AUSBuy backs Hockey on Graincorp decision

COMMENT by AUSBuy CEO Lynne Wilkinson

IT HAS BEEN a revelation to see the vitriol heaped on Mr Hockey’s decision to stop the sale of Graincorp to ADM (USA), because it has shown that many “observers” in the media have failed to see the exquisite subtlety of the decision and the limitations of their fixed views.

There is little doubt that the Abbott Government has inherited a mess, much of which has been exacerbated since 2007.

Only policies which meet Australia’s “national interest” will get Australian assets and our people working for Australia again, revitalise our economy, and reduce our debt so we can take advantage of the opportunities the Asian century is supposed to promise.

We can only hope that the “intent” of this decision is replicated as we see off-shore bidding for other strategic assets in the food sector.

If ADM owned the assets, then there is no guarantee the farmers would be able to access or use the infrastructure for any other buyer other than ADM.

The majority of our grain exports are still controlled by foreign interests beyond the farm gate. Graincorp and CBH (WA) represent less than 50% of our grain exports. Hardly a duopoly!

Foreign owned Glencore, Dreyfus, among others own our grain exports, and the family owned US company Cargill owns many of our beef and grain exports.

Cargill has not reinvested in grain infrastructure. They use existing infrastructure. So much for successive Governments’ waivers to foreign take over that they will build infrastructure and invest here.

The problem is further exacerbated by our tax laws which favour foreign interests with only 10% withholding tax on declared profits, after they have been siphoned off shore.

Mr Hockey may have found some unexpected “reds” in the bank accounts, and these are just some of the issues which rob is of reinvestment here. Food for thought in the commission of audit.

Mr Hockey has effectively told the Graincorp board to do better than they have done and reinvest in the business.

As they say “if you can’t change the people you change the people”. It seems it is all too easy for Boards to think short term, especially when there is no shortage of keen buyers.

Graincorp was once owned by the farmers. It is now owned largely by institutions who will still look for quick returns to their shareholders, but it also means Australian can invest in the company for the long term if it is controlled here.

The problem is when Australian exports are sold by foreign interests we are no longer control our reputation or the supply chain. Our products are not differentiated in the market place. Our farmers become price takers, not price makers.

It is human nature, supported by their policies, that other countries give priority to their own. This does not make sense in a world hungry to secure its food.

Generations of our farmers have built Australia’s reputation as among the best in the world for quality and productivity, decades of falling income and rising debt has been ignored.

Now Mr Hockey has given the east coast grain growers the assurance that they have some control over their future.

There are lessons to be learned from this. Governments keep talking about Australian businesses being productive and competitive, yet Australia has a handful of businesses competing with countries that have dozens if not hundreds of businesses in particular sectors, and who subsidise their growers.

In the meantime our processors and manufacturers languish, or if foreign owned here have a habit of threatening to leave or do move off shore to source elsewhere and sell back to us.

He has also defined his Party’s “open for business” policy by saying to ADM you can buy up to 24.9%, but cannot control the assets, the profits, decisions.

This new kind of “open for business” means we are not desperate sellers and deal with us on our terms. Just as every other country does that controls and grows it wealth creating assets.

We do hope Mr Robb is listening as he is rushing to sign Free Trade Agreements with China, Japan and Korea – all controlled economies that have bought assets here in the supply chain and now our land.

Perhaps finally we are going to think strategically, identify our sustainable competitive advantages and benefit from assets that are grown and produced in Australia.

Get Australians and our assets working for Australia again. We welcome foreign investment not takeover.

This has been AUSBUY’s position since 1991.

www.ausbuy.com.au

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Cape York plan is focus - QRC

THE PEAK representative body for minerals and energy developers in Queensland has reiterated its commitment to working with the state government for a balanced and productive regional land use plan for Cape York.

Queensland Resources Council Chief Executive Michael Roche said the government’s declaration to ban open cut mining across the entirety of the Steve Irwin Wildlife Reserve was an unexpected blow to QRC member Cape Alumina, the company’s shareholders and to the confidence of the broader junior resources community.

"However, we must respect the government of the day’s right to make decisions in what they consider to be the state’s interests," he said. "The issue now is where to next – and that’s clearly the draft regional plan for Cape York on which the state government is inviting comment until 25 March next year.

"The resources sector has not strayed from its commitment to working with the state government to deliver the best possible outcomes for Cape York, Far North communities and for the environment.

"Open slather mining is not one of the options on the table and nor should it be.

"Mining has played a positive role in the Cape’s history and can play a similar role in its future with a regional plan that recognises and complements the region’s environmental, agricultural and resources strengths.

"‘Weipa’s celebration this week of 50 years’ continuous bauxite mining is tangible evidence of what that one operation has delivered especially in terms of employment and economic opportunity to local indigenous communities.

"‘The state government is offering Queenslanders a once in a lifetime opportunity to plan for the future of Cape York – a land mass bigger than England. It’s therefore essential that we get it right from the start."

Mr Roche said the state government has been at pains to point out that the plan is a draft and that they are open to hearing persuasive arguments for revisions.

"Over coming weeks the QRC and its member companies will bring to the table the rigorous science and evidence needed to demonstrate that projects currently facing some uncertainty under the draft plan can be delivered without detriment to the environmental values of the Cape," he said.

"Queensland has an extremely comprehensive set of requirements relating to the environmental assessment and management of mining, and these should be fully utilised to assess the merits of proposed resource projects.

"Industry working constructively with government is the surest route to delivering certainty for investors and shareholders and large numbers of well paid jobs in the Cape, especially for indigenous communities experiencing horrendous unemployment levels," he said.

http://www.qrc.org.auends

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Retailers call on credit card companies to put a stop to rising interest rates

PEAK retail industry body the Australian Retailers Association (ARA) said despite the Reserve Bank of Australia (RBA) leaving the cash rate unchanged since August, credit card companies have been hiking up rates on their cards – leaving both retailers and consumers struggling to make the most of the festive season.

ARA Executive Director Russell Zimmerman said according to data from the RBA, the average interest rate on a standard credit card went up five basis points to 19.6 percent in November, and the average interest rate on a low-rate card went up 10 basis points to 13.05 percent in October.

“A number of banks have increased the rate on their credit cards by up to 100 basis points, and in one case up to 225 basis points.

“With Christmas just around the corner, shoppers are spending more than usual but we also know that people are trying to save as much as possible too. According to the Australian Bureau of Statistics, household saving is now at the second highest level since the global financial crisis erupted in 2008.

“While the ARA is pleased to see household saving on the rise, we also encourage consumers to increase their discretionary spending in Australian stores and support their local retail sector. With interest rates lower than they have been for some time, now is the time for credit card companies to provide some breathing room for consumers and retailers alike,” Mr Zimmerman said.

Since 1903, the Australian Retailers Association (ARA) has been the peak industry body representing Australia’s $258 billion retail sector, which employs over 1.2 million people. The ARA ensures retail success by informing, protecting, advocating, educating and saving money for its 5,000 independent and national retail members throughout Australia.

Visit www.retail.org.au

or call 1300 368 041.

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Victorian business welcomes Victoria's first Aboriginal Economic Strategy

VECCI congratulates the Victorian Government on the launch today of Victoria’s first Aboriginal Economic Strategy.

“It is important that this strategy provides a framework to support the future growth and development of Victoria’s Aboriginal businesses,” says VECCI Chief Executive Mark Stone.

“The effective linking of education, employment opportunities, business enterprise development and investment will be vital to ensuring Victoria’s Aboriginal-owned businesses reach their full potential.”

VECCI provides strong support for Victoria’s Aboriginal business community through its Aboriginal Business Advisor Program (ABAP), which is supported by the Victorian Government.

The ABAP provides a range of mobile and tailored support for operators or those wanting to start an Aboriginal-owned business in Victoria, including business and personal coaching, business tools and information, and networking workshops and opportunities.

Further information about the program can be found at www.vecci.org.au/abap 

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Japan-direct flights a great outcome for Victorian economy

VICTORIA's peak employer body has welcomed Melbourne Airport’s announcement of a direct flight service between Melbourne and Tokyo by Jetstar, because of the significant economic impact it will bring to the state.

“This decision by Jetstar shows great confidence in Victoria as a travel destination for the international market, which is a win for tourism and business in our state,” says VECCI Chief Executive Mark Stone.

“Strong avenues for travel with Japan are more important than ever during the Asian Century and we congratulate Melbourne Airport on working with Jetstar to secure this for the Victorian economy.

“The Japanese market could be worth up to $3.3 billion to Australia's economy by 2020 and this announcement is crucial to establishing Victoria in a prime-position to reap the benefits of this. Melbourne Airport is the gateway to Victoria for 30 million international and domestic visitors annually."

In the year ending June 2013, 40,000 visitors arrived in Victoria from Japan, which is a four per cent increase on the previous period. This increase contrasts the nation-wide trend that saw a two per cent decline for the same period.

The direct flights will commence April 2014.

The Victorian Employers' Chamber of Commerce and Industry (VECCI) is the peak body for employers in Victoria, informing and servicing more than 15,000 members, customers and clients around the state.

www.vecci.org.au 

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Retailers well on their way to achieving $42.2 billion in pre-Christmas sales

PEAK retail industry body the Australian Retailers Association (ARA) said retailers are working around the clock to make the most of the festive season – with $42.2 billion in pre-Christmas sales expected to go through retail tills from 14 November until 25 December, representing a 3.5 percent gain on sales during the same period in 2012 ($40.7 billion).
 
ARA Executive Director Russell Zimmerman said the 3.5 percent growth (based on 2013 Christmas sales predictions prepared by ARA research partner Roy Morgan Research) is a positive sign for the retail sector and an indication that shoppers have well and truly started their Christmas shopping.
 
“Anecdotally, we have had a number of reports from retailers that shoppers have started their Christmas shopping a little earlier this year, rather than leaving it until late December like previous years. Conversations with retailers have also reported large sales on specific popular products, meaning shoppers need to get in early if they want to guarantee their products of choice will still be on the shelves.
 
“Electronics and sporting retailers have especially enjoyed a jump in sales over the last week or two, with sporting and outdoor equipment, gaming consoles, iPads, mobiles and tablets tipped to be the hottest items under Australian Christmas trees this year.
 
“Both the Sony Playstation 4 and Microsoft Xbox One have now been released, and interestingly, shoppers are said to be almost twice as likely to purchase the Sony Playstation 4 over the Microsoft Xbox One.
 
“While we can expect traditional gifts such as perfumes, cosmetics, toys, games, footwear and clothing to continue to fly off the shelves and down the chimney, Australian consumers are looking for something new and exciting to keep them entertained this festive season.
 
“With the biggest online shopping day (Sunday 8 December) now behind us, retailers are looking forward to next week, as the week before Christmas remains the busiest time for pre-Christmas shopping,” Mr Zimmerman said. 
 
View the ARA Christmas infographic HERE for an overview of pre-Christmas sales data
 
Since 1903, the Australian Retailers Association (ARA) has been the peak industry body representing Australia’s $258 billion retail sector, which employs over 1.2 million people. The ARA ensures retail success by informing, protecting, advocating, educating and saving money for its 5,000 independent and national retail members throughout Australia.

Visit www.retail.org.au or call 1300 368 041

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Holden closure highlights need for continuing transformation of Victoria's economy

“THE announcement by Holden that it will cease its Australian manufacturing operations in 2017 is a significant blow for Victoria and in particular the workers and other businesses directly affected," says VECCI Chief Executive Mark Stone.

“While the decision does not come as a surprise, given the intense pressure on the vehicle manufacturing industry from factors such as international competition and changing consumer preferences, its impact will be felt inside and out of Holden. It is imperative that policy makers recognise the importance of supporting the transition of affected workers and businesses into new industries and markets.

“However, Victoria’s economy has already been embarking upon a transformation from traditional to advanced manufacturing and with the growth of other parts of our economy, such as the services sector, the impact of the Holden decision will be at least absorbed in part. Also positive is Holden’s confirmation that a national sales company, a national parts distribution centre and a global design studio will remain, despite the cessation of its manufacturing operations.

“It is fundamental that both Federal and State Governments support business activity that will create ongoing wealth and jobs and focus on relieving the burdens of unnecessary cost and regulation so that business can continue to meet the challenges of the increasingly competitive global economy.”

The Victorian Employers' Chamber of Commerce and Industry (VECCI) is the peak body for employers in Victoria, informing and servicing more than 15,000 members, customers and clients around the state.

www.vecci.org.au

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Coal mine closure sign of times

THE announced closure of the Wilkie Creek thermal coal mine near Dalby is another disappointing turn in the fortunes of the export coal industry, Queensland Resources Council Chief Executive Michael Roche said today.

"The announcement is a sad blow for the region but also indicative of the challenging outlook for the thermal coal industry in particular," he said.

"It’s no secret that a number of mines in Queensland and New South Wales are walking a financial tightrope as a result of subdued global demand, inherently high production costs and a stubbornly high exchange rate.

"At some mines operations are continuing only because it is more expensive to walk away from take or pay contracts for rail and port services.

"Cost cutting is the only the mechanism available to coal companies to ride out the downturn that we estimate has cost more than 8000 positions in Queensland since mid-2012," he said.

www.qrc.org.au

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Latest Victoria funding cuts damage industry and employment

THE latest round of funding cuts to the Victorian Training Guarantee funding model are bad for business and work opportunities for young people, says VECCI.

“Despite the State Government having undertaken to discuss proposals for further changes to the training system with business and industry, it appears that little consultation has taken place,” says VECCI Chief Executive Mark Stone.

Recent announcements abolishing funding support for young people engaged in part-time traineeships or apprenticeships while still at school will have an immediate negative effect on employers who traditionally provide employment and training opportunities for them.

“What seems to have been forgotten is that access to work experience and formal training not only has an immediate positive impact on young workers to the benefit of their employers, but it also provides skills that benefit the community as a whole.

“It goes without saying that the removal of funding support will now seriously undermine this training effort.”

The other major concern is a steep cut to hourly funding rates, with rates for some qualifications reduced by as much as $9 per hour to only $1.50 and many reduced by around $3 per hour.

“These cuts will work against the training effort of industry at a time when Victoria needs more highly skilled workers to remain competitive,” Mr Stone says.

The cuts being introduced will also affect existing trainees and their training providers, both of whom will now have to adjust as existing funding levels will not be maintained. Fortunately, there was some good news in the announcements, with the regional loading for training providers to be increased in line with the recommendation made by VECCI at its recent Victoria Summit.

“The regional loading increase is good news for both employers and individuals as it will help support local delivery,” Mr Stone says.

“The funding increase for concession eligible students is also welcome. However, these positives do not outweigh the funding cuts, which will affect skills shortage areas such as community services, aged care, disability services, the services sector and retail."

VECCI calls on the Government to immediately meet with business stakeholders to discuss and review the announced funding cuts because of their adverse impact on both employers and trainees.

The Victorian Employers' Chamber of Commerce and Industry (VECCI) is the peak body for employers in Victoria, informing and servicing more than 15,000 members, customers and clients around the state.

www.vecci.org.au

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Fee-free freedom: switch and save on bank fees

WHILE over 185,000 banking customers are preparing to take on eight banks for 'unfair' fees, one of Australia’s biggest comparison websites, finder.com.au is urging more Australians to go fee-free and switch financial institutions to find better deals.

The class action lawsuits are against the banks for allegedly charging customers excessive fees between $20 and $45 such as overdraft or over the limit fees.

Michelle Hutchison, spokesperson for finder.com.au, said the class action cases could be a game changer for Australia’s financial services industry.

“These class action lawsuits show the power of what public pressure can really do. Australians have had enough of paying collectively billions of dollars in bank fees and if these cases win, there will likely be a shake-up of all bank fees across the industry.

“In fact, last year, we collectively paid our banks over $11 billion in bank fees – over $4 billion of which was from households.

“But we can’t rely on financial institutions to charge fair fees or drop their fees altogether. The only way we will make real changes to the banking industry is if more Australians compared their financial products and switched. This will force institutions to be more competitive.”

According to finder.com.au, there are 39 credit cards with no annual fees, including two platinum cards and three gold cards.

There are also 105 home loans with no annual service fee, and 101 home loans don’t charge redraw fees.

Many transaction accounts come with no monthly service fees and fee-free transactions.

“It’s up to more Australians to take on the responsibility with their financial products by reviewing their options and comparing deals,” said Mrs Hutchison.

“It will not only force competition between banks but also will save consumers potentially thousands of dollars every year.”

www.finder.com.au

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Retailers suffer while government plays politics on GST issue

Peak retail industry body the Australian Retailers Association (ARA) said retailers were anxious to hear some good news after Federal Treasurer Joe Hockey met with state treasurers today with an agenda to close the GST loophole; however, no such decision has been made.  

ARA Executive Director Russell Zimmerman said it is now up to the government to fix what the previous government couldn't fix.

“The ARA has met with senior State and Federal Government Treasurers over recent weeks on the low value overseas GST collection issue, and we look forward to urgent action following today’s meeting.

“Australian retailers have been competing at a disadvantage for too long, and it is only fair that the closing of the GST loophole is made a priority.

“Retailers will be working alongside the government to ensure this issue is resolved efficiently and effectively. Large overseas online retailers can be directed by the government to collect GST at virtually no cost – this would see around 80 percent of the missing GST collected.

“If a reduction to $20 in the threshold from the current $1000 collection rate was implemented, around $1 billion GST could be collected in the 2014-15 financial year. This revenue could be put into the state governments for schools, police and other community services.

“The ARA will continue to work alongside the government to get this issue resolved once and for all,” Mr Zimmerman said.

Since 1903, the Australian Retailers Association (ARA) has been the peak industry body representing Australia’s $258 billion retail sector, which employs over 1.2 million people. The ARA ensures retail success by informing, protecting, advocating, educating and saving money for its 5,000 independent and national retail members throughout Australia. Visit http://www.retail.org.au/ or call 1300 368 041.

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