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!

Tax time

Perhaps I'm just a masochist, but I continue to prepare and lodge my own tax returns. My affairs aren't particularly complex, and over the years, I have done my best to keep up with changes as they occur, and as they are incorporated into e-Tax  I do admit that it would be challenging to lodge via e-Tax if you had to make a "cold start".  However, I  am associated with a trust that has to lodge a return, and an accountant arranges this.   Based on my experience in this regard, my observation is that the main issue is assembling the required information.  Once this is done, the actual process of inserting it into the tax return is not always as hard as it might seem.

I also note that the ATO now allows simplified returns to be lodged using "myTax".  However, my affairs do have a couple of little "wrinkles"  so I don't come into this category that can use this form, and I have to continue to work my way through e-Tax.
The biggest change this year is the need to create a "myGov" account.   Although this is a new process, I guess it just builds incrementally on the previous arrangements.    Just the same, the process certainly brought "Big Brother" to mind and I worry about the security of portals such as this.   Frankly, I'm not reassured when, after a security breach, I read statements along the lines that, oh yes, there was a vulnerability, but we've "fixed" it (that is, past tense).   I guess the next vulnerability will be fixed, too - after the hackers have demonstrated that it exists!


Another issue with e-Tax is that it's hard to save a pdf file of the final tax return as lodged (or even as a draft).  I think e-Tax expects you to retain the file within e-Tax.  I've experimented with a couple of work-arounds, and the best one that I've come across is a little bit of freeware called "CutePDF writer".   Pity that e-Tax doesn't contain something like this.

The one upside of all this is the nice feeling that I get when, after hours of digging out data and filling things in, I finally press the "submit" button!

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!

Financial Planning

I established some "settings" for my financial affairs a little time back, and to date have seen no reason to make any big changes.    Without going into too much detail, I might say that one element of my arrangements is not to put all the eggs into a single basket, nor to rely on a single "financial adviser".  That's not saying I don't seek advice, and I do my best to keep abreast of the main issues while trying to avoid the temptation to micro-manage or to make "adjustments" in haste.  In any event, I find that with the passing of the years, my enthusiasm to monitor matters in this area on a short-term basis is waning.

So when I received a phone call recently from a financial adviser associated with one of the superannuation funds suggesting we have a "chat", I wondered whether I needed to bother.   Good sense prevailed, however, and I took up the opportunity.  

It seems that I am broadly "on track", and it was good to get a little detail filling out my understanding of some of the changes that are currently occurring.  But, importantly, it was pointed out to me that one issue of which I was aware needs to be addressed sooner rather than later.    In this respect alone,  the discussion was definitely worthwhile

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?

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).

Rubbish bins at your desk - and spin

So, the Tax Office is removing individual rubbish bins in its offices.   This is being said by some as being a belt-tightening exercise;  perhaps it is.  However, at the office in which I (sometimes) work, individual rubbish bins at the desk disappeared a long time ago. 


It was portrayed as an environmentally friendly move:   rubbish has to be disposed of into various recycling bins in communal areas.    However, individual boxes in which to place waste paper have been retained, which means the outcome isn't too tough as, in the office environment, a lot of the material that actually goes into the bin is in fact paper.

It seems it's all in the "spin".  Perhaps if the ATO  went on the front foot and told the world that the change it is making was for "environmental" reasons, the reaction would be better.

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!   

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.

Cardless cash

I know that sometimes I'm a late adopter of technology, but at least I'd heard of "PayWave" before it arrived in my mailbox.  But I hadn't heard of "cardless cash" until I read about it.  This enables you to withdraw cash from an ATM without a card, by using your smartphone.  CAB offer the facility allowing up to $200 per day, and Westpac will offer something similar later in the year.

As I understand it, with the CBA, when you want to withdraw money, you use the app to say how much you want.  You then receive two PINs, one via the app on the smartphone and the other by SMS. Both of these are transmitted to your phone.  When you get to an ATM, you enter these numbers.    

I watched the clip on the CBA site and it seems that you don't need to enter your bank PIN either on your phone or at the ATM.   Security is provided by your phone password (which the bank is not concerned with).   True, most phone users set their phone so that this needs to be keyed in after a minute or so of inactivity, but even so, it left me wondering, particularly about the fact that the bank having no responsibility in the process for checking that the phone is not being improperly used (such as requiring a PIN known by the bank to be keyed in).

So, I had a look at the "fine print", as a footnote to the expression about the user not being liable for unauthorised transactions.   
This states, "^{^}This means we’ll cover any loss should someone make an unauthorised withdrawal on your account using Cardless Cash - provided you protect your phone and phone password and immediately notify us of their loss, theft or misuse, and of any suspicious activity on your account."

Hmmm, if you lose your phone, can you be said to have failed to "protect" it?  If someone loses their phone, will informing the bank be the first thing on their minds?   How quickly do you have to notify the bank in order to be able to say that you've "immediately" notified them?   I haven't used this facility (and am unlikely to do so) so perhaps I've missed something, but otherwise it seems to me that there are a few "loose ends" here!

Taj Mahal on the Swan

We weren't too far away, so while were in Perth, we just had to drive past the "Taj Mahal on the Swan".   It's still there, unfinished, and little seems to have changed since it was reported 3 years ago to be on the market, perhaps because the Oswal family finances seem to be somewhat "complex" (this link is also to a report some years back).

It is said to be caught up in a morass of legal proceedings!  As to a value of $70 million+?   Well, maybe the land (this is prime Peppie Grove real estate) is worth a bit....but the unfinished structure?    Can't see it, myself.

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

The Winter breakfast

I attended Prahran Mission's Winter Breakfast launch.  It wasn't quite as slick as the Salvo's appeal launch, and it was down to earth in a number of ways. One of the main areas that Prahran Mission works in is mental health, and they were up-front about the issues.  Mention was made of the new mental health legislation and some good aspects were described (more "one on one" programs) but that this comes at a cost (no funding for "drop-in centres).   We were told about some approaches to (and an experience of) treatment. It was also said that the rate of use of "ice" in Prahran and St Kilda is the highest in the world!  (Not sure how they work this out, but still.....)

Heath Black spoke of his personal journey through AFL football, and the serious issues that weren't being addressed in the recent past (mental health and drinking, with the drinking obscuring the depression and panic issues that some players had).   The audience was certainly captivated. We were left hoping that more attention is now being paid to these matters - but we still see media reports about "incidents".

I'm sure both Prahran Mission and the Salvos are doing vital work, but it seemed to me that they are approaching things in slightly different ways.  The Salvos, even with their corporate sponsorships and neat uniforms, are, no doubt, getting their "hands dirty", but it appeared to me that the Mission is getting fully immersed in the issues they deal with.

The Salvos

After enduring some delays on the trip in as a result of the massive train disruptions that morning, I attended the breakfast launch of the Salvation Army's Red Shield appeal.   550 people were present in the Sofitel's Grand Ballroom.   Obviously a worthy cause, although it's clear that the Salvos run an impressive operation and are well-connected in the business community.   They are also clearly quite particular about their "brand" (have you ever seen a scruffy Salvo officer?)

The child abuse issue was addressed head-on (remorse, never again), which of course is the only viable approach, although not every institution affected seems to have fully grasped this.  

Interestingly, it was said that the the Salvation Army's support in Australia is strongest in Victoria.  I wonder if there are historical reasons for this?

Legal Education

I was indebted to an article in the Australian for drawing my attention to a speech by (Victorian) Chief Justice Marilyn Warren  (the Fiat Justitia lecture, a link to the text is here) regarding a number of aspects of legal education in Australia.   Her speech covered quite a lot of ground, and it was good to see these issues getting some exposure.

One of the issues she mentioned is that the universities are producing far more law graduates than can ever be employed as a lawyer.    On a per capita basis, the number is far higher in Australia than it is in the US.  In one sense, this is not all bad news, because a law degree can be a good form of generalist education.  After all, how many arts graduates are employed as historians or whatever their major may have been?   Moreover, if the places in law courses aren't available, they will become even more elitist than they are now (I'm not sure that the brightest VCE students will necessarily become the best lawyers).

However, this seems to have the result that the universities are responding to the demand for places in law courses by turning law into a generalised degree that fails to include some matters the judiciary considers important.  She didn't say this, of course, but my informal observation is that these days there is quite an emphasis on "sociological" subjects, dealing with human rights and similar issues.  But she did say that the way in which subjects are taught has changed, and that the teaching in some core areas is, "at least disappointing and in many respects unsatisfactory."  She also says that it, "it is unfortunate that law students typically spend years studying the law before they find out what it is like to practice law".  And she sends a shot over the universities' bows, saying, "if the university sector persists with the generalist direction a solution for legal practice effectiveness is needed".  She moots various possibilities, including an "admission to practice" exam (akin to the bar exam sin the US) or even a cap on the number of lawyers (the aspect that the Australian chose as the subject of its headline).

Justice Warren's speech is worth reading in its entirety. I hope the law schools take it on board.