Business News Releases

In a trade war, retaliating with tariffs is just shooting yourself in the foot - ECA

THE biggest losers from the US's steel and aluminium tariffs aren’t other countries that export to the US.

"The biggest losers are Americans’ said Heath Baker, head of policy at the Export Council of Australia (ECA).

"People mistakenly think tariffs are a burden that foreign exporters have to absorb. They are not; they are a tax on domestic businesses and consumers. Yes, tariffs hurt foreign exporters, but they are collateral damage.

"It is America’s economy that will bear the full cost of these tariffs. They will make products more expensive for American consumers and make American exporters less competitive.

"When Australia and other countries respond to America’s actions, common sense needs to prevail. Where’s the sense of responding to an act of American self-harm with your own act of self-harm?"

In the post-World War Two era, international trade has thrived on a system of rules, and the predictability and certainty that come from those rules, according to the ECA.

"By introducing these tariffs, America is introducing uncertainty into the trading system," said Andrew Hudson, ECA board director. "But tit-for-tat retaliation by other countries will just undermine that system further, with zero real benefit for those countries.

"Australia and other countries affected by US steel and aluminium tariffs need to respond in a way that serves to both preserve and strengthen the trading system, rather than destabilising it. This means following the mechanisms established at the World Trade Organisation, through other international agreements to which the US and its trading partners are a party and through sensible diplomacy.

"Yes, this will take time. But it’s the responsible course of action. Further unilateral action merely serves to further undermine the rules-based system that has served the interests of all parties."

Mr Baker said, "The other way the Australian Government can respond is by striving to make its businesses as competitive internationally as possible. Signing the Comprehensive and Progressive Agreement for Trans-Pacific Partnership later this week will help with this. And there’s much more that can be done, particularly to get more SMEs involved in exporting, and to help existing SME exporters grow."

Last week the ECA released its annual trade policy recommendations. The focus of these were to get more SMEs involved in international trade. Recommendations here.

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The ARA securing a brighter future for retailers

AS AUSTRALIA's largest retail peak body industry, the Australian Retailers Association (ARA) has once again secured a brighter future for retailers across the country by defeating the Shop, Distributive and Allied Employees' Association’s (SDA) application to provide additional public holiday entitlements to full-time and part-time employees.

Russell Zimmerman, Executive Director of the ARA, said the Fair Work Commission’s (FWC) recent decision to reject the SDA’s application is a great outcome for the industry as retailers are already struggling with rising cost pressures in a overwrought market.

“Although the SDA continues to add pressure to retailers already facing a volatile trading environment, the FWC has once again understood the serious implications this would have had to the industry and the overall economy,” Mr Zimmerman said.

The SDA’s application sought retailers to provide additional entitlements to full-time and five-day per week part-time employees when a public holiday fell on their non-working day. 

“This application would have entitled part-time and full-time employees to a day’s pay, a day off with pay or a day added to their annual leave, not only crippling the retailers bottom line but also impacting on their ability to open their doors seven days a week,” Mr Zimmerman said.

“With Australian retail workers already receiving one of the highest penalty rates in the world, the SDA’s application to provide additional entitlements would have had serious implications to retailers across the country.”

The ARA strongly opposed the application last year, engaging their legal partners, FCB, to defend the application.

“We would like to thank those who assisted with this defence, and hope more progressive decisions like this one will bring further opportunities to employees and employers working in the sector,” Mr Zimmerman said.

“Retail employees are a vital part of the industry, and the ARA will continue to support those working in the sector to ensure these workers - at all levels - are recognised and validated for their hard work in the industry.”

 

About the Australian Retailers Association:
Founded in 1903, the Australian Retailers Association (ARA) is Australia’s largest retail association, representing the country’s $310 billion sector, which employs more than 1.2 million people. As Australia’s leading retail peak body industry, the ARA is a strong pro-active advocate for Australian retail and works to ensure retail success by informing, protecting, advocating, educating and saving money for its 7,500 independent and national retail members throughout Australia. For more information, visit www.retail.org.au or call 1300 368 041.

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FWO report finds three quarters of Caltex sites breaching workplace laws

THE Fair Work Ombudsman’s latest Compliance Activity Report shows a workplace non-compliance rate of 76 percent in the Caltex service network.

“In light of this alarmingly high level of non-compliance across its retail fuel outlets, I am not surprised by Caltex’s announcement to the ASX last week that it will transition franchise sites to company operations,” Fair Work Ombudsman Natalie James said.

“FWO’s report shows Caltex Australia has been presiding over a non-compliant and unsustainable operating model.”

The FWO commenced investigations into the network in late 2016 after receiving intelligence indicating an upsurge in compliance issues at Caltex outlets, including non-payment and underpayment of wages; cash payments made ‘off the books’; false records; and threats of termination or visa cancellation for any workers who complained.

During the compliance activity, Fair Work inspectors visited 25 retail fuel outlet sites operated by 23 Caltex franchisees in Brisbane, Sydney, Melbourne and Adelaide.

Just six of these sites were found to be compliant with workplace laws – a non-compliance rate of 76 percent.

Across the non-compliant sites, inspectors found evidence of underpayment of wages, non-payment of overtime and penalty rates as well as record keeping and pay slip breaches.

Inspectors also had concerns about the accuracy of the time and wage records provided by non-compliant franchisees, with legal action being taken against two franchisees for allegedly providing falsified records.

The Fair Work Ombudsman commenced proceedings against the former operator of the Caltex Five Dock service station in Sydney, Aulion Pty Ltd, and has also initiated proceedings against Abdul Wahid and Sons Pty Ltd, the former franchisee of a number of Caltex outlets in Sydney.

In both cases, the Fair Work Ombudsman alleges that the absence of accurate time and wage records prevented inspectors from completing audits and determining whether employees had received their lawful entitlements.

During the activity, the regulator issued nine infringement notices, 11 compliance notices and 16 formal cautions to non-compliant franchisees.

Inspectors also recovered a total of $9,329.85 in back-pay for 26 workers who were underpaid during a one-month assessment period.

Ms James said the agency believes the figure would be higher if underpayments could have been accurately calculated, but with so many deficiencies in the outlets’ records it is impossible to be sure of the true extent of the wage rip-offs.

“There’s no question that if these findings indicate the norm in this network, and if these underpayments are replicated throughout the business month after month, we are quickly looking at millions of dollars of underpayments over the course of a few years,” Ms James said.

“A large number of employees at the audited sites are young and migrant workers, cohorts that we know to be particularly vulnerable to workplace exploitation and reluctant to complain about mistreatment.

“Sixty percent of the 194 employees the Fair Work Ombudsman obtained records for were visa holders and nearly 26 per cent under the age of 24,” Ms James said.

The investigation also found that a contributing factor to the high rates of non-compliance was that 17 of the 23 franchise operators were from non-English speaking backgrounds with minimal knowledge or experience of Commonwealth workplace laws.

Ms James said these factors, when paired with low-skill work in competitive markets, escalated the risk profile for the network.

“Caltex should have recognised this in its business model by ensuring franchisors properly understood their obligations and conducted monitoring to assure itself that obligations were being met,” Ms James said.

“While Caltex claims it had a practice of carrying out annual reviews and audit processes to ensure compliance with the law, it is clear these checks were inadequate and failed to properly consider the dynamics at play in its business.”

Ms James said throughout the investigation, the FWO had offered Caltex the opportunity to enter into a compliance partnership with the FWO but Caltex had failed to commit to the proposal or discuss it in any detail.

Now that Caltex has announced it intends to convert all its franchised service stations to company-operated stores by mid-2020, Ms James has called on Caltex to engage seriously in the offer of a compliance partnership so that the regulator and the Australian community can be confident Caltex is operating openly and honestly.

“The Australian public expects nothing less from such large and reputable companies, and recent changes to the law mean that in some circumstances franchisors or holding companies can now be held liable for breaches or underpayments by their franchisees,” Ms James said.

Employers and employees can visit www.fairwork.gov.au or call the Fair Work Infoline on 13 13 94 for free advice and assistance about their rights and obligations in the workplace.  A free interpreter service is available on 13 14 50.
 
Follow Fair Work Ombudsman Natalie James on Twitter @NatJamesFWO, the Fair Work Ombudsman @fairwork_gov_au or find us on Facebook www.facebook.com/fairwork.gov.au

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IPA partners with Receipt Bank to future-proof member practices

THE Institute of Public Accountants (IPA) has announced a partnership with Receipt Bank to provide an electronic transaction solution for its members and their clients.

Receipt Bank offers a quick and easy way for clients to send their transaction data directly to their accountant’s operating system with no paper and no data entry required.

“Accountants are often time-poor and innovations such a Receipt Bank that help improve efficiency and save time will provide significant benefit to our members,” said IPA chief executive officer, Andrew Conway.

“Gone are the days of a client walking into their accountant’s office with a shoebox full of receipts; the sifting through and manual handling days are over.

“We are urging our members to embrace new technologies at all levels and this is another example where I would encourage our members to jump on board,” said Mr Conway.

Speaking on behalf of Receipt Bank, Vicky Skipp, VP of Sales APAC said it was thrilled to form a partnership with the IPA.

“The role that IPA members play in their clients’ businesses has never been more important. We’re excited to combine our best-in-class technology with their expertise to help them offer a more effective, efficient and valuable service.”

“Moving to a paperless business model removes the significant burden of storing and organising receipts and invoices for clients. IPA members will now be able to focus more on providing the advisory services their clients need instead of spending time collecting and processing documents,” said Vicky.

publicaccountants.org.au

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Guidance, not threats, needed for Data Breaches Scheme says Tax Institute

FEBRUARY 22 this year saw the effective commencement of the Notifiable Data Breaches Scheme (NDB Scheme). This Scheme applies to eligible data breaches that occur on or after that date.

The NDB Scheme together with the existing provisions of the Privacy Act 1988 effectively mandates a legislative requirement for people handling sensitive information to provide adequate and effective software protection and, more importantly, to report and notify any breaches to the Office of the Australian Information Commissioner on a timely basis. 

“Many Tax Institute members have expressed considerable frustration at the lack of clear guidance being provided on practical ways in which to ensure compliance with these ‘new’ obligations” said The Tax Institute’s senior tax counsel, Bob Deutsch.

“Rather than threatening practitioners with all manner of adverse consequences, practitioners need clear guidance on matters such as:

  1. Is the printing of tax returns with Tax File Numbers and posting those to clients either by mail or email permissible as a result of these changes?
  2. If a client has forgotten their TFN, can an agent email the TFN to them?
  3. What exactly must an agent do to demonstrate that he/she has taken all reasonable steps to protect personal information from misuse?
  4. What practical checks can an agent take to satisfy him or herself that there has not been a notifiable data breach?

“At this stage what is needed is not threats but guidance on practical issues such as those raised above," said Mr Deutsch.

“The answer to the first two issues is a resounding ‘Yes’ provided that adequate data security protection has been used to protect the confidentiality of the personal information. Guidance on the later questions is still sorely needed.”

www.taxinstitute.com.au

The Tax Institute is Australia’s leading professional association and educator in tax. Its 12,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia. The Tax Institute supports the tax profession through education and professional development and works to continually improve tax law and its administration.

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Increased mineral, petroleum exploration spending bolsters Qld jobs pipeline

INCREASED investment, in exploring for minerals and petroleum in Queensland, was a strong indicator of future jobs growth in the resources sector according to the Queensland Resources Council (QRC).

QRC Chief Executive Officer Ian Macfarlane said the Australian Bureau of Statistics (ABS) data released today, found in the December 2017 quarter mineral exploration was $64.3 million – a 27 per cent increase on the same period in 2016 – meanwhile, petroleum exploration was $40.2 million for the December 2017 quarter, which is a 23 percent increase compared to 12 months ago.

“Exploration is an important indicator of confidence in the resources sector and an investment that will grow jobs over the longer term,” he said. 

“It’s an important industry and we will work with governments to ensure there is policy certainty for future investments and future jobs. 

“The resources sector already contributes to one in eight jobs in Queensland. 

It’s disappointing that mineral investment in New South Wales increased at a faster rate – 29 per cent - in the December 2017 quarter. Like any Queenslander, I do not like to be beaten by NSW.”

Macfarlane said the ABS exploration data followed a report by Canada’s Fraser Institute that found Queensland had dropped out of the global top 10 for investments with policy uncertainty the most cited. 

www.qrc.org.au

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Unis to business: tap in to our talent and expertise

UNIVERSITIES will today make a bold bid for more companies to partner with them on everything from research and business innovation through to snapping up the best graduate talent.

Making a ‘business case to business’ to entice more firms to collaborate with universities, the sector’s peak body will unveil an ambitious pitch at the National Press Club today. 

Universities Australia Chair Professor Margaret Gardner will tell business leaders that Australian universities are equipped to help them solve some of their most complex business challenges.

“Australia’s universities are open for business and we’re here to help,” she said.

“If you have a complex business challenge you haven’t been able to crack, come talk to an Australian university about how we can work together to solve it.”

"By tapping into university talent, business can source new ideas, get the jump on early stage research and cut the time it takes to bring new products to market."

New modelling by Cadence Economics for Universities Australia to be released today also confirms that the 16,000 companies already partnering with universities derive $10.6 billion in revenue from their collaborations.

And their return on investment is $4.50 for every dollar invested into collaborative research with a university.

Professor Gardner will write to the heads of the three major business peak bodies asking them to help spread the word in corporate Australia about the strong returns to business from these partnerships.

“If we could lift the number of firms with formal collaborations with universities from the current 16,000 to 24,000 companies, it would add another $10 billion a year to our GDP,” she said.

“And that would also lift our collaboration rate to the level of global innovation powerhouses such as Israel and the US.”

Along with the new modelling, Universities Australia will today launch Clever Collaborations: The Strong Business Case for Partnering with Universities.

The publication showcases 35 case studies of businesses, community organisations and governments that are partnering with universities to solve complex challenges together.

Clever Collaborations also includes a list of key university contacts to make it easier for businesses to explore collaboration opportunities.

Download a copy of Clever Collaborations report here

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Momentum, not moratoriums - QRC

MOMENTUM in Queensland’s gas industry has started strongly this year with the State Government’s proactive approach to solving the east coast’s gas squeeze.

Queensland Resources Council (QRC) Chief Executive Ian Macfarlane congratulated Minister Anthony Lynham after two junior producers – Central Petroleum and Armour Energy – were granted tenders for domestic-only production.

“This is a good outcome for the gas industry with two Queensland producers able to develop 400 hectares in the Surat Basin. Minister Lynham is getting on with the job of increasing supply into the gas network and creating jobs in regional Queensland,” Mr Macfarlane said.

“Separately the Minister announced a further 17,000 square kilometres of land to be opened up for exploration under domestic conditions and unconditional.

“This year alone we’ve seen Santos commit to a $900 million investment across several gas regions in Queensland and a $100 million gas supply deal between Santos and New Century Mines. These two investments alone will create 640 jobs.

“The QRC fully supports the comments of Minister Lynham that southern states can’t hide behind moratoriums on gas while importing gas from Queensland. Southern politicians must back their gas industry and the science it uses to extract gas safely instead of running away from their responsibility to develop their own gas because of shock jocks and placard waving activists.”

QRC’s data shows that in 2016-17, Queensland’s gas industry contributed $8.9 billion to the state’s economy and supported almost 43,000 full-time Queensland jobs.

www.qrc.org.au

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Committee scans the future of retail

THE House of Representatives Industry, Innovation, Science and Resources Committee will hold a roundtable public hearing tomorrow as part of its Internet Competition inquiry. The public hearing will feature Data61, the CSIRO’s digital innovation group, and Professor Marek Kowalkiewicz, the PwC Chair in Digital Economy at the Queensland University of Technology (QUT).

Data61’s expertise is in digital technologies and data analytics and it provides research and advisory services to businesses, universities, and government agencies. The PwC Chair in Digital Economy is a joint venture between QUT, PwC, Brisbane Marketing, and the Queensland Government that undertakes research into the digital economy and aims to help businesses develop their digital capabilities.

Acting Committee Chair Luke Gosling OAM, MP said that the Committee will be discussing with Data61 and Professor Kowalkiewicz emerging trends in the digital economy and their implications for small Australian businesses.

‘The popularity of online shopping means that many small Australian retail businesses are facing increasingly intense competition from global internet retailers,’ Mr Gosling said.

‘For Australian businesses this increased competition is a significant challenge but, on the other hand, online shopping also provides small retailers with a great opportunity to sell their products directly to consumers across the globe. The Committee is investigating how the Government can assist small business to make the most of the opportunities presented by the digital economy.’

Public hearing details: 10.45am – 12.00pm, Wednesday 28 February, Committee Room 1R4, Parliament House, Canberra

The hearing will be broadcast live at aph.gov.au/live

Interested members of the public may wish to track the committee via the website.

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Local aspiration equals national good

THE ABILITY of regional centres to absorb population growth, thereby safeguarding the high quality of life and economic prosperity enjoyed by Australians, will be one of the themes explored by the House Standing Committee on Infrastructure, Transport and Cities when it visits Newcastle tomorrow.

The public hearing is part of the Committee’s inquiry into the Australian Government’s role in the development of cities.

Committee Chair, John Alexander OAM MP, said the Committee expects to hear from community groups, academics and business leaders on how best to ensure the Hunter’s growth boosts its productivity and delivers liveability benefits.

“Regions such as the Hunter Valley and cities such as Newcastle have the capacity to accommodate many more people and businesses, easing the squeeze on capital cities,” Mr Alexander said.

“We need to heed the aspirations of these communities and ensure we set them up with the governance arrangements, infrastructure and resources they need to succeed.”

Newcastle City Council aspires to fast rail links between Newcastle, Sydney and Brisbane.

“Newcastle and the Hunter would appear to be of significant interest for various proponents of transformative infrastructure such as fast train linkages,” Newcastle City Council said.

“Central to these initiatives are new approaches to infrastructure funding, including value capture. Federal government involvement will be required to attract, negotiate and secure such projects.”

Further information on the inquiry, including the full terms of reference, is available on the Committee website.

Public hearing details: 9.00 am – 3.00 pm, Friday, 2 March 2018, Moot Courtroom (x703), NeW Space, City Campus, University of Newcastle, Corner of Hunter and Auckland Streets, Newcastle

9.00 am: University of Newcastle
9.30 am: Hunter Research Foundation Centre
10.15 am: Centre for Urban and Regional Studies
10.45 am: Newcastle City Council
11.15 am: Regional Local Government Roundtable - Lake Macquarie City Council, Maitland City Council
1.00 pm: Government and Infrastructure Roundtable - Hunter Water, Hunter Development Corporation, Newcastle Airport, Hunter Councils Inc
2.10 pm: Business and Community Roundtable - Hunter Business Chamber, Compass Housing Services, Dantia
3.00 pm: Close

The hearing will be broadcast live at aph.gov.au/live

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Landmark investment to increase domestic gas

DOMESTIC gas supply and regional jobs are set to gain considerably with Santos GLNG to invest $900 million in gas developments in Maranoa, Western Downs, Central Highlands and Banana this year. 

Queensland Resources Council (QRC) Chief Executive Ian Macfarlane said Santos GLNG would unlock significant gas reserves in regional Queensland, which would increase supply to the domestic and export markets.

“Today’s announcement will bring intergenerational benefits for the people of these regions and again demonstrates that Queensland is leading the way to boost east coast gas supply”, said Mr Macfarlane. 

“More gas being produced is good news for all gas customers, both domestic and export. Queenslanders increasingly understand that CSG is an evergreen industry with billions more dollars invested in new fields to supply the LNG plants. 

“The QRC congratulates Santos GLNG and Minister Lynham, who continues to lead a proactive approach to the development of gas in this state. We only hope that the other states follow Queensland’s lead and open gas reserves to help fix the energy crisis households and businesses, especially manufacturers, along the eastern seaboard are facing.” 

The first year of funding for the new $750 million Roma East project would create up to 400 construction jobs and add nearly 50PJ of supply a year in 2020, along with significant flow-on benefits to local small and medium businesses. 

QRC’s data shows that in 2016-17, Queensland’s gas industry contributed $8.9 billion to the state’s economy and supported almost 43,000 full-time Queensland jobs. 

www.qrc.org.au

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