Welcome to the Mclowd Community Newsletter.

“Our economy has changed, but voters and their elected representatives don’t seem to know what’s really wrong,” he writes. Every politician promises some variation on the theme of creating a brighter future, whether their ‘fix’ is to build a wall, balance a budget, or make college free. “But here’s the thing,” he says. “No one in 2016 is really addressing the future as we are likely to experience it.”
Bill Gross, What to Do After the Robots Take Our Jobs, WSJ 4th May


While I have a tendency to go on about factors such as renewable energy and cloud computing, of the deflationary forces that have now been unleashed throughout the global economy, two stand out – both as to the speed and scale of impact:

  • Robotics
  • Machine learning computers

Self-funded retirees planning on taking a cruise this year may find themselves presented with an unfamiliar site should they decide to grab a drink at the end of a long day of sightseeing.

You see, companies like Carnival Cruises and their peers have spent the last few years installing robot bartenders on their fleet of ships.

There is a very simple reason why human bartenders are being displaced by robots:

Robot bartenders operate closer to marginal cost than human beings.

While the prospect of a world dominated by robots may be unwelcome to some, it is a future that is:

  • Now being acknowledged by business leaders such as ex-Pimco boss Bill Gross
  • An inevitable consequence of our journey towards a society characterised by zero marginal cost

Administration Platform Update

During May support was added for the following functions:

  • Demergers
  • In specie contributions

Automated feeds for broker data is now under development, and is expected to be released in August.

From there the focus will shift to integration with LodgeIT, in order that FY16 returns can be lodged online.

As a consequence of the above efforts, by the end of the year we expect to release a bundled product for practitioners that will make incumbent price points look excessive:

  • Mclowd      $70
  • SF360       $160
  • Class         $250

The following table illustrates the annual cost savings that this would represent for firms with 100, 200 and 500 Funds respectively.

Annual savings100 Funds200 Funds500 Funds
Mclowd vs SF360$9,000$18,000$45,000
Mclowd vs Class$18,000$36,000$90,000

While it should be emphasised that Mclowd does not yet represent an apples-for-apples comparison with these platforms, the above statistics illustrate the scale of deflation that is now underway in relation to SMSF accounting software.


The Australian Federal Government continues to borrow more than $100 million per day to fund recurrent expenditure, and (while they are unlikely to be discussed during the election campaign) within the forward estimates several milestones are now forecast:

  • Unfunded public sector pension liabilities will reach $200 billion dollars
  • Gross Federal Government debt will reach half a trillion dollars (to which must be added State and municipal obligations)
  • The annual cost of servicing that debt will exceed the amount the Federal Government contributes to public and private education

At the same time the RBA is actively participating in this macro-economic fiction by driving interest rates towards zero.

Yet despite all this stimulus (and household debt of $2 trillion) the CPI actually fell in the March quarter.

As I have made clear in previous communications, the increasingly desperate measures being taken by monetary and fiscal authorities are designed to keep deflation at bay, without the slightest understanding that deflation on a scale never witnessed in modern economic history is now inescapable.

All they have achieved is to make the severity of the slope that will eventually (and inevitably) need to be traversed that much steeper.


Ashley Porter

Managing Director
Mclowd Pty Ltd