austcham news 171_March 2015 by The Australian Chamber of Commerce in Hong Kong

SPRING EDITION

香港及澳門澳洲商會

austcham news Issue 171, MARCH 2015 www.austcham.com.hk

Budget Hand Outs a Hard Habit to Kick for Hong Kong’s Financial Secretary

hen Hong Kong Financial Secretary John Tsang delivered his eighth budget in late-February, he sounded like a smoker promising to go cold turkey - but only after having one last cigarette. In Tsang’s case, his addiction is to handing out large, oneoff payments from the territory’s annual budget surpluses. This year, he promised a HK$34.2 billion package of one-off sweeteners that included tax cuts, relief for businesses and boosts to payments for children, the needy, elderly and disabled. The package was 60 per cent larger than the previous year and pushed his total for one-off giveaways in the past seven years past HK$270 billion. As addictions go, giving money away is not such a terrible one to have, especially when the government is sitting on fiscal reserves that are set to reach HK$819.5 billion by the end of March this year. But, like any addiction, it is a hard habit to kick. Professional services firm EY said in a budget summary that “one-off sweeteners had become de facto requirements of any Hong Kong budget”. EY managing partner,

Tracy Ho, told Reuters that if the money was spent elsewhere it “could actually benefit Hong Kong more in the long term”.

momentous events, local and global, (that had) changed the lives of many and transformed our city

Tsang’s aides told local media the financial secretary was “still sticking to his belief that one-off measures should be gradually phased out”. Just not this year, partly because his budget surplus for the 201415 financial year came in at HK$63 billion, six times greater than the preliminary estimate of HK$9.1 billion. Tsang said that the “momentous events, local and global, (that had) changed the lives of many and transformed our city” in the past cont. P2

2 | COVERstory believe the financial secretary should be doing more to protect the territory’s finances against looming structural deficits. Associate professor of economics at Baptist University Mo Pak-hung told the South China Morning Post that Tsang was “so keen to please the politicians that Hong Kong’s long-term competitiveness has slipped out of his mind”. Chief among Tsang’s concerns for the future is the territory’s ageing population. year justified spending the unexpected windfall on one-off payments. “I am aware that many of our citizens are expecting relief measures from government to allay their burdens,” Tsang said. “In view of the challenging international macroeconomic environment, the unstable economic factors, the need to boost the local economy in the short term, and government’s relatively sound fiscal position in the short to medium term, I shall increase public expenditure in a prudent manner according to the principle of committing resources as and when justified and needed.” His measures were targeted to help the middle class, poor, small businesses and property developers. They included a salary rebate capped at HK$20,000, providing two extra months of the social security assistance payment, old age allowances and the disability allowance.

we need to take early and positive actions to contain expenditure, preserve the revenue base and save up in a timely manner Tsang estimated that the combined effect of the economic package would boost GDP by 1 per cent. With the government predicting that GDP would grow between 1 to 3 per cent in 2015, any figure at the lower end of that target would be particularly underwhelming as it would be mostly attributable to the stimulus payments. In 2014, the territory recorded growth of 2.3 per cent, well under the average of 3.9 per cent recorded over the past decade. Recipients of Tsang’s largesse reacted enthusiastically in the days after the budget but the payments received a more muted response from economists who

“In its report released last year, the Working Group on Long-Term Fiscal Planning pointed out that with an ageing population and slowing economic growth, government expenditure would keep growing at a faster pace than that of revenue and the economy,” Tsang said. “If this trend persists, structural deficits will surface within ten years. While Hong Kong would still experience budget surpluses in the coming few years, we need to take early and positive actions to contain expenditure, preserve the revenue base and save up in a timely manner to avoid the appearance of structural deficits.”

We should consider carefully the consequences of this scenario when we discuss retirement protection.” He said pay-as-you-go retirement protection would become unsustainable if the proportion of dependents to the working population increased too rapidly. “There would either be less protection for the dependent population or a heavier burden on the working population,” he said. “We should consider carefully the consequences of this scenario when we discuss retirement protection.” Part of his solution is to try and increase the pool of workers by encouraging women and the elderly to join or remain in the workforce. To try and get more women into the work force he introduced a HK$130 million package to strengthen child care services.

Tsang’s main initiative to deal with future budget shortfalls was to establish a future fund with an endowment of HK$220 billion topped with a proportion of future budget surpluses. He described the fund as an “an investment strategy” for a rainy day. It was estimated the fund could be worth HK$510 billion in 10 years when the budget is forecast to go into deficit. Tsang gave no specific purpose for the fund however it could be used to fund policies to deal with the city’s ageing population, including pensions. One option he floated to address the structural problem was to broaden the tax base, possibly with the introduction of a GST. He backed away from the same idea in 2006 after the public rejected it however this time there is more urgency. And next year will be even more urgent again. By then, Tsang will have to be doing more than just floating ideas to deal with future structural deficits. He will have to be showing the public the way forward. He predicted that at budget time next year, Hong Kong would record a surplus of HK$36.8 billion. If that’s right, the temptation to hand out one more round of sweeteners will be strong. But as anti-smoking campaigners would tell Tsang, it’s better to kick a habit by choice than have the decision made for you. - Michael Wray is a former News Ltd journalist now based in Hong Kong.

Chamberchatter | 3

CHAIRMAN'SCOLUMN

his issue of AustCham News covers a range of topics but for this column I choose to focus on the topic of competitiveness and to integrate some comments that I previously have made on this subject with some new observations. The Asian Century won’t necessarily be the Australasian Century. For Australia to do well, it will need to capitalise on the rise of Asian economies, not just in terms of selling commodities and educational services, but in terms of selling other high value goods and services and becoming an important part of the managerial, communication, and financial fabric of the region. This will require not only closer linkages with the rest of the Asia-Pacific region, but also the ability to outcompete Asian countries and companies, as well as other countries and companies for a portion of the regional business. Presently it is not clear that Australia is competing in the right things or that it is using the right benchmarks in assessing its performance. Worth noting is that in individual products, Australia’s top exports to China, Japan, and South Korea have been iron ore and coal. Its top exports to India are coal and gold. On the other hand, Australia’s leading imports from China are telecommunications equipment and parts, and computers. From Japan it is passenger motor vehicles and refined petroleum.1 The picture that emerges is of an Australia that imports manufactured and refined goods from Asia and exports resources. There is a tendency for Australia to be viewed as a more advanced economy than those of the other Asia-Pacific nations and regions. If so, then Australia presumably should be able to sell high value added goods and services into those markets. Integrating more closely with the Asia-Pacific region will require an

AustCham

understanding of the cultures and business practices in Asia. This is a challenge. An understanding of the political, economic, and social systems in Asia is lacking as well. Australian Industry Group and Asialink have recommended that an “Asia-ready” workforce strategy be developed to ensure that the skills that are needed to do well in Asia are in place in Australian businesses and in the community more broadly.2 Additionally, very few main board directors and senior executives in Australia have direct experience in the Asia-Pacific, with some notable exceptions.3 There certainly is room to improve the understanding at the highest levels of how to engage with Asia. This is something that the Austcham Greater China network hopes to address. Australia’s proximity, the fact that it has a more advanced economy than many in the Asia-Pacific region, and the fact that there are a large number of Australians that know the region should mean that Australia and Australian companies can be major players providing knowledgeintensive goods and services to the region to a much greater extent than is the case today. However, such a future is not guaranteed. Several Asian economies are as advanced if not more advanced than Australia. A number of them have easier business environments and incentive structures more aligned with economic growth than Australia, and are embedded geographically and culturally into the region in a way that it is not possible for Australia to match. The opportunities arising from Asian development will only be realised in Australia if Australian’s work together to create an environment in which they take hold rather than slip away. I hope that you will connect with the Chamber this month in some way, and that you will continue to share your views on how best the Chamber can serve you. Richard Petty chairman@austcham.com.hk

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MARCH

In March, AustCham members are entitled to an exclusive offer for a Free Five Day Office Trial from Regus. The offer is applicable for all Regus centres in Hong Kong and is valued up to HK$12,000. To book, please contact Regus on +852 3507 6056. *Terms and conditions apply.

Who To Blame? The views expressed in this publication are not necessarily those of the Australian Chamber of Commerce in Hong Kong and Macau, its members or officers. The Australian Chamber of Commerce in Hong Kong and Macau takes no responsibility for the contents of any article or advertisement, makes no representation as to its accuracy or completeness, and expressly disclaims any liability for any loss however arising from or in reliance upon the whole or any part of this publication.

AustCham Hong Kong and Macau Room 301-302, 3/F, Lucky Building 39 Wellington Street, Central., Hong Kong Tel: +852 2522 5054 Email: austcham@austcham.com.hk Editorial Committee: Drew Waters, Karen Wu Printing: Colour Max Commercial Printing Co. Ltd. Tel: +852 2891 7917 Email: marketing@colourmax.com

4 | Chamberchatter A word from Wellington

ll eyes are on the 7’s at the moment and Rugby related events are springing up all over the city. We have a record number of members booked for our season’s highlight, the Rugby Sevens Lunch at the Grand Hyatt Hotel, all looking forward to a great day with John Eales AM and our Sevens team in attendance. My special thanks to our Platinum Patron Commonwealth Bank for their enduring support of this popular event, and to Robert Walters for kicking off events prior to lunch. The AustCham Westpac Australia-China Business Awards are only a couple of months away, with the nomination process in full swing. I hope most of you have seen our advertisement on

EVENTSUPDATE March at a Glance… Mon 23 Mar Breakfast with Hon. Jay Weatherill MP, Premier of South Australia 8:00am – 9:30am Poolhouse, 11/F, Grand Hyatt Hong Kong, 1 Harbour Road, Wanchai, Hong Kong Thu 26 Mar Rugby Sevens Lunch 12:00nn – 3:00pm Grand Hyatt Hong Kong, 1 Harbour Road, Wan Chai

April at a Glance… Thu 23 Apr Mix at Six 6:00pm – 9:00pm Post 97, UG/F, 9 Lan Kwai Fong, Central, Hong Kong

May at a Glance… Wed 13 May Australian Property Market Update 6:00pm – 8:30pm 27th Floor, Club Lusitano, 16 Icehouse Street, Central Thu 28 May Australia China Business Award Gala Dinner 7:00pm until late Grand Ballroom, Grand Hyatt Hong Kong, 1 Harbour Road, Wan Chai

Australia Plus, and are looking forward to a magnificent gala event at the end of May. Shortly, the judging panel will take over proceedings in some dark and secret place, before finalists are announced in April. I would like to thank Westpac for their support of the ACBA’s, and their continued involvement for years yet to come. The individual’s award this year is for the Advancement of Women in Business, dovetailing nicely with our AustCham Women in Business Network, and members will have the chance to influence the outcome prior to the announcement. Watch this space for more information. The AustCham Women in Business Network was launched in some style

this month at the Hong Kong Club, with our special guests Michelle Guthrie and Rishaad Salamat. A great turnout of women and men were entertained in an informal and intimate style, with great discussions on all it takes to be a top business leader, not only during the presentation, but long afterwards as well. Thank you to our sponsor, Ambition, for their support and engagement with this, and future network events. Have a great month, everyone. I’ll see you all at the 7’s. Drew Waters Chief Executive

Chamberchatter | 5

A letter from Canberra - by Gai Brodtmann

t’s been a busy start to the parliamentary year, with a number of key bills and reports already debated.

potential. The inequalities are vast, and underscore why we must do better.

The annual Closing the Gap report was released in early February, and the responses by the Prime Minister, Opposition Leader and Members of Parliament were powerful and confronting.

Family violence was also the centre of debate during the sitting fortnight, as parliamentarians acknowledged International Women’s Day, signed up to the UNWomen’s HeForShe campaign and heard from Australian of the Year, domestic violence crusader Rosie Batty.

This year’s report reminded us of the inequality that still exists between Indigenous and non-Indigenous Australians – of the “two nations, two Australias”. Indigenous Australians have higher rates of cancer, diabetes, preventable diseases, illiteracy, poverty, depression, addiction and suicide than non-Indigenous Australians.

Family violence is the leading cause of injury and death in Australian women under 45 years old. One in three women over the age of 15 will face physical violence. 17 in every 100 Australian women will face violence from a current or previous partner. Yet only 20 per cent of those women who face family violence from a partner, will actually report it to the police.

A young Indigenous Australian leaving school is more likely to go to jail than university. And an Indigenous woman is 30 times more likely to know the pain and fear of family violence – and 15 times more likely to be driven from her home as a result.

Members and Senators from every party acknowledged that Australia needs strong leadership from our politicians, community, business and sporting leaders and policy makers on the issue. The Opposition Leader has called for a national crisis summit.

The gaps in Indigenous Australian health, education and welfare mean our first peoples are leading a life of unrealised

Our leaders, our communities, are calling for action. It is a blight on our society and we must act now.

COMMUNITYCORNER A hello from Michelle Gray and AIEF

ormer AustCham General Manager Michelle Gray has returned to Hong Kong after ten years living in Australia. Michelle and her husband Andrew Penfold AM, former investment banker and lawyer, established Australia’s leading Indigenous foundation on returning to Australia and will continue their work whilst in Hong Kong. The Australian Indigenous Education Foundation (AIEF) is a private sectorled, non-profit organisation focused on empowering Indigenous children in financial need to build a brighter future for themselves and for the nation. AIEF provides scholarships which enable Indigenous students to attend some

of Australia’s leading schools and universities, as well as mentoring and career support to ensure students make a successful transition from school to further studies or employment, productive careers and fulfilling lives. 93% of AIEF Scholarship Students stay at school and complete Year 12 – almost double the national average, and the highest Year 12 completion rate of any program in Australia. With AIEF’s support, 95% of these graduates make or continue a successful transition to further studies or employment after leaving school. A product of a strong partnership between the Australian Government and the private sector, AIEF is building a $140 million fund to open the doors to leading schools and universities for 7,000 young Indigenous Australians.

Andrew is also a member of the Prime Minister’s Indigenous Advisory Council in Australia, was appointed as the NSW Government’s Human Rights Ambassador in 2014 and was a finalist for Australian of the Year in 2010. Many Australian and Hong Kong corporates support the foundation including Commonwealth Bank, Qantas, HSBC, KPMG, Allens Linklaters, Swire and CLSA and based in Hong Kong is AIEF Ambassador Geoff Wilson, Chief Operating Officer, Asia Pacific at KPMG. John Eales AM is also a proud AIEF Ambassador and was recently profiled for his work supporting the foundation – www.aief.com.au. Michelle and Andrew are looking forward to hearing John at the sold out AustCham Commonwealth Bank Rugby Sevens Lunch on 26 March and also catching up with fellow members.

AustCham is a non-profit organisation and provides this space free of charge to other, selected non-profits or charities.

6 | AUSTRALIAFOCUS

The Law of Gravity Forces Changing Motions in Australian Economy

n his way to discovering the laws of gravity, English physicist Sir Isaac Newton famously said, “what goes up must come down”. Newton didn’t have economics in mind at the time however his discovery rings true for the current state of the Australian economy, which is adjusting to the end of a decade-long mining boom. The boom was fuelled by China’s insatiable appetite for raw materials during its remarkable economic expansion. Australian iron ore, coal and other commodities were in high demand, prices soared and the local economy followed. The currency went up. The terms of trade went up. Total exports went up. Government revenues went up. The overall economy sailed through the global financial crisis and avoided recession. However, the same forces at play in the boom times are now working back in the opposite direction, forcing the economy into a period of readjustment as everything that went up comes crashing back down. China has recently downgraded its projected growth to 7 percent for next year and demand for commodities has plunged. The Reserve Bank of Australia index of commodity prices has dropped more than 40 per cent. The currency has dropped more than 25 per cent. The terms of trade have dropped by 25 per cent. Nominal GDP has dropped to a six-year low. As government revenues dry up, Prime Minister Tony Abbott and Treasurer Joe Hockey have been eyeing with dread projections for future budget deficits. They tried last year to soften the electorate up for hard decisions they would have to make as the economy rebalanced. They have not found a receptive audience. Nothing can replace the mining riches for the government revenue in the shortterm but the forces unleashed by the

end of the boom have begun re-shaping the nature of Australian economy. To understand how it is taking place, accidental economist Isaac Newton once again has something to offer with his third law of motion, which states that for every action there is an equal and opposite reaction. For every cent that the Australian dollar has fallen against the US dollar, exports have looked more attractive to overseas buyers and it has returned to being an affordable holiday destination. Conversely, the lower dollar has made imports more expensive for Australians, providing a boost for local manufacturers of the same product. Commonwealth Bank economist Diana Mousina told The Australian in late 2014 that a 10 per cent fall in the Australian dollar’s value would boost economic growth by up to one per cent over two years. “Businesses with a high export propensity or high import penetration will benefit the most,” she said. “The main winners from a lower currency, from an income sense, will be company profits and government tax revenues.” The dollar has fallen even further since Mousina’s comments and it has lately been hovering around US77 cents, its historical average since being floated in 1983. It reached a record high of US$1.10 during the mining boom but has slid dramatically since then. From April 2013 to mid-March 2015 it lost a quarter of its value. However Reserve Bank of Australia Governor Glenn Stevens has said the falling dollar is good for the overall economy and that he would prefer it to be closer to US75 cents than US85 cents. Many exporters who struggled to sell their goods and services overseas when the dollar was high are hoping that the falling currency, coupled with Australia’s recently signed bilateral free trade agreements with China, South Korea and Japan, could lead to their own export

boom. The wine industry is already reaping the rewards of the currency depreciation. The industry had recorded years of declining sales since 2007 however that turned around in 2014. According to the Australian Grape and Wine Authority, Australian wine exports in 2014 increased 1.9 per cent in both volume and sales. Exports to China were up 8 per cent in that period and the booming trade was projected to grow even faster this year following the bilateral trade agreement. Exports to Singapore rose 37 per cent and Malaysia was up 33 per cent. For Hong Kong — which scrapped all duties on wine imports several years ago — Australian exports by value in the ultra-premium segment grew 127 per cent to AU$42 million. Spiros Papadopoulos, senior markets economist at National Australia Bank, told The Australian that foreign earnings from tourism and education, both major markets, may benefit from the lower exchange rate. “Tourism numbers are already forecast to increase by about 5 per cent in 2015 and a lower exchange rate will certainly help underpin inbound tourism,” he said. “Australia certainly saw a big fall in education exports in recent years after the exchange rate soared to $US1.10, so now we are just a bit more affordable for foreign students.” Studying Newton may not be classic economic theory but it makes the outlook for the Australian economy less dismal. - Michael Wray

CORPORATENEWS | 7

‘Invest in Australia’ Mission 2015 to Hong Kong and Guangzhou

ustCham member, David Thomas of Think Global Consulting, led his annual Australian mission to Hong Kong and China in January 2015 along with his co-mission leader, Dr Caroline Hong. This was his sixth annual mission to the Asian Financial Forum and, this year, his delegation travelled under the banner of “Invest in Australia” with a focus on meeting and engaging with Chinese investors (private and institutional) business leaders and potential migrants. The highlights of this year’s mission were: • AustCham Mix at Six organised by the Finance, Legal and Tax Committee on the final evening of the Asian Financial Forum • A private session with the Assistant Treasurer, Hon. Josh Frydenberg on his first evening in Hong Kong before his own appearance at the Asian Financial Forum • A full day forum in Hong Kong, hosted by King & Wood Mallesons, followed by a visit to Convoy HK, Hong Kong’s largest wealth management firm • Two days in Guangzhou meeting, networking and engaging with Chinese entrepreneurs, investors and migrants with an interest in Australia • The launch of Stacey Martin’s “Smooth Road to Travel - China to Australia” booklet, developed by her “Expat Advisors Community in Australia. A free copy is available via this link http://expatadvisorscommunity.com.au/ resources/smooth-road-to-travel/ • A night at the races in Happy Valley! For those who didn’t get an opportunity to meet the delegates and are interested in finding out more, including individual contact details, please download the mission brochure via this link http://bit. ly/1AhGhKQ

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8 | BUDGETCOMMENT

Key points to note for Hong Kong 2015 - 16 Budget

inancial Secretary John Tsang delivered his eighth Budget in February. The key mission of this budget, as AustCham Platinum Patron KPMG summarised, is to maintain a favourable business environment within the region, to promote sustainable economic development and to make available diverse and quality jobs to enable citizens to lead better lives. The Government announced a budget surplus for 2015-16 of HK$63.8bn, significantly larger than that which was estimated this time last year. This year’s budget included a number of ‘one-off’ handouts to the value of HK$34bn. The Government announced a Salaries Tax rebate of 75% up to a maximum of $20,000 and a similar rebate for Profits Tax. Child allowances were also increased from $70,000 to $100,000 per child, and from $140,000 to $200,000 in the year of birth. There were also a number of relief measures aimed at those less well off in our society, recognising the increased financial burdens faced by Hong Kong people.

funding support for projects. • Strengthening Hong Kong as the leading asset management centre in Asia through a new exemption for offshore private equity funds and new treasury centre rules. • Additional funding in the area of Fashion, Film and other Arts and Culture development In addition the government is releasing $25bn into Health to support development of hospital facilities, and the development of private clinic public outpatient services. Hong Kong is also pursuing a ‘go global’ policy for financial and professional services as an extension of the China central government “One Belt, One Road” initiative. This includes the development of ports and logistics and the big bet underlying the budget being the $140bn Third Runway development.

The Government estimates that the handouts should add an additional 1% to Hong Kong’s Gross Domestic Product, helping to overcome any negative impact to the economy from the Occupy Central movement in 2014. The Government also singled out certain businesses impacted by the movement for support.

Other initiatives that are of interest include training and development of Hong Kong manpower capability in construction, retail, financial services – amounting to HK$500m over three years; and HK$960m to support 1000 self-financing undergraduate education students across various disciplines.

The Government’s announcements to the certain business sectors should be of particular interest for AustCham members. A key aim of the Government is to promote and foster a favourable environment for businesses to operate. The Government has announced additional funding and support for: • Technology development, including the associated support of Startups, and IP registration in Hong Kong. Hong Kong Science and Technology Parks Corporation will earmark $50 million to set up a corporate venture fund for co-investment, on a matching basis with private funds, in start-ups. The Government will also inject $5 billion to the Innovation and Technology Fund. • Provide additional support for SMEs through the additional funds to the SME export marketing fund and increased

The government is also pursuing initiatives for a cleaner society including ongoing sewerage works, reduction of port charges for low-sulphur use in

shipping, CO2 initiatives and a study on water desalination plant. Lastly, the Government continues to release land for private and public housing, plus commercial development. Noting, this should also be a major funding source for government capital expenditure programs presently running at HK$70bn annually. In closing, while the budget expenditure is growing strongly at present in both operating and capital terms flowing through to increased government employment and ‘one-off’ handouts, the Government is projecting structural deficits from 2022 driven largely by the aging population. Clearly this is a concern, however there seems to be significant room for correction in the budget with reserves reasonably expected to reach HK$1tr by this point. For a detailed and personal application I would suggest discussing with your tax or financial adviser, or making reference for instance to KPMGs’ analysis of the Hong Kong tax package http://bit. ly/19aLCy4 - Article contributed by Financial, Legal & Tax Committee member Ian Thomson. For details of the budget, please check Budget.gov.hk and KPMG Hong Kong Budget Summary on http://bit.ly/1EyOamJ

INDUSTRYINSIGHT | 9

A look into 2015 Global Mobility Trends

new year gives us the opportunity to reflect on larger world events, including political, economic, social and technological transformations, and assess how they impact the Global Mobility space. Austcham Corporate Member Crown Worldwide forecasts some of the popular trends of global mobility in 2015:

It is Crown World Mobility’s annual tradition to reflect on these events, influences and requirements and generate a list of trends to provide a lens for you to assess your own policies, programs and strategies. And hopefully generate new ideas and creative solutions. With the first in our Perspectives series for 2015, Lisa Johnson, Global Practice Leader has identified some of the global topics that come up with increasing frequency among clients, colleagues and industry peers and that we think are making a difference in the how and the why. 1. Split-families The term “split-families” has come about to describe a newer and growing trend in international assignments, used for families that choose to be separated during an assignment. The split-family approach is rarely considered a longterm solution. When utilized on a long-term basis, the stress of the splitfamily lifestyle can overtake its benefits. Employee burn-out and family disruption are common side effects. 2. Managed lump sums A managed lump provides the flexibility employees crave by providing a fixed amount of money which employees can use as they choose for non-compulsory elements. The results so far have been positive for both employees and companies. Companies benefit from a reduction in labour-intensive cost reimbursement processes and relocation costs and employees enjoy the flexibility to meet their individual needs. 3. Linking Diversity & Inclusion to Mobility strategies In terms of global mobility, we see companies with strong Diversity & Inclusion (D&I) strategies looking to ensure that their efforts at recruiting and retaining diverse talent are embedded within mobility. For companies that are just starting to focus on integrating D&I goals into their mobility program, the first step is to collect relevant assignee data. When companies are ready to make the link, the next step might be assessing policies and augmenting them to better support key diversity populations. Other steps include providing unconscious

bias training for sending and receiving managers and better promotion of the company’s D&I strategy with mobility business partners. 4. Female assignees Female assignees are not a new phenomenon, but the percentage of female assignees has not changed much in the last two decades. There is a growing dissatisfaction with this situation that is forcing companies to want to drive the numbers of female assignees up. Female employees expect the same opportunities as their male counterparts and companies know that their future success may be tied to having better balanced representation of the genders with global work experience. 5. Consecutive assignments Today we are seeing a shift among global companies with global career paths, towards consecutive assignments. An assignment in one country in one position may not be enough for the company leadership of tomorrow. Pre-departure discussions, policy assumptions and endof-assignment planning require a shift as a result. As global companies evolve and their mobile population becomes less reliant on returning to a home location, approaches to family support, compensation and long-term benefits will need to evolve as well. 6. Tiered policies Most companies seeking to make changes in their policies want more flexibility. Employees want it and managers want it. One way companies are meeting these requests for flexibility is with tiered

policies. Rather than assuming that all assignments are the same and require the same support, companies are looking at their assignment needs and identifying where there are similarities which can be grouped together and differences that must be addressed specifically. 7. Assignee preference for low-touch messages One trend we see on the rise as a direct result of the millennial assignee population and their comfort with technology is an assignee preference for low-touch messages. We are seeing greater use of company intranet, the development of apps and the use of texting replacing many of the longused high-touch approaches. This is an exciting and very real shift that will take us and our notions of communication to new places in the coming years. 8. Centralizing Mobility Programs 2.0 There are an increasing number of middle-sized geographically global companies that are moving towards a more centralized approach to their HR strategies. They are recognizing the efficiencies in having a more centralized and managed approach to their global mobility programs. Crown World Mobility is seeing a steady increase in the number of clients and prospects asking questions about centralizing their mobility programs and building the business case internally to gain buy-in for a more centralized approach.

- Article contributed by Lisa Johnson of Crown World Mobility’s Consulting Group.

10 | Committeesin action

AustCham Young Executives:

another successful CEO Briefing David Buffonge then shared his principles for success in China via his extensive portfolio of projects throughout China, many of which drew from success from designing Elements Mall in Hong Kong and Singapore’s Changyi Airport Terminal 4. He articulated core themes such as the rise of mixed used developments, and flagged quite a few commercial opportunities facilitated by modern architectural design. Both speakers provided the audience with relevant tips, along with engaging anecdotes, that gave the audience insight to take back to their working environments.

he AYE Committee held its first C-Suite event for 2015 at the Herbert Smith Freehills office in Central. Our two guest speakers for the morning were David Fraser, CEO Asia for Flight Centre, and David Buffonge, Director at Lead Architecture. With a record of 50 young executives and friends in attendance, the audience was given contrasting perspectives on succeeding in China. Whilst many of the Australian audience were familiar with the Flight Centre Brand, Lead Architecture’s perspective from

operating across the region ensured the audience was provided well-balanced perspective on China. David Fraser was very engaging as he gave the audience an overview of Flight Centres values and history. He outlined how Flight Centre’s small team structure, as well as its ability to effectively leverage Returned Overseas Chinese were key success factors in building Flight Centre brands in the competitive landscape in Hong Kong and China.

The AYE committee would like to thank both David’s for taking time out to share their experiences with us, and also Herbert Smith Freehills for providing us with the venue for the event. - Paul Kam, HSBC

CONSULATEUPDATE

A new Australian business publication

he Department of Foreign Affairs and Trade recently released its first edition of a new business publication - ‘Business Envoy’. The publication shares market insights from DFAT’s global diplomatic network and may be of particular interest to Australian businesses. Minister for Trade and Investment Andrew Robb says “the bi-monthly Business Envoy will better inform Australian business on the economic and market

implications of geopolitical events and trends”. “The Department of Foreign Affairs and Trade produces high quality assessments and analyses of key political and economic issues around the world. This publication will help share that knowledge with Australian exporters and Australian businesses that have overseas operations or are looking to expand overseas”. Business Envoy draws on reporting and

advice from Australian embassies, high commissions and Consulates-General in key trade and investment markets as well as analysis on international issues from DFAT in Canberra. It complements the important work that Austrade performs in assisting Australian businesses in pursuing opportunities abroad. Business Envoy can be downloaded from the DFAT website, which also offers the choice of subscribing to the free publication by following www.dfat.gov. au/business

MEMBERCOMMENT | 11

Thoughts on

“THE JOKER’S DOWNFALL” – By Ian G. Robinson

he dead bodies begin to pile up in the first 10 pages as Robinson is called up from Australia in 1983 to begin sorting out the USD 1 billion train wreck, called Carrian, one of the top 10 listed companies in HK in 1982, by way of a back-door listing in 1979. From one simple murder of a Malaysian Bank auditor in a TST hotel, HK police are called in, the Malaysian Government begins its own study (cover-up) for the benefit of those in power. Banks which had been pounding down the doors of George TAN to get in on his “too good to be true” buy and flip real estate deals, now found themselves investigating their own for bribes. This tale which began in 1972 with the arrival of TAN, fresh from Singapore where he was adjudged bankrupt in 1974, and allowed his HK visa to expire, takes us through Hong Kong, Malaysia, the UK, Los Angeles, Germany and France. The author shows that TAN, never seemed to have any solid backing to his name or to the more than 91 companies under the Carrian moniker, which included pest control, restaurants, shipping, taxis, insurance and banking, but he certainly convinced a lot of global banks to lend him large sums of money, and in the aftermath, either prosecute their own staff for bribery or sweep it under the rug and convince the HK authorities not to prosecute their HK employees. Robinson goes into just enough detail to wet the reader’s appetite for the many court cases which go on in France, UK, and Hong Kong, without bogging down in a lot of legalese, but keep the narrative light and amusing with a good number of anecdotes sprinkled in. One has to wonder how TAN ever expected to ride the gravy train to success for very long when so much depended on his pyramid type schemes to his Malaysian Government cronies and putting so much back into the hands of those who helped financed his plans. The cars, the oil money, the jewels…. And one Japanese porn film studio. But I digress…

The author, an original member of AustCham back in the days… and currently running Robinson Management Limited in HK, rightly puts blame on those who were part of the cover-up-the banks, Carrian’s auditing firm, its’ law firm whose 1 of 3 main partners goes for a swim one night…).

This is an enjoyable read on greed, power, how fast the high and mighty can fall, and losing sight of one’s moral and ethical business compass by the arrogant power of the almighty dollar….. or the pressure from one’s boss. I let the reader choose. Malaysia is in the news recently for buy & flip schemes involving sovereign wealth funds, champagne swilling party boys and property. History repeats itself.

- Reviewed by Patrick B Trainor, MD, Cornerstone Strategic Partners Limited, and a former banker for 21 years. THE JOKER’S DOWNFALL is available at Bookazine and Dymocks. About the author:

Questions also are raised on the decision by the HK judiciary to allow an Appeals Court Judge Barker to step back and down one level to hear the first case against TAN, clearly a judge who, by this reviewer, was out of his league in understanding or keeping track of the 15 months and tens of thousands of pages of testimony and who gave up at the end. And clearly a man whose favorite daily lunch spot was the bowling alley bar in the HK Club, who offered to resign due to criticisms….and whose body is later found on a road in Cyprus…. The book is an easy read and those who are not lawyers will not be put off by Robinson’s handling of the court cases which he explains in simple terms which do not lose the reader.

Ian Robinson was born in Sydney Australia and qualified as a chartered accountant in 1962. He was the partner in charge of the corporate services division at Ernst & Young. He retired from the firm in 1994 and has continued to carry on consulting in the business of insolvency, forensic accounting, expert witness assignments, and general troubleshooting. For over 35 years, Ian has been a defining presence in accountancy in Hong Kong. Ian is also a founding member of AustCham.

12 | MEMBERPROFILE �� client’s dog to be delivered overseas. That is how bespoke our services can be!

Vistra Hong Kong Suite 5501, 55th Floor, Central Plaza 18 Harbour Road, Wanchai Hong Kong www.vistra.com Chamber representative: John Ashwood, Managing Director

What are the main skills of your job? It is important for me to be able to have a broad perspective, a global vision and yet, be able to focus on details. As the Managing Director for Vistra Hong Kong, one of my major roles is to continue to grow and expand the company geographically and in our service range, whilst continuing to provide personalised services to my clients and contacts, which makes us stand out from the crowd.

What does your company do really well? Although Vistra is a relatively young company, we have become one of the market leaders in the provision of bespoke solutions for corporate clients, private clients, fund managers and business owners. One of the main reasons we have been able to enjoy radical growth is the trust that we have developed in our professional network and clients. No client is too small or too big for us, as each solution we provide is tailor made. We make a point to understand their needs and objectives, before providing advice on bespoke solutions, which is fully supported by our in-house capability for setting-up, managing and administering, and providing a range of business support services to clients’ operations.

Vistra’s first office was set up in Geneva in 2006, and when Vistra Hong Kong was set up in 2009, we were just a small handful of staff. Today, our Hong Kong office has close to 80 people and over 1,300 people in 41 offices across 32 jurisdictions. Every day we help our clients with their global expansion plans, while at the same time, we are growing with our clients.

How would you describe your workplace and colleagues? Vistra has an open office plan, which means we can communicate more freely with each other and I have also found that this has created a rather harmonious and relaxed work environment for staff. We have highly skilled, professionally trained, multi-cultured and diligent staff. Within our Hong Kong office alone, we have English, Putonghua, French, Flemish, Spanish, Japanese, German and Korean speakers. As a services provider, we understand that people are our main assets.

What’s the most unusual thing you have had to do as part of your job? Tasting wine out of cans and arranging a

What’s something most people don’t know about your company? On January 19th the Vistra Group launched

a refreshed corporate brand uniting the Group’s key internationally recognised brands, Vistra and OIL, under the same family. The strong, globally recognised brand cements the Group’s position as one of the ‘Big Four’ among global corporate service providers. What’s your company’s connection to Australia? The company actually has very strong Australian connections. I am from Australia, the Group’s CEO, Martin Crawford who is based in Hong Kong is also Australian as well as the Daniel Booth, our Executive Director for Business Development. We have many colleagues who are either from Australia or had studied there. Moreover, Australia is an important market for Vistra as there is increasing interest from Australia to enter the Chinese market via Hong Kong, especially since the FTA agreement between Australia and China was signed in November of last year. What’s your favourite place to go on the week-end? Vistra is a sponsor of the Hong Kong Hobie Club, which is a modest little catamaran sailing club based in Tai Tam Bay, and it is where you will find me on most weekends. My son even thinks I work there as our company logo can be seen at the club. What’s your favourite place to eat lunch? In my job I tend to eat out a lot with clients, so when I am not dining with clients, I like to relax at a local Cha Chan Teng over a bowl of local wonton noodles and a cup of very strong Hong Kong style tea.

OnTHE SCENE | 13 AUSTCHAM’S 'THE YEAR AHEAD SERIES' IS BACK IN FULL SWING! THE FIRST SESSION, "STRATEGIC CSR INVESTMENT: 'WHAT’S IN IT FOR YOU' ", WAS HELD AT CONRAD HOTEL EARLIER. SPECIAL THANKS TO EVENT SPONSOR:

AustCham Chief Executive Drew Waters welcomes all.

Robert Quinlivan of Macquarie Group and Mimi Le.

Tommy Patterson of Kreab Gavin Anderson and Susan Clear of Macquarie Group.

Elisha Vincent, Aine O’Connell and Ida Cheung of Macquarie Group.

Guest speakers Matt Clifford of Jones Lang LaSalle and Fern Ngai of Community Business.

Nathan Tuck of Aristocrat (Macau) Pty Ltd and Gail Deayton of Hong Kong Art Tutoring.

Herbert Yung of Deloitte and Caroline Briggert of Kreab Gavin Anderson.

Emma Davine of ANZ Banking Group and Richard Cameron of iDeals Solutions.

Henry Jazdzewski of Infinity Transport Consultancy and Alistair Fullerton of Zenda Green Energy.

Guest speaker Quince Chong of CLP Power with Angela Yip of BNP Paribas Securities.

Pat Fong of ANZ Banking Group and Anni e Tang of Star Anise Ltd.

Paul Phenix of event sponsor Baker Tilly hong Kong with David Boehm and Kevin O’Shaughnessy of Muskoka Farms Pty Ltd.

Speakers share their company’s CSR strategy with guests.

14 | OnTHE SCENE AUSTCHAM WIT & WISDOM: A CONVERSATION WITH MICHELLE GUTHRIE WAS HELD ON 4 MARCH AT HONG KONG CLUB, TO CELEBRATE INTERNATIONAL WOMEN’S DAY. A BIG THANK YOU TO SPONSOR:

Svetiana Kumanova with Lesley Hobbs of Advent Balance.

Kym Fortescue of AIA and Stella Abraham of Jones Lang LaSalle.

Mandy Queen of CRED Communications and Anne David of Razorfish.

Eleanor Lennie and Lynnette Sarno of Macquarie Group.

Christopher McMillan and Nicole McMillan of The Three Marketeers.

Arun Nangia of National Australia Bank, AustCham Board Director Fiona Nott, guest speaker Michelle Guthrie and AustCham Chief Executive Drew Waters.

Alexandra Brook and AustCham Board Director Paul Scroggie.

Kate Dunstan of Clifford Chance and Simone Beckenham of Allen & Overy.

Stephanie Dixon of Flight Centre, Paula King of AustCham Women in Business Network spons or Ambition and Katie Simpson of Flight Centr e.

s and Elizabeth Dorrough of Treasury Wine Estate Amy Ho of Ambition.

Alanna Washington of Pure Professionals and Jiun Chan of Ambition.

Michelle was interviewed by Bloomberg TV’s Rishaad Salamat on her view on leadership and how to nurture skills for career success.

OnTHE SCENE | 15

THE FEBRUARY NEW MEMBER MIX AT SIX WAS HELD AT RED IFC, TO CELEBRATE OUR 200 NEWLY JOINED MEMBERS WITH THE PAST FIVE MONTHS.

Tavish MacLean of Robinson Management and David Meredith of Tasâ&#x20AC;&#x2122;Mania.

John Marsden of Mayber Brown JSM, Leeann Corvette of Hong Kong Trust and John Lees of JLA Asia Ltd.

Ian Robinson of Robinson Management and Peter Sprogis.

Evan Xian of Hui Ye Law Firm and Edwin Sun of UniGroup.

Patrick Dwyer of Asia Gateway Enterprises and Ross Williams of Brandwerk Ltd.

AustCham Chief Executive Drew Waters with lucky draw prize sponsors Ross Williams of Brandwerk Ltd and Shaun Campbell of Langham Place Hotel.

Anni Moyal and Nora Perenyi of mci Hong Kong.

Rikki Stancich of Leighton and Peter Winslow of InXpress.

CJ Tang and Victoria Cheng of Laracy & Co. in association with Hill Dickinson and Nicholas Tam of INCE & Co.

Book and pay for AustCham events online at www.austcham.com.hk

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