AmCham - Access Winter 2016

Issue 5 Winter 2016 American Chamber of Commerce in Australia OďŹƒcial Magazine

The Trans-Pacific Partnership

Culture Risk and Management

World News: The American Election Impact

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Page 11

Page 20

Contents

Issue 5 Winter 2016 American Chamber of Commerce in Australia Official Magazine

American Chamber of Commerce in Australia Head Office: Suite 9, Ground Level 88 Cumberland Street Sydney NSW 2000 P: 02 8031 9000 E: nsw@amcham.com.au W: www.amcham.com.au AmCham offices in Melbourne, Perth, Brisbane and Adelaide

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Cover Feature: The Trans-Pacific Partnership

Published by:

Is this the dawn of a new era of free trade across Asia and the Pacific?

Foreword

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Welcome

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Big Picture:

Representing the interests of ports and marine authorities in Australia 4

Cover Feature: The Trans-Pacific Partnership

Culture Risk and Management

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ABN: 57 074 729 007

Defence Committee

PO Box 824 Surfers Paradise QLD 4217

– A Snapshot

P: 1800 222 757 F: 1800 063 151 E: publications@ crowtherblayne.com.au W: www.crowtherblayne.com.au

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Women in Leadership: Lynn Kraus

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Lifestyle: Etihad Stadium

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Taxation Committee Editor: Samantha Regan Production Controller: Yvonne Okseniuk Business Development Manager: Trish Riley Design Team: Andrew Crabb, Michelle Triana and Danny McGirr Printed By: Newstyle Printing

– A Snapshot

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World News:

The American election and its impact on U.S./ Australian relations

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Podcast: FATCA

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Committee Round Up

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State Round Up

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Access Winter 2016 1

Foreword

Welcome to the second edition of Access Magazine in 2016 Maureen Dougherty, Chairman AmCham Australia President, Boeing Australia and South Pacific

It would be difficult to not acknowledge the rather extraordinary political environment in which we are conducting business. The political season has been and continues to be fascinating to watch as it unfolds in the U.S. and by the time you read this in Australia, voters here will have already made their decisions.

Discussing the campaign season has not been just water cooler talk; from coffees in the morning to canapés in the evening, people across the political spectrum have discussed and debated.

While politics often highlight our differences, I thought I’d instead highlight similarities in how the U.S. and Australia conduct business.

The U.S. and Australia have diverse populations. While that seems obvious, the importance is critical; diversity drives new ways of thinking in our businesses.

When people come together from different socioeconomic, educational and professional backgrounds – and the right working-together culture is put in place – amazing things can happen. I’ve seen it and, more than likely, you’ve seen it, too.

Innovation through technology is clearly a passion in both countries – from Silicon Valley in California to the exciting startup culture we’re seeing in Sydney, Melbourne and other cities.

Finally, what lies at the foundation for Australian and American companies is sound, ethical business practices backed by equally-sound government trade and tax policies. Both help ensure a level playing field.

Regardless of the election outcomes in July and November, my advice to our AmCham business leaders is simple: stay focused, and always look for ways to emphasize our shared business goals.

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Welcome

The TPP, American Politics and Having Faith Niels Marquardt, CEO AmCham Australia

AmCham’s primary policy focus for the rest of the year will remain our campaign to support ratification by the U.S. Congress of the Trans-Pacific Partnership, or TPP. Signed in Auckland in February, the TPP represents the most ambitious global trade agreement since the conclusion of the WTO’s Uruguay Round two decades ago, and the most comprehensive trade agreement ever. We need to see it ratified.

I was in Washington with an AmCham delegation just last month, with TPP as our main issue to discuss. In addition to lobbying the Congress, we met with the Australian Ambassador to Washington, Joe Hockey, and his team at the embassy to discuss TPP, among other issues. Joe is an old friend from his time as federal MP for North Sydney, and then as the Australian Treasurer. He is a warm human being with a real gift for speaking bluntly yet affably. Since going to Washington in January to succeed Kim Beazley, Joe has had to do a lot of blunt but affable diplomacy – much of it on the importance of seeing the TPP across the line. Joe gave a great speech in late May in Washington in which he laid out, bluntly but affably, what will happen if the U.S. fails to demonstrate leadership by ratifying the TPP. The result would not be pretty. Instead of a “rebalance to Asia,” the result would be – my words, not his – an American abdication of our leadership in Asia and the Pacific. “Friends like Australia and New Zealand would be greatly disappointed in us, but they have their own national interests to pursue, so who could blame them for moving more closely into the orbit of the world’s second largest economy, instead of following us?

One curious thing about the TPP has been that, every step of the way since its inception six years ago, the naysayers have said it would never happen. First, the group of countries involved was too small to be significant and was the President sufficiently committed? Then Canada, Mexico, and Japan joined, and they said it had gotten too big and too complicated.

Then they said that the Japanese would never agree to anything as liberalising as the TPP. Next, Congressional dissatisfaction with some of the TPP outcomes – the handling of tobacco, the duration of data exclusivity for biologic drugs, requirements to store financial data within member countries’ borders – meant their leadership would not bring the TPP to a vote, said the naysayers. And by then all the remaining presidential candidates Trump, Clinton, and Sanders – had expressed reservations or downright opposition to the TPP. I will not argue that this is a situation particularly conducive to ratification, but we have all seen stranger things than the political gymnastics required for ratification yet to happen. The fact is that the U.S. Congress in office in November after the election - during the so-called ‘lame duck’ session - will be the same U.S. Congress that gave President Obama TPA just last year. Will they see the geopolitical imperative to show global leadership then just as clearly as they did before? As well as the now-documented economic benefits that the TPP will bring to the U.S.?

Frankly, I think so. The lame duck session of Congress after the elections is certainly an oddity, but it will be an opportunity, perhaps the last one, to demonstrate critical leadership.

and seemingly capricious ways of the American political system to my foreign friends. In Australia more than elsewhere, because you have long been our best mates anywhere, this is particularly painful. I am asked to answer multiple questions each day by Australian friends and perfect strangers, and they all want to know, sincerely and urgently, where I think American politics are headed. In a democracy like ours, I have only my voice, and I will say only that I still have faith in America to do the right thing (perhaps, as Churchill famously said, only after we have tried everything else…). But I do have faith, generally – and I have specific faith where the TPP is concerned.

So please stick with us but continue to speak the truth to us, bluntly but affably. The best arguments we brought to the Congress last month were exactly the ones Ambassador Hockey used in his May speech – about choices and options if we choose to abdicate our historical leadership role in the region. It helps to hear from our best friends, and I do not think it is meddling in others’ affairs to help us see what is the right thing to do.

As an American who has lived overseas for most of my life, it brings me no pleasure to have to explain the arcane

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Big Picture The interests of ports and marine authorities in Australia Ports play a key role in maintaining coastal populations by providing vital supplies such as building products and fuel that can only be provided through shipping and ports.

Ports are critical in supporting regional industries such as the mining, beef and sugar cane industries enabling the economy to grow through the export of their agricultural and mineral commodities.

Total tonnage throughput 2013/2014

QUEENSLAND

VICTORIA

316,929,696

21,802,319

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SOUTH AUSTRALIA

WESTERN AUSTRALIA

24,619,422

1,219,540,897

TASMANIA 12,505,418

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ADVERTORIAL – EXPORT

Emerging Markets Provide Growth for Australian Exporters “Emerging and frontier markets are providing a hotbed of growth for savvy Australian exporters,” says Andrew Hunter, Managing Director and CEO of Efic, an Australian Government agency and specialist financier facilitating Australian export trade on a commercial basis.

Efic delivers simple and creative solutions for small and medium export enterprises and Australian companies integral to an export supply chain that may have contracts but can’t access finance for various reasons, to enable them to win business, grow internationally and achieve export success.

“All too often, small and medium enterprises don’t have the collateral that banks are looking to lend against,” adds Hunter.

“They may be service companies only holding stock, or they are creative, innovative companies with designs or IP that are not highly valued in terms of traditional lending practices.”

Efic understand the financing challenges faced by small business exporters – stretched working capital, varied payment terms, and the significant lag between production and payment – and offer a range of solutions including loans, guarantees, bonds and insurance products tailored to suit the client’s needs, or cash flow requirements.

The latest Efic product, a Small Business Export Loan launched in March, offers working capital to address three specific requirements from small business clients: an unsecured product, ie. no collateral required; a simple online application process for loans below AU$250,000; and the ability to receive the money quickly. In six weeks Efic has received and processed more than 50 applications for this product, and is already approving loans.

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“This year, Efic has provided in excess of A$160 million of financial support to small to medium business exporters,” says Hunter, “compared to five years ago, when it was AU$45m.”

“The growth comes primarily from the new lending products, and in export sectors from advanced manufacturing to the premium food and beverage, or sub-agricultural sector.”

“The depreciation of the Australian dollar since 2013 has also meant that Australian products and services are more competitive and sought after.”

“The more difficult the market, the more likely it is that Efic will pick it up,” adds Hunter.

“It may appear that we are Asia-centric, but Efic specialises in all emerging markets, where banks are known to be risk averse, and we have clients in markets across the globe. With sanctions having recently been lifted in Iraq and Iran, Efic is now looking to become active there.”

Efic also assists the Federal Government by providing financial services to Australian exporters considered by the Government to be of national interest.

For more information visit www.efic.gov.au

Open your business to the world with Efic’s new Small Business Export Loan; an unsecured loan with easy online application and fast approval.

Cover Feature: The Trans-Pacific Partnership

The dawn of a new era of free trade across Asia and the Pacific?

The Trans-Pacific Partnership (TPP) is a massive international trade deal that should be of interest far beyond the relatively small circles of trade enthusiasts, international affairs junkies, business leaders, and assorted others who have closely followed its progress over the tortured six years of its evolution from inception to signature. As it moves toward reality over the next two years, it will present important business opportunities throughout the Asia-Pacific region.

The TPP has been surrounded by a high degree of controversy, as opponents of free trade mounted an energetic series of misinformation campaigns intended to impugn it. It has been criticised as “secretive”, a “violation of sovereignty”, likely to raise prices on products like pharmaceuticals, and likely to land your net-surfing children in jail for their illegal downloads of copyrighted films. Despite these efforts, the TPP was signed in Auckland by twelve nations on the 4th February 2016. The result is a broad, regional free trade agreement of unprecedented scope and ambition with the potential to drive job-creating growth across the economies of all participants, including in Australia and the U.S. Initially the idea of four small Pacific nations calling themselves the “P-4”, the TPP eventually was embraced by the Obama administration as part of his ‘Pivot to Asia’ or ‘rebalance’ strategy. The TPP capitalises on the fact that the Asia-Pacific region has effectively become the global engine for growth, accounting for 60 percent of total global GDP and 50 percent of international trade. The initial twelve TPP members already comprise 40 percent of global GDP and over 30 percent of global trade.

The twelve countries that signed the agreement include the initial P-4 nations of Brunei, Chile, New Zealand, and Singapore, plus Peru, Malaysia, Australia, the United States, Vietnam, Canada, Mexico, and Japan. The last three nations joined somewhat late in the negotiating process, and by doing so, gave real economic weight to the grouping. However, the addition of Japan, in particular, initially increased scepticism that agreement would ever be reached. The world instead witnessed evidence of Japanese Prime Minister Abe’s determination to use the TPP as an instrument for domestic economic liberalisation – an impact that has also played out in other TPP economies.

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Speaking of the unparalleled initiative, Niels Marquardt, CEO of AmCham Australia says: “There are many important and ground-breaking aspects to the TPP that go far beyond all previous multilateral trade agreements. For example, in a world where a final product such as a car or airplane may have inputs from a dozen or more different countries, the rules of origin agreed to in the TPP now provide a framework of certainty for the producers of all those inputs that allows them to invest and grow. This merely recognises the fact of life that global supply chains are increasingly dominating the production cycle for most sophisticated finished goods.”

“Since the collapse over a decade ago of the WTO’s Doha Round of trade negotiations, important trading nations like Australia and the U.S. have been seeking both bilateral and plurilateral arrangements that allow further trade liberalisation among “coalitions of the willing” like the TPP twelve. The TPP is notable for the broad range of levels of economic development among its members, ranging from Japan and Australia on one end of the spectrum to Vietnam on the other. This may have complicated the undertaking, but it also increased the range of benefits that will flow from the agreement. Recent studies show that the less developed TPP members will benefit particularly strongly from hav-

ing undertaken the often challenging disciplines required of them to meet the high standards of the TPP.” Marquardt adds, “What is especially encouraging about the TPP is the large number of non-member countries in the region which are already “knocking on the door” to join the agreement. These include Taiwan, the Republic of Korea, the Philippines, Thailand, Indonesia, and even China.” While the TPP does not yet have agreed rules for the accession of new members, the spirit behind the agreement is open. Many of those involved in negotiating the TPP see it as eventually becoming the template for a ‘Free Trade Area of the Pacific’, or FTAP – which has been the dream of Asia-Pacific trade liberalisers for several decades.”

The inclusion of Vietnam in the TPP deserves special focus. The fact that this communist nation has voluntarily sought membership in the TPP may surprise some. It has meant that the government of Vietnam has had to undertake difficult commitments on such issues as the competition rules for state-owned enterprises (SOEs), as well as labour rights and environmental standards. While much of the anti-TPP criticism has been directed at the lack of freedom to organise workers in Vietnam, proponents argue that the TPP has done more to bring exactly such freedom to Vietnam than any other ex-

ternal development. It has also prepared the way for the eventual inclusion of other countries with non-western economic systems, notably China. The key for Vietnam has been the commitment of its leadership to address the issues raised by their TPP commitments.

The TPP, while introducing entirely new disciplines to global trade, also addresses some traditional issues, like tariffs.

“Obvious benefits, particularly for small businesses, include the reduction of more than 18,000 tariffs,” adds Marquardt.

“The agreement mandates expedited customs procedures for express shipments and prohibits customs duties from being applied to electronic transmissions. It also requires additional privacy, security, and consumer protections for online transactions and encourages the publication of online customs forms.”

Not everyone however, has been supportive of the TPP. In addition to large public protests in several TPP countries, a number of global health professionals, internet freedom activists, environmentalists, trade unions, advocacy groups, Nobel laureates, and elected officials have protested against the treaty, in large part because of the secrecy of negotiations, the agreement’s expansive scope, and several particularly controversial clauses like those covering the resolution of international disputes. Some physicians

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Cover Feature: The Trans-Pacific Partnership

and organisations like Doctors Without Borders have expressed concern about the alleged impact of the TPP on access to affordable medicines. They have argued that information released on the agreement confirms that the deal will further delay price-lowering generic competition by extending and strengthening market protections for pharmaceutical companies. Some of the same allegations were made over a decade ago during the negotiation of the Australia-U.S. Free Trade Agreement – but in fact drug prices have remained unchanged - or even decreased - in Australia since then. “Additionally”, Marquardt adds, “I would argue that there is sometimes a very strong justification for incentives to encourage investment and R&D in new pharmaceutical products, including some that hold the promise to defeat major threats to global health like cancer. The understandable imperative to hold drug prices low can sometimes stand in the way of outcomes that may be far more beneficial to society and the economy over the longer term.

“There is nothing wrong with healthy discussion and debate about trade issues,” says Marquardt. “One must remember, however, that for trade negotiations to be successful, negotiators need confidentiality - and the more countries you have involved, the more complicated it gets. Now that the agreement has been signed, the next step is ratification by the parliaments of the twelve member nations. Since the negotiations concluded last October, each member country has revealed to its citi-

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zens what the agreement contains. That will allow legislators in each country to pass judgment with full knowledge of the balance of benefits that the agreement will bring to their citizens.”

The TPP enters into force after all members ratify it, or in 2018 if a minimum of six members covering at least 85 percent of the total GDP of the initial twelve economies have ratified it. “As a matter of simple arithmetic, this means that both the United States and Japan must ratify the TPP,” explains Marquardt. “Malaysia has already ratified the TPP, the first member to do so. The main focus is now on the United States, where a toxic attitude toward trade has poisoned the pre-election political atmosphere. The best chance for the TPP to be ratified in the U.S. will be during the ‘lame duck’ session of Congress after the election on November 8.

This, however, is not a certainty, given the prevailing anti-trade rhetoric in a campaign where the remaining contenders have all expressed either reservations or downright opposition to the TPP. It will be – as trade votes in the U.S. Congress always are – a close run thing.”

Marquardt, however, remains optimistic about American ratification of the TPP, and its eventual entry into force. “Demagoguery aside, the TPP is manifestly in the best interests of all twelve members, including the United States. The U.S. International Trade Commission just released its study showing the annual benefits to American GDP as more than $57 billion.

ITC studies historically have underestimated the benefits of trade agreements, so I would expect the windfall to be a multiple of that low-ball figure.”

There is also a geostrategic argument that is far more compelling than the dollars involved. Marquardt adds that “the TPP is the most important non-military element of America’s rebalance to Asia, which has enjoyed strong bipartisan support. As Australian Ambassador to the U.S. Joe Hockey recently argued in an important speech in Washington, members of the TPP can and will pursue other options if the U.S. were to choose not to demonstrate leadership on free trade.

Australia, for example, is part of the Regional Comprehensive Economic Partnership (RCEP) negotiations that include most countries in Asia, including China and India. While a final RCEP agreement would never achieve the high level of ambition of the TPP, other countries will almost certainly conclude and sign RCEP, whether the TPP goes forward or not. If RCEP goes forward and the TPP does not, American leadership in Asia would have suffered an unprecedented blow.”

Marquardt led an AmCham delegation to Washington in June to lobby the U.S. Congress to ratify the TPP.

Feature Article

Culture and the Risk Management Framework Judith Fox FGIA, National Director, Policy & Publishing, Governance Institute of Australia

The board sets the risk appetite, which explicitly articulates the attitudes to, and boundaries of, risk.

Boards need to understand if there is any disjunction between the desired culture and the actual culture.

A risk-aware culture is a critical subset of the broader organisational culture.

A great deal of attention is currently focused on corporate culture, particularly culture in the financial services sector.

The regulators, the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulatory Authority (APRA) have both made a number of speeches and media comments, and issued reports on the issue.

Each day seems to bring new commentary in the media about problems arising from a corporate culture that creates behaviours, incentive frameworks and practices that do not support good governance or ethical conduct. Even the Prime Minister of Australia, Malcolm Turnbull, has joined the chorus of voices highlighting the importance of sound culture that can be trusted.

Risk-Aware Culture An organisation’s culture is the sum of its shared values and behaviours. It includes the values and behaviours of its people as they relate to various dimensions, such as risk, but those dimensions are not separate cultures.1 References are commonly made to an organisation’s innovation culture, safety culture or compliance culture – these are simply dimensions of the organisation’s culture. Culture is a key determinant in the performance of an organisation and its capability to achieve its objectives. It goes to the heart of the openness stewardship and informed decision-making.2 While emphasising that culture is not something that can be regulated with black letter law, the ASIC chairman has called on company directors to take more responsibility for the ethical behaviour of their employees. This, of course, raises the question of just how involved boards should be, given their role is to ‘set the tone at the top’, with management re-

sponsible for the implementation of that tone throughout the organisation. The board defines and sets the culture of the organisation and management implements the values and behaviours as defined and set by the board as appropriate for the culture of the organisation.

This is inextricably linked to risk management. Risk encompasses the opportunities to be realised by the organisation, as well as the hazards to be avoided, with recognition of the uncertainties attached to the opportunities and hazards alike.

The risk culture of an organisation is the shared attitudes (values) and behaviours of individuals about the management risk in an organisation. The organisation’s culture will be a key determinant in its ability to respond and adapt to changes in the environment in which the organisation operates.

Risk Appetite The board is ultimately responsible for deciding the nature and extent of the risks it is prepared to take to meet strategic objectives. It sets the risk appetite of the organisation, which explicitly articulates the attitudes to, and boundaries of, risk that the board expects senior management to take. The board provides a series of licenses to senior management to act in particular ways or implement particular decisions that align with these attitudes. Senior management in turn sets in place a further series of licenses that cascade the risk appetite through the organisation to align decision-making at all levels with the attitudes to risk set by the board.

To effectively manage risk and leverage the opportunities created by uncertainty, an organisation needs a risk-aware culture. A risk-aware culture is a critical subset of the broader organisational culture

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Feature Article

that incorporates the way directors, managers and employees think, communicate and behave about all aspects of risk.3 The concept of risk appetite seems easy to grasp, yet in practice answering the question of the amount and type of risk an organisation is willing to pursue or retain can be very difficult. The risk appetite statement should be descriptive enough to give its audience an understanding of the approach the organisation takes to managing risk and the weighting of risk against potential reward. Risk appetite is strategic and directly related to the achievement of business objectives, including the allocation of resources and the setting of appropriate boundaries for risk-taking.

Incentives Incentives play a powerful role in influencing the values and behaviour of individuals, and hence the culture. Incentives may have unintended consequences. Research has shown that individuals will seek to do those things that are rewarded, often to the exclusion of activities that are not rewarded. This can create cases of folly, however, where the types of behaviour rewarded are those which the organisation is trying to discourage, while the desired behaviour is not rewarded at all. 4 Board Evaluation of Culture The question for boards is whether the culture is known and understood and whether the actual culture (the lived culture) represents the necessary and desired culture. It is an essential element of governance for a board to understand if there is any disjunction between the desired and stated culture and the actual culture, for it is only the actual culture – the enacted values – that ultimately matter.

Rules are necessary but not sufficient to inculcate a culture where the enacted values align with the desired values. Also, without an open and transparent culture, the questioning that will test if the enacted values align with the desired values will not be undertaken. Both go to the

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heart of the governance and risk management if they are to create and protect value for the organisation.

For a board of directors, it can be very challenging to understand the degree to which the culture reflects the values it espouses. In an appearance before the Senate Economics Legislation Committee estimates hearing, ASIC Chairman Greg Medcraft noted that ASIC meets the boards of banks and alerts them to where it sees poor behaviour in divisions, so that boards can ensure that the tone at the top they have set cascades throughout the organisation. During the hearing Mr Medcraft noted that boards are ‘often quite shocked’ at the information ASIC brings to their attention.

New Handbook for Directors Governance Institute has recently published Risk Management for Directors: A Handbook, designed for all those seeking to gain clarity about the interaction of governance and risk management; avoid confusion in the responsibilities of those with an oversight role; and achieve focus on embedding risk management within the strategic framework.

The handbook covers the linkage between risk management culture, with questions for consideration by directors when reviewing if senior management has taken the necessary steps to monitor and

manage the organisation’s material risks consistent with the board’s risk appetite.

It helps boards in their deliberations and oversight of management to assess if risk management practices are aligned with strategic objectives. It can be downloaded from: governanceinstitute.com.au/DirectorRiskHandbook.

Notes 1. A useful working definition is: ‘a set of shared mental assumptions that guide interpretation and action in organisations by defining appropriate behaviour for various situations’ (Ravasi and Schulz).

2. Opening remarks of the Hon Justice Owen in the Final Report of the HIH Royal Commission (2003): ‘From time to time as I listened to the evidence about specific transactions or decisions, I found myself asking rhetorically; did anyone stand back and ask themselves the simple question – is this right?...Almost every facet of life is governed by rules, regulations, proclamations, orders, guidance notes, codes of conduct, and so on…There is no doubt that regulation is necessary: peace, order and good government depend on it. But it would be a shame if the prescription of corporate governance models and standards of conduct for corporate officers became the beginning, the middle and the end of the decision-making process…I think all those who participate in the direction and management of public companies, as well as their professional advisers, need to identify and examine what they regard as the basic moral underpinning of their system of values. They must then apply those tenets in the decision-making process’.

3. APRA’s Prudential Standard (enforceable) for authorised deposit-taking institutions (ADI’s), general insurers and life insurers states that the board must ensure that it: ‘forms a view of the risk culture in the institution, and all the extent to which that culture supports the ability of the institution to operate consistently within its risk appetite, identifies any desirable changes to the risk culture and ensures that the institution takes steps to address those changes’.

4. Kerr S, ‘The folly of rewarded A, while hoping for B’, Academy of Management Journal, Dec 1975, 18, 000004, p 769.

Committee Feature

Snapshot: Defence Committee Formed just two years ago – coincidentally when Sydney Blocher - Vice President Australia Business Development for Boeing Defence, Space & Security (BDS) arrived in Australia – the AmCham Defence Committee provides a forum to identify opportunities, and address challenges and topics of concern on behalf of U.S.- fronted or U.S.- centric defence, security and dual-use industry members.

Recognising that Australia has a robust defence industry with a high operational tempo and increasing national security demands, the working group is comprised of key industry stakeholders and embassy personnel, bringing together a range of perspectives and a wealth of experience and expertise.

When asked about the current security environment, Blocher says: “In addition to setting out a comprehensive, responsible long-term plan for Australia’s defence, the 2016 Defence White Paper recognises that the Asia-Pacific region is one that we should all be paying attention to.

“According to the IMF, Asia-Pac remains the growth engine of the world economy, accounting for nearly two-thirds of global growth. Developments in the region are central to the global economic outlook, and for formulating policies around the world.

“The U.S. and Australia have had a thriving partnership for decades as evidenced by the breadth of bilateral cooperation,” adds Blocher, “so it is important that both countries build and broaden alliances, helping advance regional security and prosperity.

plines and equipment to ensure the most effective and efficient organisation, and enabling Defence to deliver the outcomes required of it.”

Based on the First Principles Review, all elements of the Government’s defence investment, including new weapons, platforms, systems, and the enabling equipment, facilities, workforce, information and communications technology, and science and technology are outlined in an integrated Investment Program, termed the One Defence approach.

“The proposed end-to-end changes enable Defence to operate as an integrated system, not a federation of separate parts and is an opportunity for Defence to establish better working-together relationships with the Government, Ministers, external stakeholders, central agencies, its own leadership and workforce,” adds Blocher. “The ability to coordinate across land, air, sea, intelligence and other domains to deliver joint effects — is increasingly important to the war fighter.

“Overall however, the Australian security climate is good, it is solid and developing, and with the rapid technological and material science developments being made across the board, this is an exciting time to be part of it.”

“Other areas making significant strides include carbon-fibre technology, maritime and reconnaissance equipment, satellite communications, and obviously data processing and analytics. Everything is getting faster and smarter – it’s a self-propelled sector, and the White Paper acknowledges the fundamental contribution that Australian industry provides to the defence capability.

Asked about those developments, Blocher says: “The current focus is on interoperability, creating coalitions between disci-

“The AmCham Defence Committee applauds the reforms being implemented,” says Blocher, ‘particularly the Smart

Buyer initiative – a leaner procurement model that better leverages industry and the broader scientific community, is more commercially-oriented and delivers value for money. The initiative will allow Defence to focus on planning and governance, and industry to focus on execution.

“As one of the newer committees, the focus is on large ‘needle moving’ items - anything that streamlines or provides advantage for our members and the ADF. Working within the Canberra environment, we are fortunate enough to have access to government and military leaders from both sides, and we are excited about the support being provided.”

Syd Blocher is Vice President of Global Sales and Marketing for Australia and South East Asia for Boeing Defense, Space & Security (BDS) in Canberra Australia. As the senior defence sales and marketing executive in the Region, he is responsible for developing new growth opportunities for BDS products and services. He also oversees senior defence customer engagements and relationships for Boeing’s defence programs in Australia and leads business development and strategy for Boeing’s subsidiary, Boeing Defence Australia (BDA).

Blocher holds a Master of Science in electrical engineering and a Bachelor of Science in physics, both from the University of New Mexico. In addition, he holds an acquisition certification from the Defense Acquisition University and is a graduate of the Advanced Executive Program at The Kellogg School of Management at Northwestern University.

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Women in Leadership

Lynn Kraus, Managing Partner, EY

How do you lead? What’s your leadership style and what’s your philosophy about leadership?

“I really follow the principal of servant leadership. Leaders as servants, and for me what that really means is – I’ll never ask anyone to do anything that I am not prepared to do myself. I truly believe as a leader it is not about leading from the front, it is mostly about leading from the back. To encourage and influence people to be better, they need to know that you are going to be in there with them. You get the best out of people by doing, not telling.”

Could you share an example of when you encouraged someone to become a leader?

“One of the most important things that I do in the firm is to appoint leaders. Over the past year I have appointed eight leaders to run our industry segment model.

With each of them it’s very different, and with each of them I have been able to share my experience and what I have done.

Share my ups and downs, but also help them find the leader within themselves, because leadership can’t be copied. You can’t mimic what others have done. You have to be true to who you are.”

Lynn Kraus is Oceania Markets Leader and Sydney Office Managing Partner of EY. Lynn is responsible for the firm’s go-to-market and client service strategies across Australia, New Zealand, Papua New Guinea and Fiji. The role is public facing with an active focus on market participation, leadership and defining the industry markets in which EY operates.

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Lynn is driven to develop senior female executives into leadership positions and is a passionate supporter of diversity and inclusiveness. She enjoys mentoring and coaching female leaders to reach their potential.

In 2014, Lynn received the NAB/Women’s Agenda National Award for Mentor of the Year. She is a member of the Advisory Board for Heads Over Heels, and a Council Member and the Treasurer of Kidsafe.

Lynn holds a Bachelor of Science in Accounting from Clemson University in South Carolina. She lives in Sydney with her husband and two sons.

“I have had a few cases with some of my leaders where the biggest challenge has been to learn that it is ok to take a risk and do something different. I’ve tried to explore what is at the heart of that. A lot of it is about trust and organisational trust. To be a leader you need to trust that when you get it wrong you will be taken care of, as long as you have done it in the right way and been consultative along the way. For me, working with my leaders and asking them all to stretch to the next level is about them trusting me; that when they get it wrong I will support them and help pick up the pieces, and equally celebrate with them when they get it right.”

What does mentorship mean to you and how do you mentor successfully?

“Mentoring is really the key, and I feel it is the best way to give back to the firm and to

others. For me ‘mentorship’ is about listening. It’s about asking the right questions, it’s never about telling someone what they are going to do and how they are going to feel. If you are open and vulnerable that’s the key to being a great mentor. A lot of people would look and think you have got it all worked out. In reality none of us have it all worked out, but we can learn from the mistakes that we have made. What I bring to a mentoring relationship is that vulnerability; that ability to share what I have learned but always allow them to work it out for themselves.”

“Some of the females that have come through the firm didn’t know whether partnership was right for them. It’s not for me to always pull them through, but to give them all the facts and knowledge from my experience to help them make the right decision for themselves.”

What do you think are the qualities of a great leader, especially for women in leadership positions?

“I think for women in leadership you have got to be confident and you’ve also got to continue to collaborate. For me the most important thing is to be empathetic, truly understand individual situations, personal motivations and what drives them to get the most out of them.”

“There is usually at least a day a fortnight where I work from home so I can not only drop off the boys to school but I can also pick them up and be a part of sports. On Fridays I try to get away by 3pm. I think the reality is we are all online all the time anyway. When and where work gets done are not the issue.”

“I also try to make sure that I create an environment where the women and the men can communicate to me what challenges they face balancing work and family, so that we can manage it together. My second in command who is a fantastic strategic person needed a sea change and a life change. She moved her young family three hours down the coast and I see her a day a fortnight when she comes to Sydney. She runs everything beautifully in our organisation and markets, and we are achieving everything we would have achieved if she had stayed here. It’s a great example that if you have good communication, jobs can be done anywhere.”

What do you think is the most important step that needs to be taken to achieve parity for women in the workplace?

“It’s a really hard question. Parity for me can only be achieved by having great leadership. So you do have to go back to the simple truth that we need more female How do you make leaders in firms y o u r o r g a n i and corporates sation family “PARITY FOR ME who can really f r ie nd l y f or change the culyour staff?

CAN ONLY BE ACHIEVED ture. It’s happening in Aus“First of all I

BY HAVING GREAT tralia but it is try to lead by LEADERSHIP.” happening at a example, I have glacial pace here to walk the walk and around the and talk the talk. I world. We run a prohave seven year old gram called ‘Women and nine year old boys Fast For ward’ globalwho are very demanding ly and two-three years ago and I make sure I am there when we launched it all the research for them. I make it a priority to be with showed that it will be 80 years until my family. I am lucky I have a great CEO women will have parity. Not only in fiwho supports that I only travel every nancial terms but with access to educaother week because I need to be at home tion and health care and access to the with my kids.”

same opportunities in government that men have. What has been really disappointing is that we have re-run that program and it’s now 117 years until women will achieve parity. So we still have a long way to go.”

“In Australia we are really fortunate, but one of the challenges for me is not so much organisations (because organisations are doing great things to support and help women), I think the challenge is community: the long term beliefs held about the role of men and the role of women. Having a husband that gave up his career so I could advance mine has really proved that to me. The playgrounds aren’t as friendly to him as they would be to me. Women aren’t as welcoming to men as they are to women at school drop offs. Even if you work in an organisation that is doing great things, if the male who is taking a slower journey on his career, doesn’t fit into the communities we live in, and communities aren’t accepting, it doesn’t matter how great a corporate can be. There is still the pressure that society is just not accepting of the different roles that women play. There is still such a traditional view on where we should all be.”

What advice you could give women who are stepping up into those leadership positions?

“First of all, take that step up. In my career there were many times where I chose to hold myself back only to be encouraged by others. At no point in any of those leadership roles, have I ever not been capable and not delivered. Second is to listen, be prepared to listen, and then be prepared to act and back yourself on the decisions that you make. But do it in a knowledgeable way, which means that you have consulted with, and listened to those around you. The third thing that I think is really important for women is: you have got to be yourself and be authentic to who you are. We bring very different skills to leadership than men do, and I think we should not be afraid of them.”

Access Winter 2016 15

Lifestyle

Massive Acts ‘Under the Roof’ at Etihad Stadium

Etihad’s Stadium is arguably the Southern Hemisphere’s most popular, busiest and most successful sports and entertainment venue, having hosted a plethora of acclaimed international artists and superstar groups.

When the iconic Melbourne stadium opened in March 2000 Barbara Streisand performed in its very first concert. Over the following 16 years the stadium’s path has been well worn by contemporary stars such as Taylor Swift, Justin Timberlake, Bon Jovi, U2 and Coldplay.

There’s also something of a synergy between AC/DC and Foo Fighters’ performances. The incomparable bands arrived on stage four years apart but also on nights when ferocious electrical storms left trails of destruction across the city of Melbourne. Each show attracted crowds of 60,000 plus, but the star of both concerts, at least from a venue management perspective, was Etihad Stadium’s famous retractable roof - it saved the day (or night).

While many global stadia have a capacity to host huge crowds, Etihad Stadium’s retractable roof, 38 metres above surface level provides promoters, artists and importantly fans with surety – the shows always go on.

Etihad Stadium hosts an average of 80 arena events, as well as 600 functions a year. With more than two million fans coming through the gates, the business is diverse, constant and hectic.

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Coldplay – Back at Etihad Returning to Etihad Stadium in December will be one of the globe’s most popular bands, Coldplay. Headed by Chris Martin, Coldplay will perform at Etihad Stadium on December 9 & 10, in support of the group’s latest album A Head Full of Dreams.

Etihad Stadium – The Home of AFL Of course, there is another regular event that occurs under the roof at Etihad Stadium for nearly seven months a year. Etihad Stadium’s ‘bread and butter’ is AFL, known to some overseas as aerial ballet, but to the locals, it’s footy! It’s a code equally as fast and ferocious as U.S. gridiron, and while the occasional player has been known to wear a helmet, the suggestion of wearing padded outfits would be anathema. More than 50 games of AFL are played under the roof at Etihad each year, attracting attendances of more than 54,000 fanatical fans. The stadium’s also adjoined to the administrative headquarters of the AFL. Such is the passion for the game, among many, it’s known as Melbourne’s true religion.

Access Winter 2016 17

Committee Feature

Snapshot: Taxation “The objectives and goals of the AmCham Tax Committee are to provide members with up-to-date and relevant information regarding legal and tax issues impacting foreign investors in Australia,” says Chris Morris, Partner, M&A and International Tax, PwC and Chairman of the AmCham Taxation Committee.

“The Committee, comprised of tax professionals and in-house corporate tax practitioners, also seeks to work with government officials to improve the tax and legal climate for foreign investors, and to promote further cooperation between the United States and Australia.

“With tax reform high on the political agenda, and the release of a suite of multinational tax avoidance measures, including the announcement of a Diverted Profits Tax in the 2016 Federal Budget, the AmCham Committee, foreign companies and their tax advisers have been very active on a number of high-level submissions.”

The legislated multinational anti-avoidance law purportedly targets multinational companies engaged in diverting profits earned in Australia to no or low tax jurisdictions. Applied from January 1, 2016 the new law has provided little time for restructuring to comply with these new rules. The ATO is now seeking to determine whether the rules could apply on a much broader basis through the issue of questionnaires and requests for meetings with identified companies.

“Most companies are willing to comply with the reforms,” says Morris, “they just want some certainty around the rules, so that they can restructure their tax affairs to comply with the new law and avoid being hit with tougher penalties.”

Australian Treasurer Scott Morrison recently stated that the OECD/G20 Final Report shows “Australia is firmly on the right track”. He also said that the Australian Government will consult with stakeholders and pay close attention to ensuring investment activity is not compromised.

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“There are many factors that affect what falls in or out of the Australian tax net,” says Morris, “In an uncertain environment, that is being further impacted upon by the pending election, it is likely that these measures will become more stringent. They are of importance for foreign-owned and Australian-owned businesses, as well as all taxpayers.”

Other areas where reform looks likely include (but not limited to): • Introduction of anti-hybrid measures to deal with mismatches between tax laws focusing on financing arrangements.

• Interest deductibility: The OECD proposals around the allocation of interest costs across multinational groups depart from existing practice by many countries.

The level at which interest costs will be deductible, and in which country the deductions can be claimed, is likely to change.

• Permanent establishments: The OECD’s lowering the bar before permanent establishment status is met: preparatory and auxiliary activities, and commission style arrangements, will now be more likely to meet the test to become permanent establishments. This is important as many small and medium sized enterprises go offshore early in their business lifecycle. Incremental activity means that it will now be easier to become taxable overseas by mistake.

• Moving to introduce GST on inbound digital services – expected to apply from 1 July 2017.

“It appears that Government and big business alike, are considering a range of options”, says Morris. “As the OECD guidelines and recommendations continue to develop and be implemented, it is important to continue to monitor developments over time and the Committee will actively participate in various consultation processes.”

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World News

The American election and its impact on U.S./ Australian relations David Smith, Senior Lecturer in American Politics and Foreign Policy, and Academic Director at the Academic U.S. Studies Centre at the University of Sydney.

“The American election attracts a lot of attention in Australia,” says David Smith, Senior Lecturer in American Politics and Foreign Policy, and Academic Director at the Academic U.S. Studies Centre at the University of Sydney.

“This in itself is not unusual,” Smith says, “the last few did, particularly when Barack Obama became the first African American to hold the office, as well as being the first president born outside of the continental United States. This election however, is attracting attention for all the wrong reasons.

“The candidates, and campaigns are polarised, with class, race and ideology growing more divisive and intertwined, but our focus remains on the highly unlikely, and distinctly unpalatable, Republican candidate. Trump is deeply unpopular, and the thought that he could be elected is scary for both Americans and Australians,” adds Smith.

Eight years ago, Obama, with his unwavering belief in the ability to unite people around a politics of purpose, initiated policies that were outward and inclusive. He recognised that America needed to be seen to be extending its influence and ability to pursue a broad and seamless trade and investment environment by setting commonly agreed rules and promoting transparency of laws and regulations.

“His Pivot to Asia initiative was meant to be a strategic “re-balancing” of U.S. interests from the Middle East towards East Asia – a move “TRUMP IS DEEPLY that made sense both in terms of domestic politics and international affairs, and UNPOPULAR, AND THE while adopting a marginally more asserTHOUGHT THAT HE COULD tive stance, Hillary Clinton’s strategic and economic dialogue suggests that she BE ELECTED IS SCARY FOR will follow suit.”

BOTH AMERICANS AND AUSTRALIANS”

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“Trump is the opposite in both respects.

His outlook and language are blatantly racist and xenophobic. His rallies incite violence, and he has been criticised for his call to

deny Muslims access to the country, and for his controversial statements about Mexicans and women.”

“His pro-American stance is aggressive, even claiming that the U.S. is being ripped off by its allies. While he cannot be labeled a warmonger, Trump appears to have enormous faith in his own ability to right all wrongs and mete out punishment accordingly.”

From a religious perspective, contrary to former Republican candidates, Trump continues to be unconventional. He professes to be anti-abortion and conservative, but his libertine lifestyle is an embodiment of the opposite. His multiple divorces, participation in the Miss USA pageants and self-confessed “fighting his own personal Vietnam” when it comes to avoiding sexually transmitted diseases, has alienated almost all, but the white male public.

“As the world watches the real estate mogul with morbid curiosity however, the side-line fight being fought by outsider Libertarian Party nominees, Gary Johnson and Bill Weld have got much less attention. Hillary Clinton has achieved her unstoppable march to the party’s presidential nomination, and appears to be the frontrunner because she enjoys the confidence of African-Americans and Latinos, not to

mention middle-aged and older white liberal Americans.”

That she represents a historic opportunity to finally be the first woman president of the U.S. also gives her an edge with female voters.

“A Democratic win is not however, a foregone conclusion,” adds Smith. “Growth in the U.S. has slowed significantly over the last quarter - not a good sign; speculation on property continues to rise but as we know from experience this is fundamentally unsustainable; and globally we have very low interest rates (another bad sign). The spectre of a recession looms, and a recession is always bad for the ruling party.”

“While it is unlikely that there will be a full blown recession before 8 November, the Chinese economy is slowing and its deceleration has led to a sell-off of global commodities. U.S. stocks, and by proxy Australian stocks, are going to become increasingly volatile in the lead up to November. This delicate balancing act is not one that Trump and his protectionist stance, if elected, would manage diplomatically.”

“Trump reduces everything to simple equations; China cheats and is responsible for taking jobs from Americans. His solution is to penalise companies moving manufacturing offshore, and to impose

punitive tariffs on goods. Unfortunately, when a great power’s influence is, in world terms, starting to diminish, it tends to rely more on the element of power which remains supreme – and in essence, one has the makings of a trade war.”

“Should this happen the whole world’s economy will be teetering on the brink.

We could well have a situation where countries will be choosing sides, and it’s not clear who would back whom.”

“In terms of U.S./Australian relations, it appears from our own politicians that Australia’s relationship with the U.S. transcends politics, and that Canberra will work with whoever is in the White House. As far as public opinion goes however, Australian/U.S. sentiment was at its lowest point during the Iraq war, but it is expected to drop even lower should Trump be successful.”

“Whatever the outcome there is much at stake, and Australia needs to be conspicuously independent and constructive. As Australia positions itself for the future, it is vital that we understand the reality of our position with the United States, and our neighbours,” says Smith.

This election is undoubtedly highlighting the painfully longstanding issues of identity and deeper social complexities coming to the forefront of every political arena.

Access Winter 2016 21

Podcast: Bringing Business to You

FATCA, the Foreign Account Tax Compliance Act – Good, Bad or Just Plain Ugly?

Interview with Thomas Carden, International Tax Director for U.S. Global Tax

The AmCham Podcast is an on-demand talk radio show, hosted by Dr Duff Watkins of ExecSearch International, that brings the most pioneering and influential minds of the business world to you.

In this podcast we will learn the facts behind FATCA: what the implications of non-compliance are, what the IRS reporting requirements for Expats are and how these regulations affect doing business with and in the U.S. “The short description of what FATCA means is that it’s the nuclear weapon to end bank privacy around the World,” says Thomas Carden, International Tax Director for U.S. Global Tax. Thomas has a juris science masters and is a current candidate for juris science doctorate in International Tax and Financial Services at the Thomas Jefferson School of Law. “FATCA was passed, oddly in an Act called the Hiring Incentive to Restore Employment Act of 2010,” Carden adds.

“And out of this seemingly innocuous, hundred-page job creation bill, somebody slipped in a two-page Act that forces all global financial institutions to identify U.S. account holders and report them back to the IRS.” “The way this works is that if a bank or other financial institution is deemed uncompliant, when a wire passes through the international banking wire system, and every wire in the world goes through the New York banking system, they will withhold thirty percent of the wire.

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“The U.S. is unusual in that it taxes its citizens on their world-wide income no matter how long they live outside the country, they are taxed based upon citizenship rather than residence,” says Carden. “Unfortunately there are wealthy people in the U.S, and all over the world, that try to escape taxation by numerous means - foreign trusts, foreign companies, hiding money in Swiss and Liechtenstein bank accounts. Australia does not have the power over the international banking system like the U.S. does, and while it was only a brief two-page inclusion, the current regulations regarding FATCA adherence are four hundred plus pages, and this is literally costing the banks around the world billions and billions of dollars.

“The first issue with this law, is that even though the average U.S. expat may be setting up a trust in Australia or New Zealand, or anywhere for regular financial planning issues, because their financial planners don’t necessarily know that the U.S. views foreign trusts and foreign companies owned by individuals as tax dodges, they make their reporting very stiff to do and the bill to do the tax return can be three or four thousand dollars. The compliance costs for these institutions are so high they have to pass it on to the client.”

But what happens to expats who live in this country who have not filed?

“What FATCA is meant to do, is put the onus on every financial institution to identify U.S. citizens,” says Carden. “And that has been augmented by the fact Australia and the U.S. and New Zealand and the U.S. have both signed intra-governmental agreements. This means that it’s

not just the banks responsible for identifying U.S. citizens, but the Australian government, the chief of the ATO and in the case of New Zealand, the IRD. “Oddly enough, the biggest bank secrecy country in the world was the U.S. If you were a foreign national and you had an account in the U.S, you paid no interest, and by law it was not reported to anybody unless a criminal affidavit was signed by the relevant authorities. The carrot for Australia and New Zealand, and everybody who signed the intra-governmental agreement, is that once the U.S. gets the information, they begin sharing that data, the host-country receives a portion of the revenue and that era of bank secrecy between the two disappears. Host country governments now have a very powerful incentive to make sure that this process is monitored thoroughly.”

“I’m afraid this also applies to those who hold dual-citizenship,” adds Carden. “Regardless of the fact that you hold Australian citizenship, you are still a U.S. citizen until you physically renounce it at the U.S. Consulate and pay a fee of US$2,500. You also have to have completed five years of tax returns prior to that renunciation.

“Bizarre when one considers that to get U.S. citizenship, which is months of work, and interviews, and documents, and processing, is only US$1,750,” says Carden.

“It’s cheaper to get citizenship which is far more work for everybody to do, than it is to get rid of it. Obviously, they want to discourage people from renouncing citizenship because what used to be 120 to 150 people a year is now approaching about 5,000 a year - and the number one reason

over and over again, is that they don’t want to continue paying thousands of dollars a year to get their tax returns done.

“Unfortunately it appears that the U.S. mentality is that you left to cheat on your taxes. No other reason.”

“It gets worse if one doesn’t become compliant, or undertake foreign bank account reporting – generally termed the F-bar,” warns Carden. “The F-bar is a document where you have to report the values of your liquid investments annually. This can be stocks, bonds, and/or bank accounts, and one needs to begin reporting these if your total foreign accounts exceed US$10,000. That’s not if one account exceeds US$10,000, but rather the sum total of all assets. With the F-Bar, you don’t owe any tax, even if you have three million dollars in the F-bar, it won’t report tax to it. You will have to get taxed on the interest and dividends, but in Australia’s case that’s generally zero because the Australian tax is higher than that, so it wipes it out, but, should one fail to file, and the IRS detects that you failed to file this form, the max penalty is fifty percent, not of any tax due, but of the account value. For example, if you’ve been detected because you sold a house and you put US$600,000 in profit into an Australian bank account, then you will have a US$300,000 penalty. And because the system is based upon bank accounts not banks, should you have moved the funds into different account in order to buy another property, you will incur another US$300,000 penalty.

“There are many instances of this happening, primarily because the general

populace just doesn’t know or understand the U.S. tax system and consequences of contravention. It all begins with paragraph D on the last page of any U.S. passport,” says Carden. This innocuous statement reads “U.S. Taxes; All U.S. citizens working and residing abroad are required to file a report on their worldwide income, consult IRS publication fifty-four, tax guide for U.S. citizens or residents, aliens abroad.”

“One must get the right advice,” says Carden. “It is estimated that of the approximately 10 million U.S. citizens, only a million of them are compliant, so there are a number of programs that have been made available to enable one to become compliant. The key however, is to engage specialists to assist with the myriad of rules and regulations.

“Another grey area for expats is that of compulsory superannuation,” adds Carden. “The tax treaty as it currently stands between Australia and the U.S. does not clarify what this form of income is deemed, so technically superannuation earned by expats is subject to taxation. As with most laws, the argument hinges, very specifically, on the definition of ‘pension’ within the tax treaty. In this case, the current definition, and one that would be used from a U.S. standpoint, not from an Australian standpoint, is found in the OECD U.S. model tax treaty, and clearly states that as long as the investment program is meant for retirement, it qualifies as a pension. It’s a complex issue but one that can be argued, and by submitting a foreign tax treaty disclosure the income can become tax-free.

“There’s a very specific skillset one needs to have in these areas,” reiterates Carden.

“And if one is planning on doing business in the U.S, one’s accountant should ideally have a master’s degree in international tax law as well.”

“The general regulations of doing business in the U.S. are particularly complex. The current U.S. tax code is over one hundred thousand pages, and you have the added issue of fifty states with fifty separate tax codes. Factors such as where you locate, where you incorporate or even how you do, all have tax implications… say you’re selling into America via Amazon and you have no permanent establishment in the U.S. All you would require is a form called a W-8ben that should cost US$250 and will last for three years. Should you then decide you’re selling to other companies however, and you hire a sales person on a contract basis but he doesn’t work for anybody else, then you will be deemed to have established a permanent operation, and all profits would be subject to U.S. taxation laws.”

“The U.S. is one of the most open and free markets in the world,” says Carden. “The Americans welcome people coming into the country and want you to set up businesses, but it is a highly regulated market and it’s getting worse, not better. One has to be prepared to do the research, contract the specialists and pay the fees.

That way, you have something akin to an insurance policy - the upfront planning can literally save you hundreds of thousands of dollars.”

Listen to all AmCham Podcasts by subscribing to iTunes or by visiting www.amcham.com.au

Access Winter 2016 23

Committee Round Up

Food and Beverage Committee Doug Townsend, CEO, Markstone Management Consultants, Chair Food and Beverage Committee

The AmCham Food and Beverage Committee is just a few months old, with the first meeting held on 2nd March 2016.

As there is a lot happening in the sector, AmCham compiled a collective group to identify key issues facing the industry to see what the Chamber could do to help progress, or address these issues on behalf of its members.

Being a new Committee, we are currently discussing the best approach we can take.

One of the things we have done to date is to review and approve the submission to the NSW Container Deposit Scheme by the Chamber and discussed its effects on our members. This was put together by Christine Black, Public Affairs & Communication Director, Coca-Cola South Pacific, and made a clear statement about

the lack of economic modelling and the failure of similar schemes overseas. A copy of the submission is available on the AmCham website.

This was a good start for the Committee and we wish to continue with this proactive approach for our members. We are busy planning the best way we can assist members in the industry, and what our clear theme(s) should be. Whilst these discussions are in the early stages, two general options are emerging.

Firstly the Committee’s role on being active in the space of regulation that impacts on our members. We have seen the proposed changes in requirements of packaging in relation to country of origin, with the two year phase in-period, the recent changes in the budget on the Trusted Trader Scheme, and the proposed removal of GST exemptions for small importers.

There is also an increasing tendency for Government to rely on “Sin” taxes on food and beverages (e.g. Wine Equalisation Tax (WET) and proposed sugar and fat taxes) to create revenue and use as social engineering. We have commenced a study on sin taxes and the current policy positions of the major parties. We would be keen to

Innovation Committee Geoff Culbert, President and Chief Executive, General Electric Australia and New Zealand, Chair Innovation Committee

The Innovation Committee was launched members to get connected to the Innoin the middle of last year and got vation agenda. off to a flying start with the “WE BELIEVE Innovation Mission to SilWithin the Innovation THAT AMCHAM icon Valley in November.

Committee we have two CAN PROVIDE A The trip was attended by streams: the Access BRIDGE BETWEEN close to 50 people from Group and the Advocacy AUSTRALIA AND THE U.S. a range of different inGroup. As the name sugAND GIVE AUSTRALIAN MEMBERS ACCESS dustries and the feedgests, the Access Group TO THE WORLD’S back was overwhelmaims to provide members MOST INNOVATIVE ingly positive. We hope to with access to different MARKET.” carry the momentum from events and opportunities. last year into 2016 and create We believe that AmCham can more opportunities for AmCham provide a bridge between Australia

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hear from any members that are being affected by these changes. There have been discussions on conducting a delegation of members to Canberra, as has been done by AmCham for members in Defence, Health and Trade.

Secondly we are looking at how the Committee can assist our members in increasing their share of the Australian Food and Beverage market. We are currently doing a review of the opportunities for AmCham members to participate in trade shows, delegations and other activities. Our goal is to create a comprehensive calendar of events for our members. We are also drafting a one pager on the Food and Beverage Industry which will outline the size of market and include positive case studies.

The Committee is also in the early stages of devising a survey for AmCham members in the Food and Beverage Industry, to get feedback on how it can work to maximum benefit for AmCham members. The Committee meets bimonthly in Melbourne, with some Committee members attending via phone conference. If you would like to attend please contact the Chamber.

and the U.S. and give Australian members access to the world’s most innovative market. We also want to provide members access to the best of what is happening in Australia. It’s about connecting people and creating opportunities to collaborate.

The Advocacy Group will look to make sure that the interests of members will be best represented in the burgeoning discussion around Innovation in Australia.

The Government has set a very clear and exciting agenda for innovation with the release of its policy last year. The Advocacy group will be taking input from members to ensure that, as the Government’s policy is translated into action, we maximise the opportunity for everyone.

We look forward to working with all our members on this ambitious agenda.

Health Committee Andrew Wiltshire, Senior Director Corporate Affairs, Medtronic Australasia, Chair Health Committee

The AmCham Health Committee includes representatives from a diverse range of member companies across pharmaceuticals, medical devices, dental, complimentary medicines, and services.

The nature and importance of ‘good health’ within our community means there are always platforms to speak about. Where the AmCham Health Committee differs, is in the ability to make these platforms relevant and meaningful for members and our community.

As we approach the 2016 election, one of the key election battlegrounds – Health – will feature prominently. Already, we are seeing conflicted policy announcements and platforms from across the board, reflecting ideological differences around how Medicare, pharmaceuticals and other aspects of healthcare delivery are funded and accounted for within our local environment.

It’s a complicated area and the AmCham Health Committee have been actively making a difference to ensure the debate is both elevated and informed to capture what really matters to Australian healthcare.

Our efforts started long ago, working across the full term to raise important policy issues with Government, opposition and senior health department officials. The Committee has hosted round-table meetings with senators and members of parliament, as well as conducted a series of doorknock delegations in Parliament House.

I am always delighted by the reception our Committee receives in Canberra.

The commitment to the Australia-U.S. relationship and the goals of fostering two-way trade and goodwill is clear,

enduring and shared in a bipartisan manner. Equally outstanding is the support received from U.S. missions in Australia, the Embassy, the Sydney Consulate and the State Department and USTR representatives.

$51 million dollars in additional R&D investment.

• A mCham advocates the establishment of an expanded period of data exclusivity in the Australian environment.

The platforms of the Committee are consistent – as reflected through position papers on a range of issues of importance to AmCham members and the community.

Position papers can be found on the AmCham website, however key areas of focus during the election are:

3. Innovation: • Across the range of medical technology, pharmaceuticals, complementary medicines and services, the Health sector in Australia is at the forefront of innovation. It offers many opportunities for Australia to lead the world – exporting innovation and attracting investment in innovation.

• AmCham encourages Government to seek every opportunity to foster collaboration across science, research and entrepreneurial endeavour in the development of the health sector. This should be supported by an aligned, whole-of-government approach that ensures that every aspect of the research, regulatory, purchasing, reimbursement, IP and venture capital environment is appropriate to foster innovation in the health sector.

1.

•

Reform of the Regulation of Medicines and Medical Devices in Australia: AmCham supports the majority of the recommendations of the Expert Panel Review of Medicines and Medical Devices in Australia and encourages Government to move quickly with implementation.

2. Data Exclusivity: • Australia lags behind most other OECD countries in providing Data Exclusivity terms, which provide incentives for pharmaceutical innovators to invest in development of evidence to support the usage of life saving and changing products in new diseases and conditions, or expanded patient populations, bringing $43 million dollars’ worth of direct health benefits and

Conversations on health need to be relevant to make a difference. As part of the AmCham Health Committee I’m confident we are working towards a healthier community.

Access Winter 2016 25

Committee Round Up

Women in Leadership (WIL) Committee VIC Charlotte Blair, Partner, The Strengths Partners, Chair Women in Leadership Committee

“Like most good things in life, these benefits don’t happen by accident. I’ve probably spoken to hundreds of employers about this topic in recent years. I still see most approaching flexible working as a negotiation between managers and employees, often triggered by an investment in technology or workplace design, or a desire to improve gender equality. This approach confines the new work equation to be an individual, rather than an organisational opportunity.

Workplace flexibility is rethinking how work has "traditionally" been completed.

It means adjusting work hours outside the 9:00-5:00. It means giving employees the autonomy to work beyond the office; at home, in transit, the library or a coffee shop. For many organisations, workplace flexibility is the new norm for how work gets done. On the 16th June we heard from a number of panellists from GE, PWC, Melbourne Business School and Mercer on the topic of Workplace Flexibility.

Yolanda Beattie, one of our panellists and the Diversity and Inclusion Practice Lead at Mercer in the Talent Business, has shared her thoughts on the subject: “Flexible working is among the top three most sought after attributes in a job by employees worldwide, according to Mercer’s 2016 Global Talent Trends Study. Yet the same research found most employers are still struggling to deliver flexibility in a market where top talent is increasingly hard to keep and attracting diverse talent pools is a global priority.

“Companies will continue struggling to mainstream workplace flexibility and unleash its potential until they come to grips with the new work equation. In this new world trust is key, autonomy

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and collaboration must co-exist and meaningful work with career development matters more; for many people even more than money.

“While gaining growing attention in recent years, giving employees greater control and choice about how, where and when work is done has been part of workplace parlance for decades. Flexible work has traditionally been the domain of working mothers in the form of reduced hours (aka part time), because working flexibly is still seen as career limiting.

This is largely because our deeply engrained stereotypes about the ideal worker clash with our beliefs about women and mothers. As long as flexibility is primarily seen as a means to provide work/ life balance, it will struggle to gain the foothold it’s worthy of.

“In practice, greater work/life balance is more a by-product of flexible working. A growing body of evidence suggests real business value is gained from higher employee engagement, greater discretionary effort and improved productivity.

Indeed, Mercer’s recent study found two in three employers believed their team were more productive when they worked flexibly but less than half of employers reported having flex.

“Instead I recommend employers build a vision for their workplace that has flexibility at its centre. Leaders and middle management must buy into the future of work, understanding what’s at stake and what needs to change. Building a new management skillset to allocate roles and responsibilities across individual capabilities (i.e. what people are good at) and capacities (i.e. how many hours per day/ week / year they’re available) is critical.

When tackled at the organisational and team level, so much more is possible.”

Telstra’s Reid Johnson is a great example of this. In his late 40s and raising a family of four, Reid sees himself working another 20 years in senior executive roles. To live a full life of family, community and career however, Reid put his hand up to move to a 9-day fortnight, compressed into a four day week. It means Friday is his day to take a much needed breath while someone else in his team steps into his shoes. His delegates enjoy fantastic career exposure (two were promoted in the first year of Reid’s arrangement), while Reid’s productivity and engagement have soared.

Reid was one of five men who featured in the Equilibrium Man Challenge – a micro-documentary series exploring flexible work for men. His story, and others like it, highlights the importance of out of the box thinking when it comes to structuring work so that individuals, teams and organisations benefit.

State Round Up NSW New South Wales has an engaging range of events coming up in July, August and September. In July we have a signature event from Uber’s David Rohrsheim. Also Kerrie Mather from Sydney Airport will be holding a Business Briefing on one of the largest infrastructures in Sydney.

Australia Post and Paul Perreault, CEO and Managing Director of CSL. There will also be panel presentations on the Australian Economy, Flexibility in the Workplace and The Future of Health in Australia. Boardroom Briefings will include topics such as Debt Recovery, Branding, Block Chain and Free Trade Agreements.

In August, David Ray from Twitter will feature in our ‘Future of Media Series’ and discuss the trends in media consumption and its impact on the media landscape. We also have Kevin Mitnick, once the “World’s Most Wanted” social engineer and computer hacker by the FBI, who will speak on cyber threats and deliver a live hacking demonstration.

We are also planning a U.S. Election watch event to keep an eye on “the Trump factor.”

In September we kick off the month with Pip Marlow, Managing Director of Microsoft and Sue Langley Managing Director at Langley Group. Sue will be talking about the approaches of traditional leadership vs Positive Leadership which encourages leaders to deviate from the norm. To round off the year we have a great range of speakers in the pipeline such as Greg Medcraft from ASIC, Jim Betts from Infrastructure NSW, Craig Gailey from Caltex and Stephen Scheeler from Facebook.

VIC The Melbourne Innovation Mission is scheduled for October 6th and has a great line up of advanced manufacturing and innovation organizations. We will visit the GM Holden design centre, Boeing manufacturing facility, the Telstra Gurrowa Innovation laboratories and the Carlton Connect Initiative.

WA We have an exciting line up of events over the next few months. Our Women in Leadership Committee is presenting a talk by Mary Hackett, Regional Director, GE Oil and Gas on Leading Through Disruptive Times, in July.

In August The Hon Dean Nalder MLA as part of our Meet the Minister Series will be sharing his views on Value Capture, as well as his plans for the Agriculture and Food portfolio. Also in August we have Nigel Atterley, Founder and Chief Executive of Satterley Property Group, giving a business briefing on investment in Perth.

In September Matthew Cobbett, Executive Director of Business Development for Flour’s Mining and Metals Business for the Europe, Africa and Asia Pacific Regions will analyse the cause and effect of project performance, and what contributes to successful and unsuccessful outcomes.

July will see a Nevada Trade delegation visit Melbourne and Sydney. Led by the Governor Brian Sandoval, the delegation will meet with government and private industries. Industry sectors being represented are: Higher Education, Mining and Water.

The Victorian events calendar for July and August will feature presentations by Ahmed Fahour, MD and Group CEO for

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