Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 283

Cuffelinks Newsletter Edition 283

  •   7 December 2018
  •      
  •   

The Royal Commission's two defining moments

In his final summary after an exhausting 68 days of public hearings, 134 witnesses and 6,500 exhibits, Commissioner Kenneth Hayne identified one phrase, six words long - "Can I show you a document?" - that had entered the vocabulary over the course of the Commission. It was usually followed by Rowena Orr or Michael Hodge demonstrating an embarrassing mistake.

I consider the two most impactful words of the Commission were dissembling and criminal.

It was Michael Hodge who accused CBA's Marianne Perkovic of dissembling. In Marianne's defence, I thought she had a right to provide context, as most answers are not black or white. Dissembling means 'to conceal or disguise one's true beliefs'. Kenneth Hayne issued a warning:

"We will get along much more quickly and efficiently and if I may put it quite bluntly, it will be safer for you, if you attend to counsel's questions. If you need to stop and think about your answer, take your time." 

Safer for you! What did he mean by that serious threat?

Michael Hodge said: "Is the reason why you are dissembling in the way you are dissembling because you are trying to pre-emptively explain why it took more than two years to notify ASIC of this breach?"

Kenneth Hayne later added: "Ms Perkovic, I do not regard that as answering counsel's question. Please ask the question again. I want you to listen to it and I want you to answer it as directly as you can."

Little wonder Marianne completed most of her subsequent evidence with one-word answers. This was in April 2018, near the start of the Commission, and it set the rules. It was a warning to everyone, and the QCs hired by banks stepped up their witness training intensity.

Giving evidence was probably the most intimidating experience in the careers of most of the witnesses. Put this to your 'inverted bucket list' of things you never want to face ...

 


Similarly, a collective shiver hit witnesses when Hayne asked Nicole Smith, the NULIS/MLC trustee, if she had ever contemplated that:

" ... taking money to which there was no entitlement raised a question of criminal law?"

It was one thing to give evidence that might result in a corporate fine, but Hayne was suggesting financial services staff might go to jail. The Royal Commission had become dangerous.

Garry Mackrell's opinion on what went wrong at CBA has already received almost 10,000 views, and it's well worth reading if you missed it.

Many important articles this week 

Would you change your portfolio if you could take a genuinely long-term view and ignore the daily market noise? Chris Cuffe explains how managing a charitable portfolio gives him freedom to look to the future and generate returns to build the money for charitable giving.

Phil Graham shows how balanced fund performance comparisons are flawed by using short time periods and different asset allocations. Given the Productivity Commission recommendation to push default superannuation contributions into a 'best in show' shortlist of funds, these comparisons may have major policy and business implications.

Dr Rodney Brown lectures on SMSFs and financial planning, and he describes a technique for SMSF trustees to continue to utilise their franking credits under Labor's proposal. It hangs on the entire SMSF being treated as a single tax entity, and the ability of some trustees to emulate what the large funds can do in co-mingling pension and accumulation money.

The latest report on commercial property in Asia Pac has just issued, and Adrian Harringtonchecks how Australian cities are faring. In another sector, John O'Brien says we tend to overlook the enduring quality in consumer staples, worth a look in this highly volatile market.

Then Phillip Richards reminds us of the value of appointing an enduring Power of Attorney, perhaps something to fix up over the coming holidays, and Aaron Binstead warns of the impact of sequencing risk on retirement outcomes. 

Two big news items in the last week - the students going on strike to protest against inaction on climate change, and David Attenborough telling leaders at a UN summit that "we are facing a man-made disaster of a global scale" - make Colonial First State Global Asset Management's White Paper on climate change highly topical.

Welcome to two new sponsors for 2019, OpenInvest and Regal Funds Management.

Graham Hand, Managing Editor

 

For a PDF version of this week’s newsletter articles, click here.

 


 

Leave a Comment:

banner

Most viewed in recent weeks

Australian house prices close in on world record

Sydney is set to become the world’s most expensive city for housing over the next 12 months, a new report shows. Our other major cities aren’t far behind unless there are major changes to improve housing affordability.

The case for the $3 million super tax

The Government's proposed tax has copped a lot of flack though I think it's a reasonable approach to improve the long-term sustainability of superannuation and the retirement income system. Here’s why.

Tariffs are a smokescreen to Trump's real endgame

Behind market volatility and tariff threats lies a deeper strategy. Trump’s real goal isn’t trade reform but managing America's massive debts, preserving bond market confidence, and preparing for potential QE.

The super tax and the defined benefits scandal

Australia's superannuation inequities date back to poor decisions made by Parliament two decades ago. If super for the wealthy needs resetting, so too does the defined benefits schemes for our public servants.

Meg on SMSFs: Withdrawing assets ahead of the $3m super tax

The super tax has caused an almighty scuffle, but for SMSFs impacted by the proposed tax, a big question remains: what should they do now? Here are ideas for those wanting to withdraw money from their SMSF.

Getting rich vs staying rich

Strategies to get rich versus stay rich are markedly different. Here is a look at the five main ways to get rich, including through work, business, investing and luck, as well as those that preserve wealth.

Latest Updates

SMSF strategies

Meg on SMSFs: Withdrawing assets ahead of the $3m super tax

The super tax has caused an almighty scuffle, but for SMSFs impacted by the proposed tax, a big question remains: what should they do now? Here are ideas for those wanting to withdraw money from their SMSF.

Superannuation

The huge cost of super tax concessions

The current net annual cost of superannuation tax subsidies is around $40 billion, growing to more than $110 billion by 2060. These subsidies have always been bad policy, representing a waste of taxpayers' money.

Planning

How to avoid inheritance fights

Inspired by the papal conclave, this explores how families can avoid post-death drama through honest conversations, better planning, and trial runs - so there are no surprises when it really matters.

Superannuation

Super contribution splitting

Super contribution splitting allows couples to divide before-tax contributions to super between spouses, maximizing savings. It’s not for everyone, but in the right circumstances, it can be a smart strategy worth exploring.

Economy

Trump vs Powell: Who will blink first?

The US economy faces an unprecedented clash in leadership styles, but the President and Fed Chair could both take a lesson from the other. Not least because the fiscal and monetary authorities need to work together.

Gold

Credit cuts, rising risks, and the case for gold

Shares trade at steep valuations despite higher risks of a recession. Amid doubts that a 60/40 portfolio can still provide enough protection through times of market stress, gold's record shines bright.

Investment strategies

Buffett acolyte warns passive investors of mediocre future returns

While Chris Bloomstan doesn't have the track record of his hero, it's impressive nonetheless. And he's recently warned that today has uncanny resemblances to the 1990s tech bubble and US returns are likely to be disappointing.

Sponsors

Alliances

© 2025 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.