Business begs for fewer taxes
Industry groups have demanded that the federal and state governments reduce the number and complexity of the tax system.
A survey by PriceWaterhouseCoopers found that companies face up to 56 different taxes. They also found that the businesses paid $101 million in compliance costs to collect almost $65 billion in taxes.
A similar study in the UK found only 22 business taxes.
End to pay confusion in sight
Employer groups have welcomed Opposition Leader Kevin Rudd’s promise that a Labor government would end widespread confusion in the business community by ensuring updated pay scale information is published each year.
Many SMEs were left struggling to determine how much to pay employees after the Australian Fair Pay Commission decided not to publish updated pay scale information as part of its minimum wage review in November 2006.
Labor’s promise follows an outcry from business groups, many of whom have had to devote significant resources to calculating the thousands of pay scales that apply across the country.
VECCI Workplace Relations legal adviser Peter Vitale says any move to provide better pay scale information will be welcomed by employers. “We certainly found the necessity to calculate all those hundreds of wage rates was problematic and a cause of significant inconvenience to our members,” he says.
Business groups have already called on the Australian Fair Pay Commission to publish pay scale information when it makes its next minimum wage review decision in mid-2007.
The Australian Industry Group’s national industrial relations director, Stephen Smith, says he hopes the commission takes the business groups’ submissions into account.
“The submissions we made this time are very strong and include examples of the confusion caused and witness statements setting out the problems they’ve had,” he says.
Smith says a lack of resources is no excuse. “If there is a resource problem then the Government should provide the resources,” he says.
– Mike Preston
More money soon for start-ups
New ventures that specialise in clean technologies could be winners from the latest attempts by the Federal Government to get fund managers to invest in risky start-ups.
Four venture capital funds have been short listed from 21 contestants in the third round of the Federal Government’s Innovation Investment Fund (IIF). Two specialise in clean technologies/energy companies. The $200 million program, which aims to encourage fund managers to invest in very early stage ventures, grants a licence and funding to two new managers each year for five years.
The two winners, which will be backed by $420 million of government funding, will be announced in May. The four funds in the running are:
- Jagen’s Prescient Ventures, associated with the Liberman family, focuses on information and communication technology and clean energy companies.
- Cleantech Australia Fund, commercialises clean technologies, particularly water treatment.)
- Accede Capital, focuses on internet and communications
- Brandon Biosciences Fund No 1, invests in life sciences
– Amanda Gome
Ouch… we need budget relief!
Higher interest rates, petrol prices and inflationary pressures are biting with businesses looking to the federal budget for some release.
Almost a third of businesses have been negatively affected by interest rate hikes – up from 22% in February, according to the latest Dun & Bradstreet Business Expectations Survey.
Inflationary pressures are also expected to continue. About 62% of business executives expect selling prices to be higher in the June quarter than in the corresponding quarter in 2006. A quarter of businesses are expecting an increase in profits as compared to the 2006 June quarter.
And on the wish list for next month’s federal budget is a reduction in company taxes (52%), measures to stimulate business investment (10%), initiatives to assist business export growth (9%) and a reduction in personal income tax rates (8%).
– Amanda Gome
Private equity: the cost to SMEs
Massive debt leveraging and overseas profit transfers by private equity giants could be a big drain on public coffers, leaving business based in Australia – largely SMEs – to prop up government treasuries and foot the bill for much-needed infrastructure.
The surge in private equity investment at the top end of town could deprive the Federal Government of up to $2 billion in tax revenue, the Australian Financial Review reports today.
Ports, roads and rail do not come cheap, and while the top 200 companies – the main focus of private equity investors – are big users of this infrastructure, their ability to minimise their tax obligations means the burden of paying for them could fall increasingly on the shoulders of SMEs.
– Mike Preston
Still no SME stats
Unbelievable. While other countries have researchers, governments and universities poring over every small business to discover trends and opportunities, Australia has a dearth of research into this hugely important sector of the economy.
Now SmartCompany has learnt that yet again, the Characteristics of Small Business report published by Australian Bureau of Statistics every two years, has been delayed. This survey was due out last year, then in February, then delayed until April.
Now the good folk from the ABS tell us it is coming out on June 20. Worse, the figures are based on 2005 data so they will not be very current, warns a bureaucrat. You can say that again!
The Federal Government is also refusing to release its major Australian venture capital industry review, infuriating industry pundits. The review, headed by Pooled Development Fund Registration Board chairman Brian Watson, and looking at the state of venture capital in Australia, was expected to be released last year.
– Amanda Gome
Solomon Lew’s $1.14 billion spending spree
Attention has turned to what Solomon Lew will do with the proceeds sale of his 5.9% stake in Coles that fetched $1.14 billion.
There is speculation that the experienced ragtrader will invest in some underperforming retailers. He has shares in Housewares International, Just Group and is believed to be building a stake in Australian Pharmaceutical Industries, according to the Australian Financial Review.
API, which owns the franchised Priceline, Price Attack and House chains, has had a bad run. It revealed a $17.2 million black hole in its accounts in 2006 and two profit downgrades.
– Jacqui Walker
Rising electricity prices
Businesses are expected to have to pay millions of dollars in increased electricity prices because of rising demand and short supplies. Electricity retailers and big users are paying the price the pressure the drought has placed on hydro and thermal power plants, as well as seasonal maintenance of generators and strong demand.
Off-peak prices in NSW more than doubled and Victoria’s peak prices rose nearly 90% during the past week, compared to the same period last year. Queensland prices rose 50% and South Australian prices rose 20%, reports the Australian Financial Review.
– Jacqui Walker
Vista upgrade doubts
Everyone knows about Microsoft’s new product Vista. But is it selling?
A poll of 2223 US online adults conducted by market research firm Harris Interactive found that although awareness of Vista has risen, customers are not buying into the pitch.
The poll shows that those intending to upgrade fell from 20% on December, to 12% in March. The problem could be that consumers are reluctant to keep buying new releases, with some preferring to wait until service packs have been released to fix real or perceived problems, ITWire reports.
Record-keeping resentment grows
Almost 40% of Australian SMEs are still unclear about their obligations under the amended Workchoices record-keeping requirements, and are concerned about the HR implications, a survey by Drake International has found.
Under the new requirements, effective from March 27, employers are required to record the number of overtime hours for employees that have a specific overtime entitlement in their employment agreement.
They also have to keep records of hours worked for casual or part-time employees. The survey of 300 SMEs (ranging from three to 500 employees) found 57% believed the new record keeping rules will have a negative impact on their business.
One issue is that employees may have negative connotations about record-keeping, such as clock-watching and workplace surveillance.
- 62% cite overall staff morale as a concern
- 55% were worried about the potential negative impact on company culture
- 52% were concerned about the possible effect on workplace productivity.
ANZ job ads data released today suggests wage pressures look set to continue, with the number of jobs advertised online and in print increasing 1.9% in March 2007, up 24.7% on this time last year.
Retail sales for 2007 should increase by a strong 5.5% in 2007 and 6% in 2008, according to ANZ’s 2007 retail outlook.
The food and recreational goods sector will lead the way, ANZ says, with nominal growth of 6.6% and 6.8%, respectively. Department stores are predicted to experience the slowest growth of 4.3%.
The NAB business survey for March shows a troubling combination of rising wages and slightly weaker business conditions. According to the NAB survey, released today, trading conditions remained steady and profits fell in March, while wages rose 1.3%. Business confidence was also down on February’s high levels.
In the US, 180,000 new jobs in March pushed the unemployment rate down from 4.5% to 4.4%.
And the ASX/S&P 200 is up 0.7% to 6118.3 at 11.50 am today, while the Australian dollar has pushed back above the US82¢ mark to be US82.22¢ at 11.50am, up from its most recent US81.59¢ close.
– Mike Preston