Business News Releases

Access to finance a problem for small business - ASBFEO

THE Australian Small Business and Family Enterprise Ombudsman (ASBFEO) has welcomed government moves to reduce regulatory barriers to entry for new entrants to the banking system.

Treasury is consulting on proposed changes to the Banking Act, which would allow use of the word “bank” by authorised deposit-taking institutions.

Ombudsman Kate Carnell said this should improve access to finance for small business.

“The power and control of the established banks remains a barrier for small businesses seeking capital to start or expand their operations,” Ms Carnell said.

“Another barrier is a general requirement by the major banks for bricks-and-mortar security.

“Unless a small business is able to meet this requirement, often by using a business owner’s home as security, they have few options to obtain finance.

“Many young people do not own a home or have limited equity in their home, and therefore struggle to borrow to start or expand a business.”

Ms Carnell said removing restrictions on use of the term “bank” should enable more industry participants to compete with established institutions and make it easier for small business operators to borrow funds.

She noted the Australian Prudential Regulatory Authority’s guidelines currently require “banks” to hold at least $50 million in Tier 1 capital.

“APRA will need to review its guidelines for minimum capital requirements if new entrants are to compete equally with the major banks,” Ms Carnell said.

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ARA calls on the Productivity Commission to widen the net for GST

THE Australian Retailers Association (ARA) has put forward a submission to the Productivity Commission (PC) inquiry into Collection Models for GST on Low Value Imported Goods.

The submission supports the preferred Vendor Collection Model along with additional measures which could become more effective collection models over time.

The PC is tasked with investigating the best model for collecting GST on tangible offshore purchases under $1000 AUD. The changes to GST are set to come into effect from 1 July 2018, ensuring fairness for Australian retailers.

Currently, the PC supports a Vendor Collection Model where the overseas retailer collects the GST at the time of purchase. The ARA supports this as a first step and is calling on the PC to also consider additional models to ensure greater efficiency.

ARA Executive Director Russell Zimmerman said the GST changes were important for levelling the playing field for Australian retailers.

“This is about fairness for Australian retailers who are facing tough trading conditions, especially with overseas competitors going untaxed up to now,” Mr Zimmerman said.

“We support the Vendor Collection Model, but we also believe it is important to look at other models to increase the efficiency of GST collection.”

The submission calls on the PC to consider allowing GST to be collected by post and transport companies as international agreements become effective. This in combination with the Vendor Collection Model would achieve close to 100 per cent compliance over time.

“Retailers are looking forward to these changes being implemented from July 1 next year, but concerns remain about the effectiveness the amount of tax collected,” Mr Zimmerman said.

“Changes in technology over the next few years will allow post and transport companies to also collect the GST from overseas purchases. These transporters should be responsible for tax and excise on the items they are transporting.”

“We see this as a very effective way to level the playing field for Australian retailers.”

To view the ARA’s submission to the Productivity Commission Inquiry on Collection Models for GST on Low Value Imported Goods, please click here.

About the Australian Retailers Association:

Founded in 1903, the Australian Retailers Association (ARA) is the retail industry’s peak representative body representing Australia’s $310 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 7,500 independent and national retail members throughout Australia. For more information, visit www.retail.org.au or call 1300 368 

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Dodgy labour practices in Lockyer Valley targeted in multi‑agency operation

THE Fair Work Ombudsman has joined forces with Queensland Workplace Health and Safety and the Queensland Police to lead a multi-agency compliance operation targeting worker exploitation in the Lockyer Valley.

The operation began following a tip-off from within the farming industry.

The allegations included potential underpayment of wages; workers being provided unsafe and very poor accommodation, unsafe drinking water and unregistered transport; and workers being charged job find fees. 

In response, a 12-person team of Fair Work inspectors, Work Health and Safety inspectors and police conducted unannounced visits to four vegetable farms over two days.

Fair Work inspectors are auditing the farms’ employment records for July and August 2017 to check compliance with the Fair Work Act 2009 and Horticulture Award 2010.

As a result of the operation, the Fair Work Ombudsman has commenced a number of investigations into potential breaches by several contractors.

Issues outside the Fair Work Ombudsman’s jurisdiction are being dealt with by the relevant regulators.

Fair Work Ombudsman Natalie James said it was encouraging to see businesses taking a proactive interest in ensuring compliance within the horticulture sector.

“The fact that the industry itself is willing to bring forward allegations of suspected non-compliance is a positive sign,” Ms James said.

“Over a number of years my agency has undertaken activities aimed at shining a light on the dodgy labour practices and it is pleasing to see the industry take steps to stamp out these insidious practices.

“It is blatantly unfair for workers and it is unfair for responsible operators that are doing the right thing to have to compete with those who base their business models on unlawful activities. 

“We are pleased to work alongside Queensland Workplace Health and Safety and the Queensland police in this operation to tackle the serious issues in this sector.

“It sends a strong message to crooked operators that we are on the case and will use our powers to enforce the law and disrupt their unlawful activities.”

Known as Queensland’s salad bowl, the Lockyer Valley is a principal horticulture growing area in Australia.

The Fair Work Ombudsman’s Harvest Trail Inquiry, due to report its findings this year, is focusing on the horticulture and viticulture sectors nationally in response to ongoing requests for assistance from employees in the sector, persistent underpayments and confusion among growers and labour hire contractors about their workplace obligations.

Ms James says while employers must comply with their workplace obligations, it was important for workers to understand their workplace rights and know where to go to seek help.

“I strongly encourage all workers engaged in the sector to check out the Fair Work Ombudsman’s top tips for backpackers, seasonal workers and growers online,” Ms James said.

Employers and employees seeking assistance can visit www.fairwork.gov.au or call the Fair Work Infoline on 13 13 94. An interpreter service is available on 13 14 50. 

The Fair Work Ombudsman’s ‘Record My Hours’ smartphone app is aimed at tackling the persistent problem of underpayment of vulnerable young workers by using geofencing technology to provide workers with a record of the time they spend at their workplace. The app can be downloaded from the App Store and Google Play.

Overseas workers can now anonymously report workplace issues in their own language following the launch of the Fair Work Ombudsman’s Anonymous Report function in 16 languages other than English.

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ASIC small business strategy welcomed: IPA

THE Institute of Public Accountants (IPA) has welcomed the corporate regulator’s small business strategy 2017-20.

“It is very pleasing that ASIC is placing due attention on small business through its small business strategy with the focus on "assist, engage, protect," said IPA chief executive officer, Andrew Conway.

“In particular, we support and encourage the effort to engage by promoting and supporting greater financial capability of small business owners. 

“During our Small Business White Paper roadshow across Australia, the need for greater financial literacy by small business owners has emerged as a constant theme. 

“The IPA also encourages assisting small business by promoting an understanding of compliance obligations. 

“Small business cannot always do this alone and we encourage small business owners to consider using public accountants and other advisers to assist in meeting their compliance obligations. 

“We also support ASIC's actions as a regulator to protect small business through its activities to level the playing field by investigating and taking action against those who are not doing the right thing. 

“As a promoter and key advocate of small business, the IPA believes that we all have a part to play in building and strengthening the small business sector, said Mr Conway. 

The IPA is currently developing the second edition of the Small Business White Paper which puts forward recommendations to boost small business productivity and prosperity.

publicaccountants.org.au

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Adani announces construction date

THE Queensland Resources Council (QRC) has welcomed the announcement by Adani Chairman Gautam Adani to start construction on the company’s Carmichael coal mine in central Queensland in October.

Queensland Resources Council, Chief Executive, Ian Macfarlane said: "The decision comes at a time when parts of regional Queensland are experiencing high levels of unemployment and I congratulate Adani on its ongoing commitment to source contracts locally and the company’s leading diversity targets for indigenous employment and participation.

"Adani have had a clear objective on working with local suppliers to maximise the opportunities for regional Queensland right from day one.

"The first phase of construction will be the Carmichael mine camp with a first coal shipment target of March 2020. Once operational, the Galilee Basin mine will generate $185 million in royalties per annum, which at today’s coal prices would pay for 2,900 extra nurses or 3,350 extra police officers or 3,400 extra teachers.

"In addition, this mine will provide a reliable, high-energy, low-emission fuel and deliver electricity to some of the 300 million Indians without power."

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ATO checking that cash adds up in Sunnybank

CAFES, shops and salons in the Sunnybank area of Brisbane can expect a visit from the Australian Taxation Office (ATO) in September as part of efforts to tackle the cash economy.

Assistant Commissioner Tom Wheeler said that while most small businesses now take electronic payments, accepting cash is still common.

“When businesses advertise as ‘cash-only’, it raises a red flag about whether those businesses are accurately reporting all their income, and meeting their obligations as an employer,” Mr Wheeler said.

“Over the next 12 months, ATO staff will be visiting businesses across the country. We are focusing on businesses that typically have high cash transactions or only take cash, such as restaurants, cafes, pubs, hairdressers, beauty salons and home-based businesses, along with other local retailers.”  

Mr Wheeler said that after the visits the ATO will assess if some businesses need assistance in understanding and meeting their obligations.

“These visits are an extension of our ongoing focus on protecting honest businesses and supporting those that need extra help to get their tax right,” Mr Wheeler said.   

“If a business is behind in their lodgments or their record keeping isn’t quite up to scratch, we will give them some support to get back on track. Other businesses may be investigated because we’re concerned they’re deliberately doing the wrong thing.”

Mr Wheeler said the ATO is reminding taxpayers that running a cash-only business doesn’t mean they’re invisible to the ATO.

“We receive data on businesses that take electronic payments, so we can identify those that don’t. This means we can investigate further to make sure they are meeting their tax and super obligations,” Mr Wheeler said.

“In 2015–2016 the ATO raised over $208 million in tax and penalties from its cash and hidden economy compliance activities.”

“We urge all businesses to report all their income and meet all their obligations as an employer. Our increased use of data and analytics mean that sooner or later, we will catch up with those businesses seeking to avoid their obligations. The cash economy just doesn’t pay.”

For more information, visit ato.gov.au/protectinghonestbusiness

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The key to liveability - committee meets

VICTORIA’s population growth leads the country, with Melbourne having a population of 4.5 million in a total of 6 million. The key to liveability in the face of such rapid growth is better connectivity and environmental and social sustainability.

With this in mind, the Committee on Infrastructure, Transport and Cities will visit Melbourne as part of its inquiry into the Australian Government’s role in the development of cities. The Committee will inspect a number of environmentally and socially sustainable developments and speak to industry experts, businesses and academics about how population increases can be accommodated without impacting liveability.

Committee Chair, John Alexander OAM MP, said the inquiry has a dual focus on enhancing and adapting existing capital and regional cities, as well as investigating the possible benefits of developing new regional centres.

“We are looking at how we can rebalance our population between major cities and regional areas,” said Mr Alexander.

“This may involve improving the infrastructure and connectivity of existing regional centres to entice people away from capital cities like Melbourne. Or it may be that developing brand new regional centres offers greater opportunity to accommodate a larger Australia in a sustainable manner.

“We’re examining opportunities for the Commonwealth Government to provide leadership in this area.”

Professor Peter Newton of Swinburne University suggested that population decentralisation is unlikely to succeed without better linkages between capital cities and regional centres.

“Traditional 20th century policies focussed on attempts to create new basic industries or relocate federal or state government offices will not succeed,” he submitted.

“Twenty-first century agglomeration economies favour large cities and will continue to do so until provincial cities become part of a functional mega-metropolitan region centres on a major capital city…”

Public hearing details: 9.00 am – 3.10 pm, Tuesday 29 August 2017, Room G3, Parliamentary Annex, Parliament of Victoria

9.00 am– 9.40 am: SGS Economics and Planning
9.40 am – 10.20 am: Centre for Urban Research RMIT
10.40 am – 11.10 am: Professor Peter Newton
11.10 am – 11.50 am: National Transport Commission
11.50 am – 12.30 pm: National Growth Areas Alliance
1.20 pm – 1.50 pm: Associate Professor Hussein Dia
1.50 pm – 2.30 pm: University of Melbourne
2.30 pm – 3.10 pm: City of Melbourne
3.10: Close

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

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

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City of Melbourne incubates global start-ups

MELBOURNE-BASED start-ups are being given the chance to share in $80 million in financial support and connect their ideas with the world, after the opening of a new incubation space in the CBD.

The City of Melbourne has partnered with the Jiangsu-Suzhou Science and Technology Town, RMIT University, the University of Melbourne, Victorian Government and Australia China Association of Scientists and Entrepreneurs (ACASE) to open the Jiangsu-Victoria Innovation Centre at 51 Queen Street.

The Innovation Centre, run by ACASE, will provide Melbourne based startups with access to coaching, market information and entrepreneurial guidance, linking their ideas with universities, research institutes and the Chinese based Suzhou accelerator space to expand their reach into Asia.

Suzhou High-Tech Venture Capital Group is providing up to $80 million in financial support to run the centre, facilitate access to angel investment and fund project development over three years.

Acting Lord Mayor Arron Wood said the centre is the first of its kind in Melbourne and will feed into our booming startup sector.

“This Jiangsu-Victoria Innovation Centre will nurture the next generation of innovators and entrepreneurs to go on to great things,” Cr Wood said.

“The incubation space will provide expert business development guidance and the potential to export ideas to the world.

“Melbourne is now home to 170 co-working spaces, which is one measure of a healthy startup community. The recent launch of our Startup Action Plan shows we're serious about playing our role. Add to this the Jiangsu-Victoria Innovation Centre and it makes for exciting times for new and innovative businesses and business models.”

Chair of the City of Melbourne’s Prosperous City portfolio Councillor Kevin Louey said Council’s vital contacts in China helped get the Innovation Centre off the ground.

“For many years the City of Melbourne has worked tirelessly to help connect our businesses to the largest economy in the world,” Cr Louey said.

“This Innovation Centre is the culmination of many months of work between the Suzhou-Jiangsu governments, the City of Melbourne, ACASE, and two of Australia’s biggest universities in RMIT and University of Melbourne.”

The first cohort of startups to occupy the space will be selected from the ACASE Sunan Cup competition winners earlier this year.

The startups range from “intelligent clothing” to smart electronic stethoscopes, smart alarms and third-party brain MRI imaging.

Victorian innovation minister Philip Dalidakis said the announcement was another positive step for Victoria as the state continues to develop as Australia’s technology hub.

“We’re already seeing plenty of brilliant startups emerge in our state and I have no doubt that this centre will help more startups turn bright ideas into thriving businesses.”

www.melbourne.vic.gov.au

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Banks challenged to become ethical leaders

THE Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, has challenged banks to become leaders in ethical business practice.

Speaking at the National Small Business Summit in Melbourne, Ms Carnell said trust in banks had been eroded and must be restored.

In her speech, Ms Carnell also:

  • Welcomed the big-four banks’ commitment to eliminate unfair terms from small business contracts; and
  • Encouraged the growth of alternative lending to improve access to capital.

Corporate regulator ASIC confirmed this week that banks have agreed to implement fairer contracts for small business customers that include important protections.

Banks will no longer be able to unilaterally vary contracts, and unfair clauses such as the banks’ power to default or terminate a loan for an unspecified negative change in circumstances, have been removed.

Ms Carnell said compliance with unfair contract terms legislation and improvements to the banking code of practice had been key recommendations from her 2016 small business loans inquiry.

“Banks can no longer use their market power and their hundreds of lawyers to move all risk to the small business borrower,” she said.

“A fair contract is one where risk is shared and it is clear who bears what risk, and neither party has the power to change that balance unilaterally.

“Historically the banks have required small businesses to sign contracts that have given them the power to change the fundamentals of contracts, interest rates, the amount lent and repayment times, without the agreement of the other party.

“The agreement that ASIC and ASBFEO have reached with the big four banks has changed that.”

Ms Carnell called on the major banks to demonstrate industry leadership in embracing best practice.

“Hopefully this will set the tone for the rest of the financial services sector and their support to small business,” she said.

Ms Carnell repeated her call for the contract safeguards to apply to small business total loan facilities up to $5 million. The legislation requires compliance up to $1 million and the big four banks have agreed to $3 million.

“We’ll be talking to the government, opposition, crossbench MPs and the banks about raising the threshold to $5 million, which is appropriate for capital intensive small businesses and family enterprises such as farms,” she said.

Ms Carnell also endorsed efforts to increase competition in the financial services sector.

“Peter Costello was right when he said on the weekend that access to capital is too restrictive for business and that Australian bank business lending is negligible,” she said.

“Banks are geared towards residential property, which inflates the housing market at the cost of stifling small business investment

“Unless a small business has adequate property as security they have very limited access to finance through traditional banks.

“On a positive note, the alternative finance sector is growing and the government has indicated it wants to reduce barriers to entry.”

 

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Local businesses approved for submarine supply chain

TODAY the Turnbull Government and Naval Group Australia confirmed that 126 local businesses to date have been pre-qualified as eligible to take part in the supply chain for the $50 billion Future Submarine Program.

Over the last 12 months, these businesses have been thoroughly assessed and deemed as capable of delivering the quality products, parts or services needed to deliver this vital project.

Minister for Defence Industry, Christopher Pyne MP, said that this clearly shows the Government is setting a cracking pace in ensuring maximum Australian industry involvement, generating jobs and driving economic growth across the country in this flagship program.

“These Australian businesses that have passed the rigorous screening process are now able to bid for Future Submarine tenders for parts such as batteries, motors, pumps and many others as they are announced,” Mr Pyne said.   

“The Future Submarine program will create 2800 jobs, but also many more thousands in the supply chain across the country in businesses such as these.

“This is just the beginning for Australian businesses becoming eligible to take part in this and our other naval shipbuilding projects.

“The Government fully expects many hundreds of Australians businesses to be part of the supply chain of our locally built Future Submarines, Future Frigates, Offshore Patrol Vessels and Pacific Patrol Boats,” he said.   

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The AusMumpreneur Conference and Awards is underway in Sydney

SYDNEY - Yesterday, 160 women in small business attended the first day of the AusMumpreneur Conference at Sydney’s State Library.

The two-day workshop and conference finishes this afternoon and is followed by the AusMumpreneur Awards which will take place tonight at Doltone House, Sydney. More than 660 000 Australian small business owners are women and over 330,000 are mothers in small business.

Peace Mitchell said, “We are so excited for the awards tonight! It’s our biggest awards ever with over $200 000 in prizes and 275 people from all over Australia going to attend. It’s going to be spectacular.”
 
Yesterday, mumpreneurs attended workshops with Catherine Langman from Productpreneur Marketing, Louise Marshall from Reckon, Karen McDermott from Serenity Press, Candice Meisels, a PR expert specialising in start-ups and affordable PR, Helen Butler, a professional organiser and Katrina McCarter from Marketing to Mums.

While the workshops were running, finalists met with judges for a series of interviews which will determine the winners of the prestige AusMumpreneur Awards.

On Thursday afternoon, each AusMumpreneur of the Year finalist presented to the audience and judges. Each finalist then had to answer questions from the judges and the audience.

Today, delegates will listen to:

Amy Taylor-Kabbaz from Happy Mama, Karen Gee, Jacinta McDonnell, Urban Yoga and The Human Kind Project, Emeli Paulo, Collective Potential, Rhian Allen, Healthy Mummy, Monique Filer, b.box, Mrinalini Chakrabarty, Google and Peace Mitchell and Katy Garner, the co-founders of the AusMumpreneur Network.
 
Some interesting statistics:
 
The AusMumpreneur Network is the number one network for Mums in Business across Australia, according to the Federal Productivity Report 2015.
 
There are currently 660 000 women in business in Australia. 330 000 are mumpreneurs.

 
Start Up Smarter Report 2016

About 70 percent of startup founders are aged between 30-40 and the number of female founders are on the rise predicted to increase to 31 percent of founders in 2017 from just 16 percent in 2014. 

https://www.ausmumpreneur.com/


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