VICTORIAN businesses forecast strengthening sales and employment in what is anticipated to be a positive end to 2015, according to the quarterly VECCI Survey of Business Trends and Prospects released today.

“Following a tough second quarter of 2015, it is pleasing to see key business indicators rebound and the Victorian economy poised to round-out 2015 on a healthy note,” said VECCI Chief Executive Mark Stone.

In an encouraging sign for business, sales performance improved for one in three (35 per cent) surveyed businesses during the September quarter. This is an improvement on the June 2015 quarter, when sales trends were comparatively flat across surveyed industries.

Sales are expected to continue to improve in the lead up to Christmas, with 34 per cent of respondents anticipating growth in the December 2015 quarter.

The VECCI survey of nearly 450 businesses across seven major industry sectors also found that selling prices are expected to increase, with almost one in five (17 per cent) surveyed businesses predicting a rise. The positive sales and selling price outlook indicates business expects stronger consumer spending over the next three months.

In a further sign of confidence, following a sharp decline in employment levels last quarter, almost one in five (17 per cent) surveyed businesses reported a rise in employment during the September quarter and a similar share forecast further jobs growth in coming months.

“It is positive to see both business trading conditions and confidence on the rise, however the underlying soft job market and intense international competition remain headwinds to a sustainable lift in business performance,” said Mr Stone.

“In this environment, policy makers must do what they can to ensure business confidence remains positive. Action is needed to lower business costs and encourage job creation.”

The Victorian Employers Chamber of Commerce and Industry (VECCI), established in 1851, is the most influential business organisation in Victoria, informing and servicing more than 15,000 members, customers and clients around the state.

vecci.org.au

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THE Australian Retailers Association (ARA) says retailers support the Federal Government’s Financial System Inquiry (FSI) recommendations to ensure excessive credit card surcharging is legislated and cease exorbitant merchant fees by unregulated payment systems through regulation.

ARA Executive Director and Chair of the Australian Merchant Payments Forum (AMPF), Russell Zimmerman, said the recommendation will benefit both retailers and consumers, allowing retailers to reduce surcharging on high cost payment systems.

The ARA believes there are flaws in the current system, the biggest of which being the lack of regulation of the plethora of high cost and new payment systems coming into the market.

American Express co-branded cards, Diners Club, China Union Pay, and Bitcoin, are not regulated, and all carry greater costs for retailers and consumers alike.

It costs retailers twice as much to accept these unregulated cards as Visa and MasterCard, which is why so many retailers are forced to pass costs onto customers via a surcharge.

As the banks are able to charge more for these cards, they are issuing more of them, placing pressure on Australian retailers to accept unregulated cards.

“The devil will be in the detail. Where retailers do surcharge it is often a blended rate, including the high cost payment systems to simplify the payment for the customer,” Mr Zimmerman said.

“Will retailers need to break out low cost cards they don’t usually surcharge on such as Visa and MasterCard and surcharge the high cost systems separately, or will there be a blended rate for ease of use by customers?

“The ARA and AMPF firmly believes that there is an unequal playing field, with some card systems able to decide their own pricing model and choose if they wish to allow surcharging by the merchant.

“Both Visa and MasterCard are regulated to ensure that merchants are rightfully not charged more than a reasonable Merchant Service Fee, and we believe this should be the case for all cards.”

As noted in the Murray report, proposals for surcharging standards should make surcharging standards simpler and more accurate, while encouraging system providers that are not subject to interchange fee standards to reduce their cost.

“All participants in the payments system must be treated fairly and equally. Legislation and regulation needs to include three party schemes (where banks issue co-branded cards allowing systems like Diners Club and American Express to avoid rules), which are significantly hitting retailers’ bottom lines, alongside the currently regulated four party schemes (Visa and MasterCard).

“In principle, retailers do not believe in surcharging, and in the vast majority of cases they don’t for the regulated low cost three major card schemes (including eftpos).

“Where they do need to surcharge is on the unregulated high cost schemes, which gives the consumer the choice of whether they use a high cost, unregulated, surcharged card,a or a no cost regulated card,” Mr Zimmerman said.

The ARA is pleased to see that many of our submission recommendations have been included in the Government’s final recommendations and that both the small and large retailers that provided input into this process have been heard.

Key points in the ARA’s recommendations are:

Surcharging

• Principles-based surcharging, where there is no surcharging allowed for low cost systems (eftpos and debit) and businesses are permitted to apply a surcharge which reflects the cost of acceptance for credit
• To ensure that there is no cross subsidisation, blended surcharging not permitted
• ACCC given powers to enforce this policy, particularly excessive surcharging. Consumers able to report excessive surcharging to ACCC.

Level Playing Field

• Any regulation must apply equally to all payments systems including American Express, Diners Club, Union Pay, JCB, PayPal
• A threshold set at 1.5 percent of retail payment transactions marketshare before regulation is applied
• Regulation to capture new forms of payment systems under this model as they emerge.

Interchange

• A significant and meaningful reduction in the disparity which currently exists between large and small merchants
• A defined range of interchange rates applied to industries and products
• An annual reset to ensure regular compliance with a weighted average of 50 basis points for interchange rates
• Allowance of ‘special rates’ for a defined period of time, to allow schemes to incentivise new technologies and innovations in the market (to recognise that large merchants can assist with early adoption through leverage of their scale)
• Acquirers to separate debit and credit rates in their provision of pricing to all merchants.

About the Australian Retailers Association:

Founded in 1903, the Australian Retailers Association (ARA) is the retail industry’s peak representative body representing Australia’s $284 billion sector, which employs more than 1.2 million people. The ARA works to ensure retail success by informing, protecting, advocating, educating and saving money for its 5,000 independent and national retail members throughout Australia.

For more information, visit www.retail.org.au or call 1300 368 041.

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THE House of Representatives Agriculture and Industry Committee will conduct a public hearing tomorrow for the inquiry into agricultural innovation.

Appearing at this first hearing for the inquiry will be the Rural Industries Research and Development Corporation.

Committee Chair, Rowan Ramsey MP, said, “The Committee is pleased to commence hearings for this important inquiry. Australian farmers are renowned for their pioneering attitude to agricultural technology. Submissions to the inquiry have highlighted exciting prospects for Australia to continue leading the world in agricultural innovation.

“We are keen to hear from the Rural Industries Research and Development Corporation (RIRDC), which supports small rural industries and undertakes cross-sectoral rural research. RIRDC will be able to offer compelling insights into the opportunities and challenges which emerging technology will pose to the agriculture sector over the decades to come.”

The hearing will be held in Committee Room 1R1, Parliament House, Canberra:
 
Thursday, 22 October 2015
12.30 pm (approx.) Rural Industries Research and Development Corporation
1.30 pm close

The public hearing will be webcast live at: http://www.aph.gov.au/News_and_Events/Watch_Parliament

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WHILE the Government’s “inner revolutionary” approach shows positive signs to drive economic growth and productivity, cooperation across government, business and academic sectors will be critical, according to the Institute of Public Accountants (IPA).

“Our research tells us there is insufficient cooperative behaviour between Australian businesses, creating a barrier to the spread of existing innovations to a wider cross-section of firms; this represents a significant lost opportunity to the economy,” said IPA chief executive officer, Andrew Conway.

“Australia needs action to promote increased innovation across the Australian SME sector including more government support for research and development by small and medium-sized firms; and government support for firms to adopt existing technologies and innovation.

“We also believe there needs to be better linkages between cutting-edge research universities and industry.

“Firms should also be encouraged to adopt continuous improvement methodology to embed incremental innovation as this will generate large productivity improvements more quickly.

“To help facilitate this, the Government could provide tax breaks for companies acquiring new technologies not developed in-house, along with a tax allowance for companies investing in intellectual property protection in-house, and a tax allowance for companies that generate licensing income from in-house new technologies,” said Mr Conway.

www.publicaccountants.org.au

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