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Cuffelinks Newsletter Edition 246

  •   30 March 2018
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It's not just cricket where it's just not cricket

Ethics and culture dominated the hearings at the Financial Services Royal Commission, and the cameras recorded evidence of surprising misconduct and negligence. And so it was with the Australian cricket team in South Africa. The cameras caught the illegal tampering with the ball, and the confessions by Steve Smith and Cameron Bancroft were as cringeworthy as those of the bank executives.

The full Cricket Australia media release on the findings against the players is here.  

It's not difficult to draw comparisons between cricket and the banks. CBA (sponsor of cricket) is undergoing an executive purge, with the departure of another three c-suite members announced this week and more to come. The same has now happened in the c (cricket)-suite. The umpire, Commissioner Kenneth Hayne, is investigating incidents which will lead to major changes, as they have in cricket. The hubris of senior executives and cricketers put one goal (profit or winning) above all others, blurring the now-infamous 'line' of responsibility. All are paid millions in highly-privileged positions. The boards of cricket and banks talk of the need to rebuild trust and pride.

The decisions taken by both parties are equally unpleasant, and like Australia's sledging, the behaviour has been going on for too long. It's almost 20 years since the publication of Naked Among Cannibals on bank culture, and a major review of cricket was undertaken in 2011 by Don Argus, ironically a former CEO of National Bank. 

Vinay Kolhatkar looks at crossing the imaginary line in cricket and business, while Ashley Owen finds a curious statistic in the history of Australia versus South Africa.
 

David Warner sledges angrily and the team thinks it's a great laugh. He developed the ball-tampering plan and has been banned from team leadership positions forever. Source: AP. 

Franking credit 'pensioner' exemption

Feedback on the impact on 'pensioners' has forced a Labor policy rethink, but they use a confusing terminology. Someone drawing a pension from superannuation is not a 'pensioner' unless they are also on an age or disability pension. Jon Kalkman argues the real targets are zero taxpayers and the incentives increasingly encourage people not to self-fund their retirement. Geoff Walker believes the partisan debate cannot be won on logic alone. John Maroney, CEO of the SMSF Association, said:

"In the future, there will be no protection for SMSF retirees who may need part government support to supplement their superannuation income, creating an unfair, two-tiered and complex treatment of SMSF members ... (they) are worse off than people with less savings but refundable franking credits and a part pension." 

Investment markets  

Aaron Minney explains how loss aversion influences retirement investments, while Ilan Israelstam updates the data on the growth and use of Australian ETFs.  

Even for investors with little interest in bonds, these markets offer warnings, and Roger Montgomery sees early signs of stress. Charlie Jamieson expects the tailwind from decades of falling rates to become a headwind, especially for lower quality assets.

This week's White Paper from Colonial First State Global Asset Management looks at how 'value' and 'growth' managers have performed, and the differences are often huge in the same asset classes.

Graham Hand, Managing Editor

 

Edition 246 | 30 Mar 2018 | Editorial | Newsletter

 


 

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