Economy

Telcos slam Telstra… National regulation plan… Dollar, employment records… Gerry Harvey’s office plan… more…

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Escalating war of words on broadband

 

A group of 11 telcos made a complaint against Telstra to the ACCC yesterday, alleging that Australia’s biggest telco has engaged in misleading and deceptive conduct in its campaign against the current telco regulatory regime.

 

The group, which includes Primus, AAPT and iiNet (but not Optus), say the complaint is designed to bring more honesty to the broadband debate. They have labelled their campaign T4, or “Tell The Truth Telstra,” and have launched a rival PR website to Telstra’s nowwearetalking.com.au.

 

In a letter to the ACCC, they claim Telstra executives Phil Burgess and Justine Milne have made statements regarding the regulation of broadband that give “the false impression that Australia’s telecommunications regime somehow ignores Telstra’s costs and its legitimate business interests”.

 

Primus’ general manager of regulatory affairs, Ian Slattery, denies the complaint is just part of a spin war being waged in the lead-up to the Government’s decision on broadband regulation.

 

“This is not a PR stunt,” Slattery says. “Telstra are not telling the whole story and we don’t want to see that misinformation for setting regulation policy that will be in place for the next 10 to 20 years.”

 

Slattery declined to comment on why Optus did not add its name to the complaint, but confirmed that it had been invited to do so. An Optus spokeswoman also refused to comment on its decision but said they were “supportive” of the group’s initiative.

 

ITWire telecommunications editor Stuart Corner says it would be a good thing if the complaint leads to Telstra pulling back on the intense lobbying it has been conducting on broadband.

 

“Telstra is pushing the Government for a quick decision on this and the Government is under pressure because the ALP gained the initiative with its broadband proposal. But I don’t see how it will come up with a regulatory solution that works in the time available. I think it will be disaster, to be honest,” Corner says.

 

Telstra has dismissed the complaint, labeling the group “hysterical” and the complaint a “media stunt”. A spokesman says Telstra does not expect the ACCC to take the complaint any further.

 

– Mike Preston

 

National regulation plan

 

Just imagine. Employing people in different states would no longer require different occupational health and safety regimes. Builders could move across borders without concerns about different state regulations and a single business regulation would be valid across all states.

 

If only. This is Prime Minister John Howard’s latest plan to reduce red tape.

 

Howard has written to premiers offering to spend $118 million to fund a new uniform regulatory codes – but conditions are attached. The states must hand over powers to the Commonwealth.

 

Under Howard’s plan, national unified schemes would be created around:

  • Occupational health and safety
  • Environmental assessments
  • Building regulations
  • Properties securities register which would include internet domain names.
  • Consumer product safety
  • National trade measurement system
  • Business registration, rail safety,

 

But does it have any chance of getting up or is it just posturing in the ongoing battle of finger-pointing and one-upmanship between the Commonwealth and the states? The Australian Financial Review this morning pointed out that more than a year after federal and state governments pledged to tackle the rise of new laws, lawmakers are creating nearly double the number they were two years ago.

 

According to research by the Institute of Public Affairs, the Commonwealth passed 6786 pages of new primary laws in 2006, almost double the 3463 pages passed in 1986.

 

Strangely out of the blue, from London, came a press release from Treasurer Peter Costello. “The Government has made significant progress over the past nine months in reducing regulatory burdens imposed on business by Commonwealth Government regulation, and in improving regulation-making and review processes,” he huffed.

 

– Amanda Gome

 

Dollar, employment hit new records

 

Strong Australian employment figures and a report highlighting the weakness of the US economy have pushed the Australian dollar to a new 17-year high of US82.71¢ at 11.55am.

 

More than 10,000 jobs were created in March, causing the unemployment rate to drop to a 31 year low of 4.5%, according to Australian Bureau of Statistics figures released today. Although the result is slightly below market expectations, it is strong enough to build expectations the Reserve Bank will lift interest rates next month.

 

The Australian dollar has also been boosted by predictions that the growth of the US economy will drop sharply this year contained in an International Monetary Fund report released yesterday.

 

The report says that while world’s economy is looking stronger than it did six months ago, there is still a significant risk that global growth will slow as US growth rates decline from 3.3% in 2006 to 2.2% in 2007.

 

The IMF expects Australia to defy the trend, however, with improved growth predicted over the next year.

 

– Mike Preston

 

Gerry Harvey makes his intentions clear

 

Gerry Harvey is busy talking down the value of Coles’ Officeworks as he prepares to make an offer for the office products company.

 

Yesterday, as he reported Harvey Norman’s sales were up 17.2% in the March quarter compared to a year earlier, Harvey said he believes Officeworks is worth closer to $600 million rather than the $1 billion reported.

 

He tried to add some uncertainty into the equation for his competing bidders, suggesting that if he did not get to buy Officeworks, he might launch a competitor.

 

– Jacqui Walker

 

ATO issues MIS ruling

 

The Australian Taxation Office took another step towards ending agriculture-based tax minimisation schemes yesterday when it released a draft ruling confirming the tax deductions the schemes rely on are not legal.

 

The draft ruling, which applies to MIS schemes for growing products such as olives, nuts and avocados, will take effect in July 2008 unless the MIS industry wins a High Court case against the tax office on the issue.

Tax Commissioner Michael D’Ascenzo says developments in case law have required the tax office to reconsider its views on the deductibility of investments in both forestry and non-forestry schemes.

 

“Our reconsidered view is that investor contributions to such schemes are capital expenditure and therefore not deductible,“ he says.

 

– Mike Preston

AWA policy debate – not relevant for many employers

 

Publicly, industry groups and business have rejected the Prime Minister’s call to advertise the benefits of WorkChoices in the lead-up to the election, but key industry, business and employer organisations have received more than $20 million in Federal Government funding to educate their members about the industrial relations laws.

 

Prime Minister Howard has previously claimed the groups should help out because it would be unethical to spend taxpayers’ money on advertising the policy before the election.

 

Figures compiled by the Sydney Morning Herald show that about 40 groups received a total of $20.7 million from the Government to assist their members in understanding the laws and implementing them. Another $4 million has been earmarked to be handed out.

The Australian Industry Group has received $2.6 million so far and the National Retail Association $354,000. Two of the largest employer organisations, the Australian Chamber of Commerce and Industry and the Business Council of Australia, have apparently not received any Government money but are believed to be contemplating running an advertising campaign closer to the election.

Yesterday ACCI released a study claiming that 87% of Australian employers oppose the abolition of Australian Workplace Agreements (AWAs) and 92.2% support legal rights for employers and employees to individually bargain over wages and conditions of employment.

 

But how popular are AWAs? At the end of December 2006, only 11,653 employers have made AWAs since the commencement of WorkChoices.

– Jacqui Walker

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