Economy

Unfair dismissal criticism grows… Broadband argy-bargy… COAG ‘theatrics’… Online ad monopoly fear… Woolworths Coles play…

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Criticism grows on Labor unfair dismissal plan

Labor must reveal more detail on its new plans for an unfair dismissal regime to counter growing criticism from business, say industry groups.

Labor announced yesterday that it plans to scrap the unfair dismissal regime exemption for small business if it wins power later this year. There is a small concession: employees of companies with less than 15 employees that had been with the company for less than a year cannot claim unfair dismissal. If the company has between 15 employees and 100 employees, those with less than six months service cannot make a claim.

But industry groups point out that many unfair dismissal claims come from employees.

Australia has had unfair dismissal laws in some shape or form for the past 25 years. David Gregory, head of workplace relations policy at VECCI, says: “There have been a stack of cases over the years of employees drinking for years, involved with theft – and these people when dismissed could pay a $50 filing fee and you would have a third party offer to take up the action on a no fee no pay claim. Many people ended up coughing up more money just so they would go away.”

Since unfair dismissal exemptions were introduced a year ago, the prediction that a string of high profile stories about appalling employers, never eventuated. “Not only that, employees can of course claim unlawful discrimination and those cases have fallen as well. So why go backwards.”

There would also be more paperwork involved for small companies as Labor is planning to introduce a Fair Dismissal Code to help employers would out what is a fair dismissal.

While this guide is a good idea, employers would have to keep records to show they complied with the guide which would involve more paperwork and red tape.  

– Amanda Gome 

 

Telstra, Optus weigh in as broadband argy bargy continues

The war of words on broadband ratcheted up another notch yesterday, as both Telstra chairman Don McGauchie and Optus chief executive Paul O’Sullivan pushed for quicker action to resolve the uncertainty about Australia’s telecommunications regime.

McGauchie says Australia’s telecommunications regulatory regime is “failing” and uncertainty over broadband can’t be allowed to “go on for ever,” The Australian reports today.

He called for the Government to push ahead urgently with negotiations on the construction of a fibre to the node network for Australia. “We need to make sure this does not go on for ever,” McGauchie says.

But O’Sullivan says the debate over broadband is “hysterical” and says legal action is an option if the Government gives Telstra an unfair competitive advantage if its broadband proposal is given the green light.

O’Sullivan told a conference in Sydney that “if there’s an uncompetitive deal struck, we would naturally oppose that in any way we could”, The Australian Financial Review reports today.

Meanwhile, Tesltra has also questioned the viability of a NSW Government plan to establish a free broadband network in the Sydney CBD. NSW hopes to emulate cities such as San Francisco that have built free broadband networks in their CBD.

Optus and wireless broadband company Unwired both expressed interest in the scheme.

– Mike Preston

 

Lacklustre COAG “a politicians club”, says Chaney

The Council of Australian Governments consistently fails to deliver the outcomes it promises and should be overhauled, Business Council of Australia president Michael Chaney says.

Chaney told business leaders in Sydney yesterday that business has “stopped believing” in a COAG that “meets only occassionally, decides erratically and follows through irregularly”.

He urged state and federal political leaders to move beyond “theatrics” and “political rhetoric” and to focus on delivering substantial reforms in federal-state tax and regulatory arrangements.

Meeting more than once a year and setting out clear timelines for agreed reform process should be the first steps in reforming COAG, Chaney says.

The Federal Government should consider taking over responsibility for business rules and regulations if the states will not take reform seriously, he says.

– Mike Preston

 

Internet advertising monopoly fears

Sour grapes or legitimate concerns? Google’s $3.1 billion offer for internet advertising company DoubeClick has caused a storm of protest, led by companies who missed out on the prize.

The major concern, voiced by unsuccessful bidder Microsoft, was that the sale would result in two of the largest distributors of online advertising combining forces and this could reduce competition in advertising market on the web. There are also concerns at the emergence of a global Big Brother as Google would have access to an enormous amount of personal information about a person’s activities on the internet.

But Google says any concerns will be examined by regulatory bodies in the US and Europe.

– Amanda Gome

 

Woolworths play for Coles

Yesterday Woolworths CEO Michael Luscombe confirmed that the retail giant has lodged an expression of interest in Coles’ general merchandise assets Target and Officeworks.

Woolworths dominates Australian retailing. Nearly 19% of every retail dollar spent each month is spent at Woolworths, according to a report in The Australian Financial Review. Coles is not far behind; its sales represent almost as much of monthly spending on top of that.

Suppliers already (privately) complain that the two players have too massive a market power. The ACCC will be very interested in any deal giving part of Coles’ market share to Woolworths. The question will be whether the deal would significantly lessen competition – for suppliers and other service providers as well as consumers. It’s hard to imagine how it could not.

What do you think? Email: [email protected]  

– Jacqui Walker

 

‘Australian Made’ set for return

The “Australian made” logo will feature in a new food labeling scheme, according to trade magazine Retail World. Australian Made Campaign Limited (AMCL) claims the logo is viewed as the most trusted country of origin symbol.

AMCL has research by Roy Morgan that indicates that 75% of consumers would like the logo to be used on fresh produce. New rules governing the use of the certification trade mark are under consideration by the ACCC and will allow products such as fruit and vegetables, meat and dairy products to carry the logo with the words “Australian Grown”, provided each significant ingredient has been grown in Australia and all or virtually all of processes involved in production of the product occurs in Australia

AMCL’s chief executive Ian Harrison expects the use of the kangaroo logo in the labeling scheme to be approved by the ACCC by mid-May 2007.

 

Economic round-up

Consumer confidence has fallen 0.2% in April, thanks to the prospect of higher interest rates, according to the Westpac-Melbourne Institute Consumer Confidence Index released today.

There was a 3.7% decline in the index that measures whether people believe it is a good time to buy a new home – and a 7% fall in the confidence of homeowners with a mortgage on last month. Expectations for family finances also fell 8.6%.

Despite the drop, consumer confidence remains 10.7% higher than last year’s average, and 1.2% above that of the consumer “boom years” of 2003 and 2004.

Interest rate rises are key drivers behind lacklustre residential property, according to the Australian Property Institute’s Australian Property Directions Survey.

Of the property industry professionals surveyed, 91% said interest rate rises had had a strongly or moderately negative impact on the residential property sector, compared to 42% for retail property and 12% for commercial property.

Most respondents to the survey thought the Sydney and Melbourne commercial property markets offer the best growth prospects in 2008. Retail property in the east coast capitals will reach its zenith next year and begin a downswing phase, the survey reveals.

The US consumer price index core measure rose 0.1% in February, defying economist’s expectations of a 0.2% rise.

Housing starts in the US increased by a moderate 0.8% in February, while a gauge of national building industry sentiment fell several points, suggesting the US housing sector remains soft.

The ASX/S&P 200 is up 0.8% to 6238.7 at 11.30am. The Australian dollar is up strongly on yesterday’s close of US83.20 cents, to be trading at US83.65 cents at 11.30am.

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