Not all apartment amenities are immediately visible.

Swimming pools, gyms, rooftop terraces and residents' lounges have long featured on buyers' wishlists, but as the way Australians live has changed, so too have the features that make apartment living more convenient.

Increasingly, buyers are placing value on the practical aspects of day-to-day life. Fast internet, EV charging, secure bike storage, flexible workspaces and parcel management are becoming just as relevant as lifestyle amenities, reflecting changing habits and expectations.

Online shopping has been one of the biggest drivers of that shift.

Australians spent a record $82.6 billion shopping online in 2025, with almost one in every four retail dollars now spent digitally, making parcel deliveries a routine part of everyday life rather than an occasional convenience.

For apartment residents, however, receiving those deliveries isn't always straightforward.

Without someone home to accept a parcel, deliveries can be redirected to a nearby Post Office, left in building foyers or common areas, or require building management to temporarily store packages. As apartment living continues to grow across Australia's cities, parcel management has become an increasingly important consideration for both residents and developers.

Australia Post's Parcel Locker network is one response to that shift.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/KPZ9j5FRdsQ?si=Qztc1dNP3ZvEIUhb" title="YouTube video player" width="560"></iframe>

Rather than relying on home delivery, eligible parcels can be directed to a nominated Parcel Locker, where they're securely stored until collected. Once a parcel arrives, residents receive a notification through the AusPost app or SMS and can retrieve it using a one-time code or QR code at a time that suits them.

The network has expanded to more than 1,500 locations nationwide, with Parcel Lockers positioned at Post Offices, shopping centres, supermarkets, transport hubs and, increasingly, within or alongside residential developments.

That growing presence reflects a broader change in how apartment buildings are being planned.

Developers are increasingly considering the operational side of apartment living alongside traditional lifestyle amenities. Just as secure mailrooms, bicycle storage and EV charging have become more common inclusions, parcel management is emerging as another feature that supports everyday convenience.

It also helps preserve the arrival experience within a building. Carefully designed lobbies and communal spaces can quickly become cluttered when deliveries accumulate, while secure parcel solutions reduce the likelihood of missed deliveries or parcels being left unattended.

For buyers comparing apartments, these everyday details are becoming part of the decision-making process.

Location, floorplans and finishes remain fundamental, but the features that simplify daily life are carrying greater weight than they once did. As online shopping continues to shape consumer behaviour, secure parcel delivery is increasingly becoming another amenity worth looking for.

Joel Robinson

Parcel delivery is joining the apartment amenity checklist

Inca Property Group has lodged a State Significant Development Application (SSDA) for Dawn, a 53-apartment oceanfront development overlooking Mona Vale Beach.

The proposal, at 35-39 Darley Street East, would replace an existing 18-apartment strata building with a new owner-occupier-focused development comprising 53 two and three-bedroom apartments, including nine affordable built-to-rent residences delivered under the State's infill affordable housing scheme.

Positioned on a 2,679 sqm elevated site around 280 metres from Mona Vale Beach, the development has been designed to maximise panoramic ocean views while responding to the site's sloping topography.

<a href="https://www.apartments.com.au/developers/inca-property-group">Inca Property Group</a> Managing Director Josh Thompson said the State Significant pathway provided greater certainty for projects of this scale.

"This State Significant pathway gives the team real certainty to progress <a href="https://www.apartments.com.au/new-apartments/dawn-35-39-darley-street-east-mona-vale-nsw-2103">Dawn</a> through to completion," Thompson said.

"It allows us to acquire a one-off site, design it carefully and deliver the right offering for the suburb, assessed by the NSW Government's planning department."

The project is one of the first developments in the area to be assessed under the NSW Government's Low and Mid-Rise Housing policy, with the site sitting on the edge of the policy's designated inner area.

The proposal includes three basement levels providing 124 car spaces, alongside a range of resident amenities including a swimming pool, gym, sauna, wellness facilities and private plunge pools for selected ground-floor and penthouse apartments.

<img alt="Dawn" data-entity-type="file" data-entity-uuid="fc1a1daf-0ce4-4f12-9076-b1fa553c7a91" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-21%20at%208.42.11%E2%80%AFAM.png?VersionId=4GZ9h.gpNkTljbxyAET8Jfhv51XUamDm" />

Thompson said Dawn had been designed specifically for owner-occupiers and downsizers, a buyer profile that has driven demand across Inca's recent Upper North Shore developments.

"The majority of buyers in our recent North Shore projects have been downsizers, and we are learning exactly what this market is looking for. Beyond the location itself, we have included resort-style amenities to deliver a genuine lifestyle offering," Thompson said.

Located within walking distance of Mona Vale Beach, the town centre, Mona Vale Golf Club and the Royal Motor Yacht Club, Dawn represents Inca's first Northern Beaches project following the sell-out of Tara on Park in Waitara and Ellis Residences, currently under construction in St Ives.

Construction will be undertaken by Inca's in-house construction arm, GOP Constructions.

Dawn is the latest major apartment proposal for Mona Vale, with the suburb emerging as one of the key beneficiaries of the NSW Government's new Low and Mid-Rise Housing policy.

New developer One Living, led by industry veteran Joseph Scuderi, recently secured a site on Mona Vale Road, on the border of Mona Vale and Pymble, where it is planning around 140 apartments.

IPM is also planning its third project in Mona Vale, significantly increasing the scale of its previous developments with an 82-apartment proposal at <a href="https://www.apartments.com.au/new-apartments/159-167-darley-street-west-mona-vale-nsw-2103">159-167 Darley Street West</a>, opposite Bayview Golf Course and less than 800 metres from Mona Vale town centre.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/one-living-enters-sydneys-new-apartment-market-with-northern-beaches-site-acquisition">One Living enters Sydney's new apartment market with Northern Beaches site acquisition</a>

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-ipm-plans-third-mona-vale-project">First look: IPM plans third Mona Vale project</a>

First look: Inca eyes Mona Vale with State Significant DA for Dawn apartments

Seasoned Victorian apartment developer <a href="https://www.apartments.com.au/developers/central-equity">Central Equity</a> has logged more than $400 million in sales in its luxury apartment project Palmera Residences at Northcliffe on the Gold Coast.&nbsp;

Central Equity Director Karl Kutner said the sales result reflected a combination of location, product quality and delivery certainty with the project already under construction by building powerhouse Multiplex.&nbsp;

"Surpassing $400 million in sales since launch is a significant milestone and an outstanding endorsement of <a href="https://www.apartments.com.au/new-apartments/palmera-residences-gold-coast-18-garfield-terrace-surfers-paradise-qld-4217">Palmera Residences</a>,” he said.&nbsp;

"We believe one of the key reasons for this strong result is the confidence purchasers have in knowing the project is under construction with Multiplex. Buyers are increasingly looking for certainty. They want to know that the project they commit to today will be delivered by an experienced team with a proven track record."&nbsp;

[smartcode_project:default project_id=108274 project_image_fid=365782]

Kutner said it was clear there was still high demand for luxury projects that offered certainty of delivery.&nbsp;

“We are in a market where many residential developments have faced delays due to rising construction costs, labour shortages and financing challenges,” said Kutner.&nbsp;

"But having construction underway has provided our buyers with resounding confidence backed by more than 40 years of development delivery by Central Equity combined with construction by one of Australia's most respected construction companies."&nbsp;

[smartcode_project:default project_id=108274 project_image_fid=365785]

Central Equity is one of Australia's most experienced privately-owned property developers. Over more than four decades, the company has delivered in excess of 85 residential developments including 10,000 apartments and many thousands of stand alone homes.&nbsp;

Located on Garfield Terrace at Northcliffe, between Surfers Paradise and Broadbeach, Palmera Residences occupies one of the Gold Coast's most sought after beachside locations. The development has been designed to appeal to owner occupiers seeking premium residences that combine generous living spaces and resort style amenities.&nbsp;

Palmera Residences will feature an exceptional collection of resort style amenities, including two swimming pools: a generously sized family pool with safe shallow zones for relaxed recreation, and a 20 metre lap pool positioned to maximise all day sunlight.&nbsp;

Residents will also enjoy exclusive access to wellness and recreational facilities including a magnesium pool, sauna, yoga studio, expansive fitted gymnasium, resident lounge, outdoor BBQ’s&nbsp;and indoor and outdoor dining areas, together with a dedicated concierge and luxurious hotel inspired entrance foyer.&nbsp;

[smartcode_project:default project_id=108274 project_image_fid=365767]

A unique feature at Palmera Residences has been designed to enhance the Gold Coast lifestyle which includes both indoor and outdoor gymnasium facilities, together with thoughtfully designed indoor and outdoor dining and entertaining areas. A corner café has also been incorporated to provide residents with a destination for their everyday needs.&nbsp;

Kutner said buyer demand had been broad based with purchasers attracted from interstate as well as throughout South East Queensland.&nbsp;

"We're seeing strong interest from owner occupiers, lifestyle buyers and people relocating to the Gold Coast. Many purchasers have been searching for a premium beachside residence where quality, design and delivery are equally important."&nbsp;

[smartcode_project:default project_id=108274 project_image_fid=365771]

Kutner said the sales milestone was an important achievement, but the focus remained firmly on delivering an exceptional development.&nbsp;

"While reaching $400 million in sales is an important milestone, our priority remains delivering a project that exceeds purchaser expectations,” he said.&nbsp;

"Palmera Residences has been designed to become one of the Gold Coast's landmark residential addresses, and we look forward to welcoming our purchasers to their new homes."&nbsp;

There are a limited number of residences remaining in selected configurations with pricing from $2,950,000 to $8,950,000. Palmera Residences is also crowned by expansive penthouses with wrap around views.

[smartcode_project_cta:default project_id=108274]

Construction certainty and strong buyer demand drive major sales result for luxury Gold Coast development

Palmera Residences fly out the door as sales pass $400 million

National property developer <a href="https://www.apartments.com.au/developers/goldfields-group">Goldfields</a> has appointed BINAH as its construction partner for Quartet, its new Brisbane apartment development in the undersupplied suburb of <a href="https://www.apartments.com.au/developments/milton-qld-4064">Milton</a>.

Located just two kilometres from the Brisbane CBD and moments from key 2032 Olympic precincts, <a href="https://www.apartments.com.au/new-apartments/quartet-milton-33-manning-street-milton-qld-4064">Quartet</a> will deliver 131 one, two, three, and four-bedroom apartments priced from $1 million to $4.2 million, combining elevated design with a wellness-focused lifestyle offering.&nbsp;

[smartcode_project:default project_id=108736 project_image_fid=368000]

Goldfields’ Chief Executive Officer, Lachlan Thompson, said the appointment of <a href="https://www.apartments.com.au/builders/binah-constructions">BINAH</a> marked an important milestone for the project.&nbsp;

“Bringing BINAH on board as our construction partner will allow us to bring our vision for Quartet forward with a team that has a proven track record of delivering high-quality residential projects,” Thompson said.&nbsp;

“We’ve taken a considered approach to progressing the site because we wanted to deliver the whole package. Buyers ultimately back great developers, great projects and great builders, and with Quartet, we’ve made sure all three line up.

“People want certainty, they want to know the project will be built, that the homes will be delivered as promised, and that the developer stands behind the quality of what they create. That’s something Goldfields has built its reputation on over many years.”&nbsp;

[smartcode_project:default project_id=108736 project_image_fid=367993]

BINAH’s Managing Director, Khalil Hafza, said the company was proud to be partnering with Goldfields to deliver Quartet.&nbsp;

“Quartet is an exciting project to bring to life, particularly given the level of detail in the residences and the extensive rooftop amenity planned for the building,” Mr Hafza said.&nbsp;

“Our focus is on delivering a high-quality build that brings that design vision to life and creates homes residents will enjoy for many years.”&nbsp;

[smartcode_project:default project_id=108736 project_image_fid=367999]

The facilities at Quartet have been feared towards the roof, with a&nbsp;25 metre lap pool, spa, sauna and cold plunge, and a communal barbecue area and alfresco.

Town planning was designed by <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> and brought to life by Melbourne-based architecture firm Cera Stribley.

<a href="https://www.apartments.com.au/interior-designers/cera-stribley">Cera Stribley</a> Co-Founder and Managing Principal, Dom Cerantonio, said the project responds to both its riverside setting and Brisbane’s evolving urban character.&nbsp;

“Quartet has been designed to sit comfortably within its riverside context, offering a refined take on urban living through well-planned, generously proportioned residences that will stand the test of time,” Mr Cerantonio said.&nbsp;

“An emphasis on natural light, natural textures and carefully selected finishes from timber and marble to premium appliances, creates calm, considered interiors designed for comfort and long-term liveability.”&nbsp;

Construction of Quartet will commence in July 2026, with completion anticipated in Q4 2028.

[smartcode_project_cta:default project_id=108736]

Construction to commence on 131-residence tower designed around wellness-focused living

Goldfields appoints BINAH for Quartet apartments in Milton

The first partnership between national developer <a href="https://www.apartments.com.au/developers/fortis">Fortis</a> and Adelaide-based developer <a href="https://www.apartments.com.au/developers/otello">Otello</a> has made a strong start, with the pair securing $21 million in unconditional sales at <a href="https://www.apartments.com.au/new-apartments/one-four-four-hutt-adelaide-144-hutt-street-adelaide-sa-5000">One Four Four Hutt</a>&nbsp;on the edge of the Adelaide CBD.

Over a third of apartments have been snapped up in the boutique 44-apartment project on the corner of Hutt Stret and Wakefield Road. Local downsizers and owner-occupiers wanting to remain in Adelaide's tightly-held southeast quarter have been the most prominent purchasers.

The DKO-designed, mixed-use development is one of the few new apartment projects in the precinct, an area where new housing supply has remained limited despite continued demand from buyers wanting to stay close to the CBD, Victoria Park and Adelaide's established east-end amenities.

[smartcode_project:default project_id=151233 project_image_fid=375378]

Fortis Head of Development SA Arthur Dendrinos said the early sales reflected both the strength of the local owner-occupier market and confidence in the Hutt Street location.

"The level of early commitment reflects the confidence local buyers have in the Hutt Street precinct," Dendrinos said.

"Many purchasers are long-term east-end residents who love the area and want to stay connected to the neighbourhood. They recognise the value of a well-designed, well-located development.

"Our partnership with Otello has been central to this success, and the number of unconditional sales at this stage only strengthens our confidence in the South Australian market."

[smartcode_project:default project_id=151233 project_image_fid=375379]

Otello Director Daniel Harris said the sales result also highlighted the lack of new apartment opportunities within the Hutt Street precinct.

"One Four Four Hutt has clearly resonated with buyers, with strong early sales reflecting both the appeal of the Hutt Street corridor and the lifestyle on offer," Harris said.

"The activated ground-floor retail has also been a key drawcard, with purchasers responding to the vision of a more vibrant and connected streetscape, not just the residences themselves."

One Four Four Hutt will deliver 44 one, two and three-bedroom apartments, alongside a collection of penthouses, above a ground-floor retail offering designed to further activate the Hutt Street precinct.

Construction is scheduled to commence in the third quarter of this year, with completion anticipated in 2028.

[smartcode_project_cta:default project_id=151233]

Fortis Head of Development SA Arthur Dendrinos said the early sales reflected both the strength of the local owner-occupier market and confidence in the Hutt Street location.

Fortis makes Adelaide debut with Otello as One Four Four Hutt records strong early sales

Royal Commission

<html><body>
GUEST OBSERVATION
Among the many recommendations of the banking Royal Commission was a <a href="https://financialservices.royalcommission.gov.au/Pages/reports.aspx#final" target="_blank">Board of Oversight</a> for the two regulators in charge of financial institutions; the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority: ASIC and APRA.
Since then APRA’s own internal review conducted by deputy chairman John Lonsdale and NSW Supreme Court Judge Robert Austin, Australian Competition and Consumer Commission commissioner Sarah Court and UNSW professor Dimity Kingsford-Smith has found APRA to be soft on enforcement and <a href="https://www.apra.gov.au/sites/default/files/apra_enforcement_strategy_review_-_final_report_web.pdf" target="_blank">timid by comparison to its international peers</a>.
Nonetheless, and to demonstrate that APRA still doesn’t get what it doesn’t get, its chairman used Tuesday’s <a href="https://www.apra.gov.au/enforcement" target="_blank">release of the review</a> to announce a new mantra. From now on, APRA is to be: “<a href="https://www.financialstandard.com.au/news/apra-to-up-the-ante-135451581" target="_blank">constructively tough</a>”.
‘Constructively tough’?
It sounds like “tough but flexible”, a contradiction in terms if ever there was one. Despite its Royal Commission hammering, APRA still seems not to have internalised the message: fraud and theft are not up for negotiated settlement.
This is why a board of oversight is so necessary.
I have frequently argued in favour of such a reform: a <a href="https://theconversation.com/australias-financial-regulators-need-policing-91396;%20https://theconversation.com/to-clean-up-the-financial-system-we-need-to-watch-the-watchers-38359" target="_blank">regulator to regulate the regulators</a>. Along with colleagues Karen Fairweather and John Tarrant, I was invited to make a submission to the Royal Commission detailing egregious examples of regulator inefficacy, and capture by, and subornation to, the industries they are meant to regulate. Included was a body of theoretical and empirical international scholarship suggesting that financial sector regulators are more susceptible to capture than regulators of other industries.
We argued that the gravity of the potential harm from crises, superimposed with the frailties – both observable and theoretical – of regulators, required enhanced safety in the form of an overseer to police the corporate police.
So it was encouraging to see our submission reflected in the commission’s recommendation for a board of oversight:
<hr>
<a href="https://images.theconversation.com/files/269730/original/file-20190417-139084-e0dozd.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip" target="_blank"><img src="https://images.theconversation.com/files/269730/original/file-20190417-139084-e0dozd.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
<a class="source" href="https://financialservices.royalcommission.gov.au/Pages/reports.aspx#final" target="_blank">Final Report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, February 2019</a>
<hr>
Of concern, however, is that the commissioner elected to leave the details of how the board would work to parliament. It is here that the process faces its greatest risk: the risk of clumsy albeit well-intentioned implementation, all the way to purposefully bad implementation, fully intended to undermine the fundamental goals of the whole endeavour, and facilitated by equally captured and suborned politicians.
Politicians have a history of backing down
It has happened before. The 1991 report of the The House of Representatives Standing Committee on Finance and Public Administration entitled “<a href="https://www.aph.gov.au/Parliamentary_Business/Committees/House_of_representatives_Committees?url=reports/1991/1991_pp290report.htm" target="_blank">Pocket Full of Change</a>” recommended a banking code of practice, which was ditched at the last minute to be replaced by a different code written by the Australian Bankers’ Association. The result was a code that protected banks against their customers, while allowing them to virtue signal.
So far Treasurer Frydenberg has refused to commit to one of the single most necessary powers that such a board can possess: the power of public opprobrium. As far back as the late 1860s Charles Francis Adams Jr wrote of the need to subject captured and corrupted railroad commissions to the disinfecting power of sunlight; what Thomas McCraw, writing in the mid-1980s referred to as a <a href="https://military.wikia.org/wiki/Charles_Francis_Adams,_Jr." target="_blank">Sunshine Commission</a>.
The anti-viral power of public exposure has been amply demonstrated by the banking royal commission already. Heads have rolled: the chair, chief executive and group counsel at AMP. The chair and chief executive of the National Australian Bank (albeit after significant procrastination). Some entities have self-selected out of their business model. Others have self-selected out of the market entirely. Retail Super funds have haemorrhaged well in excess of one million members, and over <a href="https://www.afr.com/personal-finance/superannuation-and-smsfs/industry-super-funds-win-11b-from-retail-funds-after-hayne-scandals-20190226-h1bqiq" target="_blank">$11 billion in funds</a>.
But none of this fallout, none of it, is due to post-royal commission enforcement measures. It is all thanks to public opprobrium: sunshine.
Few things are as powerful as the power to shame
So it is of concern that the treasurer hasn’t yet made an unequivocal commitment to make public the board of oversight’s reports into the performance of our regulators, performance which to date has been weak enough, feckless enough, and incompetent enough to more than justify the royal commission.
Speaking to the ABC on February 4 in what might be some sort of Orwellian newspeak, Frydenberg would only say: "this new oversight board will be reporting to government and governments don’t operate in secret."
Sometimes they do, and especially when dealing with banks. APRA reports are routinely withheld form the public, making use of the secrecy provisions of the Banking Act.
Frydenberg should instead be mindful of the extensive protection his government has provided to the banking and retail super industry over the past five years, shielding them from the threat of inquiry by a royal commission up until the point when it was impossible to resist. It will serve no purpose to replace one protection racket with another. And that applies to both banks and super, something Labor’s Chris Bowen should keep in mind should he become treasurer.
Put simply, as we emerge from this dark, decade-long night of the most appalling dishonesty and wickedness in our financial sector, more than anything else, now we must ensure the sun shines.
Andrew Schmulow, Senior Lecturer, Faculty of Law, University of Wollongong
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/constructively-tough-neither-side-has-committed-to-fully-adopting-perhaps-the-most-important-recommendation-of-the-banking-royal-commission-111428" target="_blank">original article</a>.
</body></html>

j.ballantyne1990-6AQqhLzZaK

Why has neither party backing the banking royal commission's most important recommendation

<html><body>
GUEST OBSERVATION
The <a href="https://agedcare.royalcommission.gov.au/hearings/Pages/default.aspx" target="_blank">Royal Commission into Aged Care Quality and Safety</a> is this week turning its focus to aged care in the home.
So far it has heard evidence of <a href="https://www.smh.com.au/national/elderly-australians-dying-while-they-wait-for-in-home-aged-care-20190316-p514qt" target="_blank">long waiting times</a> to access home care services and a <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2019-03-18/royal-commission-told-of-bottom-feeder-applicants-for-home-care/10912738" target="_blank">complicated system of fees</a>. It’s only a matter of time before it questions the reasons behind those wait lists and fees.
Unlike aged care, access to many health care services is unlimited. Anyone can seek an appointment with their GP or turn up to a hospital emergency department, in most cases for free.
But the number of home care packages available to older Australians is capped, and the frail elderly are asked to foot some of the bill.
While some may argue to uncap the number of home care places, and replicate parts of the health system by providing free care for all, it’s not that simple. Governments will keep increasing the number of subsidised home care services in response to needs, but costs will also keep rising.
The challenge is to find the right funding balance between individuals and taxpayers, and for the system as a whole to remain sustainable.
Why are many health services free?
Australia has a high standard of health care, which supports people to live to a longer, and <a href="https://www.aihw.gov.au/getmedia/7c42913d-295f-4bc9-9c24-4e44eff4a04a/aihw-aus-221.pdf.aspx?inline=true" target="_blank">generally healthier</a>, old age.
Our Medicare system of funding is based on the principle of universal public health insurance which is paid for by the government (that is, the taxpayers). Public patients receive free care in public hospitals. Medical services by GPs and specialists are subsidised, as are many blood tests, X-rays and other imaging, allied health services (such as optometry), and most medicines.
In the year to September 2018, <a href="http://www.health.gov.au/internet/main/publishing.nsf/Content/Quarterly-Medicare-Statistics" target="_blank">86% of all GP attendances</a> were “bulk billed” (provided at no cost to the patient).
These benefits, however, come at a cost. About <a href="https://www.aihw.gov.au/getmedia/7c42913d-295f-4bc9-9c24-4e44eff4a04a/aihw-aus-221.pdf.aspx?inline=true" target="_blank">10% of Australia’s economic output</a> (gross domestic product) is spent on health care and two-thirds of this is funded by governments.
And, of course, not all health services are free for most people. Visits to dentists, physiotherapists and others are regular reminders of this. A more equitable way of funding <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/health/2019-03-18/calls-for-medicare-funded-dental-health-scheme-in-australia/10903574">dental care</a> is one of the emerging issues for the upcoming federal election.
What is home care?
Aged care plays a different role to health care in supporting people to stay at home. There are two forms of home care.
First, the <a href="https://www.myagedcare.gov.au/help-home/commonwealth-home-support-programme" target="_blank">Commonwealth Home Support Program</a> assists with daily activities such as meals, transport and personal care (showering, dressing, and so on) and some allied health services such as physiotherapy and podiatry (foot care).
In 2016-17, <a href="https://www.myagedcare.gov.au/help-home/commonwealth-home-support-programme/accessing-commonwealth-home-support-programme" target="_blank">around 723,000 people</a> received one or more of these services.
Second, Home Care Packages provide <a href="https://agedcare.health.gov.au/programs/home-care/home-care-packages-program" target="_blank">expanded support</a>, with daily activities as well as more complex health care from nurses and allied health workers.
At September 2018, there were <a href="https://www.gen-agedcaredata.gov.au/www_aihwgen/media/Home_care_report/HCP-Data-Report-2018-19-2nd-Qtr.pdf" target="_blank">over 90,000 people</a> receiving one of the government’s subsidised Home Care Packages.
Why are many elderly asked to help pay for home care?
Australia’s population is ageing. In 2017 3.8 million Australians were aged 65 and over. In the next 40 years this will probably <a href="https://www.aihw.gov.au/reports/older-people/older-australia-at-a-glance/contents/demographics-of-older-australians/australia-s-changing-age-and-gender-profile" target="_blank">grow to 8.8 million</a>. The costs of funding aged care will continue to increase.
In 2011, when one of us (Michael Woods) was the presiding commissioner on the <a href="https://www.pc.gov.au/inquiries/completed/aged-care/report/aged-care-volume2.pdf" target="_blank">Productivity Commission’s inquiry into aged care</a>, we put forward three principles to help governments create a sustainable funding models for aged care:
<ul>
<li>
accommodation and everyday living expenses should be the responsibility of individuals, with a safety net for those of limited means
</li>
<li>
health care services provided through aged care (such as nursing and allied health care) should be subject to charging arrangements consistent with those in the health care system
</li>
<li>
individuals should contribute to the cost of their personal care according to their capacity to pay, but should not be exposed to catastrophic costs of care.
</li>
</ul>
The current fee arrangements broadly reflect the intent of these principles.
The government aims to keep fees for the basic <a href="https://agedcare.health.gov.au/sites/default/files/documents/01_2018/client_contribution_framework_guide.pdf" target="_blank">Commonwealth Home Support Program</a> at very affordable levels and has produced fee guidelines for providers. There are no formal income tests and while some providers do no more than seek a voluntary contribution for some services, others may recover around 10% of the cost of some services as direct fees or membership subscriptions.
For the more complex and higher cost home care packages, providers can charge consumers a basic daily fee of <a href="https://agedcare.health.gov.au/programs/home-care/home-care-fees-for-consumers-entering-a-home-care-package-from-1-july-2014#Basic%20daily%20fee" target="_blank">17.5% of the basic rate</a> of the single age pension.
There is also an income-tested care fee, which recognises many older people have a greater capacity to contribute to the costs of their everyday living expenses. As a safety net for all, however, there are annual and lifetime caps on these fees.
The home care system has many issues to address, but it is not in crisis
Despite the <a href="http://www.health.gov.au/internet/ministers/publishing.nsf/Content/health-mediarel-yr2019-wyatt003.htm" target="_blank">growing number</a> of government-subsidised home care packages, the latest aged care statistics show that at December 2018 there were <a href="https://www.gen-agedcaredata.gov.au/www_aihwgen/media/Home_care_report/HCP-Data-Report-2018-19-2nd-Qtr.pdf" target="_blank">over 127,000 people</a> on a national priority list for services that met their needs.
The wait time for some, sadly, is <a href="https://www.smh.com.au/national/elderly-australians-dying-while-they-wait-for-in-home-aged-care-20190316-p514qt" target="_blank">too long</a>. However, some subsidised help is available for nearly all people on the list. Over 96% of people on the list had been offered, and were generally accepting, a lower level of subsidised support while they waited for a higher level of service.
There are also questions about how this queue is created and the assessment process itself that the royal commission may want to follow up.
For example, not all assessments and referrals to services are necessarily based on current needs. At December 2018, <a href="https://www.gen-agedcaredata.gov.au/www_aihwgen/media/Home_care_report/HCP-Data-Report-2018-19-2nd-Qtr.pdf" target="_blank">96,000 people</a> who were waiting for their approved level of home care package also had an approval for a permanent place in residential aged care. This suggests the assessment process may contain an element of anticipating future needs, rather than reflecting current needs.
Another concern with the current assessment process is a lack of focus by some assessors on helping older people to regain a level of independence through short-term “reablement” programs rather than adding them to the queue for ongoing services. As the <a href="https://consultations.health.gov.au/in-home-aged-care-division/streamlined-consumer-assessments-for-aged-care-ser/supporting_documents/Discussion%20Paper%20%20Streamlined%20Consumer%20Assessment%20for%20Aged%20Care.pdf" target="_blank">Department of Health</a> notes, a wellness and reablement approach in assessment and service delivery is not being consistently and effectively applied across the regions.
For the foreseeable future we can expect the government to keep increasing the number of subsidised home care services, but it will also keep a careful eye on the balance between public and private funding, and seek to keep the overall cost to the elderly and to the budget within sustainable limits.<img src="https://counter.theconversation.com/content/112963/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
Michael Woods, Professor of Health Economics, University of Technology Sydney
Sarah Wise, Senior Research Fellow in Health Policy, University of Technology Sydney
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/would-you-like-to-grow-old-at-home-why-were-struggling-to-meet-demand-for-subsidised-home-care-112963" target="_blank">original article</a>.
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Would you like to grow old at home? Why we’re struggling to meet demand for subsidised home care

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GUEST OBSERVATION 
The Royal Commission has sparked fresh discussions in Australia surrounding mortgages, in particular, what it means for homeowners who are currently paying interest only loans and how this will shape the Australian property market in years to come.
In-depth investigations during the commission put newfound pressure on Australian Financial Institutions to significantly improve their lending standards and reduce higher risk lending. Currently, approximately 200,000 Australians have interest-only loans but with the government removing the interest-only benchmark at the start of 2019, this figure is set to change drastically.
In the past, Australian banks offered interest-only mortgages to customers which could be renewed every five years. However, the removal of the benchmark now means that homeowners cannot renew interest-only loans and instead, must begin principal repayments as part of their mortgage repayments.
In addition to this, commissioner Kenneth Hayne proposed changes to the mortgage broker industry, whereby the consumer would be required to pay the mortgage broker’s commission, instead of the banks.
These proposed changes have the ability to drastically affect the landscape of the mortgage industry by potentially wiping out the whole mortgage broking system, leaving larger financial institutions with the freedom to set the interest rates however high they choose.
But who will be the most affected if these changes are confirmed? Unsurprisingly, it’s fairly widespread and will impact current Australian homeowners as well as those looking to borrow money, even impacting those in the rental market.
Homeowners will be paying more for their mortgages
There is approximately $360 billion worth of money wrapped up in interest-only mortgages. In the past, mortgage repayments have been dependant on interest rates, which fluctuate due to mortgage brokers and banks offering competitive rates.
But with the expiration of interest-only loans after three-years, homeowners will be required to fork out a lot more for their mortgage repayments, potentially increasing a massive 70%. An example of this is if you are currently paying $3,000 a month in repayments on interest only, interest and principal would escalate monthly repayments to $4,700.
The impact of requiring to pay principal will depend on the financial situation and lifestyle of the homeowner but those with a large property portfolio of interest-only will be hit the hardest.
This means having a buoyant property portfolio will only be available to those who are cashed up, which then leads to a flow on affect in the rental industry.
Tenants will likely experience an increase in rent
Even with the current market experiencing price declines, the prospect of purchasing a home will now seem even more daunting to prospective buyers due to these changes, driving one-third of Australians to rent instead.
Typically, most interest-only loans are covered by the rental income on an investment property. But with investors now set to be more out of pocket due to principal repayments, it’s only natural that this will affect how tenants are charged, with some landlords opting to charge more in rent in an effort to cover the difference.
Less money in the tenant's pockets means less money to put towards their own house deposit and this creates a vicious cycle. It’s unfortunate that salaries do not increase the same way houses do.
The fallout from the commission has led many people to debate how they should react but the truth is, it’s still a bit blurry. Once the new government is in place in May and the new budget is announced, things will start to cement.
But one thing that is certain is it going to be a lot tougher to borrow money, whether it be for investment or as an owner occupier. It’s not that banks don’t want to lend, more the Royal Commission has governed them to be more responsible when it comes to lending. We live in a society where it is very easy to shift the blame to others but at the end of the day, it comes down to each individual’s financial situation and the lifestyle they lead.
Bruce Oliver is the co-founder of Xynergy Realty, a Melbourne-based real estate agency.
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How the Royal Commission will affect the property market: Bruce Oliver

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GUEST OBSERVATION
What a backdown.
On Tuesday, with all the grace he could muster, Treasurer Josh Frydenberg declared that he wouldn’t be implementing as many of the banking royal commission recommendations as he had said he would.
As he <a href="http://jaf.ministers.treasury.gov.au/media-release/040-2019/" target="_blank">put it</a>:
"Following consultation with the mortgage broking industry and smaller lenders, the Coalition Government has decided to not prohibit trail commissions on new loans, but rather review their operation in three years’ time."
Trail commissions are the small annual payments lenders make to mortgage brokers to reward them for loans they have arranged, typically between 0.165% and 0.275% of the amount outstanding per year.
They are paid in addition to the upfront commission, which is typically between 0.65% and 0.7% of the amount lent.
On a loan of A$500,000 they could amount to A$1000 per year, a payment which, in the words of Royal Commissioner Kenneth Hayne is “<a href="https://financialservices.royalcommission.gov.au/Pages/default.aspx" target="_blank">money for nothing</a>”.
Hayne recommended that the borrower, not the lender, pay the mortgage broker a fee. Trail commissions would be axed straight away, and after a period of two or three years upfront commissions would go too.
In responding to the report on Day 1, Frydenberg more or less endorsed Hayne’s recommendation.
From July 1, 2020, the government would <a href="https://static.treasury.gov.au/uploads/sites/1/2019/02/FSRC-Government-Response-1.pdf" target="_blank">outlaw trail commissions on new loans</a>.
It would ask the Council of Financial Regulators and the Australian Competition and Consumer Commission to review the impact of the changes and implications of moving to complete borrower-pays remuneration in three years time.
The backdown means trail commissions are also safe for three years, which, given the likelihood of another lobbying campaign from brokers in three years time, means they are probably safe forever.
There’s a case against commissions
Anyone who has seen the movie “The Big Short” has seen a dramatic and only somewhat fictional representation of what can go wrong in the mortgage broking industry.
In that rendition, a bunch of highly incentivised, all care and no responsibility brokers help borrowers get loans they have no reasonable ability to repay. The brokers make out like bandits and the world economy is brought to the brink of total collapse.
We can all agree that was a bad outcome. According to Hayne, the problem with commissions is that they make brokers act in their <a href="https://financialservices.royalcommission.gov.au/Pages/reports.aspx" target="_blank">own interests</a>, rather than those of their customers.
But commissions are common…
It’s a legitimate concern, but let’s not forget that a range of actors in the economy act in their own interests all the time. Consumers buying everything from orange juice to health insurance to television sets act in their own interests. And firms selling them do too. Many pay their sales staff commissions.
Deferred commissions are common too. For executives, they ensure that they have something at risk after their term of services. For mortgage brokers, they create an incentive to recommend loans their customers won’t later switch out of.
Hayne thought that wouldn’t be needed. He recommended (and the government agreed) that the law be amended to require mortgage brokers to act in the best interests of borrowers.
It’s a nice idea, but tricky to police. It might be better to properly align the incentives to ensure the interests of the broker and borrower coincide, which is the position the government has belatedly adopted.
If it keeps commissions, as it now seems determined to do, it might need to apply some latitude to the term “best interests”. It is hard to require brokers to act in the literal best interests of their clients when the best loans for many of them will be the cheapest – mortgages from lenders that don’t pay commissions.
…and so is politics
The politics are complicated. Mortgage brokers account for more than half of all new mortgages written.
Notwithstanding the desire to look tough and adopt all of the Hayne recommendations, both sides of politics are aware that brokers are typically small(ish) business people of the kind they usually court aggressively, and that many would not survive having to charge upfront fees.
If the old adage is right, that the most dangerous place is between a politician and a camera, then another fairly hazardous spot is between a voter and property.
Mortgage brokers play an important role. At their best they help borrowers get better terms and inject some competition into an otherwise very concentrated banking market.
But if their incentives are not well-aligned then things can go awry, Big Short style.
We’ll have to wait
The best solution might be to make sure brokers get paid for getting their clients a good mortgage, rather than just a big mortgage.
This could involve “bands” of commissions based on mortgage size, rather than a bigger commission for every extra dollar borrowed.
And it could involve “skin in the game” where the size of the repayment is related to the commission.
Doing nothing would be a bad idea. So too might be doing something radical as Hayne has proposed.
But nothing might be exactly what we’ll get. The Coalition appears to have put off designing a proper commission structure for the next three years in order to buy some peace.<img src="https://counter.theconversation.com/content/113544/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
Richard Holden, Professor of Economics, UNSW
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/vital-signs-its-one-thing-to-back-down-on-haynes-recommendation-about-mortgage-brokers-its-another-to-offer-nothing-in-its-place-113544" target="_blank">original article</a>.
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rh-YsoTT2xMuQ

It’s one thing to back down on Hayne’s recommendation about mortgage brokers, it’s another to offer nothing in its place: Richard Holden

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GUEST OBSERVATION
The Hayne Royal Commission began and ended with strident criticism of the mortgage broking industry.
It recommended brokers be required to act in the “best interests” of intending borrowers, and that intending borrowers, rather than the successful lender, pay the broker’s fee.
So-called “trailing” annual payments from lenders would be outlawed as soon as possible and upfront commissions outlawed after two or three years.
It’s the only set of recommendations the government has been lukewarm about adopting, announcing instead that while brokers will be required to act in the best interests of borrowers and from July 1 2020 will no longer be able to accept new trailing commissions, decisions about upfront commissions will be delayed until a further review, to take place “in three years time”.
The government is right to be cautious.
What’s the problem with commissions?
Both the royal commission and the Australian Securities and Investments Commission are concerned commissions:
<ul>
<li>encourage brokers to recommend mortgages that borrowers cannot plausibly afford</li>
<li>cause the broker to recommend higher paying products over lower paying products, potentially to the detriment of borrowers.</li>
</ul>
So what’s the go with brokers?
Typically a borrower approaches a broker who works with banks to secure a loan.
According to ASIC, the method of payment is fairly standard:
<ul>
<li>the broker receives a commission from banks for each successful home loan. The commission is often divided into an upfront payment and a trailing commission, which is paid over time</li>
<li>the lender benefits because it can spread its commission expenses over time and can also terminate commissions if it believes a broker has behaved badly</li>
<li>the commission rates are relatively similar across lenders, with upfront commissions typically ranging from 0.46% to 0.65% of the loan amount, about $3,000 on a $500,000 loan. Trailing commissions typically range from 0.1% to 0.35% of the ongoing loan, about $1,000 per year on a $500,000 loan</li>
<li>lenders can also offer bonus payments, loyalty payments and “soft dollar commissions” which take many forms, including overseas conferences and holidays, shopping vouchers and tickets to sporting events</li>
<li>loan aggregators can also play a role. They provide back-office support and ancillary services to brokers. Some are partly owned by banks. These banks receive a slightly larger share of loans from brokers who deal with these aggregators than from brokers that don’t.</li>
</ul>
In practice brokers often provide good service
ASIC research finds that regardless of the conflicted remuneration structure the interest rates brokers obtain for clients are not significantly worse (or better) than those obtained by borrowers who deal with banks direct.
Their clients are slightly different, on average two years younger than bank clients and with incomes about A$6,000 lower. Brokers’ clients borrow slightly more than direct bank clients and their loans are more likely to be interest only.
Although until now legislation has not compelled brokers to act in clients’ best interests, other professional standards often do so.
And brokers are keen to get referrals and repeat business, which relies on brokers providing good service in the first place.
They’ve little incentive to push bad loans
Because banks compete for business, they tend to pay similar commissions, in much the same way as they tend to charge similar interest rates. It means that in practice there is isn’t much incentive for a broker to recommend one lender over another. This is especially so when you factor in the desire to get repeat business, and referrals, which they would lose if they pushed poor products.
And it is hard to recommend unnecessary loans. Borrowers usually come to brokers to arrange loans for homes they are already planning to buy. There aren’t that many extra dollars in recommending clients borrow more, and even if brokers did recommend higher loans they would still be subject to banks’ serviceability and equity checks.
At the moment banks are highly reluctant to lend large sums at high loan-to-valuation ratios.
All this means that commissions have a muted effect on brokers’ lending recommendations, with conflicts being ameliorated by the practical reality of commission homogenisation and the desire for repeat business and referrals.
And if commissions went…
If commissions went, brokers would have to be paid by borrowers.
Many borrowers would baulk at the fees, and would go to banks instead. This would increase banks’ costs, which could be passed on through additional borrowing fees. It would also increase the time borrowers must devote to sorting through potential lenders.
Some borrowers who lack financial expertise would then have to rely on banks’ advice, rather than brokers’; and, banks are hardly less independent about their products than are brokers.
It would be the smaller brokers that would suffer the most, some going out of business. Larger brokers would also be affected, but less so, due to economies of scale. The end result would be fewer brokers and less access to advice.
It’d be an unintended consequence of what Hayne recommended, and perhaps an unnecessary one.
While there are always bad apples in every industry, removing commissions would be a blunt – and potentially unnecessary – instrument with plenty of downsides. <img src="https://counter.theconversation.com/content/111631/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
Mark Humphery-Jenner, Associate Professor of Finance, UNSW
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/honest-brokers-why-mortgage-broker-commissions-arent-the-problem-111631" target="_blank">original article</a>.
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Why mortgage broker commissions aren’t the problem: Mark Humphery-Jenner

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EXPERT OBSERVER 
<div>The Hayne Royal Commission’s recommended changes to the mortgage broker remuneration model are well-intended but could cause consequences that ultimately leave the customer in a poorer position. 
</div>
<div>I urge the Federal Government to take great care in considering how this recommendation could be implemented, to retain the spirit of the change without severely affecting the broker industry. 
</div>
<div>Heritage Bank understands the need for financial services providers to have the best interests of customers as their top priority at all times, as that’s the central ethos of the customer-owned model. 
</div>
<div>However, banning commissions for brokers could actually be detrimental to customers, and give the big banks a free hit. 
</div>
<div>We do not support increasing the costs for customers to obtain a home loan, in the form of a customer-paid fee-for-service, and worsen the current affordability crisis for those customers already struggling to afford a home. 
</div>
<div>Nor do we condone the significant impact to competition that these measures are likely to create. 
</div>
<div>It is crucial that we maintain competition in the sector. The Royal Commission recommendation would create severe challenges for the broking industry and give more power back to the major banks. 
</div>
<div>The broker channel is vitally important for smaller lenders that do not have the large distribution footprint of the major banks. 
</div>
<div>At Heritage, we rely on brokers to grow our member base nationally, particularly outside of our home state of Queensland. 
</div>
<div>A major contraction of the mortgage broking industry would reduce competition and put the big banks in an even more powerful position in the home loan market. 
</div>
<div>We are a regionally headquarted bank, based in Toowoomba, and understand the importance of brokers in both regional areas as well as in capital cities in being able to support consumers’ access to competitive home loans. 
</div>
<div>Customer-owned banks such as Heritage operated in a fundamentally different way to the banks that were found to have systemic issues during the Royal Commission. 
</div>
<div>One of the key findings of the Royal Commission was the motivation of greed, both for personal gain and for higher profits for the business and shareholders. This is where customer-owned banks are fundamentally different - our members are our owners, and as such, profit is not our highest priority. 
</div>
<div>Heritage Bank is committed to supporting the mortgage broker channel, and we will continue to work with all industry participants to lobby for competition and viability of the broker channel to be maintained.</div>
<div> </div>
<div>Peter Lock is the CEO of Heritage Bank.</div>
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jrobinson-rf4aSBido9

Broker recommendations could impact customers and competition: Heritage Bank boss Peter Lock

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AMP's profit has been hit by its appearance at the royal commission, after which customers pulled $4 billion from its wealth management arm in 2018.
The beleaguered wealth manager's profit plummeted 97 per cent to $28 million after taking a beating at the banking royal commission.
Revenue from ordinary operations dropped 55 per cent to $820 million.
AMP made a profit of $848 million a year earlier.
The company said its underlying earnings, which strip out a lot of one-off costs and gains, were down a more moderate 35 per cent to $680 million.
It also recorded $656 million in customer remediation largely related to misconduct aired at the financial services royal commission.
AMP cut its final dividend from 14.5 cents to 4.0 cents.
Net cash outflows from its Australian wealth management division totalled nearly $4 billion dollars, compared to $931 million in the prior financial year.
AMP said the exodus was due to "the reputational impact of the royal commission" and financial advisors focusing on keeping existing customers rather than bringing in new business.
Superannuation member contributions were down but the company said it retained the majority of its employer super plans.
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AMP sees $4 billion withdrawn from its wealth management

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EXPERT OBSERVERS
Most of the economists polled think better regulation can make banks put customers first. The rest think it will need more. 
After three years and 35 polls, the Economic Society of Australia has received its first-ever <a href="http://esacentral.org.au/nep-polls-and-articles-item/33205/bank-royal-commission-ii/?type_fr=452" target="_blank">unanimous response</a> to a survey question.
It asked just over 50 of Australia’s leading economists to respond to this statement:
There is no way to significantly increase the degree to which Australian retail banks act in the interests of consumers.
Twenty did. All rejected the proposition that nothing could be done. But there was widespread disagreement about what should be done.
Most thought that regulations should be tightened and better enforced.
<a href="http://esacentral.org.au/national-economic-panel-item/15794/matthew-butlin/?type_fr=369" target="_blank">Mathew Butlin</a>’s comments typify this “more regulation” approach:
The incentive structures for bank staff, from the top down, play a key role in shaping behaviour. A more complete set of performance measures linked to remuneration that strongly penalises behaviour not in the consumer interest would provide stronger incentives for better behaviour, especially when linked with reliable information on non-compliance going to management and ultimately the bank board and a requirement for both to take action.
A smaller group openly doubted that better regulations would help, because they were not confident that the current crop of regulators or politicians would be able to devise and properly enforce them.
<a href="http://esacentral.org.au/national-economic-panel-item/15810/allan-fels-ao/?type_fr=369" target="_blank">Allan Fels</a> gave the most damning response (with the highest word count) saying what was needed - among other things - was a “radical improvement in the performance” of the two main regulators, the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority.
In particular they need a change of culture. This will prove to be harder to do than it sounds. People have been talking for over twenty years about the ASIC and APRA culture needing improvement.
<a href="http://esacentral.org.au/national-economic-panel-item/16039/geoff-kingston/?type_fr=369" target="_blank">Geoffrey Kingston</a> called for mandatory minimum sentences for financial crimes, arguing that the courts were complicit in the maintenance of financial crimes by being reluctant to jail white-collar criminals.
Kingston and <a href="http://esacentral.org.au/national-economic-panel-item/16049/joaquin-vespignani/?type_fr=369" target="_blank">Joaquin Vespignani</a> pointed to the monopoly power of the big four banks before then raising the hope that the “big data” revolution would democratise banking and re-empower consumers, an idea at the heart of the government’s <a href="https://www.accc.gov.au/focus-areas/consumer-data-right" target="_blank">Consumer Data Right initiative</a>.
Also targeting market concentration, Allan Fels, <a href="http://esacentral.org.au/national-economic-panel-item/16044/james-morley/?type_fr=369" target="_blank">James Morley</a>, and <a href="http://esacentral.org.au/national-economic-panel-item/17340/john-quiggin/?type_fr=369" target="_blank">John Quiggin</a> called for the separation of bank functions (with marketing separate from advice) or the breakup of banks themselves as happened in the United States under the <a href="https://www.investopedia.com/terms/g/glass_steagall_act.asp" target="_blank">Glass-Steagall Act</a> of 1933 which separated investment banks from deposit-taking banks.
<a href="http://esacentral.org.au/national-economic-panel-item/15811/gigi-foster/?type_fr=369" target="_blank">Gigi Foster</a> called for foreign countries to send competent regulators to sort out Australian’s banking system, suggesting that Australian regulators were compromised.
John Quiggin called for a stand-alone “no frills” public bank modelled on New Zealand’s <a href="https://www.kiwibank.co.nz/about-us/" target="_blank">Kiwibank</a>, something he hoped would rein in the expansion of the financial sector that began in the 1970s. But he added:
These proposals may be beyond the realm of political feasibility, which is why I have expressed only modest confidence in my view.
Quiggin and a substantial minority of those polled acknowledged that - uncomfortably for economists - many of the barriers to getting banks to behave better lay outside the realm of economics. Like well-meaning doctors, economists have been dispensing prescriptions that “should work”, while the patient continues to die.
But standard prescriptions have their place – among them removing commissions, imposing salary caps, imposing fee caps, revoking licences and setting minimum jail terms, all of which would change the balance of risks and rewards and help put money back into the pcokets of ordinary Australians.
Of course, even applying traditional economic prescriptions require political will.
Perhaps surprisingly for a group of “dismal scientists”, 20 of Australia’s leading economists believe that change is possible. It isn’t the economics that is dismal, it’s the dearth of political courage to do what’s needed.<img src="https://counter.theconversation.com/content/111748/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/gigi-foster-194" target="_blank">Gigi Foster</a>, Professor, School of Economics, <a href="http://theconversation.com/institutions/unsw-1414" target="_blank">UNSW</a> and <a href="https://theconversation.com/profiles/paul-frijters-3277" target="_blank">Paul Frijters</a>, Co-Director, Wellbeing Program, <a href="http://theconversation.com/institutions/london-school-of-economics-and-political-science-1219" target="_blank">London School of Economics and Political Science</a>
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/its-unanimous-economists-poll-says-we-can-fix-the-banks-but-that-doesnt-mean-we-will-111748" target="_blank">original article</a>.
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Economists’ poll says we can fix the banks, but that doesn’t mean we will

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GUEST OBSERVATION
One of the most important lessons to come out of last week’s banking royal commission is one of the least likely to grab attention, certainly not in the way <a href="https://theconversation.com/defence-mechanisms-why-nab-chairman-ken-henry-lost-his-job-111182" target="_blank">the resignation of NAB chair Ken Henry did</a>.
It’s that, in the view of Royal Commissioner Kenneth Hayne, when all is said and done the complex patchwork of rules that regulate financial institutions can be boiled down to six simple requirements:
<ul>
<li>
obey the law
</li>
<li>
do not mislead or deceive
</li>
<li>
act fairly
</li>
<li>
provide services that are fit for purpose
</li>
<li>
deliver services with reasonable care and skill, and
</li>
<li>
when acting for another, act in their best interests
</li>
</ul>
Yet, under our current law, these six principles are expressed in different terms in multiple pieces of legislation that run to thousands of pages and even more regulations, at both state and federal levels.
The labyrinth is arguably unnavigable for even sophisticated parties with access to good legal advice.
It wholly fails as a way of communicating the law to ordinary people, the businesses and citizens who are bank customers. It also provides an endless supply of “stall and evade” opportunities for wrongdoers who can clog up the courts with technical and strategic debates over how to interpret the labyrinth.
Legislative porridge
Even the best-intentioned plaintiff or prosecutor can end up pleading every possible permutation of the law to try and cover all bases.
The inevitable result is to “<a href="https://www.propertyobserver.com.au/http://www.austlii.edu.au/au/cases/cth/FCA/2016/1343" target="_blank">delay the proceeding and increase legal expenses</a>”, in the words of a recent Federal Court judgement.
Take the core prohibition of “misleading or deceptive” conduct.
Research conducted at Melbourne Law School finds the same prohibition in slightly different forms, with different requirements, different defences, and different remedies and penalties in <a href="https://financialservices.royalcommission.gov.au/Submissions/Documents/Round-6-written-submissions/POL.1000.2000.0030_0001.pdf" target="_blank">more than 30 pieces of state and federal legislation</a>.
The result has been described by another Federal Court judge as a “<a href="https://www.propertyobserver.com.au/http://www.austlii.edu.au/au/cases/cth/FCA/2012/1028" target="_blank">legislative porridge</a>”.
For many Australians it makes the use of the courts to resolve financial disputes with banks and insurance companies simply not possible.
As a result, we have developed a parallel “soft law”, that doesn’t work badly.
The <a href="https://www.ausbanking.org.au/code/banking-code-of-practice" target="_blank">Banking Code of Practice</a> sets out what banks should do and the <a href="https://www.afca.org.au/make-a-complaint/" target="_blank">Financial Complaints Authority</a> resolves disputes.
The Authority’s guiding principle is as simple as could be – that its decision be <a href="https://www.afca.org.au/public/download.jsp?id=6892" target="_blank">fair in all the circumstances</a>.
<img src="https://images.theconversation.com/files/258063/original/file-20190210-174870-dmhgrs.JPG?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""> 
<a class="source" href="https://www.afca.org.au/about-afca/rules-and-guidelines/afcas-operational-guidelines/" target="_blank">Australian Financial Complaints Authority Operational Guidelines.</a>
It raises the question of why the law needs to be so complex when the alternative to it doesn’t need to be.
Simplification has to start somewhere
Hayne wants to simplify the law, but he says the overall task is wider.
It will require examination of how the existing law fits together and identification of the policies given effect by the law’s various provisions. Only once this detailed work is done can decisions be made about how those policies can be given better and simpler legislative effect.
Our Australian Research Council Discovery project on <a href="https://findanexpert.unimelb.edu.au/display/grant103207" target="_blank">Rationalising the Law of Misleading Conduct</a> is undertaking precisely this task for the rules about misleading conduct, trying to track how the various laws and regulations overlap and interact with the ancient, evolving and equally complex general laws governing contracts, torts and equitable principles.
This initial “mapping” task requires sustained and expert attention, so much that it might seem beyond governments’ usual attention-spans.
But, faced with the enormity of the task, Commissioner Hayne doesn’t engage in a counsel of despair. Instead, he picks two easier steps that could be done quickly in order to make a real difference.
First, get rid of exceptions, carve-outs and qualifications. An example he uses is the special treatment given to grandfathered commissions, but carve-outs are everywhere.
Reducing their number and their area of operation is itself a large step towards simplification. Not only that, it leaves less room for “gaming” the system by forcing events or transactions into exceptional boxes not intended to contain them.
We should be clear about what is at stake. The rule of law demands that like cases must be treated alike. It follows that exceptions need to be strongly justified. And they haven’t been. Instead, exceptions and carve-outs reflect the lobbying of powerful industry groups concerned to preserve their own self-interest. And in some cases a failure on the part of the drafters to understand how the regime as a whole fits together and works.
The second step is to draw explicit connections in the legislation between the particular rules that are made and the fundamental principles to which they are intended to give effect.
Drawing that connection will have three consequences. It will explain to the regulated community (and the regulator) why the rule is there and, at the same time, reinforce the importance of the relevant fundamental norm of conduct. Not only that, drawing this explicit connection will put beyond doubt the purpose that the relevant rule is intended to achieve.
But a serious concern remains: how to do it without complicating the law further.
It might be time to take the leap and go back to basics: to reduce the legislation to the core principles and leave the detailed explanation of how they work in practice to “soft law” guidelines.
On how this might look, see our contribution <a href="http://press-files.anu.edu.au/downloads/press/n2641/pdf/ch27.pdf" target="_blank">Statutory interpretation and the critical role of soft law guidelines in developing a coherent law of remedies in Australia</a> in R Levy et al (eds) “New Directions for Law in Australia: Essays in Contemporary Law Reform”.<img src="https://counter.theconversation.com/content/110509/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
Elise Bant is Professor of Law, University of Melbourne
Jeannie Marie Paterson is Professor, University of Melbourne
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/understanding-hayne-why-less-is-more-110509" target="_blank">original article</a>.
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Understanding Hayne: Why less is more when it comes to simplifying banking law

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GUEST OBSERVATION
The Netherlands consumer-pays fee-for-service mortgage broking model recommended by Commissioner Hayne in the Banking Royal Commission has proved to be a huge failure for consumers in the Netherlands since its introduction in 2008.
The only winners are the big banks.
According to a 2017 report, entitled Banking in the Netherlands, obtained by Loan Market Group, the total number of banks in the Netherlands decreased from 99 banks in 2007 (when the market still operated on an upfront and commission model) to just 44 banks in 2017 (nine years after fee-for-service was introduced).
Mortgage broker commissions from lenders were completely banned in 2013, after being phased out from 2008.
<a href="https://www.statista.com/topics/3442/the-banking-sector-in-the-netherlands/" target="_blank">The Statista report</a> found the size of the banking sector as a whole in the Netherlands decreased by almost half. The total number of bank offices was approximately 3,400 in 2008. In 2016, this was less than 1,700.
The report categorised the Dutch banking sector as “one of the most concentrated in Europe”.
Additionally, Moody’s Investment Services 2018 report found one of the biggest Netherland institutions ABN Amro’s net interest margins have grown steadily since 2010.
In comparison, the Australian marketplace net interest margins of major and regional banks have been on a steady decrease since brokers were introduced into the sector in the mid-1990s, according to the Reserve Bank of Australia.
Loan Market Group believes this data demonstrates a pronounced lack of competition in the Netherlands, significantly contracting the banking sector, with mortgage brokers no longer having the ability to introduce borrowers to numerous products offered by the smaller banks and lenders.
This just further demonstrates the Netherlands model is a terrible outcome for Aussies.
The model has resulted in fewer lenders and fewer options for Dutch consumers. I fail to see how this is the best option for our marketplace.
The model that has been held up as the roadmap for the Australian mortgage market has been proven to result in less competition and the highest concentration of big banks in Europe.
This means customers have less choice, pay more fees and will get stuck in a home loan because the cost of changing will be too much as they’ll need to fork out each time they want something changed.
The only guarantee that will result from the Dutch model is that customers will pay more and will be locked into their loans.
Some of the key findings and insights from the report include:
●  The Netherlands experienced a massive reduction in the number of lenders from 93 banks in 2008 (when fee-for-service began) to just 44 in 2017.
●  The top five big banks in the Netherlands (including ING, Rabobank and ABN Amro) now control 83.8% of the Netherland’s marketplace.
●  Total number of bank “offices” or branches fell from 3,421 to just 1,619 between 2008 and 2017.
It is very clear the real reason the Big Four Banks in Australia are pushing for the Netherlands model. It will effectively kill off the competition coming from smaller lenders and banks and result in the banks having the lion’s share of the pie again.
This is definitely not the best outcome for customers by any stretch. Not only do customers in the Netherlands have less choice than before the upfront payment was introduced, but they are also paying fees. Fees that Australians don’t currently pay.
It is astounding people have spoken about the Netherlands model with such enthusiasm when we were able to find this solid research very quickly and easily online. It would be nice to think the Commissioner and his team might have done more research than they have, before turning the mortgage industry on its head and recommending a financially detrimental solution for everyday Aussies who are looking for the best home loan solution.
In addition to the reduction in competition, Australian consumers may soon have to pay a fee to get a mortgage. That may well be an option the first time they look for a loan, but it will also be payable if they want to refinance, or change their loan arrangement. Unless the savings are really compelling, switching won’t be worth their while financially, leaving them languishing with whatever product they already have.
As in the Netherlands scenario, it feels very much like the banks are trying to reintroduce exit fees by stealth, making the idea of switching home loans deeply unpalatable to consumers.
Some may suggest that the banks will reduce their fees accordingly, but what in the last 14-months of Royal Commission hearings would give anyone confidence that the banks do anything but look after their shareholders?
Background to the mortgage industry in the Netherlands:
●  In 2008, the Netherlands Ministry of Finance slowly started changing the payable upfront and commission amounts. Starting with 80% and 20% spilt then to 70% and 30% and then to 50% and 50%.
●  In 2011 the regulator announced its attention to completely ban commissions by the end of 2012.
●  The ban on mortgage broker commissions came into place at the beginning of 2013.
●  Borrowers now pay a fee-for-service
Sam White is the Loan Market Group Executive Chairman.
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