substantially less than the global average."

Mr Langley, who is in Australia to launch the report, said a lack of attention to staff retaining good staff contributes to a "brain drain".

"There's an opportunity for Australian organisations to start to invest in careers of project managers in both the public and private sector," Mr Langley said.

Australia compares poorly to other competing nations where waste on projects has been reduced, according to the research.

India has the lowest waste of $73 million for billion dollars followed by China and the Middle East with $82 million wasted per billion.

PMI says Europe has the worst waste management with $131 million lost for every billion dollars invested.

Mark Langley says the rally in infrastructure spending after Donald Trump's presidential victory has been "quite positive".

But Mr Langley conceded there is a risk of disappointment if Mr Trump fails to deliver on the big spending plans.

"I think there's always a danger on that. But building out infrastructure is absolutely essential to economic growth."

Business Council boss Grant King says Australian credit rating needs to remain near AAA

Newly-appointed Business Council of Australia Grant King has warned that the government's AAA credit rating is at risk if efforts to repair the budget fail.

Mr King told the ABC's AM program that a ratings cut "just follows as a matter of logic" after Deloitte Access Economics forecast bigger-than-expected deficits over the next four years.

"If those budget deficits continue to expand then our credit rating will be at risk. I think that would be a correct statement," Mr King said.

"I think it is very important that Australia maintains a high credit rating. Whether it's AAA, it's certainly not much less than that.

"We are seeing indications that the deficit is deteriorating so it is going to be a challenge."

Mr King's warning of an imminent ratings cut came after the ratings agency Standard & Poor's reiterated that the Federal Government has six to 12 months to deliver on more budget savings and revenue measures.

Mr King underscored the importance of Australia maintaining the AAA sovereign rating to ensure it can deliver on services Australians have come to expect during the boom years.

"The government is like the community's insurer of last resort. We expect our governments to look after our community and our citizens if there's a disaster like cyclones in Queensland," Mr King said.

"In order for the government to have that capacity to support the community it has to maintain a good credit rating to be able to fund whatever those circumstances are."

The former Origin Energy chief executive of sixteen years is also expressed concerned that US president-elect Donald Trump will torpedo the Trans Pacific Partnership (TPP) by not participating.

Mr King says despite the absence of the United States, Australia need to find ways to encourage and improve global trade.

"Australia in a global context is a relatively small economy. We don't have a large domestic economy so trade is critical to Australia," Mr King said.

"We have to be an outward looking country. We can't run inwards and look to our own economy."

Mr King's appointment as Business Council president comes after criticism about the business lobby's power and influence from former Future Fund chairman David Murray and Liberal Party powerbroker Michael Kroger.

Former BCA president Catherine Livingstone and current chief executive Jennifer Westacott have been described as "out of touch" and "missing in action".

"Look I think there are many aspects of public debate out there that are making it more and more difficult for any organisation frankly to get its view across," Mr King said.

"So yes it might be right to say it's become more difficult. My hope is that in the next couple of years we can get better and better at that."

 Mr King also defended the government's plans for corporate tax cuts of $48 billion over ten years despite perceptions the money will go into shareholders pockets rather than create new jobs.

 "What the BCA's arguing for is a reduction in the rate of tax. Business would be happy to pay more tax in total but a lower rate is a key to doing that."

The business push for company tax cuts comes after confirmation that wages are growing at the slowest pace on record.

Rio Tinto executives sacked over Guinea consultancy payments

Read my story on ABC News Online

Source: Rio Tinto statement

Indigenous Australians' wellbeing 'stagnating or worsening': Productivity Commission

Indigenous Australians are becoming more disadvantaged with alarming increases in imprisonment rates, mental health problems and self harm, according to a damning Productivity Commission report out today.

The Commission's "Overcoming Indigenous Disadvantage" report says despite some positive trends, the plight of indigenous Australians has "stagnated or worsened" in critical areas of wellbeing.

Read the Productivity Commission report

Among the findings, the national indigenous imprisonment rates have surged by 77 percent over the past fifteen years with hospitalisation rates for self harm up by 56 percent over the past decade.

Listen to my interview with Productivity Commission deputy chair Karen Chester

The report points to a failure of policy and oversight, with the Commission estimating that only 34 of a thousand indigenous programs are been properly evaluated by authorities.

Productivity Commission deputy chair Karen Chester told the ABC's AM program the findings are a wake up call for all levels of government about the reality of indigenous wellbeing and whether the $30 billion budget is being properly spent.

"You want to know that money is being spent not just in terms of bang for buck for taxpayers but that we're not shortchanging indigenous Australians," Ms Chester said.

"Of over a thousand policies and programs, we could only identify 34 across the whole of Australia that have been robustly and transparently evaluated.

"At the end of the day, we can't feign surprise that we're not seeing improvement across all these wellbeing indicators if we're not lifting the bonnet and evaluating if the policies and programs are working or not."

The report is being billed by the Commission as "compulsory reading" and the most comprehensive report on indigenous wellbeing undertaken in Australia.

Aboriginal and Torres Strait Islanders were involved in the study which was produced by the Productivity Commission for a review into government service provision.

Despite the disturbing assessment, an number of case studies have been highlighted where good governance is contributing to the success indigenous organisations.

These include the Waitja Tjutangku Palyapayi Aboriginal Corporation in central Australia which helps communities to counter economic disadvantage and the Marius Project in the northern Victoria town of Swan Hill.

(Perhaps point to Things That Work chart on page 23)

The report says areas of health, economic participation, life expectancy and aspects of education have improved from the update two years ago with child mortality rates narrowing between 1998 and 2014.

The proportion of adults whose main income came from employment increased from 32 percent in 2003 to 43 percent in 2014-15.

But the Productivity Commission's Karen Chester says it is now up to state, territory and federal governments to take the report on board to determine what is working and what is failing.

"I think the clock has been ticking for a while already," Ms Chester said.

"We have the data, we have the analysis and we know what indicators are linked to the others."

While the report includes case studies of examples of "things that work" it says the small number available underscores the lack of indigenous programs that are being rigorously evaluated for effectiveness.

Cyber attack threats expose Australia to $16 billion risk, warns global insurer Lloyd's

The growing risk of cyber attacks leaves the Australian economy exposed to a potential $16 billion dollar damage bill over the next decade, according to one of the world's biggest insurance companies.

Listen to my interview with Lloyd's global chief executive Inga Beale

In a joint study with Cambridge University, the Lloyd's insurance giant has found that out of 301 global cities, Sydney ranks 12th in terms cyber attack exposure with $4.86 billion of economic growth at risk.

In its City Risk Index 2015-2025, Lloyd's says Sydney is the riskiest Australian city followed by Melbourne, Brisbane, Perth, Adelaide and Canberra.

Read the Lloyd's report  

Globally, Lloyd's warns that $294 billion is at risk as attempted and successful cyber attacks become more prevalent.

The warning comes after recent evidence of attempted cyber attacks at the Bureau of Meteorology, the Australian Bureau of Statistics and the Reserve Bank of Australia.

Lloyd's global chief executive Inga Beale told The World Today that dealing with the constant threat of cyber attacks is now critical for businesses of all sizes.

"It's not just for banks to worry about - it impacts retailers, travel and hospitality firms, education and healthcare providers, and any business with proprietary information worth protecting," Ms Beale said.

"Where a decade ago people would talk about preventing a cyber-attack, the reality is firms will be subjected to attacks. The issue is how you mitigate against that."

The Australian Cyber Security Centre recently said systems in government agencies had been hit with 1,095 cybersecurity incidents considered serious enough to trigger an operational response.

The Lloyd's study points to a report from the accounting firm PWC which highlights a 109% increase in detected security incidents in Australian companies, compared to a 38% global average.

Under proposed legislation before the Australian parliament, hacked companies that lose personal details, tax file numbers, medical records or credit card information would be required to report the incident and alert customers.

But Inga Beale warns that while big business and government agencies are at most risk, private individuals are at risk from personal information stored in smartphones and personal computers.

"We are living in a world where people carry a globally-connected supercomputer in their pocket and almost every important work document is stored in the cloud, on servers or online," Ms Beale said.

"The result is an explosion in the potential for cyber risk. The latest series of high profile data breaches is just the beginning. With the emergence of the Internet of Things the potential for cyber risk is enormous."

As one of the world's major insurers and reinsurers, Lloyd's is now seeing demand for cyber attack cover form a major part of its traditional business of insuring for global natural disasters and catastrophes.

Lloyd's says demand cyber insurance in Australia has increased by 16,828 percent in the past two years as businesses seek protection from current and emerging threats.

The Lloyd's index points to a range of other risks including power outages, terrorism, sovereign default, oil price shock, heatwave, drought and floods.

Consumers need greater rights to private data, Productivity Commission urges

Australian laws regulating access to personal private data are out of date and need to be overhauled to get in line with the digital age, according to a report out today.

The Productivity Commission says a move to mandate unrestricted access to private data is in the national interest and wants the government to introduce legislation to force government agencies and the private sector to share private information.

Read the Productivity Commission report

Under the proposed reforms, consumers could demand access to private data held by banks, GPS providers, insurer companies, doctors, health insurers and social media giants like Facebook.

In a world is rocked by digital disruption and a deluge of private data being held by governments and private companies, the Commission points to a data overhaul as top ten economic reform to the Australian economy.

Listen to the full interview with Productivity Commission chairman Peter Harris

While existing privacy laws would remain in place, the draft report says greater data sharing would create better competition, allow consumers to know more about their digital lives and maybe even get a better deal with a bank or on their power bills.

The Commission is proposing greater data access rights for consumers with the creation of a "Comprehensive Right" which would also include a greater ability for people to opt out of data collection activities.

Productivity Commission chairman Peter Harris told The World Today that while data is a major asset to Australia's economy, consumers currently have limited rights on accessing and levering their own personal information.

"Surprising though it may be to many, individuals have no rights to ownership of the data that is collected about them," Mr Harris said.

"Data is increasingly an asset, and when you create an asset you should have the ability to use it, or not, at your choice."

The data law reforms would give consumers the right to direct government agencies and private companies to transfer their information to a third party as part of a major shift in competition policy.

The Commission says the transfer of data would help consumers strike a better deal by making sectors such as financial services and energy utilities compete for business.

"This will give people and businesses who want to be active consumers genuine control over their data and will allow innovative businesses and governments the chance to offer those consumers better services," Mr Harris said.

The report also points to greater opportunities for improved health care, safer and more efficient infrastructure and machinery maintenance through "data driven" competition.

However the report warns it is a misconception that cyber risks will be limited if consumers continue to be denied access to their personal data.

"The risks from the proposed reforms are no greater than the risks today that are managed by any consumer who chooses to click a mouse and buy or subscribe to a product," Mr Harris said.

"And the same advice applies: be very choosey about who you share your data with."

The Commission warns Australia is "rapidly falling behind" other developed economies like the UK, US and New Zealand in reforming data access laws.

The proposed reforms are likely to be opposed by government agencies and private companies.

The Commission is calling for submissions and will hold public hearings on the proposed reforms later this month.

Bank owned super funds accused of gouging by delaying switch to default schemes

Banks are being accused of gouging customers by delaying the transfer of superannuation accounts into lower cost default superannuation funds.

Under new rules, retail funds have been given four years to switch accounts nominated as "default" into cheaper My Super products with a deadline of 1 July 2017.

Listen to the interview with Industry Super Australia chief executive David Whiteley

But research out today suggests bank-owned funds are dragging their feet by leaving default super in high cost legacy funds for as long as possible.

A study by Rainmaker Information commissioned by Industry Super Australia says banks are profiting by between $800 million and $1.8 billion in fees by stringing out the transition to approve default funds.

Rainmaker says given the aim of MySuper is to provide a default option for "disengaged passive members", the motivation of bank-owned funds need to be examined.

"The core question is to what extent have funds expedited this transition," the research suggests.

"This question is crucial because Rainmaker's annual superannuation fee surveys have revealed that MySuper products are on average 30% cheaper than regular corporate retail solutions.

"So the sooner members transition across to these lower cost products the sooner they start saving fees."

Industry Super Australia chief executive David Whiteley told the ABC's AM program the behaviour of bank-owned and retail funds was "unconscionable" and undermined public confidence in the compulsory superannuation system

"The retail and bank-owned super fund practice of leaving members' accounts languishing in more expensive legacy products requires greater scrutiny," Mr Whiteley said.

"The regulator would do well to ask if the product trustees are fulfilling their legal duties to put the interests of members over profits generated by wealth businesses inside the banks."

The research shows that although not for profit funds completed the transfers to MySuper by June 2014, retail funds are lagging with just 43 percent of funds switched by June 2016.

The Financial Services Council, which represents bank-owned and retail funds, maintains there is a clear timeline for the transfer to default funds.

FSC director of policy Andrew Bragg told the ABC that all existing money in the default super system must be transferred by June next year under longstanding legislation.

However, Mr Bragg said more competition was required as recommended by reviews conducted by Jeremy Cooper in 2010 and David Murray in 2014.

"Until there is competition for the $10 billion default contributions each year, MySuper will be an unfinished reform, " Mr Bragg said

RBA governor Philip Lowe warns Trump victory would not be a "benign event" for world

The governor of the Reserve Bank says the election of Donald Trump as US president would not be a "benign event" for the global economy.

Dr Philip Lowe says while there is no specific scenario planning for an increasingly unlikely Trump victory, the RBA prepares for events that could rock financial markets.

In his first official speech as RBA governor, Dr Lowe said the rise of protectionism was at the top of a list that was making him more worried.

Listen to the story here

Read the story here

Regulator puts banks, insurers on notice over risk culture

The prudential regulator has put banks and insurance companies on notice to improve their risk culture or face "greater supervisory intensity".

The Australian Prudential Regulation Authority (APRA) says the financial sector needs to pay greater attention to risk, warning that many institutions are "grappling" with how to best improve their risk management.

In an information paper released this afternoon, ARPA chairman Wayne Byres told institutions the regulator would step up surveillance if needed.

"APRA cannot regulate sound risk culture into existence," Mr Byres said.

"However, APRA will apply greater supervisory intensity to institutions that are either unwilling or unable to address behaviours that are inconsistent with prudent risk management practices."

APRA will also review the remuneration policies and practices of institutions it supervises to determine what role salary and incentives play in risk culture.

The information paper describes remuneration frameworks as "important barometers and influencers of risk culture."

The review will also examine the arrangements and outcomes for some senior executives and "material risk takers" at a sample of financial institutions.

APRA's review comes as co-regulators like ASIC (Australian Securities & Investments Commission) investigate banks and insurers over alleged unethical or unlawful banking behaviour.

Last week, ASIC released a report on the life insurance industry showing a high level of rejected claims for total and permanent disability (TPD) and trauma.

ASIC is also investigating the scandal at the Commonwealth Bank's insurance arm CommInsure as revealed by an ABC Fairfax investigation.

The chief executives from the major banks were grilled by a parliamentary committee a fortnight ago as the federal government continues to rebuff calls for a Royal Commission into the banking sector.

Brexit, Trump not concerns in Henderson Janus funds merger negotiations, says Andrew Formica

Henderson Group chief executive Andrew Formica has shrugged off concerns about Brexit and Donald Trump as he sells a multibillion dollar merger with the US funds giant Janus to investors.

Speaking in Sydney, Mr Formica told The World Today he is more concerned about tighter regulation of funds in the wake of the global financial crisis than Britain leaving the European Union, the rise of Donald Trump and the falling British pound.

Listen to the full interview with Andrew Formica

The merger, which is subject to investor and regulatory approval, will create a US$6 billion company and between them Henderson and Janus will have US$320 billion of assets under management.

"The discussion on Brexit is not really relevant to this deal in the sense that conversations (about the merger) started back in February and carried on prior to the vote," Mr Formica said.

"They weren't influenced by Brexit, they weren't accelerated or decelerated by Brexit. We're looking at something that you judge on a ten to 15 year view and discussions around the EU and the UK really will be a drop in the ocean."

Mr Formica is in Australia with proposed co-chief executive Dick Weil from Janus to promote the proposed deal to investors and institutions.

Both will head Janus Henderson Global Investors in a deal billed as "a merger of equals".

Mr Formica also said he was unconcerned about the falling value of the British pound against the US dollar and that the Brexit fallout did change the terms or rationale of the merger.

"Regardless of what form the UK takes in Europe going forward, the UK market will be a large market for us as a firm as will Europe," Mr Formica said.

"What's happening with the pound, what's happening with the UK economy was less relevant to this. So being a truly global business helps us diversify against any one market or risk."

While Janus has deep exposure in the United States, Mr Formica is similarly unconcerned about Donald Trump tilt for the White House and that his threat to unwind trade agreements could destabilise financial markets.

"Yeah, that was a concern but at the end of the day, again we see on the longer view that it won't have much of an impact."

Despite the relaxed comments about Brexit and Donald Trump, the merger is important for both Henderson and Janus given anticipated cost savings of US$110 million per year.

The Henderson Janus merger is seen as a possible prelude to similar marriages in a world of low interest rates and slowing growth.

However, Mr Formica says while it makes sense for Henderson and Janus, it might not necessarily work for competitors.

"The industrial logic of doing this makes a lot of sense and you could argue that other firms should do the same," Mr Formica said.

"But their ability to actually do it and bring it to fruition would be challenged."

Fed minutes show division but point towards December rate rise

The likelihood of the first US interest rate rise in a year has slightly strengthened after a number of Federal Reserve voting members said a hike would be justified "relatively soon".

With markets factoring in as much as a 70 percent chance of a December rate hike, several members noted higher rates would be warranted if the US economy continues to strengthen.

"Several members judged that it would be appropriate to increase the target range for the federal funds rate relatively soon if economic developments unfolded .. as expected," according to the minutes from the Fed's September policy meeting.

Read the minutes here

Despite signs of a stronger appetite for a rate rise, the minutes also signal caution and division among members about the actual timing on a rates move.

"It was noted that a reasonable argument could be made either for an increase at this meeting or for waiting for some additional information on the labor market and inflation," the minutes say.

"A couple of members emphasized that a cautious approach to removing accommodation was warranted."

The minutes show that three voting members on the Fed's rate-setting committee dissented on the September policy in favor of an immediate hike when rates were left at between 0.25 and 0.5 percent.

There is concern that "without gradual increases in the target range" a tighter labour market could result in "a subsequent sharp tightening .. that could shorten the economic expansion."

There also appears to be jitters that inflation remains below the Fed's two percent target with voting members noting that "there were few signs of emerging inflationary pressures."

Wall Street stocks ended 0.1 percent higher after the Fed minutes were released despite initial analysis showing little new information in the Fed's rates thinking.

The US dollar was slightly higher on the continued speculation that the Fed will push the rates button in December.

The Federal Reserve board next meets on November 1 but a rate rise is seen unlikely a week out from the US presidential election.

ASIC launches crackdown on life insurance industry as CommInsure probe continues

The Australian Securities & Investments Commission has announced a major crackdown on the life insurance sector after identifying what it calls "significant shortcomings" in the way claims are handled.

Read the review here

While ASIC has not found evidence of system misconduct, it has revealed the highest level of rejected claims relate to total and disability and trauma.

ASIC's crackdown comes as it continues to investigate claims of unethical behaviour at the Commonwealth Bank's insurance arm, CommInsure.

Here's my report from The World Today on ABC Radio.

FIRB boss Brian Wilson shelves controversial private equity role amid perceived conflicts

Foreign Investment Review Board chairman Brian Wilson has shelved controversial plans to take an advisory role with a global private equity company to avoid a perceived conflict of interests.

In a statement released this afternoon, Mr Wilson said he would suspend his proposed role with The Carlyle Group "to ensure there can be no question as to the integrity of Australia's foreign investment review system".

"Having noted concern in some quarters and to ensure appropriate due public confidence in the foreign investment review system, I have decided to take this extra measure." Mr Wilson said.

The appointment as a senior advisor with Carlyle's Asia buyout team was seen by some critics as a potential conflict given Mr Wilson's role in overseeing Australia's foreign investment interests particulary given a tense relationship with China.

Last month when the appointment was announced, a spokeman for TreasurerScott Morrison rejected claims of conflicts saying Mr Wilson would step aside from deliberations that could clash with the interests of FIRB.

At the time, the spokesman defended the appointment saying FIRB needed to attract people with deep experience of foreign investment and that there were "strong proceedures in place to manage conlicts".

Mr Wilson says he will delay the commencement of the Carlyle role until April 2017 when his chairman role at FIRB expires.

Mr Wilson said the Carlyle appointment had been originally approved on the basis that "normal proocols would deal readily with the very rare conflicts."

In line with the Treasurer's statement from last month, Mr Wilson repeated he would stand aside from any matter involving The Carlyle Group until his chairmanship expires.

Compulsory super contributions should be left at 9.5% says Grattan Institute

The compulsory superannuation contribution should be frozen at 9.5 percent to encourage Australians to consider more flexible options to save for retirement, according to a report out today.

The Grattan Institute says the federal government should reconsider lifting the compulsory contribution to 12 percent warning that a focus on superannuation alone won't necessarily provide an adequate or comfortable retirement.

Listen to the full interview with Grattan Institute chief executive John Daley

The study says it's a mistake to confuse superannuation with retirement savings given that on average superannuation only accounts for 15 percent of household wealth.

Grattan Institute chief executive John Daley told The World Today the importance of superannuation was "overblown" and an increase to 12 percent ignores modelling about the way people really save.

"If we do go to 12 percent we will be forcing many households to in effect live less prosperous lives while they're working," Mr Daley said.

"I think it's quite possible that we might see a government rethink the currently legislated increase to 12 percent. It's already been delayed a number of times so it's possible we might see that rethought."

The study comes as superannuation remains a hot political issues with the federal government negotiating to convince the Senate to approve reductions in tax breaks for super contributions.

The Grattan Institute research is also likely to anger the Labor opposition and former Prime Minister Paul Keating who advocate a 15 percent compulsory contribution as critical to retirement planning.

But John Daley says the 15 percent argument underscores the confusion in the national debate between superannuation and alternative retirement savings.

"It's needs to be around 15 percent if you assume people don't saving outside and that's just not true," Mr Daley said.

Mr Daley said there were vested interests in the superannuation sector - both retail and industry funds - who would immediately oppose the report's findings.

And he agreed taxpayers were rightly cynical about superannuation policy given the politicisation of retirement and super tax breaks.

"It's no surprise that people don't trust government not to change the rules," Mr Daley said.

"But I think it's also perfectly rational for people to have some of their savings where they can use it before they turn 65."

Super funds under pressure to end executive bonuses linked to more fossil fuel projects

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Source: "Digging Deeping" from Market Forces

Australia's big superannuation funds are under pressure to veto bonuses to energy company executives who are rewarded for expanding traditional fossil fuel or carbon emitting projects.

A report from the environmental advisory firm Market Forces says super funds are "hoodwinking" investors by voting for multi-million dollars bonuses despite committing themselves to climate friendly policies.

Listen to the full interview broadcast on The World Today

Market Forces executive director Julien Vincent says superannuation funds are being hypocritical in approving bonuses for energy executives whose remuneration is explicitly linked to pursuing and establishing new fossil fuel exploration projects.

"It's an absolute hypocrisy for funds to be saying they are helping to steer the economy in a direction that's compatible with limiting global warming and the incentivise more fossil fuel exploration on behalf of their members," Mr Vincent told The World Today.

"Super funds love to tell their members that they're engaged on climate change and they're working with companies to get results and transform companies and transform the economy.

"But what we've found is that they're actually voting for the executives of fossil fuel companies to get fat bonuses to go and explore for more fossil fuel reserves when we've got far more than we can actually burn for a safe climate."

The report identifies seven ASX-listed energy companies that have awarded bonuses relating to new fossil fuel projects including Santos, Oil Search and Karoon Gas Australia.

The report titled "Digging Deeper" urges superannuation funds to use their voting power at Annual General Meetings to vote against bonus deals.

"Super funds actually this money on behalf of millions of Australians so this is actually our money being used to vote for fossil fuel executives getting bonuses to damage the environment and worsen climate change," Mr Vincent said.

"It's the old adage - money talks. And we're talking about assets worth about 20 percent of the ASX. That's a huge chunk of change there and that's very influential.

"Many investors have started writing to companies saying you either need to change your business model or do the decent thing and start returning capital to shareholders."

The Australian Council of Superannuation Investors has rejected the claims of hypocrisy contained in the report.

An ACSI spokeswoman told the ABC the council is "is engaging with resources companies on behalf of its members on the transition to a low carbon economy."

ACSI is also calling on companies "to provide greater levels of transparency around the way bonuses are calculated to enable an informed assessment to be made."

China trade deal allowing dumping of cheap steel on Australia needs to go, report urges

The federal government is facing calls to remove a special trading deal that allows China to dump cheap steel and aluminium on the Australia market.

A study by the McKell Institute released today says Australia's decision in 2004 to award China "market economy" status has backfired and Australian companies are being damaged by the predatory dumping of products at below market cost.

Listen to my full report on this morning's AM program

The call to review World Trade Organisation (WTO) rules on China's access to Australia's market comes as big steel producers like Bluescope and Arrium struggle to complete in a world of too much cheap steel.

Source: McKell Institute report on Australias' anti-dumping framework

Australian Workers Union national secretary Scott McDine seized on the McKell study and pointed to major construction in central Sydney as evidence to the damage caused by steel and aluminium dumping.

"We've got Darling Harbour and the convention centre. There is not one scrap in that whole contruction of Australian steel. That is Chinese and Korean steel," Mr McDine told the ABC's AM program.

"There is not one bit of steel out of the Port Kembla steelworks and not one bit of steel out of the Arrium steelworks in Whyalla in there."

Mr McDine said Australia needs to act on parts of the "China accession protocol" under WTO rules which will expire at the end of the year to prevent China's ability to dump products without paying appropriate duties.

"It seriously needs to be debated by Australia as an absolute necessity and it needs to be done by the end of this year," Mr McDine said.

"The rest of the OECD nations around the world have not given China market status. It is now becoming increasingly apparent that will not be the case at the end of 2016."

Predatory dumping from China hurts businesses of all sizes including the Australian company Capral which manufactures aluminium products like windows and doors to industrial customers.

Managing director Tony Dragicevich told AM that over the past decade China has flooded 40 percent of the local market.

"It's made life extremely difficult. We've had to lay off a number of people over the years, we've had to close a factory and our employee numbers have reduced significantly," Mr Dragicevich said.

"Our business has not been able to pay a dividend to shareholders for the past 13 years and that's made it difficult to raise capital and to continue to invest.

"Australia is currently one of only three developed countries which consider China as a market economy  and that means Australia is a reasonably easy target."

The Australian government recognised China as a "market economy" in the leadup to the China-Australia Free Trade Agreement which came into effect last December.

However the Department of Foreign Affairs & Trade says the recognition "has not prevented Australia from remedying injurious dumping of products from China."

"The Australian Government is committed to a strong anti-dumping regime to ensure our manufacturers and producers can compete against imports on a level playing field".

The spokesman said investigations into alleged dumped products from China are treated on a case by case basis by the Anti-Dumping Commission.

Trade Minister signals new foreign investment rules after China rebuff

The Trade Minister Steve Ciobo has signalled the federal government is preparing to update its foreign investment guidelines to appease disgruntled or confused Chinese investors.

Mr Ciobo is visiting Hong Kong where he reassuring Chinese investors that Australia is open for business, despite the Treasurer's decision last month to block the sale of the New South Wales electricity provider Ausgrid.

The rule changes are likely to provide clarity to proposals relating to critical infrastructure to ensure all investors have clear guidelines when they tender for assets up for sale in Australia.

Mr Ciobo told The World Today that while the government is not signalling that investment in Australia infrastructure is off the table, it is moving to provide great certainty for investors after the Ausgrid rejection.

"The Treasurer is working through a number of proposals in respect to critical infrastructure," Mr Ciobo said.

"It's not about putting forward a prescriptive of assets they can or cannot bid for."

Mr Ciobo, who is attending an investment conference in Hong Kong, confirmed he would be meeting with Cheung Kong Infrastructure, one of the unsuccessful bidders for Ausgrid to discuss proposed and current investments in Australia.

Mr Ciobo said he wanted to send the message that Australia has a non-discriminatory approach to foreign investment while retaining the power to veto proposals that could be in conflict with the national interest.

"Provided it's communicated well to to investors it means they can have certainty about investment proposals in Australia," Mr Ciobo said.

"But at the same time, Australians can have certainty that investment into Australia is going to be good for our country."

In a speech to be delivered later today in Hong Kong, Mr Ciobo is expected to single out the "critical power and communications services" that Ausgrid provides to Australian business and government.

But Mr Ciobo will stress the Treasurer's rejection of the Ausgrid proposal related to the "nature of the assets - not to any particular investor".