 Welcome and Aloha. I am Mark Schloff, the host of Think Tech Hawaii's Law Across the Sea program. Today we're going across the sea to Australia to chat with Michael Butler. Michael is an attorney with the Finlayson's law firm, which is located in the city of Adelaide, which is the capital of the state of South Australia, which is in the middle of Australia. And I think we have a map to kind of take a little look at where we are. And right at the middle, South Australia in purple, and Adelaide, down towards the bottom, is where Michael is located. Michael and I became friends through our membership in the Inter-Pacific Bar Association. Michael is a tax attorney specialist, but his legal and practical knowledge and his activities for and on behalf of his clients are very broad and encompass a wide range of personal and professional skills that help his clients ultimately achieve their goals. So welcome, Michael. I'm good to see you. I've asked you to tell us what's up down under. How are you? I'm well, Mark, and it's a pleasure to be on your program. Now, sorry, you don't want to know what's happening in Australia. What's happening in Australia? What are the headlines in Adelaide today? Well, perhaps probably not surprisingly, in Australia and Adelaide, the headlines are just all about COVID. I tried to get you something different today, but it's, and I'll tell you why in just a moment, it's a big day today. But I suspect the emphasis is very different to Hawaii. I thought it might just be worth starting by giving some context and comparing your state with South Australia. The populations are very similar. Hawaii is about 1.7, 1.5 million residents. South Australia has 1.7. But the, your current COVID daily cases are about 200, 220, or so I understand, ours are currently zero. The total cases to date of COVID in the last 80 months, Hawaii, my Wikipedia has told me 87,000. South Australia just over 900, substantially less. And in terms of unfortunate deaths in Hawaii, just over 1,000 in Australia, South Australia four. That may all change very, very soon. From midnight last night, it's 9.30 here in the morning in Adelaide. So nine hours ago, South Australia has reopened its borders with the other states to double vaccinated travelers. And the news this morning is that there are 30,000 people waiting to cross the straight state line back into South Australia. So that's a very real development this morning. And what we're doing, we're on the verge of achieving a double vaccination rate of just under 80%. But we're bracing ourselves to live with COVID. I think that now that the border is open nine and a half hours ago, there's an acceptance that the daily COVID numbers are going to increase substantially. Still, what you've just told me is remarkable. I mean, we in Hawaii believe that we have done a pretty good job with COVID. And what you've told me says that South Australia, I mean has Australia. How specifically has, well, your law firms and your city, Adelaide, South Australia and all of Australia, how have you dealt with it to come up with these figures? Well, I think Australia's success in containing COVID can be traced to the decisions taken in March last year. So 18, 19 months ago. Firstly, to shut the Australian border to foreigners xenophobic, but only allowing a limited number of returning Aussie citizens and permanent residents back into Australia. There's still a lot of Australians want to come back. And secondly, preventing Australians leaving Australia. It's a very hard border. There are exceptions, but the border shutdown has meant that Australians simply haven't been able to travel overseas. And Mark, Evans, you know, we Australians, we love to travel. But it's had some very significant economic effects and two vital industries have been very badly affected, like, like Hawaii tourism, and also international education with foreign students. I'm sure we'll talk about that a bit more in just a moment. Right. I mean, and, you know, with respect to the practice of law, how has that changed for Australians and in your personal practice and just generally, what is that like? It depends from state to state to state and state to territory. In New South Wales and Victoria are two of most populated states. The majority of lawyers have been working from home for most 18 months. My daughter works in Sydney and she has her apartment is down near the sea. She's loving it. But in South Australia, apart from six to eight weeks in April, May last year, and a very snap three-day lockdown, hard lockdown last November, about a year ago, which was sparked by an outbreak at the Woodville Pizza Bar. We've been back in the office since June, early June 2020 for 17 months. Well, I mean, you seem to be in your office, Mark, but we've we've actually moved offices after 30 years on B-day during the sixth last year. We came back slowly, but we're we're we're things, but things may change very quickly and very rapidly when we're ready for that and direction every day from our managing partners. Make sure you take your your services home tonight when you go home. Right, yeah. Okay, that's I mean, it's really interesting, you know, and and now you're looking towards this opening of the borders, which I guess everybody's holding their breath about. And you mentioned there's some rules and some COVID mandates that must be followed. And tell us a little bit more, how did and how do Australians? I mean, my I know some Australians and I'm not sure how they would react to mandates, but how do they react to mandates and vaccinations and masks? Well, Australia, like the United States, is a federation of of states and territories of an overarching federal government. And each state and territory, as I understand in the United States, is responsible for its own COVID mandate mandates and restrictions. And one of the difficulties over the last 18 months has been that the often very different requirements in each of those states and territories. Some are open only to some states. Others are open to all. In some states, masks are mandatory. Whereas in South Australia, for example, masks are compulsory indoors, but only in public areas. So there are lots of differences. Interestingly, in Western Australia, which is geographically very distant from the rest of Australia, and Mark, you've seen that on your visual aid, they've been very successfully avoiding any COVID outbreaks by simply shutting the borders to everyone, including Australia, period. And that hard lockdown has been politically very popular. And it seems to have done the trick. As regards vaccinations, Australia has very quickly achieved one of the highest vaccination rates in the world. We started a bit late because we had to get our supplies and the other Europe and North America obviously needed to get vaccinated first. The majority of Australians have been seizing the opportunity to protect themselves. And indeed, the governments are linking the Australian state and federal governments are linking vaccination rates to the reopening of the borders. To be sure, there are a number of very vocal and ardent anti-vaxxers. And only last week there were freedom rallies and large freedom rallies in all the states and territories. However, unless individuals are double vaccinated, they are becoming increasingly marginalised and excluded from pubs, restaurants, sporting events, concerts, movies and the like. One other difficult issue that's arising in relation to vaccination is whether employers and employers and workplaces can insist that individuals be double vaccinated as a matter of law. A number of companies and government departments, and I think in the same way as the United States, there are a lot of similarities, I think, Mark, have taken the view or the position that employees must be double vaccinated in order to keep working. And that's especially the case in the health and age care sectors with the police and fire departments. However, there are a number of outstanding and unresolved issues, and very much untested workplace issues about whether employers can in fact force their employees to be vaccinated if they want to continue working. And is there litigation about that? Is there lawsuits or...? Here. Australia's... One of Australia's richest men, the mining magnate, magnate Clive Palmer, who is based in Queensland, mounted an appeal to our High Court, which is the equivalent of your Supreme Court, about his inability to access Western Australia. But that went down in flames. The government... We have free trade, commerce, and intercourse between states under our Constitution, just like the United States. And trade and commerce must be absolutely free, but it has to be proportionate. It was held that the laws regulating travel were proportionate. And I'm just amazed by how well you folks have done, and I understand you're holding your breath and to see what happens next. Has the government of Australia done anything? Well, how have you been affected economically? I mean, has that been affected by the COVID pandemic? And if so, what's the government done? Well, I think as a general, some businesses have suffered very badly, particularly in the larger states, New South Wales and Victoria. Victoria had had 260 days of lockdowns and six lockdowns over the last 18 months. The Australian economy very generally has been fairly resilient. Very early April last year, the federal government introduced its so-called JobKeeper program, which heavily subsidised the wages of employees where provided the business could show or could predict that it would have a 30% decline in revenue. And that was to enable firms to retain employees, to hibernate and to be ready to emerge at the other side. And that appears to be very successful. But what unfortunately has happened is that it appears that a large number of firms claimed JobKeeper, and very large firms claimed many, many millions of JobKeeper, where not only didn't the revenues decrease over the JobKeeper reference period, the revenues actually increased and they made very substantial profits. And there have recently been calls for companies that claim JobKeeper to disclose their revenues and profitability over the relevant period. At present, the government seems to be the view that as JobKeeper work, let's just move on. I don't think we've seen the end of this, the last of this particular this issue. You know, and one quick question I want to ask you about, about the travel thing that you were talking about in the borders reopening in West, in South Australia. But if I'm in Hawaii and I want to go to Australia, can I go to Australia? Is there a problem with that? The international borders are just opening. But, and it was announced yesterday. Mark, this is not a surprise, give my admiration for you professionally. The South Australian borders open today. And the government announced only yesterday, the federal government, that they would be fast tracking the increase in the migrant intake and visas to come back to Australia. But in particular, targeting the international student sector and skilled migrants to cover the skills gaps, where we rely to a great extent on travelers and people on working holidays. And that just hasn't happened over the last 18 months. If you want to tell me, you'd be an essential traveler, Mark. But there are the other issues is one issue is getting a visa. The other one is the quarantine. And up until very recently, to the extent that even if you're Australian, you could come back, you have to quarantine in one of the quarantine hotels in the main capital cities for two weeks, no ifs, no buts. And there have been some minor exceptions, but that's going to be the issue. In terms of opening up, I think the current intention is if you are double vaccinated from overseas, and you can get a visa, you can effectively home vaccinate for seven days. I think that's where they're moving to. Will that work? It remains to be seen. What's this space? Okay. Yeah. Okay. Yeah, I would imagine that a lot of people are very interested in Australia if they know these facts. And it sounds like Australia actually welcomes people from other countries into its country, which is somewhat different than the United States in some ways. And it sounds like it benefits Australia. I want to move on. I want to ask a question about the Australia-France-US nuclear submarine controversy. And I want to, I mean, that was in the news. There was a lot of problems between France and the United States in the news, but we never really heard the Australian viewpoint. And I'd like to ask you, what was that controversy with the submarines, the nuclear submarines? What was that from the Australian point of view? And what's been the reaction to this change of where we're getting our submarines from? Mr. Schwab, I'm a tax money from South Australia. This is above my pay scale, mate. Look, for what it's worth, my understanding is that Australia, and this is public, cancelled the French submarine contract for a variety of reasons. But on the basis, the costs have blown out significantly. There was already substantial delays. And Australia was only getting diesel and not nuclear subs, and only in about 20 years' time. And so there were a variety of problems. And it's also been reported that the French were aware that the subcontract was in trouble well before the announcement of the Orcus Pact. And it certainly caused an enormous amount of publicity at the same time. And perhaps the interesting point, Mark, is that we're actually, I think, aware in Australia a lot more about what was going on overseas. And we were aware of the issues that your president was having with Macron. And we are aware of those issues that France was having in the United States. And we watched them closely. But the interesting thing is that three or four weeks on, things have moved on. It's no longer newsworthy. It's a 24-hour news cycle, COVID, COVID, COVID. We've moved on, I think, from the submarines. Well, I just want one more thing about the kind of connected with the submarines. What's the relationship with China and Australia? How is that? And is there business going on now? And is there cordial cordiality? And I know there are a lot of students come from China to Australia. What's going on? Australia enjoyed a very close relationship, trade and economic and cultural with China before COVID. Unfortunately, as a result of the Australian calling for an international investigation into the origins of COVID, a Prime Minister this summer ago, China has imposed a number of import bans and very high tariffs that have affected a number of Australian industries, in particular barley, cotton, wine and seafood, a number of the favourites. However, Australia continues to export iron ore to China, although there are fears that foreign spear are steel prices and weaker demand may affect that important trade sector. But, nevertheless, we've, I think, continued to see a significant amount of business continue to be carried on in Australia by Chinese investors. We're aware of that. As regards Chinese students, I mentioned a moment ago that the International Education Centre sector had been hit very hard by the border closures, and that's in all states and territories. However, there's a very strong push to encourage foreign students to return, and it'll be interesting to see whether the numbers bounce back, especially given the announcement only yesterday that the re-entry of students and skilled migrants will, in fact, be prioritised. There's been a lot of work going on the background there, and I think in South Australia, we consider it very important, but I know also in Victoria and New South Wales, they're all very keen for students to come back. Okay, so that looks hopeful for the future, based on what you've told me, and the relationship is an interesting one under these strange times. Everything seems COVID-related. I want to put up Finlayson's website on the screen, and Finlayson's website opens with the words industry-focused, globally-minded, relationship-driven. I know you're marketing your law firm, but those are kind of important words, and what do they mean to you and your law firm, and what do they have to do with the practice of law? Our question is there, Mark. I'll go through them. The reference to industry-focused is the fact that we've, for many, many years, specialised in a number of industries, rather than specific areas of law. We've focused on the industries, such as agribusiness and food, defence, education, energy, environmental, family business, health and aged care, property development, and, as we'll discuss in just a moment, I hope, are the wine industry. So that's industry-focused as regards, globally-minded, although we're based in Adelaide with an office in Darwin, which is due north on your map, Mark, right at the top. We work for a number of clients outside Australia, and for Australian clients who are seeking to invest and do business overseas. I recently did a tally over the last few years. I think we've assisted clients with their legal matters in over 30 foreign countries, and that certainly keeps me interested in coming to work every morning. Finally, the relationship driven is the fact that we strive to have long-term relationship with our clients and their businesses over the years, rather than having one transaction stands. So I think about those three points. It's not just marketing, Mark. We live it and breathe it. Well, and you mentioned the wine. The Finlayson's website indicates that you have legal expertise in the wine industry. Now, what is a tax lawyer doing in the wine industry? What's that about? Well, when clients and friends and family hear that we have a dedicated wine law group, their first response is, hey, Mike, we all like drinking wine, but what's the legal angle? And I like them to introduce them to my wine law partner, Will Taylor, who's been practicing solely in this area for 25 years. Our wine group deals with a wide range of wine law issues, but in particular in relation to wine taxation, as you've got me on my favorite topic. When the Australian sales tax system was revamped in the late 1990s, we had five different rates depending on what type of category of goods you were selling. It was replaced with a uniform 10% goods and services tax. And what the government had to do at that stage was to introduce a wine equalization tax of 29%. And that replaced a 42% wholesale sales tax that was imposed on wine. So the 29% wine equalization tax plus the 10% GST was about the same as a 42% wholesale tax on wholesale prices. The math is a bit wonky there, but it does work. Then in the early 2000s, the government introduced the wine producer rebate. What that does is it passes back the 29% wine equalization tax, the wet the producers collect on behalf of the government, passes it back to the producers. And that's designed to encourage and support regional winemakers and diversity in winemaking product. And the Finneson's wine tax group advises wine manufacturers on their ability to claim this very important tax rebate. If I can finish off on the spiel mark, we're actually very deeply committed to the wine industry. And every year for the last 27 years, we've delivered the Finneson's wine roadshow, where we go to typically nine or 10 winemaking regions right around Australia, not just in South Australia, although we do make the best wine in South Australia. We do that and we speak on a variety of legal, regulatory, tax accounting, and marketing issues. I think I would like to go along with that tour and talk about this more over a glass of wine, perhaps. I've done it a couple of times, it's hard work. Now, we're getting towards the end of our program. And I want to ask a couple of questions about how we go forward. And how can Australia and the United States, and especially Hawaii, and I know you've done some work with some Hawaii folks, but how can we work together for the mutual benefit of both countries, both states, South Australia, Hawaii? What can we do? Interesting. I did check my figures here just to be sure of a fact I'm just going to put forward. The US has for many, many years, and continues to be the largest source of foreign direct investment into Australia. We're a capital importing country, we import capital, and we import people. I think, and I think Mark, you and I through our mutual love of the Indo-Pacific Bar Association, we know that international trade is the lifeblood of the world economy. And once the pandemic is over, and it will end, maybe not this year and maybe not next year, but when it does end, and business women and businessmen are able to travel again, and with the skills they've learned from working remotely over the last 18 months, I believe that Australia and the United States in particular, and especially Hawaii, will be able to work very closely for their mutual benefit. You mentioned a moment ago that I've recently been assisting a Hawaiian client who's keen to import goods from Australia into the Hawaiian market. And what they realised through their research was that there was an opening in the Hawaiian market for certain Australian products. And I'm very much hoping that that's a sign of things to come. And also, Bar was traveling to your lovely state and to importing your goods and services. And as I think I mentioned earlier on Mark, we are all raised watching Gilligan's Island. And so we certainly feel as if we have a great affinity for the Hawaiian state. Okay, well, that's good to hear. And a lot of what you're talking about also is a lot of relationships. Now, we have one minute left. And I just want to ask you, what have you learned about life and the practice of law during these strange times? I thought about that. I had an immediate answer. And it's legally based. But you know, there's an enormous amount of information out there on the internet. Every man can be his own physician. Everybody can be his own lawyer. But at the end of the day, there's no substitute for sitting down with an independent lawyer to discuss your professional business and personal tax and legal problems. And I think that's that's of course legally focused. But I think that goes to all areas of life that we're really going to be the importance of personal relationships in doing business. It can't be done entirely over the internet, even by Zoom. And you know, I agree getting together, especially as we you and I got together at the Inter-Pacific Bar Association, that type of relationship. That's how it started and grew. So, Michael Butler, I appreciate you being my guest today. Thank you very much. Look forward to the next time we are seeing each other in person, hopefully over a glass of wine. Thank you, Mark. And Aloha. Aloha.