UBER

Introduction ...

The world of business survives on a simple concept of supply and demand in that the charge for supply can vary based on how many people want that supply.  However, this is regulated to stop price gouging, greed, extortion, fraud, misrepresentation and like unlawful actions by specific verbal or written contractual obligations on concluded agreements protecting the so-called weaker party.  Not all is fair in business.

In simple terms, both parties must agree to any transaction for it to be legal otherwise anyone could bill anyone and expect payment with no recourse.

A seller has little obligation to supply at a price other than when advertised at a certain price which leaves a vast grey area when the price is advertised as a variable based on demand.  

Enter ‘surge’ pricing from UBER.  UBER says that their surge pricing is designed to get more drivers into areas of high demand thereby supporting those wanting to travel.  On a prima facie test this would seem logical in that drivers would flock to ‘surge priced’ demand locations thereby increasing their revenue and basic supply.  But this would also reduce supply from other areas as demand goes unmet resulting in those areas also suffering surge pricing because demand exceeded supply and Uber’s algorithm kicked in.  A vicious circle not benefiting customers in any way shape or form but hugely benefitting Uber and their drivers.  Surge pricing just follows demand.  Uber obviously target demand areas and automatically add surge pricing which creates further areas of demand because supply has left to chase the first area.  A ‘self inflating’ cycle.

Imagine if this surge concept applied to the average supermarket ... “Sorry Madam but your bill was for $23 but because there was a queue of 4 people waiting to pay there will be a surge charge of 4 leaving you a bill of $92 but as we already have your credit card on file it was automatically deducted.  Have a nice day”... If Madam had accepted this surge in full and absolute knowledge before the event then she was accepting paying $92 for a $23 bill.  But if the surge is not known or accepted before the event then it’s unlawful. 

However, law surrounding extortion, fraud, blackmail, price gouging, deception and misrepresentation can mitigate Madam’s problem.  Is it extortion to charge 4 times a normal price when demand is high or is it just normal business practice?  I suspect the latter albeit we all have a choice not to shop at that supermarket or ride with Uber as companies extorting clients [extortion - a demand without a reasonable cause with an intent to gain a benefit]. There is a difference between demand pricing and fee gouging and a huge difference to charging after the fact without consent.

 

Case study ...

In our case, we accepted a confirmed charge of $115.32 as a concluded agreement by phone app despite Uber’s surge pricing of 3.9 because we had little choice.  Uber’s algorithm had calculated the fare based on known traffic conditions.  Pay 4 times the fare or walk!

What we didn’t expect was a further loading of 50% with a charge of $57.55 deducted from the credit card without our knowledge or consent.  We had not accepted this further charge.

This final fee was a clear misrepresentation of our already concluded agreement.  It was and is tantamount to fraud.  Intentional theft of funds without consent.

Conclusion ...

Before travelling with Uber make sure you know what is being charged and make sure it is accepted as a concluded agreement and don’t accept ‘after the fact’ charges.  Better, support normal taxi drivers.

Mismanagement of Covid19

‘The amnesiac [Coate’s enquiry], mismanagement-Andrews’, is out of control with Covid19.

Andrews’ actions propagate the self righteous / self entitled to openly defy public health orders.  These are the ‘covid spreaders’ caring little about anyone outside their own bubble whilst ignoring community responsibility.  Despite being labelled as ‘boofheads’ by the police they continue to ignore simple anti-death measures such as vaccination, masks, distancing and sanitising.  They could be big family groups insular to the health requirements of their community or just dropkicks unable to think past their nose.

Lockdowns are NOT going to create behavioural change in these people because they already have a mental fire wall separating cognitive thought from their chosen path.  Any actions they see as exacerbating a reduction in their precious freedom will only make them retreat further into stupidity.

Walk along Beaconsfield parade in Middle Park any Sunday afternoon during lockdown and watch the mask-less boofheads defiantly strut along seemingly fed by their own brain dead aggressive persona. 

Do I blame them for being angry?  Not really because even a ten year old can see ‘mismanagement-Andrews’ is out of his depth.  That same ten year old could also see Andrews desperately try to shift responsibility by prepending all statements with ‘based on health advice’ and/or emotive fear mongering words such as ‘highly infectious’ as though both of those disclaimers justify his actions.  They don’t.

The answer seems simple in that to stop the virus, stop the spreaders.  This is harder than enforcing an economy wrecking lockdown - which obviously does not stop those covid spreaders as a dropkick entitlement syndrome [DES] is alive and well. 

Mismanagement-Andrews must please take advice from statisticians who would have laughed at ‘the numbers’ he flaunts as justification for lockdowns. Traces of virus in country Victoria locks down the whole state costing millions [didn’t actually exist on retest] and one or two cases locking down a city of 5 million people [statistically absurd].

If it’s true, all we need to do is wear a mask, keep our distance and sanitise – often.  How hard can that be?  Unfortunately testing is ‘after infection’ and whilst vaccination will reduce chances of death it will still allow some spreading and, worse, the virus can apparently live on hard surfaces for an inordinate time.

Therefore the answer seems to be to encourage the spreaders to comply, by stick and carrot, without disastrous mis-management lockdowns penalising the innocent both financially and emotionally.

Firstly the ‘stick’.. If masks are SO important then those deliberately flaunting the rules need to be fined something in the order of $2,000 per offence.  Then, even the idiot can see that perhaps wearing a mask is better than shelling out $2k each time one is caught.  This is not a forever law but a temporary measure only until the virus is whacked.

Secondly the carrot ..   It seems vaccinations are our only long term solution and to that end EVERYONE must get vaccinated.  The carrot to achieve this is ‘the pass’ as has been introduced in France where fully vaccinated people enjoy greater freedoms after proving they have had the jab.  Those not wanting vaccination would not be allowed in restaurants, theatres, planes, etc.  Once again, a simple choice.  Get the jab, protect yourself, protect all those around you and enjoy a free life.  The option for those not wanting to protect our community is to stay at home.  A simple choice really, a choice everyone can understand.  Biden’s rules are similar – come to work but if you are unvaccinated then you must wear a mask, keep 1.5m distance to anyone and don’t travel. 

This can only happen with legislation allowing the police to blitz and fine and by making vaccination easy, plentiful and without grubby reporters selling fear and gloom as they have with AZ.  AZ is saving Britain!

The question is, ‘can mismanagement-Andrews make this happen?’  I hope so but then I doubt it.  His whole amnesiac management team [including health professionals] seem to be going down a different path.  A path of economic fatality and virus eradication failure despite his narcissistic power grab through state of emergency legislation.  I can’t imagine a worse person to hold that power.

The solution is to establish an arms length group of professionals to manage the pandemic with mismanagement-Andrews kept well away from any decision making.

CREEPING ASSUMPTIONS

 There is something intrinsically and inherently wrong with any manager who is responsible for other people’s money failing to take responsibility and validate the spending process.  A manager does not just spend a few million dollars without exact validation from those in charge.  Doing so is criminal. 

With Andrews spending millions of dollars of our money on private contractors in hotel quarantine there can be no ‘creeping assumptions’ as to who actually ticked the ‘spend’ box.  This is not play time, there are millions of dollars of our money seemingly spent for no reason as the ADF were offered for nothing and 800 are dead.

This is not a political statement, it is a comment on the appalling management and consequent mal administration of the hotel quarantine program in Victoria.  Circa 800 innocent people lost their lives as a direct result of that mal administration.

If a manager did that in the private sector they would most probably be charged with fraudulent funds misappropriation but at the very least fired for stupidity.  With Andrews it seems that level of mismanagement is accepted as the norm.  Funds misappropriation and stupidity are accepted.

Politicians are good at getting elected and convincing us lemmings that they are strong, honest, knowledgeable and able.  Remarkably, even in the face of proven disaster contradicting all those attributes, some will ignore incompetence and continue supporting obvious stupidity.  After the Royal Commission into banking many many CEO’s and executives and board members were forced to fall on their sword.  Yet, Andrews survives.  How?

Any acceptance of a ‘creeping assumption’ should immediately trigger replacement of the entire management team for incompetence leading to mal-administration and also trigger civil and criminal investigation leading to charges.  Remember at stake there are millions of dollars and sadly circa 800 lives lost.

This is serious.  Monetary losses alone will top a trillion dollars, many people are dead, there are major issues with decreasing mental health and our country is going backwards thanks to Andrews mismanagement.

Just today NSW and VIC have almost the same number of cases yet NSW is firing on all fronts whilst Vic suffers draconian lockdown measures at the behest of Andrews and his incompetent management team.  For example NSW has a 2sqm rule for outside dining and a 4sqm rule for inside dining.  We have take home only with dining in prohibited!  26 weeks of lockdown for Victoria after Andrews bungled management

The cost to Victoria in lost productivity will be literally trillions.

A new management team is mandatory!

Lock down in Victoria - government in fear

 The Andrews government in Victoria is responsible for some 800 deaths [800 of the 900 for the whole of Australia!], billions of dollars of debt for Victoria and Australia and the bankrupting of thousands of small business.  As every part of ‘Australia’ faced the same pandemic it is indeed obvious that Victoria’s failures were specific to Victoria and Andrews.

Obviously, Andrews and his key advisors [the memory lapse 8 et alia] lacked or knowingly suppressed [for private political agenda reasons as no one in their right mind kills 800 people!] the necessary intellect to construct the correct course of action remembering the rest of Australia was and is fine.

Victoria failed.

Indeed the facts were known and there were worldwide precedents to learn from yet Andrews ignored those facts and the second wave was born out of the mal-administration of hotel quarantine.   Apart from his lack of cognition choosing the wrong course of action Andrews and his so called team couldn’t step back and deal with the outbreak at an intellectual level [thus affecting success] but instead choosing to display a complete lack of actual intelligence with knee jerk ‘rules’ set at random without validation by experts.

Fear had set in.  Fear at government level is dangerous as the action of conation drives knee jerk actions based on that fear rather than intellect driving ‘step back’ thought.  The four modes in this respect are determine real facts, take quick action to halt dysfunction, implement long term fixes and follow through reforming and adapting on the way.  Not rocket science.

The federal government analysed the global situation, closed the borders and set in train the need to quarantine those seen at risk.  The same federal government also offered expert support to enable the states to deal with the quarantine thereby taking care of the first two management issues. 

Australia at this point seemed to be leading the world in decisive action so now it was up to the states to implement and follow through the quarantine process.  People were dying all over the world so the need for urgent action was critical but driven by cognition and intellect.

Victoria failed. 

Instead of implementing successful strategies with the support of the federal government as did the other states, Victoria decided to spend a few more million contracting private untrained security guards to monitor the quarantine process.  The result being some 800 deaths from a 99+% certainty those deaths were the result of maladministration of that private security.  Cognition and intellect had taken a back seat.

Now, fear had really set in but with rampant obfuscation, politicisation and blame shifting.  Those in charge were out of their depth both cognitively and intellectually.  Sheer panic and the fear of being blamed drove Andrews to want to be seen as the saviour instigating knee jerk curfews, travel restrictions et alia all the while the wearing of masks, social distancing and basic hygiene were proven to be the most effective anti-covid measures.  The Andrews lockdown is causing thousands of bankruptcies and significant mental health issues which has and is decimating our state.  No other state has chosen Victoria’s so called remedy because their systems were in place using the federal government’s offered support.  No out of control ego, no empty rhetoric just cognitive action driven by intellect.

Victoria failed and it’s cost Australia some $14 billion dollars and 800+ deaths.  This so dysfunctional and punctuated by the fact that NSW has more cases than us but is open and thriving.  NSW manages the outbreak whilst we have a dearth of cognitive intellect.

Collective amnesia at ministerial level

‘Where there is no vision, the people perish: but he that keepeth the law, happy is he’ [proverbs 29:18] – The so called crisis council being Daniel Andrews, James Merlino, Tim Pallas, Jacinta Allan, Jenny Mikakos, Jill Hennessy, Martin Pakula and Lisa Neville obviously had no vision, no oversight, no responsibility,  no management expertise and it seems no memory as all suffered inexplicable group amnesia over the refusal to use the offered ADF but instead to use private contractors costing millions of dollars and 800 lives.  Failing to act in good faith is a failure to ‘keepeth the law’ with the result being confusion and chaos with no concrete ‘vision’ of returning to normal.   

Once more unto the breach [a second wave of Covid] we are still stuck in minutia by being enveloped in a blame game that is both brain dead and dysfunctional but is still costing innocent lives and billions of dollars.  Please don’t blame others or point to other countries misfortunes because Australia was under control with Covid 19 until Ruby Princess [28 dead] and Andrews quarantine maladministration [800 dead!]. 

This is a ‘management’ issue where elected politicians with little management experience pontificate from on high whilst the visionless minions try to make sense of gross stupidity and criminal mismanagement.  800 deaths and a trillion dollar debt is criminal. 

There is no doubt that the Victorian labor government has been and is responsible for putting Victorians at risk through and by the mal administration of the so called second wave.  Not only though as there is still the ramping up of unsustainable debt, not having a clear vision for Victoria, selling our sovereignty to a rogue power and failing to even make common sense.  Andrews is the self appointed leader of that dysfunction but not the only culprit.  The ‘gang of 8’ comes to immediate mind as a group of senior government people so far out of their comfort zone that collective amnesia has set in - as ably demonstrated at ‘the enquiry’. 

No one is to blame so it seems for 800 deaths and a trillion dollar debt. No, not me, can’t remember, no one told me, my computer crashed, was sick that day, the dog ate the memo, aliens stole the email.  Sadly, these are responsible adults holding down key management jobs yet they come across as 10 year old kids determined to get out of trouble by any obfuscation or fabrication possible.

It’s pathetic but worse it’s ‘adult’ pathetic with known consequences.  Acting in bad faith doesn’t even come close.  Mindless narcissistic drivel but with enormous ramifications for their victims – us! 

It’s easy to devolve to minutia during periods of brain overload, as a matter of fact sometimes necessary to keep our sanity.  But, this is not what we pay our leaders for.  We pay them to actually think strategically.  Simple.  Shouty is not good.

This last week has been all about minutia and finger pointing over small things.  Good television but led by pontificating idiots focused on blame shifting away from themselves.

May I repeat, this current so called second wave has been caused by the collective labor government and bureaucratic affiliates with each identified player adding their useless two bob’s worth.  Let’s focus on 800 deaths and a trillion dollar debt instead of who said what to whom at 3:27pm.  Or, is that too hard?  Simple statistics show huge flaws in management and rhetoric.

It is a management problem!

Andrews has been and is wallowing in a sea of ineptitude.  Not only are his shortcomings on show but it seems all concerned are also wallowing.  This second wave should never have occurred yet it did because of sheer incompetence by a whole gaggle  of politicians, bureaucrats, advisors and public officials.  “I am too senior and beyond reproach”.  Yeah, right.

The solution?  We, the affected, demand Andrews and his cohorts apply some degree of intelligence to fixing the mess they created.  Not only Covid19 but the debt burden and the sale of Victoria to a foreign power.  Can they do this?  No.  They need help in the form of real and proven leaders from all sides of politics.  Think what Don Argus did for Coles Myer after a management import created disaster.  A calming strategic influence – right time right place.

I mean really, a curfew no one wanted or thought necessary [except Andrews], draconian lockdowns the same professionals thought unnecessary and a political ‘roadmap’ which was and is a joke to any business or indeed any thinking person.

I would be happier if it was the same Mexicans who invaded Telstra management and tried to screw the company before an Australian steadied the ship [Thodey]. In that case one could just ship them back to their home hole in the ground but we have an elected Government bent on staying in power by any means.

Therefore, we are stuck with the labor collective for a while albeit they must accept support from the real adults lest we all sink. Adults who think strategically such as Kennett, Keating, Costello and Gillard.

Oblivion is but a small step when good people fail to act - 800 lives lost and a trillion dollar debt is not political playtime.  When the country divides, political leaders have failed.  Simple, but watch the fools try and shoot the messenger.

It’s a shame that the pandemic response is but one of Andrews failures.  A big one, but just one.

Andrews again!!

 Why am I upset with the Victorian government [small g]?

When Alan Bond was caught and had to answer questions he had inexplicable memory failure yet some time later he came good-ish both physically and mentally.  Go figure.

This current enquiry into the hotel quarantine mal administration also seems to attract similar memory loss .  Chris Eccles [Andrews department head – slight similarity to 1950’s ‘The Goons’] admitted to receiving email re ADF offer yet couldn’t remember passing it on to anyone.  An offer this important just slipped from memory.  If this is the case then he is incompetent in the extreme.  If he did in fact pass it on then the plot thickens.  It is reported that Andrews did get the offer but, inexplicably, also had his own bout of memory loss.

And, if that’s not bad enough, Andrews wants more power through and by the brand new Omnibus bill.  This would allow Andrews to authorise anyone he sees fit to detain [arrest] people whom they ‘deem’ a health risk.  This health risk can be as little as passing someone who is ‘suspected’ of say having COVID19.  Imagine a scene where a few pimply faced untrained so called Andrews authorised health official goons [no similarity to 1950’s the ‘Goons’] arrest people walking around Albert Park lake during their allotted 2 hours of exercise because they happened to pass a person, also walking, who had the temerity to sneeze during hay fever season thereby being deemed to be a health risk.  Perhaps Andrews could re purpose the physically larger tram inspectors, as no one rides trams anymore, with say 10 minutes of training, a few warm handshakes and a special mask covering their identity.  Their kit could include truncheons, spit masks, pepper spray, Tasers and of course cable tie wrist and ankle restraints.  Only the select few would have assault rifles.  To be fair they would have to treat all the same including kids, the disaffected, the weak, the stupid and all gender varieties.  Now the Andrews goons have pounced they would have to do something with the deemed infected.  Enter Gulag 13 which is a razor wire fenced off area on a golf course somewhere [unused as Andrews banned golf] where miscreants are re-educated with electricity to the temples and sent to forced labour [not labor] camps [the new hotel quarantine] for 14 days.  There would be wall to wall photographs of Andrews with thought bubbles – me me me me].  Trite?  Perhaps those of lesser risk could be transferred to nursing homes as they are now nearing empty because past residents have succumbed to the same Corona Virus mal administration.   As someone was reported as saying [paraphrased],’the greatest failure of a public health management event ever!’

The Andrews government is heading towards the above.  He continually seeks more and more power yet has been proven absolutely incompetent and unable to manage.  He has the blood of hundreds of people on his hands as the second wave has been 99.9% caused by hotel quarantine failures.  Would you let a failed bus driver take your kids to school day after day?  Answer, no!  Yet we allow Andrews to remain as the man in charge despite selling us out to a foreign power, bringing in companies owned by that power to control infrastructure, sending us bankrupt and mal administering a simple hotel quarantine which everyone else got right.

Perhaps we Victorians are all evil and we are getting Andrews as punishment for our sins?

AN OPEN LETTER TO ALL VICTORIANS RE ANDREWS

 ANDREWS

Rowan Dean [AFR] wrote of Premier Andrews - “.. a cesspit of self indulgent cosmopolitan culture and disastrous financial management.. ” and “… secret deals signed with Beijing overlords …” and “… his bungling treasurer …” .  His opinion of his Federal counterpart was not much better.  “… the scheming eunuch Al-Bo and his insane proclamations which would send Australia into a death spiral”. [paraphrased but not much]

Alas, Victoria has devolved, with this premier in charge, from a debt free prosperous and viable state to one of eye watering debt owed to ‘someone’ who will expect interest and security.  That someone will own some $100 billion’s worth of Victoria.  Yes, nearly a trillion dollars in debt over 7 or 8 years of mismanagement.  We are now the pariah mendicant state.

How about secret deals with a regime which has, does and is proving on a daily basis to ignore the world in which it sits thereby putting our sovereignty at risk [HK, Taiwan, S^th China Sea, global trade rules, the WHO, Australia, USA, et alia].   He is also spending billions of our money on a ‘look at me’ power trip [ for example the subway and level crossings being built by a Chinese company] whilst ignoring offered funding from the Federal government on independently identified essential infrastructure [East West link - $1.2b thrown away].  How about funding the destruction of heritage properties [Sandringham golf course $10m] and destroying an inner suburban golf driving range to build more netball courts without thought of massive parking issues and whilst there is an existing huge netball centre 5 minutes away.  How about proving a lack of rational thought by banning activities during our exposure to the global pandemic such as fishing, golf and archery which are all, by their very nature, social distancing.  All as a “look at me I’m doing something to stop this pandemic all by myself”.  No other state followed suit.  Go figure.

Indeed, he and Victoria are a laughing stock from Canberra and from every other state.   He is on his own in the real world and out of control but out of control threatening our sovereignty, our financial security and our future.  People are dying! He even claims to have closed the country’s borders despite the Prime Minister doing just that.  Perhaps it didn’t occur to him that he CAN’T close ‘national’ borders or claim credit.

 

THE SECOND WAVE

The so called second wave is all Andrews doing in that he refused to listen to the others who got it right [everyone else], refused to accept help [ADF with contact tracing], refused the bees knees of contact tracing software and instigated draconian ‘look at me’ rules [curfew] which no expert believes will do any good but many believe will exacerbate mental harm.  Now we find out he deliberately misled parliament, the police and health services. History proves just how badly conceived and managed that was - mal administered and mal managed – knee jerk crap from people who shouldn’t be let run a two person tea room. After refusing expert help he spent millions of dollars of our money on private security firms without safeguards or oversight. This terrible management decision by Andrews caused the so called second wave with further losses of billions more dollars for Victoria and Australia PLUS a loss of productivity which will have an eye watering number attached.  Far worse, this has cost hundreds of lives – all as a direct result of Andrews look at me inept management.

He has recently removed support for circa 50,000 tradies [sole traders] and partnerships that don’t employ others.  Obviously he doesn’t believe sole traders or small business are worth saving.

His thinking and statements are truly bizarre.  He has mooted a 9pm curfew [from 8pm] providing we mere lemmings are very very good and he has said restaurants will be allowed to open stressing outside dining and density limits on inside.  A couple of issues therein.  Firstly, this is Melbourne we live in with its very changeable weather so no, outside dining will never replace inside.  Secondly people will have to race through a very early dinner to get home by 8/9pm.  Obviously Andrews does not go out a lot because this will just not happen.

 

WHAT DO WE DO?

Personally I would like to see all those responsible frog marched out of Parliament into their own quarantine centre for say 6 months socialising with all the known Covid19 infected – as they have let happen to others!  And yes, pay for their own hotel room and meals.  However, realistically or lawfully that will not happen and we cannot change Government on a whim as much as I would like to.

But, in the short term, what we can do is change responsibility for critical issues such as anything threatening our sovereignty, spending and anything to do with Covid19 and, for good measure, throw in dealing with homelessness.  Let Andrews run the day to day minutia whilst bringing in a team of proven ‘can-do’ people [those that can galvanise transparent action] to get us back on track - just as in dealing with rogue suburban councils.

The irony of this is that this is what Andrews should have done from the start.  If you don’t have the expertise then, go and get it.  Simple business 101! Don’t pontificate with ‘look at me’ rhetoric whilst the state is haemorrhaging and people are dying.

Harsh?  It can’t get more serious on several fronts.  Andrews needs to admit a problem and bring in the new short term can-do management team.  In this he will be seen as strong, in control and delivering for the people of Victoria as a leader who recognises when to get help.  Reverse narcissism – good! 

Send out a distress call to well proven leaders and experts for help.  How about Keating, Kennett, Costello and Gillard establishing an expert team to bring us back on track.  Wow!  Great people all, bi-partisan and proven leaders.  Just 3 months and we could be seen once again as the state that deals with issues on the front foot, quietly, respectfully and with transparent purpose.

Premier, please lead from the rear – a long way to the rear!

END

AFCA and Zurich insurance

Dysfunction ... 

The Australian Financial Complaints Authority [AFCA] has been and is seemingly supporting Zurich insurance to avoid paying out lawful travel insurance claims.  Despite clear evidence.

 Zurich as a global company with teams of researchers, actuaries and analysts all mitigating risk through known events knew there was a pandemic looming circa 2019 [Covid19] which would [standard terms and conditions small print] negate any insurance claim yet they still took people’s money for travel insurance in that exact knowledge and knowing quite well that they would never have to pay out.  ‘A false pretence’.  Obtaining money under false pretences is at the very least fraudulent misrepresentation.

As long as AFCA fail to curb obvious dysfunctions there can and will be no change.  Following the Royal Commission’s scathing reports on companies such as Zurich and indeed the AFCA itself, it is indeed obvious that there is no change to past practices.

You may gather I am a little tense.

andrews [small a]

Dear all,

Angry does not describe how I feel about Daniel Andrews. 

His government’s absolute mismanagement of our state has cost us, Victoria, literally billions.  Billions we don’t have because he’s spent it and had to borrow squillions from the Chinese just to feed his ongoing funds mismanagement.  The last time it was this bad was under Cain / Kirner. Go figure. 

Worse, Victoria is now the pariah state and seen as such by the rest of the country.  It’s cost us personally circa $30,000 over the 10 weeks of the last lockdown and something similar this time - and we are only one tiny little restaurant.  We will survive because we are financially secure – ish, have a great customer base and have planned for this sort of contingency.  Hundreds of businesses will not survive.

In terms of sport, he has finally figured out that we can still play golf because it’s naturally self distancing.  The rest of the country figured this out long ago and continued to play during the last lockdown.  We were then seen as a joke.  I despair.

Similar, archery is a non contact, naturally socially distancing sport.  This is a no-brainer.  Yet it’s banned.  Why, when golf driving ranges are open?  What’s wrong with archery when it’s so similar to the golf driving range?  No logic – no sense.  [UPDATE 15/7/20 - HE'S NOW BANNED DRIVING RANGES AS WELL]

We have a second pandemic wave because the premier sent a whole raft of mixed messages.  For example, allowing 10,000 people to march in the city.  She’ll be right mate. 

It’s not right, mate!  Idiot.

Now we have security guards also allocated by Andrews looking after hotel quarantine allegedly screwing detainees then tootling back to their family's with a healthy dose of COVID.  Fantastic.

How about a few religious festivals where bunches co-mingle generating more and more very healthy COVID infections which are on the march - with a healthy disregard for humans.

Then he gets on TV and espouses responsibility without taking blame for the absolute mismanagement.  Mismanagement which has cost us money, lives, huge disruption and a loss of reputation.  The KIWI travel bubble just burst. 

This is not a liberal / labour gripe, it’s a plea to get rid of Andrews before he destroys Victoria. What does it take for Victorians to see through this shambolic disaster?

We have been forced into this second and now necessary lockdown because of absolute mismanagement.  How many lives have been ruined by his continuing out of control crap.  No, it’s not easy but then there are supposed to be bunches of very bright people advising the Victorian government supporting good decisions.  Apparently not so.

This needs to be treated just like the rogue local councils which were stood down because of ineptitude and replaced by an interim bunch of ‘change agents’.

I look at the Victorian government hierarchy and, as I said before, despair.  Unfortunately the ability to get elected does not mean talent at anything other than getting elected.

Victoria has a narcissistic rogue government which is out of control but before we succumb and fold let’s bring in a focused management team to take over and try and resurrect disaster.

This is not a change in government, it is a change in responsibility.

And boy, are there several people who could make this happen in the short term, even if they were very very reluctant.  Paul Keating, Julie Bishop, Geoff Kennett, Peter Costello, Julia Gillard et alia.  Give me 10 minutes and even I could think of a team of 10 which could change the world.  People who are respected for their intelligence, ability to recognise and create change in the face of great odds and garner a following from us mere lemmings.  It would be nice if just one person could lead the change but there just aren’t too many Churchill's around.

If I can see this disaster as an overworked cook / dishwasher [now currently underworked] then everyone can. 

Speak up and stop the crap.

Regards,

Langevad J  [MBA et alia]

Covid and restaurants

Why do we do things in hospitality driven by knee jerk reactions and short term thinking?

My wife and I own and run a small restaurant which has been forced into just 8 diners per sitting because of very appropriate Covid restrictions.  In order to survive from day 1 after the reopening we ran two sittings which we are fortunate enough to have oversubscribed.

We do not force people to book online with a credit card and draconian penalties and we don’t stupidly surcharge a bill for using that credit card.  Both of these very very short sighted actions assume people are basically dishonest and financially stupid.  We do not have no-shows and welcome our guests as friends – some for over 17 years.  Friends who are indeed financially astute and honest and who enjoy and indeed respect the trust placed in them. 

Further, there is a trend to try and make people spend more money through the use of set multi course menus and/or minimum spends.  Once again a negative short term cash flow ‘solution’.  Except, it’s not a solution as people rightly don’t like having choice removed.  We have clients who don’t spend much [non drinkers usually] and lots who do.  The balance is appropriate at around $120 per head.  The key is that it’s a ‘balance’ and people spend because we spend a lot of time developing a product which people want to buy, not forcing something they don’t want.

Wonder why there are so many restaurant failures?  One reason, among many, is that restaurateurs show no respect for their clients devolving their offering to their own perceived bottom end financially stupid and disrespectful thinking.  When we opened some 17 years ago Telstra failed to connect our EFTPOS et alia so we had no method of taking credit card payments.  At the time we said to all clients, ‘don’t worry, just pay us next time you pass’.  Every bill was paid within the week.  I have a very healthy respect, for respect and no, it’s not earned, it’s a God given right.

This whole Covid thing is a real bugger on so many fronts causing real financial and emotional stress.  Restrictions placed to protect us against disaster are appropriate but then we see 10,000 people allowed to protest ‘cheek and jowl’ by our government.  Mixed messages from the idiots in power obviously with a brain-thinking disconnect.

We as a nation are going to ‘bolt’ out of this forced conundrum because as that nation we DO have respect for all peoples, we are not idiots and we live in the best country on earth with freedoms of everything. 

People choose based on how they are treated.

We choose Australia and people choose our little restaurant because we respect them without demanding and without hidden charges.

LEADERSHIP

Once upon a time there was a man who the world watched with envy as he transformed his patch from just plain broke to one marching towards success.  He was a great leader and people admired him for the dedication he showed to making every post a winner.  Other leaders aspired to garner some of his charisma as they said nice things and longed for photo opps. His record on respect for all was just shoved under the carpet because the world could see what he was doing and how he needed to do it.   Then he invaded Poland.

Fast forward 80 or 90 years and we have another leader, a great leader, a leader immersed in cementing his patch as indefatigably supreme. Just like the previous leader, respect for all was low on the list of priorities as he spread his patch’s control by land grab and economic stealth whilst making others dependant on his endless treasure chest.  The world watched exponential growth, strength and fortitude whilst others sought photo opps.  Unlike the last leader this man was quiet, enigmatic and focused with no shouted rallies or look-at-me antics.  One could say inscrutable.  Then he invaded …

How about yet another leader who espouses narcissism and self along with absolute distain for anyone outside of his narrow thinking - the blond spinnaker man with his finger on the red button but without the intelligence to determine just.   A man without letters from a long line of leaders without letters leading a country already shamed with indeginous genocide and sovereign invasion.

This dysfunction happens because we let it.  Indeed, even on a local level, we have a so called leader who is irresponsible and weak as well as being on a power trip with no one to stop him.  He confuses strength with stupidity, maintenance with strategic growth and public safety with an inability to appear strong. Mouth noise replaces lucidity.  Allowing 10,000 people to protest shoulder to shoulder whilst banning groups of more than 10 people in say restaurants under strict social distancing rules during a pandemic is insane. Pity.  

 What does it take for us to recognise a pattern?

The sad thing is that all the above mentioned men are self promoted leaders seemingly doing wonderful things for their own patches albeit at the expense of anyone who stood in their way.  But, in the end, at the expense of their own patch.  They all self promoted greatness but reality disagreed.

History is full of these people and at all levels of government yet we continually turn a blind eye hoping it will get better.  America is currently imploding where respect has left the building and plague terrorises.  The shallowness of past glories laid bare to reality.  Indeed, a new reality in which ‘others’ seek a foothold through quiet, focused and specific incretion.

So, who are the good guys?  Is it Mr Enigmatic, the blond flyover, the lost premier or perhaps our man from Hill song or is it perhaps just everyone and anyone who actually gives a toss?

The media get away with rabidly stupid comments, statistics and data which a 10 year old could see though - yet people believe.  They want to believe because even someone as dysfunctional as those mentioned above are better than wimp after dodgy after hopeless.

What a day for the human race. Not.

FINANCIAL ASSESSMENT BY BANKS

The dysfunction surrounding financial assessment of a proposed borrower is currently NOT about the borrower per say but about ‘productivity system intervention’ of the process designed to reduce staff costs for the FSP.  Indeed, to achieve ‘productivity’ targets everyone is lumped into categories and ‘assessed’ by software with little ability by people to press anything other than button a or b.  Quick?  Yes  / Simple? Yes / Accurate?  No.

As a matter of fact, it’s rubbish.

For example, I had occasion to shop around for a new home loan with a major bank and was unfortunately transferred to an idiot with no capacity for rational thought [indeed 3 times with 3 banks].  The monthly expenses that they insisted we incurred were a bank construct by a team of further idiots divested from reality [See AFR Sat 17/8/2019 report damning banks incompetence].  He / they just couldn’t understand the fact that we run a company with tax implications affecting our expenses.  He did not want to understand pre and post tax expenses.  A simple concept for anyone with half a brain but not for this bank employee making decisions between A and B. 

Dysfunctional for both the bank and the client!

To further this dysfunction it has been adjudged [same case – see comment on Caviar] that a client can actually self assess their expenses with some degree of alacrity.  ASIC lost the case to Westpac because the judge said that a prospective purchaser could adjust their spending habits to suit their commitments quite easily.  He virtually threw out the banks system of personal assessment.  Drive a Porsche before the house purchase but drive a VW after because there is only so much money. 

Simple.

There is no such thing as one size fits all and no such thing as a low level bank loans assessor with enough knowledge to make informed decisions.  Pushing button A or B doesn’t cut it.

They deal with a financial process over common sense.   So called productivity gone rampant.

The fix?  Training, training, training.  Front line bank staff need to understand finance.  Not just how to press button A or B. 

Assessment is all about risk factors.  Risks for the bank albeit now the impetus is shifting where bad advice and or bad process negatively affecting a client is also seen as a breach of fiduciary duty by the loan assessor / bank with responsibility subsumed by the bank and the application of pecuniary penalties. 

However, in effect, the banks risks are low because they have assurity through say a mortgage guarantee.  The problem for the banks is when the value of that guarantee slips below the outstanding loan as they would then be trading insolvent.

All the risk is on the client being able to make payments.  In the beginning by good financial analysis [not the aforementioned idiot] but no one can predict future events.  We all hope life is tickety boo and that we remain the person our dog thinks we are and we remain financially fluid.  This is where good planning comes in.  There must be a safeguard built in to protect people against short term issues.  A ‘nest egg’ by any other name.  The availability of money to pay loans in times of stress.

These are readily available with products such as offset accounts and interest only loans.  Both allow a financial hiatus in times of stress.  The trick for a lot of people is to keep the ‘de-stressing’ contingency balance without spending it. 

This is where the whole financial system needs to be adjusted and thought through.

We all want our own home and the Porsche returned but banks lending 95%+ disallows this life ambition as there is no risk contingency.  Really, only unemployment can cause headaches because without a contingency the Porsche is gone once again followed by the home.  Not good.

In an expanding market, the banks risks are low as is the overall financial position of the borrower because asset value increases will leave a balance to start again in the event of default.  Not good but not life threatening.  However unemployment in a contracting market will be devastating for the opposite reasons.

Therefore it is critical to factor in say a two year contingency balance to cover expenses in the case of unemployment et alia.  This is not available money to retrieve the Porsche but a controlled fund by the bank [not the idiot] to be made available with proven hardship.  A de-stressing fund.

Let’s assume the idiot gets retrained and becomes human and has to assess John & Mary's home loan application.  Financial alacrity is critical in understanding the expense patterns of the borrowers.  Understanding, not computer driven assumptive rubbish.

John sold the Porsche, structured his finances through a holding company and had the minimum deposit [the sacrificed Porsche].  The assessor analysed past credit card statements to ascertain willingness to repay debt, analysed EBIT to ascertain capacity to repay including pre and post tax expenses, and, sought a credit rating to ascertain past issues.  All keeping in mind that the client wants his house and will fight tooth and nail to make sure it’s kept in the family.  In the same way we drive a car just metres from death yet we have a self preservation instinct stopping us taking risks.

The big difference we need to initiate is the contingency balance concept where the borrower and the bank are assured of financial survival over say a two year default cycle through no fault of John or Betty.

It’s simple and it’s based on an assumption that values will always increase in the long term with short term fluctuations being irrelevant. 

The assessor has figured out that John & Mary pay their debts on time most of the time, have no ‘material’ credit defaults and have a steady income able to sustain a 95% mortgage with the Porsche sale as deposit.

The assessor has also calculated 2 years of expenses for John & Mary as a total figure which happens to come to 5% of the purchase price.

He then offers John & Mary a loan with an interest rate based on a REAL risk assessment [not by the idiot].  In this case they needed 90% leverage for which they received a nice lumpy cheque.  However, their debt was actually 95% with the 5% reinvested by the bank as an offset only to be accessed in a proven emergency such as unemployment.  All these 5% ‘s can reside in a special bank fund controlled by the bank with offsets automatically deducted for outstanding debt.  In this way the client is not tempted to spend it and they receive the benefit.

Simple.

Everyone wins!

This simple change almost eliminates risk for both the bank and the borrower as well as de-stressing everyone because everyone knows there is a ‘2 year nest egg’ of available money if …. !!

I urge the FSP’s to think this through by real breathing humans analysing risk, returns and the provision of a ‘forced’ safety buffer.  It’s a much a psychological comfort system as a financial safety net which would allow everyone to relax just a little bit more toward that tickety boo nirvana.

John & Mary have their house, a dog who believes they are close to God, two expensive kids and John has his Porsche back.  Life is good. 

Security through planning.

DEEMING CLAUSES AND UNCONSCIONABLE CONDUCT - A LAY PERSONS OPINION

Submission and argument that Financial Services Providers reliance on deeming clauses within their terms and conditions is misfounded … [many sources and paraphrased quotes]

 ‘Deemed’ – to adjudge a point of view as fact [my df].

 “Can an action or intention to action be deemed as unconscionable if that act or intention is against good conscience but as yet has no victim”.  The corollary is that there is no unconscionable intent until someone is affected? [Has the tree fallen if no one sees it fall?].

Take for example a contract and in the fine print there is a clause which stipulates that one party has the right to terminate the contract if they ‘deem’ any issue they wish a breach of that contract and the contract becomes null and void without loss of benefit to the author of the contract.   An obvious nonsense.

Now let’s assume, in the normal run of events, that a company is in a strong position with services in demand or people needing those services.  People sign off the contract including the ‘deeming clause’ because they have little choice.  Say a tenancy lease or a credit card contract.  At what point and under what circumstances does the enforcement of the deeming clause become unconscionable and do we even need an enforcement to recognise this term as unconscionable and to be read down?

I believe that it is enough to make such clauses unconscionable even if there is no victim just because it may confuse, coerce and mislead people and it has the intent of doing just that and advantaging the author unconscionably at the expense of others.

Take most credit contracts.   They will all have a similar deeming clause somewhere in their terms and conditions which allows an FSP to summarily terminate an agreement and demand instant repayment of a loan.  Yet there are provisions within the Code of Banking Practice, the Australian Consumer Law and the ASIC act which specifically preclude an FSP from actioning their deeming clause without due process.

So, on one hand we have the FSP with their deeming clauses and alleged cancellation rights and we have the law on the other stopping or at least modifying the same alleged rights.  As the FSP is well aware of the law and well aware of the way their deeming clause is inappropriate then isn’t the inclusion of such a clause by definition, unconscionable and unlawful because the intent of the clause is to take unconscionable advantage - even if it’s never acted on!

Therefore the precursor to any litigation is whether or not the deeming clause is unfair because the intent of the FSP is unconscionable.  I would say that any clause which purports to allow one party to just deem a contract null and void to someone’s disadvantage must be read down as it would be unconscionable to leave it there.

Now, an FSP acts on the deeming clause and we have a victim.  Mr Victim had a credit contract and was using his ‘card’ for everyday things and accumulating frequent flyer points and paying his monthly commitments.  He was late a couple of times but fixed the arrears and all was well.  Then someone from the FSP decided to change policy and deemed the victim’s card cancelled and the victim had to repay the entire debit within a few days because that’s what the deeming clause said.

This put the victim instantly in a state of special financial disadvantage for at least two very important reasons.  Firstly, he had to find the money elsewhere to pay the loan [if he could] and secondly he had relied on the line of credit and had no other money to live on or pay bills.  In effect he had relied on the FSP acting conscionably and in compliance with all parts of the law. Mr Victim complained but the FSP just pointed to the deeming clause as justification for the cancellation.  The FSP was well aware of the law but chose to mislead and coerce the victim into believing they had the right.  Now, not only is the deeming clause unconscionable but the FSP has acted on that clause in the full knowledge of its effect on the victim.  The act is also unconscionable and caused Mr Victim to lurch into a state of special financial disadvantage.

Perhaps Mr Victim has an actionable case against the FSP on at least two grounds.  Firstly, the FSP included such a clause with obvious unconscionable intent and secondly, it acted on it possibly outside the provisions of law.  I would say that pecuniary penalties apply for both inclusion and act and the victim needs to be compensated.

Further …Unconscionable conduct - irreconcilable with what is right or reasonable and show no regard for conscience. [pecuniary penalty circa $1.1m]

Recent decisions (Australian Competition and Consumer Commission v Lux Distributors Pty Ltd [2013] FCAFC 90) made it clear that for conduct to be seen as unconscionable the determining factor was the respondent’s conduct and not the applicant’s response. It is the ‘conduct’ which is at issue and not the applicant else it could be said that the applicant is being tried for the conduct of the respondent.  A nonsense. 

Whilst it is noted that it is not sufficient for unfair, unjust, wrong or unreasonable conduct by itself to be deemed unconscionable it is quite sufficient when that conduct involves deliberate wrongdoing.

The newly amended prohibition on unconscionable conduct now makes it clear that the statutory prohibition against unconscionable conduct is not limited by the common law concept of unconscionable conduct.  The amendments also make clear that inherent systems or patterns of such conduct are prohibited, whether or not an individual is disadvantaged by the alleged behaviour. The focus, therefore, is on conduct which may offend good conscience, whether or not a "victim" is involved.  Importantly, there is now no distinction between consumer and business transactions in the factors the court may have regard to for the purpose of determining whether conduct is unconscionable.

A clause in a contract can also be declared unconscionable, even if there was no unconscionable conduct in the way the contract was signed. For example the Victorian Supreme Court has held that a clause in the fine print of a contract that created an onerous obligation was unconscionable.

Therefore, given the weight of discussion, why do FSP’s continue to include transparent ‘deeming’ clauses when that very inclusion seems to labeL  them as unconscionable?

Andrews out of control

Our State Government is out of control - again.  Like 5 year olds having found the lolly jar and woofing without thought, the Premier has no fear about ruining Victoria’s heritage or spending what he doesn’t have plunging us once again into massive debt.

The iconic bathing boxes are but a further example of his lack of a history led vision. 

How about Andrews turning an internationally recognised St Kilda ‘go to’ icon into a tram stop.  Acland street has gone and so has the history because some idiot thought it appropriate to build a tram super stop  a hundred meters or so from the already existing super stop outside Luna Park.  This is lunacy and vandalism of our history. 

How about Andrews giving $10m to destroy the last inner Melbourne sand-belt ‘peoples’ golf course being Sandringham.  A public course for over 80 years and what should have been treated as a national icon and lauded as a traditional test of golf.  One of his excuses was that women couldn’t play golf on a normal course and needed a shorter course.  This in itself is sexist and demeaning.  The course should have been treated with respect and with professional grounds people creating excellence.  Not so.  Sandringham golf course is now bulldozed and another slice of our history gone with it. 

How about permits being issued from the State Government at odds with the local council to destroy 2 Victorian mansions at 23 Brighton Road St Kilda and replacing them with 17 by 2 story dog boxes thereby also creating access nightmares .  How about wasting $1.2b of our money by NOT building something being the East West link which will have to be built anyway.  This is lunacy!  And, where is the money coming from to fund all the spending?  This is a big question!!

History proved that Cain / Kirner sent us nearly broke and smashed our international credit rating  – “ Ms Kirner was, of course, a senior member of a deeply dysfunctional government [Cain] which presided over the Pyramid, Tricontinental, State Bank and Victorian Economic Development Corporation financial disasters which undermined the state’s economy and saddled the government with a significant debt burden.” [Australian] – The damage was massive and it seems nothing has changed.

The world wants to impeach Trump before he destroys it.  He is a laughing stock as is Andrews amongst anyone who actually thinks.  Neither are funny.  Perhaps we can impeach Andrews?

How about a proper parliamentary enquiry into ‘our’ finances? 

How about Heritage Victoria actually doing something to preserve our history and planning decisions being transparent before the event? 

How about so called ‘developers’ locked up for frenetic night time demolition of historic buildings? 

How about ‘real’ public debate on contentious issues not just so called consultation ‘after’ the event has been actioned?

Kennett had to rescue us the last time from an out of control government including their unions who were also at their dysfunctional worst.  Think how many tram strikes, power blackouts and sheer angst we had to put up with before Kennett.

Now, who is going to challenge Andrews?

I hope someone will step up.

“I’ll let you go”:

Ego driven dismissive crap used by powerless people trying to give the impression they are in control. It’s insulting and demeaning.  Don’t use it.  Don’t fall into the dross trap of self importance without substance.

BANK - BIG 4

This is a story about the culture within a big 4 bank having an all pervasive internal ethos of – ‘right’. 

Thousands of employees believed they were right in everything they did because their chief executive told them so and defended their actions even though they often bent the law.  Indeed, this bank believed it was above the law because it was big and controlled money and they knew that money was everyone’s lifeblood.  It was superior and knew it was superior because everyone was always nice to them.

'You need our money' preached the bank and people queued up to borrow their dream.  After all, this was its job, to enable dreams.  Or so it said.

Their real job was to buy and sell money at a profit - perfectly commendable and natural for any big public company.  Indeed, most of us sell our time for a profit as do all the employees of the big public company / bank.

Unfortunately, some of the employees of the bank were sick the day ethics were handed out and they did things to advance their own career at the expense of reason and often ignored lawful requirements.  After all, it wasn’t their money or dreams and they knew they were right because their senior managers supported them and even encouraged them to act in bad faith.  Why be a nice guy when you can make lots of money by selling the dream then ripping the dream away – for a profit?

One day, one of the more ethically challenged employees decided, without cross checking, that a client had failed to pay a mortgage payment of circa $2,400 on his home months before.  If the employee had checked he would have realised that it was the bank that had made the blunder but fact checking was not in his mindset so he knee jerked into pious action in the absolute knowledge he could do nothing wrong - because he was a part of the bank and was always – right.

He rang the client with the opening statement, ‘We are going to sell your home in 30 days’.  Needless to say the client was somewhat taken aback, confused and indeed scared because the bank had aggressively threatened his dream without cause or reason or even humanity.

Still, this client had a life’s ethos in that it wasn’t the problem that was important it was how you dealt with it.  He knew he was outgunned by the bank that was constantly increasing its feverous attack and sought support from the Ombudsman.  This stopped the drivel and the insane fervour by the bank because the Ombudsman sported a protective umbrella shielding the client whilst they investigated as an independent authority.

That independent authority found the bank was wrong on all counts and awarded damages, compensation et alia to the much relieved client.  However, the issue now was that the client had lost a lot of money, time and opportunities as a direct result of actions by the bank but the Ombudsman was powerless to award anywhere near the quantum of loss.

The client was confused.  Would he accept the determination and accept losses whilst the bank rolled onto their next victim or would or even could he take it further.

At this point he discovered that the employee who had acted illegally threatening to sell his home had been promoted within the bank.   They were content within themselves that they were right and above the law as they had just promoted the dissident with not one syllable of apology to the client for their unlawful acts causing a great deal of stress and loss.

The client was determined to address the issue and pointed out to the bank they were found to have acted unlawfully by the Ombudsman and should compensate him for sustained losses.

The bank always seeing themselves as – right – refused.

So the client took them to VCAT where a higher level of jurisdiction could right some of the wrongs.

Now, the bank was incensed that a lowly client had the temerity to take them on even though they knew the client was the innocent and the somewhat aggrieved party.  After all, they were always right and strutted and pontificated that fact at every chance.  'How dare he!'

As a power play and not so subtle threat to the lone unrepresented client they engaged multiple lawyers, barristers and employees to defend their position in court.  Cost was irrelevant because it was shareholders money and they knew they were always right.

However, this client had done some homework and blocked every legal ‘trick’ the bank threw at him.  The client was not driven by career or personal gain but by mitigating personal loss.  Big difference and somewhat focus inducing.  At that time the bank was respected as a leader with enormous market power which did intimidate the client somewhat and that reality eventually forced a compromise.  How long could he hold out against dozens of lawyers and million dollar bank employees who were always right?   

After 5 years he settled because of a huge power imbalance and the self promoted invulnerability of the bank

That settlement saw the bank lose quite a few thousand dollars to the client but with a full cost to the bank of over a million dollars.  All for a alleged debt of $2,400.  But that’s alright because it’s only shareholders money. 

The client had mitigated some small part of his losses and the bank pontificated on as the all powerful trying to gag any public response by the client.  But now, enter the Royal Commission where Christian Porter – Attorney General said, “The royal commission has noted is that its standing powers enable it, in effect, to override the existence of any non-disclosure agreements.“  The same logically applies to settlements especially where and when there is a huge imbalance of market power forcing outcomes.

The big public company / bank now had nowhere to hide and its culture was for the first time on show for all to see, and it was found wanting.  It turned out that the bank was not superior, not right and that the chief executive had failed to act in good faith by presiding over a ‘toxic’ culture enabling many and various unlawful acts by various ethically challenged employees.  Indeed, in our client’s case the chief executive knew and sanctioned the events leading to a million dollar plus loss of shareholders money.

That revelation cost the jobs of the Chair and chief executive but still left our client in a loss situation.  A loss situation caused by and through a toxic culture supporting unlawful dysfunction.  Note that fault lies with the office as well as the incumbent executive. You can’t just change the executive and expect that all is now well.  The bank must take responsibility as an entity.

So, now our client has a determination by the Royal Commission which says the bank is indeed responsible for their ‘toxic culture’ causing dysfunction and client losses.  The bank is no longer invulnerable with pontificating executives self elevated above the law and past settlements can be revisited especially where bullying or coercion through size dominance was a factor in the signing.

Our client is now able to pursue losses caused by the bank and will.

The bank must decide if it will do the right thing and take responsibility for its actions or just continue on with an air of invincibility throwing and wasting even more shareholders funds at can’t win legal bills.

The story continues.

BUSINESS BROKERS

Want to sell your business and be assured the people you entrust to that sale are both knowledgeable and professional?  Don’t we all.

A broker is merely an expensive intermediary between buyer and seller supporting non disclosure between the parties and by validating financial and legal information leading to negotiated contractual agreements.

Unfortunately there are many so called brokers who should be in some other sort of real estate because business broking requires a deft set of learned skills so as not to disadvantage either seller or buyer.  Beware the broker who devalues a business just so they can get a quick sale commission to support their own cashflow.  Indeed, there are international methods of calculating worth remembering that ‘worth’ is not a fire sale but a true and proven financial statement showing value.

Seek the broker who recognises they have a fiduciary duty and can prove education, knowledge and results because without all three they cannot provide valid advice.

Indeed, a business broker must by necessity provide financial [valuation] and legal [contractual] advice on all matters related to both selling and buying a business and, if that advice is flawed because of a lack of education [knowledge] or for whatever reason, both buyer and seller may be severely disadvantaged. 

Brokers charge and accept significant remuneration for a ‘professional service’ being far more than the cost of just lodging an advertisement on some website.  This differentiation is critical because it means a broker has a fiduciary duty to the seller or the person paying the fees to be honest and act in good faith in all dealings.

Buyer beware because there are many ‘brokers’ who pontificate at length about their ability to sell a business yet may not have a clue other than bluster. 

In simple terms a broker must be able to prove the following and if not keep looking for one who does:

1.       Education:  A broker is supposed to be an expert professional in business valuations etc and as such needs to have some sort of financial qualification to offer that advice; at the very least at diploma level but preferably at degree or even masters level.

2.       Experience:  Whilst experience is not as crucial as educated knowledge it is desirable for the broker to have transferred their educated knowledge into sales where both parties are happy;

3.       Industry knowledge:  As a well paid mediator/negotiator it is expected that the broker has extensive industry knowledge to be able to facilitate any sale without misrepresentations;

4.       Client base:  Has the broker a good enough reputation to be able to support clients wanting to sell and buy?;

5.       Working for you:  The obligation on the broker is to represent the seller as they are paying the commission.  It is not their role to act for both sides therefore no kickbacks;

6.       Not quick turnover fire sale:  It’s worth remembering that many brokers work their sales to maximise cash flow in the short term.  Therefore avoid those who devalue a proven valuation just to get a quick sale.  They win, you don’t – a $100k drop in sale price means you lose $100k whilst the broker may lose just $5k but get $20k in the pocket today;

7.       Valuation expertise:  This is the hub of the broker’s input and where they must prove expertise ‘in good faith’.    Ask the broker to explain common terms such as ‘risk based multipliers’ and ‘EBIT normalisation’ and ‘payback’ and ‘capitalised future earnings [Nett EBIT/ rate of return] * 100 +- adjustments’;

8.       Discretionary cash flow:  This is the total owners benefit from the business including lawful tax breaks, goods and services for private purposes etc;

9.       Mitigating factors:  These are the wow and risk factors influencing a sale such as consistent and verifiable profits and hours required to sustain profit and growth potential;

The most crucial figure is proven revenue [BAS *6] from which any professional broker can deduct linked expenses at ATO published rates and wages etal, add EBIT normalisation [this is why BAS expenses are not indicative] and apply a multiplier based on risk and/or calculate worth based on capitalised future earnings and/or by detailed analysis of P&L to get an estimate of worth.  Then it’s up to market acceptance factors.

This is their job and they get paid for doing it.  If they can’t, then find someone who can.