Charter of Contractual Fairness
On 1 July we launched our Charter of Contractual Fairness

We have heavily drawn the principles of contract fairness from the new consumer unfair contract protections laws. If it's fair for consumers, it's fair for small business people - the self-employed and independent contractors.

We are currently writing to Australian corporations asking them to commit to contract fairness in their dealings with small business people.
Our Campaigning
ICA's principal commitment is to lobby/advocate on small business issues. Here are our current campaigns:
Unfair Contract Protections
ICA says "extend unfair contract protections for consumers to small business". Our overview is here.
Stop Sham Contracts
ICA supports the prevention of sham contracts. We monitor what's happening with them. Our summary links are here.
Stop Phoenix Companies
Here's our commentary and some further links on the Phoenix problem.
Defend Contractor Tax
ICA has long fought to protect fair contractor tax laws.
Election Face-off 2010
The federal election was held on on 21 August 2010. ICA was active in assessing the policies of the ALP and the Coalition. Here's our comparative summary of the parties' policies just before the election.
Australian military aircraft (JSF). Bad deal?
Australia's decision to buy the Joint Strike Fighter (JSF) as the backbone of our air defence is under attack. Is this a bad procurement and contract management stuff-up? We've summarised the arguments and included some useful videos.

We Oppose Workplace Bullying
ICA opposes attempts by construction unions to bully their way on to work sites. Here are the issues from 2010:
Overview
Union violence on Westgate
Unions make threats

Laughing lawyers
You'll be amazed by the 'slips' that some lawyers make in court.
Watching Global Economies
Watching the USA
The US economy appears to be in recession. At the very least, we're getting very mixed signals about what's happening. Click here for a rundown on some of the best links we've found.
Watching China
China has just passed Japan as the world's second largest economy. It could become the largest global economy by 2030. We're maintaining a watching brief on the Chinese economy here.
Watching Goldman Sachs
Rolling Stone magazine has blown the lid on Goldman Sachs:
Article 1 [July 2009]
Article 2 [April 2010]
Article 3 [May 2010]
Central Banks on Debt
Since mid-May, central banks have been worried about sovereign debt. Click here for a list of useful links and summaries.
What the Pessimists said (January 2010)
We've brought together some pessimistic views about economics and likely economic trends in 2010:
US toxic loans
'US as sick as Greece'
Ken Phillips's summary
An 'IMF' perspective
Predicting 2010
Government debt a giant ponzi scheme?


Click to enlarge.

Ken Phillips on the debt equation

Industry/Retail super funds must come out
The Cooper Review into superannuation says the big funds are not disclosing enough and must be forced to do so. This is vital. See Chapter 4.

Here's why workers' money is at risk if disclosure is not enforced.
Look after your retirement
The Cooper Review of superannuation says Self Managed Super Funds are good and need little change to existing arrangements. This is welcome. See Chapter 8.

The Report also seems to have stopped the attack against SMSF's.
Understanding "Us": Self-employed People
ICA is committed to quality research to understand self-employed people.

6 July 2010: We released a unique research report made possible by an unusual collaborative effort. The report shatters many preconceived beliefs about 'us'; small and micro-business people. We believe it has global implications.

Main points and commentary
Summary
Full report.

20 July 2010: Here's further research from Flying Solo:
Report Summary; Full report and from Kelly Services: Report. And here's a comparative chart of our own.

Making Super Safe
Summary of the Report

15 April 2010

A ground-breaking report into disclosure levels by industry and retail superannuation funds has been released. The report from the Institute of Public Affairs finds that the funds generally have low levels of disclosure about what they are doing with members' money. This suggests that workers' retirement funds could potentially be at risk. It's an eye-opener of a report!

The full report is here. An explanatory article by Ken Phillips is here.

Here's our summary
Superannuation contributions are compulsory for most Australian workers. The money is paid by your 'employer', but it's your money. You can choose into which fund type your money goes and you have one of three broad choices.

You can put your money into
  • Retail funds that are controlled by large corporations/trusts such as AMP for example
  • Industry funds that are controlled by appointees from unions and employer associations.
  • A Self Managed Super Fund that you control.
The report looks at the retail and industry funds. Combined, there are 233 of these funds controlling $497 billion of workers' retirement money.

The funds are required to comply with accounting and other management standards, but there is no official government auditing to verify the funds' claims about performance.

Private rating agencies 'monitor' and report the funds' performance, but at least one of these rating agencies says that some funds report nothing.

The IPA report says that it should be possible to go into the website of any of these funds and easily find out:
  • where the money is invested,
  • how it is performing relative to similar funds,
  • who gets paid to manage and administer the fund,
  • how much is paid in management fees and other costs, and
  • whether the fund's trustees have any cross-directorships.
The report has looked at some overseas superannuation funds and domestic non-super investment funds and found that this 'benchmark' of disclosure is commonly and freely available.

However
  • None of the 36 sample funds looked at fully meeting the needed disclosure standard.
  • Some funds had quite good disclosure but not to the standard needed.
  • Retail funds tended to have higher disclosure than industry funds.
Industry funds were looked at more closely. This is because they receive privileged financial advantage through the industrial relations system where they dominate (84%) the 'default' arrangements under the modern award system. That is, if a worker does not nominate a super fund to which their money goes, the award requires the money to go to an industry fund in 84% of cases.

The report investigated the structure and controlling systems in the industry fund sector and found a complex web of intertwined corporate and trust structures. They discovered a 'round-robin' of control where one outsourced fund company exercises control over huge amounts of industry super funds. Some industry funds have purchased shares in these outsourced fund management companies, but many of these assets pay no dividends and their return potential is difficult to assess (because of poor disclosure).

This has previously not been fully mapped or understood. Further, the report identifies the twelve most powerful people in superannuation today, who between them have effective control of $188 billion of industry (workers') retirement money.

This is a massive concentration of financial power in the hands of a small number of people and businesses, making them some of the most powerful people and corporates in Australia.

The report says that the low disclosure creates significant problems:
  • Confidence in the super system is put at risk
  • Fund members are uninterested in their fund operation because they cannot easily find out information.
  • If misuse of members' funds were to occur, it would be hard to uncover. The report gives examples of funds' misuse from overseas situations and non-superannuation worker trusts in Australia.
The conclusion is that the policy and regulatory environment for industry and retail superannuation funds is inadequate and that strict disclosure requirements should be enforced under law. The report details a standard reporting format that should be required of the funds.

ICA general comment
ICA has been concerned for some time about the attacks being made against Self Managed Super Funds. Our observations have been that the attacks have mainly come from the industry and retail superannuation sectors. We are extremely suspicious that the attacks are a campaign to increase the regulatory burdens on SMSFs, to push up the cost and difficulty of running SMSFs and to push money into retail and industry funds. Our suspicions have been sparked by alerts from people who know this area well.

This report by the IPA brings a new and valuable perspective to the debate. The poor disclosure levels among industry and retail funds raise important concerns because it's other people controlling workers' money.

People with SMSFs control their own money. This is a much safer model for retirement, particularly given the poor disclosure in the industry and retail funds sectors.

We hope that the current review into superannuation comes up with practical and sensible proposals to improve the operation of SMSFs. For workers who don't control their superannuation fund, we hope the review calls for mandated disclosure and that the Australian parliament moves in this direction.