AUSTRALIAN POLITICAL LEADERSHIP
Thursday 24 June 2010
Statement by Mr Peter Anderson, Chief Executive

I have today, on behalf of members of the Australian Chamber of Commerce and Industry and the wider business community, conveyed our congratulations to Julia Gillard on her election and appointment as Prime Minister of Australia, and on Wayne Swan's election as Deputy Prime Minister. I have reaffirmed the commitment of ACCI and the wider business community to working with the Australian Government and its political leadership on our economic, workplace and social challenges.

I have also today expressed our thanks and gratitude to Kevin Rudd for his leadership, service and record of achievement as Leader of the Labor Party since 2006 and Prime Minister since 2007, especially during the global financial crisis.

Prime Minister Gillard’s expression of intent to seek community consensus in advance of major government decisions provides a fresh opportunity for business input into key issues such as energy policy and resource industry taxation arrangements.

To minimise disruption to governance, early decisions on new ministerial or departmental arrangements are desirable.

The economic, workplace and social challenges Australia faces warrant strong political leadership from both government and Opposition, and a forward-looking contest of policy ideas.

Policies that support the private sector, both large and small business, together with effective political leadership, are in the national interest and will be the expectation of the business community on both Ms. Gillard and Mr. Abbott, and their ministries and shadow ministries, in the lead-up to the forthcoming federal election.

For further information:

Peter Anderson Chief Executive 02 6273 2311 / 0417 264 862

Brett Hogan Director of Communications 03 9668 9950 / 0407 273 884

ACTUAL CONDITIONS REMAIN ROBUST DESPITE A FALL IN GENERAL BUSINESS SENTIMENT
Thursday 24th June 2010

195th Survey of Industrial Trends – June Quarter 2010
The June quarter 2010 ACCI-Westpac Survey of Industrial Trends showed a marked softening of manufacturers’ General Business Sentiment for the second half of 2010, amidst softening domestic demand projections, RBA rate hikes in April and May, and growing concerns over the global outlook following the European debt crisis.

Nevertheless, the net indicators for New Orders and Output were well up over the June quarter. The net Exports deliveries indicator improved marginally over the quarter and manufacturers are expecting stronger export growth for the next three months, helped by a weaker Australian dollar. Profit Expectations for the next 12 months have continued to firm to well above their decade average level. Investment Intentions also firmed markedly, with an improvement in planned capital expenditure for plant and equipment and buildings for the next 12 months.

Net Employment and Overtime Worked indicators have remained stable and firm at well above their decade averages over the quarter, albeit manufacturers are predicting a fall in overtime worked over the September quarter. Average Selling Prices rose for the first time since the December quarter of 2008 and the pace of Average Unit Costs increases has accelerated but remains well below its decade average. Stronger price and cost increases are expected over the next three months.

Mr. Greg Evans, Director of Economics and Industry Policy, Australian Chamber of Commerce and Industry, commented:

“The overall outlook presented by the June quarter 2010 survey points towards a steady economic recovery, albeit at a slower pace than might have been suggested by the previous quarter's excessively optimistic predictions. While general business confidence is deteriorating, actual net outcomes for demand and production have firmed and forward projections by the manufacturers surveyed in respect of their own firms remain robust.

“Employment indicators have remained stable, while the softening projection for overtime worked may indicate that more employers intend to hire new labour rather than relying on overtime. The pick-up in capital investment plans for plant and equipment, gradually firming capacity utilisation and rising profitability projections are also encouraging.

“Despite the headline survey results for manufacturers heading in the right direction, we still consider there remains sufficient areas of weakness in overall business conditions to make the case for the Reserve Bank to leave the official interest rate unchanged in the period ahead. Moreover, it is concerning that further cost increases in terms of labour and finance costs will put further pressure on manufacturers’ profitability and sustainability.”

Mr. Bill Evans, Chief Economist, Economics & Research, Westpac Banking Corporation, commented:

“This is a surprisingly solid result. The Survey was conducted mainly after the release of the Federal Budget and the Government’s response to the Henry Tax Review.

“It shows that business conditions, as measured by the Westpac–ACCI Actual Composite Index, have remained strong and generally around the levels recorded in the March quarter. However, the excessive optimism which we saw in the March Survey has dissipated. In the March Survey manufacturers were expecting conditions to improve at a record pace over the June quarter. In the event, conditions improved at about the same pace as in the March quarter.

“The more volatile General Business Situation measure slipped in the June quarter. Confidence levels are now significantly below the 15 year highs which were recorded in the September quarter last year. This confidence measure is a less reliable indicator of future economic activity than the Composite Indexes and hence may be sending an unnecessarily negative signal.

“It is significant that the Westpac–ACCI Labour Market Composite Index net balance, which uses a range of employment indicators to provide an assessment of conditions in the labour market and the outlook for employment growth, held around last quarter’s level. That read is consistent with our assessment that employment growth will remain around a 2% to 3% growth pace – enough to gradually lower the unemployment rate further.

“The investment outlook firmed. There was a sharp pick up in investment intentions, supported by an improvement in capacity utilisation, solid profit expectations, and an above-trend expansionary print of the Actual Composite Index.”

Copies of the full Survey are available on the ACCI website at www.acci.asn.au/SurveyACCIWestpac.htm

The ACCI-Westpac Survey of Industrial Trends is the longest continuous running survey of industry in Australia, having started in 1966.

For further information please contact:
Greg Evans Director of Economics and Industry Policy, ACCI (02) 6273 2311 / 0407 204 559

Bill Evans Chief Economist, Economics & Research, Westpac (02) 8254 8531

Eugene Bajkowski Consulting Economist, ACCI (02) 6273 2311 / (02) 6249 6128

Brett Hogan Director of Communications, ACCI (03) 9668 9950 / 0407 273 884

Today Fair Work Australia handed down its 2010 annual wage review increasing adult award rates by $26.00 and the adult minimum wage by $26.12 to $569.90 (or $15.00 per hour).

The increases apply from the first pay period starting on or after 1 July 2010.

For many, the increases coincide with the first phasing step into their modern award rates which also applies from the first pay period starting on or after 1 July 2010.

For further information, download the full Workplace Relations Circular here. This circular deals with who is affected by the decision and its effect on classification rates, allowances, casual loadings and modern award phasing.

If you have questions regarding the circular, please call the Workplace Advice Line on 13 29 59.

The roundtable took place during the visit of His Excellency Vice President of the People’s Republic of China Xi Jinping, to Australia.

The roundtable was established to promote dialogue between business leaders as the basis for deepening economic cooperation, strengthening commercial ties and broadening communication between business and the Chinese and Australian Governments.

The first meeting of the roundtable was attended by 25 Australian and Chinese business leaders from the areas of energy, mining, resources, financial services, professional services and manufacturing.

A statement issued following the roundtable can be viewed via the following link:

http://www.bca.com.au/Content/101693.aspx

For further information, visit our website at www.bca.com.au.

To provide feedback or unsubscribe to the BCA email distribution list, please click here.

BUSINESS WELCOMES PAID PARENTAL LEAVE SCHEME
Thursday 17 June 2010
Statement by Mr Peter Anderson, Chief Executive

The Australian Chamber of Commerce and Industry (ACCI), welcomes the passing of paid parental leave legislation by the Commonwealth Parliament today.

“Australian business welcomes this important taxpayer funded social reform which will benefit women and their families. The scheme has strong bi-partisan and community support and its time has well and truly come.”

“As the representative of more than 350,000 small businesses across Australia; many owned and operated by women; ACCI is disappointed that the Government chose to ignore amendments to the legislation proposed by the Opposition and supported by Senators Fielding and Xenophon which would have seen the Government administer parental leave payments through the Family Assistance Office rather than imposing this considerable burden on small business people.”

For further information:

Ben Carter Marketing & Membership Manager 03 9668 9950 / 0457 836 763

RULES ON UNION ENTRY TO WORKPLACES UPHELD
Friday 11 June 2010
Statement by Mr Peter Anderson, Chief Executive

The Australian Chamber of Commerce and Industry, Australia's largest and most representative business organisation, has welcomed today's decision by a Full Bench of Fair Work Australia on trade union right of entry into workplaces under the government's new industrial relations laws.

"Today's decision upholds the principle that entry by union officials into private workplaces is a conditional right that carries responsibilities, and that union bargaining agreements cannot water down those conditions."

ACCI intervened in these Fair Work Australia hearings and asked the Full Bench to strike down a right of entry clause in a collective bargaining agreement which did not comply with the conditions set down by law. Those conditions include union officials having to give an employer prior notice of entry, limits on the purposes of entry to interviews with employees who consented, and requirements on union officials to comply with company health and safety regulations when on site.

"Private workplaces are not the public domain of union officials, and the tribunal has done the right thing to uphold the decision which parliament made in 2008 to make union entry conditional".

"ACCI does not envisage a problem with the application of this decision as union officials in most sectors already respect these sensible restrictions. The spirit and letter of this decision needs to be respected by those union officials who have been trying to stretch entry rights beyond those that the parliament gave."

For further information:

Ben Carter Marketing & Membership Manager 03 9668 9950 / 0457 836 763

Peter Anderson Chief Executive 02 6273 2311 / 0417 264 862

ACCESS TO FINANCE A MAJOR BARRIER TO SME EXPORTERS
Friday 11 June 2010
Statement by Mr Peter Anderson, Chief Executive

The Australian Chamber of Commerce and Industry today renewed calls for Australia’s banks to make a greater effort to understand and meet the needs of the small business sector following the release of the Export and Investment Corporation’s (EFIC’s) Global Readiness Index (GRI) yesterday.

The latest GRI highlights the continuing difficulties faced by Australian businesses seeking to export and identifies the chronic difficulty in accessing bank finance as a key barrier to small and medium businesses expanding their businesses overseas.

“Australia’s banks should step up and champion the small business sector as it recovers from the global financial crisis (GFC). Given the cost pressures on SMEs, including higher wage and labour costs; interest rate rises and higher bank fees; accessible finance for export oriented small and medium businesses is essential. This is just the moment when SME’s need reasonable, responsive and responsible partners in the finance sector.”

The GRI assesses the drivers, destinations and obstacles encountered by Australian businesses seeking to export. Of the nearly 1000 businesses surveyed, more than half (58%) nominated poor access to finance as a key barrier to expanding their business. EFIC found that access to bank finance was particularly difficult for small and medium businesses.

Chronic difficulties accessing affordable bank finance and a fair risk assessment process has been found by ACCI to be the most substantial issue affecting day to day business in the SME sector. ACCI has made recommendations to the Senate Economics Committee Inquiry into small business access to finance on this very issue.

Despite industry calls for greater competition in the small to medium finance market, this competition has not been forthcoming. In addition, despite Australian banks ability to do so, they have failed to exempt trade finance products from the strict capital requirements under the Basel II Framework.

With Australian businesses offshore investments contributing 1.5 % to GDP, the successful globalisation of Australian businesses offers an important opportunity to further contribute to Australia’s economy. The absence of additional funding for the Export Market Development Grants Scheme (EMDG) in the May Budget, despite shortfalls in pay-out amounts, has put further pressure on exporting businesses.

EFIC’s Global Readiness Index is a wake-up call Australia’s banks that their SME customers can only contribute to domestic and global recovery if the finance sector becomes a more accommodating and supportive partner.

For further information:

Ben Carter Marketing & Membership Manager 03 9668 9950 / 0457 836 763

Nathan Backhouse Director, Trade and International Affairs 02 6273 2311 / 0431 615 709

INDUSTRY EXPERTS MAP OUT SKILL & PRODUCTIVITY AGENDA
Wednesday 9 June 2010
Statement by Mr Peter Anderson, Chief Executive

Australian business faces a growing skills gap according to the Australian Chamber of Commerce and Industry’s (ACCI) Employment, Education and Training (EET) Committee which met in Perth today.

The predicted shortage of 210,000 workers in Western Australia alone over the decade was high on the Committee’s agenda.

The Committee’s Chair, Russell Varley said the future workforce problems were due to a combination of labour and skills shortages and must be addressed by a strategic approach to population, workforce participation and productivity by balancing skills development and skilled migration.

Government must also adequately take into account the particular circumstances faced by different industry sectors in shaping policy.

The issue is not just restricted to high profile industry sectors such as resources and construction. Service industries on both the west and east coasts of Australia’s are labour intensive businesses whose productivity needs compel both business and industry specific solutions.

Collaboration with business and industry organisations will be essential in mapping a way forward to a higher skilled workforce and greater productivity. Industry and government will also need to work together to better match supply and demand.

Representatives from ACCI’s national network of thirty five business organisations make up the EET Committee and ensure it has an authentic knowledge of how labour and skills shortages impact on business and communities across Australia.

Growing pressures on businesses to attract and retain the right number of staff with the right skills mix means firms are turning away business and their future growth is restricted.

"This means lost opportunity for business, lost opportunity for industry and lost opportunity for communities to achieve their full potential."

For further information:

Ben Carter Marketing & Membership Manager 03 9668 9950 / 0457 836 763

Peter Anderson Chief Executive 02 6273 2311 / 0417 264 862

Welcomed initiatives in the 2010-11 State Budget include:

*Two cuts to payroll tax – 5.5% from 1 July 2010 and 5.45% from 1 January 2011,
*Increase in payroll tax threshold from $638,000 to $658,000 on 1 July 2010,
*Abolition of the insurance protection tax from 1 July 2011,
*A Comprehensive Housing Supply Strategy that will introduce zero stamp duty for off-the-plan purchases of new homes up to $600,000 (a potential saving of $22,490 per home),
*A 25% stamp duty cut on newly constructed homes,
*Zero stamp duty for over-65s who sell their family home or downsize to a newly constructed home worth up to $600,000,
*An additional $40 million for the Major Investment Attraction Scheme to attract large ‘footloose’ projects to NSW: and
*A $75 million defence industry package.

“This is more than an election budget – it is actually a good Budget. It seeks to create workable solutions to issues around business costs, expanding housing supply and investing in transportation and infrastructure”, said Stephen Cartwright, CEO of NSW Business Chamber.

“It is fair to say that NSW has come through the GFC better than expected. However, there are still some clouds on the horizon and we have to work hard to improve the economic position of NSW.

“Treasury’s projections for growth and jobs reflect a strong, diversified and competitive business sector. The GFC has highlighted that strong and competitive local businesses are the best antidote to global instability.

“We welcome the cuts to payroll tax. Payroll tax is more than a tax on jobs, as the Henry Review highlighted, it is also a tax on wages. Whilst the additional cut in January is small at 0.05%, business recognises that the Government has pursued a strategy of small incremental cuts. This strategy has resulted in NSW now having the lowest payroll tax rate in 30 years.

“The reforms in terms of housing supply are also significant. The planning reforms, changes to levies and the zero stamp duty opportunities will encourage the supply of new housing and will remove some of the inefficiencies in the current system.

“Housing affordability has the potential to become a significant business issue in coming years as workers get priced out of Sydney accommodation. This will result in skills shortages which will increase pressure on transport and infrastructure.

“The initiatives in terms of the Major Investment Strategy Scheme, and the investment in defence jobs, highlight a more pro-active approach by the Government in creating new business opportunities for NSW. These initiatives are welcome and supported.

“We also welcome the announcement about traineeships and apprenticeships for young people and we are particularly encouraged by the announcement of new trade schools.”

Mr Cartwright said he was disappointed that the Government did not adopt a more aggressive approach to regional development in NSW.

“We need to invest further in our regional communities by encouraging relocations and by encouraging greater diversification in our regional communities. NSW Business Chamber argued for a Develop Regional NSW Fund and we believe there is still more to do in this area.

Mr Cartwright said another area of concern within the Budget was the increase in employment costs.

“The Mini-Budget in 2008 committed the Government to a 2.5% cap in employee related expenses. According to the Budget papers, employee related expenses grew by 6.6% in 2009-10 and are forecast to grow by 4.7% per annum over the four years to 2013-14.”

Mr Cartwright said it should also be noted that a Budget is exactly that – a Budget. It is not a document that benchmarks NSW against other jurisdictions, or highlights areas of efficiency.

“Budgets by their nature aren’t reforming documents. Whilst this Budget delivers on reducing business costs, dealing with housing supply and invests in infrastructure, we do believe even more could be achieved if the Government undertook a comprehensive reform and audit of its own activities, work practices and performance.

For more information contact Paul Ritchie on 0416 077 976

CHAMBER WELCOMES PAYROLL TAX CUT
Monday 7 June 2010
NSW’s largest business organisation, NSW Business Chamber, has welcomed the NSW Government’s announcement to cut NSW’s payroll tax rate by a further 0.05% in tomorrow’s budget.

NSW’s payroll tax rate will be cut from the current rate of 5.65% to 5.5% from 1 July, six months earlier than originally planned, and then cut again by a further 0.05% to 5.45% from 1 January 2011.

“These cuts represent a $300 million reduction in the cost of doing business in NSW,” said Stephen Cartwright, CEO of NSW Business Chamber.
“NSW is in competition with the other states to be an attractive place to do business – cutting payroll tax makes NSW more competitive with Queensland and Victoria.

NSW Business Chamber outlined a fully-funded plan to cut NSW’s payroll tax rate to 4.95% by 2015 as part of its pre-election blueprint, “10 Big Ideas to Grow NSW”.

“Queensland and Victoria have payroll tax rates less than 5%. We would like to see the NSW Government continue its campaign to cut payroll tax beyond 2011

” Mr Cartwright said that NSW businesses pay $1,870 in payroll tax per employee, compared to $1,498 in Victoria.

“A lower payroll tax rate in Victoria is an incentive for businesses to by-pass NSW and set up shop in Victoria. We need to continue the drive towards a more competitive tax rate with the other states.” Media Contact: Paul Ritchie 0416 077 976

WAGE DECISION - A HARSH AND IRRESPONSIBLE BLOW TO SMALL BUSINESS RECOVERY
Thursday 3 June 2010

Fair Work Australia's (FWA) decision today to increase the minimum wage and more than one thousand award wages by $26 per week, is irresponsible, potentially damaging to the economy and a stark reminder of how the centralised wage system fails to cater for those employers that can afford large rises and those that can't.

"The new IR system may have delayed the wages blow, but when it came today, it was so swift and harsh that many small businesses will be left reeling.”

While a case existed for a modest increase, this decision goes well beyond what was responsible or justified. It will be a dangerous setback to economic recovery in the small business sector. The pay rise has no natural funding basis given the complete absence of productivity trade-offs.

In reality, the increase is at least $31.20 per week after it flows onto wage add-ons such as leave loadings, superannuation, payroll tax and workers compensation premiums.

ACCI estimates that it will add $2.5 billion to the annual wages bill of Australian small business.

Small business employers in the slow lane of the two-speed recovery will be dealt a severe double blow as they also struggle with higher penalty rates and labour cost rises from 1 July due to the reorganisation of awards.

"The failure of the FWA Wages Panel to make real allowance for employers facing this double wages whammy means extreme pressure on business activity and jobs from 1 July 2010."

“This decision cannot be implemented in less than four weeks and will result in hundreds of thousands of small businesses being entangled in a red tape back pay nightmare. This alone adds insult to injury.”

For further information:Greg Evans Director, Economics & Industry Policy 02 6273 2311 / 0407 204 559

Ben Carter Marketing & Membership Manager 03 9668 9950 / 0457 836 763

The BCA has today released a statement on the government’s response to the Henry tax review. The proposed Resource Super Profits Tax does not rate well against the BCA’s high-level principles for tax reform. Of most concern to the BCA is the failure of the RSPT to meet the principle that the taxation framework be characterised by stability and predictability, with any change prospective so as not to adversely affect existing investments or create perceptions of sovereign risk.

The government’s response to the Henry tax review is not the bold tax reform that was promised. The BCA will continue to press for tax reform that will enhance Australia’s future prosperity.

Download the statement here:
http://www.bca.com.au/Content/101690.aspx

For further information, visit our website at www.bca.com.au.

TRANSITION TO MODERN AWARDS WILL INCREASE THE COST OF DOING BUSINESS
Wednesday 2 June 2010
Statement by Mr Peter Anderson, Chief Executive

The release of the Fair Work Ombudsman’s (FWO) Guidance Note on transitional provisions in modern awards makes it clear that the cost of doing business in Australia will increase from 1 July 2010 when the regulatory clean-up and phasing in of the new awards will commence.

“Australian business will face greater costs of employment including increased penalty rates, allowances and changes to regulated employment standards. These changes will hit service industries such as retail, hospitality and tourism, which are major employers, particularly hard.”

“While a reduction in the number of awards will benefit compliance in the long run, the resulting increase in labour costs is totally unacceptable and a breach of promise by government to affected industries.”

"ACCI has previously succeeded before a Full Bench of Fair Work Australia in having these costs transition over a number of years, but the higher costs and time-consuming calculations identified by the FWO are cold comfort to the hundreds of thousands of small and medium business (SMEs) employers who are battling to understand why it will it cost more to employ someone when their employee’s duties will not be performed differently."

"Added to these concerns is the doubt cast by the FWO’s Guidance Note on the right of employers to apply a general practice of absorbing these new costs into over-award payments, a right ACCI and our national network of thirty five state and territory chambers of commerce and national industry associations won in hearings before Fair Work Australia last year."

“The FWO’s active compliance activities, this Guidance Note, the new awards and the minimum wage decision this Thursday all ramp up the stress of doing business just when SMEs are recovering from the global financial crisis and new economic uncertainty emerges courtesy of doubt about the creditworthiness of some European governments, as reflected by the Reserve Bank of Australia’s decision not to increase official interest rates today.”

“Chambers of Commerce and Industry Associations are sources of trusted advice and expertise to help employers navigate these new obligations.

For further information:

Ben Carter Marketing & Membership Manager 03 9668 9950 / 0457 836 763

NO RISE INTEREST RATES RISE IS A REPRIEVE FOR BUSINESS WHICH SHOULD LAST THE WINTER
Tuesday 1 June 2010
Statement by Greg Evans, Director, Economics & Industry Policy

The Reserve Bank of Australia’s (RBA) decision to leave official interest rates unchanged is a reprieve for the Australian economy, business and consumers.

“There is no doubt that the uneven recovery of the Australian economy from the global financial crisis (GFC) and the emergence of new financial uncertainties as a result of doubts about the credit worthiness of some European governments justifies the RBA’s decision to end its current phase of monetary policy tightening.”

“Indeed, there is a strong case for the RBA to sit out the winter on interest rates and not contemplate an increase for at least three months to help rebuild momentum and confidence in the economy.”

“A winter sabbatical from interest rate rises would mean that the RBA was supporting the more than 420,000 small and medium enterprises (SME’s) which are at the sharp end of the economy and have recently endured successive rate increases while adjusting to the phasing out of government stimulus measures.”

“Vital industries such as retail, hospitality and tourism are particularly sensitive to subdued consumer demand and would particularly benefit from a longer reprieve from rate rises.”

“It must be remembered that SME’s in these and other industry sectors are the engine room of the economy.”

For further information:

Ben Carter Marketing & Membership Manager 03 9668 9950 / 0457 836 763

Greg Evans Director, Economics & Industry Policy 02 6273 2311 / 0407 204 559

ANNUAL WAGE REVIEW DECISION AND TRANSITIONAL ARRANGEMENTS IN MODERN AWARD - ANNUAL REVIEW
Tuesday 1st June
Statement by Blake Briggs, Senior Workplace Policy Advisor

Fair Work Australia's Minimum Wage Panel will hand down its first National Wage Review decision at 11 am Thursday 3 June 2010. NSW Business Chamber will be providing a summary of the decision and its application to modern awards generally immediately following the decision.

Recipients of NSW Business Chamber's Award Loose Leaf Service will receive updated pay summaries, which will include updated allowances, shortly following the decision.

Transitional Arrangements FWO Guidance Note

The Fair Work Ombudsman has released a Guidance Note relating to the model transitional arrangements in modern awards. The Guidance Note is targeted at industrial relations practitioners. Consequently, we suggest members receiving industrial services from NSW Business Chamber and those who use the
Transitional Arrangements FWO Guidance Note also contact the Workplace Advice Unit on 13 29 59.

Guidance Note also contact the Workplace Advice Unit on 13 29 59.

MODERN AWARD GUIDELINES HIGHLIGHT INCREASED COST OF DOING BUSINESS IN KEY INDUSTRIES
Tuesday 1 June 2010
Statement by Mr Peter Anderson, Chief Executive

The reality that the transition to modern awards means increased costs of employment, including increased penalty rates, allowances and changes to regulated employment standards particularly in service industries is dawning on employers today with the release of the Fair Work Ombudsman’s (FWO) Guidance Note on the transitional provisions in modern awards.

"Australian business will start to feel the impact of these increased costs of employment from 1st July 2010 when the award regulatory clean-up and phasing in of modern of awards commences. While a reduction in the number of awards will benefit compliance in the long run, the resulting increase in labour costs is totally unacceptable and a breach of promise by government to affected industries.”

"ACCI has previously succeeded before a Full Bench of Fair Work Australia in having these costs transition over a number of years, but the higher costs and time-consuming calculations identified by the FWO are cold comfort to the hundreds of thousands of small and medium business (SMEs) employers who are battling to understand why it will it cost more to employ someone when their employee’s duties will not be performed differently."

"Added to these concerns is the doubt cast by the FWO’s Guidance Note on the right of employers to apply a general practice of absorbing these new costs into over-award payments, a right ACCI and our national network of thirty five state and territory chambers of commerce and national industry associations won in hearings before Fair Work Australia last year."

“The FWO’s active compliance activities, this Guidance Note, the new awards and the minimum wage decision this Thursday all ramp up the stress of doing business just when SMEs are recovering from the global financial crisis and new economic uncertainty emerges courtesy of doubt about the creditworthiness of some European governments, as reflected by the Reserve Bank of Australia’s decision not to increase official interest rates today.”

“Chambers of Commerce and Industry Associations are sources of trusted advice and expertise to help employers navigate these new obligations."

For further information:

Ben Carter Marketing & Membership Manager 03 9668 9950 / 0457 836 763

TIME IS RIGHT FOR FURTHER CUTS TO NSW PAYROLL TAX
Thursday 27 May 2010

NSW’s largest business organisation, NSW Business Chamber, has expressed its disappointment that Unions NSW would oppose cuts in payroll tax that would encourage employers to create more jobs, especially given the $2.7 billion improvement in the NSW Budget bottom line.

“Further cuts to NSW’s high payroll tax are affordable. The time is right to continue the NSW Government’s campaign of cutting payroll tax and getting us into a more competitive position with Queensland and Victoria,” said Stephen Cartwright, CEO of NSW Business Chamber.

“Payroll tax is a tax on jobs. It’s a disincentive for employers to grow their businesses and put more people in jobs. I’ve spoken to many employers who have told me that if the rate was cut they would be more likely to put on more staff.

“I’m surprised and disappointed by Unions NSW objection to further cuts in the NSW’s payroll tax rate that would encourage employers to create more jobs.

“It would appear that Unions NSW is more interested in exporting jobs to Victoria and Queensland then creating a competitive business environment in NSW.

“Cuts in NSW’s high payroll tax rate is a campaign that both employer and employee organisations should get behind. It benefits employers by making them more competitive with other businesses and it benefits employees by encouraging more employment opportunities.”

Mr Cartwright said that Unions NSW objection to further cuts in payroll tax would undercut NSW’s competitiveness considering that other states like Victoria have just announced further cuts to their payroll tax rate.

“Victoria will be cutting their payroll tax rate further to 4.9% from 1 July. NSW’s rate is currently 5.65%, with a further cut to 5.5% from 1 January 2011. Unions NSW is asking NSW to give up on the race to be competitive with other states.”

NSW Business Chamber outlined a fully-funded program to cut NSW’s payroll tax rate to 5% over the next four years in its pre-election policy blueprint, “10 Big Ideas to Grow NSW”.

“Our proposal to cut payroll tax in 2011-12 to 5.35% would cost $185 million dollars. This is affordable given that the current projection for the budget surplus is around $1.7 billion.”

Mr Cartwright said that if Unions NSW was seriously concerned about the increasing cost of the public sector they should be advocating for public sector reform to rein in costs not slugging businesses with uncompetitive taxes.

Media Contact: Paul Ritchie 0416 077 976

GLOBAL TRADE KEY TO GLOBAL RECOVERY
Friday 21 May 2010
Statement by Mr Nathan Backhouse, Manager Trade Policy and International Affairs

The Australian Chamber of Commerce and Industry’s (ACCI’s) Trade Policy and International Affairs Committee, representing more than 20,000 Australian export trading companies in State Chambers of Commerce and Australia’s major national Business Councils, held its second meeting for 2010 in Adelaide.

The Trade Committee welcomed work by the Australian Government, supported by local industry, to maintain pressure on nations to resist protectionism as the global financial crisis still plays out in Europe and other economies.

Industry backed the federal budget’s funding for the TradeStart programme and Austrade activities abroad, but is disappointed that funding for the Export Development Market Grants (EMDG) Scheme has not increased.

Local trade managers in business organisations also saw opportunities for closer work with Austrade to deliver trade services on the domestic front.

The role of government in supporting business networks was discussed and opportunities canvassed. Currently the South Australian Government supports a network of bilateral Business Councils through the Council of International Trade and Commerce SA (CITCSA). This network has proven invaluable in making international linkages, providing business opportunities and facilitating trade to the SA business community, particularly SME’s. The Committee will take this initiative to the Australian Government recommending development of a similar model at the national level.

Nick Begakis, AM, Chair of the Trade Committee said “the lack of certainty in EMDG returns is a source of frustration to exporters using the Scheme. With one in five Australian jobs related to exports, attention needs to be focused on practical measures available to support exporters. This scheme has been a standout success in encouraging hesitant exporters to take the significant financial risks involved and go global.”

“Problems in accessing trade finance continue to exist, and ACCI’s evidence last week to the Senate Economics Committee puts pressure on the banks to come to the table and better support our industry doing business overseas.

For further information:
Nathan Backhouse Manager Trade Policy and International Affairs 02 6270 8044/0431 615 709

EMPLOYER PUSH-BACK ECONOMY ON SUPERANNUATION LEVY
Friday 21 May 2010
Statement by Mr Peter Anderson, Chief Executive

Australia's largest employer body, the Australian Chamber of Commerce and Industry, is continuing to resist the Australian Government's push to force a $20 billion per year increase in employer superannuation payments from 9% to 12% of payroll.

ACCI is also developing a strategy to force the Government to come good with its budget promise that "employers will take increases in superannuation guarantee contributions into account when negotiating future wage agreements."

ACCI has also rejected claims by the financial services industry that these increases will not burden business.

In the past fortnight ACCI has met with the Federal Minister for Superannuation Hon. Chris Bowen MP, and with the Association of Superannuation Funds of Australia to express concern on behalf of its 350,000 strong employer membership.

"The debate over the proposed Resources Tax continues to be used to muddy the water over who is paying the higher superannuation levy. It is not; repeat not, going to be paid by the Government from this proposed tax. The Government is going to legislate to require the higher superannuation to be paid by the same employers who currently pay the 9%."

"Even though the Government is phasing in this cost, it still represents a one third (33%) levy increase, or $20 billion per year once fully implemented.

"Budget allocations identifying the superannuation levy as a cost to the Commonwealth arise not because the government is paying the levy, but because Government tax concessions on superannuation cost the budget as the superannuation pie gets larger. Employers will still be required to pay."

"The capacity of employers across the economy to recoup a portion, let alone the whole of the $20 billion extra superannuation payments from future wage increases in a decentralised wage system is very difficult and in many cases not possible. To say this increase will be deferred wages is wishful thinking, unless systems are put in place to compel wage trade-offs."

ACCI has also repudiated claims by the financial services industry that employers can afford these increases because of the company tax reductions.

"Those company tax reductions are conditional on a new tax, the Resource Tax, being imposed on business. And two thirds of small business, 420,000 of which are employers, don't get a company tax reduction even if comes to pass. And it does not take too many years after paying higher superannuation for the superannuation increase to outweigh the tax relief for those who get it."

"Employers and small business don't take kindly to the superannuation industry, with its vested interest in creaming off fees and commissions, advocating the spending of someone else's money and agitating the government to break its 2007 election promise not to raise the levy. The financial services and superannuation industries need to focus on how lowering their fees and commissions can provide better retirement incomes. Total fees on superannuation balances in 2008 were reportedly $14.1 billion. Reducing these fees by half would provide retirement benefits to employees at least equal to the rise in the superannuation levy, without putting that cost on the nation's employers and the productive side of the economy."

For further information:
Peter Anderson Chief Executive 0417 264 862

Ben Carter Marketing & Membership Manager 0457 836 763

ACCI SMALL BUSINESS SURVEY - SMALL BUSINESS TRADING CONDITIONS CONTINUE TO RECOVER DESPITE PROFITS AND INVESTMENT REMAINING SOFT
Wednesday 19 May 2010
The May ACCI Small Business Survey shows a marginal improvement in Small Business Conditions over the March quarter, with this index rising to 52.9 – the highest level since the December quarter of 2007 and around 2.5 points above its five year average of 50.4. Small businesses expect their business conditions to improve further over the June quarter.

The Survey also found that:
*Small business expects Australia’s economic growth to rebound strongly over the next twelve months, with the Expected Economic Performance index increasing from 60.0 to 64.0 over the March quarter;

*While the actual indexes for the March quarter remain contractionary, small business expects Selling Prices, Profit Growth and Employment to improve over the next three months;

*The decline in Overtime Utilisation is expected to moderate further over the June quarter; and

*Smalll business expects business investment to continue to be weak over the next three months, with Investment in Plant and Equipment declining marginally to 50.0.

Following four official interest rate hikes in the six months to March 2010, coupled with some major lenders increasing their lending rates by more than the official rate rise, Level of Interest Rates has risen from the 12th to the 3rd largest impediment to small business investment. Skill shortages have also resurfaced as an impediment to small business investment, with Availability of Suitably Qualified Employees rising from the 13th to the 4th position, the first time it has moved into top five position since the September quarter of 2008.

Mr Greg Evans, Director of Economics & Industry Policy, Australian Chamber of Commerce and Industry, commented:

“While small business experienced some welcome improvements in business confidence and trading conditions over the March quarter, small business performance in general is still lagging behind its larger counterpart. Selling prices remain contractionary, which continues to put downward pressure on small business profitability and increases the need for working capital.”

“Moreover, the outlook of increasing interest rates and difficulties in accessing finance has further constrained small business investment. The two-speed economy has also put further pressure on small business to attract staff with appropriate skill levels. Therefore it is important for government to understand and address challenges currently confronting the small business community to ensure balanced and sustainable economic growth. This includes an ongoing commitment to tax reform especially in areas affecting smaller enterprises such as income tax, payroll tax, depreciation allowances & capital gains tax.”

The survey assessed business conditions and business confidence amongst 1,526 small businesses around the country over the January, February and March period. A full copy of the Survey is available on the ACCI website at http://www.acci.asn.au/SurveySBS.htm

For further information:

Greg Evans Director of Economics & Industry Policy 02 6273 2311 / 0407 204 559

Brett Hogan Director of Communications 03 9668 9950 / 0407 273 884

CHAMBER CALLS FOR TRANSPORT TSAR TO TAKE CHARGE OF SYDNEY TRAFFIC
Tuesday 18 May 2010
NSW's largest business organisation, NSW Business Chamber, said that an NRMA survey that shows businesses are paying up to $10,000 in extra wages and fuel costs as a result of traffic congestion reinforced the need for a Transport Tsar to implement a traffic demand strategy for Sydney's transport network.

NSW Business Chamber outlined the need for a Transport Tsar as part of its 10 Big Ideas to Grow NSW campaign (www.10bigideas.com.au). The 10 Big Ideas also highlighted the importance of encouraging regional location for major government agencies.

“This survey tells us what business already knows – it is becoming more expensive to do business in the metropolitan area because of the costs of congestion.

“Transport is the number one issue for businesses in Sydney. Businesses are paying for congestion through lost productivity, increased fuel costs, and lost business opportunities.

“We need a Transport Tsar to take control of Sydney's 15 transport agencies and get them working together to deliver better transport outcomes for Sydney's business owners and commuters,” said Stephen Cartwright, CEO of NSW Business Chamber.

“We want a Transport Tsar that is charged with putting in place a demand strategy for our transport network – a strategy that will use what we already have in transport infrastructure more effectively.

Mr Cartwright said that a Transport Tsar could introduce a range of measures to spread the peak including:
Trialling 10am starting school hours for high school students;
Variable tolling – implementing of peak, shoulder and off-peak pricing;
Peak, shoulder and off-peak pricing of public transport Public sector employees encouraged to start work during non-peak periods
Private sector incentives to shift hours away from traditional working hours; Incentives to encourage car pooling
Greater use of GPS, web and app technology to assist in trip planning; and Encourage greater housing density close to employment areas.

“A "business as usual" approach to transport will only increase the costs on congestion on business and the community in general. It?s time to start thinking outside the gridlock and put in place a demand strategy for our transport network.” Media Contact: Paul Ritchie 0416 077 976

MINIMUM WAGE REVIEW
Monday 17 May 2010
PETER ANDERSON:
The Annual Wage Review being conducted by Fair Work Australia is part of the new industrial relations system established by the Government. 

The Government says that its system will get the balance right, and that its system will deliver fairness. Fairness in the workplace is not just an issue for employees, it’s an issue for employers as well.

Australia’s employers, particularly the half a million small to medium business employers who are affected by this case, will be looking to Fair Work Australia to deliver a fair outcome for those businesses.

This case is not a straightforward case, nor a ‘catch up’ wage case as made out by the ACTU. This case involves the employers of Australia who, by and large, are in the slow lane of a two-speed economic recovery.

Those half a million small or medium businesses have faced six interest rate increases in the past nine months. They are employers who have kept people in work during the downturn, even where that may not have been the economically
rational thing to do in the short term. Those employers have acted fairly and those employers expect a fair deal from this case
.
This case also involves the implementation of wage increases at the very time that not only is the economy in an uneven recovery, but there are increases in labour costs for those employers coming through the pipeline, as a result of the new
industrial relations system the Government has put in place.

Even without this wage increase, from the first of July these employers are facing increases in penalty rates, increases in allowances, increases in overtime rates and the like. Where that occurs, this case will be a double-whammy. That is why
this case needs to substantially moderate the ACTU claim.

This is not a case where there needs to be any risks taken with our economic recovery.

This is not a case where there needs to be any risks taken with jobs in Australia. We need to ensure that any increase awarded is moderate. Employers are not saying that there should not be an increase. Employers are taking the fair position
and saying there should be a modest increase, but one that reflects the reality of businesses in the slow lane of the twospeed recovery, and the reality of increases coming through the wage system irrespective of this particular case.
JOURNALIST:
Can you put a figure on modest?
PETER ANDERSON:
Employers are saying that increases should be between ten dollars and fifty cents and twelve dollars and fifty cents per week. With that level of increase together with the other levels of increase that are coming through the award system and
together with the fact that there are some income tax reductions from the 1st of July, low wage earners will be protected as well as the jobs of low-paid wage earners.

That is the important objective of this case. Fairness requires attention to both sides of the industrial equation. It requires fairness to the businesses that are paying the wages, fairness to the wages of those employees, as well as protection of their jobs.
JOURNALIST:
If the unions get what they want, how many small businesses could go under?
PETER ANDERSON:
If the union gets what it wants there will be untold pressure on the bottom line wage costs of these businesses. It will be paid for in a combination of businesses struggling to make ends meet, some of which will not be able to. It will be paid
for in some reductions of working hours, and it will be paid for in some losses of jobs. Throughout the small business economy in particular, throughout the service industries, the local shops, the local cafes, the local traders, we will see the impact through less business activity, less capacity for those businesses to meet their bottom line, and less employment.
JOURNALIST:
How long is this case likely to go for?
PETER ANDERSON:
The case lasts for a week. There have been submissions presented to the tribunal since March. Last week’s post-budget submissions have been put before the tribunal. We have a week now where all the parties are going to put their case
forward. What is important in that respect is that the Government puts forward a position which is neutral, which is more neutral than what the Government has so far proposed. The Government has a responsibility to take account of the
interests of the small to medium businesses who have to pay these wage increases, not just the position of the unions.
JOURNALIST:
And you’re expecting a verdict in June?
PETER ANDERSON:
Under the Government’s industrial relations changes these increases, if there is any awarded, come into operation from the 1st of July so that means the decision is likely to be in June. What that also means, and I think this is an important
point for the media to pick up on, is that despite the ACTU saying that workers have not had a wage increase since August or October 2008, the reality is that there has only been a gap or a pause decided last year of nine months. The increase that was paused last year would have occurred from October last year, and there will now be an increase in July of this year and that is a nine month period. There has been a wages pause for nine months in Australia, not the two years that the ACTU is pretending.

SMALL BUSINESS ISSUES IMPORTANT IN PAID PARENTAL LEAVE SCHEME
Friday 14 May 2010
Statement by David Gregory, Director Workplace Policy

The Australian Chamber of Commerce and Industry, Australia's largest and most representative business organisation, has given evidence today to the Senate Community Affairs Legislation Committee hearing into the Government's National Paid Parental Leave Scheme.

“The award wage case being arbitrated this week by Fair Work Australia has the challenge of setting minimum and award wages in the midst of an uneven two-speed economic recovery.”

“The case primarily involves small and medium employers who are in the slow lane of the two-speed economy. These employers, typically small shops, cafes and local traders, have been hit with six interest rate rises in eight months and not yet seen the economic recovery boost their capacity to pay above-inflation wages, as the unions and Government would want. A more moderate rise in the region of $10.50 to $12.50 per hour is justified.”

“Many of these smaller employers also face the double whammy of wage rises plus increases in penalty rates, overtime and allowances from 1 July when new industrial awards kick-in. If arbitrated wage costs are not moderated then wage rises in this sector will come at the cost of jobs.”

The Annual Wage Review being conducted by Fair Work Australia extends beyond employees on the minimum wage to include all award wages including some professionals paid above $100,000 per year. It involves no productivity or efficiency trade-offs for the rises ordered.

ACCI will present its case to the tribunal on Tuesday. ACCI submissions, including our Post-Budget Submission, are available at www.acci.asn.au/submissions, and the Fair Work Australia web site.

For further information:

David Gregory Director of Workplace Policy 03 9668 9950 / 0417 052 390

Brett Hogan Director of Communications 03 9668 9950 / 0407 273 884

SMALL BUSINESS ISSUES IMPORTANT IN PAID PARENTAL LEAVE SCHEME
Friday 14 May 2010
Statement by David Gregory, Director Workplace Policy

The Australian Chamber of Commerce and Industry, Australia's largest and most representative business organisation, has given evidence today to the Senate Community Affairs Legislation Committee hearing into the Government's National Paid Parental Leave Scheme.

In its evidence, ACCI has ‘welcomed the introduction of the Government's Scheme’ supports ‘other policy measures that are part of the overall work and family equation, such as adequate community child care facilities’, considers the Government-funded scheme ‘measured and consistent with what is affordable and necessary for an economy-wide Scheme of this nature’, and proposes ‘administration of the Government payment scheme through the Government agency rather than employer payrolls.’

“There is an increasing convergence of views that red tape pressure on small business in particular needs to be reduced. Indications given by the ACTU in evidence this morning that unions would support sensible measures to take pressure off small business are a step in the right direction.”

A copy of ACCI’s Opening Statement to the Senate hearings, delivered today by ACCI's Manager of Workplace Relations and Legal Affairs Daniel Mammone, is available on the ACCI website at www.acci.asn.au/SpeechesMain.htm.

For further information:

David Gregory Director of Workplace Policy 03 9668 9950 / 0417 052 390

Brett Hogan Director of Communications 03 9668 9950 / 0407 273 884

RETURN TO SURPLUS - BUT WHAT IS THE RISK?
11 May 2010

“This Budget sees a sooner-than-expected return to surplus and the government meeting its own fiscal rules, but it introduces a huge question mark over future growth,” BCA Chief Executive Katie Lahey said.

The 2010–11 federal Budget forecasts a return to budget surplus by 2012–13 underpinned by the government meeting its commitments to cap real expenditure growth at 2 per cent and to constrain the level of tax to GDP. It also outlines a range of measures that have the potential to enhance productive capacity.

The proposed introduction of the Resource Super Profits Tax (RSPT), however, creates a new and substantial risk – both for the economic outlook and for the stability of the Budget itself.

Read the full statement at:
http://www.bca.com.au/Content/101683.aspx

BUDGET REPAIR TASK GETS UNDER WAY
Tuesday 11 May 2010
Statement by Peter Anderson, Chief Executive

The Federal Budget projects an optimistic yet realistic view of the growth prospects of the Australian economy and wisely commences the process of bringing the Commonwealth budget into repair after 18 months of substantial stimulus spending.

The earlier than expected return to a surplus position in 2012-13 is welcomed by business. ACCI has put the case that this is essential to ensure higher debt and deficits do not place pressure on interest rates.

Australia’s stronger growth outlook is set to bolster revenues over the forward estimates. However, ACCI considers greater scope still exists to reduce spending across government. This will provide the opportunity for earlier and more extensive tax reform.

ACCI has welcomed the depreciation changes for small business and the cut in the company tax rate. We are concerned though that failure to decouple these important initiatives from the Resource Super Profits Tax (RSPT) may make these benefits a political football.

Assisting the return to surplus is the implementation of the RSPT which we remain concerned will affect investment in this sector and businesses that are directly and indirectly linked to the resources industry.

While there are no specific further tax initiatives for business in the budget, we hold the view that tax reform is an unfinished business especially in relation to the Henry Tax Review’s proposal to abolish payroll tax, provide further capital gains tax relief and the need for continued reduction in income tax.

ACCI welcomes the infrastructure initiatives including the $5.6 billion over the next decade for the State Infrastructure Fund and an extra $1 billion for the Australian Rail Track Corporation.

Skills investment has also received due recognition with $661 million directed at the Skills for Sustainable Growth strategy.
For further information:

Peter Anderson Chief Executive 02 6273 2311 / 0417 264 862

Greg Evans Director, Economics & Industry Policy 02 6273 2311 / 0407 204 559

Brett Hogan Director of Communications 03 9668 9950 / 0407 273 884

EUROPEAN SOVEREIGN DEBT WOES NOT A BASIS FOR RESTRICTING SMALL BUSINESS FINANCE
Monday 10 May 2010
Statement by Mr Peter Anderson, Chief Executive

The Australian Chamber of Commerce and Industry (ACCI), Australia's largest and most representative business organisation, says that recent instability in overseas financial markets arising from sovereign debt issues in Europe should be used as a basis for attracting foreign capital to Australia and support the provision of finance to local businesses, in evidence at this morning's Senate Economics Reference Committee hearing in Canberra, which is conducting an Inquiry into Access of Small Business to Finance.

ACCI has also made a call for a Productivity Commission inquiry into competition in the retail banking industry in the wake of the global financial crisis.

“Small and medium businesses have been disadvantaged over the past 18 months by a combination of constrained capital flows, higher cost of overseas funds and less competition in the local retail banking sector.”

“Australia is a stable destination for capital. The jumpy nature of overseas markets should not be used by our local banks to raise the cost of finance. Bank margins were already fattened at the expense of small business during 2009, with rate rises passed on in full but not the full value of rate reductions.”

ACCI's submission to the Senate Economics Committee raises important questions about whether smaller businesses have been getting a fair deal on accessing finance and its price.

“The inquiry should shine a spotlight on banking practices and seek full accountability from the banking sector for the manner in which it decides to offer small business finance, the security it demands, and the interest rates imposed on finance and renegotiated finance. Since the global financial crisis, banks have increased their risk margins for small business loans and tightened their lending criteria through lower loan-to-valuation ratios, stricter collateral requirements and higher interest coverage ratios.”

“As important to our economy as a healthy banking system is, and as well managed as our retail banks are, the banking industry cannot hide behind its stability and profitability to sidestep the legitimate concerns of small and medium businesses when it comes to a fair deal in accessing affordable finance.”

The ACCI submission follows its General Council meeting in Melbourne on 26 March, where the Presidents and Chief Executives of Australia’s leading Chambers of Commerce and Industry Associations concluded that access to finance was "now the most substantial issue facing the day-to-day wellbeing of Australia’s small and medium business sectors."

ACCI was the first national business organisation to last year call for a national and public inquiry into the difficulties small businesses have in accessing finance. As well as the increase in the cost of finance, an immediate concern for small businesses is the availability of domestic and export finance from major lenders.

In its evidence today ACCI made seven recommendations that would assist small business, including a program of increasing the understanding of the small business sector by lending managers in retail banks.

ACCI was represented in the hearing by Chief Executive Peter Anderson, Director of Economics and Industry Policy Greg Evans, and Economic Adviser Dr. Si Wei Goo.

The submission is available on the ACCI website at http://www.acci.asn.au/SubmissionsMain.htm

For further information:

Peter Anderson Chief Executive 02 6273 2311 / 0417 264 862

Greg Evans Director, Economics & Industry Policy 02 6273 2311 / 0407 204 559

Brett Hogan Director of Communications 03 9668 9950 / 0407 273 884

NEED TO ENTRENCH SMALL BUSINESS TAX BENEFITS IN REGULAR BUDGET Friday 7 May 2010
Statement by Mr Peter Anderson, Chief Executive

The Australian Chamber of Commerce and Industry (ACCI), Australia's largest and most representative business organisation, supports the proposed small business tax concessions outlined in the Government Response to the Henry Tax Review, and has called for them to be included in the forward estimates of next week's Federal Budget, in order to prevent them being a political football caught up in the debate over the Resource Super Profits Tax.

In the current edition of the ACCI Review, released today, ACCI identifies the benefits to small business from the proposed changes to depreciation, asset-write offs and company tax reductions.

“Although the Government response did not go as far as ACCI was seeking and the Henry Review recommended, each of these measures will be beneficial to small business even though they are not evenly spread given business structures and tax circumstances vary across the sector.”

“While most of the employing small businesses of Australia will join with ACCI in opposing the compulsory increase in their 9% superannuation levy, which was a breach of promise by the Government and not recommended by the Henry Review, these same businesses will want the Government and parliament to deliver on its promise to provide tax relief in these other areas.”

ACCI does not support the Resource Super Profits Tax. Taxes like these flow through the economy and cost all taxpayers, including smaller businesses. The ACCI Review concludes that “the immediate challenge for the Government as well as the Opposition in its budget reply, is to provide a funding basis for these pro-small business measures outside of the plan to introduce a new tax on the resources sector.”

The ACCI Review also identifies the lack of relief on capital gains tax for small business as creating a large gap in terms of Government tax support for the retirement nest egg of small business compared to the retirement savings of employees.

“Small business owners have their retirement savings invested in the capital of their business. Without capital gains tax relief they are not being supported in their retirement savings anywhere like the concessions provided to wage and salary earners.”

The May 2010 edition of the ACCI Review, which also overviews budget measures to support workplace productivity, skills and growth in trade, can be found at www.acci.asn.au.

For further information:

Greg Evans Director, Economics & Industry Policy 02 6273 2311 / 0407 204 559

Brett Hogan Director of Communications 03 9668 9950 / 0407 273 884

The Australian Chamber of Commerce and Industry (ACCI), Australia's largest and most representative business organisation, has welcomed the establishment of a new national automotive industry body – the Australian Automotive Industry Association.

The new organisation, established by the Victorian Automobile Chamber of Commerce, Motor Trades Associations of Queensland, New South Wales, and the Tasmanian Automobile Chamber of Commerce, was launched in Melbourne today.

“The Australian automotive industry has a turnover of $101b a year and employs over 200,000 people. It is not only the backbone of manufacturing, but supports tens of thousands of businesses in related retail, repair and supply industries. It also invests heavily in workplace and technical skills.”

“The organisations behind this new Association have a long established track record in successfully representing their member and industry interests. I am confident that this spirit will run through the AAIA.”

“ACCI, which represents industry associations as well as Chambers, looks forward to working closely with the new Association and this vital industry sector.”

For further information:

Peter Anderson Chief Executive 02 6273 2311 / 0417 264 862

Brett Hogan Director of Communications 03 9668 9950 / 0407 273 884

IR SYSTEM UNDER SCRUTINY ON YOUTH EMPLOYMENT
Thursday 6 May 2010
Statement by Mr Peter Anderson, Chief Executive

The Australian Chamber of Commerce and Industry, Australia's largest and most representative business organisation, says that today's arbitration by Fair Work Australia of minimum engagement provisions in the retail industry is a significant test of whether the new ‘fair work’ industrial relations laws have ‘got the balance right’ as intended by the Government.

In this case retail industry employer organisations, supported by ACCI, are seeking to vary the minimum engagement rule in the recently modernised retail award so that it does not inhibit the employment of people who can only work for short shifts.

“The recent case of young people in regional Victoria losing their jobs in a country hardware store because their after-school roster from 4pm to 5.30 pm (when the store closed) did not fit the new award rule is the lightning-rod that must force a change. This example, plus others, means that sensible flexibility should be built into the award rule prohibiting minimum engagement of less than three hours so that young people don't miss out on useful work that pays award rates.”

ACCI is also today releasing an Issues Paper on Youth Employment, which highlights how young people's employment has become more vulnerable as a result of the global financial crisis.

Official ABS data shows that a quarter of a million (249,100) young people are currently unemployed and an additional 304,400 underemployed. 550,000 young people, or 26.2% of the youth labour force, are unable to find work or sufficient work. The Issues Paper concludes that due to the economic downturn they have become more vulnerable than before in seeking work – ‘when jobs become scare, young job seekers tend to fare far worse when it comes to successfully securing employment.’

“Rigid award rules that created inefficient work practices or prevented employment eventually led to deregulation of the IR system in the early 1990s. There is a place for minimum engagement standards, but award rules need to be flexible to meet business and labour market needs. If they don't, the system is discredited and industry calls for broader change become louder, especially if it means fewer jobs.”

“The Prime Minister said in February this year that this problem would be fixed up. So far it hasn't been. ACCI and our retail members have provided the forum for that to now occur. The sooner retailers don't have to dismiss staff because of inflexible award rules, the better.”

A copy of the ACCI Issues Paper on Youth Employment is available at www.acci.asn.au.

For further information:

Peter Anderson Chief Executive 02 6273 2311 / 0417 264 862

David Gregory Director of Workplace Policy 03 9668 9950 / 0417 052 390

Brett Hogan Director of Communications 03 9668 9950 / 0407 273 884

PRIVATE SECTOR REQUIRED TO ADMINISTER GOVERNMENT PAID PARENTAL LEAVE SCHEME
Tuesday 4 May 2010
Statement by Mr Peter Anderson, Chief Executive

The Australian Chamber of Commerce and Industry has welcomed today's release by the Government of exposure draft paid Parental Leave Bill but expressed caution at the unnecessary level of administrative compliance that could be imposed on employers and small business.

“The Government Scheme is measured, publicly funded, and consistent with what is affordable and necessary for an economy-wide scheme of this nature. Coupled with the significant levels of maternity and paternity leave provided by Australian employers and the additional social support through the family tax system and baby bonus it compares more than well with international standards.”

While the Government has endeavored to minimise some of the administrative costs on employers and small business through up front government payments and a 6-month transition before running the scheme through employer payrolls, the fact that employers and small business will act as paymaster adds an unnecessary level of red-tape. Businesses together with the claimant will be in a three way merry-go-round with the government agency assessing eligibility, exchanging information and waiting for correctly calculated monies to be deposited.

“It would be simpler and cleaner for the Australian paid parental leave scheme to be wholly run through the Government's Family Assistance Office, as in New Zealand, rather than having the bureaucracy receive applications and assess eligibility but than hand over payment obligations to the employer.”

“The Government has not provided any rebate to employers and small business to cover these administrative costs. Benefits to employers are not evenly spread, and the primary beneficiaries of the Scheme are employees, not businesses.”

In the United Kingdom the Government provides 104.5% of the payment to employers as compensation for administering the system on behalf of the State.

ACCI will also support Commonwealth Government efforts to have State Governments quarantine employer payments from payroll tax and workers’ compensation levies.

For further information:

Peter Anderson Chief Executive 02 6273 2311 / 0417 264 862

Brett Hogan Director of Communications 03 9668 9950 / 0407 273 884

IT'S NOW TIME FOR AN INTEREST RATE PAUSE
Tuesday 4 May 2010
Statement by Mr Peter Anderson, Chief Executive

Reserve Bank interest rate increases are always difficult for business and all borrowers across the economy. Today’s tightening, will not be welcome news for individual businesses. With six increases in eight months, including three successive rises and a combined 150 basis point adjustment since October 2009, ACCI considers that there should now be a pause before any further rate hikes in the current cycle.

“Any further move at this stage in the cycle would be imprudent without first pausing to assess the impact of the recent rate hikes and the strength of the domestic economy.”

As the Reserve Bank highlights, today's decision will leave lending rates for most borrowers ‘around average levels.’ This is especially so for small businesses who have experienced higher rates imposed by retail banks. The cash rate has been returned to a neutral setting. Any further increase in the cash rate beyond 4.5% would involve shifting policy toward a more restrictive stance.

We are in a period of economic recovery. However the robustness of the recovery is still uneven, and today's Commonwealth Bank ACCI Business Expectations Survey shows total sales revenue contracted for the surveyed firms over the past three months. Other areas of weakness include profitability and investment measures.

A pause in interest rate increases in the short term will provide the opportunity to assess the strength and speed of the recovery and avoid the potential for denting confidence and affecting demand conditions in more vulnerable areas of the economy.

ACCI is cognisant of needing to address inflationary pressures as they develop, yet we consider that the Reserve Bank should also take account of the pressures faced in the slower lane of the two speed economy.

For further information:

Peter Anderson Chief Executive 02 6273 2311 / 0417 264 862

Greg Evans Director, Economics & Industry Policy 02 6273 2311 / 0407 204 559

Brett Hogan Director of Communications 03 9668 9950 / 0407 273 884

The May 2010 Commonwealth Bank – ACCI Business Expectations Survey has found that all business actual indicators improved over the March quarter, except for the index of Sales Revenue. Nonetheless, most of the expectations indicators are plateauing after the strong rebound recorded in the preceding three quarters.

Despite improvement, the actual indexes of Export Sales, Profits and Investment in Building and Structures remained negative in the March quarter. Expectations indexes for these three indicators are in expansionary territory. Both actual and expectations indexes of Overtime Utilisation remained negative, with hours worked projected to remain unchanged, if not decline, during the June quarter.

Comparisons by Size of Firm reveal that small firms have recorded the weakest performance compared to medium and large businesses, with small businesses’ conditions, employment and investment in plant and equipment remaining contractionary during the March quarter.

Mr. Greg Evans, Director of Economics and Industry Policy, Australian Chamber of Commerce and Industry, commented:

While general business conditions and outlook have improved over the March quarter, profitability remains negative and this continues to hamper to some extent the ability of business to invest and employ. Overall, this survey posts a more positive result, yet there are pressure points. Nevertheless, we support the view that the Australian economy will return to near trend growth by the end of 2010.

Despite this, some caution is still warranted as small businesses, unlike their larger counterparts, continue to face soft trading conditions and a lacklustre employment outlook. Weak selling prices, insufficient demand and problems associated with accessing credit remain significant barriers to sustainable private sector growth. The likelihood of continued rate hikes will place further pressure on those businesses carrying debt and facing softer sales conditions.

Mr Robert De Luca, Executive General Manager, Corporate Financial Services, Commonwealth Bank, commented:

It’s encouraging to see that business confidence has turned a corner, continuing its upward trend over the March quarter. Business owners are optimistic that the Australian economy will not only perform well over the next quarter, but over the next 12 months.

Despite improved confidence, businesses are still finding that demand for their goods and services is weak, as more business owners reported a drop in sales revenue over the past quarter. Higher wage costs and non-labour wage costs are also having an impact, as are rising interest rates.

The survey assessed business conditions and business confidence amongst 2,641 businesses around the country over the January, February and March period. A full copy of the Survey is available on the ACCI website at http://www.acci.asn.au/SurveyBES.htm

For further information:

Greg Evans Director of Economics and Industry Policy, ACCI 02 6273 2311 / 0407 204 559

Brett Hogan Director of Communications, ACCI 03 9668 9950 / 0407 273 884

Kate Powditch Public Relations, Commonwealth Bank 02 9118 1667

Statement by Mr Peter Anderson, Chief Executive

The Australian Chamber of Commerce and Industry, Australia's largest and most representative business organisation, has moved to clarify the exposure employers and small business have to changes to superannuation taxation and company taxation in the Government response to the Henry Tax Review.

Some media reporting this morning claims that ‘the new Resource Super Profits Tax will fund the Federal Government's promise to raise the superannuation levy from 9% to 12%.’

Regrettably, this is not the case:

the increase from 9% to 12% is to be paid by Australia's one million employers and small businesses. Overnight ACCI has estimated that this 3% increase equals, in today's dollars, between $20 billion and $23.6 billion a year;
the superannuation levy increase is the biggest new taxing measure in the Government Response ($20 billion per year), larger than the Resource Super Profits Tax (predicted at $9 billion per year);
the Henry Review recommended AGAINST requiring employers to pay an increase in the superannuation levy. Last year the Henry Review released a report that concluded that the 9% superannuation levy was adequate for retirement purposes. The Government has made this decision off its own back;
the Government decision is a breach of a promise made to the employer community prior to and following the 2007 election that it would NOT increase the compulsory 9% employer contribution;
the Government plan to allow employers to pay this increase through a wage trade-off will be difficult to deliver in what is now a decentralised wage system. Where it is not part of a wage trade-off, it is a direct tax on employers. It is unfair to expect Australia's employers to bear the full burden of every dollar of the compulsory retirement savings of their employees;
employer superannuation payments already increase every year as wages rise, even with no levy increase. Increasing the levy means employers pay twice - a higher percentage and higher dollars as wages rise. The Government plan to phase this increase in seven steps over a decade transitions this impact but does not make an unfair situation fair.

Some media reporting this morning also claims that ‘small businesses will get the benefit of company tax reductions.’

Regrettably, this is not correct in the majority of cases:

the company tax reduction is only available to incorporated businesses. Most small businesses are not incorporated. The Government response says that there are 2.4 million small businesses, but that only 720,000 (less than one third) will be eligible for the company tax reduction;
whereas all employing small businesses will have to pay the higher superannuation levy, most small businesses will not get a company tax cut, but a larger percentage will benefit from depreciation and asset write-off changes;
“The Government response to the Henry Review is a mixed bag for business. Whatever views are held on the Government response it is important that this debate accurately and factually reflects the impact on industry. Suggestions that the proposed new tax on the resource industry is the funding basis for the rest of the package are only partially true and likely to mislead. The cost to employers of higher superannuation levies is a big hit on the productive capacity of our economy that was NOT recommended.”

For further information:

Peter Anderson Chief Executive 02 6273 2311 / 0417 264 862

Greg Evans Director, Economics and Industry Policy 02 6273 2311 / 0407 204 559

Brett Hogan Director of Communications 03 9668 9950 / 0407 273 884

BOLD LEADERSHIP ON TAX WILL REALISE OUR POTENTIAL
2 May 2010

The Henry review into Australia’s Future Tax System makes an historic and significant contribution to the economic reform debate in Australia.

“As a staunch advocate for root-and-branch reform of Australia’s tax system, the BCA strongly supports the ambitious nature of the review panel’s blueprint,” Ms Lahey said.

“The government’s initial response to the review is a step in the right direction although it is confined to a relatively narrow set of areas and only partially meets the BCA’s principles for tax reform. We hope over time the government will embrace the recommendations of the Henry review more fully, given they could add a further 2 per cent to GDP.”

Read the full statement here:
http://www.bca.com.au/Content/101681.aspx

For further information, visit our website at www.bca.com.au.

To provide feedback or unsubscribe to the BCA email distribution list, please click here.

BUSINESS RESPONSE TO HENRY REVIEW: LIMITED TAX REFORMS MATCHED BY TAX AND SUPERANNUATION HIKES AND MISSED OPPORTUNITIES
2nd May 2010

Statement by Mr Peter Anderson, Chief Executive

The Australian Chamber of Commerce and Industry, Australia’s largest and most representative business organisation, says that the Government Response to the Henry Tax Review is a mixed bag for the business community with welcome steps towards a lower corporate tax rate and small business concessions on depreciation cancelled out by tax hikes on employer superannuation and a new tax on the resources industry.

“There is tax reform in the package, but it is not bold reform and there are missed opportunities, the biggest of which is the failure to act on a breakthrough recommendation by the Henry Tax Review that payroll tax should be abolished.”

“Payroll tax is an inefficient and job destroying tax on employment and exports without reference to capacity to pay, and the Henry Review has at last said it should go. The government must now start dialogue with the States through COAG on a plan to replace it once and for all.”

The decision to increase employer superannuation payments from 9% to 12% in seven increments over a decade is in direct conflict with the Henry Review.

“Since the Henry Review did not recommend it, it is foolish of the Government to go ahead and push the 9% employer tax higher, especially since it breaches the government’s 2007 commitment to the business community.”

It is also unnecessary. The Henry Review in May 2009 released a Retirement Income Report which said “the superannuation guarantee should remain at 9%…the panel considers the rate of compulsory saving to be adequate.”

ACCI opposes this increase, especially in the form proposed. The government idea of funding it through a wage trade off is worthy, but unlikely to work in a decentralised wage system. Funding retirement incomes of employees should not be a burden business is asked to carry alone.

The reduction in the company tax rate from 30% to 28% will be positive for economic growth and encourage greater investment. However, the failure to reduce personal income tax is a missed opportunity, given that a large portion of small businesses are unincorporated and do not benefit from a cut in company tax.

ACCI welcomes the simplified and more generous depreciation allowances for assets valued at less than $5,000. These changes will partially alleviate cash flow pressures, and will provide a net benefit to small business. The Henry Review recommended the depreciation benefit should extend to assets up to $10,000 in value. This should be the longer term reform goal.

The proposal to move to single pool depreciation for all other assets, except buildings, also represents a significant benefit to small business and will lead to a reduction in the compliance burden associated with the administration of tax affairs.

Despite these first steps in tax reform, there remain important elements of the tax system that business identifies as priorities that have not been addressed at this stage.

Business looks forward to future discussion in the following areas which are fundamental to meaningful and comprehensive tax reform. Specifically:

• reductions in personal income tax rates;
• capital gains tax relief for business;
• the abolition of payroll tax; and
• proposals to reform inefficient state transaction taxes.

ACCI is concerned the reforms nominated today singularly rely on the introduction of the Resource Super Profits Tax. The minerals sector is globally exposed and vulnerable to large swings in prices and to changes in supply arrangements. It is not clear how the proposed arrangements may affect investment intentions in the sector and the economics of future projects. Funding tax reform should also focus on achieving reductions in spending rather than just relying on a new revenue stream.

If we are to reform our tax system, today’s release of the Henry Tax Review and the Government’s response must be seen as only a first step. ACCI and business organisations look forward to constructive engagement with the government and community on these and other changes.

For further information:
Peter Anderson Chief Executive 0417 264 862
Greg Evans Director of Economics and Industry Policy 0407 204 559
Brett Hogan Director of Communications 0407 273 884

The highly anticipated redevelopment of Chatswood Mall is set to commence on Monday 15 February 2010. The upgrades will see Chatswood Mall rejuvenated into a modern and vibrant café and retail promenade offering more dining space, outdoor seating and areas for events and entertainment.

The construction works will be undertaken in stages to maintain public thoroughfare and access to the shops and services located in Chatswood Mall throughout the 10 month construction period.

The final design, which was developed following extensive community consultation, will significantly improve pedestrian circulation and increase the versatility of the space through the creation of a central avenue which will accommodate footway dining, market stalls and public seating.

The new and exciting Chatswood Mall design will feature a central spine formed by a row of deciduous Chinese Elms which will form a natural canopy above seated areas providing shade in the warmer months and allowing winter sun through.

Classic high quality materials such as granite paving and hardwood will be combined with detailed pavers and public art providing a cohesive and interactive design that will both inspire and ensure the mall’s longevity.

“The Chatswood Mall is the backbone of the Chatswood CBD supporting more than 30 000 daily users,” said Willoughby Mayor Pat Reilly. “The much needed redevelopment works will ensure Chatswood Mall will retain a clean and contemporary appearance and will transform Chatswood’s principal gateway into a vibrant and flexible public space by day and night,” he said.

Visit www.willoughby.nsw.gov.au or phone 9777 1000 for more information.