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Seniors could be asked to sell family home under death tax


Baby Boomers could be asked to sell the family home when they die to pay for aged care costs under a new plan to slap an effective death tax on seniors to fund care.

Former Treasurer Peter Costello has urged the Morrison Government to consider an expanded pensioner loans scheme during his appearance today at the Royal Commission into Aged Care.

Under the proposal, seniors would be given the option of taking out a loan secured against the family home, that would then be sold when they died or other assets liquidated.

While some banks already offer reverse home loans, Mr Costello has called for debate on expanding a pensions loans scheme to use the family home as an asset that could be sold when a retiree dies to recover costs.

“I mean, financial products that can allow people to raise accommodation bonds against the family home, which is generally their greatest asset, I think there’s a much more scope for them and I think the Government could assist there,” Mr Costello said.

“The Government has a thing called the Pension Loan Scheme which it says is available. The private sector has what is called a reversible mortgage or equity drawdown mortgages.

“But I do think, you know, this is a classic area where those people that do use residential care and do have assets should be asked to make a contribution and guaranteed a return of their deaths.”

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But Mr Costello stressed that informed consent was the key to the proposal so that family members understood the cost would ultimately come out of the estate.

“Even today, if you’re asked to put up an accommodation bond, you can raise that bond with your own house as security,” he said.

“I mean, the point I’d make is that I think people should do it knowingly and in advance and there should be products that allow them to do that during their lifetime. If you come around and try to take their assets after they’ve died, I think you can expect to run into a lot of opposition there.”

Mr Costello urged debate on the option as an extension of reforms he introduced during the Howard Government.

“I felt you were never going to be able to run residential aged care with the ageing of the population off the taxpayer alone and you had to get private money and we introduced what we then called accommodation bonds,” Mr Costello said.

But Australia’s longest serving Treasurer also raised the alarm that the red tape and forms to enter aged care were so complex that even he struggled with them.

“Now, the members of my family I have attempted to fill in these income and assets tests. You all ought to do them,” he said.

“I’m reasonably financially literate. I had a lot of trouble filling it in. I don’t know how a person going into a nursing home would ever be able to fill it in.

“We’re talking about people who might be 80 or 90 years of age. How do they do this? My suspicion is that a lot of them just don’t.”

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Former Treasury secretary Ken Henry told the inquiry he still believed that a compulsory tax levy to fund aged care was necessary.

But he echoed Mr Costello’s concern about the complexity of the system.

“My principal source of discomfort is that the system overall is horribly complex and it contains a very high level of uncertainty for people,” Dr Henry said.

“People who are elderly, people who are vulnerable, people who are suffering emotional and psychological stress, many, of course, unfortunately are mentally impaired to some extent, too many have little or inadequate family support and they confront the aged care system knowing nothing about it, knowing that they have no real option but to throw themselves into the system because it’s quite simply impossible for them to continue to look after themselves.

“And they’re bewildered. This system is unsustainable. It’s underfunded, it’s under resourced and it will not be tolerated. In particular, it will not be tolerated by the Baby Boomers themselves when they find themselves in this system.”



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Business

TikTok CEO Kevin Mayer resigns amid US pressure to sell video app


Kevin Mayer, the chief executive of Chinese-owned video app TikTok, said on Wednesday that he was resigning after the company came under pressure from the Trump administration over its ties to China.

In a note to employees reviewed by The New York Times, Mayer said that a series of changes to the company’s structure prompted him to leave. The former Disney executive had only joined TikTok as CEO on June 1.

Former Disney executive Kevin Mayer is leaving teen video app TikTok after less than three months in the job.

Former Disney executive Kevin Mayer is leaving teen video app TikTok after less than three months in the job.Credit:Disney

“In recent weeks, as the political environment has sharply changed, I have done significant reflection on what the corporate structural changes will require, and what it means for the global role I signed up for,” Mayer wrote in the email. “Against this backdrop, and as we expect to reach a resolution very soon, it is with a heavy heart that I wanted to let you all know that I have decided to leave the company.”

President Donald Trump and other White House officials have said that TikTok, which is owned by the Chinese internet company ByteDance, poses a national security threat because of its Chinese ownership.



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Local News - Victoria

Man jailed over scheme to sell stolen jewellery as gold bullion


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“You thought you could do it without getting caught so you did,” Judge Johns said.

“You were clearly aware detection of your crime would be extremely difficult given the fact the stolen property was unable to be identified once it was melted down.

“It was clear you were integral and essential to its operation.

“If you had given it a second of thought you would have appreciated the sentimental value attached to many of the items would have been priceless.”

Judge Johns said Tenenboim had originally worked in his father’s jewellery business as a teenager and young adult in Sydney.

But the business was held up at gunpoint and cleaned out, Judge Johns said, bankrupting Tenenboim’s father and leading to his death, which a NSW coronial inquest ruled a suicide.

It is a shame that those experiences didn’t serve as a motivator for you to distance yourself from those that would seek to buy stolen goods.

County Court judge Scott Johns

“That experience has left a marked impression on you,” Judge Johns said. “It is a shame that those experiences didn’t serve as a motivator for you to distance yourself from those that would seek to buy stolen goods.”

Tenenboim and his co-accused, brothers Alejandro Mendieta Blanco and Julio Mendieta Blanco, were initially charged with hundreds of offences but after a plea deal, each man faced only a single charge.

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The Mendieta Blanco brothers owned Gold Buyers Melbourne, based in Collins Street, and Tenenboim had worked at the business for six years.

Over that period, the operation had become a multimillion-dollar empire, turning over $66 million in the 2015-16 financial year.

Alejandro Mendieta Blanco has admitted to buying $29,000 worth of stolen jewellery in 2017 while his brother, Julio Mendieta Blanco, pleaded guilty to buying $45,000 worth of stolen valuables.

Previously in court, prosecutors had detailed a sophisticated gold-buying scheme that used code words when dealing with customers to avoid detection by police and avoided asking some customers for ID as they were legally required to.

An undercover operation that included intricate surveillance of the business eventually upended the scheme.

On the morning of October 5, 2017, detectives from the gangs crime squad raided Gold Buyers’ Collins Street store, where gold and precious stones were traded.

Tenenboim, who has already served 32 days of pre-sentence detention, was also sentenced to a community corrections order, including 200 hours of community work. The Mendieta Blanco brothers are due to be sentenced at a later date.

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Business

Union to sell swank South Melbourne penthouse


Nearby, 71-73 Palmerston Crescent sold for around $14 million and the Royal Australian and New Zealand College of Obstetricians and Gynaecologists recently paid investor Brendan Sullivan $19 million for 1 Bowen Crescent.

Queens Avenue

Leasing negotiations for a Hawthorn office-warehouse turned into an off-market sale last week.

14-16 Queens Avenue Hawthorn.

14-16 Queens Avenue Hawthorn.Credit:

Gorman Kelly agent Samuel Torrance was handling the leasing of 14-16 Queens Avenue, a 240 sq m building along the railway line near Swinburne University.

The leasing deal turned into a $1.975 million sale with the buyer understood to be keen to get out of the rental market.

Records show secondhand mobile phone dealer Mina Raphael has slapped a caveat on the property which former real estate agent Gerry Cantwell bought in 1999.

Mr Torrance, who declined to comment on the parties, said he’s had numerous calls from other potential owner-occupiers since the deal went public.

“There’s still plenty of people, all owner-occupiers wanting space to set up businesses. It’s a good time to renovate while staff aren’t in the office,” he said.

On the other side of Hawthorn, at 14 Church Street, a bigger two storey 1146 sq m office building is on the market through Teska Carson agents Michael Taylor and Larry Takis.

It’s on a 650 sq m site near Barkers Road and will be sold subject to a one year lease to environmental consultancy Earth Systems.

Expressions of interest close on August 20 and it is expected to fetch more than $5 million.

Maatsuyker

Despite the dire 20.8 percent vacancy rate on Chapel Street, there is some movement.

574 Chapel Street.

574 Chapel Street.Credit:

Fitzroys agent Lewis Waddell has secured men’s fashion label Maatsuyker for 574 Chapel Street – previously occupied by Aquila Shoes – at the South Yarra end.

Maatsuyker will pay $60,000 a year for the 130 sq m property which is split into two levels and includes a double garage at the rear.

Mr Waddell said he had 60 enquiries for the property which has a high-quality fit-out ready to occupy.

The high end retailer is moving from Greville Street to be closer to the South Yarra strip where the Capitol Grand and the new Jam Factory redevelopment present new opportunities.

Jemena’s office

Energy giant Jemena is offloading a 1500 sq m office building in Broadmeadows which is surplus.

Jemena has recently completed a new 9500 sq m building next door and 34-36 King William Street is on the market

While the 1.4 hectare site is currently zoned commercial, it is in Broadmeadows’ designated urban renewal precinct, earmarked as a future mixed use precinct.

It’s next door to a larger 32,698 sq m site bought by Rendition Homes for $11 million at the market peak in 2017.

Current market rates for land in the area are around $350 a sq m giving the new site a potential value of around $3.85 million.

CBRE agents David Minty, Nathan Mufale and Alex Brierley are running the expressions of interest campaign which closes in August.

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Business

Cash-strapped Swinburne Uni looks to sell tower


“The sale of property assets would need to be approved by the university council and be conducted in accordance with standard government processes for sale of such property,” a Swinburne spokeswoman said.

“In the event that Swinburne commences a private sale for 226 Flinders Lane, a further statement may be made at that time.”

The university has outpost campuses in Wantirna and Croydon and an offshore campus in Sarawak, Malaysia.

Swinburne settled on Invicta House at 226-232 Flinders Lane in June last year after forking out $44 million to the private Lazarovits family, who had held the building since 1998.

The property is opposite the Nicholas building and close to Ross House in a celebrated part of Flinders Lane that features popular walkways Degraves Street and Scott Alley.

Swinburne was following a trend set by several other suburban universities which have already established vertical campus in Melbourne’s CBD, notably Monash and La Trobe universities.

Despite the turmoil and economic uncertainty created by the pandemic, the university should have little trouble selling, with buyers demonstrating appetite for commercial real estate.



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Business

Bauer to sell Australian magazines to private equity firm Mercury Capital


For Bauer’s global chief executive Yvonne Bauer, the sale is a much-needed exit from Australia and from the business her family bought from Nine Entertainment Co (owner of this masthead) for $525 million in 2012.

Six chief executives have led Bauer since it took over Australian Consolidated Press eight years ago. Since the transaction – which was considered to be well over market value – Bauer has axed major magazine titles including Dolly, Cleo, Cosmopolitan, Men’s Style, ZOOWeekly, People and The Picture magazines and hundreds of publishing jobs have been lost.

The future of Australia’s magazine publishing industry and Bauer looked more optimistic late last year when, after years of talks, Bauer announced plans to acquire Seven West Media’s magazine arm for $40 million. The merger with Pacific Magazines, which published New Idea, Marie Claire and That’s Life!, was considered imperative for the magazine industry which is under financial pressure due to reduced circulation and lower spending from advertisers.

But economic factors related to the coronavirus pandemic put further pressure on the embattled publisher in recent months. Bauer, like many media companies, experienced dramatic falls in advertising spending and tried to renegotiate the terms of its acquisition of Pacific, which published New Idea, Marie Claire and That’s Life!. Sources said almost all executives involved in the sale at the company’s Hamburg headquarters have since lost their jobs. Due to coronavirus restrictions in New Zealand, Bauer also shut its local operation.

Once the Bauer and Pacific deal was completed the business started aggressively slashing costs through mass redundancies and suspension of print magazines, which sources said was an attempt to shore up the business for a sale. About 60 Pacific staff were told they would be made redundant in their first couple of days at the newly merged business.

The cuts were in addition to almost 200 Pacific roles axed last December before the merger. Bauer also axed 70 jobs before sale completion and has suspended print production of titles including Elle, Harper’s Bazaar, NW, OK!, Men’s Health and Women’s Health, which have not returned to print. But Mr Hill has publicly said he is confident most will return in print-form.



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Financiers sell Clint Bartram’s development site


Multiple offers were made for the property which has a permit for a four-level 18-unit project, Mr Hoath said.

The row of shops at 43-47 Simpson Street is tucked away between Dennis railway station and Westgarth Primary School.

Mr Bartram turned to property development after his AFL career finished in 2012 and has a second apartment project in Northcote at the old bank building at 340-342 High Street.

Old warehouse

A locally based Malaysian investor has paid $3.2 million for an old warehouse at 656-658 Elizabeth Street, near the Haymarket Roundabout.

656-658 Elizabeth Street, Melbourne.

656-658 Elizabeth Street, Melbourne.Credit:

CBRE agent Julian White, who negotiated the transaction with Nathan Mufale, Alex Brierley and Chao Zhang, said the property sold off-market on a 21-day settlement.

The single level Victorian-era warehouse is leased to Health Foods and Allied Products and sold on a pointy yield of 1.16 per cent.

But the lease expires at the end of August and the buyer has long-term development plans, Mr White said.

The 173-square metre property came with a permit for a 13-storey development designed by Kerstin Thompson Architects.

Back in the CBD centre, the building housing The Mess Hall restaurant at 51 Bourke Street has just come to market with price expectations of about $6 million.

“This will be the first test for prime city freehold in the COVID era,” Mr White said.

The Mess Hall has a six-year lease, with a six-year option on the 190-square metre double-storey property.

Student digs

Also for sale on the city fringe is 21-23 Anthony Street, a three-storey apartment building that comes with a permit for an 11-storey student apartment tower.

The off-market listing is expected to be converted into a formal campaign soon, according to agent Tiga Commercial’s David Sia and Martin Leong, who said it had attracted 100 enquiries already.

It’s expected to fetch more than $8 million for the vendor, Rufino Viilaluz’s Dysin Investment Partners, who paid $5.65 million for the 291-square metre site in 2017.

Dysin Investment Partners has a solid pipeline of suburban projects but this was the sole CBD development on its books.

Tiga Commercial is one of a bevy of new smaller agencies started by agents who recently worked at tier-one agencies, and its founders include CBRE’s Nick Hii, Patrick Sia and Melissa Sahin.

St Johns

Another former CBRE agent, Guy Naselli, has started up NSL Property Group and is marketing an office warehouse in West Melbourne with a three-year lease to St Johns Ambulance.

Records show Manfax Hardware and Paint mogul Robert Larsson bought the city-fringe warehouse in March 2019 for $5.04 million

Mr Naselli shares the listing of 6/88 Dynon Road with CBRE agents Bryce Paine and Tim Homes and is expecting more than $4.5 million for the 1400-square metre property. What a difference a year makes.

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Hotel plans upended as developer trio sell for $9.5m


The developers decided not to undertake the project themselves.

They put both sites, with the planning permit, on the market before finding separate buyers for each portion, throwing the original proposal into doubt.

CBRE’s Mark Wizel, who managed the sale with Julian White, said the deal for 920-square-metre site 102-108 Jeffcott Street was struck at a “healthy” underlying land rate at just over $10,000 per square metre.

The site was purchased by the developers four years ago for $6.1 million.

“Some of the activity and successfully completed deals we have seen over the past 10 days indicate that buyers continue to look for opportunities in these times of uncertainty,’’ Mr Wizel said.

The sale campaign’s 11 March closing date coincided with the World Health Organization declaring the coronavirus a global pandemic.

Mr White said while the timing had “not been a positive”, a solid result was achieved nonetheless.

Mr Aziz said it was “disappointing” not to find a sole buyer.

“They are now likely to develop Jeffcott Street and 355 Spencer as standalone developments,” he said.

Lawyers are finalising contracts for the sale of 355 Spencer Street with another party, he said.

Mr Kheir owns developer Resimax Property Group and is building up a stable of city restaurants and venues, including the Adelphi Hotel in Flinders Lane.

Earlier this year, he concluded two years of negotiations to tie up a $300 million deal to buy the troubled Eynesbury Estate development in Melbourne’s west. The 828-hectare site has approval for 4500 home lots.

“We’re hoping to relaunch it to the market in August or September this year,” Mr Khier said.

His passion for racehorses connects him with Mr Mehrten, who also dabbles in property development. The pair jointly own two Melbourne Cup runners Marmelo and Wall of Fire.

Mr Palazzo owns a large stake in home builder Symonds Group and has developed high-end projects in Maribyrnong, Malvern East and Sandringham.

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