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August 11, 2011

Financing Older Australians

One of the many interesting recommendations in the Productivity Commission's Caring for Older Australians Inquiry report is Recommendation 8.1:

The Australian Government should establish a Government-backed Australian Aged Care Home Credit scheme to assist older Australians to make a co-contribution to the costs of their aged care and support.
• Under the scheme, eligible individuals would receive a Government-backed line of credit secured against their principal residence, or their share of that residence.
• In establishing the line of credit, the Australian Seniors Gateway Agency would arrange a valuation of the principal residence and specify a minimum level of equity for the person’s share of the home. The individual could draw progressively down to that minimum to fund their aged care costs. The drawdown on the line of credit would be subject to interest charged at the consumer price index. If the outstanding balance and accumulated interest reached the minimum limit set by the Australian Seniors Gateway Agency, the interest rate would fall to zero, and no further draw down would be permitted under the scheme.
• The outstanding balance of the line of credit would become repayable upon the disposition of the former principal residence including upon the death of the individual, except where there is a protected person permanently residing in the former principal residence.
• In the latter circumstances, the outstanding balance of the line of credit would be repayable when the protected person ceases to permanently reside in that
former principal residence, or ceases to be a protected person. (Protected person is defined in the Aged Care Act 1997 and includes, for example, a partner, dependent child or a carer.)

The report concluded that equity release products can be complex and there is nervousness about current privately offered products.

Proposals for regulation of reverse mortgages are contained in the draft NCCP Amendment Bill discussed here.

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Posted 11th August 2011 by David Jacobson in Current Affairs

July 6, 2011

Some figures from CBA

I attended a talk by Commonwealth Bank CEO Ralph Norris yesterday.

The CBA group (including funds under management) is now about $1 trillion (ie 1,000 billion dollars).

On that basis he regards annual profits of about $6 billion as reasonable.

CBA spends about $100 million a year on regulatory compliance.

PS When asked about the breakup with another bank he said he didn't know they had a relationship.

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Posted 6th July 2011 by David Jacobson in Current Affairs

January 12, 2011

Business continuity and Queensland flooding

I have been monitoring the flooding and heavy rain over the last 3 weeks as it has has moved south from Central Queensland but the events of this week in Toowoomba and the Darling Downs and now Ipswich and Brisbane have surprised everyone. (Who would have ever thought the Brisbane CBD would be evacuated and power cut?) See ABC News

From a business (and particularly a community banking) perspective the prime focus is the safety of staff and members.

Clients who have endured floods and cyclones regularly are used to waterproofing their premises (plastic and sand bags) and securing power generators. Flooding not only damages property but leaves mud and smells that never quite go away.

Obviously data must be backed up in a safe place off-site and if premises are flooded an alternative work space must be obtained.

Electrical equipment must be moved.

If phones (land line and mobiles) are working then phones can be diverted so that business can continue.

These days ATMs have satellite connections and power back ups in case power and land lines are cut.

The internet permits business to continue remotely but in communities hit by flooding and cyclones you need to allocate staff to hardship claims by customers. This involves deferring payments or renegotiating loan terms.

Many customers will have lost paper records and will not have been able to work. They will require assistance.

The flooding will have long term economic effects.

UPDATE: In response to enquiries, you can continue to contact Brisbane partner David Jacobson on 0421 611540.

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Posted 12th January 2011 by admin in Current Affairs, Mutuals

September 12, 2010

When advertising becomes comedy

The ANZ's Barbara the Bank Manager reminds me of the Saturday Night Live spoof featuring Roseanne as the call centre operator.

Would your ad survive a Gruen Transfer critique?

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Posted 12th September 2010 by admin in Current Affairs

June 24, 2010

UK imposes a bank and building society levy

The new UK government has moved with the French and German governments to impose a levy on large banks and building societies.

According to the BBC, British banks and building societies with assets of 20 billion pounds or more will pay a levy of 0.04% starting from 1 January 2011. The levy will increase to to 0.07% in 2012.

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Posted 24th June 2010 by admin in Current Affairs

December 13, 2009

Choice: credit union banana smoothies customers more satisfied than banks’

Taking mixed metaphors to extremes, Choice have published a video on their analysis of financial institution competition using gorillas, monkeys, zoos and banana smoothies. Their conclusion? Don't let banks treat consumers like monkeys.

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Posted 13th December 2009 by David Jacobson in Current Affairs

February 9, 2009

Credit Union Victorian Bushfire Emergency Relief

The Credit Union Foundation Australia (CUFA) has set up a tax deductible Bushfire Relief Fund for people affected by the bushfires (ABC News). Funds collected will be provided to the Red Cross.

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Posted 9th February 2009 by David Jacobson in Current Affairs