Have Your Say 2018


Welcome to the ‘Have Your Say’ section. We have received thousands of comments on articles over the years, but here is a chance for you to set the agenda.

Cuffelinks often receives emails from readers offering opinions on subjects not directly related to any article, including feedback on the weekly editorial in the newsletter.

While Cuffelinks is not licensed to give person financial advice and often cannot respond directly, ‘Have Your Say’ is a place where you can share your opinion and engage with each other.

We also receive many approaches from market experts, especially fund managers, wanting to write articles and asking what topics to cover. Raise any subjects you would like addressed.

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148 Responses to Have Your Say 2018

  1. Sam Curtis April 17, 2019 at 4:14 PM #

    Bill Shorten: “If you are getting a tax credit when you haven’t paid any income tax, this is a gift”

    He knows that is a lie, but hopes that enough uneducated voters will fall for it. Gutter politics. This is theft, plain and simple. This time it’s high tax payers and pensioners they are targeting. They are unfit to govern.

  2. Malcolm Campbell February 28, 2019 at 1:54 PM #

    I have a question. Let’s assume the ALP get elected and it’s franking credit refund policy gets legislated. Whilst refunds cease, they are not lost, but are accumulated for future use. But there is minimal opportunity for the tax-free SMSF pension recipient to use these accumulated franking credits.

    “Death and taxes cannot be avoided” but perhaps in the future the former could minimise the latter. So when I die, my Super has a tax-free and a taxable component, the latter taxed at 15%. Can my accumulated franking credits be used to reduce my tax? Please say YES. The thought of giving our Bill and our Chris, the finger from the grave, makes death sound almost pleasurable!

  3. Carlo Bongarzoni December 22, 2018 at 3:48 PM #

    Banks should show cause!

    The Banking Royal Commission has illustrated how woefully the banks have failed the public, their fiduciary commitments, and their own shareholders. Pending the Commission’s report all manner of “punishments” are being touted. But surely one remedy would suffice? The perpetrating banks should be made to “SHOW CAUSE” why their banking licence should not be cancelled! And banking licence entitlement should be reviewed 3-yearly.

    Obtaining a banking licence takes a lot of doing and it’s not just about proving that the applying entity has sufficient secure funds. Licence approval is or should be also about fiduciary responsibility, legal compliances and public duty since banks’ play such a key role in society’s monetary needs. Their proven comprehensive failure on all such criteria surely questions any continuing entitlement to a banking licence? The act of re-applying for a banking licence and showing cause for such consideration should result in future modus operandi models more likely to guarantee public and customer safeguards, Board and executive management integrity and fiduciary commitment. Imposition of 3-yearly such reviews should also be a cementing guarantee.

    A properly conducted licence renewal process backed by 3-yearly repeats could then avoid the suggested insertion of in-house monitoring and ever more additional procedures/controls. It should not however preclude serious overhaul of banking regulatory bodies whose failures have been so self-evident.

    • SMSF Trustee December 24, 2018 at 9:55 AM #

      And they would do so easily. The Royal Commission has highlighted the poor policies in some areas, but 99% of bank clients have experienced nothing but a very competent well delivered service. Their salary has gone into their account, they’ve withdrawn cash or efficiently used their cards to make payments, or they borrowed and bought their home to live in, at interest rates they know with certainty ahead of each payment. That’s what they’re licensed to do and they do it just fine.
      Let’s not diminish the findings of the RC, but let’s also not throw babies out with bath water. Keep a perspective on things please.
      I do not want to face the uncertainty of knowing if one of the four major financial institutions might get closed down when I’ve experienced nothing but good service from them. That would be an enormous unnecessary inconvenience and an economy killer.

  4. Gary Judd December 14, 2018 at 6:53 AM #

    To quote from Graham’s introduction: “In the six years I have been writing these introductions, I have been reluctant to make macro forecasts. There are so many factors at play that predictions become an unsatisfactory ‘on the other hand’ exercise. Sound reasoning can be overtaken by a late-night tweet from an egotistical and unpredictable leader.”

    The chaos theory applies both to weather and climate, and to financial markets. In both cases, predictions are unsafe except in the very short term. Where chaos theory applies, predictions become exponentially more risky as the time span increases.

    https://wattsupwiththat.com/2011/06/13/the-chaos-theoretic-argument-that-undermines-climate-change-modelling/ explains in relation to climate change modelling, but is applicable to aspects of financial markets too.

    This extract is a brief explanation.

    “Systems of forces, equations, photons, or financial trading, can exist effectively in two states: one that is amenable to mathematics, where the future states of the systems can be easily predicted, and another where seemingly random behaviour occurs.

    This second state is what we will call chaos. It can happen occasionally in many systems.”

    Aspects of financial systems are inherently chaotic. In financial systems, there is the additional factor that the inputs (such as a late night tweet from a leader, a riot breaking out in Paris or a terrorist attack in Strasbourg) can be outside the ‘usual’ range of activities occurring in markets.

  5. Ray Hendle December 13, 2018 at 12:17 PM #

    May I suggest one becomes very careful when given advice by this previous Leader of the LNP. My own financial experience of following his lead met with the same outcome as this Leader politically. Cake anyone?

  6. SMSF Trustee December 11, 2018 at 2:38 PM #

    Michael Forrest, a Royal Commission can only recommend that law enforcement authorities prosecute people. It has no powers to put people in prison as you suggest. A Royal Commission is a public enquiry. It can compel people to give evidence and appear before it, but that’s about all. It’s then up to the government and law enforcement to act if they choose to do so.

    Which is only right. There remains a presumption of innocence until proven guilty and the RC’s processes only establish that there’s possibly a case to be answered, not that guilt is proven. I think observers need to keep that in mind and let proper process play out from here.

    Also, the purpose of a Royal Commission is ultimately to change behaviours. Yes, there’ll be some prosecutions, but if that’s the only outcome and nothing else changes, then I’d be far more worried about the value of the process. So, I’d put the question the other way around from the way you have – even if no one goes to gaol, if behaviour doesn’t change ‘was it worth it?’

  7. Michael Forrest December 10, 2018 at 11:25 AM #

    I am very keen to hear from you about your feeling on the Royal Commission. Do you thing we will see Commissioner Kenneth Hayne finding actually see some of our BANK heroes spend time in jail? If not was it really worth it? What other penalties will be considered. The banks are now one of the lowest trusted groups in Australia – with that being the case is there potential for the economy to stall more than it is currently?

  8. Andrew December 9, 2018 at 10:27 AM #

    Just read the 9 December Weekend Update. Wow. Is this really the insiders’ view of the Royal Commission? That to suggest that

    ” … taking money to which there was no entitlement raised a question of criminal law?”

    was somehow dangerous??

    If there is wrongdoing, should they not point it out?

    This whole piece has the tone of the arrogant defence of the indefensible. How dare they attack banks for doing a poor job and causing so much damage!

    Banks have been reckless. Customers have paid the price, and it increasingly looks like we are all in for it as the impact of years of liar loans now come to bite.

    Bank executives have overseen this, and have been paid obscenely for it.

    Banking culture has accepted all of this as the norm, with profit the justification.


  9. Phil November 30, 2018 at 11:45 AM #

    Hi Graham,

    Firstly, congratulations on the incredible job that you and your team at doing at Cuffelinks. It was really brought home to me this week when I received a shareholder survey from the CBA, and in the list of influencers to be selected was Cuffelinks. Well done!

    And I really enjoy your refreshing weekly introduction – you have really mastered the turn-of phrase and humour, very enjoyable.

    Turning now to my inquiry.

    Would it be possible to run an expert article on what an SMSF can do in anticipation/implementation of the Labor Dividend Imputation proposal – this is now looking as an increasing certainty as every day in politics marches on.

    There have been many articles discussing the bones and impact of the proposed policy, and much wringing of hands, but I have not actually seen a good article which discusses the options that may be available to minimise the negative impact. If there is such an article, please correct me, that would be much very appreciated.

  10. Andre S November 29, 2018 at 11:11 AM #

    The Royal commission into banking might never be repeated if, – and that’s the challenge here, -if remuneration doesn’t invite to unethical, immoral and sometimes criminal behaviour.
    Detectives often solve crimes by following the money trail.
    Investors can adopt a similar strategy by scrutinising how employees in companies they consider investing in are remunerated. End of story!

  11. Chris Stott November 29, 2018 at 11:03 AM #

    Hi Graham,

    I will be finishing up at WAM in the coming weeks to take a break from markets and recalibrate.

    Thank you for having me as a contributor over the years and congratulations on the success of Cuffelinks.


    Chris Stott​
    Chief Investment Officer / Portfolio Manager
    Wilson Asset Management

  12. Dan Molesworth November 29, 2018 at 10:53 AM #

    Hi, great graph in your newsletter, it will be interesting to see what it looks like 1 Jan 2019, my guess a lot better after a combined xmas rally and end to US/China negotiations.

    Regards, Dan.

  13. Martin Castilla November 29, 2018 at 10:49 AM #

    Cuffelinks is always interesting, often thrilling.

    ThankYou Graham for your updates and comments. Much appreciated in today’s finance world…



  14. Maurie November 25, 2018 at 2:12 PM #

    I am interested in the ALP’s proposal to tax trust distributions at 30%. If the trust distribution is entirely made up of franked income, then I presume that the 30% distribution tax will be imposed on the grossed-up value of the dividend. By the time the beneficiary receives the distribution, it would have been taxed twice – once at the corporate level and once at the trustee level on the same amount. And then to rub salt into a burgeoning wound, the beneficiary is denied a refundable franking credit. This is bordering on corruption. Cannot wait for the policy release on this one.

  15. Graham Hand November 25, 2018 at 11:14 AM #

    To our readers, apologies for sending the Weekend Edition to all our subscribers. It was an admin oversight. We usually only send it to those who do not open the newsletter on Thursday. This ensures they do not miss it as many people tell us they prefer to read on a weekend and the newsletter may be missed on Thursday with full inboxes during working hours.

    • Michael2 December 2, 2018 at 9:53 AM #

      Very thoughtful, thank you

  16. Steve November 22, 2018 at 11:25 PM #

    I attended the public hearing of the House Economics Committee in Melbourne today (Refundable Franking Credits) and found it quite informative especially when members of the public were invited to speak. One member of the Committee, Mr Josh Wilson MP kept on quoting the Parliamentary Budget Office (PBO) finding that 1% of population derive an $83,000 benefit in the form of refundable franking credits. Before today, I was under the impression that the PBO findings was based on the environment that existed prior to 1 July 2017 (unlimited assets held in pension accounts). However, Mr Josh Wilson seemed to indicate that the PBO findings had incorporated the likely impact of the legislative changes that introduced the $1.6m cap on pension assets. None of the attendees in the witness chair challenged Mr.Wilson’s assertion. I find it difficult to accept this assertion given that the ALP’s franking proposal (which is based on the PBO findings) came to light in March 2018, only eight months after introduction of the Transfer Balance Cap. Anyone care to comment.

  17. charles ds November 22, 2018 at 12:35 PM #

    Franking credit refunds exemption

    I heard on a podcast recently, when talking about exemptions to the ALP franking policy, Alan Kohler stating verbatim: “if you are on any sort of government payment you still qualify for the cash rebate”.
    We qualify for the Commonwealth Seniors Health Card which comes with a small quarterly payment (about $68 pp) as part of the Energy Supplement of the Household Assistance Package.
    Can you advise whether this payment may provide exemption to the proposed ALP retiree tax.
    I have put this question to Chris Bowen office but failed to get a reply .
    Charles DS

    • charles scourfield December 13, 2018 at 11:44 AM #

      Further info on my earlier query about Commonwealth Seniors Health Card holders, and whether they would be exempt from the ALP no-cash-refunds on franking credits: I eventually received a reply from Chris Bowen’s office as follows:
      “In answer to your question, the Commonwealth Seniors Health Card does not qualify your SMSF from exemption under Labor’s Pensioner Guarantee policy.”

  18. Guy November 22, 2018 at 12:03 PM #

    This week’s edition would have to be a contender for one of the best issues!

  19. John November 20, 2018 at 12:08 AM #

    Hi, im an avid reader of cuffelinks, thanks for providing so much info to investors out there

    Obviously, ive been reading with much fear the info about how labor’s franking credit policy will affect myself and most other investors, but ive not come across anything on cuffelinks about their other policy re the reduction in capital gains discount

    But first, may I check with you, while labor say they will reduce the capital gains discount from 50 to 25 because of “high property prices” im of the understanding that this reduction will be applied to ALL asset classes, not just real estate …

    My immediate question is WHY? If people, like me, who are not invested in property, only in the stock market and other assets like bullion, crypto, and domain names, who ARE NOT part of the “problem” that is driving ever higher house prices, then WHY are labor going to penalize me with having to pay 25% more of my gains in cgt ???

    Investors NEED to keep as much of their capital gains as possible, in order to reinvest, and thus grow their dividend incomes over time, so as to eventually not be pension-reliant

    Unlike the us, Australia residents cannot defer their capital gains tax if using the proceeds to immediately reinvest in other assets …

    Imo, cuffelinks, this is as big an issue for small investors as the franking credits issue is, it’s a whopping 25% tax rise, and is going to hurt many people

    Thanks, john

    • Graham Hand November 20, 2018 at 12:09 AM #

      Hi John

      Thanks for the kind comments and the question, it’s an important issue.

      Labor’s policy is here: https://www.alp.org.au/negativegearing

      It says:

      “Capital gains tax

      Labor will halve the capital gains discount for all assets purchased after a yet-to-be-determined date after the next election. This will reduce the capital gains tax discount for assets that are held longer than 12 months from the current 50 per cent to 25 per cent.

      All investments made before this date will not be affected by this change and will be fully grandfathered.

      This policy change will also not affect investments made by superannuation funds. The CGT discount will not change for small business assets. This will ensure that no small businesses are worse off under these changes.

      Labor will consult with industry, relevant stakeholders and State governments on further design and implementation details ahead of the start date for both these proposals.”

      So it seems that any investments you already own will not be affected.


      • Jon November 21, 2018 at 1:54 PM #

        Thanks graham, but ah yes

        It will affect any shares etc I purchase in the future, which is my concern

        People who buy shares and who wish to grow their capital so as to earn more dividend income and greater gains down the track, will be heavily penalized by labor

        And these are people who are not even in the property market, thus people not causing the “problem” are again going to suffer because labor only know how to use a blunt instrument when it comes to investment taxes

        Kind regs, john

      • Michael2 December 2, 2018 at 9:59 AM #

        Hi Graham, I was wondering if Cuffelinks had covered the issue of the government targeting a 2-3% inflation band, and the effect that has on retirees.
        On one hand those on the pension are being called welfare recipients, but with the governments inflation target raising the bar constantly on what is needed to live a decent lifestyle, it makes it damn difficult, especially if you are lucky enough to live longer

      • Paul December 13, 2018 at 9:35 PM #

        Good to see Graham exploding the myth of the capital gains tax policy of Labor not being grandfathered. Further, I see no reason why people without the means to achieve capital gains, should be subsidising high income earners who lower the government’s tax revenue and then often have the hide to criticise governments when they fail to achieve budget surpluses. Of course, people hate to lose their tax lurks but their opportunity cost to the nation needs to be taken account of.

  20. Brian November 16, 2018 at 3:19 PM #

    Not surprising Shorten wants to cut refunds for SMSFs to encourage industry funds.

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