QUTEFS Review - Issue 3

the QUT ECONOMICS AND FINANCE SOCIETY

REVIEW ISSUE 3 | MAY 2016

proudly supported by our publications partner The Typewriter

we hear from

we look back at

see the latest from

Members Alumni Industry Faculty

O-Week 2016 The Big Call Application Insight Evening

CPA EY PwC CAANZ

In this issue Vice-President’s Report Ryan Nolan

3

Travels in China Liam Dillon

22

The Take Jackson Barton

4

Monetary Abuse The Spear

24

Market Outlook Sam Elderfield

6

Event in Focus: O-Week 2016

27

Corporate Changes in the Land of the Rising Sun The Typewriter

9

Buzzword or Tech Trend?

Jack Nolan

32 34

The Panama Papers Professor Pascalis Raimondos

11

Starting Out as a Student Investor Zac Brown

Islamic Finance in Australia Ben Bourke

13

Your Take: The EFS Essay Competition Winner Charlotte Davies-Clark

36

Event in Focus: The Big Call feat. QIC

14

Abenomics Joshua Evans and Jackson Barton

39

Australia’s Man in China: An Editorial Jackson Barton

18

Event in Focus: Application Insight Evening 2016

40

CPA: Leadership Track Catherine Sullivan

20

Welcome back to the conversation

Stay Connected

QUTEFS Publications Team Mitchell Goodall Jackson Barton

@qutefs

COVER PHOTO Chisomo Phiri

@qutefs

/qutefs

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CHIEF EXECUTIVE

VICE-PRESIDENT REPORT

RYAN NOLAN

Vice-President QUT Economics and Finance Society Week 13 traditionally induces a variety of emotions for all.

Most recruitment programs are now complete, which brings good news for the majority of members, I have no doubt. Massive congratulations are in order for all who were able to secure their desired positions. I have already spoken to members who were able to improve their positioning in these competitive recruitment periods by leveraging the connections they made via the society. It is a wonderful testament to the networking opportunities afforded to members by our increasingly active alumni and sponsor bases.

The end of semester also means that this is the last publication under myself and Mitch’s tenure. About 10 months ago we set some clear goals for the society: increase the number and variety of our major sponsors; improve the interaction with out existing sponsors; and improve the interaction between the society and our members.

We’re proud to say that over the past year we were able to expose EFS to three new partners: The Typewriter, QIC and KPMG. With these partnerships our members now have access to more economics based employers than ever before and have an unprecedented media platform to grow their personal and professional brands.

Our new ‘Chat With’ video series, Big Call stock pitching competition and collaborative charity Trivia Night have proven effective ways for our members’ to reach industry outside of traditional methods. Alongside our improved Application Insight Evening event, they’ve broken down barriers between our sponsors and members, allowing for increased personal interactions – something we are very proud of.

If you’re like me and feel as though they’ve blindsided you (for the 9th semester in a row) please feel free to take solace in the fact that it will all be over in less than a month. Of further consolation is the fact that we’re now only 23 days from the best social event on QUT’s calendar: EFS’ Beer Stock Exchange. It promises to be our biggest yet and will make for the perfect stress reliever, so I hope to see you all there.

We’re also looking forward to a strong events calendar throughout the second half of 2016, capped off by EFS’ annual Women in Business panel, a first-time inter-university collaborative event, a second charity event and our inaugural economics forum.

The successes of the past year are inspirational and I would welcome everyone who has thought about joining EFS to get involved for what will inevitably be a great 12 months to come. Our Annual General Meeting will be held early August. I strongly encourage you to join us and have your say on our next executive.

QUT’s premier networking evening, Fastrack, will follow a week later. With our biggest ever sponsor base it will be a great opportunity to build your professional networks, as well as meet some of your peers who will prove strong industry networks post-graduation.

Until then, I extend a final thank-you on behalf of myself, Mitch and the rest of the 2016 QUTEFS Executive.

It has been a pleasure and this record year wouldn’t be possible without your involvement and investment.

The last week of semester also, unfortunately, means that exams are upon us.

Review | May 2016 | 3

THE TAKE by

Jackson Barton

THE TAKE

Jackson Barton

Publications Director QUT Economics and Finance Society What a time it’s been since we last spoke.

In what has been a tumultuous beginning of the year for the global economy and financial markets more specifically, we’ve seen some pretty concerning developments across the board. Since we last spoke in October, I think the most pressing issue to mention would have to be the rise and rise of Donald Trump – his candidacy and near-certain GOP Presidential nomination has become the new reality for the conservative side of US politics.

The risk of a Trump administration on global geopolitics and broader financial markets and economic cooperation is something that concerns many of us, especially the engaged youth.

Another big point to mention is that of Brexit. We’ve seen some significant developments on this geo-political and geo-economic front since October as well, and with Greek financial tensions rising once again with Tsipras’ new administration clashing again with the Troika, Eurogroup, IMF and ESM in Brussels, these financial woes are sure to affect Brexit developments. We had UK Foreign Secretary Hammond and Prime Minister Cameron renegotiate a new EU agreement a couple of months back at the European Union, to little avail. For many including Nigel Farage and Boris Johnson this wasn’t enough, and with great vigour and rising poll numbers, the Leave campaign continue to push for Britain to leave the world’s largest common market. Voters head to the polls next month.

We saw great tumult on global markets in January too.

Asian markets took a considerable battering with the Shanghai Composite, Shenzhen Index, Hang Seng and Nikkei all crawling back into bear market territory, where heavy losses were sustained over late 2015 and into this year also. Many of these market woes quickly spread to US and European markets as well, with the Dow Jones Index sustaining 400+ point losses over consecutive days throughout January.

Oil prices played a crucial role here where oversupply with WTI and Brent meant that prices dipped into the $20 range after fruitless negotiations at OPEC. As we come into the halfway mark of 2016, I think it’s fitting to reflect on the great semester one we’ve had – we’ve introduced two new student competitions, new blog spaces, and we’ve had some killer social and professional events, with flagship events, BSX and Fastrack still to come. Once again, it was great to engage with our students, bloggers, academics, and our business and corporate partners in order to provide some of the most professional content we possibly could. I can’t wait for what the rest of the year brings for the EFS Publications space.

As Publications Director at EFS, this is not a farewell, but my second and certainly last QUTEFS Review. It has been a fantastic opportunity build and formalise this Publications role within EFS and to be able to nuance some dynamic, innovative channels of communication, expression and information to our members and the wider economics and finance community.

Whether it be our new blog space “The Take”, The EFS Review, publications collaborations with online partner, “The Typewriter”, or our new video series “A Chat With”, it has been a pleasure bringing you all what is now regarded as one of the most detailed, professional publications’ offerings throughout all of QUT, and I look forward to our next Publications Director further building on the success of both the EFS Review and the broader Publications portfolio.

Thanks for being a part of it. ‘Till then, Welcome back to the conversation.

Review | May 2016 | 4

It’s great to be able to present the official market outlook of Henry Morgan Funds for the first quarter of 2016. EFS is really lucky to have Sam Elderfield, an investment strategist and trader at Henry Morgan to be our Corporate Relations Director for EFS in 2016. His insight into markets, investing and the broader corporate space is highly insightful.

Well, 2016 has started with a vicious down move in global equities with some extreme volatility in virtually every market including; large currency movements, bond rallies despite the US interest rate hike, crude oil falling to new lows and gold surging higher.

Doomsday forecasts are gaining traction as prognostications focus on multiple risks including; global recession, the failure of monetary policy, significant Chinese currency devaluation, an increase in a deflationary cycle via the commodity collapse, the end of the post-WWII credit cycle and now possibly the UK initiating the collapse of the European Union.

That’s not even an exhaustive list, but it’s a good start.

MARKET OUTLOOK First Quarter 2016 by Sam Elderfield

There has been a wide range of commentaries on what policy makers globally could, would and/or should do, varying between doing nothing to more nuclear options like ‘helicopter money’ and debt jubilees. We have our own views, but that will not change the outcomes. As managers, we need to ask more important questions and then focus on where to invest. Certainly preservation of capital is important, but typically investors want returns as well. Traditional means of capital preservation may not in fact preserve.

With low to negative interest rates, coupled with the possible repercussions of low (or no) inflation currently, may well be followed by a period of high inflation to wash away mountainous debt at both the government and private level. However, we think this is years away and probably preceded by some very harrowing times given the viability of some nations.

Our opportunity resides in the ability to quickly alter investment positions between equities, currencies, bonds and commodities; essentially, the full universe of investment options including 100% cash and/or short. Investment options aside, we still need to get it right or that opportunity provides no value. Views on the current and future state of the market and economy are importantbut so is our ability to change when presented with new evidence or extreme volatility.

Our View It may be best to start with interest rates. We, like many others, think that interest rates will stay very low for a long time. Post Great Depression, rates stayed low into the 1960’s. Given that, the nadir of the Depression may have been 1932. The impact of low rates is uncertain, however we suspect that returns across asset classes will be enduringly slim. Extremely low to negative interest rates are not a great idea in our view, but we do not set policy so we will take it as it is.

Rates and Quantitative Easing have affected investment markets, but in our opinion, this has been primarily a placebo effect. That is, investors believed an effect would occur or was occurring and jumped onto what appeared to be a moving train. The underlying effects appear to have been small, but with significant market reactions. We believe that markets were wrong to over interpret, likely outcomes and myths have been created and accepted.

MARKET OUTLOOK

For example, there is a view that QE inflates asset prices.

However, PE ratios are not particularly elevated globally.

The leading light in monetary experimentation, Japan, has not been able to raise their equity markets for years.

We may be wrong in our assessment, but, if anything, we think QE and ZIRP depress asset prices over the medium term.

Regarding currencies, we have similar views to equities, in that QE may actually be supportive of a currency and currency traders have possibly been tricked into believing the opposite. Observe the strength of the US Dollar AFTER the Federal Reserve indulged in three rounds of QE (or four depending on your view). With this considered, it may highlight a potential direction of the Yen and the Euro. We are focused on any trend change in this space and interested to see the outcome.

Currencies will always be ‘the tail that wagged the dog’; so most of our efforts are dedicated to what is going on in the currency space and consequent impact on other markets. It is no coincidence that the Yuan devaluation in August last year took down equity markets. Similarly, fears of further Yuan devaluation are impacting markets now.

In the commodity space, our belief is that it is almost purely a US Dollar story. The decline in the US Dollar post 2000 and compounded post 2003 ignited commodities and also financialised them for a time. The US Dollar rally from 2011 onwards has subsequently smashed commodity markets. The countercyclical nature of these two assets with the enhanced production justifies today’s commodity prices. What is the effect of China on commodity prices? We think China has an almost zero effect on commodity prices- but many disagree with that. continued over page...

Review | May 2016 | 6

So the direction of the US Dollar will be very critical. We think the US Dollar weakens and ironically that would benefit the world even though multiple central bankers appear adamant on devaluing. We believe these devaluations are misguided (and evidently so do the equity markets which have fallen on continued ‘stimulus’), again, we may ultimately be wrong.

MARKET OUTLOOK

Direction for 2016 So where does the year 2016 go? We often hear that making predictions can be unwise, but we make them all the time- and we change our mind when it appears to be incorrect.

1. Equity markets globally are currently reasonably priced. They should end the year higher despite the gloom.

2. The US economy comes out of a soft patch and performs for the rest of the year.

3. Rates stay very low, but long-term bonds are not worth holding.

As a consolation to anyone really short right now, if we see further economic deterioration we might join you, but probably not in a broad sense as many problems have at least been partially priced in. Most equity markets have been falling for around a year and in some Emerging Markets, four years or more. written by Sam Elderfield

4. Gold has a better than even chance of outperforming almost everything else- however, we think gold is a hopeless investment long term.

5. The Yen and the Euro stage tremendous rallies confounding some central bankers and demonstrating that they never had the slightest clue as to cause and effect of their actions. Kudos to the Federal Reserve; Ben Bernanke and Janet Yellen in particular who segued between tapering QE and then finally raising rates at what will be historically viewed as the right time.

6. Defensive stock plays get hammered and growth areas (including technology) explode higher, devastating the ‘global recession’ camp.

7. UK leaves the European Union. We think this is a full gone conclusion even though polls show support for staying. UK markets including the British Pound fall, before a blistering upside move.

8. Emerging markets bottom out and crush trend followers who remain short EM currencies, debt and equities.

9. Volatility remains high in the short term before returning to normal levels late in 2016.

10. Commodities turn, but we are not overly interested as we think technology ultimately kills demand particularly in fossil fuels.

Review | May 2016 | 7

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CORPORATE CHANGES IN THE LAND OF THE RISING SUN by The Typewriter’s Editiors Desk

At EFS, we love collaborations and partnerships. In an attempt to diversify and build upon our publications space, we were thrilled to partner up with international media startup, The Typewriter (typewriterintl.com). Our Publications Director writes and edits for The Typewriter regularly, and it’s fantastic to present some of their high-quality content in The Review.

Japan has a history of static corporate structure. Their CEOs and directors are constantly working at the top of the pyramid, having never met many of their staff and considered unaccountable to any one. This is almost the polar opposite to most western business practices, where we know those who we work for and they know us in many circumstances.

In the west, we praise companies who favour open door policies for their directors. In interviews for graduate positions it’s customary for you to meet with one of the directors should you get to the later stages of the hiring process. Such concepts have been inconceivable, up until recently, in Japan’s corporate structure.

Even external stakeholders were often downplayed or ignored by the internal directors and CEO’s of the heavyweight firms of Japan. Shareholder welfare and benefit were seen as redundant or cumbersome obligations, and were therefore dismissed. In recent years however, due to globalization and in turn changes in government policy, the structure must change.

The composition of boards of directors will be one of the more significant changes made. Usually boards of directors are comprised of people outside of the corporate firm they are a part of.

Special Article

In Japan on the other hand, long term outstanding employees are often rewarded with a spot on the board.

The reason behind outsiders being preferred on the board, usually boils down to the likelihood of putting shareholders first. Decisions that can be influenced by bias and thereby affecting the shareholder, are usually capital intensive matters.

This can include pay structure, and dividend payments, things that affect how potential and current shareholders could base their investments. In recent months Prime Minister Shinzo Abe has been making some strong recommendations and voiced his opinion on changing the current corporate landscape. He wants to see a change made on the grand scale of how Japan operates to make it more inline with how the rest of the world is changing. This includes more women in higher tiers of corporate responsibility, and more transparency in the companies.

Whether or not these wishes come into effect will be interesting. There’s already signs of Japan’s current fundamental structure developing cracks. The recent 7-11 CEO departure is the most recent example. However earlier in the year Sharp executives were pressured from ‘outsider members’ into taking a higher bid from a publicly owned company. It’s starting to show that Japan is starting to change whether it wants to or not. with thanks to The Typewriter

Review | May 2016 | 9

THE PANAMA PAPERS

Fueling Debate on Activity-Based Taxation Instead of Taxing Profit written by Professor Pascalis Raimondos

Professor Pascalis Raimondos, new head of School of Economics & Finance at QUT has fantastic expertise in tax economics and international taxation frameworks. The following comes from a speech Prof Raimondos gave at an Economics Society of Australia event on Eagle St a little while ago.

“The Panama Papers’ fall-out could be the impetus for adopting a worldwide activity-based taxation system, instead of one based on profits, which would make it harder to shift and hide profit, QUT economist Professor Pascalis Raimondos says.

“Activity-based taxation has been adopted successfully in countries that are federations,” Professor Raimondos said.

“The United States was the first to institute the system back in the 1970s because each state had different taxation rules and companies were moving profits around to minimise tax.

“Canada followed in the mid-80s and recently Switzerland, Belgium, and Germany (all federations) brought the system in.”

Professor Raimondos said activity-based taxation used a formula based on three tangibles: the number of employees, the assets, and the sales of a company to arrive at how much tax it should pay in a country.

“Under this system, taxation authorities don’t care how much profit a business makes in a particular country.

They only care about the activity the firm has had because people, buildings and sales are difficult to hide,” he said.

“When activity, not profit, is taxed it is not easy to manipulate these figures – you can’t have 50 employees and say you’ve got only 10 and it is also easier for auditors to look at activity than chase profit.”

FROM THE FACULTY “Countries such as Ireland, Luxembourg and the Netherlands, which are tax havens, oppose it as they would lose money if activity taxation was brought in as the incentive to shift profits would be lost,” he said.

“After the LuxLeaks scandal in 2014, the European Commission has been pushing again for such changes.

“If Europe ends up adopting activity-based taxation, the next step will be to discuss such proposals at the international level, eg the WTO.” Professor Raimondos said activity taxing was not without its problems.

“Multinational businesses could still move their production, and thus their activity, to tax friendlier locations.

“Although moving production is more inefficient than moving profits, activity taxation can have negative effects on a country’s bottom line.

“However, given that production is less mobile than profits, a move towards activity-based taxation would be an improvement for taxing global firms.

“With the ongoing release of information from the Panama Papers we can expect growing popular support around the world for a more transparent taxation system that makes it harder for multinationals to avoid paying their fair share of taxes.”

For more information on QUT Media, contact: Niki Widdowson, 07 3138 2999 or n.widdowson@qut.edu.au.

We thank the QUT School of Economics and Finance for their contribution and continued support for EFS.

Professor Raimondos said Europe had been debating such a taxation system since 2001.”

Review | May 2016 | 11

ISLAMIC FINANCING IN AUSTRALIA written by Ben Bourke

Banking and finance lawyer, Ben Bourke, says opening the door to Islamic financing in Australia means big opportunities for young finance professionals.

FEATURE ARTICLE

The Federal Government has pledged in its Budget to “enhance access to asset backed financing”– a cryptic announcement which may prove to be one of the most significant tax changes in the budget, but which could just have easily been missed in the bustle of the budget lock-up.

What we’re really talking about here is Islamic finance – a form of financing based on the principles of Islamic law (Shariah) – which has been on the Government’s radar since as far back as 2010 when the Government announced that the Board of Taxation would undertake a comprehensive review of Australia’s tax laws to ascertain whether they were unintentionally inhibiting the expansion of Islamic finance and banking products in Australia.

A fashionably late release of the Board’s report on budget night coincided nicely with the announcement (despite the report being issued to the government back in 2011).

The report made a number of recommendations, which in essence are aimed at delivering structural reform necessary to bring transactions structured in a Shariah compliant manner on equal footing with conventional financing – or at least so far as tax is concerned.

For students of economics, law and finance with a role to play in the financial markets, the changes expected to take effect from 1 July 2018 signal a promising opportunity for us to cut our teeth on some unique and challenging deals, which unlike some of the more vanilla conventional financing structures around town, involve employing techniques and concepts which are constantly evolving and this can throw up some pretty unique challenges. written by Ben Bourke Ben is a banking and finance lawyer with growing experience in structured financing and general banking advisory across a range of sectors including real property, aviation and shipping.

While pouring over the tax implications of a financing isn’t all that exciting (at least for most of us), what is exciting about the whole notion is the prospect of Australian borrowers having improved access to the Islamic capital markets; it’s incredible to think that the global Islamic finance market reached approximately US$2.14 trillion in 2015 and is expected to grow to US$3.7 trillion by the end of 2020.

This increased access to a vast pool of capital not otherwise able to be deployed other than in compliance with Shariah - should assist Australia to further develop itself as a net capital importer of capital and bolster investment in domestic infrastructure and agriculture.

Review | May 2016 | 13

Event in Focus

This year EFS started a brand new event based competition in ‘The Big Call’: a stock pitching competition aimed at highlight investment skills and support student members who take an active interest in the stock market.

This competition was centred on delivering students with high level advice on investment techniques and gave participants the change to win a $700 voucher from our friends at M.J. BALE.

The Big Call was another successful first for EFS. We had countless entries from members, and it was great to have so many diverse, interesting stock predictions from both experienced and inexperienced students looking into some innovative publically listed companies.

Whilst we still await the announcements of the results, we’d like to commend all entrants on some fantastic predictions and justification.

The winner (being the player closest to the actual stock price as compared to their prediction by the closing date on 23 June 2016) will be announced at the EFS Beer Stock Exchange 2016.

It was a pleasure to have QIC come onto campus with EFS earlier in the Semester to host our ‘The Big Call’ workshop and information session.

This was a fantastic networking opportunity to meet with a QIC grad, as well as Kimberley Tindle, QIC’s campus recruiter. We also had a chance to hear from analyst at Henry Morgan, Sam Elderfield, give his global market outlook.

Review | May 2016 | 14

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The top employers by sector

Love your work What’s your ideal job description? One with opportunities to travel? Working for a top global brand? Leading a not-for-profit that improves lives? And making enough money to not only support your family and lifestyle but also to help make the world a better place.

“Dream job” and accountancy aren’t often mentioned together in the same sentence.

Chartered Accountants, with experience on the leading edge of business and finance, offers a different story than the cliché of a bespectacled desk-bound accountant.

SIMON HARDMAN CA is the financial controller at Microsoft. He lives with his

family in Adelaide and has the freedom to work from home and commute to Sydney HQ. For Simon, the Chartered Accountant designation has been an international passport. It has allowed him to work in Singapore, Vietnam and London and now back in Sydney.

The CA has given Simon a level of credibility that shows he has a sense of rigour in how he looks at finance holistically.

ANNA LEE CA is the CFO of THE ICONIC, one of Australia’s largest online fashion

retailers. Her Chartered Accountant qualification enabled her to play instrumental roles in global multinational organisations including Adshel and Groupon, underpinned by Big 4 finance foundations. She is renowned for contributing focused and intelligent financial, commercial and strategic input to executive management teams and boards.

ANTONY TOW CA is GM of 40K Globe, a social entrepreneurship program for

Australian students based in India. A winner of the Australian Social Enterprise Award in 2014, the CA Graduate Diploma secured Tony a role at Deloitte before he moved into the not-for-profit space. Tony is passionate about educating a generation of young Australians to use business as a weapon to drive social change. 40K provides the perfect opportunity for Tony to harness his CA skills and apply them to building a business with a genuine purpose.

Accountants are in high demand. Today, 75 per cent of graduates expect to be in full-time work within four months of graduating. This will only increase, with an expected 11 per cent rise in industry roles by 2018, according to the department of employment.

A Charted Accountant designation opens doors to some of the most exciting and influential companies and organisations. Ninety-nine of the top 100 global brands have a CA in their ranks, as the GradDip(CA) postgraduate degree is regarded as the premium accountancy qualification in the world. The rigorous and challenging training and assessment develops strong commercial acumen and strategic, critical thinking that are essential for a successful career in business.

Surprised by our Chartered Accountants’ accomplishments, and want to keep your options open? Consider becoming a CA to start on the path to creating your own success story. The opportunities across a variety of different companies and industries will give you more chances to follow your passion and really love your work.

CA’s strive for excellence and are CA’s strive for ready to challenge excellence and are the status quo. ready to challenge the status quo.

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AUSTRALIA’s MAN IN CHINA Turnbull Cracks the Middle Kingdom an editorial piece by Jackson Barton

Prime Minister Malcolm Turnbull earlier this year headed Australia’s largest ever trade delegation to China, with a number of state Premiers and Commonwealth Ministers in tow, with South Australian Premier Jay Weatherill leading his state’s largest ever delegation to the port city of Qingdao in Shandong Province.

In what is part of the Turnbull government’s new pitch towards a services-based economic model, the government hopes to capitalise on China’s similar shift - that being a more liberalised, consumption-led model, spurred on by rising income and education levels and a desire for more advanced services and capital imports to fuel this, moving away from traditional China’s traditional manufacturing-led economy.

Mr Turnbull also extended further commerce talks with Premier Li Keqiang, notably about Chinese economic recovery and the administration’s economic policy goals into the medium term.

Mr Turnbull led a considerable trade delegation through Shanghai, as part of the Australian Business Week event. The event promoted “Australia Unlimited”, a joint initiative of both the Australian Trade Commission and the Department of Foreign Affairs and Trade more broadly, whereby Steve Ciobo, Australia’s Trade Minister and former Trade Minister, Andrew Robb AO, soon-to-be Australia’s Special Envoy for Trade joined the Prime Minister in Shanghai, promoting the good work of Australia’s leading SME’s, services exporters, and high quality food and wine.

In the new PM’s first official visit to China, he stressed the importance of Australia’s bilateral economic ties In what has been dubbed the “mining to the dining” with that of the world’s second largest economy. boom, the PM used his considerable Asian connections as well as the experience of Chinese business On his first official visit to China as Prime Minister, leaders, and Australian government representatives Malcolm Turnbull is set to meet with President Xi in the Middle Kingdom to spruik the sheer quality Jinping in Beijing, for a visit aimed at setting trade and competitiveness of Australia’s exports. links in stone.

An emerging educated middle class in China is coming to the fray, demanding more high quality goods and services – something that trade leaders believe Australia is well positioned to cater for, in particular, promoting a new global “landing pad” technology hub in Shanghai for innovative Australian entrepreneurs wishing to internationalise their products and services.

The ultimate goals for the Turnbull administration really are to strengthen the bilateral relationship more broadly. Whilst currently many diplomatic and defence-related matters are strained, with contentions rising over the South China Sea dispute, Australian and Chinese leaders both agree that a healthy bilateral trading relationship, supported by the recently negotiated ChAFTA agreement is something which is of highest importance.

There’s some real opportunities here for both nations looking into the long-term, but I think the biggest challenge to overcome is the real economic transition of both economies – where China needs to dial down its’ high growth, manufacturing-led economic model, and Australia needs to smoothly transition away from the mining-boom to a more education-based, innovation-led model. Managing this transition will prove difficult for both sides, but freer trade can really assist keeping the ledger in the black – the promotion of services and consumptions underpin both countries motivations – something that we can all agree on.

Unlike an Australian electoral cycle however, Malcolm’s mere bluff and bluster, his characteristic eloquence, commanding style and stump-like speeches, simply will not cut the mustard within our largest trading partner. What Australian exporters must learn to adapt to a new style of business, whereby mere economics is not enough to succeed in what is still an emerging business environment. Businesses must not underestimate the sheer complexity of doing business with primitive governance structures and 1.5 billion people. It is absolutely vital that any Australian firm looking to export to or invest in China develops what is known as Guan Xi, whereby a strong relationship must be built before any substantive business transactions can take place. This is something that cannot be overlooked.

As China slows, and as Australia enters into a period of sustained low inflation, wage stagnation and crippling minerals prices...

EDITORIAL

it’s really important to not be fazed by what is a new era of low growth in both economies.

Trade Minister Steve Ciobo wasn’t deterred, saying that as the economy grows, growth will continue to slow but the emergence of economies of scale within the consumption sector is something those Australian exporters are still able to capitalize on into the future. With the Reserve Bank of Australia predicting that the value of food exports into China will overtake iron ore by 2030, there are some serious financial incentives capitalize on.

As the outlook for the terms of trade continues to put off many investors, it must be said that this economic relationship is something of great opportunity for both nations. As the Australian PM and Trade Minister travelled around the country with a 1000-strong business delegation, you really got the feeling that now, finally Australia had wised up on China – we’d finally secured the agreement with preferential trade, finally secured the confidence of the Chinese government and finally been able to position our economy at home to meet the needs of what is an exploding Chinese middle class.

Whilst there are enormous opportunities and milestones in this trading relationship to look forward to, key sticking points over defence, foreign affairs and general business culture remain. How Australia deals with these differences both at home and abroad will be absolutely vital if we want to sustain what is a game-changing trading relationship. written by Jackson Barton QUTEFS Publications Director This article is an opinion piece and does not represent the views of the QUT Economics and Finance Society, its corporate partners or QUT. Review | May 2016 | 18

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LEADERSHIP TRACK Catherine Sullivan CPA

When it came to choosing an industry to work in, for QUT Business School accounting graduate Catherine Sullivan CPA the choice was easy: it had to be mining.

Most of Catherine’s family members work in Australia’s mining industry, so when a graduate position was advertised at Thiess – a construction, mining and services company based in Brisbane – she knew she had to apply.

“I grew up in Mount Isa, a small mining town in the middle of Queensland. A lot of my family is involved in mining including my dad, brother and uncle. I have a natural attraction to the industry,” Catherine says.

Catherine has worked in various roles at Thiess and is now Accounting Manager, but the 29-year-old admits that being an accountant wasn’t her first career choice.

She originally wanted to become a scientist but a love of numbers and the promise of better job prospects changed her mind. So she decided to study a Bachelor of Business majoring in Accounting at Queensland University of Technology.

“I chose accounting because I love working with numbers and I was pretty good at maths at school. The diversity in the types of jobs available in different industries was also very appealing,” she says.

Catherine has recently received the CPA designation and says The CPA Program, along with her mentor Mal Edwards, have played important roles in her career progression.

“My mentor for The CPA Program, Mal [Edwards], who my first boss at Thiess, has been extremely helpful to my career. He has always pointed me in the right direction and advised me on what my next step should be, once I got a certain amount of experience.”

Catherine is now focused on completing a Masters of Applied Law at the University of Queensland and says having a master’s degree will open up new doors in the future.

“I’m striving to become a more well-rounded and commercially focused person. As Accounting Manager I’m working with numbers, which is a great experience, but eventually I hope to be a manager of a finance and commercial department.

Catherine Sullivan CPA is an accounting leader to look out for in the future.

Catherine’s tips for finding a good mentor: 1. Put a lot of thought into who would be the best mentor 2. Make sure you can trust and learn from them 3. Ensure they are someone you can communicate openly with 4. It’s a two way street, so put the effort in with your mentor You can read more Leadership Track stories with The Naked CEO at: www.thenakedceo.com

Review | May 2016 | 20

TRAVELS IN CHINA written by Liam Dillion

Featured in our first edition, Liam Dil- Acclimatising to China’s vastly different lon continues his feature on studying and culture and settling into my new home working in China. can thus far only be described as a fantastic learning experience. ExhilaratAround ten months ago while having ing, exciting, demanding, stressful and dinner at a sushi restaurant, I made the awe-inspiring are all adjectives which decision on a whim to go on exchange aptly describe how my experience of to China. moving to China has felt so far.

Not knowing what this impulse decision held in store for me, I was elated to be putting a plan in motion to spend time in China after aspiring to visit for so long.

Nearly a year later, I’ve touched down in the renowned city of Hangzhou and have commenced my studies at Zhejiang University.

Arriving in the dead of night at Hangzhou Airport, I had ¥200 in my pocket, bank cards that weren’t cooperating with the local ATMs, a phone incapable of contacting anyone without Wi-Fi, and a meagre vocabulary at my disposal.

After a lengthy cab ride into town spent anxiously glancing at the ever rising fare meter, I arrived at my hostel with ¥25 to spare...

only to find the ’24-hour check in desk’ seemingly closed up shop for the night. Just when I had resigned myself to sleeping on a stone bench by some pot plants outside the establishment, I was rescued by my girlfriend who had woken the innkeeper and in turn let me in. Following this bumpy entry, I had to wonder whether the remainder of my time in China would be so turbulent.

Fortunately, the mishaps of my first night in China haven’t followed me past this disastrous arrival, and I’ve since had the opportunity to make some early reflections. Being in China as a Westerner, one feels a long way from everything familiar. The people are different, the customs alien to outside eyes. The pace of life is accelerated, reflective of a country in motion with aspirations to reach the pinnacle of the international order. But to generalise or make broad statements about China is to err grievously; under each unturned stone lies something new to learn, a new insight into a society rich in history yet transforming more rapidly with each passing day.

Living in one of China’s vast metropolises, one is immersed in a constant cacophony of noise, embedded within a kaleidoscope of over 1.37 billion people, each with a different story to tell. Sirens and car horns blare endlessly, and every street corner has its merchant vying for the attention of all passing by. Visit tourist streets in Hangzhou and you’ll be beckoned to purchase a handful of the city’s famed Dragon Well Tea. In Shanghai, street merchants peddle counterfeit watches and designer bags. Here, the nights come alive in a blaze of neon lights accompanied by a chorus of cuisines sizzling in woks and frying over grills. The air becomes thick with the heady smells of mutton charring on the flame, egg noodles colliding with spring onion and spice, and ears ring with the sound of voices shouting, laughing, and bartering.

MEMBER Article

Regardless, I can take comfort in the knowledge that however I choose to devote my time, every day will bring with it a new opportunity to learn and discover more about this eclectic and fascinating country. written by Liam Dillon QUTEFS Member | Bachelor of Business (International Business)/Bachelor of Laws.

In just over a month, I’ve visited the glass waters of Hangzhou’s West Lake and witnessed the monolithic spires of Shanghai’s Pudong district. I’ve travelled to tea villages in valleys underneath mountains ensconced in thick forestry and shrouded in mist, and climbed the winding stairs of ancient pagodas and temples. Despite this, it’s easy to feel that I’ve barely scratched the surface of what this dynamic country has to offer. With close to five months remaining in my stay, the clock is ticking, and the dilemma I face is deciding how best to make use of the time I have left.

Review | May 2016 | 22

MONETARY ABUSE by The Spear

Auctioneer - “It’s just money people, the banks print it down the road every day!”

The Spear recently heard an auctioneer use the above line to try and elicit more bids from a gathered crowd. When The Spear first heard it, he thought it a cheap gimmick - a play at people’s irrationality and an appeal to emotion. But the more The Spear thinks about it, the more he comes to believe that for all intents and purposes, the auctioneer was right.

Money, once a gold-backed standard, has been used and abused so much in recent times that one can see how buying into the perverse logic of maximising debt-accumulation for hard asset purchases becomes not so much a matter of choice, but a matter of necessity.

As weak individuals held captive by our monetary system, sitting out the game is not an option.

Do you seriously believe that this far down the rabbit hole of Zero rates, Negative rates, Quantitative Easing, Currency Wars, Bailouts, Corporate Bond Purchases, Stock market intervention and the like, that the governments of the world will sit idly by and let their economies go bust without playing out the game Monetary Abuse to the very end?

One need only look to the 2014 budget to see where attempts at even moderate fiscal restraint and the reversal of debt-accumulation get you these days: a oneway ticket on the Siberian express (just ask Tony). The people want MOAR, so MOAR is what they shall get.

Something for nothing is the motto of the day.

Japan and pockets of Europe are nearing what The Spear would refer to as the ‘end-game’ of Monetary Abuse.

Policies such as Negative Rates aren’t even having the desired consequences, such as a weaker currency. The aura of infallibility surrounding the masters of the monetary presses, the reserve bankers, is waning. It seems that the Neo-Keynesian model of injecting money with crack to keep it hustling is beginning to break.

After just one rate rise in Dec 15 by the Fed, the markets went into meltdown in early 2016 until the doves were force-bred, released and made to do laps around the trading rooms of the world. In an era of forward-guidance, where the words of central bankers and their perceived motives can move markets far more than actions, chairwoman Yellen seems to have thrown in the towel on rate normalisation. The markets want MOAR, so MOAR is what they shall get. Something for nothing is the order of the day.

There’s lies, damned lies and statistics. Bastardised inflation measures ignore the reality of rapid asset price appreciation, and the incentive to design inflation measures to show minimal inflation is significant. How better to reduce the real burden of unsustainable government benefits which are pegged to CPI indexes? Let the silent, unmeasured inflation do its work without losing a single vote.

The SPEAR www.spearbook.blogspot.com.au

Unrewarded, nay, even punished for saving. Shrinking government support in real terms (unless perhaps you happen to be working as part of the protected sect of civil servants, with your ring-fenced Future Fund just to make sure that YOUR benefits can be paid in full). Your investment-property owning elected politicians well and truly captured by the system. A global environment of competitive money-printing. How to prevent one’s wealth from being abrogated by the funny-money beast?

You borrow. You borrow to the hilt, because that’s all you can do. You buy your assets and vote for MOAR, because that is the only way you will never have to reap what you sow: just like the rest of them. Because something doesn’t come for nothing, why should you continue paying for the excesses of others?

Of course none of this ends well. You hope the inevitable depression or revolution doesn’t come in your time, but eventually it will. Once the carcass of the funny money can be jolted with electricity and made to dance no more, the inequity becomes too hard to hide. How does one buy votes once money has been murdered?

But before that day comes, there’s a lot of Helicopter Money and other zany schemes to look forward to.

Don’t blame money. Don’t blame those who try to make it. Blame those at the top who abused it in the quest for power and left us in this seemingly inescapable situation. It is they who force the hands of individuals to do what they would otherwise not.

Something for nothing? Sounds like a vote-winner to The Spear. musings by The Spear

All of this leaves the man and woman on the street in a pickle of a situation.

Review | May 2016 | 24

A CHAT WITH a video interview series produced by Jackson Barton Kate Morris Mitchell Goodall

A casual video series, ‘A Chat With’ looks to cut through the noise and provide a stripped-back conversation about people and issues.

In this installment we chat to Rebecca Weinder from EY about life at the firm and ways students can get involved during and after their studies.

Want a chance to win a double-pass to BSX16?

Simply upload a photo to Instagram using the EFS Black Card with the hashtag #EFSBlackCard. Tag @QUTEFS and follow us to see if you’re the winner!

T&C’s The winner will be announced on June 20 2016 via Instagram. The winner will receive two tickets to the EFS Beer Stock Exchange 2016. All entrants into the competition give the QUT Economics & Finance Society permission to repost the submission on any/all of EFS’s Social Media outlets.

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Student Flights 10% off trips MJ BALE 20% off full priced items UBER first ride free with the code QUTEFS16 more deals and discounts available at qutefs.org

Event in Focus

O-WEEK 2016 As usual, O-Week for QUTEFS was an absolutely fantastic time for the club.

We signed up over 450 new members to the club, and managed to have a strong EFS presence on all four days, promoting the strong brand that we have and all of the benefits associated with joining the most awarded business society on campus.

What followed O-Week was market week, where many of the QUT Business Partners come onto campus, giving students the opportunity to learn more about their respective fields - QUTEFS was proud to host Sophie Highman and the PricewaterhouseCoopers campus recruitment team to talk about exciting student opportunities within the firm.

into the economics and finance major, to not only provide them insight into what QUTEFS does, but also engage in an inclusive discussion space about the broader fields of economics and finance.

Thanks to Administration Officer Angela Fletcher, Head of School Pascalis Raimondos, and Subject Area Coordinators for Economics and Finance Radhika Lahiri and Mark Doolan for having us along at their O-Week lecture.

It was a really fantastic way of engaging with new students and prospective members of EFS.

If you’d like to hear more about what PwC had to say during O-Week head along to the EFS YouTube channel and check out our video interview with Sophie.

O-Week also gave us the opportunity to talk to new students coming into the Faculty of Economics and Finance. It was great for our team to be able to engage with faculty members and the first-year entrants

Review | May 2016 | 27

PRESENTS THE CONFERENCE FOR

THE FUTURE OF FEMINISM IN AUSTRALIA PANEL • LGBTI+ WORKSHOP • MEN IN FEMINISM • ECO FEMINISM • ZINE WORKSHOP • ARTIST PERFORMANCES •

JULY 30TH BRISBANE Tickets available at onewomanproject.org

BUZZWORD OR TECH TREND? Understanding Industry Language to Drive Conversation written by Jack Nolan

As the global technology industry continues to grow, so too does the amount of jargon used to describe it. A lack of technical knowledge from journalists and self-proclaimed gurus has led to a poor understanding of what all the descriptors actually mean.

Law/Finance student, Jack Nolan, takes a look at the confusing myriad of buzzwords used to describe and discuss the technology industry.

Most people do not know how to describe or discuss this era’s group of high-value tech companies beyond words like ‘start-up’, ‘cloud’, and ‘disruptive’. A decade ago, most people didn’t understand the language but they also didn’t overly need to.

This is no longer the case. People use cloud storage for music, the sharing economy for holidays, and the internet of things in their homes. Tech illiteracy is no longer acceptable.

Around the world, whether it be at startup weekends, hackathons, or meetings, people discuss and group companies like AirBnB, Tesla, and Facebook together. In most cases, little thought appears to go into which random, exciting, and interesting tech companies are mentioned. The focus is on meaningless descriptors such as innovation, disruption, and growth.

While words like these do regularly apply to the companies mentioned above, they shouldn’t be used. Overly generalist language ignores the fundamental basis of what defines these organisations, and what has driven their success.

Take for example Uber, a company who are inevitably mentioned in any discussion regarding startups and disruptive innovation. Most people would be surprised to learn that by definition, Uber is not a disruptor. According to the academic who coined the term, and a wide range of other strategy experts, Uber is simply a wildly successful late market entrant.

Describing Uber and its success should instead involve a discussion around the sharing economy, OnDemand marketing campaigns, and localised yet scalable expansion. While many would fairly argue that these are also buzzwords, they are undeniably accurate and are far more descriptive. As an example, the sharing economy refers to the practice of peer-to-peer based sharing of goods and services. Using AirBnB, people share their homes, and using Uber (more specifically UberPool), people share their rides.

This is just one case of a regularly discussed company who are misunderstood. The same can be seen in almost any recent tech unicorn you can name. Spotify for example, is cloud-based, and one of the pioneers of B2C Software as a Service (SaaS). Magic Leap is already shaking up virtual reality with 3D generated superimposed images. Tesla isn’t just building cars, it’s racing Google to develop a machine-learning platform that will be able to drive on its own.

ALUMNI ARTICLE

When Spotify and Netflix each launched, the technology of P2P networks and streaming on demand had been around for years. It was the clean interfaces and strong value proposition which drove growth. Conversely, at Tesla and SpaceX, the value is derived from new technology which allows for new ways to do old things – the business strategy is almost an afterthought. By actually considering what makes a company succeed as a starting point, choosing the right words to describe it becomes easy. written by Jack Nolan Jack Nolan was a former EFS executive member and served as Finance and Legal Officer in 2014.

The point is that you can’t generalise tech companies.

Collectively the tech industry market cap for public companies stands at an estimated 10.7 trillion dollars. Companies from the post-dotcom era account for almost 20% of that already. Current growth rates and forecasts are showing that these figures will only get larger. With virtual reality, machine learning, and so many other technological advancements playing an ever greater role in day to day life, being tech illiterate simply isn’t an option.

The key to understanding and spotting the difference between buzzword fluff and accurate descriptors lies in understanding the company. Consider whether the company is innovative because of its technology, or because of its strategy.

Review | May 2016 | 32

Starting out As A Student Investor written by Zac Brown

Passionate finance student, and EFS Events and Projects Director Zac Brown gives his thoughts, ideas and opinions about starting out in investments. A really interesting take.

As a student who aspires to work within the financial industry, I’ve often wondered; what can I do now, to give myself a taste of what goes on in the big smoke?

As young people trying to learn about the industry, there’s a wealth of guides and apps that simplify the market and apparently don’t charge fees. Quickly, you’ll realise that a lot of it, is just garbage.

Pyramid schemes and hidden fees are pretty commonplace.

After a quick browse of consumer reviews and ratings, you’ll find out how many false promises there are. I did some research and some exploring into what actually works and can be largely trusted. Unsurprisingly, if you actually want to make some profit with some of these, it’ll come down to your own ability or input.

We’ve all watched Wolf of Wall Street.

FEATURE ARTICLE

Some people sign up to their finance or commerce degree because they don’t realise what a glorification it is.

Yes, most of it probably happened, but realistically how often do you think it actually occurs? More importantly, how do you get a more wholesome idea of how these traders actually work and make their profits? There’s a method out there called CFD trading.

Just to be clear, don’t sign up to this stuff expecting to reap profits, put this on your resume to compensate for a poor GPA or say you’re some veteran investor.

CFD trading is an alternative learning experience to needing huge sums of cash to start up proper investing in stocks and bonds etc. I set up my CFD account with IG with $500, and lost $100 in about 45 minutes. I lost it on sprint markets, and learnt something; if something seems like an easy cash grab, it probably is.

Since then I’ve switched to Micro-contracts, these allow me to buy into indices measured by a $1 value. This way my money lasts and I can apply fundamental analysis and get a decent idea of how I should be approaching the market. I recommend signing up to this outlet as a form of learning experience. Most legitimate high-income earners emphasize the importance of learning things in the early stages of your life/career and let money come later.

Through CFD trading I learnt how volatile markets are, and what factors do and don’t matter to different markets. That’s experience that a university classroom can’t give. When setting up your account, do your research and only enter with money that you could otherwise throw away.

The second avenue is a little more passive, and you probably wont get as much experience out of it. It’s a little app called: Acorns. It’s legitimate and been reviewed by many trusted sources such as the Australian Financial Review. I’ve been using it for several months now, and I’m very happy with the result. It’s an alternative to the piggy bank in many ways. Money you spend on your card or affiliated accounts, are rounded up to a certain value (to the dollar for example) and the difference is put away into a portfolio.

You barely notice the monetary extraction, and all of the sudden you’ve got a little stash of money hidden away.

However, just like the CFD trading this isn’t a get rich quick scheme. How much money and profit you get from it, will depend entirely on how much you put in.

The app itself offers several portfolios, depending on the risk you are willing to take on. Monthly deposits and projections are also handy options so you can evaluate how much you want to be earning. Overall Acorns is a handy app for any one just wanting to save money, not necessarily finance students.

So that’s my advice on two ways that anyone can get involved with some practical experience on financial matters.

Outlets like the Australian Financial Review and Wall Street Journal both offer good quality content, and you can access many of their articles through University online libraries. Google QUT AFR and you’ll find that after some navigation, QUT offers many of their articles online. If you want something a little easier to read, hit up Bloomberg. Their articles are a little brief and can be a little less raw, but they’re a good starting platform and offer fantastic chart analysis.

I’d like to finish off with a little caveat emptor (consumer beware). I’m still a student. Above is my opinion and recommendations to avoid you making the mistakes and wasting the time I did in using the wrong platforms, reading irrelevant content and going about the wrong method when it came to how I could get some form of experience. As I mentioned, this isn’t stuff you can brag about in an interview, but it’s certainly a conversation topic with professionals and a point in the right direction. written by Zac Brown Review | May 2016 | 34

YOUR TAKE

Hearing from the Winner of the 2016 EFS Essay Competition written by Charlotte Davies-Clark

This year we introduced the first ever EFS essay writing competition. This gave our members the chance to voice their own take on the world of economics and finance and have the opportunity to be featured in the QUTEFS Review.

We congratulate our winner Charlotte Davies-Clark who has been an active member of EFS for many years. Charlotte joins BDO next year as a graduate and we wish her all the best. This competition was generously supported by our partners at The Typewriter who awarded Charlotte with $200 for her efforts. Again, we thank The Typewriter for their continued support of EFS. Charlotte writes: Australia’s fiscal response to the GFC was to implement a two-stage fiscal stimulus package of an estimated $52 billion.

This package at the time and since has caused great controversy, with many pundits and stakeholders both criticizing and praising the effectiveness of the package overall.

The policy aims aligned with Keynesian economic theory to boost aggregate demand through government spending, theoretically lifting the economy out of financial distress. According to the budget statement of 2008-2009, the “most effective thing that can be done to support employment is to avoid a prolonged slowdown in demand”, then Treasurer Wayne Swan, on advice of Treasury Secretary Ken Henry hence adopted this Keynesian approach. Both the positive and negative aftermath of the stimulus is still present in Australia’s economy today, which has prompted discussions held in hindsight in regards to the short and long run impacts.

It is often noted that Australia fared well following the Global Financial Crisis (GFC) and many credit Australia’s stability to the rapid and aggressive fiscal policy conducted by the Rudd government, on the advice of The Treasury. Considering the GDP equation, the shortening gap between investment and savings at the time among other factors, the government was of the belief that intervention was imperative to keep the economy afloat.

The cash handouts were the most liquid form of money into the economy in the attempt to rapidly boost household demand, and the first homebuyer assistance supported demand in the housing sector. This emergency liquidity measure was prompted by Dr Ken Henry quoting to Mr Rudd “Go early, go hard, go households”, in an attempt to shore up consumption expenditure and save jobs.

One study conducted by Dr Andrew Leigh, reported that 40% recipients spent the cash, which when applied with the multiplier the effect led to a positive impact on consumption, and in turn investment.

The employment schemes in that of education investments and cash injections contributed to the rise consumer confidence into early 2010. This backed the positive impacts in other areas of the aggregate demand equation, as Keynes theorized that it was consumer confidence and expectations that drives productivity.

Unemployment in Australia was reported by the Treasury to be a significantly below the OECD average from 2009-2011, implying that the expenditure was successful in achieving increased aggregate demand through lower unemployment.

The World Bank indicated GDP grew rapidly between 2009/10, and has been relatively stable continuing since, demonstrating that the spending did in fact result in the Keynes multiplier effect for improved economic demand.

Supporters of Ricardo’s Equivalence Theory would agree with data from the Reserve Bank of Australia, detailing a steep increase in household saving post GFC – regardless of government and central bank actions. This is contradictory of the aim of the stimulus, which intended to increase consumption instead of saving. It can be assumed that as the economic shocks continued, many consumers would have been warded off spending accumulated savings in uncertain economic conditions.

Counter arguments to the stimulus success propose that the scale of the stimulus was unnecessary and excessive; as China’s demand for commodities was sustained over this time and hence was implied as the true stabilizer for Australia’s economy, whereby most of the consumption demand from regional Asian partners as well as relatively high minerals prices contributed greatly to sustained GDP figures.

YOUR TAKE

Despite Federal Budget claims that the education infrastructure program was designed to “help build Australia’s future prosperity and support jobs and growth”, when looking into the longer-term, evidence suggests that this was not achieved. Graduate employment has been declining since 2008, with one study reporting that over one-third (34.9 per cent) of employers state ‘economic and budget conditions’ as the key issues which affected the total number of graduates they recruited in 2013. This supports arguments that the allocation of resources in the package could have been redistributed for a more effective policy.

Unforeseen externalities of fiscal actions can be negative or positive, and are often unavoidable. In the short run, it would seem that the Keynesian stimulus package of 2008-2009 achieved the aims of increasing demand and keeping Australia out of recession – whereby credit continued to flow, consumers spent money over the Christmas period, and arguably unemployment effects were minimised.

Whilst the “Pink Batts” home installations appeared to adhere to Keynesian theory and produced positive externalities for social welfare, safety implementations of the scheme were fatally over-looked.

The rush to establish a successful economy boost risked the lives of four young people that may have been avoided if more time had been taken to develop policy, procedures and training.

The counter argument to this is that the urgency of the financial distress in 2009 may not have necessarily allowed for longer planning of schemes. continued over page...

Review | May 2016 | 36

It can be difficult to quantitatively measure the effectiveness of some of the policy expenditure, for example, how improved educational infrastructure effected the development of children.

YOUR TAKE

The lack of information could facilitate the argument that it may not have been a valuable investment for the prosperity of the economy.

These social externalities are generally speaking quite internalized and highly intrinsic – not only are monetary values difficult to determine, but the positive effects may only be realized well into the future.

The large budget deficit has now left Australia vulnerable to fast approaching Federal issues such as the ageing population and the desperate need for disability reforms with little resources to support them, according to one study by the Productivity Commission.

Hindsight allows us to observe the fundamental flaws in the fiscal package of 2008-09 that have certainly counteracted some the economic benefit from a Keynesian perspective.

It seems clear that there were other areas for development that could have improved both short term and long-term economic conditions within Australia.

Despite this, there is still significant evidence that the stimulus (alongside other factors) supported unemployment rates, GDP and consumer confidence in Australia throughout the GFC and contributed to the avoidance of an Australian recession, at a time where every other major economy in the world fell into serious economic downturn. written by Charlotte Davies-Clark

Review | May 2016 | 37

BEER STOCK EXCHANGE 2016

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GET YOUR TICKETS HERE Want a chance to win a double-pass to BSX16?

Simply share this video with the hashtag #GetMeToBSX16 to WIN! Winners annouced 20 June 2016 via Facebook.

ABENOMICS written by Joshua Evans and Jackson Barton

Japanese Prime Minister Shinzo Abe has had a relatively pain free time in office, since assuming the Prime Ministership in 2012.

His coalition government has worked together well, and his Liberal Democratic Party has embarked on some significant economic and constitutional reforms in order to restart the ailing Japanese economic machine. However, Abe is popular, having been re-elected in a snap election called immediately after the 2014 Brisbane G20 Summit. Abe has the real potential to be in power until 2020, which would make him Japan’s longest serving Prime Minister.

Electoral success, however, hasn’t necessarily translated into economic success. The famous Abenomics agenda, in an apparent acknowledgement of Reaganomics, Clintonomics and Rogernomics, focusses on ‘three-arrows’ which include monetary easing, fiscal stimulus and structural government reforms.

The renowned publication, The Economist summarised the programme up as a “mix of reflation, government spending and a clear growth strategy designed to jolt the economy”.

Evidence of heavy monetary easing in Japan is depicted with the introduction of negative interest rates by the central bank as well as their increased participation in money market operations. The reason for this surprise move to negative interest rates was to encourage banks to lend as well as to pursue an inflation target of 2 percent. However, the adoption of these unorthodox rates has held mixed results. The International Monetary Fund (IMF) downgraded its 2016 growth forecast for Japan to just 0.5 per cent, which has indicated that deflation is of serious concern, wage growth is stagnating and has caused the Nikkei index to plunge.

These results have caused many opposition members and even backbenchers of Abe’s LDP to push back against the Abenomics strategy. The conservative members within the LDP have expressed their desire for the Prime Minister to allocate more focus towards Japan’s debt, which is the world’s highest. These members tried to shift the focus of Abenomics to this national problem by legislating a controversial sales tax plan, which pushed the sales tax rate from 5 per cent to 8 per cent.

This plan proved catastrophic, with consumer confidence falling markedly. It was wildly unpopular within the electorate and something which the central bank determined to be the cause of the shift into recession in late 2014, and in turn, causing a spark election after the G20 Brisbane Summit. Japan’s dive into recession offset much of the Bank of Japan’s progress in terms of monetary easing due to the considerable declines in economic growth, the Yen and the Nikkei index.

These declines occurred as a result of heavy decreases in business and consumer confidence throughout the nation.

As the Bank of Japan continues to delve into negative territory, like with many jurisdictions around the world including most notably Mario Draghi’s struggles within the European Union and more acutely with Australia, with misbehaving currencies, the Yen continues to rise. This has posed a major competitiveness challenge for many of Japan’s successful export markets.

Many within the LDP with reflationary views are calling strongly on Abe to provide further fiscal stimulus in order to try and counteract this, along with even further monetary easing from the Bank of Japan, and further corporate tax cuts to try and alleviate many of the pressures being placed on manufacturers especially. Some are even calling for a further increase in the consumption tax to 10 percent – fortunately for Japan, Abe has recently stated that this would not be considered until 2019.

The IMF has recently been quite critical of Abenomics, saying that to this point, Abe’s administration hasn’t quite nailed the really necessary structural reforms required. Japan’s agriculture policy framework has long been inefficient, where protectionary policy and government subsidies have been “required” by producers in order to meet domestic demand and export requirements.

FEATURE ARTICLE

Although, it is hoped that the Trans-Pacific Partnership will alter this entirely.

There are several different aspects to Abe’s structural government reform strategy. Firstly, Abe is advocating for more women in the workforce through the adoption of comprehensive childcare support policy. Further, Abe plans to revamp Japanese innovation, IT and immigration policies to attract high-level personnel internationally, promote economic partnerships and improve the competitive landscape with other nations. With archaic corporate practices, leadership structures and ageing CEO’s, it must be said that Japan’s labour force needs to be made much more flexible, especially when taking into account a rapidly ageing population. A major challenge for Abe is the way in which Japanese citizens react to change, particularly structural, even more so with regards to the labour force. A key tactic in these reforms is cutting corporate tax and liberalising the agriculture, energy and health-care industries. However, sentiments around reform are often highly entrenched and can be very difficult to overcome.

It must be said that the Abenomics policy is something which needs further tweaking and improvement. Japanese economic recovery has proven very, very difficult for Abe’s administration, and whilst fiscal and monetary leavers continue to be pulled hard, results have been mixed. All in all, Abe accepts that although there have been speed bumps, there has been no change in the trend towards economic recovery. However, reviving the Japanese economy will continue to prove challenging due to the Japanese consumer’s resistance to change. written by Joshua Evans and Jackson Barton Review | May 2016 | 39

Event in Focus

APPLICATION INSIGHT EVENING Earlier this semester, EFS hosted a brand new professional development event in the ‘Application Insight Evening’.

A chance for members to get up close and personal with some of the biggest firms in economics and finance and hear valuable tips and tricks for navigating application season from HR representatives and graduating members.

The event kicked off with some light networking, and then transitioned into a panel discussion followed by some insightful questions from the audience.

As always, EFS ensures that all members are presented with some of the best professional networking opportunities on campus. We were thrilled to be invited up to EY, headed by Rebecca Weidner, EY Campus Recruiter, as well as QUT Careers and Employment, Daniel Chin from CAANZ, EFS members and soonto-be graduates who have landed opportunities at the Big Four accounting firms, along with our friends and partners at Cabal & Co, one of Brisbane’s leading providers of bespoke suiting and clothing.

It was also a pleasure to hear from Patrick Bowmaker of PwC, Damon McKeon of KPMG, and Andjela Macura of EY. These former members and executives of EFS gave their insights into how students can best transition from University life into the workforce and spoke of their own experiences in undertaking applications, assessment centres and interviews.

Our fantastic panellists discussed how members can best stand out from the crowd in drafting resumes, attending interviews and making a great first impression.

We thank EY for making this event possible.

It was a really fantastic night where members were able to learn more about the recruitment process as well as the Big 4 more specifically.

Damon McKeon and Patrick Bowmaker: KPMG and PwC

Daniel Chin and CAANZ and EY

Rebecca Weidner:

Review | May 2016 | 40

A commitment to diversity and inclusiveness Talk to anyone at EY and they’ll tell you it’s a rewarding place to work in so many ways.

We attract high-performing individuals from different backgrounds and experiences who — like you — bring a unique point of view and business skills. Diversity of thought is what drives EY’s innovative approach to our people and our clients’ ever changing needs.

EY recognised for LGBTI inclusion Creating a work environment where lesbian, gay, bisexual, transgender and intersex (LGBTI) professionals can be their authentic selves at work is a core element of our diversity and inclusiveness commitment. It’s where everyone’s opinion is listened to and valued. And that means you can be yourself at EY. EY Australia has been ranked 12th in the 2015 Top 20 at the annual Australian Workplace Equality Index (AWEI) awards — a special event recognising workplace support for LGBTI people.

© 2015 Ernst & Young, Australia. All Rights Reserved.

Unity Network

Marriage Equality Pledge

Our EY national network group, called Unity, is for LGBTI people and their straight allies. This group aims to create a sustainable, inclusive culture where LGBTI individuals at EY can bring their whole selves to work. Support is provided by

On 26 May 2015, Oceania CEO and Regional Managing Partner Tony Johnson signed the Marriage Equality Pledge on behalf of EY Australia. This pledge is run by the Australian Marriage Equality organisation — a national body working for equal marriage through lobbying, advocacy and education.

• Mentorship, with internal and external mentoring opportunities • Social activities • Participation in the Sydney Mardi Gras Parade with Pride in Diversity • Sponsorship of the Bingham Rugby World Cup • Connection to Global EY LGBTI networks and communities

Liability limited by a scheme approved under Professional Standards Legislation.

APAC No. AU00002272 ED NONE S1528008

Tony says, “In signing this pledge, EY Australia proudly recognises the rights of lesbian, gay, bisexual, transgender and intersex people to experience the same freedoms as others, including with whom they choose to make a commitment of love and marriage.”

puBgolF 2016

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Interesting & challenging work experiences

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Sponsors 2016

QUT Economics and Finance Society has access to many industry networks and professional firms right across Australia.

It is our job, and mission as a society to give our members as many opportunities as possible to bridge the gap between University and post-graduate employment. We cannot acheive this mission without the generous support of our corporate partners. They offer their time, resources, connections and goodwill to give our members the best possible University experience. For that, we thank them. To find out more about a particular sponsor, click the logos below.

Platinum Sponsors

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For more information about how QUTEFS can help build your Unversity brand, please contact our corporate partners team.

President Mitchell Goodall Phone: +61 435 776 845 | president@qutefs.org

Corporate Partner Relations Sam Elderfield Phone: +61 450 924 662 | s.elderfield@qutefs.org

Vice President Ryan Nolan Phone: 0481 251 114 | vicepresident@qutefs.org

Corporate Partner Relations Harrison Bell Phone: +61 438 885 264 | h.bell@qutefs.org Review | May 2016 | 51

Contact the QUTEFS Executive Mitchell Goodall President president@qutefs.org

Zachary Brown Director (Events & Projects) events@qutefs.org

Ryan Nolan Vice-President vicepresident@qutefs.org

Joshua Evans Events and Projects Officer events@qutefs.org

Cody Shield Treasurer treasurer@qutefs.org

Nicholas McCray Events and Projects Officer events@qutefs.org

Jeseyka Kelly O’Brien Secretary secretary@qutefs.org

Chizzie Phiri Director (Design) design@qutefs.org

Sam Elderfield Corporate Partner Relations s.elderfield@qutefs.org

Jackson Barton Director (Publications) publications@qutefs.org

Harrison Bell Corporate Partner Relations h.bell@qutefs.org

Andjela Macura Communications and Marketing Officer marketing@qutefs.org

Willow O’Hara Director (IT) it@qutefs.org

Kate Morris Design Officer designassist@qutefs.org

Sophie-Louise Rae Director (Marketing) marketing@qutefs.org