Born globals redefine exporting
Forget the tyranny of distance. Australian businesses are taking advantage of information technology and freer capital flows to expand globally in much more innovative ways than simply putting goods on a ship for export, according to a new report from the University of Queensland Business School and the Australian Business Foundation.
Research analyst Matthew Steen studied 18 “born global” companies and found that Australia’s geographic position can provide a competitive advantage rather than be an impediment.
He says he was surprised to learn about how the companies turned distance to their advantage in both large and small ways. “One company that provides special effects to Hollywood (Rising Sun Pictures, see Hot innovator) found it was a major advantage not having to answer emails until the evening. They also found it beneficial being removed from the politics.”
He says the research also found the smaller scale of many Australian industries and small domestic market demand means Australian firms need to perform high-risk and innovative activities more quickly and must be fleet-footed.
As a result they take their products and services to world markets more rapidly and can be more accommodating of customer’s needs.
– Amanda Gome
Government rejects SME s457 visa concerns
A Senate inquiry has dismissed concerns that SMEs will effectively be prevented from using s457 temporary skilled migration visas by proposed changes that will increase the cost to employers of importing workers.
Under the proposed changes, employers must pay for the travel, health insurance and migration agent costs of workers they bring in on s457 visas, and reimburse the Department of Immigration and Citizenship if the employee fails to leave Australia after their visa expires.
Employers which do not comply face financial penalties of up to $6600 for an individual and $33,000 for a business.
The Association of Consulting Engineers Australia argued to the inquiry in its submission that the changes would be bad for small business. “SMEs will become so constrained by compliance costs that they will essentially be unable to use the [s 457] scheme.”
ACEA national policy officer Caroline Ostrowski says many of the organisation’s SME members have reported they won’t be able to afford to bring in workers from overseas under the new laws.
“These requirements are completely anti to the government’s policy of reducing red tape on SMES; there’s too much room for error, too many impositions and if you get it wrong you get fined, so really if this comes in only the really large companies will use s457s and SMEs will miss out,” Ostrowski says.
But the coalition-dominated Senate Legal and Constitutional Affairs committee is dismissive of the concerns raised in by ACEA on behalf of its SME members.
“Given that the purpose of the scheme does not include providing employers with a cheap source of overseas labour, the committee holds the view that the criticism of the costs imposed by the bill is not well founded,” the committee says it in its report.
– Mike Preston
Bakers Delight under more scrutiny
The Bakers Delight brand is taking a battering as reports emerge of investigations by the federal government’s Workplace Ombudsman and the NSW Office of Industrial Relations into some franchisees stores.
Nineteen separate Bakers Delight franchisees have been investigated in as many months since January 2006 for alleged breaches of workplace laws, including claims of underpayment of entitlements, according to a report in the Australian Financial Review.
In the spotlight now is the store in the Sydney suburb of Kareela, where the Ombudsman is investigating allegations of duress applied by management to young workers to force them to sign allegedly illegal workplace contracts. But in 2006, the Ombudsman investigated seven franchises in Victoria, WA, NSW, Queensland, SA and the ACT. And since the beginning of this year, there have been another 11 investigations.
The AFR reports that 90% of the disputes were settled by voluntary compliance.
The owners of the Bakers Delight franchise, Roger and Lesley Gillespie, have also come under scrutiny for how they treat their franchisees. In March, the chain came under vicious attack in Federal Parliament.
The Liberal member for Gilmore and government whip, Joanna Gash, told the House of Representatives that she had been given information “that suggests the principals of the franchisors of Bakers Delight engaged in practices that I can only describe as not only dishonest but possibly criminal”. For more details see our earlier story.
There is a growing movement of disgruntled franchisees from big-name chains including Bakers Delight, franchised car care chain Midas and Lenards trying to make protection of franchisees an election issue. They have won the support of parliamentarians on both sides of the house. National Senator Barnaby Joyce and West Australian Labor MP Graham Edwards have also spoken out on behalf of the disgruntled franchisees.
– Jacqui Walker
AWA no bar to voting on collective agreement
Employees on Australian Workplace Agreements made under pre-Work Choices industrial laws are entitled to vote on a proposed collective agreement once the expiry date of their AWA has passed, an industrial tribunal has found.
The CFMEU sought to have 18 employees of Programmed Maintenance Service who work at the Yallourn Energy power station in Victoria included on the list of people who could vote on a proposed union collective agreement, despite the fact they are on AWAs made under pre-Work Choices industrial laws.
The Australian Industrial Relations Commission upheld the right of the employees to participate in the secret ballot, despite the fact that AWAs exclude the operation of collective agreement. Although the AWAs were still in operation, the commission found that because the nominal expiry date of the AWAs had passed, the workers could participate in the ballot.
The decision is significant because only workers who have participated in a ballot can be bound by a collective agreement and participate in protected industrial action. It means that it will be easier for workers on pre-reform AWAs to move back on to collective agreements once their AWA’s have expired.
– Mike Preston
Calling Vic business owners:
It’s networking month in Victoria, with the state’s largest business event Energise Enterprise kicking off tomorrow with a range of workshops, networking sessions, and other special events for small and medium business.
Highlights include the opening breakfast tomorrow at Federation Square with SmartCompany publisher Amanda Gome as MC and guest speakers including Small Business Minister Theo Theophanous and founders of Lonely Planet, Maureen and Tony Wheeler. SmartCompany editor Jacqui Walker will also be talking at an export panel on August 25.
The huge event, run by 150 industry groups and support networks, features Speed Networking events on August 2, Time-Saver Market at Federation Square on August 12 and the Energetic Business Speaker Breakfast Series.
Businesses can register the day before an event but get in early as places are limited. For more information go to: //coreuat-cdn.smartcompany.com.au/Calendar/August.html.
– Amanda Gome
More privacy red-tape for businesses
Businesses will have to immediately notify customers if a security breach occurs in relation to their personal information under a bill to be introduced into Parliament next week by Australian Democrats Senator Natasha Stott Despoja.
The Bill would bring Australia into line with similar regimes in Europe and the United States, The Australian reports.
Requiring businesses to immediately inform customers if there has been unauthorised access to their information will enable them to act immediately to lessen the impact of the loss, Stott-Despoja says.
Privacy is becoming an increasingly important issue for many businesses in the information age, both in their dealings with customers and employees – see today’s SmartCompany Tax/Legal Update on Privacy: Your obligations, your rights for more.
– Mike Preston
Economy roundup
High levels of profitability and investment have pushed business confidence to record levels, according to the NAB quarterly business survey for the June 2007 quarter, released today.
Australian businesses surveyed in the June quarter were more optimistic about trading conditions in the three months ahead than ever previously recorded by the survey, which has been running since 1989.
But NAB chief economist Alan Oster says conditions in the months ahead may not match the high expectations of the business community, with forward orders going backwards in June and many business hitting capacity constraints.
Wage levels also continue to be a concern, with businesses reporting 0.8% growth in the June quarter, just below the 0.9% recorded in the March quarter.
In signs that will be seen as bolstering the case for a interest rate rise in August, both new housing approvals and credit growth for June outperformed market expectations.
According to Westpac, the 7.5% rise in dwelling approvals for June was well above market expectations of a 2% rise. The increase is well up on the 5.7% growth in new dwellings for May.
And new Reserve Bank of Australia figures show credit growth in June was stronger than anticipated at 1.8%. The market expected growth of 1.2%
At 12.25 pm the S&P/ASX 200 was up 0.1% on yesterday’s close, to 6112.8, the market seemingly catching its breath after yesterday’s volatility. At the same time, the Australian dollar was trading for US86.11¢, rebounding strongly from yesterday’s US84.97¢ close.
– Mike Preston
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