The rights issue

I've got a small holding in AGL, so received the offer to participate in the Retail Entitlement Offer, which in old-fashioned language is a rights issue.   It's to help AGL pay for the Macquarie Generation assets.  

Now, only a week or so ago,  I attended an internal seminar at which the competition issues involved in this acquisition were discussed.   The acquisition was authorised by the Australian Competition Tribunal, which we were told was rather dismissive of at least some of the ACCC's arguments opposing the transaction (the very detailed decision is here).    And the ACCC wasn't very happy, either.  Well, we were being addressed by the lawyer who led the competition team for AGL in this transaction, so I suppose it's natural that she would emphasise the parts of the decision that might be considered as "dismissive".

But I digress.    Of course, everyone has to make their own decision as to whether they want to participate in the offer, and there are various factors involved.  But the tax consequences are almost always a factor, so I was very pleased to see that these issues were addressed in the offer booklet in an up-front way, in the section headed, "Summary of options available to you".   Sure, there's no absolute certainly about the tax issues for any particular investor, but it was good to see the issues clearly and concisely set out, instead of the jargon we so often see along the lines that "tax isn't really our concern, but if you go to page so-and-so (deep in the innards of the documentation), you'll find some long-winded and usually inconclusive explanations".  Yes, the detailed tax dissertation was there as well, but, as I've said, it was nice to find a concise summary readily available.

As a footnote, it's a bit odd that a senior executive of AGL makes some rather "interesting"comments about the operation of the national electricity market just a day or so before the last day for the mums and dads to stump up their money!

Wotif to be acquired by Expedia (2)

I see that the Expedia proposal to acquire Wotif has been given an "amber light" by the ACCC.  It seems that one of the issues of possible concern  is that Expedia tends to charge accommodation providers a higher commission than Wotif, and that if the Priceline group (which is booking.com and Agoda) and Expedia (which includes Hotels.com, as well as others) were the only participants of any scale in the on line travel agent (OTA) market, the  accommodation industry considers that rates charged to hotels would possibly rise.

I skimmed through the very interesting Statement of Issues and noted that the ACCC seems mainly concerned (see paragraphs 47 and 52) with the three largest participants on the OTA market (Expedia, Wotif and Booking.com), and doesn't  place a great deal of weight on other players in the market, such as Zuji (owned by Webjet), Flight Centre, and Orbitz (which is HotelClub.com and is linked to Helloworld).   How this will flow through to the final determination remains to be seen.

What I found very interesting in the Statement of Issues were the descriptions of the participants in the market, as above, and also that Wotif includes lastminute.com.au and travel.com.au.

The ACCC's release contains a reference to Hooroo, as a relatively new OTA.  I hadn't heard of this, so I followed up on it.   It didn't take long to see that it's owned by Qantas!   And they've built it from scratch and it's based in Melbourne.  I may in fact have unknowingly used it when booking through the Qantas site. I've added it to my bookmarks and will be looking at it in the future, but my first impression is that it's got quite a way to go before it can be taken to be a serious player in this market.   It doesn't have much coverage and it's a pity that I don't seem to be able to see the rates charged by overseas properties in their local currencies.

The Statement of Issues also stated that OTAs (except Wotif) generally charge a base rate of commission to accommodation providers for bookings through their portals and charge a higher rate of commission to hotels to appear on the front page of their unrefined search results. I guess we all assumed this, but it's interesting to see it in writing.  Another case of "buyer beware", I suppose.

Getting the car serviced

With a relatively new car, I'm still taking it to the dealer to be serviced.   But my patience is wearing thin.
For one thing, the dealer is some distance away and in a locality not well served by public transport. which gives rise to the issue of what do I do while the car is being serviced?  There is a railway station but it's a long walk which I would have to do there and back if I came home.    And there's nothing of interest in the area (except a few other car dealerships)!

I'm still at the stage where the services are more-or-less routine, and on the most recent occasion, I was informed that if I brought the car in at a designated time, I could wait for it as it would only take an hour.   I arrived a few minutes early, but even so, the car wasn't handed back to me until 30 minutes after the promised time.

Even if I have the car serviced closer to home, there are issues.     At this stage in the car's life, servicing consists mainly of a change of engine oil and oil filter plus a few visual checks.

I understand that, when I take it to the dealer,  I'm paying for the dealer's "expertise", and that he has significant overheads.   But closer to home,  there's the well-established guy with all the credentials - who is nearly as expensive as the dealer.  Then there's the guy down a side-street, who is cheaper....but based on past experience, I have some misgivings about his work.  Or there's K-mart, where the prices are somewhere in between.  But taking your car to K-mart?

Such are the issues associated with cars!

Strawberries

It's strawberry season, but it seems we live in a world where "bigger must be better".  I was surprised at the size of the strawberries available at the supermarket.

That's a dollar coin for comparison

Frankly, I can't discern any difference in the taste (for better or for worse), but I am worried what has been done to achieve strawberries of this size.

In the meantime, more conventionally-sized strawberries are around for as little as 99¢ (for 250g).

Shoe sizes

My el-cheapo but comfortable sneakers wore out, but the store had some that were almost identical.    I tried on a pair that were labelled as being the same size as my existing pair but they didn't fit.  The next size up fitted nicely.  Yet on closer examination, the shoes that fitted were identical in actual size to the earlier pair, even though labelled differently.
Yes, they were cheap, and, yes, both pairs were made in China - but it does serve to show just how unreliable the sizing system is.    How anyone manages to buy items such as these over the internet without the ability to try them on is a mystery to me.

The real CPI

The real CPI?  The one that matters?   Yes, the Cappuccino Price Index! 

Unfortunately it doesn't seem to be updated very often, but I suppose a lot of research has to be done which must be time-consuming.

I wonder if the results ought to be sorted by postcode.  Every time I buy coffee I seem to pay at least, and often more than, the average.    Where are those "good-value" coffees at less than the average price?   Perhaps we need a "coffee watch" site as happens with petrol - or would this offend the ACCC?

I also wonder where the all-pervasive coffee cards fit in to the calculations?  Does this index take account of the fact that, if you're loyal, every 6th or 7th coffee is "free"? Or are these cards disregarded on the basis that most people are like me and have a pile of cards with two holes stamped and can never find the right card when I return and have start all over again with a new card?

Buying a cable....

We all agreed that we needed a longer VGA cable as part of the AV set-up at the Church.
I checked at the local Dick Smith and was surprised that the price was nearly $60, and at Officeworks it was nearly $40.   My initial reaction when I first saw it at Dick Smith was, it's what we need, it's here and I can have it now.    But, for once, I paused......

Back home, and a few mouse clicks later, yes, it was in Mr Smith's on line store, on special for about $12.    But on attempting to place it into my "cart" on the Dick Smith site, lo, the price reverted to the store price.   Seems the one-day special was just ending, so instead of getting hot and bothered, I just moved on and found what we wanted was readily available on e-Bay at prices from $15 upwards.   But there would be a delay while it was mailed, and I don't have Paypal....all too fiddly.

Long story short - I remembered Computers and Parts Land!  It's been a while since I have patronised them, but they're still there and the item was on their website for $12. It did involve a trip to Notting Hill, but I was out and about in the car anyway (and just happened to find a reason to drop into the nearby Bunnings as well), and the instant gratification made up for the time I spent going out that way.

Not the smartest looking retail establishment around and set in a field of warehouses, but as in the past, they've got just about anything you might need and the prices generally seem to be as good as you'll get anywhere.







.

Flying to conclusions

The following post appeared in a Trip Advisor forum:
"I will be flying in from UK to Melbourne and note there are 2 airports and with price differences.
I plan to stay in a central /CBD location.
Do I select Melbourne International (cheaper fairs [sic]) or Tullamarine (more expensive)?"

Just goes to show that a little bit of care has to be taken when doing it yourself on the internet.    'Coz "Melbourne International" is the name of an airport in Florida!

Auction technique

Every real estate auction is different, and - apart from knowing what your upper limit is - there's no one rule for bidders that's invariably applicable.    However, as a long-term observer of the auction scene, I do know that agents' usual advice to "bid strongly" is not necessarily the way to go.  It seems to me that often it just communicates to the auctioneer that you're interested - with the risk that the price might drift upwards before the property is put on the market, and that this is likely to more than off-set any possible effect of "scaring off" other bidders.

Be that as it may, we recently attended a nearby auction, where there were two bidders, both quite diffident.  True, it was an executor's sale, but successful purchaser impressed me.  She dithered in her bids, asked for time to consult her husband, suggested a coffee break and generally gave every indication of being indecisive.   Perhaps she was - but I wondered if it was all an act?   Because the upshot was that the auctioneer put the property "on the market" at what I considered to be quite a low figure, and the consensus amongst the neighbours (who watch these things very closely!) was that eventual sale price was very reasonable.

I still don't know whether the "strategy" was by accident or design....but I came away impressed.

Biometrics

There was a bit of a discussion a few weeks back about the use of biometric data for security purposes.

In particular, a Facebook engineer, Gregg Stefancik was quoted  as saying that he "hates biometrics" because, once such data is compromised, it can't be amended.  He means that a person's fingerprints, retina or voice pattern can't be changed, whereas other forms of authentication like a password can be reissued.

However, the "Biometrics Institute" (not quite sure what this is or who is behind it)  apparently think that this overstates the case. They say,  "that biometrics offers far greater security than passwords and can’t be stolen because they are physical features of a person."

Well, perhaps biometric data they can't be stolen from a person, but what about at the other end?   Surely the data has to be on file at the bank or wherever, so that when the individual logs in, it knows what to look for?   And of course, we all know that any organisation that stores data about you is quite capable of being hacked (for example, eBay).  EDIT - and cloud storage also seems vulnerable.

The essence of the the Institute's  argument appears to be that you don't use biometrics alone.  Err, what's that?    So you do have to have a password or PIN as well?  Kinda defeats the purpose, I would have thought.....

Perhaps I'm missing something here, but at this stage, I remain to be convinced about the utility of biometric data!

PINs

I'm still getting letters and text messages from the bank reminding me that it's "PIN-only" from 1 August (because the banks want it that way).   It's all very annoying - especially the text messages.   ANZ in particular is getting quite agitated that I haven't used the PIN on my ANZ credit card.   They don't seem to have noticed that I haven't used the credit card at all......
Seems to me that the people that the banks need to be talking to are restaurants!    In my albeit limited sample of restaurants over the last few weeks signing is still very much alive!

But what about overseas card holders and other people who don't have a PIN?

I see that the Dementia Institute has taken up the issue and apparently it will be possible to have "sign only" cards.   So maybe things won't be entirely "PIN-only" after all.

ATM fees

It seems that ATM fees are very unpopular.   The Age (and other Fairfax media) ran a report about Galaxy Research's finding that people don't like ATM withdrawal fees when they use a "foreign" ATM.    It was mentioned that the typical fee seems to be moving up from $2 to $2.50.

But I'm sorry, I don't see any reason for indignation (at least, in relation to domestic ATMs).  Why shouldn't people be charged a fee when they use an ATM that's not operated by their own financial institution?   To me, it's a bit like walking into McDonalds and asking for a KFC product, or asking Qantas to sell you a Virgin ticket.

I think it's excellent that, if necessary, you can withdraw money from just about any ATM, but what's the problem if you have to pay when you use another bank's machine?  

It's said that people will drive to the other side of town to get petrol a few cents cheaper, so what's wrong with walking a few metres up the street to to get to an ATM operated by your own bank?  Although there are exceptions (small towns and airports come to mind), ATMs tend to be a bit like bananas - they bunch up.    Chances are that where there's one brand of ATM, several others won't be far away.

The use of  linked networks is sometimes overlooked, too.   The NAB and Redi ATM networks can be used interchangeably without fees, as can CBA/Bankwest and Westpac/Bank of Melbourne/St George.  I've seen a few Bankwest machines in 7/11 stores.  Another option is to use EFTPOS and the "cash-out" facility.    But of course the simplest option is just to plan ahead (albeit a little out-of-favour in our "instant gratification" world).

Wotif to be acquired by Expedia

While bricks-and-mortar travel agents seem to be doing OK, there's activity in the on-line sector, too.

It seems that Wotif is going to be acquired by Expedia (at a price of $3.30 per share, including a special dividend).   Wotif has been having a bit of trouble recently, with the share price hitting a low of $2.26 on 21 May, way below its 52 week peak of $5.25 on 22 July last year (and even further below its all-time high of $7.69 in April 2010).   This is in spite of claiming to have 36% of the Australian accommodation online-booking market (see company research posted on CommSec site).  Media reports suggest that it hasn't been keeping up on the technology side of things.

The takeover of Wotif.com will presumably result in the disappearance of its "interesting" code from the ASX.

The Trip Advisor community doesn't really like the deal (not that this is relevant!), as Expedia evidently have a reputation for charging higher commissions than Wotif, and for seeking favourable conditions from providers.    (Interestingly,  Trip Advisor itself was spun out of Expedia).

Will Expedia maintain Wotif as a separate brand?   Or should that be "brands"?  Like other players in this market (and in the bricks-and-mortar market), Wotif also runs other sites including the lastminute.com.au and, travel.com.au sites.  And Expedia also runs Trivago, Hotels.com and Hotwire,as well as having a tie-up with Travelocity.  Thus, perhaps the Wotif brand will continue, at least on the consumer-facing side.

The other major international player is said to be Priceline (which owns booking.com.).  This interesting article in the AFR points out the dominance of the large operators.  The scale of Expedia and Priceline means they can sign up more hotels, negotiate better prices and insist on better deals from accommodation providers (for example, enabling them to offer price-match deals).   So other Australian operators such as Webjet (which, I note, owns Zuji) and even Flight Centre might find themselves being squeezed. 

Travel agents

Our local shopping strip has lots of cafes, hairdressers - and travel agents.    I suppose that says something about the demographics of the area.

The new arrival

Recently, another travel agent has opened.  I wondered if the people behind it knew what they were doing - until it dawned on me that it was another brand operated by Flight Centre!  So I assume that even though the new shop is just down the road from the existing Flight Centre, they know what they're doing.

So many travel agents

The latest to arrive is just another Flight Centre brand

On a related note, I have used a particular consultant at the local Flight Centre branch on a number of occasions in recent years.






It seems that it was fortunate that she was available when I walked into the shop on the first occasion, as she is obviously experienced. I regard myself as a reasonably "informed" customer in that I have a fair idea of what I want before I walk in, but there are still issues on which I like to obtain a second opinion.   However, in a recent email, she informed her clients that she was moving to "Travel Associates" (yet another Flight Centre brand), which I thought was fine until I read on the website that this brand is  "a boutique travel agency dedicated to offering discerning travellers the ultimate in experiential [sic] travel and tailor-made itineraries".  Hmmm, I wonder if that's for me?

New Financial Year

Greetings on this first day of the new financial year.

And with the new financial year comes tax time.   This year, the ATO were quick off the mark - the email informing me that the new version of e-tax software was available arrived on 30 June. 

As always, there are changes, although I haven't absorbed them all yet.   But one change, right up front, is that to use e-tax, you have to register on the "My Gov" website.   I wonder where that is leading.....?

Credit charge surcharges and "drip pricing"

It's interesting that the ACCC is looking at the "drip pricing" techniques used by some airlines.  Presumably this is primarily directed at credit charge surcharges, of which I have recent personal experience.  There are other charges such seat allocation charges (on Jetstar but not Virgin or Qantas) and baggage charges (usually fairly well displayed?), but these don't seem to be such an issue.

In fairness, however, I thought the late booking deal on Virgin (which allowed payment by direct debit at no extra cost) was acceptable.   I haven't tried booking on Jetstar at short notice, but I wonder why no mention is made in the news report about the actions of Qantas which is "right up there" when it comes to credit charge surcharges (they give you no alternative but to use a card when you're booking close to the day of travel).

More generally, surcharges when you pay by credit card are increasingly a fact of life.  The Reserve Bank has views on the amount of such surcharges and the ACCC has views on their disclosure.

Clearly an important statement in the ACCC's pronouncement on the issue is that the merchant must "ensure ... customers are aware - before they enter into the transaction or contract - that a fee will apply and the amount of the fee."

In short, at the price comparison stage, this statement doesn't require the surcharge to be displayed - unless not to do so is "misleading", which seems to be the point the ACCC is taking in its recently announced proceedings.

Something else that the ACCC could look at, in a similar vein, is Melbourne Airport's practice of publicising quite prominently their "book in advance" car parking prices with no mention of a credit card surcharge at all until the final payment screen was displayed. 

Given that  there was no option at all except to use a credit card to pay, with a 2% surcharge, their otherwise helpful on-line calculator seems to me to go very close to the wind in terms of being misleading.   

Other players who are fast and loose with  the credit card surcharge, or so it seems to me, are car hire companies.  On our recent trip to Canberra, Avis looked as though it would be even worse than Hertz were in Perth:  in the case of Avis, if you wish to pay by a Visa/MasterCard debit card  (link is to FAQs, so it's necessary to select the question) so as not to incur the surcharge, the website seems to suggest that their rule is along the lines that they would take the whole of the hire charge, plus your excess plus $100 for fuel out of your debit card (that is, from your cash) - and refund it to you when they get around to it, perhaps 7 - 10 days after you return the car!  I didn't investigate whether it is quite as bad as this in practice, as needless to say, I opted for payment by credit card (and in any event I don't have the required type of debit card).  But the ultimate irony was......on carefully checking my final statement, in fact Avis didn't impose a credit card surcharge at all!   

Free range eggs

There have been concerns about just what amounts to a "free range egg", and it seems that a standard is to be developed.

About time!  Many of us pay extra for eggs that we believe to be produced under (relatively) humane conditions.   Just the same, the "devil will be in the detail", so we await with interest what the standard will prescribe.  And why wait until 2015?  The fact that are ACCC prosecutions in the wind seems a lame excuse.

Of course, even in the absence of some sort of standard, it's always open to the producer to specify what their practices are.   We recently bought eggs where it was prominently stated on the carton that the 1,500 hens per hectare standard applied.   Very commendable.

On the other hand, another brand, well-represented in supermarkets, gives no information at all on the packaging or its website as to how it defines "free range".

It's also important that statements about the source of foods are accurate.   Hopefully  Saskia Beer  now understands this.






Update:   After posting the above, I looked at the packaging of Coles "Free range eggs".  It states a maximum of 10,000 hens per hectare outdoors, and that the hens are "free to naturally roam and perch".   I don't know about the density but at least the information is there, and presumably the ability to perch is desirable. 

Travelling at short notice

Being "seniors", most of our travel is planned some time in advance.   However, sometimes events arise that require plans to be made at short notice, such as travelling to Canberra for a funeral.
Of course, the only fares on both Qantas and Virgin at our preferred travel time were significantly more costly than the cheapest fares available at other times (including later in the day on which we wished to travel ... but we didn't have the necessary flexibility).  Such is the price of booking close to the date of travel and not having a great deal of flexibility.

Even so, for a single booking at our preferred time, the fare shown was what might be regarded as a "intermediate" amount, so things could have been worse.  But, when I tried to book for 4.....a higher figure was shown!

Hmmm.   I revised the booking down to 2 people, and, yes, the lesser (intermediate) fare was available.   It seems that if a booking is for a number of seats that exceeds the number available at the cheaper figure, then the whole booking will be processed at the higher cost (I've encountered this before).   In our case, the 2 remaining family members travelled instead on Virgin, which fortunately operated a nearly parallel flight (at a nearly parallel cost).



Happily, there seemed to be plenty of accommodation available in Canberra for our night there, and we got a good rate for this.  And car hire rates at the weekend in Canberra seem to be a lot cheaper than during the week. There were certainly a lot of unused cars in the hire car carpark.

But how to avoid the credit card fees charged by the airlines?   Virgin allow you to do a direct debit (via Poli)...there are a few steps, but it's not hard.   But with Qantas, it's much more restrictive.   Within 7 days of travel, Qantas don't allow the use of BPay.  You can only use a Visa or MasterCard debit card, which I don't have (although I'm thinking about getting one), and even that costs $2.50 per passenger.  Use of a credit card attracts a surcharge of $7.00 for each passenger.
 
How Qantas justify their $7.00 surcharge in light of the RBA Guideline eludes me, but perhaps this is an issue for another time.

PayWave

"Contactless" or "tap-and-go" cards have been around for a while (Visa call it "payWave").  The Whirlpool forum on the topic has been running since 2009!  So, I accept that I'm a latecomer to this now-popular technology (and I most certainly have not read through the whole Whirlpool forum), but I noticed that when my replacement credit card arrived, there was a covering note explaining that "PayWave" could be used on it.

I was apprehensive about this technology, and then I saw the news reports about increased thefts occurring, evidently by people in search of these cards.  Well, I do my best to secure my cards so that they're not stolen and I'm not overly worried about being hacked (see here), although I do realise that both of these are possibilities and of course I would be distressed if either happened to me.  However, it seems to me the real issue with such cards for many people is literally closer to home, namely unauthorised use by other members of the household.  It's not hard to envisage a situation where another person "borrows" the card, uses it and then returns it.  Hopefully, it won't occur in our household, but many households and house-sharing arrangements are somewhat prone to events of this type.

Imagine the difficulty involved in disputing a single transaction (which occurred while the card was "borrowed"), where other legitimate transaction later (after the return of the card) have occurred!

I decided I would like to disable the feature.  The CBA website tells me that this can't be done.  I visited the bank, where it was confirmed that the feature couldn't be disabled (unless I physically damaged the particular part of the card), but a notation was placed on the file to the effect that, if a PayWave transaction occurs, I'll be notified.

The bank's action is better than nothing, but it seems to me that technology of this nature ought to be available on an "opt in" basis, and to my mind it's unsatisfactory that it's not even possible to "opt out".

The mail to your door (3)

Well, the price of stamps has gone up to 70¢, but it seems that the issue of  the frequency of mail deliveries is still bubbling away.   Some ideas were floated earlier in the year, and it seems that the issue hasn't gone away, although it doesn't seem to have made it to the "Australian Post Monitor" site. However, 3 deliveries per week seems to be occurring after 2015 in New Zealand.

In relation to less frequent deliveries,  The Age reported Australia Post chairman, John Stanhope, as saying, "If you want it fast, you pay for it"  (see also the Skynews report).    I'm not sure how this would work.  It's one thing to pay up-front for express delivery, but the tenor of the comment seems to suggest that the recipient can opt to receive daily mail deliveries.   How would this operate in the sorting/delivery process?   Will the postman still come down the street but miss the houses that haven't paid up?    Would this really result in any savings?

In the meantime, Australia Post is getting on the front foot with their post boxes.  No longer do they state expected delivery times, only the daily clearance time.

However, privatisation is said to be off the agenda - for now.

'If you want it fast, you pay for it .. if you want it more frequent you pay more, if you want it express you pay more,' Australia Post chairman John Stanhope told Fairfax media - See more at: http://www.skynews.com.au/news/national/2014/05/07/city-postal-deliveries-could-be-cut.html#sthash.8aeHDMWF.dpuf

'If you want it fast, you pay for it .. if you want it more frequent you pay more, if you want it express you pay more,' Australia Post chairman John Stanhope told Fairfax media - See more at: http://www.skynews.com.au/news/national/2014/05/07/city-postal-deliveries-could-be-cut.html#sthash.8aeHDMWF.dpuf

'If you want it fast, you pay for it .. if you want it more frequent you pay more, if you want it express you pay more,' Australia Post chairman John Stanhope told Fairfax media - See more at: http://www.skynews.com.au/news/national/2014/05/07/city-postal-deliveries-could-be-cut.html#sthash.8aeHDMWF.dpuf