Chapter 3: Employment and Work Futures

What is Work and Wellbeing?

The world would not be running the way it is right now if people did not work, as they are an
important asset of the ongoing economy. This is because people contribute a certain percentage of
money to be funded in collective wants of the country that can be used to maintain societal
standards as well as fulfill upcoming plans and goals set for the future of the country.

Reasons to Work

Benefits of Work: Earning money

Improve living standards

Gain social prestige

Self-Satisfaction

Making Friends

Helping others

Gaining disposable income

Ability to manage a household

To add to superannuation

Key Terms for Work

Disposable: Provides a person with a wage or salary in exchange for the

provision of labor

Disposable income determines our spendings ability to consume

goods and services

Consumption improves one’s wellbeing

The negative of spending a large percentage of a disposable income

is that we have a reduced capacity to save

Health and Self-Esteem: Work provides a sense of self-esteem and purpose in life

Provides goals

Stimulates mental health in getting us to use our brains and feel like
a valued member of a team

Unhealthy practices can develop, become sedentary, consume more

alcohol, or become more depressed
Economic Wellbeing: Earning an income allows an individual to purchase goods and
services, invest money, obtain a loan, and repay debts

Superannuation: Superannuation is a method of saving for one’s retirement

Superannuation allows us to prepare for the lifestyle we would like

after age of 55

If a person does not have superannuation, they will become more

reliant on the welfare system for an income after retirement
(Centrelink)

Explain the relationship between work and life balance (Extended Response)

Work-life balance is the maintenance of a person's social and professional lives. This suggests that
one should not sacrifice one for the sake of the other. It necessitates persons working productively
in their fields while simultaneously engaging in leisure and recreational activities. Individuals enjoy a
meaningful and appropriate wellness and lifestyle because of its upkeep. This is since their mental
health is maintained without jeopardizing their professional lives. To achieve this balance, a lawyer,
for example, spends around 9 hours per day at work. The rest of a person's time should be spent on
extracurricular activities and social connections.

Impact of Work on oneself

Material living standards are materialistic things that are used by people to satisfy the needs and
wants of life. Materialistic standards or goods require an income and financial stability to be
purchased, and so depending whether an individual can buy something or not there is said to be a
mental impact of their financial status as their quality of life is dependent on income. Number of
goods is measured in GDP – Gross Domestic Product

Non-material standards cannot be measured:

- Environment
- Crime Rates
- Free Electrons
- Freedom of Speech
- Time off Work

Benefits of Working on self-esteem and living standards

An employee with a higher self-esteem will:

- Trust their judgement making = better decisions

- Enables them to create more effective interpersonal and work relationships, contributing a
positive work environment
- Increases focus
- Positive development

It is also an individual’s gain and enjoy better material living standards

Disadvantages of unemployment on self-esteem

Causes:

When getting unemployed on government welfare benefits, there is a vast cut on

income. This can easily be determined after analyzing costs of each member of a
certain number of people in a family and compared to government income. It is not
sufficient for survival – resulting in heavy financial stress and anxiety.

The change from full-time to part-time leads to a deduction in disposable income.

less income again results in financial stress and anxiety.

Effects:

Poor self-esteem leads to a fear of the “new and unfamiliar” and it can lead to
unproductivity, defensiveness or rebellious

Material living standards would fall in a household, as assets and wealth is run down
by daily expenses.

Loss of self-worth, health, skills, friendship, negative feelings lead to (d) self-esteem

Types of Employments

Types of Job Conditions:

- Full-time
- Part-time
- Casual
- Apprenticeship or traineeship
- Self-employed
- Voluntary Work
- Unpaid Work

Full Time:

- Continuous, ongoing work

- Number of hours =/>38
- More entitlements than other jobs (sick-leave, annual leave pay etc.)

Part-Time Work:

- Ongoing work
- Number of hours < 38
- Number of hours can vary
- Entitlements are proportional. (pro-rata basis)
Casual:

- Employed on an hourly basis

- No permanent work schedules
- Hours/per week are inconsistent
- May work for various employers
- No access to entitlements but a loading only a loading is paid

Apprenticeship/Traineeship:

- Combines training, which can be on and off with paid work

- Apprenticeships can be part-time, full-time, or school based dependent on the industry
- Depending on the qualifications and course length, apprenticeship can vary in length

Self-Employed:

- Individual who works for themselves

Unpaid or Voluntary Work:

- Unpaid work involves no transaction and covers work in the household industry
- Voluntary work is unpaid work that is done from the own will

Sources of Income:

Wage: Money paid by an employer for periods of work. People who receive wages
usually those employed in unskilled or semi-skilled jobs

Salaries: People who are employed on a yearly basis

Fees: a payment made to a professional person or to a professional or public body

in exchange for advice or services.

Commissions: Paid to those who act as an agent or go between, buyers and sellers.
a set percentage of the selling price is their income

Alternative Sources:

Profit: Amount of income that is left over all the expenses of a business are paid for

Social Security: The federal government provides a range of social security payments that
ensure all Australians have enough money to pay for necessities for age
pensions

Interest and Dividend: Money Received from investing savings through shares

Rent: Money paid for the use of someone else’s property

Prize Money: Money earnt by luck by entering a certain draw or competition

Redistribution of Income:

Components of final income showing redistribution of income as a societal cause

What is the distribution of income?

The distribution of income is the governments’ ability to redistribute income via the transaction
system from various houses. This social transfer of Australian money allows the equal balancing of
society in accordance with one’s wealth and income. Tax Revenue or money redistributed can go to:

- Age pensions
- NDIS
 - Education
- Health

Chapter 1: Consumer and Financial Decisions

What is a Consumer?

A consumer is someone who purchases/requires goods or services to satisfy their needs and want.
Humans have needs and wants, which can be spent in money or time. This is what makes a
consumer.

Consumer Decisions

Consumers are always making choices to satisfy needs and wants, and so consumer decisions are
highly important.

Question to ask (assessable)

- Do I really want this item?

- Can I afford it?
- Is there something better?

Types of Goods

Durable goods Non-Durable Goods

A durable good is one that can be used many Non-durable goods are those than be used only
times, such as a car or television. once, such as a sandwich or a liter of petrol

In order to satisfy needs and wants, resources are used to manufacture goods and services. The four
sources are:

+ Land these resources occur naturally, such as forests, coal and fertile soil

+ Labor this includes both the physical and mental effort of people who are working

+ Capital these resources are goods used to make other goods. For example, a tractor
is capital good because it is used to produce crops.

+ Enterprise this is the ability to combine the other resources of land, labor, and capital
to earn a profit

These resources are very scarce. At usage of these resources can vary from overuse or underuse
making the availability vary. Overall, this means that making smarter decisions are highly important
or else resources can possibly run out.
Consumer Decisions:

Factors influencing consumer and financial decisions

- Price
- Convenience
- Marketing and Advertising
- Gender
- Age
- Disposable income
- Social media
- Cultural considerations

Decision Making

▪ Income is money received on a regular basis from work, property, business, investment or
welfare
▪ To gain the greatest possible satisfaction from their income, many people develop a financial
plan
▪ Making plans, enables the increase in wellbeing and quality of life

Fixed and Variable Expenses

In life there are two major types of expenses. Ones that are consistent, such as week bills rent etc
are fixed. Variable could be expenses that come along and are unexpected – they are a part of life

Comparison Shopping

Comparison shopping is the process of examining the similarities and differences between items,
before purchasing, to get the best value for money.

Consumers can find great product value at decent prices does not mean a good deal. Quality of the
product matters. Factors when comparison shopping include:

+ Price

+ Quality

+ Return Policy

+ Warranty

+ Quantity
Scams:

What is a Scam?

A fake scheme performed dishonestly by someone in order to gain an illegal benefit by fooling the
customer.

As a wise customer, it is necessary to be aware of unethical tactics of scamming to protect oneself

Common scams:

+ False misleading advertising

+ referral selling

+ special prizes and offers

+ get rich quick schemes

+ pyramid schemes

What is a Contract?

A contract is a legally enforced letter agreement between two or more parties. It outlines basic to
detailed factors to which an individual is agreeing to.

Contracts can vary in mediums: Oral, written etc.

Features of a Contract

An offer takes place – a party lists a product seeking to sell it

Acceptance – Another party likes the product and agrees to the offer. A contract is made with the
shake of a hand. It is also made with a signature.

Consideration – the final agreement: in which the customer purchases the product

Legal Rights and Responsibilities of Consumers

Consumers’ four basic rights are:

+ Access to Safe Products. Direction for proper use is provided and products are tested by
the manufacturer to ensure product quality

+ Accurate product information and descriptions

+ Full disclosure of the terms or sale. The full price is always displayed on any credit contract

+ Consumer guarantees warranties are honored.

For the exam know the role of the ACCC and ASIC (just in case)

Do all retailers follow the rules?

Even with the existance of consumer protection legislations, marketers are always attempting to
create illegal advertisements that would bring great profits to the company. Common methods
include:

Fine Print: Important conditions are written in a small-sized print and are,
therefore making it difficult to read

Tests and Surveys: Some advertisements make unsubstantiated claims; for example,
stating ‘9 out of 10 people’ prefer a product when no survery has
been conducted

Country of Origin: Accuracy in labelling is important; for example, ‘Made in Australia’

and ‘Product of Australia’ have two distinct meanings

Packagings: The size and shape of the package may give a misleading impression
of the contents inside.
Consumer Guarantees

The competition and consumer act 2010 provides consumers on certain goods and services. These
guarantees are consumer’s automatic legal right. Consumers are
guaranteed that the goods they buy:

- Are of acceptable quality

- Are fit for purpose (suitable for that which they are being sold)
- Match the description, sample or demonstration model
- Comply with any express warranty. A warranty is a voluntary promise made by a
manufacturer or supplier about the goods
- Are legally owned by the seller without any charges (owing money to them)
- Have spare parts reasonably available

Consumers are guarateed that the services they buy are:

- Fit for the purpose

- Provided with resonable skill and care
- Provided within a resonable time

Responsibilities of Consumers:

- Paying the correct amount

- Purchasing goods and services from ethical and legal sources
- Using the products in an environmentally friendly manner
- Accepting the risk when purchasing something: ‘caveat emptor’ = let the buyer beware

Organizations That Provide Assistance for consumers:

- NSW office and Fair Trading

- Australian Securities and Investment Commission (ASIC)
- The Australian Competition and Consumer Commission (ACCC)

Remedies and Their Outcomes

Consumers are entitled to four essential rights. 'No refunds' and 'no exchanges' signs might be
deceiving. A seller may not be able to issue a refund or exchange under certain situations. You can
get a refund or an exchange if the items aren't what they're supposed to be, if they were created
incorrectly, or if they don't do what you were told they'd do.
Payment Choices

Payment choices:

1. Cash:

Cash comes in a tangible payment method containing notes and coins issued by the federal
government.

2. Credit:

Credit is the money that is supplied to a consumer in return for the promise of paying it back later.
Because credit is the money you are using that is not yours, you will have to pay back in
interest. However, if you pay the debt back BEFORE the interest free period, you will not have to pay
the interest.

Advantages and disadvantages of credit include:

▪ Credit cards can make it easy to overspend

▪ Credit cards can help you establish a good credit history

▪ Credit cards can help to avoid carrying around a lot of cash

▪ Credit cards can become more expensive than other forms of credit.

▪ Credit cards can damage your credit rating if you keep making late payments.

3. Debit Cards:

A debit card is payment method using your OWN money; therefore, you do not have to pay interest,
only an account operating fee.

4. BPAY:

BPAY is an electronic method of payment used over the phone or internet to transfer money from
your account to a business.
Investing:
Reasons for investing:
Individual and business investment:

The reason individuals and businesses may choose to invest:

• Investment is when money is spent in order to gain profitable return.

• Businesses may invest in machinery, technologies, factories, product initiatives, people,
other firms or even their own firms. They do this to increase profit levels
• Individuals invest their savings in order to achieve some future goals. These goals may be
short terms(1-3 years), medium term(4-6 years), or long term(7+ years). Some examples
which might lead individuals to look for investment opportunities are, pay for major
purchase, holiday, education, comfortable retirement

The range of ways to finance investment:

Saving for an investment:

• The advantage of saving before you invest is that you don’t have to pay interest on a
loan. However, it takes time to save sufficient funds for an investment.
• Before starting to safe it is important to work out how much you are spending and if
you can save extra money. Some steps to begin this process include:
➢ Writing out a set of financial goals
➢ Preparing a weekly budget of likely spending
➢ Keeping a record each week of income and expenditure and comparing it to
your budget

Any surplus funds should be transferred to an investment account that earns

higher interest than a regular account

Borrowing to invest:

• When borrowing money for an investment, you must first ensure that you can afford
the repayments. Shop around for some loans that suit your purposes and carefully
check and compare the features of these loans.
• A fixed interest rate remains the same for the period of the loan. Fixed interest rate
loans give you greater control over your finances because the repayment amount
remains the same for the fixed interest period. However, fixed interest loans cannot
usually be paid off before the set date without having to pay a penalty fee.
• A variable interest rate moves up or down depending on the financial market. With
a variable rate, you are, therefore, at the mercy of the market. Interest rates will
vary considerably over time. The Reserve bank of Australia has some control in
setting interest rates.
• To determine exactly how much an individual or business has to invest, it is a good
idea to prepare a weekly income and expenditure account. This is a continuous
record of income earned and money spent during the previous week.
 Superannuation as an investment form:

• superannuation is a form of compulsory investment that is funded by your

employer, who pays a percentage of your wage into a type of savings account.
• It is almost as if you are investing in your own retirement, locking away funds for
when you are no longer working.
• Some people just pay the minimum compulsory percentage of about 9.5%, while
others may choose to invest extra income into their superannuation account. You
can also invest your superannuation in order to have it make more money for you.

Investment options
Range of investment options available:

• All banks, building societies and credit unions offer a variety of investment-type accounts.
These include cash management accounts, internet accounts and term deposit.
• A cash management account is similar to a normal statement savings account in that funds
can be withdrawn and deposited whenever you like. The differences are that it will pay a
much higher rate of interest and there is usually a substantial minimum amount that must
be kept in the account; for example, $5000
• Internet accounts can be accessed only through the internet. They offer higher rates of
interest, few statements, and lower fees. They tend to make excellent investment accounts
but have limitations as an everyday access account.
• A term deposit is a sum of money deposited with a financial institution that must be left
there for a set period of time (the term) in order to receive higher rates of interest in return.
• You cannot withdraw or add to the deposit if you wish to retain the higher interest rates.
Most term deposits give you the choice of when the interest is paid, either monthly or when
the term expires (this is called *at maturity").
• Term deposits are for people who wish their money to be very safe and who are also seeking
a reasonable level of return.

Shares:

• Buying shares means buying a certain number of units of ownership in a company. This
makes you a shareholder of that company.
• Some people might buy thousands of shares, others only a few. As the value of a company's
shares goes up or down, so too does the value of the shareholder's investment.
• Owning shares allows you to benefit from the company's profits, which can be given to you
as dividends or as extra shares.
• You may also benefit from capital growth if the value of your shares increase. Buying and
selling shares takes place in the share market. In Australia, such transactions take place
through the Australian Securities Exchange (ASX), which was formed in 1987 by
amalgamating the six capital-city stock exchanges.
• A stockbroker has direct access to the market for trading shares and, for a small fee, acts as
an agent who buys and sells shares for others. The fee is known as brokerage. You can also
buy and sell shares online, and there are a number of online stock trading sites that can help
you with Your investment choice.
• It is important to diversify your investments so that all your 'eggs' are not in one basket if
anything goes wrong. The Australian share market makes this easier by offering a wide
choice of companies in which to invest. There are over 2000 companies listed on the ASX.
 • These companies are involved in a wide range of industries covering most sectors of the
economy, from financial services to manufacturing and healthcare. Investing in a range of
companies spreads the risk.
• Investing in shares also gives your flexibility. Shares can be bought and sold quickly - you can
sell shares and generally have access to your money in three days or less.

Property

• In most cases, investing in property involves people purchasing their own home or
apartment. This tends to be the largest individual purchase a person will make.
• In Australia, purchasing your Own property has advantages, such as no longer having to pay
rent, and when your property is sold, any profits from its increase in value are not taxed.
• Apart from owning a home to live in, many people purchase an investment property with
the intention of renting it out. This provides advantages including the income from the rent,
the probability of the property increasing in value (appreciating)and taxation benefits.

Superannuation:

• A superannuation fund is a compulsory savings account where each time you are paid over a
certain amount, your employer will allocate a percentage of your income to the account.
• You may also want to pay additional money into your account, because this does have some
tax advantages.

Managed funds:

• A managed fund is made up of a pool of money that comes from many people who have
similar investment goals. A professional fund manager invests this money in assets such as
shares or property.
• A managed fund allows a small investor to be involved in the share market and real estate.

Cryptocurrency

• Cryptocurrencies are digital-based finances, traded mostly within the virtual world.
• Cryptocurrencies were created as an alternative to typical currencies, which are controlled
by banks, governments, and other financial institutions.
• Bitcoin is one of the earliest and most well-known cryptocurrencies and is seen to be a
desirable investment due to the capped (limited) production available to consumers. This
means the value of each bitcoin stays high with more unable to be circulated.
• Cryptocurrencies are a very high-risk investment.

Debentures and unsecured notes

• A debenture is a long-term loan issued by a company to raise money. This loan is paid back
over a long period of time and at a fixed rate of interest.
• As an alternative to investing in shares you can invest in a company by buying a debenture
that is, by loaning the company money.
• The debenture states the amount lent, the interest the company will pay and the period, or
length of time, of the investment. This is more secure than investing in shares because
interest payments must be made by the company.
 • They will also include a security that will guarantee the investment even if the company
defaults. Unsecured notes are similar to debentures except that they are not secured against
the business's assets, and therefore present a greater risk to the investors in the note (the
lender). For this reason, an unsecured note attracts a higher rate of interest than a
debenture.

Ethical investments:

Investing ethically

When making investment decisions, some people decide to invest only in certain companies or
organisations whose products, policies and practices are in line with their own beliefs and values.
This is known as ethical investment (also called green or conscious or socially responsible
investment). It is becoming more common, as people become more aware of the issues and
practices of businesses, that can damage our society and the environment. Some examples of issues
that might influence the decisions of an ethical investor include:

• the type of products a company makes or sells, such as cigarettes, alcohol or gambling
machines
• evidence of unsafe working conditions
• the company forbidding trade unions
• evidence of the exploitation of child labour
• creation of excessive amounts of greenhouse gases
• destruction of old growth forests
• experiments in genetic engineering or animal testing
• creation of excess waste
• firms affecting the Earth's biodiversity
• involvement in the nuclear industry.

The two most common ways of investing ethically are negative screening and positive screening.

• Negative screening - avoids investing in some types of firms, for example, cigarette
companies or firms that make alcohol.
• Positive screening - involves investing in those firms that are involved in activities which are
deemed desirable, such as renewable energy or healthcare.
The relationship between risk and return

• A key factor in investing your money is the rate of return. This is the profit you receive on
your investment as a percentage of the original investment. When investing your money,
your main aim is usually to maximise the rate of return; that is, to make the most profit
possible.

There are two main categories of investment:

1. Growl assets, such as shares and property, which generally provide a higher return over
longer periods. However, these investments are volatile. This means that their prices
fluctuate greatly in the short term, so they are higher risk.

2. Income or defensive assets, such as government bonds and term deposits, which usually
provide a lower return but are lower risk -~- their value does not change dramatically in the
short term. The price of every asset will fluctuate. This is the risk of investing the higher the
rate of return, the greater the risk involved. An investment portfolio is a collection of all the
investments an individual has. It is generally wise to invest in as wide a variety of investment
products as possible. This would include term deposits, property, government securities as
well as Australian and overseas shares.

Rate of return= Profit from the investment/Original investment X 100/* Period (years) of
the investment

Factors influencing an investment portfolio

• When an individual or a business is considering investing, they need to consider many

factors; these include risk, return, diversification as well as short, medium, and long-term
goals

Diversification:

• Diversifying your investments means spreading your money across different investment
types in order to spread the risk. This is one of the main principles of investing.
• Basically, it means "don't put all your eggs in one basket' Investment history shows that
different investment types perform well at different times.
• No single investment will always be the best, but no single investment type will outperform
all others over all periods
• For example, shares may be a good investment this year, but the previous year they may
have lost value while property was doing very well. By putting all your money into one
investment, you run the risk of losing a considerable proportion of the investment.
• By spreading your money across a range of different investment types, the risk of a fall in the
value of your overall investments can be reduced. A diversified strategy generally provides a
greater return.
Investment planning- maintaining records and Short-term investments
• A short-term investment is usually an investment of less than three years; These
investments are normally chosen by people who want ready access to their funds. Generally,
most long-term investments have a lower rate of return. This is because of the convenience
of being able to convert them to cash in a short period of time.

Long-term investments
• Long-term investment are those that are held for over seven years. Generally, the longer the
period of investment the higher the rate of return. (Note: Medium-term investments are
those between 3-7 years.)

Modifying investments to maximise long-term gains

• Buying shares and then selling them for a profit is subject to capital gains tax.
• Income received as a dividend has already been subject to company tax as it was part of the
firm's profit.
• Dividends on which company tax has been paid are said to be fully franked". Therefore, the
payment of a dividend does not necessarily increase an individual's tax bill.

Managing investments and risk mitigation

Personal and economic circumstances:
• When deciding to invest, individuals and businesses need to take into account any changes
in their personal or economic circumstances. For example, if an individual was retrenched
then the income they had available for investment would dramatically change and they
would need to adapt their investment strategy to reflect this. Similarly, if a business
suddenly was faced with a strong competitor then future plans for investing in larger
premises may need to be put on hold.

Personal circumstances
• Illness, change in family situations, or losing your job can all mean that investments need to
change. You could have your funds in a fixed investment earning interest, which you then
need to withdraw in order to pay your bills. Similarly, you might be making regular payments
into an investment, which you have to cease. Many people take out income insurance in
order to counteract this. This means that an insurance company will pay you about 80% of
your income so you can maintain your financial obligations.

Economic circumstances
• Sometimes the global market changes - things happen that are out of our control, and it can
be hard to counteract these issues.
• Finances of nations around the world change frequently and may follow patterns based
upon factors such as trade, employment, or national security.
• Others follow no patterns in times of turmoil. Knowing you are investing in national
companies that have contingency plans to counter economic changes means that your
shares might be safer in times of financial challenge.
Risk mitigation strategies for managing investments

• With any investment, making the initial decision and then monitoring the investment needs
an approach utilising risk management strategy.
• If, after considering the likely consequences and realising there is a high risk, it is vital to
follow through on further risk evaluations or assessments to make sure you don't lose funds.
Investment risk mitigation is the process of developing strategies to reduce threats to your
overall financial position.

The role and responsibilities of the financial services industry

Role of the financial services industry
Many individuals choose to employ specially trained people to assist with their investment
decisions. The role of the financial service industry is to:
• provide individuals and businesses with the tools, advice and guidance to effectively
manage their financial resources
• develop and maintain chosen financial systems and provide the relevant training to
support operations and reporting needs
• provide advice and oversight on the development and management of investments
to ensure long-t financial gain
• ensure transactions are processed accurately, in accordance with laws and policies,
and in a timely manner
• provide guidance whenever needed for contingency and continuity planning
• assist in the identification, evaluation, and mitigation of risk
• provide financial reports and statutory remittances.

Financial advice
Financial institutions help individuals in many areas; these include:
• identifying short, medium, and long-term goals. developing strategies to achieve
your financial goals
• developing an investment plan
• choosing tax-effective investments
• making the most of your superannuation
• finding out if you're eligible for any government assistance
• working out your insurance needs
• planning for your retirement
• considering your estate planning needs.
• Individuals should start by considering whether they need help with a single issue, like
consolidating superannuation or choosing investments, or if they are after a more
comprehensive financial plan. Businesses will be assisted with any financial decisions they
need to make.

The responsibilities of lenders and advisers:

 Financial institutions provide a range of advice. Consequently, a financial adviser must be
licensed by ASIC: o- be an authorised representative of an organising licensed by ASIC. You
can access the financial advisers register on the money smart website to check that the
person you are dealing with is authorised to give you the advice you want.
Responsible lenders obligations include:
• making reasonable inquiries about the consumer's financial situation
• taking reasonable steps to verify the consumer's financial situation
• making an assessment about whether the credit contract is suitable based on the
information in the first two obligations.
Additionally, you are trusting the financial adviser with your money. You need to know they
are qualified to be using your funds appropriately

The role of government agencies- ASIC

• The Australian Securities and Investments Commission is an independent Australian
government body that acts as Australia's corporate regulator.
• ASIC's role is to enforce and regulate company and financial services laws to protect
Australian consumers, investors, and creditors. This government agency is
important, as its role is to maintain the financial system and monitor investment
practices, which directly impacts our nation's wealth.

Current issue - banking deregulation

• Investment opportunities slowly changed in Australia when the federal government
started the process of deregulation in 1973, which saw the removal of some of the
strict rules regarding how banks operated in Australia.
• This included allowing foreign banks to open branches and a range of alternative
financial institutions, such as building societies, credit unions and superannuation
funds arose to compete with the banks. This deregulation continues today, with
further changes resulting from the 2019 Banking Royal Commission.
• The Australian Prudential Regulation Authority (APRA) oversees authorised deposit-
taking institutions (ADIs): banks, credit unions and building societies. ADIs are
authorised to take deposits from customers under the Banking Act 1959.
• Deposit-taking institutions pool these deposits. This means they put them together
and then lend them to individuals and businesses in the form of loans and
mortgages.
• The financial sector has recently seen the start-up of many new banks, which are
online-only banks. They provide many of the functions of traditional banks, such as
Westpac, NAB and the CBA, but do not have any branch network.
• Customers access the bank's services though the internet, telephone, ATM or via an
app on their smartphone. Some popular internet-only banks in Australia include ME
Bank, ING, Volt Bank and UBank.
Banks
• Banks offer a wide range of financial services to all participants in the Australian
economy - accepting deposits; offering credit cards, cheques, overdrafts,
investment, and savings accounts; and lending money through personal loans,
business loans and mortgages. Banks also provide other typical banking services
such as internet banking, automatic teller machines (ATMs) and financial advice.
• A bank savings account is an easy and safe place for people to keep their money.
This type of account allows you to deposit money and make withdrawals. In return
for your deposits, the bank pays you money known as interest.
• The amount of interest paid depends on the type of account, the number of times
interest is paid into the account each year and the amount of money in the account.
• A bank is a business that wants to make a profit, so it accepts money as savings
(deposits) at a lower interest rate and lends that money at a higher interest rate.
Depending upon the type of savings account you hold, your interest earnings could
be anywhere from 0.2 per cent up to around 3 per cent.
• For borrowing, interest payments vary depending on the type of borrowing, and can
range between around 3.5 per cent on a variable mortgage and over 13 per cent on
some credit cards.

Credit unions
• A credit union is a financial institution that is owned and operated entirely by its
members. Credit unions provide a range of products and services that are similar to
those offered by banks.
• These include accepting deposits, offering personal and home loans, and providing
payment services such as credit cards. To open an account with a credit union, you
have to be an 'eligible' member.
• Every credit union has its own rules for determining eligibility, but it sometimes
means that you have to belong to an industry affiliated with the credit union or be
related to an eligible member. Because a credit union is focused on the financial
wellbeing of its member’s, maximising profit is not its main objective.

Building societies
• Like credit unions, building societies are owned and operated by their members. As
their name suggests, building societies historically supported their members in
purchasing homes. In more recent times, building societies have expanded to offer
similar services to banks.
• As deposit-taking institutions, building societies accept deposits from customers and
provide loans and payment service There are now less than ten building societies in
Australia because many of them have converted t or merged with banks.
Definitions:

• Assets items of value

• Blue chip shares very safe and secure shares
• Capital gains tax a tax on the profits arising from the increased value of assets such
as shares or property
• Capital growth value of an asset increases over time
• Company tax a tax on the profit of a company
• Cryptocurrency a digital currency in which encryption techniques are used to
regulate the generation of units of currency and verify the transfer of funds.
Cryptocurrency traders reoperate independently of a central bank
• Debenture a document that is issued by a firm when you lend money. It states the
amount, interest, and term of the investment. If a firm is liquidated debenture
holders are one of the first to be repaid
• Dividend part of a firm's profit that is divided amongst shareholders
• Economy all activities undertaken for the purpose of production, distribution, and
consumption of goods and services in a region or country
• Entrepreneur a person who sets out to build a successful business in a new field. An
entrepreneur's methods are sometimes regarded as innovative
• Ethical acceptable to society's current standards
• Fixed interest rate interest rate that remains the same for the period of the loan
• Income and expenditure account an ongoing record of income earned, and money
spent during the previous week
• Investment the use of money to purchase equipment or premises for the
establishment of a new business or the expansion of an existing business
• Investment portfolio all the investments owned by an individual
Managed fund a pool of money that comes from people who have similar
investment goals, and invested in assets such as shares or property, by a fund
manager
• Markets an exchange of goods, services or resources between buyers and sellers
• Mortgage a loan from a financial institution such as a bank where something is held
as security in case the loan is not repaid, e.g., a house
• Rate of return the profit you receive on your investment as a percentage of the
original investment
• Share a part ownership of a public company
Travel:
Aboriginal cultural tourism
• The Tourism Australia website offers information to travellers interested in having an
authentic first nation experience in the land 'down under'. According to the website, 'The
world's oldest living culture delivers a diversity of experiences that create truly memorable
Australian journeys.
• Opportunities to experience Indigenous culture are readily available, often with the benefit
of being led by Aboriginal guides keen to share their rich heritage and give people a deeper
understanding of Australia.

The range of Aboriginal natural and cultural experiences include:

• visiting distinctive landscapes and waterways with unique flora and fauna
• identifying bush tucker and possibly traditional hunting sites
• exploring ancient rock art sites that give insight into the Dreamtime
• engaging in immersive journeys on country and learning firsthand about the strong
spiritual connection between Australia's first people and the land
• walking tours, and museum and gallery visits
• staying in traditional accommodation in remote areas.

Ecotourism
• Ecotourism involves all nature-based forms of tourism that support an appreciation of
nature and the traditional cultures within them. The aim is to manage tourism in a
sustainable way. This might be through educational programs related to the environment or
cultural heritage, or by controlling the types and locations of tourist activities or the number
of tourists visiting an area.

Ecotourism differs from traditional tourism in two main ways:

• It recognises that many tourists do wish to learn about natural environments (such as reefs,
rainforests, and deserts) and the cultural environment (indigenous communities).
• It aims to limit the impact of tourist facilities and visitors on the environment area.

Ecotourism differs from traditional tourism in two main ways:

Ecotourism is often characterised by:
• small-group tours
• being locally owned and operated
• involving activities that have minimal impacts on the natural environment
• bringing income to local communities through alternative employment and income
opportunities
• increasing the overall awareness towards the conservation of natural and cultural
environments.
In Australia, with its unique natural beauty, both local and international tourists are
motivated to experience high-quality ecotourism experiences, often in World Heritage areas.
A famous example of wildlife-based ecotourism is Monkey Mia in Western Australia. Here,
the wild dolphins come into shore and tourists are able to feed, swim with and touch them.
The following figure shows some of the regulations in place to manage this experience for
the mutual benefit of tourists and the marine wildlife.
Planning a trip
Choosing a travel destination
Many different information sources are available to assist travellers select their destinations.
These include pamphlets, brochures, travel guidebooks, travel agents, fellow tourists (this is
a particularly important resource for backpackers) and travel programs on television. As you
browse the internet, you may also find sources of inspiration and good tips on travel
blogs, Instagram, Facebook and from reading comments on sites such as TripAdvisor - or
even just from searching 'top destinations'
When identifying an appropriate travel destination, people need to consider factors such as:
• the weather
• their finances
• government travel advice
• special events such as sporting fixtures or religious holidays
• the type of holiday they are seeking.

Factors affecting travel decisions choice of tourist destinations are:

• personal preference
• the political situation in the countries that will be visited a person's financial circumstances.

Personal factors

• People may have personal reasons for their desire to visit a certain destination. The reasons
may include the culture, history, natural beauty, and/or familial ties sitar dear country or
city. You also may consider whether you want an active or relaxing trip. and who a pa will be
travelling with, such as family and or friends.
• Maybe you are thinking of going by yourself? What about the weather? Northern
hemisphere winters can be very cold and traditionally popular tourist destinations will be
less crowded. On the other hand, northern hemisphere summers can be very hot and may
clash with locals having their holidays.
• Many of these personal reasons may also be influenced by age, education, and the cultural
background of the traveller. Consideration also should be given to other factors, such as the
length of time you want to be away, which will then influence how far you want to go.
Political situation

• Instability (both short and long term) in a country may influence a person when considering
their trave options. If it is anticipated that the instability is most likely short term (for
example. due to a recent change of government), a person may decide to travel elsewhere
or postpone their trip for the immediate future. If the country is experiencing political
instability on a more ongoing basis, people may decide to travel to the country but heed any
travel advice and warnings to mitigate possible danger to them.
• Political risk is a difficult factor to gauge because the situation within a particular country can
literally change overnight. If travelling overseas, it is a good idea to seek advice from the
Department of Foreign Affairs and Trade (DFAT), either by phone, accessing the
website www.smartraveller.gov.au, following them on Twitter or Facebook, or downloading
their free app. This organisation issues travel advice on various risks to travellers, including
political instability or terrorism threats in a particular country. The advice is generally based
on up-to-date official information from defence organisations such as ASIO (Australian
Security Intelligence Organisation) and is much more reliable than any other source that is
available to the general public.

Financial factors

• An individual's financial situation will affect their choice of travel destination,

accommodation standard and the activities in which they participate when on holiday. Some
people take out a loan so that they can have an enjoyable holiday and then spend several
years repaying it. Others simply save for their holiday and thus avoid having to pay large
amounts of interest. The downside of this option is that they must wait until they have saved
enough money before booking the holiday.
• Before beginning your trip, it is an extremely good idea to prepare a budget. This budget
should show the amounts allowed for accommodation, travel, food and entertainment. For
people travelling overseas, it should also include an amount for safety in case of unforeseen
circumstances, such as an airline strike or a fall in the value of the Australian dollar. The
table shows a typical travel budget.
Do-it-yourself
• Whether it includes the gathering of information so that possible destinations can be
considered, right through to booking all flights and accommodation, the do-it-yourself travel
option has become increasingly popular with travellers. Many businesses in the travel
industry encourage the do-it-yourself option by setting up user-friendly websites so that
people can book directly.
• The main advantage associated with the do-it-yourself option is that people are able to
pursue their travel plans and organisation at their own leisure. For example, the major
airlines will often e-mail subscribers
• 'Special ..deals' available for '24-hours only or until sold out' offering extremely low airfares
at any time of the day. Similar deals also occur with accommodation, whether it be through
hotels directly or via opportunities offered by electronic-based travel companies. These
deals can provide access to heavily discounted travel options across a variety of smart device
platforms that permit a response at any time of the day, without relying on anyone else.
• The additional advantage is that people who choose the do-it-yourself option can often sort
their travel plans at a time that is convenient to them, without being constrained by the
application of business and retail hours and/or time zones and also take advantage of
holiday options provided by local operators.
• Local operators (often identified after extensive searches) have become aware of the need
to appeal to do-it-yourself holiday planners and so offer websites that can be accessed in
different languages.
• The major deterrent of the do-it-yourself option is that people are unable to avail
themselves of the experience, convenience and, in some cases, the value that travel agent
specialists might offer.

Using an agent
An agent is a person or organisation that conducts business, such as arranging travel plans,
on behalf of another. (Other types of agents include real estate agents and stock and station
agents.)
Using a travel agent has advantages, such as:
•dealing with qualified staff who are experts in their field and will consequently be
aware of problem areas (this could include visa or immunisation requirements)
• gaining access to cheaper holiday packages than those available to the general
public
• organising travel insurance at a reduced premium.
The main disadvantage of dealing with travel agents is that sometimes their costs are higher,
as they take a commission on the fees charged. in the past, some agents have also gone into
liquidation, and this has left tourists stranded in all parts of the world
Considerations when planning a trip

Official documents

• Traveling overseas requires a good deal of preparation to ensure your trip is safe and free of
trouble. Your hirst step should be to ensure that your passport is in order.
• A passport is an official document granting permission to travel between countries. You
must have a valid passport before leaving Australia, and in some cases, it must be valid for at
least six months beyond the planned stay. You should also make sure that you have
obtained any required visas.
• A visa is an endorsement on a passport, usually by a stamp or certificate, indicating that the
holder is allowed to enter, leave, or stay in a country for a specified period of time. Different
requirements and regulations exist all over the world regarding entry requirements. To get a
visa, you will need to fill in a form with details of why you are requesting permission to enter
the country and what you intend to do when you get there. You will also have to pay a fee.
• A visa usually states the length of time that you will be allowed to stay in the country and in
what capacity you are visiting. For instance, if you have indicated you will be on a working
holiday, your visa will state that you are allowed to seek employment. You must also pay a
departure tax when leaving a count; In Australia, this is usually included the cost of your
airfare. In other countries, you may have to pay this at the airport before departing. Some
nations also require you to pay an entry tax upon arrival. This usually has to be paid in the
local currency on arriving back in Australia, a traveller must have the following documents.

• A completed incoming passenger card - the aim of this document is to keep a record of
people entering the country. to monitor for any illegal immigrants and to keep out
undesirables such as criminals
• A valid passport.

The Australian Border Force has the responsibility of preventing prohibited imports and
exports from entering and leaving Australia. Since Australia is an island, many of our
customs regulations are designed to keep out or avoid the spread of exotic diseases and
pests. This includes foot-and-mouth disease and swine fever. There are many goods that you
are not allowed to import or can bring into the country only under strict guidelines. These
include drugs, firearms, live animals, animal products, plants, plant products, and various
protected wildlife and their products. For example, ivory is an illegal import. Failure to
comply with these laws can result in items being confiscated, fines and even imprisonment.
Medical requirements
A useful starting point before travelling overseas is to visit the smart traveller website; It
provides useful information on health risks and medications. It also highly recommends
visiting your local doctor for more clarification and requirements. Your doctor Will be able to
provide advice on general health issues when travelling. They may also refer you to a
specialist travel medical centre or a doctor with experience in medical requirements for
travellers, where they may advise particular vaccinations or prescription medicines before
you travel. You should ensure you visit these medical practitioners to seek advice on
appropriate vaccines and medications well before your intended travel date because some
vaccines take a period of time before they take effect.

In some countries (for example, Australia), potential visitors must have a certificate of
vaccination
for medical conditions such as yellow fever. Entry into the country may not be permitted
unless proof of
vaccination is presented to authorities.
In some cases, it is wise to err on the side of caution and to take general precautions as well
as adhering
to medical advice. This includes:
• wearing long clothing and insect repellent in mosquito-rife areas
• packing a first aid kit
• not sitting for excessively long periods and/or wearing compression stockings to reduce
the incidence
of deep vein thrombosis (VT), especially while flying

• avoiding local tap water, including not having ice in drinks or eating anything washed in it
• applying (and reapplying) sunscreen and wearing hats
• ensuring that food is freshly prepared.
People who require ongoing medications should ensure that they collect them beforehand and
have enough for the duration of their trip. There is no guarantee that people will be able to
access their medications when travelling. Further, medications may be packaged differently or
have different chemical composition to those available in Australia.

Political stability and travel warnings

Recent political unrest in some countries has changed the nature of travel, most probably
forever. A degree of caution needs to be applied to all travel destinations; however, some might
require more caution than others. The Department of Foreign Affairs and Trade (DFAT) provides
quite extensive Safety and Security advice or travel warnings for a range of countries and
regions. Often the advice includes general information such as avoiding public demonstrations,
being alert in commercial and public areas and exercising caution in rural areas. Travellers are
encouraged to monitor political situations on an ongoing basis through travel advisories because
situations can change quite quickly. All travel involves an element of risk. The advice is meant to
assist people, but it cannot prevent a situation from occurring. Australians are also encouraged
to register with the nearest Australian diplomatic mission when travelling overseas for extended
periods. This FAT service is offered to assist in locating Australians in emergency situations such
as natural disaster, political disturbance or family emergency.
10.6.4 Travel insurance
• Travel insurance is where the traveller (either individually or as a family) pays an
amount of money provider for protection against misadventure during the course of
their travel. Travellers should always ensure that the insurance policy selected
matches the requirements of the trip.
• The policy should be read and understood by the policy holder before they commit
to the conditions stated in the document. Areas covered by travel insurance include
health, property, and travel cancellation. It is available most travel agents, private
health funds and companies offering insurance products. The government-funded
health insurance scheme Medicare is of little use overseas and is no substitute for
travel insurance.
• In some instances, an injury or sickness overseas has cost tens of thousands of
dollars. and these costs would have been borne by the traveller if they had not had
travel insurance, The insurance policy (and a copy) should be able to be accessed on
the trip in the event that a claim the trip is necessary and it should contain
emergency contact details to facilitate queries should they arise during Travellers
should also note that travel insurance might be compromised if government advice,
such as that referred to in section 10.6.3 is not heeded.

Language and cultural considerations

• When planning a trip to a country where you are unable to speak the local language, you
should consider learning some basic words.
• The ability to be able ID convene with the locals is an advantage to a traveller.in many ways.
If a traveller has command of even a few Words. they appear more confident and/or may
click assistance at à time when they most need it.
• The words for hello, please and thank you are often simple to learn and help to act as a way
of adapting to a new situation.
• The often-fried strategy of speaking English more loudly or slowly will likely fail. Courses are
available for travellers that provide them with some basic words and phrases that take some
of the difficulties out of travelling to a new country. Also available are apps that allow for
basic phrases lo be converted to other languages to facilitate communication.

Organising a passport and visa

Applying for or renewing an Australian passport
The process of applying for or renewing an Australian passport is reasonably simple. Details olinitele
process are available at the Australian Government & Department of Foreign Affairs and Trade
website-Also available there is a guide that is speech enabled for vision-impaired people
Applicants are advised that they should allow approximately three weeks to receive their new
passport and that the process is assisted if all of the necessary documentation is provided. If,
however a passport is needed urgently, a priority-processing service is available for an extra fee. This
service will usually ensure that the passport application turnaround time is reduced to two business
days (plus any delivery time). All of the fees and charges associated with obtaining a passport, and
additional passport information, are available on the Australian Passport Office website. Information
regarding child passport applications 1s also available at this website. The passport application
process is as follows.
STEP 1 Complete the application form
The first step of the process can be undertaken online and then printed later. The document once
saved online can be returned to for completion at a later date. This process also assists people
renewing their existing passport and/or checking the existing status of their application.

STEP 2 Collecting citizenship and

identity documents Applicants must confirm their Australian citizenship and prove their identity
using original documents, including a full Australian birth certificate or Australian citizenship
certificate.

STEP 3 Passport photographs

Applicants are required to provide two identical colour photographs that are fewer than six months
old Other specific requirements must also be met, such as quality, clarity and lighting. These
photographs need to be endorsed by a referee who must be Australian citizen aged IS or older who
has known the applicant for at least 12 months and who is not related or does not live with them.
This referee must also undertake their endorsement according to certain requirements.

Applying for or renewing a visa

A visa Is an endorsement on a passport, usually by a stamp or certificate, indicating that the holder is
allowed to enter, leave, or stay in a country for a specified period of time. The Australian
government does not issue visas for other countries and is unable to provide information about a
person's eligibility. Information about visa requirements is available through the embassy or
consulate of the country being, travelled to, and limited information is available to assist traveling
Australians on the smartraveller website The availability of a visa does not ensure entry to a country
by a person because this is always at the discretion of the immigration officials of the country that
issues the document. Before a visa is issued, a person will usually pay a fee and complete an
application form that requires personal details. Often a travel agent can assist with this process.
The traveller entering another country may be asked to present return travel tickets and, in some
cases, evidence of enough currency to cover their costs for the duration of the stay. People are not
automatically issued with a visa and may be refused entry due to general appearance, criminal
records, and/or medical conditions. Many countries require a minimum of six months validity
remaining on a person's passport beyond their planned stay