AustCham News April 2020 - Stronger Together by The Australian Chamber of Commerce in Hong Kong

THE AUSTRALIAN CHAMBER OF COMMERCE IN HONG KONG

Where Business, People and Ideas Connect

AUSTCHAM NEWS Issue 214 | april 2020

STRONGER TOGETHER SUPPORTING YOU THROUGH CRISIS

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Chairman's Column

y last letter started by referencing the devastating Australian bushfires. How much the world has changed since January. We now find ourselves in a changed and unprecedented world. The COVID-19 virus has changed the world, probably forever. Hong Kong has passed the height of infections, and has started to record less infections from social transmission. Although this may signal the beginning of the end of the worst for the city, it will still be a while until things return to a sense of normalcy. The key to reducing the imported rate will remain border closures, checks, and quarantines for some time - at least until an on-the-spot test can be deployed at ports and airports around the world. Every business has been impacted. Our food and beverage, hospitality and tourism members have been hardest hit. Closures and layoffs are crippling the sector. Other businesses have adapted to work-from-home (“WFH”) arrangements, and back to back zoom calls are now the new norm. The typically sized HK apartment doesn’t lend itself well to accommodating two WFH spouses, and children studying online. Mental health issues are emerging. It’s against this backdrop that the Chamber has focused its efforts on connecting members digitally. Offline events and series have been converted to online. Many of the webinars we have delivered, or have in development, have come about as a direct result of member requests, or conversations. This is our way of staying connected, because we believe we are all stronger together. Of course, the Chamber has been affected, like so many of our SME members. Your board is meeting frequently and regularly to assess, evaluate and plan. Committees are reviewing activities and aligning their focus on member challenges. Like all businesses, we’re trying to do more with less. And that’s why our focus is providing the tools and expertise businesses need to perform in this environment.

AUSTCHAM NEWS - ISSUE 214 Stronger Together

Working From Home may be Exposing us to Cybercrime

What happens when your Staff Contracts the Virus?

Funding and Support for SMEs

32nd Annual General Meeting Welcomes 11 New Directors Hong Kong’s Generosity for Bushfire Relief 11 Is your Australian Home Still Safe?

Letter to the Australian Treasurer

New Members

READ AUSTCHAM NEWS ONLINE:

Of course, we will get through this. Hong Kong’s spirit remains strong. There are positives to be learned and retained from this period. And the companies that emerge strongest will learn these lessons and leverage them. But until then, stay safe by socially distancing, washing your hands, staying home, and wearing a mask. Yours sincerely, Please email story ideas, corporate news or thought leadership to the editor: isabella.chan@austcham.com.hk

Andrew Macintosh chairman@austcham.com.hk

UPCOMING WEBINARS 29 APR | 1-2PM | Managing Cash & Working Capital in Turbulent Times KPMG Director, Chris Ball will talk through some fundamental items to consider to when building a robust cash and working capital management strategy.

28 APR | 6.30-7.30PM | Workforce of the Future Panel discussion with Virginia Morris, Managing Partner & Leadership Strategist, Bamboo Difference and Jessica Lam, Head of Strategy, WeLab.

12 MAY | 1-2PM | Leadership During Crisis Panel discussion with Fiona Nott, CEO, The Women’s Foundation & Carli Renzi, Head of Global Subsidiaries, International, ANZ, and Dr Lucy Lord, moderated by Nigel Smith, Managing Director, Colliers.

12 MAY | 6.30 -7.30PM | Personal Value With Carole Lewis, Executive Communications Coach, Professional Certified Coach, International Coach Federation.

14 MAY | 1-2PM | Hong Kong Employment Market Outlook Chris Aukland, Regional Managing Director-Asia, Ambition & HaTCH Powered by Ambition, will share current trends in the employment market.

Chamber Chatter

What’s Trending

his is an extraordinary time to be alive – let alone to be leading teams, running organisations, or even juggling children learning from home online while you attend a business meeting around the kitchen table. Much of the conversations that we have been facilitating through our webinars identified both the opportunities and challenges inherent in managing through this global pandemic. This calls for a different skillset; one that includes empathy and curiosity, agility and a forward-thinking mindset. (Our University of Wollongong Mentor Program will address these skills at an upcoming event when we explore the “Future of Work”). For those who struggle with change and uncertainty, this is a very challenging time. As we pivoted quickly to webinars, we have found members embrace this change enthusiastically. While we miss the face-to-face engagement of our in-person events, we are seeing others who are seizing the opportunity. Running events online, for example, means we can bring you speakers from outside Hong Kong. And the travel shutdown means that we have more of your time. Some members are finding this an excellent time to reset, to upskill and to engage more with the Chamber as part of your commitment to ongoing learning. Macquarie University, sponsors of our CEO Forum, told us on a recent webinar that they were seeing a significant uptick in enrolments in their online courses. What that means for AustCham is that we are busier than ever and, like you, doing more with less. We have been humbled by the response to our “Stronger Together” campaign in which you have all demonstrated the value you see in being part of AustCham as we seek to continue to serve you and advocate on your behalf. Some key areas of advocacy in recent weeks have seen us engage with the Australian Treasurer regarding changes to the Main Residence Exemption, urging an extension of the June 30 deadline (p.12); as well, information sessions with our new Senior Trade Commissioner, Shannon Powell, on export grants and how she and the Austrade team are working to ensure that fresh food supplies can reach Hong Kong from Australia, despite limited flights. Through the excellent work of our Construction, Property and Infrastructure Committee led by Michael Carmerlengo, we have also been lobbying the Hong Kong Government to address the bottleneck in approving critical Capital Works programs, vitally needed to meet Hong Kong’s future infrastructure needs and for the ongoing employment of the ageing construction workforce (p.11). And we joined forces with our friends at BritCham, AmCham and other international chambers of commerce to lobby the Hong Kong Government to introduce a wage subsidy, similar to Australia’s JobKeeper program. We are delighted to see the Employment Subsidy Scheme unveiled and look forward to the details which we understand will be available next month. We have also been working hard to connect you in a meaningful and material way with the various Hong Kong Government relief measures available and were pleased to run a practical session with the Hong Kong Productivity Council identifying key grant programs – and offering one-on-one appointments with members thereafter (p.10). We truly believe that there is only one way through this crisis – and that is together. We are only as good as our members who continue daily to surprise us with your ideas, your energy and your commitment to your fellow members. So, see you on the next webinar, but very much looking forward to seeing in person sometime soon. Jacinta Reddan, Chief Executive, AustCham

Published By: The Australian Chamber of Commerce in Hong Kong Room 301-302, 3/F, Lucky Building 39 Wellington Street, Central, Hong Kong T: +852 2522 5054 E: austcham@austcham.com.hk Editorial Committee Isabella Chan Jacinta Reddan Advertising E: advertising@austcham.com.hk

WHERE BUSINESS, PEOPLE AND IDEAS CONNECT Established in 1987, The Australian Chamber of Commerce in Hong Kong represents Australia’s largest international business community outside of Australia. Our 1,300 members represent 300 Australian and Hong Kong based companies across all major industries. AustCham member companies employ more than 6.2% of the workforce in Hong Kong, reflecting the growing strength of Australian business across Greater China. Our mission is to promote and represent business and values while enabling members to connect, engage and grow bilateral relationships, through our committees, events and meetings with government and industry leaders. Disclaimer: The views expressed in this publication are not necessarily those of the Austr alian Chamber of Commerce in Hong Kong, its members or officers. The Australian Chamber of Commerce in Hong Kong 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 PLATINUM PATRONS

4 • April 2020

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Stronger Together

he Chamber is driven by you, our members, and during these challenging months we have been working hard to ensure you stay engaged with the business community. To support you individually and as employees, as businesses and leaders, our webinars and articles are focused on equipping you with the skills and information to manage through the current situation. We have also been lobbying on your behalf to government on issues that affect you (also see p.11-13). In partnership with other leading international chambers, we wrote to the HKSAR Government urging immediate financial support to business in order to maintain employment. We are pleased to welcome the HK$137.5b economic relief package that followed. You can see more details on Government support on our website. We are also prioritising our SME members with a dedicated information page on access to funding schemes (p.10), and are helping you stay informed with our COVID-19 page. The platform is regularly updated with official updates, travel advice and insights and advice from the community and industry experts.

Visit our COVID-19 page:

Read our Joint Business Support Letter:

Mateship in critical times During this critical time, we have seen the business community exercise mateship in true Australian spirit. We were pleased to source and donate 3,000 masks for some of Hong Kong’s most disadvantaged families through our CSR partner The Hub, thanks to AustCham Platinum Patron Leighton Asia. With schools closed since mid-January, The Hub is working incredibly hard to ensure families and children are supported during the health crisis.

Demonstrate leadership while working from home - By Paul Smitton, CEO and Managing Director, Asia Miles 1. Increase your availability: Be present despite working remotely. Block out time in your calendar specifically for communication with your team to maintain motivation. 2. Share your experiences: Lead by example and share how you’re feeling, or what you are doing. This encourages others to share and creates a sense of belonging. 3. Enable your management: Demonstrate how you are working together as a team during these unusual times by leaning on them to help develop engagement ideas and drive motivation. Gather feedback and suggestions from staff. 4. Show trust and be flexible: Don’t micro-manage unless they aren’t delivering quality work, or meeting deadlines. Enable your staff to do their job with the right technology and support, and then trust them to determine how they work best in their new environment 5. Connect outside of the work: Try to replicate some of the water cooler moments virtually to keep with culture you have worked hard to develop e.g. Friday playlist, remote trivia over lunch.

Through our members, Sino Group, The Ng Teng Fong Charitable Foundation and The Fullerton Hotel Sydney have donated 8,000 N95 respirators to Royal North Shore Hospital in Sydney to support efforts in combating the novel coronavirus (see images above left). ISSUE 214 • 5

‘Click for urgent coronavirus update’:

Working From Home may be Exposing us to Cybercrime - By Craig Valli, Director of ECU Security Research Institute, Edith Cowan University

part from the obvious health and economic impacts, the coronavirus also presents a major opportunity for cybercriminals. As staff across sectors and university students shift to working and studying from home, large organisations are at increased risk of being targeted. With defences down, companies should go the extra mile to protect their business networks and employees at such a precarious time. Reports suggest hackers are already exploiting remote workers, luring them into online scams masquerading as important information related to the pandemic. The Australian Competition and Consumer Commission’s Scamwatch reported that since January 1 it had received 94 reports of coronavirus-related scams, and this figure could rise. As COVID-19 causes a spike in telework, teleheath and online education, cybercriminals have fewer hurdles to jump in gaining access to networks. The shift to working from home means many people are using home computers, instead of more secure corporatesupplied devices. This provides criminals relatively easy access to corporate documents, trade secrets and financial information. Instead of attacking a corporation’s network, which would likely be secured with advanced cybersecurity countermeasures and tracking, they now simply have to locate and attack the employee’s home network. This means less chance of discovery. Beware cryptolocker attacks Cryptolocker-based attacks are an advanced cyberattack that can bypass many traditional countermeasures, including antivirus software. This is because they’re designed and built by advanced cybercriminals. Most infections from a cryptolocker virus happen when people open unknown attachments, sent in malicious emails. If an employee working from home accidentally activates cryptolocker malware while browsing the internet or reading an email, this could first take out the home network, then spread to the corporate network, and to other attached home networks. This can happen if their device is connected to the workplace network via a Virtual Private Network (VPN). This makes the home device an extension of the corporate network, and the virus can bypass any advanced barriers the corporate network may have.

6 • April 2020

Encryption: not a cryptic concept On the bright side, there are some steps organisations and employees can take to protect their digital assets from opportunistic criminal activity.

Backup, backup, backup People often backup their files on a home computer, personal phone or tablet. There is significant risk in doing this with corporate documents and sensitive digital files.

Encryption is a key weapon in this fight. This security method protects files and network communications by methodically “scrambling” the contents using an algorithm. The receiving party is given a key to unscramble, or “decrypt”, the information.

When working from home, sensitive material can be stored in a location unknown to the organisation. This could be a cloud location (such as iCloud, Google Cloud, or Dropbox), or via backup software the user owns or uses (files stored in these locations may not protected under Australian laws). Businesses choosing to save files on the cloud, on an external hard drive or on a home computer need to identify backup regimes that fit the risk profile of their business. Essentially, if you don’t allow files to be saved on a computer’s hard drive at work, and use the cloud exclusively, the same level of protection should apply when working from home.

With remote work booming, encryption should be enabled for files on hard drives and USB sticks that contain sensitive information. Enabling encryption on a Windows or Apple device is also simple. And don’t forget to backup your encryption keys when prompted onto a USB drive, and store them in a safe place such as a locked cabinet, or off site. VPNs help close the loop A VPN should be used at all times when connected to WiFi, even at home. This tool helps mask your online activity and location, by routing outgoing and incoming data through a secure “virtual tunnel” between your computer and the VPN server. Existing WiFi access protocols (WEP, WPA, WPA2) are insecure when being used to transmit sensitive data. Without a VPN, cybercriminals can more easily intercept and retrieve data. VPN is already functional in Windows and Apple devices. Most reputable antivirus internet protection suites incorporate them. It’s also important that businesses and organisations encourage remote employees to use the best malware and antiviral protections on their home systems, even if this comes at the organisation’s expense.

Appropriate backups must be observed by all remote workers, along with standard cybersecurity measures such as firewall, encryption, VPN and antivirus software. Only then can we rely on some level of protection at a time when cybercriminals are desperate to profit. Craig Valli Director of ECU Security Research Institute, Edith Cowan University

This article is republished from The Conversation under a Creative Commons license. Read the full original article here:

MATES RATES | Special Offers for Members Enjoy exclusive year-round privileges & complimentary product or service listings. By presenting our membership e-card or quoting your member ID at the time of booking, AustCham members can enjoy offers on dining, travel, retail and more. Access and download your e-card by logging into the Member Portal:

10% off selected items

15% off all a la carte dining

20% off Food & Beverage 20% off at the Cake Shop

15% off Food & Beverage

20% off dining

10% off a la carte menu

50% off Food & Beverage

20-25% off buffets and a-la-carte 15% off selected take away menus

Dine & Relax Package

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Stay 2 get 3 Chill Out Package

Staycation Package

Free Payroll Service ISSUE 214 • 7

What happens when your Staff Contracts the Virus? In a recent webinar AustCham members heard from Fred Kinmonth and Nathan Dentice, from MinterEllison, who shared their experience managing a COVID-19 case in their office and the importance of having a Business Continuity Plan. Read their step-by-step management of the incident.

interEllison's existing Business Continuity Plan (BCP) was reviewed in early January and was found to be inefficient. Based on the following principles a COVID-19 specific plan was produced: - The health and safety of staff was paramount. - It would take the form of a comprehensive check-list with clear allocation of responsibility. - It should be as short and focussed as possible with clear and effective communications. - The office should remain open and resume normal business as soon as possible. The plan identified these immediate tasks to be followed should there be a COVID-19 incident: - Inform staff, identify persons at risk and arrange for them to be isolated and tested. - Arrange for all staff to work from home on a temporary basis. - Obtain medical advice.

- -

Arrange for the office to be "deep cleaned". Assemble a core team to support office operations so that: • The finance team could function remotely. • The IT team could ensure that remote access arrangements operated effectively; and • Office management staff could deal with ad hoc emergencies. Evening Saturday 21 March - A staff member notified the company that they had tested ‘preliminarily positive’ for COVID-19, with a further test to be conducted the next morning (proved positive). - A meeting was called with relevant executive staff. The associate who shared an office with the patient was immediately asked to isolate themself. Sunday 22 March 2020 First email and WhatsApp message: - Informed all staff of the incident and asked those who had contact with the patient to inform the firm and isolate themselves for 14 days while testing was facilitated. Other staff would work from home for an initial period of at least a week. - Arrangements made for office to be sanitised. - Consultation with medical advisor (OT&P). - The associate who shared an office with the patient went to a public hospital for testing and was sent to Government quarantine. Monday 23 March 2020 Office remained open operating with essential staff: select partners, office manager, finance head, IT and support staff. Second email and WhatsApp message: - Explained medical advice and approach to testing. Those who had “close contact” (i.e. 15 minutes or more of faceto-face contact) would be tested. Others should isolate themselves and monitor their symptoms, and testing would be arranged if symptoms developed. Tuesday 24 March 2020 Third email and WhatsApp message: - Informed all staff that the work from home period would be extended for a second week.

8 • April 2020

Relevant staff privately tested. Pillows and water sent to associate in Government quarantine.

Wednesday 25 March 2020 - Building management (belatedly) announced that the office had a COVID-19 case and further cleaning would be carried out. - Office visited by reporters. Friday 27 March 2020 - Test results received. All staff returned negative results and no staff on the contact list had reported symptoms. Fourth email and WhatsApp message: - Informed all staff of the results and circulated a roster for following week, with additional social distancing procedures. Key Takeaways • The BCP depends on people who can function well under stress. Not all people do. It was important that the partners were accessible to communicate so decisions could be made quickly. • Managing staff anxiety is very important. An infection in the office naturally caused a high degree of anxiety,

followed by a fog of intranet traffic. Implementing a targeted plan coupled with speed of communication and clear decisions calmed matters down quickly. • A good plan, and clear and simple communications, are essential. As above, transparency and focused communications did much to counter anxiety. • Practice working from home. It is important to distinguish roles and tasks of staff when isolated. • Keep the office open if possible. It may be necessary to use the office facilities and have a core group to keep the BCP on track and provide leadership. • Take all available steps to keep the office sanitised and enforce social distancing. Doing so gave staff the confidence to return to the office and work effectively - leaving no stone unturned to ensure a safe environment.

Fred Kinmonth Senior Partner, MinterEllison

Nathan Dentice Partner, MinterEllison

Nathan Dentice

ISSUE 214 • 9

Funding and Support for SMEs To support our SME members AustCham have launched a dedicated SME support information page, Help for SMEs, highlighting current Government funding schemes and advice from financial experts on managing through COVID-19. Articles featured include insights and advice on protecting staff, managing talent risk, cash management strategy and contractual issues. Visit the page by scanning the QR code (right):

o streng then suppor t for SMEs and to raise awareness of various funding schemes, the Hong Kong SAR Government has consolidated the services of existing SME centres to provide a “four-in-one” integrated service spanning trade, industry, science and technology. In addition, a new dedicated service team SME ReachOut, operated by the Hong Kong Productivity Council (HKPC), was established this year to provide consultation and matching of appropriate funding schemes through free one-on-one sessions. The Centre also holds regular funding workshops to share updates of funding schemes and practical advice for funding application and implementation. The four consolidated centres consist of the SME One under the Hong Kong Productivity Council, Support and Consultation Centre for SMEs (SUCCESS) under the Trade and Industr y Depar tment, the SME Centre under the Hong Kong Trade Development Council and TecONE under the Hong Kong Science and Technology Parks Corporation.

For support or SME ReachOut directly at 2788 6262 or email sme_ reachout@hkpc.org. The HKPC has highlighted five (of 40) funding schemes available:

D e di c at e d Fu n d o n B r a n ding , U p g r ading a n d D o m e s t i c S a l e s (BUD Fund) To enhance enterprise competitiveness and facilitate their business development through developing brands, upgrading and restructuring their business operations, and promoting sales. For non-listed enterprise with substantive business operation in HK. • 1:1 matching •

Cumulated limit: HK$4M for Mainland Programme + HK$4M for FTA Programme

•

Funding ceiling per project: HK$1M

SME Export Marketing Fund (EMF) To encourage SMEs to expand their markets outside Hong Kong through participation in export promotion activities. For local SMEs with substantive business operation in Hong Kong. • 50% of the approved expenditures, up to HK$100K per activity •

Enterprise Support Scheme (ESS) To encourage the private sector to invest in research and development. For local companies with substantive business operation in Hong Kong or a nongovernment subvented organisation or its subsidiary. • 1:1 matching basis •

Funding ceiling: HK$10M per project

Retail Technology Adoption Assistance Scheme for Manpower Demand Management (ReTAAS) Subsidises enterprises to adopt technologies for manpower demand management, to enhance their productivity and improve working conditions of workers. For non-listed enterprises with substantive retail business operation in Hong Kong. • 1:1 matching basis •

Cumulated limit: HK$50K per company

Technology Voucher Programme (TVP) Subsidises local enterprises in using technological services and solutions to improve productivity, or upgrade or transform their business processes. For non-listed enterprises with substantive retail business operation in Hong Kong. • 75% of the approved expenditures •

10 • April 2020

Cumulated limit: HK$800K per company

Cumulated limit: HK$600K per company

32nd Annual General Meeting Welcomes New Directors

e are pleased to announce that the 2020 Annual General Meeting of the Australian Chamber of Commerce in Hong Kong was held on 11 March, 2020 both virtually and in person.

and Hong Kong business community. See all Board of Directors here:

The meeting was chaired by Andrew Macintosh who delivered the Chairman’s report highlighting the Chamber's achievements - a significant positive result amid a challenging environment. The Chamber halted a trend of growing deficits over preceding years to return the Chamber back to profit - and with fewer resources, acquiring two new Platinum Patrons, Asia Miles and Leighton Asia.

David Simmonds David is the Group General Counsel, Chief Administrative Officer and Company Secretary of CLP Holdings.

We are pleased that three board directors, namely Andrew Whitford of CT Group, David Simmonds of CLP and Jay Bailey of NAB were appointed.

Jay Bailey Jay is the Asia regional Head of Divisional Controls for National Australia Bank, and Alternate Chief Executive for Hong Kong.

CQ Lu, Deborah Leung and Gautam Dev retired from the Board during the year. We are thankful for their contribution to the Board and the Australian

Hong Kong’s Generosity for Bushfire Relief

here’s no better way to demonstrate the power of community – we are thrilled to announce that our six-week bushfire fundraising appeal has raised more than HK$900,000 (AUD$180,000). Thank you, Hong Kong. This is testament to the extraordinary generosity and efforts of individuals and companies in the wider Australian-Hong Kong business community. It’s all the more outstanding when we consider the challenges Hong Kong is facing. This brings to life the enduring ties between Australia and Hong Kong which are borne of 200 years of co-operation and collaboration. We may be thousands of miles away but clearly distance does not diminish our desire to respond to the scenes of devastation caused by the catastrophic fires of Australia’s “Black Summer”. The appeal brought out the best in us – from a young executive in our mentor program who raised funds through an ANZAC biscuit bake sale at her office, to a run on margaherita pizzas, through to school children chipping in, corporate matching and community fundraisers. And there were many more offers to help and others who donated separately. There are many to acknowledge but we want to give a special shout out to Cathay Pacific and Societe Generale whose staff pulled out all stops with the companies matching their generosity; to Pizza Express, Treasury Wine Estates, the HK Lions Club and Lipman Karas. Thank you again. Your efforts and donations will go on to help devastated communities rebuild and revive through the Australian Red Cross Disaster Relief and Recovery fund, who will need these much-needed funds more than ever.

ADVOCACY NEWS hrough our Construction, Property and Infrastructure committee, we lobbied on your behalf to the Hong Kong SAR Government calling for consistent and timely approvals of Capital Works Project funding applications through the Legislative Council. Now more than ever, the construction industry has a vital role to play - ensuring the fall-out from the economic downturn can be mitigated and to provide the catalyst to get Hong Kong’s economy back on track.

Read the letter here:

COMMITTEE NEWS We welcome the merger of our Sustainabilit y and Innovation and Technolog y commi t tees , chaired by Austin Bryan, Senior Director – Innovation, CLP Holdings.

ISSUE 214 • 11

Is your Australian Home Still Safe? By Lucy Zheng, Certified Financial Planner Practitioner, Financial Partners Ltd and Anthony Burling, Certified Accountant, Burling Consultant

mid the holidays, bushfires, protests, Brexit and a global health crisis, the Australian government passed legislation to deny the Main Residence Exemption to non-residents in December last year.

The senior council of Tax Institutes stated, “There is no legitimate policy reason for denying Australian citizens the Capital Gains Tax (CGT) main residence exemption in these circumstances”. Similar sentiments were put forward in months of advocacy by leading accounting, tax and business bodies, particularly those representing expatriates, including AustCham. The many policy submissions and meetings with politicians managed to delay the legislation, which lapsed at the calling of the Federal election last year. However upon re-election the bill was re-introduced and is now law. So, what is the change? If you are not an Australian tax resident when you sell your home in Australia, you will not be entitled to any main residence exemption from Capital Gains Tax. This means you will pay tax on any growth from the day the property was initially purchased until it was sold. Even if you lived in it for 30 years. The main residence exemption rule will not be available, so you also will not be entitled to the six-year extension on CGT exemption (explained below in the case studies). There are some exceptions in special circumstances (carved

Making your voice heard Letter to the Australian Treasurer With the Prime Minister's announcement ending auctions and open houses in Australia, those living overseas can no longer sell their homes before Treasurer Josh Frydenberg's June 30 deadline, under changes recently introduced. We wrote to the Treasurer calling for an urgent extension of this deadline for 12 months. We encourage you to do the same. Read the letter and more here:

12 • April 2020

out due to lobbying by AustCham and others leading bodies) such as divorce, terminal illness and death (of a family member, not the owner). The new legislation will affect properties if you sell it after 30 June 2020. If you purchased after 9 May 2017 it already affects your property. In addition, your 50 percent CGT discount, as a non-resident will be reduced under previous changes instituted in May 2012 which arguably is more complex and damaging piece of legislation for expats than the denial of main resident exemption. Note that the changes do not apply to: – A pure investment property (there was no main residence exemption in the first place) – An Australian tax resident at the sale contract date – Government employees in certain commonwealth super funds If you think this tax change may affect you, please seek professional advice soon. You may want to act before the transition rules end on 30 June this year.

Two Examples: 1. SHORT TERM EXPATS July 2000: Purchased home in Australia. Cost $700,000. September 2015: Moved to Hong Kong. Became non-tax residents. Rented out former Home. Property market value $2,000,000. April 2020: Still living in Hong Kong. Property market value $3,500,000

2. LONGER TERM EXPATS July 2000: Purchased home in Australia. Cost $700,000. September 2010: Moved to Hong Kong. Became non tax residents. Rented out former home. Property market value $1,500,000. September 2016: Their six year extension ran out. April 2020: Still living in Hong Kong. Property market value $3,500,000 Option 2.1 - Sell Before 30 June 2020

Option 1.1 - Sell before 30 June 2020

Option 1.2 - Sell in July 2020

Within grandfathering period

Old rules apply

Rented out for 10 years > 6 years

Partial Capital Gain is taxable

Within grandfathering period • Old rules apply • Non-tax residents < 6 years • No Capital Gain • No tax

New rules apply • No Main Residence Exemption • Capital Gain = $3,500,000 – 700,000 = $2,800,000

Gross Capital Gain = $3,500,000 – 1,500,000 = 2,000,000 Assessable Capital Gain = 4/20 years x 2,000,000 = $400,000

Option 2.2 - Sell in July 2020

Option 1.3 - Move back to Australia then sell

Same gross capital gain of $2,800,000 as scenario 1.2 above.

March 2021: Move back to Australia July 2021: Sell property for $4,000,000 Tax resident Resident’s rules apply

Option 2.3 - Move back to Australia then sell

Property rented out September 2015 to July 2021 < 6 years Main Residence Exemption applies No capital gain No tax

Note that the examples and calculations are heavily simplified. Australian tax law is extremely complicated, and we are just focusing on portraying a small part of it.

March 2021: Move back to Australia. July 2021: Sell property for $4,000,000. Tax residents Resident’s rules apply Rented out for 11 years > 6 years Partial Capital Gain is taxable Gross Capital Gains = $4,000,000 – 1,500,000 = 2,500,000 Assessable Capital Gains = 5/21 years x 2,500,000 = $600,000

ISSUE 214 • 13

Celebrating our spirit From an outback airstrip to becoming our national carrier and flying 50 million people across the world, we’ve come a long way. And while times have changed, our spirit has remained the same. Throughout all the stages of our history — in times of war, peace, natural disaster and national celebration — serving Australia has been at the heart of everything we do. Join us as we celebrate the beginning of our next 100 years. qantas.com/100

Welcome to our New Members Platinum Patron ANZ Alannah Poh Andrew Harward Carol Leung Cindy Wei David Lin Dennis Law Eliza Siu Yee Liu Greg Andrews Japhet Lee Juwon Lee Karen Chan

CK Infrastructure Carrie Huen Eva Ng Peter Bourke CLP Hendrik Rosenthal NAB Cassandra Lister

Lisa Kwan Mandy Siu Nathan Herman Nelson Chen Prash Odhavji Thomas Lee Vincent Wu Winnie Leung Yan Kwan Yun Jing

Telstra Michael Yao David Robertson Corporate Sponsor Bright Food Asia Geoff Erby Jason Gale Corporate Patron Australian Consulate-General Leah Yeak Nicole Doughty JEB International Robert Wall Mayer Brown Steven Tran MTR Roger Bayliss

St James's Place Wealth Management Matthew Deeprose Corporate Member BM Human Resources and Constructions Limited Surekshya Khadka Abi Khadka Frasers Property Australia Robert Pearce Infosys Consulting AG Anmol Jain Island Shangri-La Sharon Lee Kerry Logistics Brian Wong OFX Julie Tran The Murray Ken Law Qantas Donna Shiu Individual Member Altitech Asia Brendan Kendall Amgen Kylie Park Cocking & Co. Dennis Wong Digital Butter Michael Ashton Lynk Global Tanya Mendzel Peter Richie Spark Group Asia Tanya Dillon Stacey Guo Young Executive AXA Norman Tan Cisema Hamish King Concierge Consulting Services Limited Dominick Finlayson Weir & Associates Jennifer Baccanello ISSUE 214 â&#x20AC;˘ 15