ACCESS Family Business - June 2019

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Family Business

With David Pring

WELCOME o KPMG Family Business ea ure ar icles, which I hope you enjoy reading.

I you would like o discuss hese ar icles or how KPMG can help wi h your business, please eel ree o con ac me on 9455 9996 or davidpring@kpmg.com.au

Welcome No new axes on SUPERNNUA ION sel -managed unds hope or s abili y n JULIE DOLAN OS -elec ion, he $750 billion sel -managed superannua ion indus ry is probably relieved ha no ur her shake up o he indus ry is being planned.

Over he las couple o years, he SMSF indus ry has ried o implemen and adminiser he his oric number o changes ha came abou rom he Simpler Super e orms in 2016. ere is no doub hey are welcoming a period o rela ive s abili y.

Labor’s proposed aboli ion o ranking credi re unds was defni ely a poin o con enion be ween bo h par ies. e core o he deba e was he di ering opinions on how he ax policy around ranking credi s should be deal wi h. Bo h opinions held meri .

Labor believed i was an erosion o he corpora e ax base whils he Coali ion argued i was a reins a emen o he correc ax posiion o he receiving axpayer. Due o he ax posi ion o many sel - unded re irees and SMSF’s, he impac o his measure had signifcan impac .

Prime Minis er Scot Morrison has guaran eed “no new axes on Superannuaion”. Whils his guaran ee has been made, he Coali ion has s ill announced a ew minor changes o superannua ion.

Some o hese changes o SMSFs include: • Changes o he ‘work es ’ ha will allow individuals aged 65 and 66 o make volun ary superannua ion con ribu ions. Curren ly only individuals over he age o 65 can make volun ary con ribu ions i hey have me he ‘work es ’. is es requires ‘gain ul employmen ’ or a minimum o 40 hours in a 30 day period be ore he con ribu ion can be made; • Ex ending he ‘bring orward’ rules o hose aged 65 and 66. As he rule curren ly s ands, a person needs o be under he age o 65 o benef rom he ‘bring orward’ rule so as o make hree years’ wor h o nonconcessional con ribu ions; • Increasing he age limi or spouse con ribu ions rom 69 o 74 years; • ein roducing he measure o increasing he SMSF member limi rom 4 o 6, despi e he removal o he measure shor ly be ore Parliamen was dissolved;

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• Adminis ra ive changes in rela ion o how he SMSF calcula es exemp curren pension income. is includes a elimina ing a requen ly deba ed requiremen or SMSF’s o ob ain an ac uarial cer ifca e when he und is 100 percen in pension mode.

• Con inuing o allow SMSFs o benef rom limi ed recourse borrowing arrangemen s.

As o when hese proposed measures are in roduced will be a mater o ime, however

wha is cri ical, is ha any ur her changes are assessed agains he overall objec ive o superannua ion. is main objec ive, being “ o provide income in re iremen o subs i u e or supplemen he Age Pension”. o regain rus and s abili y in he indusry, a long- erm view needs o be aken. is is ur her subs an ia ed rom he recen fndings coming ou o he Financial Services oyal Commission, Produc ivi y Commission and APR repor s.

A er many years o poli ical urmoil in Aus ralia and he desire o Aus ralians or

s able leadership, le ’s hope ha he Morrison led Coali ion par y will deliver his much needed requiremen . I is a ime o ‘rese ’.

I you would like ur her in orma ion on ax regarding SMSF’s, con ac David Pring on 9455 9996 or davidpring@kpmg. com.au.

Article first published by Julie Dolan, Director, KPMG Enterprise on KPMG Newsroom.

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Family Business

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Why were he “quie Aus ralians” missed in he elec ion pre-polls? n AMANDA HICKS HE inaccuracy o polling da a came as a big shock in he recen Federal elec ion.

A er consis en predic ions o a Labor vic ory, wi h bookmakers even paying ou in advance, he Liberal par y re ained heir majori y.

As la e as elec ion eve, mos major polls had Labor ahead 51-49 on he wo-par y pre erred vo e. is resul mirrors a number o polling “upse s” globally over he pas ew years, rom rump’s elec ion in he US o Brexi .

I ’s clear polls are missing a cohor o conserva ive vo ers, which he Aus ralian Liberal par y has now named “ he quie Ausralians”. is conserva ive vo e was also under represen ed in he 2015 UK General Elec ion, he 2016 Brexi re erendum and he 2016 US elec ion. is group is geting harder o quani y using radi ional polling me hods. ere are several reasons why he polls can pain an inaccura e pic ure o he elec ions, and in par icularly over he elec ion weekend in Aus ralia.

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Increased disengagement In research, we ge much s ronger levels o accuracy and par icipa ion when people eel engaged in he issues a hand. e curren level o disengagemen wi h poli ical issues may be driving some o his under-represen a ion.

We o en hear more s rongly in research rom hose wi h he loudes , mos ves ed voices. In his case, hose ha wan ed change may have been more visible and audible in he polls han hose con en wi h he s a us quo.

Fragmented audiences Poli ical opinion polling is a science ha depends on ex raordinary accuracy in erms o represen a ive samples, a a ime when inaccuracy is now oo easy. ere is no single way o reaching every Aus ralian cohor in an opinion poll. is compares o several years ago, when almos everyone had a landline and would answer he phone o do a quick survey. oday, increasing numbers o Aus ralians have in erne -only landline connec ions, i hey have a landline a all, and rely exclusively on mobile. Analysis o ACMA da a predic s only 50 percen o Aus ralian homes will s ill have a landline in 2021, down rom 83 percen in 2011.

Wi h he 2015 UK general elec ion, he main problem wi h polling inaccuracy was de ermined o be unrepresen a ive samples.

People who ook par in polls did no accura ely re ec he popula ion as a whole.

Analysis o he 2016 UK Brexi polling has indica ed ha online polls seemed o per orm beter han phone polls. In o al, 63 percen o online polls correc ly predic ed a Leave vic ory, while 78 percen o phone polls wrongly predic ed ha emain would win.

Some o he discrepancy may have been due o younger vo ers suppor ing emain, bu no bo hering o vo e. A key di erence in Aus ralia, o course, is ha wi h vo ing being mandaory, he en ire elec ora e is represen ed.

Asking the right questions In he 2016 US elec ion, he vas majori y o polls predic ed ha Hillary Clin on

would bea Donald rump. One poll ha did correc ly pick rump in he lead was he USC/Los Angeles imes Daybreak racking poll. I allowed people o assign hemselves a probabili y o vo ing or ei her candida e, ra her han having o declare heir pre erence wi h 100 per cen . Di eren ypes o quesioning – ra her han he curren , s andard vo ing in en ion ques ion – may end up providing grea er insigh . And we are now seeing discussions abou whe her social media da a is a valuable predic or o vo ing in en ion.

So when i comes o research, here is increasing inaccuracy buil in o he me hodologies ha akes ime and money o overcome.

Poli ical opinion polling, such as ha we see in our media, is a rela ively unique

orm o research wi h regards o he degree o accuracy required, and he level o public scru iny placed on i hroughou an elec ion cycle. Commercial organisa ions recognise ha insigh and s ra egy is based on inves ing ime and money in seeking viewpoin s rom a varie y o da a sources o ensure all views are accura ely represen ed.

I you would like o fnd ou more abou KPMG Acui y marke research services, please con ac David Pring on 9455 9996 or davidpring@kpmg.com.au.

Article first published by Amanda Hicks, KPMG Australia.

Logistics: the unlikely hero of business transformation n BRENDEN RICHARDS BIG par o wha I do in my day o day work is business res ruc uring. Now, in my line o work, here is a lo o con usion over exac ly wha res ruc uring involves.

A lo o people hink o i as a slash and burn exercise where we grab any hing o value and sell i o o he highes bidder while he res o he business goes down he oile . Bu , in reali y, wha i really involves is reorganising he business – i s ownership, s ruc ure or opera ions – o make i more prof able and beter organised or i s u ure and presen needs.

A company ha has been res ruc ured e ec ively will, in heory, be leaner, more e fcien , beter con rolled and beter ocused on i s business. I will have a revised s ra egic and fnancial plan, and all o ha will o en mean ha i is wor h more should anyone wan o sell i .

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In my experience, a he hear o his ransorma ion, si s and unlikely hero – logis ics. emember, logis ics is no an indus ry, i is he unc ion o movemen . a ’s why i accoun s or up o 80 percen o every hing ha happens in our economy and ha ’s why any kind o business rans orma ion should s ar wi h an examina ion o he logis ics o he business.

As I am ond o saying, logis ics is where real change happens. evolu ionary logis ics solu ions have regularly changed he social and economic landscape – hink he mo or vehicle, prin ing press, email and, mos recen ly, he cloud.

Logis ics echnology changes everyhing. Cloud-based compu ing has emerged as a kind o digi al warehousing, accessible anywhere, reducing he need or physical in ras ruc ure. 3D prin ing will even ually elimina e much o he global shipping rade or manu ac ured produc , and he con inued grow h o online re ail will con inue o knock over radi ional supply chains and hose who par icipa e in hem.

e ra e o change in logis ics is ruly s arling, bu he poin is ha hose opera ing any kind o business and looking or an oppor uni y o rans orm ha business need o adop a logis ics mindse . ey need o look a heir business in erms o how every hing can be moved more e cien ly – no jus physical goods bu everyhing. ey also need o examine he various business unc ions rom a logis ics perspecive ins ead o he perspec ive o wha ever he discipline is radi ionally called.

Le me give you an example. Is a ‘wai er’ a hospi ali y worker, a cus omer service represen a ive, or a logis ics manager? e mos backward o mindse s would defne he wai er by he indus ry hey work in.

Someone more progressive migh look a hem rom he poin o view o heir in erac ion wi h he cus omer and he value ha adds. Bu he mos progressive will unders and ha he vas majori y o heir job involves moving he orders rom he ki chen o he able. ey are logis ics managers and

any hing he business can do o make ha movemen o goods more e ec ive, more e fcien and more cus omer ocused will have a ar grea er impac han he marginal improvemen s o ered by he narrow defni ions o ‘hospi ali y’ or ‘cus omer service’. ink abou i . Business rans orma ion involves making undamen al changes in how a business is conduc ed so i is beter able o cope wi h shi s in he environmen .

In he modern world, mos o hose shi s are he resul o changes in logis ics. I makes sense ha business rans orma ion is bes achieved by realigning he business o a logis ics mindse . o fnd ou how we can help you wi h ranspor & logis ics, please con ac David Pring davidpring@kpmg.com.au

First published in the April issue of Prime Mover. Brendan Richards, Partner, National Sector Leader Transport & Logistics, KPMG Australia.

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