Regulatory Roundup – August 2013

Carbon tax to ETS: How will it affect your business?

The government announced that it would move from a carbon tax to a market-based emissions trading scheme (ETS) from July 2014, a year earlier than originally intended, in a change that will only go ahead if the existing government is re-elected in the upcoming federal election. Foregone revenue looks like it will be replaced through reforms to the fringe benefits tax (FBT) regime, with the government announcing that it is looking to cover the $1.8 billion lost in revenue with $1.9 billion gained by winding back FBT car concessions. The changes will not affect people who use their own car for work-related purposes or existing concessions for some uses of taxis, panel vans and utes. Government assistance to emissions-intensive trade-exposed industries will remain unchanged. Analysts said that apart from changes to FBT car concessions, not much else will change for business, although they said any final outcomes are dependent on market forces and will be hard to predict.

Aggrieved businesses groups call for end to politicking and early election

Business groups have responded to Prime Minister Kevin Rudd’s appointment by marshalling for an earlier election date than September 14. Australian Industry Group chief executive Innes Willox said the long pre-election period “created a long period of instability which was impacting on investment and confidence” while the Australian Chamber of Commerce and Industry chief executive Peter Anderson said the frustration of the business community with government policy is deep. “Our tolerance factor with instability in the leadership of Australia’s government is at breaking point, matched only by a swathe of anti-business policies which have brought business frustration to boiling point”. One of these “anti-business policies” no doubt is the 457 visa bill, which the new Rudd government voted in (read about this in the July Regulatory Roundup).

Study shows tighter finance market will make funding more expensive for small businesses

Research from the Australian Centre for Financial Studies points to a future where financial institutions will be required to pay more to secure their funding, which it concludes will inevitably lead to higher charges for loans. And as small businesses invariably rely on banks and other financial institutions for funding, the impact of this trend is most likely to be felt by the small business sector. The research concludes that another aspect of funding becoming more expensive for banks to provide is the growing amounts of money being held in superannuation accounts – a trend helped along by super funds competing with banks for domestic savings, which has coerced banks to offer higher interest payments.

Griffith University study reveals the secrets to business success

Failed business owners tend to be older, have lower levels of formal education, feel they were forced into business ownership and are more likely to have a prevention-focused business model over a proactive approach, new Griffith University research has found. It showed that surviving business owners tend to be younger; hold higher levels of formal education; have greater levels of autonomy and adaptability as they are usually sole traders; have lower levels of debt; have less access to finance; and have a better work-life balance.

Productivity ($6 billion of it) lost through workplace drug and alcohol issues

Experts said businesses are losing more than $6 billion annually in lost productivity and absenteeism due to drug and alcohol use in the workplace. Australian Drug Foundation head of workplace services, Phillip Collins, said the costs to businesses can often be hidden. “Employers and HR departments simply don’t have enough information to attribute the days of work their staff are missing to drug and alcohol use. Alcohol and drug use, especially when it’s outside work hours, is a hard issue for many businesses to deal with. Many resort to targeting individual ‘problem’ employees, which is misguided.” Collins suggested that businesses implement good practice alcohol and drug programs tailored to their workplace.

Australian start-ups outperform more established businesses in 2012

Start-up businesses worked fewer hours than more established small to medium-sized enterprises (SMEs) for better financial reward last year, according to a recent MYOB Business Monitor. In the year to February 2013,

  • 36% of start-ups saw revenue gains, compared to 18% of SMEs
  • 27% were significantly less likely to report a fall in revenue, compared to 39% of SMEs
  • 42% expected revenue to increase, compared to 30% of SMEs, and
  • the mean working week for start-ups was 39.7 hours, compared to 40.6 hours for SMEs.

The biggest challenges for start-ups were attracting new customers (73%), cash flow (71%) and fuel prices (70%).

Female business owners not paying themselves a wage and often discriminated against

More than 50% of female business owners and entrepreneurs do not pay themselves a wage, according to an Australian Women Chamber of Commerce and Industry study. According to the study, metro-based respondents are slightly more likely to pay themselves a wage (56%) than those from regional locations (46%). From those that do pay themselves, only 37% of respondents understand their wage to be at market rates. Gender discrimination is also prevalent in male-dominated industries such as agriculture (46%), transport (43%) and construction (42%) but least common in wholesale trade (13%), and accommodation and food services sectors (14%).

Family businesses are “surviving, but certainly not thriving”: Study

Family businesses remain bleak about the future – with the majority experiencing no growth in profitability or market share in the last three years – as a study highlighted the many problems facing the sector. A few of the worrying statistics to emerge from the study were:

  • only 9% of family businesses believed the government provides them with enough support
  • family businesses involved in the manufacturing industry – once the heartland of the sector – have declined from 40% to 20%
  • average number of employees in family businesses have decreased from 49% in 2003 to 36% in 2013
  • the number of female family business owners has remained stagnant at 10%, and
  • business owners who think they do not have adequately funded retirement programs doubled from 17% in 2006 to 34% in 2013.