Customs scheme could cost big… Ads on social sites?… Midas delay, again… China FTA still in air… Too much super closes investor doors… High debt threat to rates… Mire of telco politics
Monday, June 25, 2007/
- Customs scheme could cost big…
- Ads on social sites?…
- Midas delay, again…
- China FTA still in air…
- Too much super closes investor doors…
- High debt threat to rates…
- Mire of telco politics…
- Economy round-up
Exporters, importers and SMEs with international supply chains could be faced with massive bills of more than $100,000 to comply with new proposed accreditation requirements from the Australian Customs Service.
A new anti-terrorism security program, currently being trialed by the Australian Customs Service, would accredit businesses meeting certain requirements. These businesses would be able to regain access to facilities such as ports or airports more quickly in the event that these were shut down because of a terrorist incident under the voluntary scheme.
But the cost of becoming accredited could be prohibitive for SMEs. Food & Beverage Importers Association president Neil Brand says the cost of putting 24 hour security in place and performing background checks on all employees could easily range above the $100,000 mark for an SME.
“The cost of around-the-clock security would be very substantial. Even a small business would need at least three people to do it,” Brand says. “Our company has six sites with three entrances, so you could easily be talking about a very big number.” Brand is also a senior executive for a national food importing company.
The security benchmarks include:
- Tight physical security at worksites and warehouses.
- More stringent background checks on staff.
- Stricter access requirements to premises.
- International auditing of product movements.
– Mike Preston
New classified advertising is set to hit the Australian arm of social network MySpace in August. And car and real estate advertising is expected to be added before the end of the year.
As competition between the social networking sites hots up, with the growing popularity of rivals such as Facebook and Friendster, the focus is now turning to revenue. But pundits will be watching closely to see if the monetisation of social network sites affects the social fabric and causes networkers to seek alternatives.
– Amanda Gome
The planned sale of car care franchise Midas Australia to John Pearson, the owner of Tyrecorp, has been further delayed, according to an email franchisees and staff received from franchisor Philip Bonney on Saturday.
The email states: “As indicated it was our intention to make an announcement this week. Unfortunately we are not in that position yet, however we are very close and can say it is progressing well and are confident the date of changeover will be announced very soon.”
Previously, Bonney had advised franchisees that the sale would be completed by early June, if not before. There have been persistent doubts among franchisees that the sale would go ahead. Franchisees in dispute with Midas are concerned that if the business transfer does not include liabilities, their claims for compensation will be fruitless.
Midas Australia has not responded to any of SmartCompany’s questions or requests for an interview.
– Jacqui Walker
Entrepreneurs wanting to take advantage of a Free Trade Agreement with China might have another few years to wait. Despite years of talk, negotiations are no closer to being finalised.
The sticking point is tariffs, and Australia is demanding that until the Chinese come back with a better offer, there will be no further discussions on the issue. The Australian Financial Review reported that on Friday an official in Beijing reported that the teams were looking at very different FTAs.
Meanwhile Chinese inflation might be on the rise, with food prices shooting up.
People’s Bank of China Governor Zhou Xiaochuan says a further rise in interest rates could not be ruled out (there have been four interest rate rises in little over a year) and he urged investors to be cautious.
– Amanda Gome
The Federal Government is facing an embarrassing end to a high-flying year in super because the changes to the super rules have been too successful, and ironically, too complex despite the “Simpler Super” reforms.
Investors face losing millions of dollars in tax savings because the superannuation and financial services industries aren’t coping with the unprecedented demand for advisers, fund transfers and pension restructuring.
Many advisers have closed their doors to new clients until they can deal with the requirements of their existing client list, and platform providers (wraps) have placed cut-off dates much earlier than 30 June for certain transactions, preventing investors from taking advantage of some of the super changes.
Although many of the changes were announced in May 2006, substantial amendments were made to the original announcements in September 2006, and the substantive changes did not become law until 15 March this year, leaving little time for investors, advisers and financial houses to get the systems in place to cope with the ensuing pandemonium.
The majority of investors affected by the late introduction of the legislation are those trying to move money between super funds, or trying to change the type of pension arrangements they have in place, as a means to maximise the tax-free component.
The peak accounting industry body, CPA Australia, is concerned with the inequities caused by investors missing the 30 June deadline due to processing issues. The industry association has approached Assistant Treasurer Peter Dutton about the matter.
CPA Australia’s superannuation policy adviser, Michael Davison, says it may be impossible to consolidate super benefits before 30 June if individuals waited until the super legislation was finalised in March, or when the regulations were final in late April.
This article first appeared in the Eureka Report.
– Trish Power
Skyrocketing debt levels in countries such as Australia mean households are more exposed to a possible global downturn than even before, a new report by the Bank for International Settlements says.
The BIS, known as the reserve bank for reserve bankers, has chosen to highlight rapidly increasing debt burdens being taken in developing countries including Australia in its 77th annual report.
Australian households are now using a record 11.9% of their income to service the interest on debts, RBA figures released last week revealed.
The report says reserve banks in countries where consumer debt is high like Australia face a difficult balancing act – lifting interest rates causes widespread pain for exposed consumers, but leaving them in place risks inflationary pressures getting out of control and even higher debt levels.
The BIS report urges reserve banks to consider what the economic impact would be if current low interest rates reached higher levels in the long term.
– Mike Preston
If only telcos and politicians would spend as much energy getting telecommunications policy right as they do on political attacks and backslapping.
Having announced its expert broadband panel and allocated almost $1 billion to an Optus/Telstra joint venture for broadband in the regions, the Federal Government now seems to have turned its focus to attacking Labor.
Communications Minister Helen Coonan says she will establish an expert committee to consider where the money made from the Government’s $2 billion fund for rural and regional communications facilities will be spent. The transparently partisan objective? To skewer Labor, which has promised to use this money to fund its public broadband network proposal.
The Government has already done its best to ensure that Labor won’t be able to use the money if it does happen to win the federal election later this year by passing legislation locking up the fund. Given that Labor probably will not have a Senate majority, this could put a serious hitch in its broadband plans.
Meanwhile Telstra PR chief Phil Burgess has engaged in his own bit of politicking by lavishing praise on Labor’s $4.7 billion broadband plan.
“The Labor Party thinks about this in terms of a holistic nation-building approach; the Government is thinking about it in terms of a piecemeal approach,” The Age reports Burgess as saying.
Unscrambled this reads – don’t mess with us, Government, or not only will we brazenly criticise you, we’ll heap praise on your opponent.
– Mike Preston
The Australian dollar has pushed higher, trading at US84.93c at 12.36pm after the most recent Sydney close of US84.95c. Its rise is in part thanks to last week’s household debt figures and today’s Bank of International Settlements report linking them to inflationary pressures.
A combination of the surging dollar and concerns that US banks will be saddled with losses from mortgage bonds has hit key stocks, driving the S&P/ASX 200 down 1% on Friday’s close to 6319.6.
– Mike Preston