WorkChoices backfires for PM
Prime Minister John Howard’s strategy to coerce industry groups into publicly backing WorkChoices is backfiring. Industry groups, business academics and accountant groups say the Coalition needs to do far more to reduce red tape and paperwork. They also claim that WorkChoices is flawed, with many employers struggling with the regime.
But many are also afraid to speak out publicly. SmartCompany has learnt of one industry group that wants to go public with its dissatisfaction with WorkChoices but that has been warned off by another prominent industry group that has been very vocal in its support of WorkChoices.
Some industry groups are caught in a quandary. They have received a lot of money from Federal Government coffers to educate employers and employees about the benefits of WorkChoices. Some still feel obliged to push its benefits to members.
Others are too annoyed to stay silent. James McCall, executive director of the Motor Traders Association in NSW, says his members are very confused by WorkChoices. “There is a whole host of problems. It is very difficult to get definitions and clarification on the rules and our members are very confused. And it’s nearly all at the federal level,” McCall says. “Small business has numbed itself because of the massive increase in paperwork imposed in the last nine years, and almost all of it is at the federal level.”
He also claims that the benefits of the unfair dismissal exemption for companies with fewer than 100 employees has been overstated. “We see employees still suing in the district court for other things like breaches of contract.”
A number of industry groups confirmed to SmartCompany off the record that they will not be using advertising and marketing to publicly support WorkChoices.
They say that while businesses support the substance of WorkChoices, it should be working hard on ways to improve implementation and transition difficulties, and address the myriad of other concerns about regulation and red tape increases.
“Any enthusiasm for WorkChoices might be there in substance but has been muted by implementation difficulties,” says workplace relations lawyer Peter Vitale who works at VECCI. “The added complexity of the system has bemused a lot of people.”
It is not just WorkChoices. The former ACT small business commissioner, Michael Schaper, says that Howard in 1996 promised to cut paperwork and red tape by 50%. “The execution from the Coalition falls far short of the rhetoric. While the small business minister has made a good attempt to rein things in, there are a multiple of things that could be fixed quite easily and are not being addressed.”
He was highly critical of the lack of research into paperwork, regulation and WorkChoices. While a lot of money has gone into selling the benefits of Workchoices, almost none has gone into researching whether the benefits are tangible, Schaper says.
Brian Welch, executive director of the Masters Builders Association, says that while WorkChoices has increased productivity and provided other benefits for employers, the downside has been compliance and paperwork. “Things definitely need to be improved.”
Internet entrepreneur Adrian Giles made a cool $21 million yesterday when he, his business partner Andrew Barlow and their investors sold Hitwise to Experian, a global information solutions company, for $288 million.
Melbourne-based Hitwise, founded in 1998, has been one of the few global technology success stories for Australia. The company measures audience data on web sites; Hitwise reports on nearly a million websites a day and sells the information to companies who market their services online. Clients include Google, eBay, CBS News and IKEA.
Giles, 33 (pictured right), who had a 7.5% stake in the company before the deal, told SmartCompany he has no intention of leaving Hitwise. Instead he is gearing up to launch some innovative products that will change the way that businesses can collect data on their customers.
Giles says using combined data and technology from Hitwise and Experian, companies are able to get a survey result on their businesses without actually surveying them.
“Because we are measuring internet traffic at the network level – and are able to marry up lifestyle attributes against those households – as soon as that household visits a particular website we’re able to attach that mosaic segmentation profile to it. And then start building up those profiles that go to a particular website and provide these to that site without them having to do any particular survey work at all,” Giles says.
“We can provide lifestyle profiles on around 30,000 sites, and it’s a great way for a website owner to get a very detailed lifestyle breakdown profile of their audience without having to take much effort at all… without having to do anything.”
He claims Hitwise can get a lot more data than if using the traditional television ratings method. “That means we can cover more sites, and with more sites we can provide more lifestyle profiles.”
Giles says there are many more products that can be spun out of the Hitwise data.
“We’re looking at the emergence of other platforms of access to the internet and measuring those platforms. Like wireless, and the growth of IPTV and so on. As those methods of accessing content grow, Hitwise is really well placed because we’re on the IP network, and we have this unique network level in data collecting technology, that can be very easily turned on to collect wireless data.”
Click here to hear the interview with Adrian Giles about the sale.
Click here to read the Lunch with an Entrepreneur feature with Adrian Giles, where you can also listen to this interview via podcast.
– Amanda Gome
Tax office identifies merger hit list for 2007-08
Businesses involved in mergers and acquisitions, restructuring or that use complex financial structures are on the Australian Taxation Office’s hit list for the 2007-08 financial year, Tax Commissioner Michael D’Ascenzo says.
In a speech to the Deloitte Academy in Melbourne, the rapid escalation in the value and volume of mergers and acquisitions in 2006-2007 has created a dynamic environment more likely to give rise to potential tax risks, D’Ascenzo says.
- That capital gains tax outcomes on divestment are appropriate.
- Compliance with the thin capitalisation rules.
- Whether increased capital allowance deductions reflect increased tax value of assets on acquisitions.
- The use of carry forward losses comply with the loss rules.
- That any payments to overseas related parties are at arm’s length.
Complex tax planning involving unit trusts, stapled instruments, tax deferred distributions and CGT deferrals in relation to unstapling hybrid instruments will also be subjected to “close analysis,” D’Ascenzo says.
He will appear before the Federal Parliament public accounts and audit committee today, the first in what will become a regular biannual appearance designed to increase scrutiny of the tax office’s operations.
– Mike Preston
Drought puts the squeeze on food retailers
The water crises facing farmers in the Murray-Darling basin will also put pressure on independent retail grocers, National Association of Retail Grocers of Australia chairman John Cummings says.
Prime Minister John Howard announced yesterday that farmers in the Murray-Darling basin will not receive a water allocation this year unless there is heavy rain within the next eight weeks.
The area is considered the most fruitful agricultural land in the country and is a key source of produce for all retail grocers.
Cummings says there is “no doubt” the dry conditions being experienced in the basin will drive up fresh produce prices and make life harder for independent grocers already under intense competitive pressure from Coles and Woolworths.
A significant drop in production will also hit the canning and grocery manufacturing industry, Cummings says. “If retailers start having to go overseas for supply it will decimate these industries and once the supply arrangements are put in place they don’t just come back,” he says.
State and federal governments should devote more resources to helping farmers survive the drought, Cummings says. “The alternative is that we will all be eating a can of baked beans from China, and no one wants to see that.”
– Mike Preston
Australians owe more on their credit cards than ever before, new Reserve Bank of Australia figures reveal.
Cardholder debt reached 38% of available credit in February, the highest result since the RBA started measuring credit card debt in 1985. The average credit card balance is $2952 in February, 8.1% higher than the same time in 2006.
The surging Australian dollar drove a 1.7% drop in import prices in the March 2007 quarter, according to new Australian Bureau of Statistics import/export price figures. The result adds to a generally good run for importers over the past year as import prices have dropped by 3%.
Of course, there is an unfortunate flipside to the strong dollar – higher export prices. Although exports stayed level in the March 2007 quarter, they have increased 5.8% over the past year. Iron and nickel ores, wool and barley experienced the biggest prices rises.
New residential building activity rose 0.6% seasonally adjusted in December, according to new Australian Bureau of Statistics figures. The moderate increase was driven by a 0.4% rise in work on new houses and a 3.4% rise in the value of alterations and additions.
Also from the ABS, new car sales rose 1% over the month of March, with New South Wales and Queensland both experiencing the largest growth in sales with 2.9% each.
Speculation of an interest rate rise in China after a strong 11.1% GDP result sparked selling of Australian stocks yesterday, but the S&P/ASX 200 bounced back this morning, lifting 0.61% to 6202.9 at midday. The Australian dollar is trading at US83.43 cents, up on yesterday’s local closing price of US83.11 cents.