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Australia’s superannuation system, the fourth largest in the world, is huge and growing.
The total assets held in superannuation accounts in Australia are currently worth 100% of annual GDP. By 2033, Deloitte reports that will grow to 180% of GDP – an extraordinary savings pool for a country with historically low savings rates.
Accountancy Deloitte has, for the past six years, been conducting an annual overview of the sector, and how it is meeting Australia’s retirement needs.
The latest report, <a rel="nofollow" href="https://www.deloitte.com/assets/Dcom-Australia/Local%20Assets/Documents/Industries/Financial%20services/Deloitte_Dynamics_of_Superannuation_2013_report.pdf">released yesterday</a>, is a fascinating glimpse into how the money that leaves our weekly pay cheque will end up serving us. Here are four gems from Deloitte’s report.
How much you need to retire comfortably
Going on current life expectancy rates, Deloitte has calculated how much super you need to retire with a ‘modest’ or ‘comfortable’ lifestyle.
For men aged 65 today, they need $330,000 in superannuation to fund themselves to the tune of a ‘modest’  $22,654 every year. For women, who generally live slightly longer, they need $360,000 in superannuation assets to pay out the same amount every year.
For those who want a ‘comfortable’ lifestyle in retirement, the figures are nearly double. A man requires $590,000 to pay themselves $41,197 a year, while women need to have $660,000 in superannuation assets for the same.
But most people don’t have anywhere near that
For most Australians nearing retirement, these figures are far, far more than they currently have in their superannuation balances.
According to the Association of Superannuation Funds of Australia, the average male 60-64 year old has $85,000 in superannuation assets. For women, who on average live longer, the disparity is even more stark – most have just $59,000 in superannuation assets.
For those slightly older – the 65-69 year olds, some of whom are already in retirement – the figures are worse. Men in that age group have, on average, $77,000 in superannuation assets while women have $55,000.
For those who have lived only a few decades under the current superannuation regime, there is no way they will have enough in their balances to fund their retirement, Deloitte notes. They will have to rely on the aged pension instead.
As the report’s author, Deloitte partner Wayne Walker, puts it, “despite the $7.6 trillion asset pool we project for 2033, [the potential of superannuation] to generate wealth and prosperity may well bat risk for the average Australian”.
“Many Australians now approaching retirement have only received super for a limited portion of their working lives as our system is still maturing.”
“The concern is that current policy settings, including changes to caps and drawdowns, and the SG 12% increase, will not deliver the lifestyle that the majority of those retiring in the next 20 years are seeking. The reality is that many Australians will need to work longer and where possible contribute more.
“To that end our report projects the possibility of Australians deferring retirement by two and five years respectively. The results are significant.”
 For Gen X, the situation is better
For those who’ve worked most of their life paying money into superannuation, the system is working, but not perfectly.
For a statistically average 30 year old working currently on $60,000 a year (the average income for people of that age), Deloitte estimates they’ll retire with $1.1 million in superannuation.
Given rising inflation, Deloitte thinks this’ll be enough to support themselves until they’re 94, but only on a ‘modest’ retirement. If this worker choses a ‘comfortable’ retirement, the $1.1 million will last them only until they’re 77. To have a comfortable retirement that doesn’t run out, Deloitte thinks that worker will need $1.6 million in superannuation assets if male, or $1.8 million if female.
Superannuation hasn’t recovered from the GFC
The financial crisis, which began in 2009, had a huge impact on Australia’s superannuation assets, eclipsing that of recent economic crises such as the dot-com crash.
Deloitte sees the superannuation asset pool remaining below GFC levels until 2016 (see graph), highlighting how much of a setback it was to the balances of millions of Australians, particularly those about to retire.
<img style="max-width: 540px; max-height: 480px;" width="470" height="355" src="https://www.smartcompany.com.au/images/stories/news/super-picture-540-408.jpg" alt="super-picture-540-408">
Industry funds as popular as SMSF
For much of the past few years, self-managed superannuation funds have <a href="https://www.smartcompany.com.au/finance/057570-asic-warns-smsf-trustees-when-it-comes-to-fraud-you-re-on-your-own">grown strongly in numbers</a>. But in the years to 2033, Deloitte expects industry funds to grow just as fast. Ultimately, most people move from industry funds to SMSFs as they retire.
Over the past year, growth in SMSFs has slowed, Deloitte notes. This reflects the reduction in concessional contribution limits and product innovation in industry and retail funds, which have blunted the advantages of SMSFs.
 
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 This artcile originally appeared on <a href="https://www.smartcompany.com.au" target="_blank">SmartCompany</a>.
 
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How much superannuation do you need to retire comfortably?

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The Australian Securities and Investments Commission wants to beef up the mandatory disclosures advisers give to people setting up a self-managed super fund, saying in many cases the advice given doesn’t reflect the risks.
In a <a rel="nofollow" href="https://www.asic.gov.au/asic/asic.nsf/byHeadline/13-243MR%20ASIC%20consults%20on%20the%20quality%20of%20SMSF%20advice?opendocument" target="_blank">report released yesterday</a>, the regulator flagged it wants to make SMSF advisers warn clients that if they set up a SMSF, they do not have access to compensation in the event of fraud or theft.
It also wants advisers to give more information about the roles and responsibilities of trustees, the costs of setting up a SMSF, as well as more information about other types of superannuation products that might be more suited to someone’s particular situation.
“When it comes to planning your retirement, establishing an SMSF is a very significant decision,” said ASIC deputy chairman Peter Kell.
“We want to help ensure that the SMSF sector is healthy, and that investors make informed decisions about SMSFs.
“Our recent surveillance of the sector found that advice was not up to a standard we would like.”
The warning comes after the Trio Capital affair, which saw the company collapse in 2009 after directors and executives stole $176 million from SMSF investors in<a href="https://www.smartcompany.com.au/economy/056372-trio-capital-directors-accept-enforceable-undertakings-from-apra-construction-sector-contracts-for-34th-consecutive-month-midday-roundup" target="_blank">what was called “the biggest superannuation fraud in Australian history”</a> by a joint parliamentary committee. More than 6000 investors lost money after placing it into two offshore hedge funds through Trio Capital.
However, Graeme Colley, the director of technical and professional standards at the SMSF Professionals’ Association of Australia, says ASIC’s concerns about poor quality advice may be overblown.
“Last year, ASIC decided to have a look at advice on a very select part of the superannuation industry, which was self-managed super funds with less than $150,000 in them that had received advice on property investments where the property was mortgaged. Looking at those, they concluded that the advice being given wasn’t adequate.
“But it was a very selective sample.
“Unfortunately, ASIC hasn’t provided examples of the poor or inadequate advice it saw.”
ASIC also released a report yesterday by actuaries Rice Warner, which looked at the minimum balances needed before SMSFs become cost-effective relative to other superannuation arrangements.
“Through our consultation we are looking to encourage further discussion and explore the issues relating to SMSF costs with industry and consumer stakeholders,” Kell said. “We think that understanding the costs associated with having an SMSF will help advisers and their clients consider whether a SMSF is a cost-effective option when compared with an APRA-regulated fund.
“ASIC does not want to see an influx of trustees who are ill-equipped to cope with the responsibilities and obligations of running a SMSF.”
The report found that when the maximum level of compliance administration is assumed, SMSFs do not become cost-effective when they have balances of less than $500,000.
However, many trustees do their own administration and compliance, which means the costs of maintaining a SMSF would be lower, Peter Burgess, the head of policy and technical at AMP SMSF said.
“This is in line with what we already knew – you need a reasonable amount in your SMSF for it to be cost-effective.
“But cost isn’t the only consideration here. There are other reasons to manage your own super – you might have specific estate-planning needs, or want to take advantage of specific investment opportunities and so on.
“And while it’s not cost-effective for very low balances, when you have more than $100,000 in your fund, it does depend on how much work you’re doing yourself. It’s hard to get data on this, but a significant amount of trustees do their administration work and so forth themselves. This can make it cost-effective below the $500,000 threshold.”
Colley was also reluctant to accept the higher threshold, saying that in his experience most trustees contribute to the operation of their fund.
“Much of the work with these funds is done by the trustees, so the expense is exaggerated. The Rice Warner report does say that where trustees do contribute, the running cost is around 1.5% of assets. In my view, that’s at the upper end, but probably more realistic.
“We think the $200,000 threshold mentioned by both ASIC and the ATO many years ago is still valid when it comes to cost-effectiveness.”
Recently, ASIC has flagged its <a href="https://www.smartcompany.com.au/superannuation/054815-asic-sounds-warning-bell-on-smsfs-2">concerns about the growth of the self-managed superannuation industry</a>, saying the increasing amount of money being held in SMSFs could prompt newcomers who are far less financially sophisticated to set up their own funds.
The self-managed superannuation industry now holds just under a third of all the money held by Australians in superannuation, having grown around 20% per annum in recent years. There is now $439 billion in assets held by SMSFs. There are over a million SMSF trustees who together manage half a million SMSFs.
Colley does not believe SMSFs are necessarily more risky than investing through a major fund.
“There are two persistent criticisms around SMSFs. One is that trustees don’t know what they’re doing, and the other is that SMSFs are being used by property spruikers to invest in property.
“I was at a major super fund conference earlier this year when one of the speakers got up and said: ‘If you think SMSFs are jokes, who don’t do as well, you need to think again’. They do, roughly, 1% better, on average, than bigger super funds.
“And there’s a huge amount of noise around property, but if you look at the statistics, less than half of 1% of SMSFs invest in property loans.”
Burgess believes there’s still further growth to be had for the industry. “There’s still significant room to grow. There’s a lot of research and statistics out there that shows there are plenty of people with tendencies that could benefit from a self-managed super fund, but who don’t currently have one.”
 
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 This article was originally publsihed on <a href="https://www.smartcompany.com.au" target="_blank">SmartCompany</a>.
 
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ASIC warns that when it comes to fraud, SMSF trustees are on their own

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The Australian Taxation Office plans to clamp down on self-managed super fund trustees who move their assets around before selling them to avoid capital gains tax.
In a draft ruling issued last week, and open for public comment until September 4, the ATO said that from July 2014, SMSF trustees will have to obtain an actuarial certificate to claim the pension income-tax exemption, or entirely segregate their SMSF fund assets into those that are in the accumulation phase and those that bear liability for their current pension.
Failure to do so could result in the ATO pursuing them under tax avoidance provisions.
Currently, SMSF assets used to pay out pensions are tax-exempt, whereas assets that don’t currently have any pension liability still incur capital gains tax.
The ATO also flagged its concern about trustees moving assets from the accumulation to the pension stage before selling them to avoid capital gains tax.
“If an asset is purported to be segregated [i.e. claimed to be in the pension phase and thus tax-exempt] shortly before disposal, and then disposed of in circumstances where a capital gain is claimed to be exempt income, it will be a question of…whether it was invested or otherwise being dealt with for the sole purpose of enabling the fund to discharge liabilities in respect of superannuation income stream benefits,” the ATO’s draft ruling stated.
The ruling will have broad implications, as most self-managed super funds both distribute pensions and accumulate superannuation, AMP SMSF head of policy and technical Peter Burgesssaid. This can be for multiple members or for the same member if they are still working past the age where they get access to their super.
“What the ATO talked about is if you want your fund to be treated as a segregated fund, you have to ensure that your assets are entirely segregated,” he says.
“They used examples where you could have a property within a self-managed super fund and say a certain proportion of that property is tax-exempt as it’s in the pension stage and the rest is within the accumulation stage, and try to treat the fund as segregated.
“The ATO says they don’t think that suffices. You need to make sure that if it’s a property, it either sits entirely within the pension pool, or you treat it as an unsegregated fund, in which case you need an actuarial certificate to determine which parts are tax exempt and which parts are not. None of this business where you say it’s segregated when it’s not to avoid the cost of an actuarial certificate.”
The ATO is obviously also concerned about individuals wanting to use the tax-free provisions surrounding pension assets to avoid capital gains tax, Burgess says, “which they would do by transferring an asset from the accumulation part of the portfolio to the pension part and then selling it shortly after”.
However, Burgess said the ATO did not define what “shortly after” meant, and so it remains unclear how long an asset must be held so as to not flag alarm bells with the taxman.
Aside from property, other assets likely to be affected by the change are things like joint bank accounts.
This article originally appeared on <a target="_blank" href="https://www.smartcompany.com.au/">SmartCompany</a>.
 
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ATO set to clamp down on SMSF trustees who move assets to avoid capital gains tax

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In Sydney, 1.3% of the population has US$1 million (A$1.114 million) or more in assets, once their primary residence is excluded.
That makes Sydney the world’s 12th most dense millionaire city. Melbourne is six places behind with 0.9% of the population meeting the same wealth threshold.
Together, 61.8% of Australia’s millionaires live in our two largest cities, with 37.8% living mainly in Sydney and another 24% in Melbourne.
The figures come from a report by global wealth consultancy New World Wealth, which found Geneva was the world’s leading city when it came to millionaires, with 5.9% of the population being seriously loaded.
In total aggregate numbers, London is home to the world’s most millionaires, with 339,200 calling the city home. This works out to 2.5% of the total population.
In the Asia-Pacific, Tokyo and Singapore lead the ranking, with 226,500 and 225,000 millionaires apiece respectively. Singapore has recently seen a flood of millionaires calling it home, like Australian <a target="_blank" href="https://www.smartcompany.com.au/growth/economy/33471-nathan-tinkler-s-aston-metals-now-placed-in-receivership">mining speculator Nathan Tinkler</a> and Facebook cofounder Eduardo Saverin. Such recent arrivals have helped make Singapore the<a target="_blank" href="https://www.smartcompany.com.au/finance/wealth-management/31372-rich-tales-switzerland-s-loss-is-singapore-s-gain-as-wealthy-turn-to-asia">most dense millionaire city outside Europe</a> – 4.5% of the population there are millionaires.
There were no Middle Eastern or African cities in the top 30. However, New World Wealth notes  Istanbul’s 35,000 millionaires mean it just missed out on a top-30 ranking. The highest-ranked African city was Johannesburg, with just over 23,000 millionaires.
The ranking shows that wealth remains concentrated in Europe and the United States. There were no less than seven US cities in the top 30, including second-placed New York. There were 10 European cities in the top 30, including two in Switzerland and three in Germany.
This article first appeared on <a target="_blank" href="https://www.SmartCompany.com.au">SmartCompany.</a>
 
 
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Sydney beats Melbourne when it comes to millionaires: 1.3% of population is seriously loaded

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There were 4430 bookstores in Australia during the 2004-05 financial year. Now, there are just 2921 bookstores owned by 2700 companies, and industry forecaster IBISWorld isn’t optimistic for those that remain.
According to a new report by IBISWorld analyst Claudia Burgio-Ficca, industry revenue will decline 8.1% during the coming financial year, with annual revenue declines moderating after that. By 2018-19, the forecaster believes annual revenue falls will stabilise to just 3.8% a year.
It’s been a perfect storm for booksellers over the past five years, Burgio-Ficca says. On the one hand, retail generally has had a challenging time, battling low consumer sentiment and lacklustre spending.
The industry is also facing structural change, with a rising breed of online-only booksellers operating with leaner business models, broader catalogues and lower prices forcing the industry to cut costs and become far more competitive.
Discount booksellers haven’t helped either. IBISWorld notes that discount department stores have increasingly been making bulk purchases of books, and then offering them at bargain-basement prices to customers during key selling periods such as Christmas. This limits the ability of bookstores to profit from the flurry of gift-buying at the time.
“Bookstores have fought to stay afloat,” Burgio-Ficca says. “A host of issues have plagued the industry.
“As a result, profitability has trended downwards.”
Despite the presence of big-name brands like Dymocks and Collins Booksellers, bookselling is a small business industry. The top four players together hold under 40% of the market share, and barriers to entry are relatively low.
But it’s not all doom and gloom. Despite catering to a far smaller share of the market, speciality bookstores have performed better.
“Niche bookstores such as those specialising in languages are projected to remain in demand, and face relatively little external competition,” Claudia Burgio-Ficca says.
Discount bookstore chain allbooks4less.com.au was <a target="_blank" href="https://www.smartcompany.com.au/growth/economy/32568-discount-book-chain-turning-over-21-million-goes-under-after-directors-death">placed into administration in July</a>. As the figures show, it’s <a target="_blank" href="https://www.smartcompany.com.au/growth/economy/28192-collapse-of-iconic-adelaide-bookstore-mary-martin-highlights-ongoing-pain-in-book-market">far from the only bookstore</a> to face such a fate.
This article first appeared on <a target="_blank" href="https://www.SmartCompany.com.au">SmartCompany</a>.
 
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Another 300 bookstores set to go, but further chapters remain in saga: IBISWorld

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Yesterday’s shock inflation figure makes further interest rate cuts unlikely, and lays the groundwork for the Reserve Bank to hike interest rates in 2014.
The 0.8% quarterly rise in the consumer price index surprised the nation’s markets on the upside – most had been factoring in a 0.5% rise.
It’s also above the RBA’s own Statement on Monetary Policy, released in November 2013, which forecast 2013 would end with inflation at 2.5%. Inflation for the year is now at 2.7% – heading towards the top of the RBA’s 2-3% target band.
“The magnitude of the increase this quarter surprised us,” Westpac chief economist Justin Smirk says.
This is despite the bank expecting to see some inflation arising from the <a target="_parent" href="https://www.smartcompany.com.au/growth/export/528-">weaker Australian dollar</a>, which makes imports more expensive.
It puts a stop to speculation that the RBA could cut interest rates – <a target="_blank" href="https://www.smartcompany.com.au/growth/economy/34437-breaking-news-cash-rate-left-unchanged-at-2-5">already at record lows</a> – to stimulate the economy and ease its transition away from the mining boom.
“If the numbers are a true reflection of inflation, rate cuts from here now look extremely unlikely, especially given the lower currency and momentum gathering in some areas of the economy,” said ANZ senior economist Riki Polygenis.
She added that most commentators have previously figured the RBA isn’t too concerned with inflation at the moment. “At first glance, these figures do question [that assumption].”
The only way the RBA can fight inflation is through raising interest rates. Commentators are divided on whether yesterday’s inflation figure is enough to see the RBA push the brakes.
One economist who thinks a rate hike is now on the horizon is Market Economics’ Stephen Koukoulas. Prime Minister Julia Gillard’s former economic adviser said Australia wouldn’t have an inflation problem, provided the RBA “does its work and adjusts interest rates according to this new information”.
“A rate hike in March, with more through 2014, looks the best policy approach,” he said.
Driving the increase was a rise in non-tradable inflation, which refers the rise in price of things that aren’t imported such as fast food and utilities. Non-tradables rose 0.8% in the quarter, taking their yearly rise to 3.7%. Such goods comprise 60% of the weighting of the Consumer Price Index, so the rise was a large contributor to December’s increase.
Despite the lower Australian dollar, tradable inflation was more subdued, rising 0.7% in the quarter. That takes tradable inflation to 1% in the twelve months to December.
The fastest-rising individual category was recreation and culture, which represents holiday travel, where prices rose 2.1%. Food and beverages also rose 1.6%, communication services rose 1.2%, while housing rose 0.5% in the quarter.
Alcohol and tobacco rose 1.6%, but the main contributor to this was a rise in the federal excise tax on tobacco that kicked in from December 1, 2013.
Perhaps due to the end-of-year-sales, clothing and footwear actually saw price deflation of over 1% in the December quarter. Also falling were health and transport costs, while education costs remained steady.
A higher CPI can mean automatic wage hikes for many of the country’s employers, as contracts typically stipulate annual wage increases in line with inflation as a bare minimum.
Smirk doesn’t think employers will get much relief from this.
“Without a significant further dip in the [Australian dollar], we still see inflation peaking around 3.0% in early 2014,” he said.
This article first appeared on <a target="_blank" href="https://www.SmartCompany.com.au">SmartCompany.</a>
 
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Yesterday’s shock inflation figure means you can say goodbye to further interest rate cuts

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The Sydney Business Chamber has welcomed tough new street violence law which impose mandatory 1.30am lockouts on many CBD venues, saying they’re necessary to safeguard Sydney’s reputation as a safe city.
But the Australian Hotels Association is highly sceptical of the new laws, believing they punish businesses that rely on the night-time economy despite their having nothing to do with street violence.
NSW Premier Barry O’Farrell has been under pressure for some weeks to introduce a legislative response to the one-punch death of Sydney teenager Daniel Christie, who died after being punched in the head from behind in Kings Cross at 9.10 pm on New Year’s Eve. It follows a similar incident in 2012 where another 18-year-old, Thomas Kelly was fatally and without provocation punched in the back of the head.
Yesterday, O’Farrell announced a suite of sweeping measures aimed at combatting the problem of street violence, which include mandatory eight-year minimum jail sentences for fatal one-punch attacks, significant increases in on-the-spot penalties for disorderly behaviour, and increased police powers to ban ‘troublemakers’.
The laws also target businesses. Venues in the Sydney’s central business district and Kings Cross will have 1.30am lockouts and be forced to stop selling drinks at 3am, while bottle shops across New South Wales will be forced to shut at 10pm.
<a href="https://www.smartcompany.com.au/growth/economy/975-">Small bars serving up to 60 people</a>, restaurants, casinos and tourist accommodation facilities will be exempt from the laws.
Parliament will be recalled next week to pass the new measures.
Patricia Forsythe, the executive director of the Sydney Business Chamber, says the new laws are needed to maintain Sydney’s reputation as a safe city.
“We’re a city very much based on the service economy, and as part of that, the visitor economy is one of the critical parts of our economy,” she said.
“To be able to attract visitors, and be a city popular with tourists, whether Australian or overseas, we need a reputation as a safe place to visit. We’ve had that reputation. The events of recent times in particular, and the media frenzy around those events, have put that at risk.”
The state government’s proposed laws strike the appropriate balance between upping the penalties on violent offenders while also limiting the potential for street violence to occur, she added.
“There’s no single solution. What the government’s tried to do is adopt a multi-faceted approach, which does require changes from business, government, law enforcement and the community in general.”
Forsythe particularly welcomed small bars and restaurants being excluded from the laws.
“They’re not the source of the problem. Indeed, they may be part of the solution.”
However, the Australian Hotels Association has been far less welcoming of the proposed changes.
In a statement, the body said it welcomes tougher sentencing for “thugs”.
“However, we remain sceptical about the effectiveness of lockouts across the Sydney CBD area and ‘last drinks’ at 3am – the time of the taxi changeover.
“We do not believe tens of thousands of people will stay in licensed premises past 3am once alcohol is no longer served but will instead be out on the streets looking for a way home. The government will need to address this new issue.”
“The lockouts and closures in the Sydney CBD will also have an undeniable impact on the night-time economy penalising businesses that are well run and have had nothing to do with the recent violence.”
Before the new laws were announced, the NSW AHA’s director of public policing, John Green, said any lockout would see more young people on the streets in the early hours of the morning.
“Organisations are again using an incident which occurred early in the evening to call for mandatory lock-outs and closures of hotels from 1.30am. Yet no one seems to be able to explain how this would help.
“[It] flies in the face of common sense. The latest tragic incident happened at 9.10pm allegedly by a man on bail for assault. The death of Thomas Kelly happened just after 10pm at the same location in King’s Cross – how would further restrictions on venues in the early hours of the morning make any difference?
“Independent Bureau of Statistics figures show that violence in and around licensed premises [is] at the lowest level in 15 years – this is thanks to the co-operation between hoteliers and police… However, we are being told by doctors that the intensity of assaults is increasing.
“What has changed, and where has the prevalence of the ‘king hit’ culture at all hours come from?
“There is a far deeper explanation, and simply closing hotels and shutting down the city is not the answer. We need to work with the community on finding solutions.”
This article first appeared on <a href="https://www.SmartCompany.com.au" target="_blank">SmartCompany.</a>
 
 
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Sydney's street violence laws given thumbs up by business, but hoteliers more sceptical

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The world’s richest 85 people have wealth equal to that of half the world’s population.
According to Oxfam, which relies on World Economic Forum statistics released in November, this global elite is worth $US110 trillion, which is equal to the wealth of the poorer half of the world’s population. And the wealth of the richest 1% of the world’s population is 65 times the wealth of the bottom half of the world’s population.
Oxfam’s study is addressed to the delegates at the World Economic Forum, taking place at Davos in Switzerland this week.
“Oxfam is concerned that, left unchecked, the effects are potentially immutable, and will lead to ‘opportunity capture’ – in which the lowest tax rates, the best education, and the best healthcare are claimed by the children of the rich. This creates dynamic and mutually reinforcing cycles of advantage that are transmitted across generations,” the charity writes.
“This massive concentration of economic resources in the hands of fewer people presents a significant threat to inclusive political and economic systems. Instead of moving forward together, people are increasingly separated by economic and political power, inevitably heightening social tensions and increasing the risk of societal breakdown.”
Oxfam calls on the delegates to Davos to pledge not to dodge taxes in their own country or the countries they invest in, to not use their economic wealth to seek political favours that undermine the democratic will of their fellow citizens, to be transparent about their investments and to support social protection and a progressive taxation system.
According to the study, Australia saw the second-largest largest percentage increase in the income share of the richest 1% of the population between 1980 and 2012, behind only the United States over that period. In 2012, 10% of Australia’s wealth went to the richest 1%, which is double what it was in 1980. In the United States, the most unequal society studied, nearly 20% of the country’s wealth went to the richest 1% - in 1980 it was just 10%.
Economist Richard Denniss, executive director of left-wing think tank The Australia Institute, says the numbers are “as alarming as can be”.
“As is the fact that no one expects anything to change. It shows how effective the rich are at changing the rules to benefit themselves.”
Sadly, Denniss says, wealth inequality in Australia mirrors the global trends, with the gap between the rich and the very poor significantly widening over recent decades.
“The easiest evidence is to look at Australia’s richest person, Gina Rinehart. She’s far richer today relative to the average than the richest person in 1980. And she’s far, far richer than the second-richest person in the country.”
Oxfam’s study also surveyed residents in six countries about whether they perceived laws and regulations to be regularly designed to benefit the rich. A majority of respondents agreed with the statement.
The study did not survey Australians, but Denniss says he believes the trends would be replicated here.
“For example, we’ve just removed the mining tax which would have been paid by foreign countries and Australia’s richest people, and aimed to spread the benefits of the mining boom more fairly.”
“It’s a bad thing, for democracy, for any group to have far more influence than their numbers entitle them to.”
Denniss says that if Australia’s richest people are committed to equality and opportunity for all, they shouldn’t focus on philanthropy, but should instead support a fairer taxation system, and be supportive of increases to the minimum wage and other aspects of the social safety net.
Oxfam is more optimistic than Denniss. In its <a href="https://www.oxfam.org/sites/www.oxfam.org/files/bp-working-for-few-political-capture-economic-inequality-200114-en.pdf" target="_blank">closing summary</a>, the charity says the trend can be reversed, as it has been in the past.
“The US and Europe in the three decades after World War II reduced inequality while growing prosperous. Latin America has significantly reduced inequality in the last decade – through more progressive taxation, public services, social protection and decent work. Central to this progress has been popular politics that represent the majority, instead of being captured by a tiny minority. This has benefited all, both rich and poor.”
This article first appeared on <a href="https://www.SmartCompany.com.au" target="_blank">SmartCompany.</a>
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World's richest 85 people as wealthy as 50% of the world's population combined

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Employee ownership schemes are a start-up’s best friend.
If you lack the cash to pay the talent you need, shares in your company may be one of the few assets you have.
That’s why, if the start-up succeeds, early employees usually make a killing. But such schemes are far less common in established firms, especially smaller, private ones.
Architectural firm Hayball is celebrating its 30th birthday after years of fast growth. In the past 10 years, revenue and staff numbers have trebled. And to guide their business through the next period of expansion, Hayball’s partners have decided on a radical proposal.
They want to give their employees a stake in the company, comprising 25% of total ownership within 10 years.
Tom Jordan, the managing director of Hayball, says the idea came about after seeing what happened to the firm’s workers after they were made partners and given an ownership stake.
“When people became partners in the past, we immediately got a much greater engagement from them on the business side of the practice,” he said.
“Not only did they have a greater understanding of what was going on, but they became much more focused on developing the businesses and generally acted more commercially.”
This makes sense. Someone with a direct stake in the overall financial success of the firm is <a href="https://www.propertyobserver.com.au/https://leadingcompany.smartcompany.com.au/managing-people/cant-buy-me-love-why-using-money-to-motivate-your-workers-is-trickier-than-it-seems/201305274304">less likely to waste time or resources</a>.
What the new scheme does is try to extend these benefits beyond those in senior management. Exceptional employees at all levels of the business, going forward, will be given stock as a bonus.
They will then continue to hold this stock and a share in the firm’s profits, as long as they work for Hayball. Should they resign, they forfeit a percentage of the value of their holdings. Should they be made redundant, the company will buy back their stock at its full value. In this way, the scheme will aid retention of the firm’s best employees.
“What we want to is provide our senior staff with a career path and attract and retain the very highest calibre of staff we can find,” Jordan says.
“We’re not alone – engineering firms have done this in the past, particularly overseas. It’s not truly pioneering, but we’re one of the larger firms in our industry to bring in something like this.”
Unlike directors, the scheme has been drafted so employees with stock face limited liability should the company go bust.
“Non-director shareholders have some degree of protection from corporate liability,” Jordan says. “Setting that up was very complex – we had various opinions. We resolved that, but it wasn’t easy.
“Overall, the tax environment really doesn’t encourage this,” he adds. “We’re just going to cop the tax bills, unfortunately.”
Under the Australia tax system, employee share schemes are <a href="https://www.smartcompany.com.au/finance/tax/32063-employee-share-scheme-tax-systems-set-for-an-update">regarded as compensation</a>, and so qualify for income tax in the year they are given. This is despite employees not actually receiving any money from the shares until they are sold.
“In other countries, the taxation system really supports employee share schemes,” Jordan says. “It’s a pity it doesn’t do so here.”

<hr>
This article first appeared on <a target="_blank" href="https://www.SmartCompany.com.au">SmartCompany</a>.
 
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Architectural firm Hayball celebrate 30th anniversary with introduction of employee share scheme

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This Thursday evening, Christmas will arrive at Bay Street in Port Melbourne.
It’s the day the bayside shopping strip’s 180 retailers will have their window displays completed. The shops will be open late as thousands of families stream into the strip to view the shopfronts of the participating businesses.
It’s the second year Bay Street’s retailers have coordinated their Christmas displays, and Jennifer Crosswell, the proprietor of homewares store Edelene on Bay, says she can’t wait for this year’s event.
“Last year, it was amazing,” she said. “We had so many people – on the night a couple of thousand people turned up, which was quite unbelievable given it was a 39 degree day.”
“It’s huge, and just beautiful.”
Crosswell is on the Port Melbourne Business Association’s committee, and has been the principal organiser of this year’s event, which features 4.5 kilometres of unique window displays along the strip.
The displays are crafted by Swiss artist Roz Zweifel, who’s created 2000 display windows, each suited to the particular store.
The event receives no funding from the local council, with the $30,000 cost to create and install the windows being split between the 180 traders through their annual levy to the Port Melbourne Business Association.
“It’s such a great shopping strip,” Crosswell says. “So many people in the community tell me they’re so proud to live here, and to see all the retailers united like this. It’s bringing us together, and getting people from outside the area to visit the strip.”
Getting such a project off the ground required getting businesses that are normally competitors to work together for the good of the area.
Paul Littmann, president of the Port Melbourne Business Association as well as owner of Bay Street organic dry-cleaning business Daisy Drycleaning, says it was hard to get some retailers on board the first year, but it got easier the second.
“We just went in and asked each and every retailer whether they wanted us to decorate their windows,” he tells SmartCompany. “Some of them said no, or had concerns about keeping their own branding. But then they saw their neighbour’s windows and would then ask us to do theirs too.
“This year, we’ve had no trouble getting people on board. It’s become an important part of the yearly calendar. And the community gets in on it. Retailers get asked where their window displays are.
“Come January, they’re dragging their feet about taking the displays down.”
Crosswell says you <a href="https://www.smartcompany.com.au/growth/economy/34203-mary-portas--known-as--mary-queen-of-shops--offers-11-tips-for-retail-small-businesses" target="_blank">can’t think like competitors if you want a strip of retailers to be successful</a>.
“We all work together, and we need each other,” she says. “If we had one bike shop, no one would come here to buy a bike. Because we have three or four, people come here to have a look at everything at once.
“And that’s the case with plenty of our stores.”
One of the event’s highlights is the 12 Days of Christmas displays, which are an adaptation of the classic Christmas carol to Port Melbourne. Visitors to the street go around trying to find all 12 displays, which are dotted throughout the street.
“The trading night is one thing, but what’s really lovely is coming down here a week or two before Christmas and seeing an 80-year-old grandparent with his five-year-old grandson singing the carol together as they find the windows,” Littman says. “It’s really special.”

<hr>
This article first appeared on <a href="https://www.SmartCompany.com.au" target="_blank">SmartCompany</a>.
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Port Melbourne retailers band together for Christmas display rejuvenation

South East Queensland developer&nbsp;<a href="https://www.apartments.com.au/developers/gardner-vaughan-group">Gardner Vaughan Group</a>’s entry into the Gold Coast apartment market has progressed from pipeline to market, with its Chevron Island project Bronze on Chevron now formally available to purchase ahead of a planned 2029 completion.

The 119-apartment development on Mawarra Street marks the Brisbane-headquartered builder-developer’s first residential play in the Gold Coast, following its expansion south from Brisbane and the Sunshine Coast.

<a href="https://www.apartments.com.au/new-apartments/bronze-on-chevron-8-mawarra-street-surfers-paradise-qld-4217">Bronze on Chevron</a> comprises a mix of two-, three- and four-bedroom residences, with pricing starting from just over $1.5 million. The project is being delivered under Gardner Vaughan’s fully integrated model, with the group acting as both developer and builder, a structure it has consistently applied across its South East Queensland portfolio.

[smartcode_project:default project_id=107520 project_image_fid=367182]

Architecture has been designed by <a href="https://www.apartments.com.au/architects/cottee-parker-architects">Cottee Parker</a>, with landscape architecture by <a href="https://www.apartments.com.au/landscape-architect/jeremy-ferrier-landscape-design">Jeremy Ferrier</a>. The building presents as a single-tower scheme, with a focus on maximising outlook across both the Surfers Paradise skyline and the Nerang River.

Apartments have been planned with open-plan living zones extending to generous balconies, a response to the site’s dual-aspect positioning between river and ocean. Interiors follow a restrained coastal palette, with two colour schemes offered, and an emphasis on natural light and cross-ventilation.

[smartcode_project:default project_id=107520 project_image_fid=367181]

Resident amenity is concentrated across more than 1,250 sqm and includes a resort-style pool, gym, yoga lawn and rooftop entertaining areas. A function space with catering facilities forms part of the upper-level offering, alongside north- and south-facing outdoor areas.

Ground level will incorporate two retail tenancies, intended to extend the existing village character of the surrounding streets.

&nbsp;

[smartcode_project:default project_id=107520 project_image_fid=367200]

The project sits within walking distance of Thomas Drive’s established dining strip, while maintaining proximity to <a href="https://www.apartments.com.au/developments/surfers-paradise-qld-4217">Surfers Paradise</a> beach and broader Gold Coast amenity. The location, positioned on Chevron Island between the river and coastline, has increasingly attracted mid- to high-density development in recent years as the precinct evolves beyond its low-rise origins.

Gardner Vaughan’s move into the Gold Coast was first signalled in 2025, with the group identifying the region as a natural extension of its operations. Chief Executive Officer Simon Betteridge described the expansion as both “strategic and natural”, citing demand for well-designed apartments in lifestyle-driven markets.

Construction is expected to complete in early 2029.

[smartcode_project_cta:default project_id=107520]

Joel Robinson

Gardner Vaughan brings Bronze on Chevron to market as Gold Coast debut

One of the penthouses at Lily Lane, the latest stage of Carrington Place by Ellipse Property, has set a new local apartment price record.

The four-bedroom residence, purchased by a local downsizer, sold for $5.75 million—around 75 per cent higher than the previous record of $3.3 million.

Over 40 per cent of the first release of apartments at&nbsp;<a href="https://www.apartments.com.au/new-apartments/lily-lane-at-carrington-place-castle-hill-32-carrington-road-castle-hill-nsw-2154">Lily Lane</a> have already been snapped up just six weeks since it launched to the market.

&nbsp;

Located at 32 Carrington Road, <a href="https://www.apartments.com.au/developments/castle-hill-nsw-2154">Castle Hill</a> and designed by award-winning architects <a href="https://www.apartments.com.au/architects/ptw">PTW</a>, Lily Lane is directly opposite the Hills Showground Metro station. It offers a total 213 units over two 12-storey towers - a mix of 67 one-bedroom, 100 two-bedroom and 46 three-bedroom apartments - with a ground-floor retail offering.

[smartcode_project:default project_id=151821 project_image_fid=368352]

Blake Schulze, National Director – Residential at <a href="https://www.apartments.com.au/project-marketer/colliers">Colliers</a>, says around 44 per cent of buyers are&nbsp;owner occupiers, with 35 per cent being investors and 21 per cent first homebuyers.

“Developments of this calibre are very rare in the Hills District, and Lily Lane’s sales success demonstrates the depth of demand for over-sized apartments that genuinely compete with freestanding homes," Schulze says.

"We are seeing particular demand from downsizers who want to remain in the area but transition into spacious, high-quality apartment living."

On the penthouse sale, it says it shows buyers&nbsp;are prepared to pay a premium for scale, quality, and direct access to the Metro.

[smartcode_project:default project_id=151821 project_image_fid=368351]

One-bedroom apartments are sized from 50-72 sqm with prices starting at $745,000, while two-bedrooms are priced from $990,000 with sizes from 75 to 132 square metres. Three-bedroom floorplans are sized between 97 and 182 sqm,, with prices starting at $1,395,000.&nbsp;

The three remaining penthouses, spanning up to 262 sqm, are priced from $2.9 million.

Over 75 per cent of apartments include dedicated studies, multipurpose rooms or family rooms, with select layouts offering walk-in pantries and laundries. Apartments are appointed with premium Miele appliances including ovens, washing machines, dryers, gas cooktops and dishwashers, while larger residences also incorporate integrated Miele microwaves, Fisher &amp; Paykel integrated refrigerators and five-burner Miele cooktops.

[smartcode_project:default project_id=151821 project_image_fid=360285]

Lily Lane will be constructed by award-winning iCIRT-rated builder <a href="https://www.apartments.com.au/builders/decode">Decode Group</a>, with construction to commence in mid-2026 and expected to complete early 2029.

Carrington Place comprises more than 800 apartments and is being delivered across multiple stages, with completion expected in 2032. Integrated with neighbouring bushland, the project will feature over 20,000 sq, of outdoor recreational area, including a one-kilometre boardwalk to Fred Caterson Reserve.&nbsp;

The Hills Showground Metro Station is just a two-minute walk away, offering fast connectivity to Sydney’s CBD, North Sydney, Chatswood, Macquarie Park and Norwest Business Park.

[smartcode_project_cta:default project_id=151821]

Ellipse sets Castle Hill apartment record with $5.75 million Lily Lane penthouse sale

Fresh off completing its Delano Crows Nest development, Lindsay Bennelong has lodged plans for its next project, this time turning its attention to the beach.

The developer, founded by Clarendon Homes founder Peter Campbell, is proposing a 37-apartment scheme at <a href="https://www.apartments.com.au/new-apartments/17-25-ashburner-street-manly-nsw-2095">17-25 Ashburner Street</a>, Manly, positioned between the southern end of <a href="https://www.apartments.com.au/developments/manly-nsw-2095">Manly</a> Beach and East Manly Cove.

Lindsay Bennelong called on local architecture firm Platform Architects to design the new building, given their success on The Finn, Lindsay Bennelong's current luxury apartment project on North Steyne.&nbsp;

According to the Design Verification Statement by Bridie Gough of Platform Architects, the proposal “relates to the current context but also the desired future character of taller buildings suitable to the new planning controls.”

The site has been identified as a Low to Mid-Rise Housing (LMR) location, given its position within 400 metres of the Manly Town Centre E1 Business Zone. The LMR controls are intended to unlock additional housing supply in well-located areas close to public transport, allowing developers to seek increased height limits to support greater density.

“The proposal seeks to provide this increased level of housing whilst being respectful of some of the smaller scale buildings also nearby,” the statement reads.

Lindsay Bennelong Development Director Leigh Manser said the project has been carefully aligned with the intent of the LMR controls. The proposal will significantly increase housing yield on the site, replacing four houses and 10 apartments, comprising 25 bedrooms, with 37 new apartments delivering a total of 94 bedrooms.

“Sydney is in a severe undersupply, and delivering more dwellings and more bedrooms than what currently exists is exactly what the LMR policy is designed to activate,” Manser said, noting that nine of the apartments will be allocated as affordable housing for frontline workers.

“We have already commenced discussions with our community housing provider to determine the rental levels that frontline workers can realistically afford in this location,” he said. “These will need to sit well below the standard affordable housing benchmark of 20 per cent below market rent, and that has been factored into our feasibility and pricing.”

<img alt="Manly" data-entity-type="file" data-entity-uuid="ad03000f-19f9-48b4-b27d-e85ca800a1da" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-30%20at%208.41.59%E2%80%AFAM.png?VersionId=a.txHwCZgbCInlQ6QXbIrI.umvW1T.r8" />

The design of the building incorporates a wave-like indentation running through the façade, referencing the nearby coastline and anchoring the building within its local context.

The&nbsp;Design Verification Statement says careful consideration has been given to the articulation of the building, ensuring the bulk is broken down to a more human scale through a defined four-storey podium."

The scheme includes a mix of one-, two- and three-bedroom apartments.

“The design ensures a high level of amenity, with apartments offering generous private open space, many with expansive views, and all with comfortable proportions."

<img alt="Bennelong" data-entity-type="file" data-entity-uuid="6a7f2812-72a1-4959-84b0-997e8cd88aed" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-30%20at%2010.15.50%E2%80%AFAM.png?VersionId=6iMxU3MkXmHVHAoNhYBjnqgka8CUZNbk" />

<a href="https://www.apartments.com.au/developers/lindsay-bennelong-developments">Lindsay Bennelong</a>&nbsp;is currently developing Finn Manly, just three full-floor luxury apartments on North Steyne. They recently welcomed residents to its 81-unit Delano Crows Nest development, a&nbsp;carefully scaled infill project designed to bridge&nbsp;<a href="https://www.apartments.com.au/developments/crows-nest-nsw-2065">Crows Nest</a>’s lively village centre with its surrounding heritage streets.

Designed by&nbsp;<a href="https://www.apartments.com.au/architects/ajc-architects">AJC Architects</a>,&nbsp;<a href="https://www.apartments.com.au/new-apartments/delano-crows-nest-27-57-falcon-street-crows-nest-nsw-2065">Delano</a>&nbsp;is arranged across three low-rise buildings, incorporating a mix of one, two, and three-bedroom apartments alongside a limited number of townhomes addressing Hayberry Lane. The architectural approach draws on the area’s Art Deco lineage, reinterpreted through contemporary detailing and framed by landscaped communal gardens.

The developer also has a development site in Maroubra.

First look: Lindsay Bennelong's new Manly apartment development revealed

Fifty-nine residences across 37 levels. No more than two per floor. With 80 per cent now sold, what remains at <a href="https://www.apartments.com.au/new-apartments/madeline-by-mosaic-broadbeach-22-mary-avenue-broadbeach-qld-4218">Madeline by Mosaic</a> is a short list.

Madeline was always conceived at a scale that sits outside the normal register of Gold Coast apartment living. The residences are half- and full-floor configurations, with the largest spanning more than 400 sqm, dimensions that place them closer to the penthouse end of the market regardless of where they sit in the building.

That scale is the organising principle of everything else: how the floorplans are laid out, how the materials read, how the connection between inside and outside works.

[smartcode_project:default project_id=150135 project_image_fid=355941]

The interiors were developed in collaboration with <a href="https://www.apartments.com.au/architects/fraser-partners-0">Fraser &amp; Partners</a>, the architecture practice&nbsp;<a href="https://www.apartments.com.au/developers/mosaic-property-group">Mosaic</a> brought in as design partner for the first time on this project. The palette runs to natural stone, textured timbers, and soft metallics, materials chosen as much for their tactile quality as their appearance.

Light cleverly shifts across surfaces through the day, and the design is explicit about wanting that to be noticed. Full-height glazing runs across the primary living areas, and where the building faces east toward the ocean, those walls of glass are doing real work: framing a view corridor that the site's position directly opposite Broadbeach State School's playing fields keeps permanently open.

That outlook is the site's most consequential asset. In a suburb where new towers continue to rise, a protected view line is genuinely rare, and the Mary Avenue address secures it. Residents at Madeline will look out over open parkland rather than the rear of another building, a distinction that becomes more meaningful with each new development approved nearby.

[smartcode_project:default project_id=150135 project_image_fid=355939]

The private outdoor spaces are sized to match the residences themselves. Terraces on the upper levels frame uninterrupted ocean panoramas, and the planning ensures that living areas extend into those outdoor zones rather than treating them as separate attachments. The flow between the two is part of the design intent, not an afterthought.

Inside, the finish specification reflects the same approach. Rich stone benchtops, warm timber joinery, bespoke hardware, each element specified to hold up over time rather than read as a moment in a particular trend cycle.

[smartcode_project:default project_id=150135 project_image_fid=3409]

Beyond the residences, the amenity offering extends that register. A lap pool and sun deck anchor the outdoor space, alongside a magnesium pool, cold plunge, steam room, and sauna.

A commercial-grade gymnasium, residents' lounge, library, and boardroom round out a programme that functions more like a private members club than a standard building amenity floor.

Construction has commenced under Mosaic's in-house building arm, with completion scheduled for late 2028.

[smartcode_project_cta:default project_id=150135]

Madeline by Mosaic delivers penthouse-level living across every apartment

Developer Fortezza Group is the latest to take its new apartment development, <a href="https://www.apartments.com.au/new-apartments/the-belvedere-5-7-church-street-nelson-bay-nsw-2315">The Belvedere in Nelson Bay</a>, to the NSW Government.

Fortezza, predominantly a South East Queensland developer, is the latest to apply for State Significant Development&nbsp; status through the NSW Government's Housing Delivery Authority, a pathway becoming favoured by developers to speed up the approval process.

They are planning 57 two- and three-bedroom apartments across 5-7 Church Street and 42 Donald Street, near d'Albora Nelson Bay Marina. The diverse apartment mix has sizes from just over 80 sqm to the largest three-bedroom penthouses that reach nearly 200 sqm.

<img alt="Fortezza" data-entity-type="file" data-entity-uuid="090360e1-66d7-43ad-b686-aba81f173bf2" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-29%20at%2010.22.40%E2%80%AFAM.png?VersionId=DMqF96eBZolqSAAAcugX0l66ueWng66m" />

Fortezza calls the project a "piece of Istria in Nelson Bay,"&nbsp;referring to the largest peninsula in the Adriatic Sea, shared by Croatia (90%), Slovenia, and Italy, which is known for its Roman history, Venetian-style coastal towns and inland hilltop villages.

They say the The Belvedere is strategically positioned at the apex of Nelson Bay, offering unrivalled views of the ocean, the bay and captivating topography of the area.

"Our commitment to maintaining the integrity of every view and sight line has been relentless," Fortezza Group says.

"Through extensive modelling and analysis, we ensure that each apartment enjoys the natural beauty of Nelson Bay, regardless of future developments. Each design element is carefully curated to harmonise with our European heritage, drawing profound inspiration from the Roman architectural marvels in Istria. The arches, the cascades of greenery and the stonework that define our project pay homage to the structures that once exemplified Roman grandeur."

Residents will have access to a pool, communal green spaces, an office and a coffee shop.

Myriam Robin

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