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TEN TAX TIPS FOR STUDENTS? [1]

Mark Morris La Trobe Business School Professor of Practice

By Mark Morris

Few student welcome the prospect of preparing and lodging an income tax return with the Australian Taxation Office (the ATO).

However, where the income tax deducted from a student’s job exceeds the total income tax payable for the tax year the only way in which a student can obtain a refund of overpaid tax is by lodging an income tax return.

Of course, other students will be legally required to lodge a return and pay tax where insufficient income tax been retained from their salary, or where they derive other categories of assessable income on which they owe tax.

We have developed ten tax tips to help you decide whether you need to lodge an income return for the year ended 30 June 2017, and how to prepare a return if you have too.

1. Are you an Australian tax resident?

The first step is to work out if you are an Australian resident for Australian income tax purposes.

If you were born in Australia and continue to live here, you will be regarded as an Australian resident for income tax purposes as this is the country in which you reside.

However, it is important for international students to recognise that being a resident for Australian tax purposes is quite different to being a permanent resident for Australian immigration purposes, and that they may sometimes unknowingly be an Australian tax resident.

Very broadly, an international student may be regarded as residing in Australia if they are here for such a period of time that their behavior reflects a degree of continuity, routine or habit that is consistent with residing in Australia.

Whilst it is a question of fact in each case as a broad rule of thumb the ATO takes the view that living in Australia for six months is a period of time which is generally consistent with a person residing here for tax purposes.

For example, in one of the ATO’s binding public taxation rulings it held that an overseas student who came to Australia to attend a pre-arranged 4-year university course was an Australian resident even though he left after 6 months to return to his home country following a family illness as his living and working arrangements whilst in Australia were consistent with someone whose pattern of behavior was that they resided in Australia[2].

Accordingly, if you are unsure whether you are an Australian resident for income tax purposes you should contact the ATO or a registered tax agent to obtain more clarity as to whether or not you are an Australian resident in working out your tax rights and obligations.

2. What happens if you are an Australian tax resident?

Assuming you are regarded as an Australian resident for tax purposes what are some of the key tax implications you need to consider.

On the plus side you will be entitled to a tax free threshold which will mean that you do not pay any income tax for the year ended 30 June 2017 if your total taxable income was $18,200 or less.

Accordingly, if you worked part time and derived salary income from which income tax was deducted by your employer you will be able to obtain a tax refund of any Pay As You Go (PAYG) tax retained from your salary income if your total taxable income was $18,200 or less.

In practice, most individual resident taxpayers will also usually be entitled to a tax credit being the low income tax offset which means that no tax will typically be payable if that person’s taxable income is below $20,542. However, the amount of this this tax offset reduces tax payable but is not in itself refundable.

On the negative side you will be subject to tax on all your assessable income for the year ended 30 June 2017 regardless of where it was sourced. For example, an overseas student would need to include both their Australian salary income and any interest income earned in a bank account held in their home country.

In addition, Australian residents are subject to a 2% Medicare levy but only where their taxable income exceed certain thresholds.

By contrast a non-resident is only taxable on assessable income which has an Australian source being generally locally derived investment income. However, such income will be subject to tax at a rate of 32.5% for any taxable income derived up to $87,000 as there is no tax-free threshold for non-resident individuals.

3. What do I need if I want to lodge a return for the 2017 year?

Most students who have been employed would have already been issued a tax file number which is a prerequisite for every individual lodging an income tax return.

If for some reason you are lodging a return but do not have a tax file number you will need to apply for one from the ATO either directly or by using a registered tax agent.

You should then collate all the records and information you will need to prepare you income tax return including, amongst others, any payment summary, bank interest statements, dividend slips, invoices and receipts.

Assuming you have a tax file number you may consider preparing and lodging your income tax return on-line using the ATO’s myTax product if your tax affairs are reasonably simple. Further details on myTax can be found here.

Otherwise it may be prudent to contact a registered tax agent to ensure you identify all your entitlements and to ensure that your income tax return is correctly prepared.

Regardless of how you lodge your return you will need to disclose full bank account details when preparing your income tax return if you expect to receive a tax refund.

4. What types of income need to be included in your return?

As discussed, as an Australian resident you will be taxed on all of your assessable income wherever it is derived.

Some of the more common types of assessable income include the following:

  • Salary and wages (whether as a full-time, part-time or casual employee);
  • Allowances and bonuses (where received during the 2017 income year);
  • Tips and gratuities (such as those received working in hospitality jobs);
  • Fees received as an independent contractor under a contract for service;
  • Any business income derived during the year (not being income derived from carrying on a hobby);
  • Australian government payments and allowances including, amongst others, Newstart allowance, youth allowance, AuStudy payments and certain other educational and training allowances;
  • Interest income;
  • Dividend income (including the amount of any franking credit tax offset for any franking credit attached to a dividend paid by an Australian resident company);
  • Any distributions received as a beneficiary from a family trust or as a partner in a partnership; and
  • Capital gains arising from the disposal of certain CGT assets (which is a highly complex area requiring specialist expertise).

The total of such assessable income may be reduced by eligible deductions which may take the form of work-related deductions, self-education expenses in certain circumstances and personal deductions.

5. What type of work-related deductions can you claim?

You may be entitled to claim a deduction for expenses directly incurred in the course of gaining or producing your assessable income. However, you will not be able to claim an outright deduction which is capital in nature although you may be able depreciate certain capital assets like a computer over time for tax purposes where it has been used for the purpose of gaining or producing assessable income. In addition, you will not be entitled to claim a deduction for expenditure which is private in nature such as the cost of conventional clothing (e.g. suits) purchased for work purposes.

Some of the more common types of deductions you may be able to claim are as follows:

  • Work-related subscription and union fees;
  • Protective clothing and certain work uniforms (including compulsory work uniforms required by your employer);
  • Home office expenses (where you are required to work at home after hours and have a separate room allocated in your home study for that purpose);
  • Employment related telephone mobile and internet costs; and
  • Travel expenses between worksites (but excluding travel between home and work)).

You may also be entitled to claim a deduction for the cost of tools of trade, briefcases and calculators costing less than $300 to the extent to which you use it for work-related purposes.

However, you will only generally be able to claim any work related expenses costing $300 or more if you have retained all the relevant invoices and receipts.

6. When are self-education costs allowable?

Broadly, self-education expenses are only deductible to the extent that the course of study undertaken will either maintain or improve your skills in your current occupation.

Accordingly, you will not be entitled to claim the costs of your course if you’ve not yet embarked on a particular career. Nor will you be able to claim such costs if you have decided to change careers and have incurred such expenses in studying a new area of expertise.

However, you will be able to claim a deduction for self-education expenses where the study or training you are undertaking is likely to enhance your chances of promotion or increase your income earning capacity in your existing occupation.

Further details as to when self-education expenses are allowable or not are set out in Taxation Ruling TR98/9 which can be downloaded here.

Eligible self-education costs include, amongst others, course fees, textbooks, stationary, travel costs and the depreciation of items such as laptops, tablets and printers. However, it is necessary to add back $250 of any self-education expenses as being non-allowable.

Finally, any Higher Education Loan Program (HELP) repayments are non-deductible.

7. What other personal deductions may be allowable?

Donations of $ 2 dollars or more to a deductible gift recipient (e.g. a charity like the Red Cross) will be allowable provided you have kept copies of receipts for any gifts made.

You can also claim a deduction for any fee paid to a registered tax agent during the year ended 30 June 2017 for the cost of managing your tax affairs. However, any amount paid to a registered tax agent to assist you in in preparing your 2017 income tax return will only be deductible in the year ended 30 June 2018.

8. What tax offsets can you claim?

Whilst tax deductions may reduce assessable income tax offsets are directly applied as a credit to reduce tax payable.

Certain tax offsets may also result in a refund to the extent that the tax credit exceeds tax payable.

The most common tax offsets that a student may claim include the beneficiary tax offset, the franking credit tax offset and the small business tax offset.

A beneficiary tax offset may be available where a student receives a Newstart allowance, youth allowance, Austudy payments and certain other Commonwealth education or training programs.

The calculation of this offset can be complex but this offset may not only reduce tax payable on the amount of Government benefits received but also assessable income received from other sources.

Further details on the beneficiary tax offset can be found here.

A resident company may pass on a tax credit for tax it has paid to shareholders when it pays such shareholders a franked dividend. Such a tax credit can be claimed as a franking credit tax offset which may also result in a tax refund where the franking credit exceeds tax payable.

Finally, where a student is also carrying on a business that individual may be entitled to the small business income tax offset for the year ended 30 June 2017 being 8% of the income tax payable on the portion of an individual’s taxable income that is ‘total net small business income’ provided the aggregated turnover of the business is less than $5million.

However, an individual is only able to claim one small business tax offset for an income year irrespective of the number of sources of small business income derived by that individual and the maximum amount of the offset is capped to $1,000 per year. The application of this offset is also quite complex and specialist advice should be sought if you intend to claim it.

9. What are some of the potential traps to watch out for?

There are special rules to discourage adults from splitting income with their children (i.e. minors) aged under 18 at the end of the year unless that minor is engaged in a full-time occupation, receives a carer allowance, disability support pension or double orphan pension or a person who is disabled or a beneficiary under a special disability trust.

Where the minor is subject to these special rules, penalty tax rates apply to such children receiving dividends, interest, rent, royalties or a family trust distribution.

Where such income is between $417 and $1,307 tax will be paid on the excess of income over $416 at a rate of 68% whilst any amount of such income in excess of $1,307 will be subject to tax at a rate of 47%.

10. Where do I go for help?

If you believe that you required to lodge an income tax return or that you may wish to lodge a return in order to obtain your tax refund, you may wish to either contact the ATO or look at their website for more details at www.ato.gov.au

Should you want to get independent tax advice then try to locate an accountant who has the tax expertise to makes sure you lodge a correct income tax return but make sure that the accountant is also a registered tax agent who has been legally authorised to provide such services.

And if you are entitled to a tax refund go get what is yours!

[1] Latrobe University has used reasonable care and skill in compiling the content of this general commentary. However, it should not be relied upon as advice in any circumstances, and no warranty is provided by either the University or the author concerning the accuracy and completeness of these materials. Accordingly, they disclaim all and any liability to any person in respect of reliance on any of the matters raised in these materials, and professional advice should be sought from an appropriately qualified registered tax agent where required.

[2] Refer to Example 8 of Taxation Ruling TR98/17.

Competing theories of economic thought: a changing pedagogy?

Dr Mark Cloney, Professor of Practice, Economics

Dr Mark Cloney, Professor of Practice, Economics

By Mark Cloney

Mark Cloney is a Professor of Practice at La Trobe Business School. In the following piece, POP Mark Cloney observes that economic theory has been a bit slower than other sciences to catch up to the changing nature of knowledge and the dynamics of the knowledge-based global economy [1]

He argues in the following entry that this has implications doe the discipline in terms of its capacity to engage with contemporary economic challenges, and also raise questions about the teaching of economics.

Capitalism has variously been described as an economic system with private or corporate ownership of capital goods; where investments are determined by rational decision makers and supply and demand; and production and the distribution of goods determined mainly by competition in a free market. These microeconomic foundations stem from neoclassical economics through the writings of economists such as Marshall [2].

Marshall’s Principles of Economics (1890) formalised the move from labour to utility as the source of value: a commodity’s value came from its utility to consumers through the forces of the market (i.e. supply and demand) [3]. Accordingly, in the marketplace people are rational and utility maximisers characterised as households, consumers or economic agents. These concepts were formalised in pure mathematical form in the general equilibrium model by Arrow and Debrea (1954) based on Walras’s earlier theory of equilibrium [4].

This general equilibrium model has formed the basis for economic thinking in most Western economies and university teaching of economics for the last 60 years or so.

So microeconomics analyses, the market behaviour of individual consumers and firms, is an attempt to understand the decision-making process concerned with the factors that influence the choices made by buyers and sellers, price, and supply and demand in individual markets. And, this is what drives innovation, economic development and firm behaviour in a globalised knowledge–based economy – or is it?

One of the problems with this perspective is that factors such as investment in research and development (R&D) or where actual research is conducted matters very little [5]. The traditional neoclassical view of knowledge as a public good  is that it is available everywhere and to everybody simultaneously which implies that innovation flows in a frictionless manner from producers to a full set of intended and unintended beneficiaries, contributing to generate a long-term process of convergence across countries and regions (see Rodriguez-Pose 2008). [6]

But what happens if competitive advantage in a global knowledge-based economy is as much actually determined by local non-market factors including its institutions, networks and innovation ecosystems? Or, by the forces of ‘collaboration’ not ‘competition’, or maximising ‘social and shared value’ not profits for stakeholders but for the community within in which firms operate? Do these orthodox microeconomic foundations still hold up?

The emergence of the knowledge-based economy, where knowledge, learning and innovation are the new drivers of economic growth and competitiveness, is premised on a distinct shift in the mode of production from the traditional capital and labour divisions to knowledge generation and diffusion [7]. This understanding of the knowledge economy comes from evolutionary, neo-Schumpeterian and economic geography economic theories. [8] Complementing this work are studies into the entrepreneurial society  and creativity where entrepreneur capital is a key driver for economic growth [9].

Internationally, innovation and regional development policy that focuses more explicitly on the ‘institutional’ and ‘locational’ dimensions of enterprise and socio economic development has emerged as a major policy tool to foster competitive advantage [10]. That is, there has been an increasing recognition by many that non-market factor influence competitiveness of firms just as supply and demand. So government policies have been designed to better coordinate collaboration structures in regions or local innovation ecosystems between government, education and the private sectors. Here local institutions including financial and legal support the supply side inputs and entrepreneurial activity that drives economic development and innovation [11].

These ideas support a range of alternative government policies targeted at small to medium business, industry clusters, business incubators and accelerators, strengthening institutional arrangements and networks, encouraging university/industry collaboration, local capacity building (including education, training and entrepreneur skills) and regional innovation ecosystems.

Consistent with these trends, Michael Porter and Mark Kramer (2011) [12] argue for the importance of creating shared value, which focuses on policies, collaboration and operation practice that enhances competiveness of a company while simultaneously advancing the economic and social conditions in the communities in which they operate. They cite firms such as Google, IBM, Intel, Jonson and Johnson, Nestle, Unilever and Wal-Mart as examples of companies that have embarked on shared value initiatives within the community’s where they operate. The notion of shared value changes the traditional emphasis on profit and price to a much broader definition.

Porter has suggested elsewhere that government policy, business and community processes (in other words institutional arrangements) are as important determinants of industry success as is ‘price’ [13].

The move to ‘shared value’ has seen the rise of B Corps which are for-profit companies certified by the non-profit B Lab to meet higher standards of social and environmental performance, accountability, and transparency. More than 1,400 Certified B Corps from 42 countries and over 120 industries are working together toward the goal: to redefine success in business [14]. B Corps meet high standards of verified social and environmental performance, public transparency, and legal accountability, and aspire to use the power of markets to solve broader social and environmental problems. In 2013 the United States introduced legislation to recognise this new type of corporate legal entity which has now been passed into law in 17 states [15]. Under this legislation companies must have a corporate purpose to create a material positive impact on society and the environment, director’s duties include consideration of non-financial stakeholders, besides shareholders, and it includes a reporting obligation on the social and environmental activities (verified through third parties).

Although in its relative infancy this movement is attempting to overcome market failures and treat as endogenous the negative externalities typically associated with the dynamics of neo-classical theory. This may or may not be a lasting trend, but what if it became the norm for firm behaviour and economic development in the knowledge-based economy?

What assumptions and economic theories can best capture these economic and policy trends and explain the broader social-political context shaping these ideas, firm behaviour and competitiveness? This is the real challenge for the next generation of economic theorists.

One of the major challenges for orthodox economics is that its theory is embedded in axioms that used to understand the world as largely stable and predictive, and which are now seen as unstable and largely unpredictable [16], as the Global Financial Crisis demonstrated in 2008.

Since the 1960s there has been profound advances in how other science disciplines understand and teach the systematic nature of botany, biology, physics, computer science, neuroscience, oceanography, and atmospheric sciences to name a few. As Liu and Hanauer (2016) [17] argue across these fields we have seen a set of conceptual shifts in understanding from: simple to complex; atomistic to networked; linear to non-linear; mechanistic to behavioural; efficient to effective; predictive to adaptive; independent to interdependent; individual ability to group diversity; rational calculator to irrational approximators; selfish to strong reciprocal; win-lose to win-win or lose-lose; and, competition to cooperation.

More contemporary economic theory such as complexity, evolutionary and behavioural economics [18] are incorporating these types of conceptual shifts and as such challenge orthodox economic theories. These contemporary approaches variously emphasise the actual motivations for firm and human behaviour, the importance of networks, ecosystems and endogenous processes, and the dynamics of constant innovation and disequilibrium as the basis for better understanding the empirical reality of the knowledge-based economy.

The remaining challenge is to design a new economic pedagogy (conceptual models and theories) to support the teaching of these alternative approaches and to incorporate them into undergraduate economic degrees.

 

 

Dr Mark Cloney

Professor of Practice – Economics

Department of Economics and Finance

La Trobe Business School

College of Arts, Social Sciences and Commerce | La Trobe University | Bundoora Victoria 3086

T: 03 9479 5621   |M: 0428173880  |

E: M.Cloney@latrobe.edu.au

[1] See Ngai-Ling Sum and Bob Jessop (2013) Competitiveness, The Knowledge-based economy and Higher Education, Journal of the Knowledge Based Economy, Vol.4 pp 24-44.

[2] See E.K. Hunt. (1979), History of Economic Thought; A Critical Perspective, Wadsworth Publishing

[3] Ibid

[4] John, Peters, John Elliott and Stephen Gullenberg (2002), Economic Transition as a Crisis of Vision: Classical versus Neo-classical Theories of General Equilibrium, Eastern Economic Journal, Vol.28, No.2, Spring 2002.

[5] Andre’s Rodriguez-Pose and Richard Crescenzi (2008), Research and Development, Spillovers, Innovation Systems, and the Genesis of Regional Growth in Europe, Regional Studies, Vol 42.1, pp51-63, February.

[6] Ibid.

[7] Mark James Cloney. (2003), Regional Development in Australia: Rethinking the Basis for Regional Policy, PhD Economics, University of Sydney & Maskell, P. and Malmberg, A. (1999), Localised learning and industrial competitiveness, Cambridge Journal of Economics, 23 (2):167- 185.

[8] Ibid.

[9] David. B. Audrestsch (2009), The entrepreneurial society’, The Journal of Technology Transfer, Vol. 34, Issue 3, June, pp. 245-254

[10] Giordano, B. (2001) Institutional Thickness: political sub-culture and the resurgence of regionalism in Italy a case study of Northern League in the province of Varese, Transactions of the Institute of British Geography, 26 (1): 25-41.

[11] Ngai-Ling Sum and Bob Jessop (2013), p. 32.

[12] Michael E. Porter and Mark R.  Kramer (2011) The Big Idea: Creating Shared Value, Rethinking Capitalism, Harvard Business Review, Jan- Feb – https://hbr.org/2011/01/the-big-idea-creating-shared-value/ar/pr

[13] See Michael Porter (1990) The Competitive Advantage of Nations, McMillian Press, Hong Kong.

[14] http://www.bcorporation.net/what-are-b-corps

[15] Gove, Andrea; Berg, Gary A. (2014), Social Business: Theory Practice, and Critical Perspectives, Springer-Verlag Berlin and Heidelberg GmbH & Co.p165.

[16] Eric Liu and Nick Hanauer (2016), Traditional Economics Failed. Here’s the New Blueprint’, http://evonomics.com/traditional-economics-failed-heres-a-new-blueprint/

[17] Ibid

[18] Amna Silim (2016), What is New Economic Thinking? Three strands of heterodox economics that are leading the way, https://evonomics.com/new-economic-thinking/

Cleaning up sport: conflicts of interest at the top | Space for Transparency

 

By Catherine Ordway

The tension between the International Olympic Committee (IOC) and the World Anti-Doping Agency (WADA) has never been greater than this year, when WADA recommended a ban on all Russian athletes from participating in the Rio Olympic Games, only to have the IOC reject that position. This points to a fundamental challenge for the relationship between the two organisations. As WADA is half run and funded by the IOC, its independence can be questioned.

In a vote to maintain the status quo, 75 year-old Sir Craig Reedie, an IOC member since 1994, was re-elected on 20 November as WADA President for a further three year term. Many of WADA’s decision-makers appear not to see a conflict in their dual/multiple roles. As IOC member and former WADA President, Dick Pound put it: “Tell me what the conflict of interest is between your capacity as an IOC member espousing clean, doping-free sport and sitting as representative of that organisation on [the] foundation board of WADA, which has the same objective.”

The fact that both WADA and the IOC have as a common goal the desire to achieve ‘drug free’ sport, does not negate the inherent conflict that arises in the space where the aims differ.

Despite creating WADA with inbuilt conflicts, the IOC now realises that WADA needs to change. The Declaration of the 5th Olympic Summit of 8 October recognised the fundamental philosophical tension within international sport on WADA’s role. Recommendation 3 emphasises that: “WADA [is] to strengthen its governance structure” and “[must] Ensure compliance with the highest ethical standards in particular with regard to the resolution of conflicts of interests and integrity.”

The Declaration went on to indicate that WADA should both be better resourced to operate independently and have greater powers. Hopefully this is also an indication that the IOC may now be willing to relinquish control and allow for greater independence.

Organisational objective conflicts

The IOC owns the Olympic Games and receives much of its revenue from the broadcasting and sponsorship of these events. It’s in the IOC’s interest to have the best athletes from all member nations there to keep the Games relevant and competitive. The proposal to ban Russia created a difficult dilemma for the IOC.

The challenge created when common interests raise a potential conflict is also demonstrated in WADA’s appointment of Dick Pound as the lead investigator in the first “independent” report into international athletics (IAAF) and Russia’s state sponsored doping. For the report to be ‘independent’, Pound’s current and former positions should have made him ineligible for this role.

In the most recent demonstration of the challenge posed, IOC members Gian-Franco Kasper and Dr. Ugur Erdender currently sit on both the committees that considered whether the athletes nominated by the Russian Olympic Committee should be barred from competing at the Rio 2016 Olympic Games, namely the IOC and WADA Executive Boards.

The IOC’s decision not to accept WADA’s recommendation on Russia’s eligibility sends the message that Olympic goals, including supporting one of the IOC’s strongest members, are prioritised over the aims of WADA. At the meeting of the broader IOC membership, only the former British skeleton athlete, and WADA Foundation member, Adam Pengilly, voted to support WADA’s recommendation, while Reedie abstained.

Composition of WADA’s Decision-Making Bodies

WADA’s mission is to: “promote and coordinate at [the] international level the fight against doping in sport in all its forms”.  To strengthen WADA’s governance and remove the conflicts between the different stakeholders, as recommended by the IOC, requires rewriting WADA’s constitutional documents to allow for the appointment of independent decision-makers.

As it stands now, WADA’s constitution provides for a two-tiered decision making system: the large Foundation Board made up of representatives from both governments and the Olympic movement, and a sub-set of that group sits as the Executive Committee. Most of the policy-makers sitting on WADA’s Executive Committee are also on its decision-making body, the Foundation Board. In order for the Foundation Board to truly play an oversight role, there should not be an overlap of personnel.

To have any claim to ‘independence’, WADA must also sever the tie between receipt of funding, and eligibility for a seat at the WADA board table.

As detailed elsewhere, this bind creates a number of issues for WADA, including: the danger of WADA being manipulated or held hostage by the dominant funder (see reference 1 below) and wasting resources on solving the struggles and disagreements between stakeholders with competing agendas (see reference 2 below).

The separation will help to diminish, but not completely avoid, the issues around funding bodies influencing the way WADA operates. How ‘independence’ is defined and achieved is a challenge that needs to be worked through in consultation with all the major stakeholders. Athletes have the ultimate vested interest in ensuring that sport is played fairly, and that ‘innocent’ athletes are supported and protected (see reference 3 below).

The current financial and rights model must be turned on its head to give athletes the ultimate say on how sport is governed and policed. Inverting the power pyramid will open up dialogue around ensuring greater justice and economic benefits for athletes. A more representative WADA would see a broad, inclusive group of skilled people reflecting the demographics of the community, including athlete alliancesanti-doping specialists, scientists, professional team sport employers and sponsors.

Opening up the nomination process would also provide the opportunity for other organisations with an interest in supporting ‘clean’ sport, such as the UN Office for Drugs and Crime and the Global Organization of Parliamentarians Against Corruption, to increase their involvement.  There is also capacity to expand UNESCO’s role in monitoring the implementation of the anti-doping convention.

An independent Foundation Board and Executive Committee will “strengthen [WADA’s] governance structure” by creating an additional internal accountability mechanism.  The challenge will be to then develop a fair, inclusive process so the views of athletes can be more comprehensively reflected, replacing the current Athlete Commission model.

The IOC’s plea for the “resolution of conflicts of interests and integrity” can be answered by ensuring that WADA’s decision-making bodies are composed of a diverse range of independent thinkers who are answerable to the athletes, not representative stakeholders.  Managed carefully, having experts from a range of disciplines available to set WADA’s strategic direction will ensure that anti-doping serves those most impacted by it.

References

1. For more on capture, see P. Sabatier, ‘Social Movements and Regulatory Agencies: Toward a More Adequate – and Less Pessimistic – Theory of “Clientele Capture”’ (1975) 6 Policy Sciences 301; M. E. Levine and J. L. Forrence, ‘Regulatory Capture, Public Interest, and the Public Agenda: Toward a Synthesis’ (1990) 6 Journal of Law, Economics & Organization 167.

2. U. Wagner, ‘The World Anti-Doping Agency: Constructing a Hybrid Organisation in Permanent Stress (Dis)Order?’ (2009) 1 International Journal of Sport Policy and Politics 183, 196.

3. S. Moston and T. Engelberg, “Guilty Until Proven Innocent (and Then Still Guilty)” Report, James Cook University, 15 November 2016

This post was originally published on the Transparency International Blog.

Big Data and Cybersecurity: Are We Ready?

cybersecurity

La Trobe Business School would like to invite you to La Trobe University’s panel event: “Big Data and Cybersecurity: Are We Ready?”

The Australian Crime Commission estimates the annual cost of cybercrime in Australia to be more than $1 billion. At the same time there’s a severe global skills shortage in cybersecurity workers, with 1 million job vacancies expected to be advertised this year.

The exponential growth in cybercrime, and the number of jobs available in this area, has seen cybersecurity emerge as a key field requiring skilled specialists. Companies are now recognising the importance of cybersecurity and protecting their data. This panel event will explore the complex nature of data-rich industries and discuss the importance of data-driven decisions in the new age of cybersecurity.

Our panel consists of leading industry experts, La Trobe academics and representatives from our industry partners. The event will conclude with an audience question and answer session followed by drinks, canapés and the opportunity to network.

Speakers

  • Master of Ceremonies: Stilgherrian – freelance journalist, commentator and broadcaster
  • Sandie Bradley – Executive Director Cyber Security, Australian Signals Directorate, Australian Government’s intelligence agency within the Department of Defence
  • Brian Williams – Technical Product Manager of Security, Cyber Security Centre of Excellence, Optus
  • Kristin Lyons – Chief Information Security Officer, Australia Post
  • Professor Wenny Rahayu – Head of the School of Engineering and Mathematical Sciences, La Trobe University

Panel Event

Date:  26 October 2016

Time:  6pm  – 8.30pm

Venue: RACV City Club, 501 Bourke St, Melbourne

Register: Please register via the La Trobe University web page, here.

LBS’s Catherine Ordway comments on WADA Report on 666 ABC Radio Canberra

CatherineOrdway

On 28 April 2016, LBS Professor of Practice Catherine Ordway was featured on 666 ABC Radio Canberra’s Drive. Catherine commented on Australia’s appearance in WADA’s report as one of the top ten global offenders for doping in 2014.

Listen to Catherine speak (2:14:00) in the full fragment on ABC radio’s website.

Leading La Trobe researchers comment on ongoing impacts of Essendon case

HH
On the evening of 21 March 2016, Professor Patrick Keyzer appeared on the ABC’s Four Corners, to comment on 22 year-old Hal Hunter’s case against Essendon Football Club.  Hunter played at Essendon during the now notorious Essendon supplements scandal.  Patrick Keyzer is a Professor of Law at La Trobe University, but is representing Hal Hunter in his private capacity as a barrister.

Hal Hunter played for Essendon for two years before being de-listed in 2013. After his parents’ attempts to get information from the club were ignored, Hal decided to seek pre-litigation disclosure from Essendon and the AFL.  After eighteen months of delays Hal got his day in court in October last year.  The Supreme Court ordered the AFL to produce over one hundred documents for Hal and his legal and medical team to consider.  The Supreme Court did not order Essendon to produce any documents because, the day before the hearing, Essendon’s lawyer swore an affidavit that Essendon had told him that they had provided all of the relevant documents they had.  Notwithstanding their representations to the Court, which they relied on successfully when they sought a costs order against Hunter in February, Essendon sent further documents to Hunter just last week.  Keyzer was reported on 3AW Radio yesterday and advised that if Essendon did not agree to a reversal of the costs order that Hunter would have no choice but to return to Court and point out to the judge that the affidavit sworn by Essendon’s lawyer in October was no longer accurate.

“They’re treating it like an issue that will just go away,” Hal Hunter said on Four Corners, “but for me, if I’m not going to get the answers to the questions I’m asking, it’s never going to go away.”

Through the program, Essendon players were injected with unknown substances repeatedly, sometimes on off-site locations. When asked about the risks of these substances Dr Peter Brukner OAM, who is a specialist sports and exercise physician, media commentator, and Honorary Professor of Sports Medicine at La Trobe University, explains that the risk lies in the fact that they are unregistered:

“What people sometimes don’t realise is that the Essendon scandal doesn’t revolve around supplements, but actual unregistered drugs. This means that these drugs aren’t tested and long-term effects or harmful side-effects are largely unknown. To someone like Hal Hunter, the unknown nature of these drugs is understandably distressful, and Essendon should do anything within its power to provide this clarity to its players.”

LBS sports academic, Dr Emma Sherry, whose research focusses on sports and athlete welfare and sport and the community, is happy to see the narrative of the Essendon trial shift to the health of individual players.

“Often in instances of doping, the focus is on the fact that athletes were cheating, rather than the health risk any unregistered drugs may impose. But for these 34 players, their sense of control has been taken away from them, when it comes to their health. When they get sick in the future, they will never be certain whether this development is a long-term side-effect from this unregistered drug, or whether it would’ve happened regardless. Basically, they have been exposed to a human clinical trial, without giving their consent.”

 

Essendon obtains costs order from Hal Hunter

Catherine Ordway Alistair Twigg Snedden Hall & Gallop La Trobe Law School
By Allistar Twigg [1] and Catherine Ordway [2]

In the drawn out process leading to a decision as to whether Hal Hunter decides to sue the Essendon Football Club or the AFL or both (or neither), the Victorian Supreme Court made a formal costs order against Hunter in favour of Essendon in respect of an interlocutory matter. At this stage, the parties have been involved in just the one specific legal issue for nearly 18 months: that of pre-action discovery.

Hunter played with Essendon as a rookie for nearly two years until he was cut and de-listed (and departed Essendon and the AFL) in September 2013. During that period, he was allegedly involved in the now notorious controversy referred to as the ‘supplements program’.

The Court of Arbitration for Sport found 34 Essendon players guilty of using performance enhancing drugs as part of the supplements program. Hunter was not among them.

As a consequence of that same supplements program, Essendon Football Club pleaded guilty to significant workplace breaches and was fined $200,000.

Now Hunter is concerned about his health and wants to know what the consequences of the supplements program are to him. So Hunter and his lawyers want access to all the supplements program documents held by the AFL and Essendon in order to see if he has a case and, if so, whom he should sue. He is doing this by way of pre-action discovery.

Pre-action discovery, which may be granted at the discretion of the court where the ends of justice require, differs from ordinary discovery in litigation, which is an entitlement.

Lengthy and somewhat testy correspondence about the supplements program documents between the parties’ lawyers over a year or so culminated in an application by Hunter for a formal order for pre-action discovery heard by The Honourable Associate Justice Mukhtar in October last year. His Honour found that Essendon had by then handed over every document it had relating to the supplements program.

As a result, on Wednesday 10 February, Essendon applied for and was granted an order for its costs of that October hearing which will likely be of the order of tens of thousands of dollars Notably, however, Essendon will receive no costs for any of its work in the eighteen months leading up to the day before the hearing. The judge formed the view that the late provision of an affidavit by Essendon disqualified it from receiving all of its costs. .

Essendon has been quoted over the last few years as vowing to look after the players involved in the supplements saga. Obtaining an order for costs against one of them seems directly contradictory to this.

The discovery of only a handful of documents by Essendon indicates that record-keeping during the supplements scandal was not a high priority. Yet there are a substantial number of authorities that indicate that poor record-keeping is reflection of negligent practice. Furthermore, a clause in the tripartite contract between players, the AFL and AFL clubs imposes a duty on the AFL and clubs to advance the welfare of the player. It would be impossible to argue that this duty was fulfilled during the supplements scandal.

Essendon and the AFL should take steps to settle this matter, and the other cases that have emerged among the Essendon and former Essendon players caught up in the supplements scandal. In the short term, taking steps to enforce a costs order against a now seemingly struggling ex-player, is not a step in this direction.

[1] Catherine Ordway is a Professor of Practice in La Trobe Business School, specialising in sport management and a Senior Consultant at Snedden Hall & Gallop.

[2] Allistar Twigg is a Sports Lawyer at Snedden Hall & Gallop, and has been involved in the sports industry for more than fifty years.

 

Catherine Ordway discussing Essendon Football Club supplements case on ABC Radio

CatherineOrdway

Recently, Sports Management specialist and La Trobe Business School Professor of Practice Catherine Ordway, was featured on the ABC Radio news speaking about the decision of the Court of Arbitration for Sport on the Essendon supplements case.

You can listen to Catherine on the ABC website.

Doping verdict takeout: Ask more questions

By Catherine Ordway

I am not surprised by the Court of Arbitration for Sport’s finding of anti-doping rule violations by the Essendon Football Club players. It’s the right decision and I am pleased the panel found the evidence supports the claim made by ASADA that the players had been injected with a prohibited substance.

The 34 current and former Essendon players, whether innocent or not depending on your perspective, were found to have been injected with the banned peptide Thymosin Beta-4. They have been suspended until November 2016 after a tumultuous three years of intense scrutiny.

The outstanding takeaway from the CAS decision for the players and the board members of the Essendon Football Club is this: Ask more questions.

Catherine Ordway La Trobe Business School Essendon Doping Verdict

Essendon chief executive Xavier Campbell (left) and chairman Lindsay Tanner at a press conference after the CAS handed down its decision. Picture: Michael Dodge/Getty Images

Players accepted what they were told by their coaches and trainers and ignored warning signs: Why wasn’t the club doctor involved? Why were they being taken to an off-site location? Where was the documented individual player injection programs? Why weren’t there medical files for each player? What were they being injected with on each occasion? Was it approved for human consumption? How were the performance improvements being measured?

As ASADA CEO Ben McDevitt said: “At best, the players did not ask the questions, or the people, they should have. At worst, they were complicit in a culture of secrecy and concealment.”

The starting point under the World Anti-Doping Code is that all athletes take full responsibility for any substance ingested into their body. Despite the players receiving anti-doping education, and the supplements program not being administered by the club doctor Bruce Reid – he was excluded from the program – players took the word of Stephen Dank, employed as a sports scientist by Essendon.

Read the CAS ruling in full here

 

If the players believed what they were being told about the program being WADA compliant, why didn’t they declare the injections on the ASADA doping control forms as required? Is it because they didn’t know, and didn’t want to know, what they were being injected with?

The players were told by Stephen Dank the program complied with the WADA code. PIcture: Shutterstock

The players were told by Stephen Dank the program complied with the WADA code. PIcture: Shutterstock

The players were lied to about what they were being injected with, and told by Dank the program complied with the WADA code. In this way, players can be said to be innocent victims up to a point, but they should have done more to seek advice beyond the narrow confines of the club.
Dank’s behaviour throughout did not satisfy any professional standards.

Beyond requirements for athlete support personnel under the WADA Code, conduct of this kind in any other industry would attract jail time.

While players should have asked more questions, fault for this scandal lies much further up the line: multiple governance failings and weaknesses created this perfect storm. The governance within the club has been described as appalling; with major structural and accountability deficiencies identified.

To a large extent, these issues have now been resolved and the recommendations outlined in Dr Ziggy Switkowki’s 2013 report followed. Dr Reid admits that he could have done much more to prevent the program, although he did try to have it stopped; an instruction which was ignored.

Former Essendon coach James Hird. Picture; Michael Dodge/Getty Images Catherine Ordway La Trobe Business School

Former Essendon coach James Hird. Picture; Michael Dodge/Getty Images

Another crucial factor to be considered is the team environment versus athletes competing in individual sports. Although all the players were over 18, senior players and people with “god-like” charisma, such as that ascribed to Essendon head coach James Hird, can have an enormous influence in a team setting. This was not explored by the CAS panel.

I wonder whether this presents a research opportunity: comparing the influence a long-term, one-on-one coaching relationship has on a young, impressionable individual athlete verses the pressures within a team environment, and whether these are factors the CAS panel should have taken into account.

From here, there are two ways the 34 players can explore further legal options. First, lawyers for the players could appeal the CAS finding to the Swiss Federal Tribunal. This, however, I suspect is unlikely. The CAS decision thoroughly sets out why the panel felt they were “comfortably satisfied” with the evidence presented. The “comfortable satisfaction” standard of proof sits somewhere between the criminal standard of beyond reasonable doubt and the civil standard of the balance of probabilities.

The second approach is for players to lodge civil action against the Essendon Football Club for a breach of the club’s duty of care toward them, and citing a loss of reputation, current and/or future earnings and potential damage to players’ future mental and physical health. As the products have not been approved for human consumption, we have no idea what the injections’ impact could be, with the possibility they may lead to heart conditions, fertility issues, susceptibility to various cancers or impacts on their unborn children.

The CAS finding that the players were injected with an unapproved substance will undoubtedly now be used against the club in expensive civil proceedings.

At a time when there have been numerous failings around governance in sport internationally — including a raft of reports that have given international federations responsible for football, cricket, cycling and athletics a shake-up — the Essendon case is important. The CAS ruling makes it clear athletes need to do more and take more responsibility for their own health and wellbeing, even in a team environment. Players and officials cannot rely entirely on information they are given within the club. Players must do their own independent research and ask more questions.

CatherineOrdwayCatherine Ordway is a Professor of Practice in La Trobe Business School, specialising in sport management. She has more than 20 years experience in the Sports Industry and continues to provide consultancy services to Olympic bidding cities, government agencies and sporting organisations on integrity and anti-doping issues. Catherine is a member of the SportAccord (GAISF), IBAF (baseball), ICC and West Indies (cricket) anti-doping tribunals, and is the IAAF (athletics) medical and anti-doping delegate for Australia.

This article was originally published on Melbourne University’s Pursuit Blog.

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