B2B issue 95 July 2014

B2BMAGAZINE.COM.AU

JULY 2014

95

A TIME TO

Celebrate BRADLEY ALLEN LOVE – LAWYERS–

TIPS ON HOW TO BUY A BUSINESS

9 771833 823005

01

$4.95 inc. GST

ISSN 1833-8232

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CONTENTS

PUBLISHER'S NOTE

Government still vital to Canberra TIM BENSON Publisher

As much as we trumpet the changing economy in Canberra, the fact remains that most of us, and our businesses, wouldn't be here if it wasn't the national capital.

We have to remember that if the capital was Sydney, Melbourne or Brisbane (as most people overseas believe it is) then Canberra wouldn't have a lake, sheep would graze lazily over most of our beautiful valley, blow flies would be far more prominent and well, it wouldn't be called Canberra and we would be part of New South Wales.

I'm all for raising the flag and applauding the wonderful efforts of business in the ACT, but there is no doubting that the massive cuts to the public service announced by the AbbottHockey Federal Budget will have a devastating impact on Canberra in the short term. Just to remind you the cuts to Canberra are $375 million and 6500 jobs over four years.

Now I say short term - because these cuts are superficial, ideological and political. Superficial because the government will realise after about 18 months that they can't actually do the work they want to without hiring more staff. Ideological because conservative governments believe in smaller government and more opportunity for business - yet in a mixed economy both the public and private sectors are critical. And political because, well because most Australians believe Canberra is full of 'fat cats', politicians and lazy public servants and it is a soft target - yet you won't find the Abbott Government saying this to the faces of the staff in their departments that are burning the midnight oil to implement their policies.

So, yes, these savage cuts to Canberra and the public services will cause significant pain to the ACT over the next 18 months, people will lose jobs in the public and private sectors, house prices will be impacted upon and growth will slow - but then after all this pain the Abbott Government will start spending again and, mark my words, in a further 18 months to three years down the track they will be spending more in Canberra, in real terms, than they are today. I can only rationalise this lunacy that by punishing Canberra in the short term must result in votes in the wider Australian community. Otherwise, why would they do it?.

Photo: Andrew Sikorski

14 COVER STORY BRADLEY ALLEN LOVE LAWYERS A TIME TO CELEBRATE

Send all comments to editorial@b2bmagazine.com.au

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Entries Close 29 Augu st 2014

PROGRAM DELIVERED BY: AN ACT GOVERNMENT INITIATIVE

PROGRAM DELIVERED BY:

C ANBE RR A BUSINESS COUNCIL

AN INITIATIVE OF

CONTENTS

FEATURE

26 ESTATE PLANNING

Peter Brock and his will(s) story

By Certus Law

06 Challenging a will can be risky business

FAMILY LAW Overseas travel and children

By Dobinson Davey Clifford Simpson Lawyers

Dobinson Davey Clifford Simpson Lawyers

08 OPC and Koomarri OPC I.T

06

F E AT U R E

steps

to buying hed

an establis

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28 INTELLECTUAL PROPERTY

12 Three steps to buying and established business RSM Bird Cameron Chartered Accountants

Why conduct an IP audit?

By Arete Group

ONLINE MARKETING Tips for DIY AdWords account managers By nFlame Creative

23 Struggle. Survive. Evolve.

Canberra Web

30 PROPERTY FINANCING

COVER STORY 14 A time to celebrate

Why you need to make use of mortgage offset accounts

By Loan Market

18 ADVICE FROM THE EXPERTS

RECRUITMENT ACT job market. How is it performing?

By Hays Recruitment

Bradley Allen Love Lawyers

19 ACCOUNTING

What's happening in your super?

By RSM Bird Cameron Chartered Accountants BANKING Going green: is it worth the energy?

By ANZ Mortgage Solutions Belconnen and Gungahlin

32 MINISTER'S MESSAGE Local business fundamental to Territory economy

Business taxation debts

By Vincents Chartered Accountants

33 CANBERRA BUSINESS COUNCIL

BOOKKEEPING Three tips to improve your accounting system

By Tailored Accounts

34 ACT & REGION CHAMBER OF

ACT Budget reinforces confidence in Canberrra and its future COMMERCE & INDUSTRY One voice of business a step closer

22 BUSINESS LAW

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ISSN 1833-8232

User experience is the key to success

By Synapse Worldwide

A2B: ASSOCIATIONS TO BUSINESS

20 BUSINESS ADVISORY

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31 WEBSITES

Employee share schemes: start-ups let down by Federal Budget

By Bradley Allen Love Lawyers

35 ACT EXPORTERS

CORPORATE ADVISORY Take the guesswork out of business decision-making

By MAXIM Chartered Accountants

BUSINESS NETWORKING

Poland–the gateway to European markets

36 B2B @ Garry Lee Retirement and RSM Bird Cameron 30 Year Anniversary

37 B2B @ CBC & Chamber Members Vote

24 CORPORATE GOVERNANCE

Measuring what natters

By Australian Institute of Company Directors

38 B2B @ CBC ACT Budget Breakfast 38 B2B @ Federal Budget Breakfast

EDITOR

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about buying a

?

It isn’t always easy but with a little tenacity, hard work and the right advice, it can be an incredibly rewarding experience.

We’ve been advising Australian business for over 90 years For the winning connection speak to us Contact Andrew Sykes, Director, Business Solutions Tel: (02) 6217 0300 | Lvl 1, 103–105 Northbourne Avenue andrew.sykes@rsmi.com.au | www.rsmi.com.au

Bird Cameron

Chartered Accountants

F E AT U R E

Challenging a will can be a risky business

By Brendan Cockerill

The judgement in the recent New South Wales Supreme Court decision Friend v Brien stated the following: It is difficult for parties to assess the likely outcome of a claim for a family provision order.

The criteria to be applied are so general and the judgement to be made so evaluative that the same facts can appeal to different judges in markedly different ways.

As Palmer J said in Carey v Robson (No. 2) [2009] NSWSC 1199 concerning the claim of an unsuccessful plaintiff that: “I do not regard Marion’s claim is borderline.

However, I readily acknowledge that other minds may come to a different conclusion.

Marion may have succeeded in her application before another judge. That’s the nature of this kind of litigation.””

We are often asked “Can my will be challenged?” The simple answer to the question is yes. The more important question, however, is whether or not any challenge will be successful. Two recent cases give an indication of just how difficult mounting a challenge can be at times and how the size of the estate appears to impact greatly on the outcome.

The first, Wilcox v Wilcox, involved a claim by two grandsons against their grandfather’s will. The grandfather’s estate was worth around $5.5 million and was left mostly to his only daughter who was the mother of his two grandsons. The deceased owned and operated a farming business with his daughter and her partner. The deceased had paid for his grandson’s education at boarding school as well as providing them with accommodation and other benefits. The grandchildren were not involved in running the family business and 6

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did not appear to have a very close relationship with their grandfather.

The court found that the grandsons were not impressive witnesses and that a substantial basis of one of the grandson’s claims seemed to be “a highly developed and unhealthy sense of entitlement” and that generosity by a grandparent in favour of a grandchild did not automatically convert into an obligation to provide for the grandchild in their will.

One of the grandson’s settled his claim before the final hearing and despite his views, his Honour made in order of $387,000 in favour of the other grandson. The judgement suggests the costs of both parties were borne by the estate.

The second case, from which the above quote is taken, involved a claim by an adult daughter against her father’s will. Her father’s estate comprised a half interest in a farm and a farming partnership worth around $1.3 million, which were left to his son who had worked in the family business since he left school aged 15, and other assets worth around $70,000 which were left to his widow.

His widow also benefited from joint assets of around $400,000. The gift to his son was charged with a legacy of $157,500 payable to the deceased’s daughter.

After finishing school, the daughter trained as a school teacher and at the time of the hearing was retired. She and her husband had modest assets and would have owned their home debt free after the daughter received her legacy in the will. The judgement indicates that the deceased and his daughter had a good father daughter relationship.

His Honour rejected the daughter’s claim.

On the issue of costs, which amounted to

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$150,000, his Honour made an order that the daughter pay the estate’s costs. So, after allowing for the costs order, the daughter will actually receive very little from her father’s estate and the family relationships may be irreparably broken.

Both cases show how difficult assessing the likely success of any family provision challenge can be, particularly when business assets are involved. In our view and experience, proper business succession and estate planning and communication can go a long way to avoiding challenges being made. Although, challenges cannot always be avoided and good early advice is crucial to getting the best possible outcome.

DDCS Lawyers can provide you with specialised advice in relation to all aspects of business succession and estate planning.

To make an appointment please contact a member of our estate planning team.

Brendan Cockerill is a Senior Associate of the firm.

18 Kendall Lane, New Acton, Canberra phone (02) 6212 7600 mail@ddcslawyers.com.au, www.ddcslawyers.com.au

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F E AT U R E

OPC AND KOOMARRI “By investing in IT, our aim is to cut administration time, and re-direct the hours saved back into providing front-line services.”

K

oomarri is the leading specialist disability service provider in our region founded over 60 years ago by families wanting to support a member with a disability. Their vision is to support people to achieve their life goals, dreams and aspirations. Koomarri’s workforce of 100 staff provides essential services to over 300 individuals in and around Canberra and it operates four businesses, including garden maintenance and office support.

Koomarri’s funding is primarily provided by the Government, supplemented by income from its businesses. With the NDIS now empowering individuals with direct funding and the freedom to source the service providers who best meet their needs, Koomarri is expecting increased demand for its services.

“In 2012, we undertook a strategic review to examine our preparedness for the NDIS. The result was eight strategic projects, including one for IT, to transition us to compete in the new market,” says Miranda Garnett, Koomarri CEO. “The opportunity to now grow, however, can’t be realised without seriously investing in IT,” adds Miranda.

Part of the challenge, is Koomarri’s largely mobile workforce and its 15 physical locations.

Staff up until recently have been supported by manual processes and were spending upwards of 20 per cent of their time on administration.

OPC has worked with Koomarri to implement a new IT infrastructure in order to operate and realise opportunities in this new market. The benefits of this are clear to Miranda.

“By investing in IT we are aiming to reduce administration time to 10 per cent.

That equates to approximately 20,000 hours that can be re-channelled directly back into providing services to individuals with a disability,” she said.

OPC’s Managed Services Solution ensures that all staff, both in office locations and in the community, are always connected and that they have access to real-time and accurate information; information which is critical because it can directly impact the quality of service provided to individuals in their home.

“The system allows Koomarri to efficiently deal with more than 300 individuals including their communications and finances and allows for growth over the next five years,” says Clinton Henderson, OPC Technical Services Director.

“We are at a critical point in our history where we needed a provider who could work

L-R: Brett Norton Managing Director OPC IT, Janette Macintyre Koomarri client, Miranda Garnett CEO Koomarri. | Photo: Andrew Finch

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with us, help us realise our strategy, who understands who we are and can work with our management team,” Miranda said.

Koomarri now has the peace of mind that it can leave IT to OPC and focus on providing services to its clients, not administration.

“OPC has been able to do that well by walking alongside us and supporting us. From day one they positioned the right solution and they allow individual staff to contact them because learning and skills transfer are imperative as we adapt to the new market,” concludes Miranda.

To find out more about Koomarri’s services please visit, http://www.koomarri.asn.au

For more information on how an OPC Managed Services Solution can revolutionise your business, contact us at www.opc.com.au

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11

F E AT U R E

steps to buying an established

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F E AT U R E

T

here is much to be said for buying a business that’s already proven, and it does have its advantages over investing in a greenfield business.

In most cases, buying an existing business is less risky as you take over an operation that has already generated cash flows and profits.

You have an established customer base, reputation and employees who are familiar with all aspects of the business.

On the downside, it is often more costly than starting from scratch and buyers do need to take steps to minimise the risk of inheriting existing problems, financial or otherwise, incurred by the seller.

Andrew Sykes, director of business solutions, RSM Bird Cameron, says “Before buying an existing business be aware of the advantages and disadvantages and the steps to make sure you understand exactly what you are buying and that you don’t pay too much.”

“It is critical that you think about ways to protect yourself from the unknowns associated with buying an existing business.

For example, rather than buying the Pty Ltd company, you may buy the assets and trading name and set up a new company. That way you may avoid being caught up with any possible skeletons which may exist in the old company structure.

“Once you have evaluated the benefits and risks, and have found a business that matches your strengths and interests, you must then conduct a thorough examination of the business opportunity which is a formal process called due diligence. The due diligence process focuses on the key factors likely to affect the decision to proceed with the purchase and that affect the price paid.”

Three steps to purchase 1. Investigate Find out why the business is for sale. One of the primary reasons businesses are sold is because they are failing in some way or simply do not produce sufficient profit for owners.

By gathering as much information as possible about the business, you should be able to pinpoint its weaknesses. Question whether or not the business has potential for future growth and what some of its prospective shortcomings might be.

Whether you want to acquire a service, retail, manufacturing or wholesale business, be sure to analyse the industry market as well.

Determine the current industry trends and who its customers are as well as the stage of the business life cycle and sustainability of the current business model.

Think long and hard about the types of businesses you’re interested in and which best match your skills and experience.

2. Evaluate Evaluate all aspects of the business such as location, management, goodwill, inventory, customer base, suppliers, equipment, employees, legal contracts and financial records.

It is important to assess the company’s reputation and the strength of its business relationships. Talk to existing customers, suppliers and vendors about their relationships with the business.

You may also decide to consult a business advisor experienced in conducting due diligence processes whose expertise will focus on your interests and help to reduce the risk of overlooking important details.

When due diligence is done, you will know just what you are buying and from whom.

3. Negotiate When you have thoroughly investigated and assessed the value of the business, you can begin to negotiate a price with the seller. It is important to document all communications and representations to make sure that both you and the seller are clear on what is being negotiated and what is included and excluded in the sale (for example, existing inventory).

As most sellers determine the price for their business arbitrarily or through an industry specific formula, it is often the party who comes most prepared to the negotiations which will end up with the most leverage.

Andrew Sykes says “Once you have undertaken due diligence and even before the contract is signed it is critical to start talking to key employees, customers and suppliers before you take over; tell them about your plans and ideas for the business’s future.

Implement an internal communication and change management strategy as this will ensure a smooth transition for existing employees and help you retain them in long term.”

Bird Cameron

Chartered Accountants

For more information, contact: Andrew Sykes, Director RSM Bird Cameron Andrew.sykes@rsmi.com.au 02 6217 0300 rsmi.com.au With RSM Bird Cameron you really are... Connected for Success

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COVER STORY

A TIME TO

Celebrate

T

WITH BRADLEY ALLEN LOVE LAWYERS

his month, Bradley Allen Love Lawyers has much to celebrate with staff and clients. The firm has completed renovations of its premises, which now includes the 8th and 9th floors of the iconic Canberra House at the heart of Canberra’s legal and financial precinct. The firm also celebrates the promotion of seven of its lawyers as they take on new responsibilities.

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COVER STORY

“IT’S IMPORTANT TO ACKNOWLEDGE AND CELEBRATE SUCCESS” “Bradley Allen Love Lawyers has gone from strength to strength since the merger of well-known firms Williams Love & Nicol Lawyers and Bradley Allen Lawyers in September 2012,” Managing Legal Director, John Wilson said.

“To support the firm’s continued success and growth in operations, we’re pleased to be able to accommodate our eighty staff within one location in the city with some great new facilities for our clients,” he said.

Bradley Allen Love Lawyers’ stylish renovations at 40 Marcus Clarke Street include client seminar room facilities, additional conference rooms, a large project area and a staff breakout area.

“It’s important to acknowledge and celebrate success and we look forward to doing this with our staff, clients and community partners at the renovation opening,” he said.

“The Directors are very proud of the team at Bradley Allen Love Lawyers and that it continues to be a city firm in the heart of Canberra.”

The team comprises seven Directors – John Wilson, Mark Love, Susan Proctor, David Toole, John Bradley, Alan Bradbury and Keith Bradley who lead five Special Counsel, four Senior Associates and five Associates.

This year’s promotion of seven of the firm’s lawyers is recognition of their hard work and determination to establish their reputations in their chosen field, and acknowledgement of their commitment to client service excellence.

“As a local firm, we invest in our staff and provide them with a rewarding career path so they are proud ambassadors for our firm and an integral part of the Canberra community, whether for work or in their social lives,” John said.

“The Directors congratulate each of the team members on their promotion.”

Work/life balance Bradley Allen Love Lawyers’ ability to continually attract and grow a quality legal team demonstrates the firm’s continued commitment to support and invest in its people and expertise.

A valuable part of this investment is supporting a work/life balance for employees, evident in Bradley Allen Love Lawyers’ commitment to group fitness and innovative health and wellbeing strategies.

Though it was recognised that many other professional services firms offered gym memberships, Bradley Allen Love Lawyers believed that this approach did little to break down internal barriers. Their fitness programs range from bootcamp to soccer, yoga to running and include nutrition seminars.

“Our focus is not on working until you burn out but ensuring you take the time to enjoy your work environment and maximise your performance by maintaining your health and fitness,” John said.

“We believe this group-orientated, entry level staff approach to workplace health and wellbeing is a real point of differentiation for the firm and encourages fantastic team spirit between the Directors and all staff members.”

The firm even conducts networking through a circuit style exercise competition called ‘Sweatworking® – the Bradley Allen Love way to network’ where other professional services firms and commercial agents are invited to participate in this yearly event with all proceeds donated to charity.

Bradley Allen Love Lawyers has firmly positioned itself as a leader in the field of

workplace health for lawyers and support staff alike. The firm’s approach is used as a case study by Healthier Work – an ACT government service established to support employers to develop health and wellbeing initiatives within their workplace.

Social responsibility and community The firm is a keen contributor to the Canberra community in a number of ways including the provision of pro-bono legal assistance, undertaking volunteer legal work, sponsorship arrangements, donations and developing young professionals. Bradley Allen Love Lawyers proudly sponsors, and is the sole legal provider to, the University of Canberra Brumbies.

Bradley Allen Love Lawyers’ innovative partnership with Craft ACT is a shining example of the firm’s ability to ‘think outside the box’ in building meaningful, effective partnerships out of a shared passion. The success of this partnership was recognised in 2013, with the firm being awarded the Creative Partnerships SME Award for New South Wales and the Australian Capital Territory.

Several of its lawyers are actively involved in the Property Council, Master Builders Association, ACT Law Society and Law Council of Australia committees, as well as other professional associations such as the Women Lawyers Association of the ACT. The firm’s Directors and lawyers sit on not-for-profit boards and community associations including Diabetes ACT, SIDS and Kids, Duo Services Australia, Juvenile Diabetes Research Foundation, Craft ACT and ACT Government Boards including the Land Development Agency.

Facing page L-R Bradley Allen Love Directors: Alan Bradbury, Mark Love, Keith Bradley AM, David Toole, John Bradley. Foreground: John Wilson, Susan Proctor Photos: Andrew Sikorski. Shot on location at Hotel Realm.

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COVER STORY

A TIME TO

Celebrate

John Larkings – Special Counsel John is an Accredited Specialist in commercial litigation and has over a decade of experience in the conduct of litigation and dispute resolution matters. He is highly experienced in several legal areas, including debt recovery matters, contractual disputes, bankruptcy and corporate insolvency matters, corporate governance matters and leasing disputes.

Gabrielle Sullivan – Special Counsel Gabrielle has been practising civil law for over 15 years, primarily in employment and workplace relations law. She has an understanding of both employer and employee perspectives of the workplace relations law landscape. Her focus is on workplace misconduct and investigations, and extends to providing practical advice and representation in discrimination, underperformance, workplace entitlements and termination of employment matters.

Ian Meagher – Senior Associate Ian practises across the litigation and employment teams at Bradley Allen Love Lawyers. Ian’s practice primarily involves insurance litigation, employment disputes and commercial litigation. He has advised various insurer and employer clients on public liability and work safety standards and has a passion of applying this experience to his individual clients also.

Liam Early – Associate Liam specialises in property law and has extensive experience advising clients on a wide range of issues including the purchase

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CONGRATULATIONS TO 2014 STAFF PROMOTIONS

and sale of commercial property, unit title issues, commercial leasing, property development and SMSF purchases. Liam was recently the supervising solicitor for a transaction involving over 80 properties across Australia.

Tim Morton – Associate Tim practises in the estates, estate litigation and estate planning section at Bradley Allen Love Lawyers. Tim’s practice is multi-jurisdictional and covers the ACT, New South Wales, Victoria and Queensland. Tim tutors wills & estates law at the ANU and is currently completing a Master of Laws (wills & estates).

Mark North – Associate Mark practises in the Business Law section at Bradley Allen Love Lawyers.

Mark advises public and private companies, individuals and industry peak bodies on a broad range of corporate and commercial issues. Mark is experienced in the establishment and commercialisation of business ventures, venture capital and private equity, corporate governance and compliance, intellectual property and general commercial contracting.

Laura Scotton – Associate Laura was admitted to practice in the ACT Supreme Court in 2013. Laura manages an agency practice for a number of interstate firms in relation to ACT Magistrates and Supreme Court matters and advises in relation to commercial and contractual disputes, bankruptcy, insolvency, debt recovery and enforcement.

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Bradley Allen Love Lawyers Areas of expertise • Business and Corporate • Property, Building and Construction • Conveyancing • Employment and Workplace Relations • Estate Planning and Business Succession • Government and Administrative Law • Insolvency and Reconstruction • Litigation and Dispute Resolution • Local Government Law • Planning and Environmental Law • Wills, Power of Attorney, Probate and Administration.

Contact 9th Floor Canberra House 40 Marcus Clarke Street, Canberra City ACT 2601 GPO Box 240, Canberra City ACT 2601 DX 5626 Canberra Phone: 02 6274 0999 Fax: 02 6274 0888 Email: reception@bradleyallenlove.com.au www.bradleyallenlove.com.au Twitter: @BALLawyers

COVER STORY

Gabrielle Sullivan Timothy Morton John Larkings Laura Scotton

Liam Early

Mark North

Ian Meagher

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ADVICE 19 19 20 20 22 22 24 26 26 28 28 30 30 31 18

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ACCOUNTING

What's happening in your super?

by Michelle van Lier, RSM Bird Cameron Chartered Accountants

BANKING

Going green: is it worth the energy

by Kylie Peden, ANZ Mobile Lending

BUSINESS ADVISORY

Business taxation debts

by Tony Lane, Vincents Chartered Accountants

BOOKKEEPING

Three tips to improve your accounting system

by Harry Hoang, Tailored Accounts

BUSINESS LAW

Employee share scheme: start-ups let down by Federal Budget

by Mark Love, Bradley Allen Love Lawyers

CORPORATE ADVISORY

Take the guesswork out of business decision-making

by Ben Weber, Maxim Chartered Accountants

CORPORATE GOVERNANCE

Measuring what matters

by Phil Butler, Australian Institute of Company Directors

ESTATE PLANNING

Peter Brock and his will(s) story

by Stephen Bourke, Certus Law

FAMILY LAW

Overseas travel and children

by Jacquelyn Curtis, Dobinson Davey Clifford Simpson Lawyers

INTELLECTUAL PROPERTY

Why conduct an IP audit?

by Shaun Creighton, Arete Group

ONLINE MARKETING

Tips for AdWords account managers

by Damian Schroeter, nFlame Creative

PROPERTY FINANCING

Why you need to make use of mortgage offset accounts

by Peter Spooner, Loan Market

RECRUITMENT

ACT job market. How is it performing

by Jim Roy, Hays Recruitment

WEBSITES

User experience is the key to success

by Sam Gupta, Synapse Worldwide

ACCOUNTING

by Michelle van Lier

BANKING

What’s happening in your super?

This update covers announcements in the Budget and other changes over recent months. As Budget announcements may not necessarily become law, they are subject to change.

Tax deductible contribution caps From 1 July 2014 the concessional contribution cap will rise from $25,000 to $30,000. In addition, anyone aged 50 or more at any time during the year may contribute up to $35,000.

Non deductible contribution caps The non concessional contribution cap will rise from $150,000 to $180,000 from 1 July 2014. For persons under 65 who have access to averaging provisions, this means the “bring forward” cap changes from $450,000 to $540,000.

The bring forward rule allows persons under 65 on 1 July to bring forward the following two years’ contributions. Please note if you have already triggered the bring forward rule in the 2013 or 2014 financial year then you will still only have access to the current $450,000 cap.

Penalty regime The Australian Taxation Office (ATO) has historically only had two courses of action for SMSF compliance breaches – writing letters or making a fund non-complying with significant tax penalties.

From 1 July 2014 the ATO will be able to issue monetary penalties, require a breach to be rectified or require a trustee to undertake education.

We wrote to the minister on your behalf to confirm that the ATO will use discretion, and that some breaches will result in no penalties. The minister replied yes.

Making sure your bank account doesn’t go into overdraft and checking with us prior to any unusual investment transaction will reduce your risk of a breach.

Age pension Currently, superannuation fund income is not considered for the age pension income test. However for persons receiving the age pension or those who may be eligible for a seniors health care card, any new income stream commenced after 31 December 2014 will now be counted for the income test.

Please note to fall under the existing rules members must have received at least one income stream payment prior to 1 January 2015. For those members who draw down annual amounts in June each year you may wish to change to monthly drawdowns from July 2014.

The Budget also included announcements on: increasing age pension access to age 70, having the biannual indexation at a lower rate, changing deeming rules which will result in more income being counted and freezing the asset and income tax thresholds for 3 years from 2017.

We expect that final law will not include all these measures, or there will be variations.

Bird Cameron

Chartered Accountants

For more information, please contact Michelle van Lier, of RSM Bird Cameron, on 6217 0316 or michelle.vanLier@rsmi.com.au.

By Kylie Peden

Going green: is it worth the energy?

Making a house truly energy-efficient takes more than simply switching a few light bulbs. So, is green renovation worth it for an investor?

Many experts, like Associate Professor Stuart McAuliffe of Bond University’s Institute of Sustainable Development and Architecture, believe it is. He maintains that consumer demand for sustainable products is increasing.1 For example, he says, the huge demand for greener vehicles has meant car manufacturers had to turn hybrid cars from a novelty to “orthodox strategy” in just a few years.1 According to McAuliffe, the demand for sustainability, fuelled by rising energy and resource prices, will influence future housing markets.1 He claims that making your property more sustainable can “futureproof” your investment by increasing its appeal and value.1 A real-world example of this comes from the ACT where, since 1999, they’ve had a mandatory disclosure scheme where houses for sale receive an efficiency rating from zero to ten.

A recent study showed that buyers there willingly pay an average of 3% more for a similar property with an extra star.2 This means that investors spending just $1,200 on insulating a $400,000 property could increase its value to around $412,000.3 Though currently only in the ACT, the Government is planning a nationwide energy-efficiency disclosure system in the next few years.3 That means starting now could put you ahead of the pack when ratings arrive. Plus, making a few small changes may make your property more comfortable and appealing today, encouraging tenants to stay and reducing vacancy periods.

References 1. ‘How will sustainability affect real estate?’, liveability.com.au, accessed 4 January 2013.

2. Australian Bureau of Statistics and Department of the Environment, Water, Heritage and the Arts, ‘Energy efficiency rating and house price in the ACT’, nathers.gov.au, 2008.

3. ‘Greening your property makes money and sense’, environmentvictoria. org.au, accessed 4 January 2013.

4. ‘During the tenancy’, lawhandbook.org, accessed 17 January 2013.

Disclaimer: The information is in summary form and does not purport to be complete.

It is intended as a general guide only and is not a substitute for professional advice. The information does not take into account your personal needs and financial circumstances and you should consider whether it is appropriate for you.

For more information, contact Kylie Peden, ANZ Mobile Lender, M: 0400 131 314 E: pedenk@anzmortgagesolutions.com This Mobile Lender operates as ANZ Mortgage Solutions Belconnen & Gungahlin, ABN 39 142 445 725 an independently operated franchise of Australia and New Zealand Banking Group Limited (ANZ) ABN 11 005 357 522. Australian Credit Licence Number 234527.

ANZ’s colour blue is a trade mark of ANZ. Terms and Conditions, fees and charges apply. All applications for credit are subject to ANZ’s normal credit approval criteria.

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BUSINESS ADVISORY

Business taxation debts

By Tony Lane

The recent further tightening of fiscal policy may see the ATO increase its activity level in the pursuit of business taxation debts.

Where a company is the debtor, the ATO may issue a statutory demand, under the Corporations Act 2001, in seeking to recover the outstanding amount. In addition, the ATO may also issue a Director Penalty Notice (“DPN”). Unless a director takes one of four steps within 21 days, namely: • Pay the amount due; • Enter into a formal payment agreement; • Place the company into voluntary administration, pursuant to section 436A of the Corporations Act; or • Place the company into voluntary liquidation, pursuant to section 491 of the Corporations Act. the director becomes personally liable for the debt of the company.

Different rules apply to debts that have not been notified to the ATO and are outstanding for more than 3 months.

Where directors chose to make payment in full or enter into a payment agreement, care should be taken to ensure that the arrangement is robust.

In these circumstances the ability of the company to pay not only with the ATO, but all of its creditors is paramount.

The judgement Young & Anor v Commissioner of Taxation1 (Young) is significant for directors hoping to avoid a formal insolvency appointment by striking an arrangement with the ATO. In Young, a former director of a company borrowed funds from a relative in order to repay debts due to the ATO. Those funds were recorded in the company’s records as a loan from the former director to the Company, despite those funds emanating from a relative in the first instance.

When a liquidator was appointed to the company, he commenced proceedings against the ATO for recovery of an unfair preference – all the money paid to the ATO within the 6 months prior to the winding up.

The Court found against the company and the transactions were therefore recoverable by the liquidator. However, the decision in Young is only half the story. The ATO enjoys a special right under the Corporations Act, allowing it to recover against directors any amount repaid to a liquidator as result of a recovered voidable transaction.

In Young, the director became exposed to a ‘repeat’ claim by the ATO upon the successful action by the liquidator, effectively paying the amount to the ATO twice.

Directors faced with similar circumstances should take urgent professional advice.

Endnotes 1 [2010] NSWSC 288

Tony Lane is a Senior Manager at Vincents Chartered Accountants and provides specialist advice to clients in the areas of insolvency, business risk and financial conflict and dispute resolution.

Level 7, 1 Hobart Place, Canberra City. T: 6274 3400 F: 6274 3499 E: tlane@vincents.com.au | www.vincents.com.au

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BOOKKEEPING

By Harry Hoang

Three tips to improve your accounting system

Heraclitus, a Greek philosopher said “Change is the only constant in life.” As with people, businesses must embrace change. So, this financial year, consider making some changes in your business.

1. Improve your accessibility Technological advancement has accelerated the pace of doing business, hence it is not surprising that business owners find themselves having to multi-task most of the time. Imagine a situation where a plumber can use his iPad to invoice a customer after finishing a job onsite. Isn’t it better if he can also use the same device to process credit card payments? What I am trying to emphasise here is, business owners like you and me should embrace technology to increase our accessibility to customers, as this will not only save us time, but gets rid of the traditional paperwork needed to process our cash flows. Does your accounting software provide you with the convenience and accessibility when dealing with your customers? If not, then this is a good time to change!

2. Improve your filing system Many business owners have remarked that the only reason they undertake filing is to comply with the ATO. But have you ever come across an office without any financial paperwork? At Tailored Accounts, we have made this possible for many of our clients. Using programs such as Receipt Bank, they store receipts in PDF or JPEG format which has removed the hassle of physically managing receipts and invoices, and ultimately leads to reduced processing time.

3. Streamline your processing Many businesses that I have encountered are struggling with their accounts payable processing. Overdue bills emerge, and they only pay their bills when suppliers threaten to cut off services. The most dangerous thing about cash flow getting out of control is forgetting to make BAS payments to the ATO. Using real-time accounting softwares such as XERO will help you to get overdue bills sorted out each day. Specifically, when you log in to the system, you will get a summary of the amount you owe others, and vice versa. By streamlining the process of paying creditors, you can create a weekly payment schedule, instead of paying off each bill when the due date approaches.

Cloud accounting is one of the biggest innovations in the accounting/ bookkeeping industry as it automates many accounting processes, reduces time wastage, and makes your business more efficient. Migrating from one accounting system to another can be a huge challenge. It's best to seek help to manage the migration process. Talk to any of our accountants in Tailored Accounts, and we look forward to making your business healthier, more cost-effective, and time-efficient

Harry Hoang is Tailored Accounts Executive Director Glebe Park Apartment, Ground Floor - 186/15 Coranderrk St, Canberra T: 02 6169 6763 | M: 0434 196 607 E: info@tailoredaccounts.com.au | www.tailoredaccounts.com.au

hat w e l p o d pe e k s a d uld o w If I ha y e h d, t e t n a w rses. o they h r e t s id fa a s e v a h ord F y r n e ―H orse. faster h “

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design&print branding web design strategy www.evendots.com.au

BUSINESS BUSINESS LAW LAW

by Mark

by Mark LoveLove

CORPORATE CORPORATE ADVISORY ADVISORY

Employee Employee share share schemes: schemes: start-ups start-ups let let down down by by Federal Federal Budget Budget

The The current current tax treatment tax treatment of employee of employee shareshare schemes schemes in Australia in Australia putsputs our local our local start-ups start-ups at a significant at a significant commercial commercial disadvantage disadvantage to their to their overseas overseas competitors. competitors.

Employee Employee shareshare schemes schemes should should allowallow earlyearly stagestage start-ups start-ups to attract to attract and and retain retain talented talented and and skilled skilled employees employees without without having having to pay to them pay them largelarge initialinitial salaries salaries (which (which the start-ups the start-ups generally generally can’tcan’t afford) afford) by allowing by allowing the employees the employees to instead to instead benefit benefit fromfrom the upside the upside and and shareshare in the in risk the of risk of the business the business alongside alongside otherother investors investors and and founders. founders.

The The current current regulatory regulatory framework framework was was introduced introduced in Australia in Australia in in 2009.2009.

It was It was intended intended to stop to stop executives executives exploiting exploiting the existing the existing system. system.

Unfortunately, Unfortunately, the unintended the unintended consequence consequence of the of changes the changes was was to to create create a significant a significant obstacle obstacle to innovative to innovative start-ups. start-ups.

As the As laws the laws currently currently stand, stand, the key the issue key issue in Australia in Australia is that is that employees employees can be canliable be liable for an forupfront an upfront tax charge tax charge on the on value the value of of shares shares or options or options that that theythey receive receive under under an employee an employee shareshare scheme. scheme.

ThisThis means means that that tax istax owed is owed immediately immediately on shares on shares or options or options where where the value the value oftenoften can’tcan’t yet be yetrealised, be realised, to betofunded be funded fromfrom income income yet yet to betoproduced. be produced.

Often Often the employee the employee has no hasway no way to sell tothe sell shares the shares or or options options (because (because therethere is noistradable no tradable market) market) and and end end up saddled up saddled withwith an immediate an immediate tax liability tax liability for the for deemed the deemed “income” “income” that that theythey havehave notionally notionally received. received.

It is possible It is possible to structure to structure employee employee shareshare schemes schemes that that address address this this upfront upfront tax issue, tax issue, but this but isthis complex is complex and and hence hence expensive, expensive, and and thusthus out out of range of range for most for most smallsmall start-ups. start-ups.

On 7On February 7 February 20142014 Treasury Treasury completed completed a round a round of public of public consultation consultation into into employee employee shareshare schemes schemes and and at least at least threethree cabinet cabinet ministers, ministers, including including Treasurer Treasurer Joe Hockey, Joe Hockey, Communications Communications Minister Minister Malcolm Malcolm Turnbull Turnbull and and SmallSmall Business Business Minister Minister Bruce Bruce Billson Billson are reported are reported to betoinbefavour in favour of revoking of revoking the 2009 the 2009 changes. changes.

As such, As such, it was it was widely widely hoped hoped within within the innovation the innovation sector sector that that changes changes to the to current the current framework framework would would be announced be announced in the in recent the recent Federal Federal Budget.

Budget.

Unfortunately, Unfortunately, however, however, the Budget the Budget was was silentsilent on this on this issue.issue.

WithWith industry industry insiders insiders tipping tipping that that the changes the changes will be willpart be part of of Prime Prime Minister Minister TonyTony Abbott Abbott and and Industry Industry Minister Minister Ian Macfarlane’s Ian Macfarlane’s national national industry industry investment investment and and competitiveness competitiveness agenda agenda to betoreleased be released laterlater this year, this year, we are weleft are with left with an uncertain an uncertain wait.wait.

Employee Employee shareshare scheme scheme reform reform will put will the put Australian the Australian innovation innovation sector sector backback on aon level a level playing playing fieldfield withwith its overseas its overseas competitors. competitors.

SmallSmall start-ups start-ups needneed the ability the ability to attract to attract and and retain retain the people the people theythey needneed to to buildbuild strong, strong, successful successful businesses. businesses.

If youIf you require require assistance assistance withwith an employee an employee shareshare scheme, scheme, please please contact contact our firm. our firm.

MarkMark Love,Love, LegalLegal Director, Director, Business Business Law Law 9th Floor, 9th Floor, Canberra Canberra House, House, 40 Marcus 40 Marcus ClarkeClarke Street,Street, Canberra Canberra ACT ACT 2601 2601 E: mark.love@bradleyallenlove.com.au E: mark.love@bradleyallenlove.com.au T: 02 6274 T: 02 0810 6274 0810 | www.bradleyallenlove.com.au | www.bradleyallenlove.com.au

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by Ben

by Weber Ben Weber

Take Take thethe guesswork guesswork outout of of business business decision-making decision-making

Are you Are you looking looking to make to make business business investment investment decisions, decisions, suchsuch as as refinancing, refinancing, acquisitions, acquisitions, internal internal investments, investments, project project investments investments or or capex capex spend spend decisions decisions and and pricing pricing services, services, products products or tenders? or tenders?

If so,Ifyou so, you will be willconsidering be considering howhow to ensure to ensure you you havehave the strongest the strongest possible possible planplan for your for your transaction transaction or business or business casecase idea.idea.

You You will also will also be keen be keen to show to show youryour decision decision is financially is financially rigorous rigorous and and that that youryour analysis analysis is sound. is sound.

When When undertaking undertaking any of anythe of above the above mentioned mentioned business business decisions decisions a financial a financial model model whether whether simple simple or or complicated complicated should should be a be keya factor key factor in the in decision the decision making making process. process.

Many Many businesses businesses are often are often too focused too focused on the on strategic the strategic rationale rationale behind behind decision decision making making and and fail to failproperly to properly calculate calculate the financial the financial implications implications bothboth on earnings on earnings and and theirtheir balance balance sheetsheet or capital or capital base.base.

A financial A financial model model will help will help any business any business link the link strategic the strategic purpose purpose behind behind decision decision making making to financial to financial return return and and performance performance i.e. isi.e. theis the investment investment worthwhile worthwhile fromfrom a financial a financial return return prospective prospective not just not ajust a goodgood idea!idea!

Robust Robust financial financial modelling modelling requires requires a detailed a detailed understanding understanding of best of best practice practice techniques, techniques, analysis analysis and and logic.logic.

Building Building an effective an effective business business financial financial model model can be cana be complex a complex and and difficult difficult task task and,and, as a as result, a result, it is it is no surprise no surprise that that the majority the majority of business of business models models contain contain errors errors or door do not account not account for allforthe all financial the financial implications implications of a of decision. a decision.

The The size and size and number number of errors of errors and and omissions omissions can significantly can significantly change change the interpretation the interpretation of a of situation a situation and and it is crucial it is crucial to betoaccurate be accurate to ensure to ensure you you are making are making informed informed business business investment investment decisions. decisions.

No matter No matter the size the of sizethe of decision the decision or project, or project, Maxim Maxim Corporate Corporate Advisory Advisory and and Transactions Transactions can help can help enhance enhance youryour understanding understanding withwith insightful insightful financial financial analysis analysis and and modelling, enabling modelling, enabling you you to make to make better better decisions decisions and and achieve achieve greater greater valuevalue and and financial financial returns. returns.

We can We help can help you you withwith the value the value analytics, analytics, financial financial modelling modelling and and the business the business casecase process process to test to test and and better better inform inform youryour key key business business investment investment choices. choices.

We work We work closely closely withwith our clients our clients to to helphelp withwith business business casecase development development and and model model builds builds to provide to provide the financial the financial information information you you needneed to make to make youryour critical critical business business investment decision. investment decision.

Ben Weber, Ben Weber, HeadHead of Corporate of Corporate Advisory Advisory and Transactions and Transactions LevelLevel 2, 59 2, Wentworth 59 Wentworth Ave, Kingston Ave, Kingston ACT ACT 2604 2604 T: (02)T:6295 (02) 6295 8744 8744 F: (02)F:6295 (02) 6295 8344 8344 www.maximca.com.au www.maximca.com.au

STRUGGLE. SURVIVE. EVOLVE. CONGRATULATIONS! You’ve Finally Managed To Put Together Your Dream Website, But Here Comes the More Difficult Challenge…

I know for a fact that getting your website up and ready is bit of a painful process in its own right and once it is ready the excitement of sharing the accomplishment with your friends, family, co-workers and employees is just overwhelming. While I really don’t want to burst your bubble, I’d also hate to hide the harsh realities of the corporate world waiting to strike you, and strike you hard. Here is the bullet for you to bite.

“You have to work at least 200 times harder than you’d already worked for getting the website set-up and be online.” Here’s why…

If you want to survive in this cutthroat, unforgiving business environment, you need customers and a lot of them. To make things worse, targeted inflow of website visitors is NOT the only important thing you need, you also require your visitors to do the most desirable action such as giving you a ring, shooting an email, subscribing to your e-mail list, or just buying your product or service.

I meet start-ups and existing businesses day-in, day-out and consistently find them stuck at “taking their presence to the next stage”, where they can start registering success and stay in the business for as long as they possibly can.

Marketing is a skilled expertise and not all entrepreneurs or business owners have it. Even when they do have the marketing skills they just don’t have the time to execute those skills because so much else is on the plate. After all, they have to do things like servicing customers, delivering products, managing finances and doing whatever it takes to keep their businesses up and running.

to successfully spread the word, build reputation, or drive the results it is after. That’s nearly about a whole working week!

Speaking of SEO, one of the most talked about online marketing strategy, Google is committed to kick out all lowquality websites from its index by continuously flashing out complex algorithms in short time intervals making the job of marketers highly specialised and time consuming.

Good luck to all those ventures that are ready to take the risk of churning out big money in an effort to recruit and train someone on their payroll with absolutely NO guarantee of the results.

How do you cope with such a challenging business environment? What I’ve been experiencing is astute businesses are turning to the services that specialise in not only helping them to get FOUND in the immensely cluttered online space, but providing data driven suggestions and insights to boost their conversion rates.

Now how to select such a service is another point of huge debate, but I strongly believe this is the right way of going about it. Outsourcing highly specialized marketing skills is allowing business owners to free up their time for doing what they are expert in, running their business. The other significant advantage of utilising someone outside of your business is, you only pay for the results agreed upon before the project gets off the ground.

So, if you are struggling to be found online or have visitors but just not converting into revenues, here is your chance to pick up the phone, call Canberra Web, and let us know your woes and pains. We love to listen to our customer problems because it allows us to offer appropriate solutions.

According to Inc.com, one of the world’s leading magazine for start-ups and businesses, on average a business needs to spend around 20-25 hours a week on a single social media platform

Give us a shout at (02) 6223 2222 or drop into our office from Mon- Fri (business hours) U5, 47 Vicars St, Mitchell for chat. www.canberraweb.com.au

CORPORATE GOVERNANCE

Measuring what matters

by Phil Butler

This column has often discussed the benefits of a board and appropriate governance structures to assist organisations achieve their outcomes. Having a board of skilled directors can provide the strategic guidance to help steer organisations in the right direction and ensure that appropriate risk controls are in place.

In the for profit environment, the outcomes being sought can be measured by ratios such as return on investment. The measurement of this, while not without its challenges, is often reasonably straight forward as is the benchmarking of performance against similar organisations.

However in the not for profit (NFP) and public sectors, the measurement of outcomes can be much more difficult.

As we enter the new financial year, many organisations will be considering the past year and looking at what the new year may bring.

Unfortunately many will have reported on what they have always reported on rather than considering the real value of their reports.

The release of the NFP Governance Principles and Guidance publication in 2013, dedicated one of the ten principles to Organisational Performance. The Principle noted that it can be difficult to measure the degree to which an organisation is delivering on its purpose, however a board can assist by discussing the types of indicators that may be useful.

For example a membership based organisation may be able to use membership growth, acquisition and retention as indicators. A community service organisation may use number of clients helped as an indicator. Whatever the final decision, it is critically important to ensure that the indicators are readily understood by all concerned including, board, staff and external stakeholders.

Another key element is to ensure that the indicators are not too costly or complicated to report on. For smaller , less complex organisations it is vital that you don’t over burden them with reporting requirements that take away from the key activities. Similarly, you should strive to have consistent indicators so that you are not constantly changing reports that are going to the board.

As with much of corporate governance, there are no rights or wrongs in performance measurement. Choose measures that suit your organisation, be prepared to adjust over time but resist the temptation to take on each new idea that pops up at a meeting.

It’s a fun way to get fit and improve your tennis!

• Learn a game you can play for life • Play at Barton or Dickson • It’s a great way to reduce stress after work.

Delivered by Qualified Tennis Coaches & Sport Science University Graduates Mention the B2B Cardio Tennis Special when booking online in June and receive Six Cardio Tennis Sessions for $60 (normally $90).

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Get started Phil Butler is Manager - NFP, Public Sector & ACT at the Australian Institute of Company Directors.

Level 3 54 Marcus Clarke Street Canberra T: 02 6132 3200 | www.companydirectors.com.au

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today!

Bookings: www.healthyidentity.com.au/cardio-tennis Phone: 0423 366 014

Intelligence Officers $68,568 to $87,300 (plus super), Canberra

ASIO is looking for talented people to fill a number of critical roles in the collection and analysis of intelligence. As an Intelligence Officer you will identify and investigate patterns and anomalies, solve complex problems and produce high-quality advice for government.

You need to possess highly developed analytical and research skills, a keen intellect, flexibility and commitment. Applicants with qualifications across a range of disciplines, in particular international relations, law, science and counter-terrorism, or applicants with significant work experience across a range of industries will be highly regarded.

Selected applicants will undergo an extensive security vetting process.

Apply online

www.asio.gov.au

B2B Mal_PM_Half Page April 2014_Layout 1 17/04/14 2:40 PM Page 1

To be eligible for this diverse and interesting role you must: ▶ be an Australian citizen ▶ hold a degree qualification in any discipline ▶ be willing and able to relocate to Canberra for the training period and thereafter any Australian capital city, including Canberra, for the duration of your career ▶ hold at least a Provisional Drivers Licence for a C Class Vehicle.

Opening date:

3rd July 2014

Give your property investments…

We tailor-make property managements to suit your property investments 1. We are a company that is big enough to be systemised, organised, structured and well resourced, however, small enough to care about all our clients 2. Our website has a major focus on property management* and is a very powerful and time saving tool for both you, and your tenants 3. Exclusive on-line portal provides investors with convenient 24/7 access to all your properties details. This service gives you the technological edge, and the peace of mind that everything, including ledgers, is in order 4. We contract only professional photographers to deliver better representations of your property to be showcased on a range of marketing media to maximise your returns

5. Our property inspection reports are thoroughly completed and supported by photographic evidence of the inspection’s assessment.

These reports and photos are available to you on our website 6. Flexible property income options allow you to decide when and how your rental income will be paid to you 7. Direct debit arrangements take care of your tenants' payments and minimise rental arrears 8. Our dedicated management team ensure that each property and tenant receives maximum attention which gives you the freedom of continuous leasing 9. Tenants can apply quickly for your property on-line with easy, no-fuss applications

10. We maintain and grow a strong and active database of diplomatic and executive tenants looking for quality properties 11. Our complete property management coverage and advice means that you can invest with confidence in the Canberra market.

If you would like all the benefits of a tailormade, property management consultation and assessment, call Sue Maloney today.

realpeople… realresults!

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the Maloney’s touch

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ESTATE ESTATE PLANNING PLANNING

by Stephen

by Stephen Bourke Bourke

Peter Peter Brock Brock andand hishis will(s)story will(s)story

I wasI was reading reading the Australian’s the Australian’s Women’s Women’s Weekly Weekly the other the other day (as day (as you do) you when do) when I came I came across across an article an article about about the estate the estate of Peter of Peter Brock.

Brock.

It is aItsalutary is a salutary lesson lesson in being in being prepared prepared for one for one of the of two the two certainties certainties in in life –life – death. death.

First,First, a little a little background. background.

PeterPeter had had prepared prepared his first his first will in will 1983. in 1983.

The The will was will was professionally professionally drafted drafted and and properly properly executed. executed.

It was It was thenthen stored stored in the in solicitor’s the solicitor’s safe safe custody. custody.

As time As time wentwent on, Peter on, Peter thought thought to update to update his will. his There will. There was was a signa sign “WILL “WILL KIT KIT BUY  BUY ONE,ONE, GETGET ONEONE FREE”.

FREE”.

PeterPeter sat down sat down to prepare to prepare the the will but will when but when it came it came to filling to filling in the in details the details of the of will the kit, willhe kit,said he said to Bev to Bev “You“You fill it fill in. itYou in. You will know will know whatwhat to do.” to do.”

PeterPeter signed signed it. The it. The will was will was witnessed witnessed by one by one witness witness (you(you needneed two two witnesses witnesses for the for valid the valid will).will).

As itAs turned it turned out, out, Bev did Bevnot did fill notinfill the in details. the details.

But the But will the kit willhas kit ahas a pre-printed pre-printed clause: clause: “I revoke “I revoke all my allprevious my previous testamentary testamentary dispositions.” dispositions.”

Subsequent Subsequent to that to that will kit, willPeter kit, Peter and and Bev broke Bev broke up. Peter up. Peter thenthen formed formed a new a new relationship relationship withwith Julie.Julie.

PeterPeter thenthen has another has another will kit willand kit and decides decides to dictate to dictate his will his to willhisto his assistant assistant whowho was was to filltoout fill the out will the kit. willPart kit. Part way way through through the process, the process, Peter’s Peter’s assistant assistant says says to him to him that that the will the was will was becoming becoming too complex too complex and and that that PeterPeter should should havehave it prepared it prepared by a by solicitor. a solicitor.

TheyThey adjourn, adjourn, put the put the incomplete incomplete will kit willinkit the in filing the filing cabinet, cabinet, not signed not signed and and not witnessed. not witnessed.

PeterPeter dieddied in 2006. in 2006.

Which Which of the of three the three wills wills is theis valid the valid will? will?

• The • The last will last was will was nevernever signed signed or witnessed or witnessed and and it was it was not completed. not completed.

It was It was not anot valid a valid will; will; • The • The second second will was will was not filled not filled out but out itbut was it was signed. signed.

The The courtcourt thought thought the witnessing the witnessing was was not fatal not fatal to validity to validity and and found found that that will to will to be valid. be valid.

• The • The first first will (prepared will (prepared by the by solicitor the solicitor in 1983) in 1983) was was found found to beto be revoked revoked because because of the of pre-printed the pre-printed clause clause in the in will the kit. will kit.

So the So second the second will was will was the valid the valid will. But will. all Butit all diditwas did was revoke revoke the first the first will and will and did not did contain not contain any gifts any gifts because because Peter’s Peter’s request request to Bev to to Bevfilltoout fill out the details the details was was not carried not carried out. out.

The The will kit willwas kit was blank. blank.

There There was was a challenge a challenge to the to will. the will.

It became It became an expensive an expensive process process withwith the much the much of the of value the value of the of the estate estate beingbeing eateneaten up inup fees in fees . The. The Women’s Women’s Weekly Weekly article article says says that that Julie Julie “still “still can’tcan’t say the say word the word ‘lawyer’ ‘lawyer’ without without getting getting upset.” upset.”

The The article article goesgoes on toonsay tothat say that the fees the fees of the of estate the estate contest contest tooktook up up so much so much of the of estate the estate that that bothboth Bev and Bev and Julie Julie are struggling are struggling financially financially to this to day. this day.

On top On of topthe of financial the financial burden, burden, therethere was was also also a very a very heavy heavy emotional emotional toll on tollalloninvolved. all involved.

So the So moral the moral of this of story this story is: Get is: Get youryour will done. will done.

It’s something It’s something that that manymany people people put off putbecause off because it does it does not have not have to betodone be done today. today.

However, However, if youif have you have a properly a properly prepared prepared will and will and estate estate planplan in place in place you you can save can save youryour family family not only not only the large the large financial financial costscosts involved involved in a court in a court challenge challenge but also but also save save thosethose left be lefthind behind the heavy the heavy emotional emotional toll. toll.

Stephen Stephen Bourke Bourke is a director is a director of Certus of Certus Law Law Certus Certus Law specialises Law specialises in superannuation, in superannuation, truststrusts and estate and estate planning. planning.

Visit Certus Visit Certus Law at Law Level at Level 5, 28 5, University 28 University Avenue, Avenue, T: 6268 T: 6268 9090,9090, www.certuslaw.com.au www.certuslaw.com.au

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FAMILY FAMILY LAW LAW

by Jacquelyn

by Jacquelyn CurtisCurtis

Overseas Overseas travel travel andand children children

WithWith a healthy a healthy tourism tourism market market and and affordable affordable air travel, air travel, Australians Australians are are finding finding it more it more and and moremore appealing appealing to take to take the kids the kids on an oninternational an international vacation. vacation.

For separated For separated families, families, travelling travelling internationally internationally withwith theirtheir children children isn’t isn’t as simple as simple as nabbing as nabbing a cheap a cheap flightflight and and resort resort package package deal deal online. online.

Parents Parents needneed to betoaware be aware of the of issues the issues which which arisearise in relation in relation to to international international traveltravel where where therethere is a parenting is a parenting dispute dispute and and of how of how to to manage manage these. these.

EarlyEarly planning planning and and timely timely legallegal advice advice are key. are key.

Do IDo need I need the other the other parent’s parent’s permission? permission?

If noIfparenting no parenting Court Court Orders Orders are inareplace, in place, you you do not do need not need the other the other parent’s parent’s consent consent for holiday for holiday travel. travel.

However, However, it is wise it is wise to give to give the other the other parent parent plenty plenty of notice of notice before before departure. departure.

ThisThis maymay lessen lessen the risk the of riskthe of the otherother parent parent attempting attempting to stop to stop the child’s the child’s traveltravel at the at last the minute. last minute.

If parenting If parenting Court Court Orders Orders are inareplace, in place, or if or Court if Court proceedings proceedings are are underway underway in relation in relation to the to child, the child, you you cannot cannot taketake the child the child overseas overseas without without the written the written consent consent of the of other the other partyparty or a or Court a Court Order Order permitting permitting the travel. the travel.

To do Tosodoisso a criminal is a criminal offence offence punishable punishable by by imprisonment imprisonment for up fortoup3 to years.

3 years.

A specific A specific written written authority authority signed signed by the by the otherother parent parent is required. is required.

You You should should consult consult a lawyer a lawyer in this in situation this situation to to ensure ensure the requirements the requirements are met. are met.

Getting Getting a passport a passport and and the other the other parent’s parent’s consent consent to travel to travel Often Often to get tothe get trip the off tripthe off ground, the ground, the consent the consent of the of other the other parent parent is is needed needed to obtain to obtain a passport a passport for the for child. the child.

The The Australian Australian Passport Passport Office Office will telephone will telephone bothboth parents parents for verification for verification afterafter a child’s a child’s application application for afor a passport passport is submitted. is submitted.

The The process process maymay be halted be halted if consent if consent is notis given. not given.

ThisThis is theis case the case unless unless you you havehave a Court a Court Order Order granting granting you you sole sole parental parental responsibility responsibility for the for child the child and and a copy a copy of that of that Order Order is submitted is submitted withwith the passport the passport application. application.

It can It sometimes can sometimes be difficult be difficult to obtain to obtain the other the other parent’s parent’s consent. consent.

Sometimes Sometimes therethere is a good is a good reason reason for not for providing not providing consent. consent.

Other Other times, times, therethere is not. is not.

A parent A parent whowho objects objects to overseas to overseas traveltravel maymay seekseek to stop to stop the child the child fromfrom leaving leaving the country the country by obtaining by obtaining “Airport “Airport Watchlist Watchlist Orders” Orders” fromfrom the Court. the Court.

In some In some cases, cases, thesethese orders orders can be canobtained be obtained fromfrom the Court the Court without without youryour knowledge. knowledge.

TheyThey resultresult in you in you beingbeing stopped stopped at the at airport the airport and and fromfrom departing departing withwith the child. the child.

The The other other parent parent doesn’t doesn’t consent consent – what – what can can I do?I do?

If theIf other the other parent parent won’t won’t consent, consent, you you mustmust applyapply to Court to Court for Orders for Orders permitting permitting the child the child to travel to travel and/or and/or for afor passport a passport to betoissued. be issued.

A Court A Court will decide will decide whether whether it is in it isthe in best the best interests interests of the of child the child to goto go on the on overseas the overseas trip. trip.

If theIf Court the Court considers considers that that therethere is a risk is a of riskthe of child the child beingbeing removed removed fromfrom Australia Australia permanently, permanently, you you would would not be notsuccessful. be successful.

If youIf you are thinking are thinking of travelling of travelling overseas overseas withwith youryour child,child, give give yourself yourself plenty plenty of time of time to obtain to obtain a passport a passport for the for child the child and and the other the other party’s consent. party’s consent.

Jacquelyn Jacquelyn CurtisCurtis is an Associate is an Associate of theoffirm the firm 18 Kendall 18 Kendall Lane,Lane, New New ActonActon Canberra Canberra City ACT City ACT 2601 2601 T: (02)T:6212 (02) 7600 6212 7600 E: mail@ddcslawyers.com.au E: mail@ddcslawyers.com.au www.ddcslawyers.com.au www.ddcslawyers.com.au

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INTELLECTUAL PROPERTY

by Shaun Creighton

Why conduct an IP audit?

With the start of a new financial year, now is the time to start planning for the upcoming year. A key area often overlooked by businesses is the protection of intellectual property (IP).

Nearly every business has IP of some kind. It can be embedded in things as commonplace as a list of customers or an advertising pamphlet.

Businesses are often unaware of the full extent of their IP. The result is that many businesses insufficiently protect and under-exploit this valuable asset.

Conducting an IP audit can be a cost-effective means of identifying your business’s IP and developing strategies to protect, use and enhance it.

Some key questions that can be covered in an IP audit include: • Do you own all the IP you use? For example, if you engaged a graphic designer to prepare an advertising campaign, did the contractor agreement transfer ownership of the IP created in your business? Do your employee agreements specify who owns any IP created during the course of employment?

• Do you have trade mark protection of your business name or brands, keeping in mind that business, company and domain name registrations do not give you any substantial intellectual property rights in law?

• Are your staff aware of what constitutes infringing your IP or misuse of confidential information? It is much better to ensure you have clear guidelines in place and educate your staff appropriately than to deal with disgruntled ex-employees attempting to solicit your clients or use your business’s confidential information at a later date.

• Are you unwittingly infringing someone else’s IP, including trade marks, patents or designs? Such infringement could prove very costly in the long run, and could necessitate complete re-branding of your business.

• Do you have IP lying dormant that could be put to a valuable use?

• Do you have plans to develop and commercialise your IP? • Are there strategies that can be developed to limit gaps in your IP ownership?

Developing an IP register and good IP policies ensures you maximize your business’s growth opportunities, avoid infringing other business’s IP and protect your business from IP misappropriation.

IP audits can be geared to each business’s needs, however big or small, new or established. ARETE Group provides IP audits and develops IP strategies and associated documents on a fixed fee basis, depending on the size and scope of your requirements. We can also assist in the protection, commercialisation and enforcement of your valuable intellectual property rights.

For further information in ARETE Group’s Intellectual Property Audit and Strategy Service (IPASS) program and specific service offering, see http://www.aretegroup.com.au/ipass.html

P: GPO Box 579, Canberra ACT 2601 E: shaun.creighton@aretegroup.com.au shaun.creighton@aretegroup.com.au T: 02 6162 1639 | M: 0430 22 78 62 www.aretegroup.com.au or www.asportslaw.com.au

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ONLINE MARKETING

by Damian Schroeter

Tips for DIY AdWords account managers

Do you manage your own Google AdWords account? Have you thought of getting a second opinion on your account to make sure that things are running as well as they should?

If this sounds like you, then you really need to give our office a call. We specialise in assisting local businesses reach and reward local, national, and international customers online. Before you call us, I thought I would share a few common scenarios we see when we review self-managed Google AdWords accounts and some quick tips to clean up your account.

You receive a lot of traffic to your website from locations which are outside your ideal target regions.

Check your Google Analytics account and see if these clicks are coming from your AdWords campaigns. If so, log into your AdWords account and check your location targeting settings. Make sure you are not wasting your PPC budget on locations outside of your company’s service region.

Your AdWords account is generating lots of impressions and clicks, but not recording conversions.

Firstly; check that your AdWords conversion tracking code has been installed on your website, and that your AdWords and Analytics accounts have been linked properly. If that all looks OK then check the pages that your ads are pointing to. Perhaps the theme of your landing page is irrelevant to the content of the ad and to the keywords programmed in the campaign or Adgroup. Make sure relevant ads point to relevant pages with clear objectives to measure conversions. Micro conversions should also be used for websites where Macro conversions are less frequent.

Your Daily PPC Budget is always maxed-out and you receive few conversions.

If you are generating enough conversions to meet your targets, this might be OK for your account. If you can sustain the extra growth you may consider increasing your budget to meet a higher demand, and it is also an opportunity to refine your campaign keywords and focus on conversion optimisation. Conversion Optimisation can lead to a higher number of conversions and reduced cost per click. You should also check your location targeting and Ad Scheduling is correct for your objectives.

We advise monitoring the objectives of your campaign in-line with the trading hours of your business and the reportable actions on the other side of a website click.

You can learn more about managing your own account with confidence by visiting our website. We offer Google AdWords training services for small groups and individuals to learn the basics for self management. If this sounds like you, visit www.nflame.com.au/training to learn more.

Damian Schroeter is a Google Partner and Director of Design & Advertising at nFlame Creative.

Visit: www.nflame.com.au/AdWords Consultations by appointment: Phone (02)6249 8694 or email info@nflame.com.au

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PROPERTY PROPERTY FINANCING FINANCING

by Peter

by Peter Spooner Spooner

Why Why youyou need need to to make make useuse of of mortgage mortgage offset offset accounts accounts

To me, To the me, introduction the introduction by most by most Lenders Lenders of a of 100% a 100% linked linked mortgage mortgage offset offset account account offering offering was was the best the best thingthing sincesince slicedsliced bread bread in providing in providing the opportunity the opportunity to reduce to reduce mortgage mortgage interest interest charges. charges.

Other Other thanthan the the mortgage mortgage holder holder usingusing the account the account nothing nothing moremore needneed be done be done to gain to gain the benefit the benefit of reduced of reduced interest interest charges. charges.

What What could could be easier? be easier?

AndAnd yet, Iyet, amI regularly am regularly surprised surprised that that mortgage mortgage holders holders whowho havehave an an offset offset account account available available to them to them do not do use not the use account the account at allatoralldoornot do not use the use account the account effectively effectively eveneven though though in most in most casescases theythey are paying are paying a a monthly monthly or annual or annual fee that fee that includes includes availability availability of this of facility. this facility.

I amI even am even moremore surprised surprised when when I findI find that that thesethese samesame folksfolks are also are also paying paying fees fees and and charges charges for transaction for transaction accounts accounts at other at other institutions institutions that that clearly clearly cannot cannot linked linked to their to their mortgage mortgage account. account.

ThisThis situation situation is particularly is particularly in evidence in evidence when when couples couples are inare in the pre the the pre offset the offset account account generation generation or those or those couples couples whowho havehave a a mindset mindset that that eacheach partner partner has their has their personal personal account account plus plus having having a a jointjoint housekeeping housekeeping or mortgage or mortgage repayment repayment account account or both or both – not – to not to mention mention a holiday a holiday savings savings account account and and so on. so on.

At aAt time a time when when the banks the banks are paying are paying abysmally abysmally low interest low interest ratesrates on on savings savings and and termterm deposits deposits whywhy would would you you not stick not stick everyevery centcent you you havehave into into an account an account that that payspays you,you, by default, by default, at your at your mortgage mortgage interest interest rate rate – and – and tax free tax free at that. at that.

Call Call me old me fashioned, old fashioned, but itbut seems it seems crazycrazy to have to have bankbank accounts accounts withwith balances balances in them in them not deriving not deriving a material a material benefit benefit otherother thanthan to the to bank. the bank.

To state To state the obvious: the obvious: • Start • Start usingusing the offset the offset account account exclusively. exclusively.

• Have • Have youryour income income direct direct debited debited into into this account. this account.

• Close • Close all other all other accounts. accounts.

Remember, Remember, banks banks calculate calculate mortgage mortgage interest interest charges charges dailydaily but but charge charge themthem to the to mortgage the mortgage account account monthly. monthly.

So every So every day that day that funds funds are held are held in the in offset the offset account account the interest the interest charge charge for that for that day isday reduced. is reduced.

If consolidating If consolidating all the all individual the individual accounts accounts into into a single a single offset offset account account is a bridge is a bridge too far tooitfar is likely it is likely that that a mortgage a mortgage restructuring restructuring that that facilitates facilitates separate separate bankbank accounts accounts could could well well be the be solution. the solution.

Though Though this article this article is primarily is primarily focused focused on optimising on optimising the use the of use of home home loanloan offset offset accounts accounts the incorporation the incorporation of anofinvestment an investment property property loanloan into into the mix the mix offers offers the opportunity the opportunity to further to further maximise maximise benefits. benefits.

Want Want to know to know more? more?

Want Want to discuss to discuss loanloan structures structures and and options options for effective for effective investment investment property property or owner or owner occupied occupied financing? financing?

Please Please contact contact PeterPeter Spooner.

Spooner.

RECRUITMENT RECRUITMENT

by Jim

by Roy Jim Roy

ACTACT jobjob market market How How is itisperforming? it performing?

As recruiters As recruiters we are weoften are often asked asked howhow the job the market job market is performing. is performing.

Various Various surveys surveys showshow that that employers employers are now are now moremore confident confident to to hire, hire, and and the general the general consensus consensus at our at annual our annual HaysHays Salary Salary Guide Guide launch, launch, which which was was attended attended by over by over 125 employers 125 employers last month, last month, was was that that the ACT the ACT will experience will experience a slowdown a slowdown but itbut willit remain will remain in good in good fiscal shape. fiscal shape.

ThisThis sentiment sentiment was was echoed echoed at a recent at a recent IPAAIPAA event. event.

AndAnd according according to findings to findings in our in 2014 our 2014 HaysHays Salary Salary Guide, Guide, 41% 41% of employers of employers see asee a moremore positive positive economic economic outlook outlook on the on horizon the horizon whilewhile 66%66% expect expect theirtheir levelslevels of business of business activity activity to increase. to increase.

The The challenge challenge ahead ahead for employers for employers thenthen will be willnavigating be navigating the the paradox paradox in our in employment our employment landscape landscape — namely — namely a shortage a shortage of highly of highly skilled skilled and and experienced experienced professionals professionals and and an oversupply an oversupply of candidates of candidates without without the necessary the necessary skillsskills or experience. or experience.

Candidates Candidates too will too need will need to navigate to navigate this market this market and and ensure ensure theirtheir career career develops develops in the in direction the direction of skills of skills shortages shortages rather rather thanthan candidate oversupply. candidate oversupply.

ThisThis paradox paradox has remained has remained a distinguishing a distinguishing feature feature of the of ACT’s the ACT’s employment employment market market for some for some time.time.

EvenEven during during the global the global financial financial crisiscrisis demand demand and and supply supply nevernever correlated correlated perfectly. perfectly.

ThusThus therethere remains remains a shortage a shortage of the of right the right typetype of labour of labour in many in many sectors. sectors.

ThisThis will only will only intensify intensify as employers as employers fromfrom otherother east east coastcoast capitals capitals beginbegin to compete to compete for the for top the talent. top talent.

In most In most demand demand in the in ACT the ACT are top are tier top legal tier legal professionals professionals and and those those withwith employment employment law experience. law experience.

Executive Executive Assistants Assistants withwith clearances, clearances, Business Business Services Services accountancy accountancy professionals, professionals, CA or CACPA or CPA qualified qualified Financial Financial Analysts, Analysts, CivilCivil Engineers, Engineers, strong strong Credit Credit Controllers, Controllers, Property Property Managers Managers and and Payroll Payroll experts experts are also are also all inallhigh in high demand demand but but shortshort supply supply in Canberra. in Canberra.

For more For more insights insights on the on skills the skills in demand, in demand, or current or current salary salary trends, trends, please please contact contact me. me.

OurOur 20142014 HaysHays Salary Salary Guide Guide is now is now available available and and reveals reveals salary salary and and recruiting recruiting trends trends for over for over 1,000 1,000 rolesroles in 14in 14 locations locations including including Canberra.

Canberra.

It is based It is based on aon survey a survey of over of over 2,5002,500 employers employers as well as well as placements as placements made made

by Hays.

by Hays.

Request Request youryour free free copycopy today today http://www.hays.com.au/ http://www.hays.com.au/ salary-guide/request-copy/index.htm. salary-guide/request-copy/index.htm.

PeterPeter Spooner Spooner is a qualified is a qualified and highly and highly experienced experienced residential residential property property financing financing specialist. specialist.

He has Heaccess has access to over to over 800 loan 800 loan products products fromfrom a panel a panel of 30of 30 lenders lenders (including (including all ofall theofmajor the major banks) banks) plus reach-back plus reach-back to over to over 500 Loan 500 Loan Market Market associates associates whenwhen formulating formulating solutions solutions for hisforclients. his clients.

PeterPeter does does not charge not charge a fee-a feefor-service. for-service.

Australian Australian Credit Licence Credit Licence 390222 390222

To gain To further gain further information information regarding regarding the Loan the Loan Market Market go togo www.loanmarket.com.au to www.loanmarket.com.au or contact or contact PeterPeter directdirect at peter.spooner@loanmarket.com.au at peter.spooner@loanmarket.com.au or calloron call 0400 on 0400 281 398 281 398

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Jim Roy, Jim regional Roy, regional director director 5th Floor, 5th Floor, 54 Marcus 54 Marcus ClarkeClarke Street, Street, Canberra Canberra T 02 6112 T 02 7663 6112 7663 | F 02| 6257 F 02 6257 6377 6377 E canberra@hays.com.au E canberra@hays.com.au

WEBSITES

by Sam Gupta

User experience is the key to success

Steve Jobs once said: design is not just what it looks like or feels like, it is how it works. Every user is different and so is every website or app.

In many cases, the engagement and interactivity boils down to one thing; how user-friendly it looks and feels to your users. User experience (abbreviated as UX) is exactly that; how users feel while using with your digital product. It is why Apple became Apple.

Design and interface play an important role. It’s not just usability— it’s about taking it to the next level. It is about understanding who the users are, what are they looking for, how are they behaving and being able to design your website or app to respond accordingly. UX is more about intuition and emotional connection with the user.

Here is a three step process you can follow to improve user experience: 1. Identify Two things you need to identify are— who the user is and what device they are on. Whatyou’re your user group demographics? What are their perceptions? Take time to clearly identify the traits of your users.

2. Understand Understand what are they looking for, their expectations, what they are used to. They will have different expectations on mobile devices versus personal computers. A 20 year-old user is likely to behave differently to a 40 year-old user. Take the time to understand their behaviour and what drives them.

3. Empower Users feel comfortable when they feel they are in control. Empower them with functionalities. Keep the user interface simple and userfriendly. Don’t restrict users for the sake of it. Let the back-end programming do its bit. Guide them by providing visual feedback for each interaction. Anticipate their actions and try to make their life easy.

There is a reason, even after so many years, Google’s front page has just one simple search option in the centre of the page. Perception is reality and experience is everything. Keep your interface consistent throughout the website or app.

If you are looking to improve the user experience of your website or application, opt for our free 1 hour consultation to get started. .

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31

G2B

MINISTER’S MESSAGE

Local business fundamental to Territory economy ANDREW BARR

ACT DEPUTY CHIEF MINISTER TREASURER MINISTER FOR ECONOMIC DEVELOPMENT

T

he 2014-15 ACT Budget recognises the important role that local businesses will play in the Territory economy over the coming 12 months.

The Budget has been framed by substantial Commonwealth cuts and the ACT Government has had to respond to the impacts on our economy and on our own finances. Unlike other regions in Australia that received significant support packages to help ease the blow of job losses, no such package has been forthcoming for Canberra. That’s why the ACT Budget invests in our economy, invests in business and invests in jobs.

Significant shocks to regions

• •

•

•

Direct budget and staffing cuts to Commonwealth government departments, and the consolidation of agencies, will hurt not only individuals and households but also the Territory economy. However, the investment pipeline appears to have stabilised – encouraged by the ACT Government’s tax reforms and stimulus measures.

Despite the uncertainty from the Commonwealth, Canberra has a confident and innovative business sector that is up to the challenge of taking up the slack and growing our economy.

The budget included a number of initiatives aimed at helping Canberra’s business sector grow and create jobs. This includes: • Local businesses will benefit from an acceleration of payroll tax reform. The threshold rises from $1.75 million to $1.85 million in 2014-15; the 6.85 per cent rate remains. Businesses with a payroll of $2 million will save $6,850 per year, and about 39 businesses will no longer pay this tax.

• A flat rate of stamp duty continues, at the new lower level of 5.25 percent for properties valued at over $1.455 million, resulting in significant savings on commercial sector properties. For example, 32

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for a property valued at $5 million, the additional saving in 2014-15 is $12,500 with a total saving of $56,750 since taxation reform commenced. $2.8 million over four years to help the CBR Innovation Network assist new, existing and start-up businesses. $800,000 will help promote Canberra both interstate and internationally, continue development and roll-out of the CBR brand and forge partnerships with local Canberra businesses.

Funding of $300,000 will help young people develop ideas for establishing local businesses and will include planning and market development advice and assistance in attracting capital investment. $150,000 will extend and target advisory services to small local businesses and a further $150,000 will provide advisory services and support to assist public sector employees to transition to the private sector and assist them to create new local businesses.

The 2014-15 Budget contains a $2.5 billion investment in infrastructure over four years – a record capital works spend by an ACT Government.

Net debt to gross state product ratio

The budget delivers funding for transformational projects like the University of Canberra Public Hospital, Capital Metro light rail, Australia Forum, City to the Lake and a new court precinct; a host of projects in the tens of millions of dollars, such as the Coombs school and the ACT Government office block in Gungahlin; and a wide array of smaller infrastructure and maintenance projects right across Canberra.

In this budget the Government has made the choice to support our economy. Over the coming 12 months I look forward to working closely with Canberra businesses to build a stronger, fairer and more prosperous Canberra.

A S S O C I AT I O N S T O B U S I N E S S

A2B

ACT Budget reinforces confidence in Canberra and its future

I

n the wake of a tough Federal Budget, the 2014-15 ACT Budget recognised two fundamental realities. This is not the time for the ACT Government to add to the economic pressures by also cutting its spending. Rather it is the time to support our economy by investing in infrastructure and stimulating economic activity to create jobs.

Second, the private sector has a significant role to play, as the engine of economic growth in the ACT, in helping to counter the impact of the Commonwealth cutbacks and continue to build a strong ACT and region economy.

The direct impact on the ACT of the contraction in Commonwealth consumption and employment in Canberra will be in the vicinity of $375 million over the next four years. Approximately 6,500 APS jobs will be cut in the ACT over the next four years, 2000 in the next year alone. Economic growth (measured

by GSP) will be just 1¾% in 2014-15, down from 2¼% in 2013-14 and below the national average of 2½%, and employment growth will moderate to just ½% in 2014-15, down from ¾% in 2013-14. However, while the outlook is weaker, the Government is still forecasting growth and believes the ACT will avoid recession, unlike the situation in 1996.

This is not the time for the ACT Government to add to the economic pressures by also cutting its spending.

Canberra Business Council supported the ACT Government’s intention to continue to build resilience and diversify our economic base by investing in a number of key industry sectors where the ACT can leverage off its strengths and growth potential – tourism, innovation and the digital economy, education and building and construction.

In the tourism industry, funding for the Australia Forum, the Cooperative Airline Stimulus Fund to support direct international flights, the Arboretum, Brand Canberra, delivering major events such as the Cricket World Cup and stimulating an increase in overnight visitor expenditure will ultimately increase the number of tourists who visit Canberra and enable us to showcase Canberra nationally and internationally.

Funding for business innovation programs and programs to support early stage businesses is

welcomed. The CBR Innovation Network, the Young Business Connect program, the Supporting Local Business Fund and the Private Sector Transition Fund, while relatively small in size, will all support local businesses to establish and grow.

In the area of Information and Communication Technology, the ACT Government will invest $85m into the Digital First approach to streamlining the back-end of government, providing better services as well as savings. iConnect, e-tendering, smart parking, and upgrading internal government ICT systems will not only simplify the way businesses and individuals interact with government and make it more efficient, they will provide opportunities for local ICT businesses to bid for this important work.

The Budget includes record investment in infrastructure, with roughly one third expected to be spent within the next two years. The University of Canberra Public Hospital, a new school at Coombs, fast-tracking land release and a number of other projects will provide much-needed work for local building companies over the next few years before the larger construction projects such as Capital Metro, the City to the Lake project and the Civic to Gungahlin Corridor come on line. This will boost home-buyer, business and investor confidence at a critical time.

Canberra Business Council believes it is reasonable to borrow to invest in productive infrastructure to support growth and jobs at times like this even though the unfortunate outcome of the combined impact of Commonwealth contraction and the investment program outlined in the ACT Budget is a large deficit, to the tune of $333 million in 201415. While the ACT Government forecasts a return to surplus in 2017-18, the Council believes that this outcome is predicated on very optimistic predictions about future economic growth and revenue and may not be achievable.

Despite the challenges ahead, here is a sense of confidence that the economy and the business community are more robust and resilient than in previous periods of Commonwealth contraction; that this time around the majority of exiting APS staff will find employment in the ACT rather than leave town and that, in the medium-term, the private sector will expand substantially as the economy picks up.

What is required now is a close partnership with the private sector to implement the initiatives outlined in the Budget documents.

CHRIS FA U L K S

CEO CANBERRA BUSINESS COUNCIL

CANBE RR A BUSINESS COUNCIL AFFILIATED WITH

Principal Members ACTEW Water, BluePackets Brookfield Johnson Controls, Canberra International Airport, CanPrint Communications Pty Limited, Cantlie, Cre8ive, Custom Security Services, Elite Sound & Lighting, Ernst & Young, eWAY, Hindmarsh, ISIS, KPMG, Master Builders Association (ACT), National Australia Bank Limited, PricewaterhouseCoopers, Staging Connections (ACT), The Village Building Co, Toshiba (Australia) Pty Limited, TransACT Communications, Westpac Banking Corporation

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A2B

A S S O C I AT I O N S T O B U S I N E S S

One voice of business a step closer ANDREW BLYTH

CEO, CHAMBER OF COMMERCE & INDUSTRY

Corporate Sponsors ActewAGL TransACT The Canberra Times The Good Guys Tuggeranong Synapse Chamber Networks Women in Business Young Business Network Business after Business Foundation Member Australian Chamber of Commerce & Industry

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n June 11 an overwhelming majority of eligible members of the ACT & Region Chamber of Commerce & Industry (Chamber) voted in favour of creating a single organisation to represent the interests of business in Canberra and the region in conjunction with the Canberra Business Council (Council).

The Boards of the Chamber and the Council have for some time been considering this significant prospect to combine the strengths of the two organisations to provide a greater depth and quality to the important services that they provide to business – and members have now given their blessing to embark on this new and exciting approach to business representation.

Members have shown their full support for this important move as combining the skills, experience and resources of the Chamber and Council will now enable us to create a single, stronger organisation – which can only be good news for business.

From the smallest business to the biggest business, the goal is to create a new organisation that will work hard to understand their needs and to help them grow and prosper.

Our Chairman, Julian Barrington-Smith publicly thanked Ms Michelle Melbourne, Chair of the Canberra Business Council, the boards and staff of the Chamber and the Council, and respective members of both organisations for all the hard work that has gone into reaching this historic agreement.

Members of the transitional board include: • Julian Barrington-Smith, Managing Director, The Good Guys (Tuggeranong) • Keith Cantlie, Director, Cantlie • John Hindmarsh, Executive Chairman, Hindmarsh • Louise Hughes, CEO, SRC Solutions • Kathy Kostyrko, Director, Public Sector, Hays Specialist Recruitment • Laurie McDonald, Director, Canberra Furnished Accommodation • Michelle Melbourne, Executive Director, Intelledox • Kristine Riethmiller, Director, KMR Consulting • Craig Sloan, Partner, KPMG • Chris Taylor, Area General Manager, Telstra Corporation • Archie Tsirimokos, Managing Partner, Meyer Vandenberg Lawyers • Mike Zissler, CEO, Lifeline Canberra B2B M AGA ZIN E

ACT Budget fiscally necessary but debt reduction strategy needed We recently saw the ACT Government deliver its Budget and the Chamber welcomed it as being fiscally necessary but warns that more action is required to rein in escalating debt and remove barriers to private sector investment.

The ACT Budget 2014-15 forecasts an operating loss of $333 million but with a net borrowing requirement of $862 million. Although Andrew Barr predicts a return to surplus in the 2017-18 financial year, the overall borrowing requirement will have

From the smallest business to the biggest business, the goal is to create a new organisation that will work hard to understand their needs and to help them grow and prosper. blown out to $2.7 billion, with an interest bill of $216 million. Further, Net Financial Liabilities blow out from $3677.5 million in 2013-14 to $5111.1 in 2017-18, a massive increase of almost 40 per cent.

The Budget contains a number of measures welcomed by the business community, including additional payroll tax relief, reduction in stamp duty, incentives to grow local businesses and attract businesses to Canberra, and maintains a continued focus on tackling red tape. However, the Budget does contain a number of business imposts including a significant increase in the Fire and Emergency Services Levy on commercial properties – an increase of 35% and a direct hit on business; and funding of some $23 million to commence planning for the Light Rail Project – a project running the risk of becoming a political project not an economic project; and best left for when the budget is back in surplus.

With this Budget, Andrew Barr has managed a difficult situation well, but he is strongly encouraged to further identify asset sales and to be more aggressive in cutting expenses to balance the books.

Importantly, the ACT’s economic future depends on private sector growth to drive investment and create new jobs, particularly for young Canberrans.

The Government’s role going forward is to remove any barriers that restrict this growth as there is no other way to restore the Territory’s economic position.

A S S O C I AT I O N S T O B U S I N E S S

A2B

Poland–the gateway to European markets

P

oland offers an attractive blue sky opportunity for ACT businesses to diversify and leverage because of its geographic location and strategic position within the European Union (EU), an economic zone that generates approximately one quarter of the world’s GDP. Poland is the sixth largest economy of the EU. Since joining NATO in 1999 and the EU in 2004, Poland is now integrated with the global security and economic architecture. As one of two OECD countries to maintain economic growth during the global financial crisis (Australia being the other), Poland has enjoyed cumulative GDP growth amounting to 18.1 per cent over the years 2008-2012, considered as “the best result in the EU-27”1.

Over the last decade, Poland’s GDP per capita has nearly doubled to USD 20,260 and is expected to continue to grow. The country is transitioning from lower-middle to upper-middle income status, which presents opportunities for Australian firms. Also, Poland is regarded as one of the EU’s most youthful nations with 27 per cent of the total population aged 24 years and under.

Two-way trade between Australia and Poland, Czech Republic and Slovak Republic is relatively modest at AUD 465 million, AUD 545 million and AUD 196 million respectively. However, the potential for Australia-Poland relations was highlighted during the historical March 2014 meeting between Australia’s Foreign Minister, Julie Bishop, and Poland’s Foreign Minister Radoslaw Sikorski.

Specific areas for Australia-Poland economic cooperation may include: infrastructure investment; high tech manufacturing; tourism; mining; clean technologies; renewable energy; agriculture; education; research and development; health care and wellbeing; and human resources. There are potential markets in Poland and other Central European countries for Australian businesses offering high value added products and solutions not locally available.

To explore business opportunities, international trade fairs are held in Poland such as Innovation Technology Machines, TechNet Europe, Glassman Europe, and the FMCG Expo. Notably, Austrade hosted an Australian mining mission to Poland in April 2014.

Australian businesses currently present in Poland include the Macquarie Group, a major shareholder

in DCT Gdansk, the country’s most strategic port, offering access to Europe via the Baltic Sea. Squiz Australia, a leader in open source software and content management systems, has a local subsidiary–Squiz Poland. Squiz Australia has previously met with a Polish delegation of 13 senior representatives from the Ministries of Economy, Finance and Digitisation, who attended the CeBIT event in Sydney to learn about Australian digital industry capabilities.

Australian technology is also used by the Polish horse racing industry, with Sterile Racing successfully delivering a 12 and eight-stall starting gate to the Warsaw Race Track ‘Sluzewiec’ in 2013. There are many more such opportunities to meet emerging needs of Central Europe.

There is a natural synergy between Australian and Polish business cultures; both are aspirational, gogetting and pragmatic2 nations with a healthy sense of humour, even in challenging situations.

With unique and untapped synergies between Australia and Poland, now is the time for ACT businesses to benefit from a closer economic relationship.

Should you require further information about the ACT Exporters’ Network, please contact Larry Fisher at larry.fisher@canberrabusinesscouncil.com.au or call (02) 6247 4199.

References 1 Rozkrut, M. (2013) Ernst & Young (Poland), ‘PolishAustralian Business Forum & Mining Seminar’, 6 May 2013, Sydney.

2 Sikorski, R., 2013, Polish-Australian Business Forum and Mining Seminar, Sydney, 6 May 2013.

B2B M AGA ZIN E

LARRY FISHER

EXPORT DEVELOPMENT MANAGER CANBERRA BUSINESS COUNCIL LTD

For more information on the ACT Exporters’ Network visit actexportersnetwork.com.au or call 02 6247 4199 The ACT Exporters’ Network is proudly sponsored by the ACT Government, Canberra Business Council, the Centre for Customs & Excise Studies and AusIndustry.

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