Economy

Business vs unions on skilled migrants… Good news from the RBA… Super boom… Small-cap round up… Bank penalty relief… Mind your own business… Franklins to franchise Pick n Pay style…

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Business vs unions on skilled migrants

The fight between business groups and unions over skilled migrant visas is hotting up.

Big contracting and mining companies are complaining that the skilled migrant visa system is slow and clogged with red tape, according to a report today in the Australian Financial Review. They warn that major projects could have been disrupted by a doubling of the time it takes to hire skilled workers under temporary visas, saying there is a four or five month wait.

Immigration Minister Kevin Andrews said yesterday work is being done to streamline the process, but business says it wants changes immediately.

Meanwhile, there are reports today about the poor conditions some foreign workers on s457 visas are being subjected to. At least one union is calling for a full, independent judicial inquiry to look into 457 visa scheme after revelations three foreign workers died.

Some employers are reportedly breaching the strict conditions of the visas, including putting workers in jobs they are not trained for, ignoring safety standards and deducting accommodation and meal expenses directly from wages.

A university-trained Filipino farm supervisor was thrown off the back of a truck and killed on a Northern Territory cattle station in June. Two days earlier, a Chinese logger died north of Brisbane when a dead tree fell and crushed him. And in March, Filipino stonemason Wilfredo Navales was crushed to death by two slabs of granite at his workplace north of Perth.

The employers that are trying to rort the system with false documents are slowing down the approval process, a department spokesman previously told parliamentary inquiry.

A growing number of employers are turning to the visa scheme for staff to grow. Figures from the Department of Immigration and Citizenship show that the number of visas granted in 2006-07 was up 18% to 46,680 over 2005-06, which itself was up 45% the year before.

In April Andrews promised fast track approvals for companies with a history of compliance. Business is still waiting.

– Jacqui Walker

Good news from the RBA

The credit squeeze is loosening and steps taken to ease upward pressure on interest rates have helped stabilise market conditions, says the Reserve Bank of Australia.

In a speech to a finance conference, deputy governor Ric Battellino says the bank had further scope to provide liquidity but RBA measures should not be perceived as an attempt to ‘bail out’ the market.

The RBA has been injecting money into the market since the sub-prime crisis hit in early August. “In recent days there have been some encouraging signs of improvement in markets, both here and in Australia and overseas,” he says.

– Amanda Gome

Super boom

Cash flooded into super funds in the three months to June at a rate that exceeded all expectations. As much as $20 billion extra went into retail super in the quarter, thanks to the generous new tax benefits, according to a report in the Australian Financial Review. A similar amount probably went into DIY super, according to the report.

Most super payouts to over-60s became tax-free on July 1 and people rushed to top up their funds to beat the introduction of strict annual contribution limits.

– Jacqui Walker

Small-cap round up

RAMS struggles on

RAMS Home Loans Group, struggling with higher funding costs, does not intend to lift interest rates.

The non-bank lender, which has been hit hard by the sub-prime crisis in the US, today reported a 2006-07 net profit of $43.5 million, an increase of 49% on the previous year.

RAMS is trying to refinance its loan book and increase the proportion of its funding from other sources including offering residential mortgage backed securities. RAMS share price has fallen by more than 50% in recent weeks.

– Amanda Gome

Small companies optimistic for 2008

More customers booking business and hotel accommodation online helped boost online hotel booking company Wotif.com’s net profit to $26.4 million, a 60% increase on last year. Revenue also rose by 44% from the year before to $67 million.

The seven year old Wotif claims to have 36% of the market, stealing market share from competitors as well as taking a large slice of an expanding market.

Wotif plans to expand internationally as well as in core markets but faces competition from hotels as they offer online bookings.

Meanwhile, what a great year it has been for salmon, vitamins and furniture.

Salmon producer Tassal Group expects higher growth next year on the back of increased consumption in local markets. Revenue was up from $199 million to $243 million and net profit doubled from $10.5 million to $20 million.

Fantastic Furniture, which expects to open another eight stores in 2008, increased dales by 16% to $273 million with net profit rising slightly to 16.7 million from $14.45 million.

Blackmores, optimistic about growth with the increased use of natural health remedies, also had a jump in revenue from $148.9 million to $172.9 million with profit rising from $14.45 million to $16.7 million.

– Amanda Gome

As for art and horses…

Both are on the nose. The art market is always a good benchmark into Australia’s economic performance. When the spivs are buying up, seasoned entrepreneurs know the market is heading for a fall.

Nearly a third of the 103 paintings offered at Sotheby’s last night were passed in. And it was the third art auction in a row to report low clearance levels, according to the Australian Financial Review.

As for those nags; it seems horse racing has been suspended indefinitely in NSW due to the equine flu, but the Melbourne Cup will go ahead. Victorian Racing club chief executive Dale Monteith says the Melbourne Cup Day, traditionally on the first Tuesday in November, will not be moved. So relief for all those small businesses supplying hats, food and booze to the party goers.

– Amanda Gome

Bank penalty relief

Consumer groups’ actions to tackle bank penalty fees seem to be having an impact with one bank announcing it will change its regime. The ANZ Bank says it will waive the first penalty fee incurred by customers and also committed to not charging more than one fee a day.

The ANZ will also advise customers they can opt out of overdraft penalty fees and over-limit credit card penalty fees. Gordon Reenouf, Choice manager of policy and campaigns, says ANZ customers now have the option to contact their bank and request that their account be prevented from going below a zero dollar balance or above an agreed limit for their credit card.

Choice has been running a campaign to remove unfair charges and reduce fees.

– Amanda Gome

Mind your own business

Australian companies may escape a red tape nightmare, with reports this morning that Australia is unlikely to introduce a compulsory name-and-shame regime to enforce better protection of consumer information.

Federal privacy commissioner Karen Curtis says the shakeup of the privacy provisions will not follow the US, which has compelled corporates and government agencies to publish details of even minor loss or exposure of customer information.

– Amanda Gome

Franklins to franchise Pick ‘n Pay style

Franklins has decided to franchise its supermarkets to compete with Woolworths and Coles.

Franklins will base its franchise model on that of South African parent company Pick ‘n Pay, the Australian Financial Review reports.

In this way, franchisees, with a financial stake in the investment, will be able to give more attention to the customers and they will also have the support of the franchisor.

There are six franchised Franklins stores in Australia, with plans for that to expand to 10 by February. Franklins managing director Aubrey Zelinsky said there are plans to add 10 franchises a year.

Not all stores will be franchised; company-owned stores will be retained to monitor customer trends.

Franklins aims to attract independent market owners to the Franklins brand, to better compete with the larger chains.

While franchise systems usually use royalty or similar payment systems from franchisee and franchisor, Zelinsky says Franklins royalty payments use a sliding scale linked to how much product franchisees source from the head office, so royalties a franchisee pays could be minimised from 2% to almost nothing.

Inside Retail

New head for VECCI

Wayne Kayler-Thomson was yesterday appointed the new chief executive of VECCI and pledged to help businesses with trade promotion and to become sustainable. Kayler-Thomson says VECCI’s role had evolved from being focused on industrial relations and now includes providing information and leadership while continuing to lobby governments to cut ret tape and taxes.

– Amanda Gome

 

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