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Data Breach Reporting

Crisis Communications, Cyber crime, Data security

The introduction of mandatory data breach reporting laws has ushered in a new era of accountability for Australian companies. It’s a regime that many organisations are not yet prepared for.

It’s not just big business that will be impacted by these laws. Any business with an annual turnover of more than $3 million is now required to notify individuals and the Office of the Australian Information Commissioner when there is a data breach that is likely to result in serious harm to those individuals. This includes small and mid-market businesses, who often do business with larger enterprises and governments

A data breach is not limited to a cyber attack: examples also include the loss or a laptop or flash-drive containing customers’ personal information, or emailing personal information to the wrong address.

Data breaches have become an all too common threat to Australian businesses. Yet, until now, they have often gone unreported and unnoticed by those who may be impacted by a breach.

The Notifiable Data Breaches scheme changes all that. Companies who have suffered a cyber attack or any other type of data breach can no longer avoid customer and public scrutiny. In a world where we continue to distrust our major institutions such as business and government, it is critical that organisations consider and develop a response plan which places communications, speed and transparency front and centre.

Of all the risks associated with managing a data breach, the potential to hit brand and reputation and loss of customer or shareholder trust may well be the most damaging.

Effectively managing a security incident requires careful planning and strong partnerships between communications, forensic IT and legal counsel.

 

Before a Data Breach

Here are some important planning steps to take before a data breach hits:

  • Appoint a communications lead to be part of the core incident response team, ensuring that communications and reputation management are properly represented from the outset of the decision-making process. Identify in advance who will speak on behalf the organisation in the event of a data breach.
  • Develop a communications component of existing incident response plans, including clear ownership and approvals processes. Many companies have technical incident response plans for investigating and remediating an issue, yet often lack a communications process for deciding what information to disclose to whom and when.
  • Map the stakeholders who may need to receive communications in the event of a data breach, including customers, employees, the OAIC and other regulators, media, partners and vendors. Understanding your disclosure obligations ahead of an incident can save valuable time during a live response.
  • Develop draft media holding statements and other materials for the major types of incidents that are of most concern to your company. These statements may be used with media and other stakeholders during the early stages of an investigation when many of the details are still unclear.
  • Consider the communications implications for each type of incident to help guide decision-making. For example, if and under what circumstances would your organisation pay to remove ransomware and how would you position this decision to stakeholders.
  • Host a tabletop exercise with members of the entire incident response team to test how they would react to the media, customer and regulator attention in a data breach. Invite legal counsel to the tabletop and focus on the non-technical aspects of an incident response.

 

During a Data Breach

Managing communications in a data breach presents unique challenges compared to other kinds of crises.

What a company knows about the scope of information lost, how long hackers have been in the system, and what remediation steps were successful in keeping them out, can change drastically over the weeks of a forensic investigation. As a result, there are real risks of communicating inaccurate information.

While the facts of each incident will differ, there are several principles to keep in mind:

  • Focus on actions not outcomes. Early in an incident response, keep communications focused on the actions your company is taking to investigate and remediate the situation. Avoiding disclosing numbers or other details of the scope until there is forensic certainty around these facts.
  • Keep customers as your north star. In all messages, ensure you are addressing customers’ concern or needs. Providing actionable guidance is likely to be far more helpful to customers than dwelling in too much detail about how the data breach happened or who was behind it.
  • Ensure that any customer-facing employees are briefed about the data breach and are equipped with appropriate talking points or complaint escalation processes, should they get questions.
  • Leverage your owned properties, for example, your website or Facebook page, to create a single online destination for accurate and updated information about an incident response.

 

After a Data Breach

  • Consider what steps will be needed after a data breach incident is concluded to regain or earn the trust of those whose information was compromised. In some instances, a long-term reputation recovery strategy may be necessary.

This is by no means a complete list of actions and considerations. Every company has its own challenges and special circumstances to factor in. For those businesses which have not yet prepared a data breach communications plan, the time to begin starts now.

The State of Trust in Australia

Australian Business, Business and Populism, Consumer Trends & Insight, Crisis, General, Insights, Media, Public Affairs, Trust

The institutional slip and slide
Trust in Australia continues to decline across all four key institutions; media, business, Government and NGOs. This has resulted with Australia sitting only 4 percentage points above the world’s least trusting country; Russia. Trust in media has fallen to a new all-time- low of 31 percent, and 60 percent of Aussies are disengaged with news from major organisations.

Although these data paint a chilling picture of trust in Australia, we can hardly be surprised following a tumultuous year. The Government has seen a plethora of negativity with citizenship fiascos across major parties and leaked transcripts revealing a heated phone call where Trump reportedly berated Prime Minister Turnbull. Business and media have been no stranger to controversy either with money laundering and counter-terrorism scandals, and high-profile strikes for Australia’s biggest publishers over job cuts.

Fake news betraying Australia
While misinformation has been prevalent for thousands of years, digital society now spreads mass misinformation. We have largely been a voyeur to affairs in the U.S. and there has been little reflection on how fake news impacts Australia’s residents. However, we cannot escape global news cycles. Fake news is a major concern for Australians, who are increasingly distrusting and searching for who and what to trust.

What we’re seeing from the Trust Barometer in Australia is the global swell of fake news could be leading Australians to look deeper at media sources. In the 2017 Edelman Trust Barometer, 60 percent of the Australian general population were more likely to believe search engines compared to human editors. This year, traditional and online media have moved significantly upwards in trust compared to search and social.

The dawn of the activist CEO
In a world where media confusion is causing a churn of trust, voices of authority, including experts and CEOs, are regaining credibility. Across Australia a new wave of proactive CEOs is standing up for a cause.

High profile examples included CEOs standing up for modern slavery, gender equality and equal pay. Furthermore, more than 600 corporations backed the ‘yes’ side in the Australian marriage equality vote, including Qantas, the Australian Stock Exchange, and ANZ. These individuals are still a minority. With average credibility in CEOs still sitting at 39%, and more than six-in-10 believing CEOs should take the lead on change ahead of government, more need to stop hiding and stand up for a societal cause.

Populism – My company, my clan
2016’s general election saw a surge in support for independents and minor parties, thanks partly to charismatic individuals. What is distinctive about Australian populism is the emergence not of one key figure – but of a diverse field of parties and personalities. In tandem with this phenomenon, trust has decreased, and more than half of Australians think Government is broken.

Businesses and employers are far more trusted. Corporations have been given licence to stand up for societal issues in their place, speaking for, and with, the people. The highest trusted institution in Australia is ‘our employers’. Businesses need to think carefully about how they can use workforce loyalty to advocate for beliefs.

2017 Federal Budget Wrap

Government Affairs, News, Public Affairs

Last night Treasurer Scott Morrison handed down his second budget, and in doing so many commentators say he has finally removed the Turnbull government, and Liberal Party, from Tony Abbott’s deeply unpopular 2014 budget.

Introduction

Last night Treasurer Scott Morrison handed down his second budget, and in doing so many commentators say he has finally removed the Turnbull government, and Liberal Party, from Tony Abbott’s deeply unpopular 2014 budget.

The Australian Financial Review noted that yesterday’s budget spends big, taxes big, builds big, and belts the banks. With major spending announcements on infrastructure, schools and the NDIS, as well as tax hikes on the big banks and foreign investors, some commentators have been quick to label it a ‘Labor tax dream’.

While the Turnbull government has won praise for bold spending measures focused on stimulating growth in the right areas of the economy, the prime minister has already been forced to defend ambitious GDP forecasts, which project a $7 billion surplus by 2020/21. Tony Abbott’s former chief of staff Peta Credlin has criticised the Turnbull government for losing its focus on debt reduction and deficit repair with new and higher taxes and heavy spending on infrastructure, education and health.

But with a headline grabbing measure targeting the banking sector – one of the few ‘new’ announcements in a widely pre-briefed budget – Scott Morrison ensured a broadly positive reaction in the morning’s papers.

Now the hard work begins.  While Labor are left trying to criticise policies they effectively proposed, there is significant proportion of coalition politicians who crave fiscal responsibility and reduced deficits, and will need to be convinced of the merits of higher spending and taxes.

The Edelman team have summarised the main developments by sector:

 

Infrastructure 

After Mr Morrison announced last month that infrastructure spending represented ‘good’ debt, it was no surprise it formed a central pillar of this year’s federal budget.  The proposed decade long $75 billion spending spree already being referred to as the most ambitious infrastructure spending program in a generation.

The major announcements included:

  • Investing $5.3 billion over ten years to build the new West Sydney Airport at Badgerys Creek. By creating the Western Sydney Airport Corporation, the government will take full control of building and operating Sydney’s second airport. With earthmoving work to begin next year, the airport is planned to be fully operational by 2026. The project will lead to the creation of 20,000 jobs by the early 2030s, and 60,000 jobs in the longer term.
  • On top of a planned $2 billion upgrade announced earlier this year, the budget outlined to offer to buy the NSW and Victorian combined 87% stake in Snowy Hydro, which could cost the Commonwealth up to $5.25 billion.
  • A $10 billion program to upgrade Australia’s rail network, focused on improving urban and regional services and upgrading critical freight lines. The east coast of Australia will see $8.4 billion in funding for the Melbourne to Brisbane rail project.
  • $1 billion for regional rail projects across Victoria, including $30 million to develop a business case for a rail link to Tullamarine Airport. The Treasurer has signaled that funding could also be available for AdeLINK, Brisbane Metro, Cross River Rail in Brisbane, and the Western Sydney Airport Rail Link.
  • Establishing the Infrastructure and Project Financing Agency to help the government identify new financing solutions and provide advice on implementation.

 

Financial Services

Australia’s banks have been dubbed the biggest losers of this year’s Federal budget, with the Turnbull government introducing a major bank levy for the ‘Big Four’ plus Macquarie.  This was one of the few policies that had not been announced before yesterday’s budget, so received widespread media coverage – particularly as the banking industry has responded furiously while commentators have suggested customers may be left to foot the bill.

The major announcements included:

  • A banking levy on those with licensed entity liabilities of at least $100 billion from 1 July 2017.  It is predicted to raise $6.2 billion and will be calculated quarterly on an annualised rate of 0.06 per cent to raise just over $1.5 billion each year.
  • The Australian Competition and Consumer Commission (ACCC) has been tasked with ensuring the levy does not come out of customers’ pockets, and can force the top five to explain any changes or proposed changes to residential mortgage pricing.
  • In response to the Ramsay Review, the creation of the Australian Financial Complaints Authority, a “one stop shop” for complaints and for Australians to resolve disputes and obtain binding outcomes from the Banks and other financial institutions.
  • A new Banking Executive Accountability Regime which will require all senior executives to be registered to APRA. If executives breach their obligations they can be deregistered, disqualified from holding executive positions and stripped of their significant bonuses. If banks try and hide misconduct or breach misconduct rules they will face fines starting at $50 million for small banks and $200 million for large banks.
  • A permanent team within the ACCC will be set up to investigate competition in the banking and financial system.

 

Housing

Leading up to last night’s budget announcement, housing and affordability continued to be a focus of discussion for the Federal government.  With house prices surging in Sydney and Melbourne, a significant proportion of the community has been priced out of private rentals and sales leaving some to claim that the Australian dream of owning a property is becoming just that, a dream.  To address this, the government introduced a number of measures but stopped short of fully reforming negative gearing, which critics say is one of the main drivers behind housing affordability issues.

It will be interesting to see how this affects the government’s virtually impossible challenge of making housing more affordable without reducing the value of people’s homes – an almost guaranteed vote-loser.

The major announcements included:

  • From July 1, those looking to buy their first home will be able to contribute up to $30,000 into their superannuation account to buy their first home. Dubbed the “First Home Super Savers Scheme”, it will attract the tax benefits of superannuation, with contributions and earnings taxed at 15 per cent, rather than marginal rates, and withdrawals taxed at 30 per cent below their marginal rate although some economists have previously questioned this type of initiative, warning it may increase demand and push up house prices even further.
  • Australians aged 65+ are also being offered tax incentives to sell their homes and downsize, in a bid to boost the supply of housing for younger people. From July 1, 2018 they will able to deposit $300,000 from the sale of their home into their superannuation accounts, as a non-concessional tax contribution, regardless of how much super they already have.
  • Negative gearing rules are being tightened around what can be claimed, specifically travel expenses and depreciation deductions.
  • Focus on building more homes to increase capacity and ease affordability issues. Measures in the budget include working with states and territories to reform planning and zoning laws, opening up surplus Commonwealth land for development, and establishing a $1 billion National Housing Infrastructure Facility to “address infrastructure chokepoints that are impeding housing development in critical areas of undersupply”.  

 

Tax Overview

The government used the budget to reaffirm its commitment to cut the company tax rate to 25%, whilst proposing measures aimed at reducing red tape and easing tax burden on small businesses. A statement accompanying the budget outlined that a 25% company tax rate would increase competitiveness, attract investment, and protect jobs from being taken overseas. However, there were tax increases notably the bank levy and for individuals through the Medicare Levy.

In addition to the bank levy outlined in the Financial Services section, the major announcements included:

  • A new tax for businesses hiring foreign workers – $5,000 upfront for each foreign employee on a permanent visa for companies with a turnover exceeding $10 million
  • A continued crackdown on multinational tax avoidance and profit shifting with a toughening of the Multinational Anti-Avoidance Law, and a renewed crackdown on the back economy
  • For small businesses, the popular $20,000 instant asset write off facility for businesses with a turnover of less than $10 million extended for another year, while states and territories will receive up to $300 million in exchange for reducing red tape for small businesses
  • Increasing the capital gains tax discount from 50% to 60% for residents who choose to invest in affordable housing. Foreign investors are the biggest losers, with a new tax aimed at those who leave their building unoccupied or unavailable for rent for more than six months of the year. The CGT withholding rate for foreign residents also increases from 10 per cent to 12.5 per cent and the withholding threshold will be reduced from $2m to $750,000.
  • A significant increase in the Medicare Levy to 2.5 per cent for every Australian earning over $21,655, an increase of 0.5 per cent that is expected to raise $8.2bn over four years (see further details in Health)

 

Technology and Innovation

Whilst the government has come under fire since last year’s election campaign for losing sight of its innovation agenda, Scott Morrison used the budget to outline the Coalition’s ongoing focus on boosting Australia’s digital infrastructure.  The government allocated $350 million over three years to incentivise to modernising the public service.  However, the tech sector has reacted with disappointment suggesting budget initiatives do little to put the government back on track when it comes to innovation.

The major announcements included:

  • $10.7 million will be allocated to build a Cyber Security Advisory Office, which will be established by the Digital Transformation Agency over the next four years
  • $22.7m has also been allocated to complete the next stage of development for GovPass – the digital identity framework which links to existing document and facial verification services to provide secure proof of identity on online government services.
  • A funding boost to the CSIRO’s digital research network, Data61, to develop a data integration platform to support law enforcement and regulatory agencies to better detect, prevent and disrupt illicit activities within Australia and overseas
  • Just over $374 million will be spent over the next two years to give every Australian an electronic health record by default, with another $67.3 million to go towards the overhaul of the Medicare payments system. The Immigration department has been handed $95.4 million to improve its storage and processing of biometric data and introduce a new risk processing system for travellers.
  • Measures aimed at cutting regulation for fintech startups and expanding the ‘regulatory sandbox’.

 

Education

Education has been a key policy area in the build up to the budget, with the government announcing major changes on university and school funding over the past week. As such, there were no major surprises under the education banner on Tuesday night.

The Turnbull government has effectively poached Labor’s policy by announcing the Gonski 2.0 education package on needs based funding. However, developments are not so great for university students.

The major announcements included:

  • A $2.8 billion cut to Australian universities will increase the share of university costs borne by students by an additional 7.5 percent to be phased in over four years, while also lowering the salary threshold for university fee repayments to $42,000 from a current level of $55,874.
  • Federal money for schools will increase from $17.5 billion in 2017 to $30.6 billion by 2027 in an effort to give all students a ‘fair go’ by bringing each school to the same needs-based per-student level. The majority of Australian schools will see an increase in funds of 2.5 percent, with some experiencing greater increases.
  • 51 independent schools (both private and Catholic) will experience cuts or withdrawal of government funding. In response to a backlash from the Catholic education sector, Senator Birmingham has maintained that the cuts are all part of introducing true needs-based funding based on fairness.

 

Health

Australia’s health system was a primary focus for this year’s budget, with a $10 billion healthcare package announced. As part of this, the Medicare Levy will rise from 2% to 2.5% of taxable income (from July 1 2019) in order to fully fund the National Disability Insurance Scheme (NDIS) and guarantee Medicare.

The decision to raise the levy will ensure the NDIS is fully operational by 2020; seeing 46,000 disabled people better supported at a cost of $21 billion a year. Tax payers who pay the Medicare levy will be affected by the increase in tax rates whereas low income earners will continue to receive relief from the levy through the low-income thresholds for singles ($21,655), families ($36,541), seniors and pensioners ($34,244). The current Medicare Levy exemptions will remain in place.

The major announcements included:

  • A new Medicare Guarantee Fund to cover essential healthcare which will see $1 billion provided over four years from 2017-18 for the phased unfreezing of the Medicare rebate. Starting with bulk billing incentives for GPs in July 2017 and moving on to the lifting of the Medicare rebate for specialist consultations in 2018, specialist procedures in 2019 and diagnostic imaging in 2020
  • Patients with severe eating disorders will now benefit from an $80 million fund for those with severe mental illnesses and $350m will go to mental health services for veterans. There will also be greater investment in access to telehealth and telemedicine for psychology services.
  • A $5.5m vaccination campaign that will see Family Tax Benefit A payments reduced by $28 a fortnight from July for children who aren’t fully immunised.
  • Price cuts for taxpayer-subsidised medicines, which will save $1.8 billion over five years, and an extra $2.8 billion in funding for hospitals, including $730 million for Tasmania’s Mersey Hospital.
  • Reforms to the Pharmaceutical Benefits Scheme will be used to reinvest into drug subsidies and pharmacy initiatives.
  • The Medical Research Future Fund will get $65.9 million towards preventive health research, clinical trials and breakthrough research investments, and $5.8 million will be provided for research into childhood cancer.

 

Resources, Energy & Climate

In the biggest energy announcement in this year’s budget, the government outlined its plan to acquire a larger share or outright ownership of Snowy Hydro, as well as a commitment to keep the scheme in public hands, in what it is calling Snowy 2.0. Currently, Victoria and New South Wales own a combined 87% of the Scheme, and the Treasurer flagged that discussions with the NSW state government were already underway.

Announcements in this area were likely muted, with the wide-reaching Finkel Review into Australia’s energy future due in the coming weeks.

The major announcements included:

  • An announcement to set aside $90 million to secure access to gas resources for domestic use. Energy consumers and businesses will get a fairer deal, with more funding going to ACCC to investigate competition in retail electricity and gas markets. Additional funding will go towards improving gas market efficiency and transparency, and there will be increased investment in “new generation, transmission and storage capacity”.
  • Around $37 million will go to South Australia for new energy infrastructure and funding to prove up gas pipeline proposals to South Australia from Western Australia and the Northern Territory.
  • The establishment of an enquiry into why electricity prices are continuing to rise. The government will also be offering limited assistance to pensioners struggling to pay their bills.  A one-off energy assistance payment of $75 for single eligible recipients and $125 per couple was also announced.

Long weekend listening

Entertainment, General, Media

We’re switching off the laptops, putting the phones to silent and kicking back until Tuesday morning. For any trips, long or short, podcasts are essential. Here are Edelman Australia’s top picks to keep you entertained over Easter.

We’re switching off the laptops, putting the phones to silent and kicking back until Tuesday morning. For any trips, long or short, podcasts are essential. Here are Edelman Australia’s top picks to keep you entertained over Easter:

 

My Favorite Murder – @MyFavMurder @MFMPodcast @MyFavoriteMurder

Weekly comedy podcast hosted by two lifelong true crime fans and comedians, Karen Kilgariff and Georgia Hardstark. The girls bring their own flavour to each episode, using dark comedy and shock to share their unique perspective on well-known cases.

Bonus: It has applications to work! Click here for ‘5 things marketers can learn from My Favorite Murder podcast.’

 

Generation Why – @GenWhyPod @TheGenerationWhyPodcast @GenerationWhyPodcast  

The ultimate true crime podcast, where Aaron Habel and Justin Evans spend every episode delving into all the details and their theories surrounding an unsolved murder, mystery or true crime story.

 

My Dad Wrote a Porno – @MyDadWroteaPorno @MyDadWroteaPorno @MyDadWroteaPorno

Yes you read this right, but don’t judge until you listen to it. It follows some QI (that program with Stephen Fry) researchers where one of their Dads has literally written a naughty novel, entitled Belinda Blinked. Hilarity ensues and it is well worth it. 

 

The Bugle – @TheBugle @TheBugle @TheBugle

For a touch of British sarcasm and a run down of the biggest news, this is your go-to. This satirical podcast throws shade onto all of the world’s leaders in the most hilarious fashion. 

 

#AskJackD – @JackDelosa @delosa @Jackdelosa

Jack Delosa is an entrepreneur and the founder of The Entourage who aims to bring entrepreneurial learning into schools. He offers simple and tangible advice on how to grow your business, generate revenue or deal with business failures.

 

Ted Radio Hour – @TEDRadioHour @TEDRadioHour

Talks on all fascinating ideas, inventions and new ways to think and create. From understanding why people are always online, to scientific processes and achieving the next big breakthrough. The sessions are hosted by Guy Raz and new episodes are released weekly.  

 

ABC Radio National – All In The Mind @allinthemind @ABCRNAllInTheMind 

Want to know more about your brain and how it tweaks behaviour, this is the podcast for you. Most recently an episode called “Growing Up Digitally” documented how different generations mature with and without internet. Fascinating listening. 

 

A Neuroscientist Explains@bnglaser 

A podcast that only kicked off in 2017, A Neuroscientist Explains looks at a different news topic each week through the science of the mind. The sessions are shared on a weekly basis and hosted by Observer Mag columnist and neuroscientist Dr. Daniel Glaser. Highlights are ‘How music affects the brain’ and ‘How we perceive the truth’.

 

The 5AM Miracle – @JeffSandersTV @jeffsandersproductions

An action-focused weekly podcast hosted by Jeff Sanders that is dedicated to “dominating your day before breakfast”. Jeff talks about how to tackle goals and challenges with enthusiasm and encourages his listeners to adopt small daily habits that lead to long-term results. He often hosts experts who contribute to the podcast covering topics such as emotional health and happiness, productivity and time management.

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