Issue 60 - 25 May 2009

The Industrial Training Institute in Kwinana offers a variety of short courses for training of apprentices and employees.

Click on any of the below courses for more information:

• Skills Assessments, RPL and Training Consultancy Services
  
  
• Higher Engineering Courses
  
  
• Cert IV Instrumentation
  
  
• Electrical Short Courses
  
  
• Fabrication Short Courses
  
  
• Mechanical Short Courses

For more information on the Industrial Skills Institute please click here.

Ninety five per cent of compliance and risk professionals surveyed believe that corruption is more likely to occur in the current economic environment, particularly as organisations look to do business with emerging markets in an attempt to cut costs.

This is despite only 12% of respondents having full confidence that Australian companies currently comply with Australia’s anti-corruption legislation, according to a recent Dow Jones survey.

Seventy seven per cent of survey respondents believe there is now a greater focus on anti-corruption as a result of the risks associated with the global financial crisis such as growing trade relationships with emerging markets that still have a high level of state-owned companies.

According to Dow Jones risk and compliance solutions specialist Richard Butler this focus on anti-corruption has not been converted to companies taking the necessary actions to ensure they comply with anti-corruption legislation.

“As a result of several Federal Government initiatives to stimulate the economy, it is likely that this additional funding will also stimulate corruption," he said.

"While perhaps not intentional, we’re seeing a greater incidence of corrupt practices such as corporate gift-giving that can ultimately influence the decision-making process. This is a very serious issue.”

Almost half (48.5%) of the survey respondents indicated that those in senior leadership positions within Australian companies only have minimal knowledge of anti-corruption legislation, leaving the door open to the risk of judgment errors. Thirty five per cent of survey respondents believed board members and senior executives did not supply sufficient resources to combat or prevent corrupt practices.

“Anti-corruption enforcement needs to come from the top,” said Mr Butler.

“Australian senior executives need to realise that anti-corruption is a business issue and not just a compliance issue that is relegated to the compliance manager. The reputational and financial cost of non-compliance is far greater than the alternative.”

Acts such as the Crimes Act 1914 , the Criminal Code Act 1995 and the Proceeds of Crime Act 2002 list a number of corruption offences including bribery of a public official, falsifying a document and forgery. In addition, Australia has become party to a number of international conventions to fight corruption including the United Nations Convention Against Corruption and the Organisation for Economic Cooperation and Development Convention on Combating Bribery of Foreign Officials in International Business Transactions.

“While trust needs to be inherent within every company, senior executives cannot rely on ethics alone to stamp out corrupt practices. The backbone of any compliance strategy is sound technology that can deliver the necessary checks to clarify the grey areas that exist around corruption and corporate culture,” Mr Butler said.

The State’s peak business organisation, the Chamber of Commerce and Industry, respects the decision of a majority of Western Australians to reject the permanent introduction of daylight saving.

CCI chief executive James Pearson said from the perspective of business the result was disappointing as it left in place a barrier to local employers as they sought to weather the economic downturn.

"Nevertheless, the outcome of the vote is clear and the debate over recent weeks is a sign of robust and healthy democracy at work," he said.

CCI joined the YES campaign as it believed the introduction of daylight saving would remove an unnecessary source of inconvenience and frustration by keeping the time difference between WA and the rest of the national economy manageable.

While the daylight saving campaign is over, CCI said it remains committed to assisting local businesses across the State by encouraging politicians of all parties to support sound policies that will promote investment, prosperity and jobs for all Western Australians.

"CCI, on behalf of the Western Australian business community, would like to thank the hundreds of thousands of Western Australians who voted YES in yesterday’s referendum, along with the many supporters, volunteers and contributors to the YES campaign," Mr Pearson said.

The Federal Government has announced that effective from 15 May 2009, occupations falling into the Australian Standard Classification of Occupations (ASCO) major groups 5 - 7 are no longer eligible for regional sponsorship on a subclass 457 visa.

Under the change, employers in regional areas are no longer able to nominate activities that have tasks that correspond to the tasks of occupations in ASCO groups 5 - 7, notably semi-skilled occupations (covering advanced and intermediate clerical and service workers as well as intermediate production and transport workers).

This impacts all subclass 457 applications that have been lodged where the tasks fall under ASCO 5-7, and where a decision has yet to made made.

The Department of Immigration and Citizenship (DIAC) has set out a webpage on frequently asked questions about changes to the subclass 457 program at http://www.immi.gov.au/skilled/skilled-workers/asco5-7-faq.htm.

The current gazetted list of eligible ASCO 1 - 4 occupations is available here

Regional employers intending to employ overseas workers in the ASCO 5 - 7 occupations will need to negotiate and enter into a labour agreement with the Federal Government.

For further information contact CCI Migration Services (MARN 0318589) on (08) 9365 7521 or email visas@cciwa.com.

The Tax Office is conducting a national awareness program to help taxpayers protect themselves against promoters marketing dodgy tax schemes.

In the current financial climate, the ATO are concerned promoters may increase the marketing of high risk tax schemes and scams, taking advantage of the recent financial vulnerability of many taxpayers.

The program is predominantly online and in partnership with leaders in the community including chambers of commerce and other business and tax intermediaries.

The ATO says if you invest in a dodgy tax scheme, you will be risking your original investment plus you could have to pay back any missing tax with interest and penalties long after the promoter and your money are gone.

Before you invest in any tax scheme, the ATO recommends you:

• investigate carefully;
• seek independent advice from a professional advisor and/or the Australian Taxation Office, and;
• check information and warnings about investment schemes and scams on the Australian Securities and Investment Commission and the Australian Competition and Consumer Commission SCAMwatch websites.

The Australian Chamber of Commerce and Industry (ACCI) says that passage of the Australian Government’s investment allowance during budget week provided a much needed boost to investment certainty.

ACCI chief executive Peter Anderson said it was a wise maxim to not miss the opportunity presented by adversity.

"With low interest rates and attractive tax incentives for investment in new capital this is a low cost opportunity for business to purchase plant and equipment, benefiting both the business and stimulating the economy,” he said.

ACCI’s latest Survey of Investor Confidence indicated that almost 32% of businesses planned to bring forward investment plans for 2009/10 and take advantage of the investment allowance, provided the credit squeeze eases.

“Legislative certainty for these measures was a stumbling block for some businesses to use the incentives. That has now been removed,” Mr Anderson said.

“Business investment is one of the building blocks for economic recovery. Now that business can be certain about their legal right to claim these temporary tax benefits, the banks need to play their part in lifting the flow of credit and stock of working capital available to business, especially small business.

“The government acted in the interests of the economy to first introduce this allowance last December, to lift the tax benefit in March and to extend it further in the May budget.”

ACCI commenced discussions with the Government on these measures once the global financial crisis hit in 2008.

Perth has been ranked the third best Australian city to live in according to Mercer's 2009 Worldwide Quality of Living Survey.

Internationally, Perth is ranked 21 in the world top cities behind the Australian cities of Sydney (ranked 10) and Melbourne (ranked 18) but ahead of Brisbane (ranked 34).

Mercer’s Quality of Living ranking covers 215 cities and is conducted to help governments and major companies place employees on international assignments.

The quality of living rankings are based on a point-scoring index where cities are ranked against New York as the base city with an index score of 100.

The top 50 cities ranked by quality of living standards is available here.

For further information contact CCI Migration Services (MARN 0318589) on (08) 9365 7521 or email visas@cciwa.com.

Speaking at the Australia China Business Forum in Sydney, Austrade chief economist Tim Harcourt outlined the continuing promise of the world’s fastest growing major economy for Australian trade and investment.

Mr Harcourt said that despite the global downturn, China’s predicted economic expansion of between six and eight per cent in 2009, coupled with the latest industrial production figures,  indicated a return to solid growth, particularly in second and third tier cities in western China.

“Trade and investment links with China and other emerging economies are going to help Australia survive the global credit crisis," he said.

“Australia’s share of goods exports to emerging countries has risen to 53% compared with 43% 10 years ago and China is an important part of that story, with exports to China averaging annual growth of 24.8% over the last 10 years.

“According to research commissioned by the Australia China Business Council, the average Australian household now benefits to the tune of $3400 a year from Australia’s trade with China.

“Investment is also an increasingly important part of the Australia-China relationship. Strong outward FDI flows from China are replacing the traditional trade route as a form of global engagement.

“According to the ABS, China's total foreign investment stock in Australia reached A$6.2 billion in 2007, a 78% increase on the year prior and a 120% increase over five years.

“Current levels, while still relatively modest, indicate the strong potential for China to grow its foreign direct investment position, and given recent FIRB approval trends, we should see a marked increase in China's total FDI investment in Australia in 2008-09.

Mr Harcourt said the recent implementation of significant stimulus measures had been well received in China and bolstered the economy in several areas.

“While there remains a range of challenges to deal with, the general view is that China will continue to make a major contribution to world economic growth in the short and medium term," he said.

“The rapid rate of infrastructure development, the industrialisation of agriculture, and the development of east coast cities will continue, along with the development of China’s western interior."

Mr Harcourt said the trading relationship was also undergoing increasing diversification as the Chinese economy rapidly evolved. 

CCI Construction Services proudly invites industry representatives to WA’s largest and most prestigious annual dinner event for the resources and construction sector.

Individual Registration

Corporate Table Registration

Featuring speakers from a number of Australia's largest resource companies and industry bodies, CCI’s Resource Conference, WA’s Resources Landscape: Projects on the Horizon, will provide delegates with an insight into the future of WA’s resource landscape and an update on a number of major resource projects currently planned for Western Australia.

Inidvidual Registration

Corporate Table Registration

Cash-strapped Australian exporters will get a much needed funding boost when their Export Market Development Grants are paid in full for 2008-09.

The Federal Government has delivered an extra $50 million for the scheme in this year’s budget.

“In the midst of the global recession - but with Australia better positioned than most and with opportunities in the Asian region - it is vital we ensure much needed liquidity to those exporters who continue to pursue trade opportunities despite the most difficult export conditions in living memory,” said Minister for Trade Simon Crean.

The extra funding will be paid to an estimated 1800 Australian companies that employ more than 34,000 workers. The money will be delivered in grants in June 2009.

Eligible small and medium sized exporters were facing second round payouts from the scheme of as little as 30 cents in the dollar.

“With the funding boost, exporters will now receive 100% of their eligible expenses,” Mr Crean said.

The Rudd Government has announced 89 projects totalling $29.5 million from the first two rounds of its Green Building Fund program – to help commercial office buildings reduce their energy consumption and greenhouse gas emissions.

“We predict that these projects will cut greenhouse gas emissions by almost 65,000 tonnes every year," said Innovation Minister, Senator Kim Carr.

“Not only is this great news for the environment, it is great news for the economy because these grants will support a total investment of $96.8 million to retro-fit the buildings.

"Reducing greenhouse emissions means an increase in energy efficiency and real savings for business in tough economic times. I encourage other businesses to apply for future rounds.”

Successful projects announced included:

• upgrades of heating, ventilating and air conditioning (new chillers, variable speed drives, etc.)

• installation or replacement of Building Management Systems

• installation of wind turbines and solar panels

• replacement of glazing

• replacement of base building lighting

• installation of external shading

The world economic climate index rose in the second quarter of the year for the first time since 2007 as a result of more favourable expectations for the coming six months, but the assessment of the current economic situation worsened yet again, falling to a new record low, according to the latest International Chamber of Commerce / Ifo Institute for Economic Research survey report.

The survey revealed that the rise in favourable expectations put the climate indicator at 64.4 points compared with 50.1 points in January. Nevertheless the indicator remains well below its long term average of 96.4 points between 1991 and 2008.

“The improvement of the climate indicator is exclusively the result of more favourable economic expectations for the coming six months,” the report said. “The assessments of the current economic situation, in contrast, have worsened further.”

The report, based on a survey of 1,040 economic experts in 90 countries, sought to dampen optimism that the current global recession was nearing an end by emphasising that “the difficulty of forecasting the future scenario of the world economy is unprecedented as the financial sector is still fragile.”

But it said that the current pattern signals the slump may bottom out in the second half of the year, cautioning however the economic recovery is likely to only gradually gain momentum in 2009.

ICC Secretary General Guy Sebban said the report gave him reason for cautious optimism.

“After months of very depressing news we are finally seeing some signs of hope,” he said.

“The outlook for the next six months is positive for most areas of the world, including the United States and Europe.”

Economic expectations for the next six months improved in all major regions, especially in North America and Asia. At the same time, the worst appraisals regarding the current situation came from North America and Western Europe.

The report said that while the recession in the United States appears to be bottoming out and could start a recovery in the second half of the year, high unemployment and large public deficits will most likely remain an urgent problem throughout 2009.

The report added that the global recession has hit the euro area harder than the United States because most countries that use the European currency are more dependent on exports for growth than the United States is.

The report said the credit crunch and economic slowdown in Western Europe have strongly hit Central and Eastern Europe, bringing Hungary and Latvia to the brink of bankruptcy.

It said economic expectations had been upgraded for all Asian countries except Indonesia and Bangladesh. In Latin America economic expectations were upgraded for all countries except Trinidad and Tobago, Uruguay, Bolivia, Costa Rica, Ecuador and El Salvador.

Economic expectations for Russia were upgraded significantly since the January report. But the economic climate deteriorated further in Australia and New Zealand. The climate indicator remained negative for South Africa, that continent’s largest economy.

The economic experts surveyed said they expected a global inflation rate of 2.7% in 2009 compared with 5.4% last year. Inflation is expected to drop further during the next six months.

“Despite the clear disinflation trend which is prevailing in the majority of countries worldwide, there are hardly any signs for a deflationary danger, possibly with the exception of Japan, where a decline of consumer price inflation of almost half a percentage point is expected on average of 2009,” the report said.

Minister for Trade Simon Crean and the Republic of Korea’s Minister for Trade, His Excellency Mr Kim Hong-joon, met in Melbourne last week for talks aimed at further strengthening the bilateral trade and investment relationship. 

The Ministers officially launched the first round of negotiations for a bilateral Free Trade Agreement.

“I am delighted that Australia and South Korea have reached the point of commencing FTA negotiations," Mr Crean said.

"A bilateral FTA is a natural step in the evolution of our commercial relationship. It reflects the high degree of complementarity between our economies and the shared commitment of the Governments of Australia and South Korea to liberalised trade and investment, even in times of global economic difficulty.

Hong Kong financial services firms will be among the industries gaining greater access to the Chinese mainland market following the latest supplement of the Closer Economic Partnership Arrangement (CEPA) between Hong Kong and the mainland.

CEPA VI, signed by Hong Kong Financial Secretary John Tsang and Chinese Vice-Minister of Commerce Jiang Zengwei earlier this month, introduces 29 liberalisation measures covering 20 sectors, including tourism, finance and the legal profession. Two new sectors – research and development, and rail transport – have been added. The new CEPA additions take effect 1 October.

Guangdong once again serves as the testing ground for many of the pilot initiatives, including the banking sector. Hong Kong banks will be able to expand more easily in Guangdong, opening sub-branches in cities within the province. Qualified Hong Kong and mainland securities firms will be allowed to set up joint-venture securities investment advisory companies.

The latest initiatives, which bring the number of services sectors covered by CEPA to 42, also allow post-production on mainland domestic films to be done in Hong Kong. There will also be more opportunities for exhibition, shipping and publishing companies, as well as engineering and scientific research concerns, to establish on the mainland.

Hong Kong services suppliers can organise exhibitions in Beijing, Tianjin, Chongqing, Zhejiang Province, Jiangsu Province and Fujian Province on a pilot basis. Meanwhile, Hong Kong enterprises set up on a wholly owned, equity joint-venture or contractual joint-venture basis in the provinces and autonomous regions of Guangxi, Hunan, Hainan, Fujian, Jiangxi, Yunnan, Guizhou and Sichuan can organise overseas exhibitions on a pilot basis. 

In the newly added sector of transportation services, Hong Kong services suppliers can construct, operate and manage the Shenzhen Metro Line Four project in Shenzhen in the form of wholly owned operations. They can also set up wholly owned shipping companies in second-tier ports in Guangdong to provide clerical and administrative services.

Austrade invites CCI members to subscribe to a focused India investment reporting system, which taps into the growing interest in inward investment opportunities in Australia by Indian companies.

India has growing investment interests in Australia. According to UNCTAD World Investment Report 2008, Indian FDI outflow rocketed more than four times from US$2.9 billion (2005) to US$13.6 billion (2007), enhancing India as a major player in global FDI outflow. According to the Reserve Bank of India total outward investment from corporate India rose 29.6% to US$17.4 billion in 2007-08. KPMG estimates Indian investment into Australia at currently more than AU$1 billion, ranking Australia as the ninth destination for Indian foreign direct investment.

Indian interests in Australia are focusing on sectors including IT/ITES services, resources, mining and manufacturing. This is followed by expanding investment interests in financial services, bio-technology, clean energy, tourism and hospitality.

The increasing trend of investments and acquisitions by Indian companies in Australia presents significant opportunity for Australian banks and financial institutions, legal firms, consulting companies and other support services to facilitate investment projects as the Indian corporate global ambitions continue to grow.

The Australian Trade Commission, the Australian Government international trade and investment promotion agency, aims to maximise the benefits of inwards investment in Australia by supporting Australian companies to identify and to link into investment opportunities. The reports present current market intelligence to Australian service companies to identify industry sector trends in Indian outward investment and specific high potential company intelligence and to exchange market information and practices through Austrade supported inward investment opportunities.

The Australian Taxation Office (ATO) has released a revised superannuation guarantee ruling (SGR 2009/2) on May 13 that will replace existing rulings 94/4 and 94/5 from 1 July 2009.  This ruling clarifies the meaning of 'ordinary time earnings' (OTE) for employers for the purpose of calculating the minimum level of superannuation required for individual employees.

What are the key changes?

Overtime:

In a previous draft ruling released by the ATO (SGR 2008/D2), regular overtime was to be recognised as part of an employee’s OTE. However, due to significant lobbying efforts by the Chamber of Commerce and Industry of WA and others, the ATO has revised this decision and will now exclude regular overtime from the calculation of superannuation liability where the award or agreement stipulates ordinary hours of work; this is an important victory for employers who have employees working significant amounts of overtime.

Payment in lieu of notice:

In the revised ruling, payments made to an employee in lieu of providing notice of termination of employment is considered to form part of an employee’s OTE. This is contrary to prior ruling 94/4 in which payments in lieu of notice were deemed to be excluded from OTE as it was a payment made to an employee for hours never worked. However, it is in line with previous Federal Court rulings that require employers to pay notice in lieu as though the employee has worked the time.

Workers’ compensation:
SGR 2009/2 clarifies the issue of contributions in respect of workers’ compensation payments. Workers’ compensation payments made by an employer (or on behalf of them) are part of an employee’s OTE only if they are paid in respect of ordinary hours of work. Any such payments are considered to be OTE only if the employee actually performs work or is required to attend work.

Payments for unused leave entitlements whilst still employed:

Whilst lump sum payments for unused annual and long service leave upon termination are not considered part of an employee’s OTE, such payments whilst still employed are. For example, if an employee cashes out long service leave while the employee remains employed, this amount is paid in connection with the employee’s ordinary hours in the same way as any long service leave payment. Therefore this payment whilst the employee is still employed is considered OTE.

Allowances:

The new ruling has also clarified which allowances form part of an employee’s OTE and which do not.  Allowances that are paid in respect of a condition of employment are considered OTE (such as danger, dirt and site allowances), whereas allowances that are paid that are not in respect to an employees ordinary hours (such as on call allowance where the employee is not otherwise working) or an allowance paid to an employee that is an expense allowance (which is expected to be fully expended) is not considered OTE.

Bonuses:

In most circumstances, bonuses will be considered part of an employee’s OTE unless the bonus relates solely to work performed outside of ordinary hours. As such, bonuses such as Christmas bonuses would now normally be included in OTE; contrary to prior rulings made by the ATO (i.e. SGR 94/4).

Need to know more?

SGR 2009/2 will take effect from 1 July 2009. For members seeking more information on the new ruling please contact the Employee Relations Advice Centre on 9365 7660 or email advice@cciwa.com.

The Westralia Airports Corporation has released the draft preliminary master plan for the Perth Airport for public comment.

The master plan describes the expected developments at the Perth Airport during the next 20 years and also presents an indicative plan for the airport once it is developed to its ultimate capacity.

CCI has welcomed the Westralia Airports Corporation expansion plans announced in 2008, which will see the domestic terminal precinct be consolidated into the international terminal precinct.

CCI has noted with concern that the Commonwealth and WA Government have not allocated appropriate funding in the 2009-10 Budgets to undertake the necessary upgrades to the Government’s road network around the airport to support the Airport’s consolidation.

The master plan states that “if there is not a credible proposal put forward to substantially reduce congestion around the airport, and particularly on Tonkin Highway, airlines will not support consolidation, and therefore it will not proceed.”

The Perth Airport is estimated to directly contribute $1.4 billion to the current WA economy, with private investment of $2.4 billion to be spent over the next 10 years on the expansion plans.

This expansion is expected to directly increase the Perth region's economic output by $791 million in the next ten years, assuming no impediments such as a lack of supporting infrastructure.

CCI has long advocated the need for a world class airport for Perth and urge the WA Government to immediately address the road transport needs of the areas.

The masterplan can be downloaded from http://www.perthairport.com/default.aspx?ContentID=613&MenuID=177.

Members are invited to send comments to CCI’s senior adviser industry policy Sharon Dignard on (08) 9365 7531 or sharon.dignard@cciwa.com.

CCI has welcomed the passage of the Australian Government’s investment allowance legislation, passed through Parliament earlier this month, which includes the small business tax deduction.

The small business tax deduction is a 50% deduction on the cost of eligible assets worth $1000 acquired between 13 December 2008 and 31 December 2009.

This tax break will apply to businesses with a turnover of less than $2 million per year.

Other businesses will also receive a general tax break at a lower rate of 30% for eligible assets acquired before 30 June 2009, which will be lowered 10% until 31 December 2009.

This should provide small, medium and large enterprises with more certainty when making new business investment.

CCI continues to work with the Australian Chamber of Commerce and Industry (ACCI) on taxation matters.

CCI’s Small and Medium Enterprise Forum will be engaging with the Australian Taxation Office’s (ATO’s) new relationship manager to ACCI, which is one part of the ATO’s Small Business Assistance Program.

The relationship manager is available to answer taxation related questions, issues and enquiries about red tape and compliance from members at no charge.

CCI continues to advocate for clearer and simpler taxation legislation. CCI believes this should be a fundamental requirement for the ATO given businesses are expected to self assess their own tax obligations.

More information about the tax break can be found at http://www.ato.gov.au/taxprofessionals/content.asp?doc=/content/00175431.htm.

For more details please contact CCI’s senior adviser, industry policy Sharon Dignard on (08) 9365 7531 or sharon.dignard@cciwa.com.

The Australian Government is currently consulting with industry about the regulatory environment surrounding the National Broadband Network (NBN), which is relevant for all telecommunications providers.

Legislative amendments that will be enacted to support the NBN includes the following.

1. The governance arrangements for the NBN company such as the:

     •      nature of the wholesale services;

     •      mechanism for determining price and non-price terms of access, and;

     •      principles for access prices for using NBN services.

2. Expediting land access arrangements for carriers rolling out fibre to the home.

3. Improving access to poles, ducts and other infrastructure (including access to power poles and location of poles, ducts and pipes).

4. Requiring that fibre optic networks be installed in greenfield estates that receive planning approval from 1 July 2010.

Industry is invited to comment on the above proposals and the following regulatory issues.

1. The competition framework such as:

     •      access arrangements;

     •      anti-competitive provisions, and;

     •      spectrum reform, among others.

2. The consumer safeguard framework including:

     •      universal access;

     •      retail price controls, and;

     •      red tap removal, among others.

The discussion paper titled National Broadband Network: Regulatory Reform for 21st Century Broadband can be downloaded by clicking here. Submissions are due by 3 June.

Members are invited to send comments to CCI’s senior adviser, industry policy Sharon Dignard on (08) 9365 7531 or sharon.dignard@cciwa.com.