B2B July 2012 (issue 73) by B2B magazine

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JULY 2012

S U p p o r t I n g C a n B e r r a â&#x20AC;&#x2122; S 1 0 0 I n 2 013

MYSKILLS

manager set to revolutionise the training, recruitment industries and the practice of skills management and employee engagement.

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INT. CHILD CUSTODY DISPUTES

MEMBERS VOLUNTARY LIQUIDATION

AINSLIE CELLARS GRAND OPENING

How to avoid them

How easy are they?

Fine wines on the Northside

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CONTENTS B2B EDITORIAL

ANU cuts to Canberra School of Music are disgraceful Those of us that spend our time talking up Canberra and the Australian Capital Territory, usually highlight the disproportionately large number of TIM universities we have based here, as BENSON one of the great bonuses. We also Editor like to throw around the great stats on levels of education, incomes and patronage of the arts. These great attributes and the fact that we have low unemployment, great health services and a clean and safe city are indeed the reasons why most of us choose to live here. Oh, and did I mention our culturally diverse and tollerant population, due to all of the above and the large diplomatic community ... I digress. Back to the universities. I for one deplore the decision taken recently by ANU Vice Chancellor, Ian Young, to sack all of the teachers at the ANU School of Music and to give grants to musicians to pay for private tuition ... or not. The explanation I have heard is that students studying and instrument can use this allowance to attend a conference or to access tuition online ... What? Yes these should all be options and musicians need to keep up with technology just as much as everyone else but not at the expense of quality professional teachers in the flesh. Believe it or not but most musicians study with a teacher not an institution. I doubt whether many trumpet players are studying jazz at the School of Music because it is the ANU. Lose the teachers and the ANU will not attract the students - and our community will be less rich because of it. And what is the saving to made from this savage cut to the School of Music - $1.5 million. The same amount the ANU Vice Chancellor has allegedly spend on employing two additional senior administrative staff at the ANU. The arts have always been at the forefront of any civilised society. The arts are always held up as the shining jewel in the crown. The arts meld and forge our identity. This is why it is so important for the Canberra community to continue to have its voice heard in opposition Please send all comments to to these cuts. editorial@b2bincanberra.com.au

CALL FOR ENTRIES 2012 ACT CHIEF MINISTERâ&#x20AC;&#x2122;S EXPORT AWARDS

photos by Andrew Sikorski

23 CoVer StorY

MYSKILLSmanager set to revolutionise the training, recruitment industries and the practice of skills management and employee engagement.

OPINION 10 Ann Northcote, Director, Farrar Gesini Dunn,

How to avoid international child custody disputes

FEATURES 12 Member's Voluntary Liquidation- aaa RSM talks about closing a business

14 Ainslie Cellars: fine wines on the Northside

CONTENTS RECRUITMENT FEATURES 16 People Bank- Accredited best employer 18 M&T Resoucres- Quality resources for IT & business 19 ICTRA- Delivering specialist support 20 Hays- Moderate salary increases

COVER STORY 23 MYSKILLSmanager- set to revolutionise the training, recruitment industries and the practice of skills management and employee engagement.

VOX POLI 28 Should Canberra’s business community subsidise the ANU School of Music?

31 ADVICE FROM THE EXPERTS 32 ACCOUNTING Business start ups- what to consider By RSM Bird Cameron BUSINESS LAW Service Agreements and the long arm of the ATO By Elringtons Lawyers

33 BUSINESS SERVICES To pay or not to pay: your duties answer the question By Kazar Slaven 34 CORPORATE GOVERNANCE Managing risks in social media By Australian Institute of Company Directors ESTATE PLANNING Real estate in self managed superannuation funds By Certus Law

35 HEALTH A life changing opportunity By Healthy Identity IT Is your website working for you? By Synapse

36 RESIDENTIAL PROPERTY Renovate or relocate? By Ray White Kingston STRATEGIC FINANCIAL ADVICE Small business, big risks By Perpetual 37 TRAINING Rewarding training excellence By Learning Options A2B: ASSOCIATIONS TO BUSINESS 38 CANBERRA BUSINESS COUNCIL: Need to diversify the ACT Revenue base finally being recognised 39 ACT DEPUTY CHIEF MINISTER AND TREASURER: New ACT budget - Supporting the Canberra Economy 40 ACT & REGION CHAMBER OF COMMERCE & INDUSTRY: Securing the next generation of your workforce 42 ACT EXPORTERS: Entered the ACT Chief Minister’s Export Awards yet? If not, why not? BUSINESS NETWORKING 06 B2B @ Cancer Council ACT Biggest Morning Tea 07 B2B @ Defence Reserves Support Council – ACT & SE NSW Employer Support Awards Dinner 08 B2B @ Ainslie Cellars Grand Opening 09 B2B @ The Official Opening Of Ricoh's New Canberra Branch And Showroom 11 B2B @ Cancer Council ACT Canada Day Fun Run 45 PROPERTY 46 Stamp duty cut for 97% of properties More affordable housing for Canberrans 48 BENDIGO BANK talks stamp duty 52 BRINDABELLA BUSINESS BROKERS Part 2 Understanding the market and its influence on buyers

PUBLISHER I EDITOR

tim Benson editorial@b2bincanberra.com.au 02 6161 2751

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tim Benson 0402 900 402 tim.benson@b2bincanberra.com.au

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B2B @ CANCER COUNCIL ACT BIGGEST MORNING TEA

B2B @ DEFENCE RESERVES SUPPORT COUNCIL – ACT & SE NSW EMPLOYER SUPPORT AWARDS DINNER ANZAC HALL, AUSTRALIAN WAR MEMORIAL

B2B @ AINSLIE CELLARS GRAND OPENING AINSLIE SHOPS

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B2B @ THE OFFICIAL OPENING OF RICOHS NEW CANBERRA BRANCH AND SHOWROOM RICOH AUSTRALIA, FYSHWICK

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OPINION

“I’m leaving on a jet plane...

(don’t know when the kids will be back again)...” How to avoid an international child custody dispute By Ann Northcote, Director, Farrar Gesini Dunn

here has been a lot of publicity lately about the four girls caught in the middle of a dispute between their Australian mother and Italian father. This case has been in the Family Court and will now be heard in the High Court. It serves as a good reminder that overseas travel by your children with your ex-partner is something that should not be taken lightly. Australia is a signatory to the Hague Convention on the Civil Aspects of International Child Abduction. Countries who sign the Convention agree that children, who are brought to their country without the consent of a parent in the other convention

ex-partner to take the children overseas because at a certain point that parent may wish to take them overseas too. Consent, however, would depend on a number of factors e.g. if a parent was seeking to take a child for a holiday to a war torn destination. However, if your ex-partner is wishing to take the children to an overseas destination, not by way of permanent relocation, but either for some months or perhaps a year or two then leaving things on a casual basis between the two of you is inadvisable. In those circumstances negotiating Consent Orders to be filed in the Family Court clearly specifying for how long the children are to go; the contact you will have while they are overseas (whether that be by the children returning to Australia If there are parenting orders in force then a party is not permitted by and/or you visiting overseas); the costs of Australian law to take or send a child from Australia unless the other contact; how often there will be telephone, Skype or e-mail contact; the continuing party has consented in writing or unless a Court has speciﬁcally ordered. provision of a residential address, telephone country, should be promptly returned to However, it is a good idea when giving number, etc. while the children are overseas their country of residence. In broad terms, your written consent to reach an agreement are all extremely important. The important it has been a good example of international as to the information you will be provided thing is if the children do not return within the cooperation and many children sent to one such as a copy of the full itinerary, with dates, timeframes that have been stipulated; do not country have been returned to their country flight numbers and times, addresses while let the “grass grow under your feet”. Go and see of residence quickly and without their overseas etc.; an experienced family lawyer. parents having to incur huge legal fees as the In addition there should be some provision For Family Law Advice contact Farrar Gesini Dunn Central Authority (generally speaking being for contact in the event of an emergency Level 5, Colonial , Mutual Building the relevant government department in the (e.g. that the parent taking the children will 17-21 University Avenue, Canberra City ACT country) handles the matter. activate global roaming on their phone). P (02) 6257 6477 | F (02) 6257 4382 Of course, not all countries have signed Obviously one parent should not E fgd@fgd.com.au | www.fgd.com.au the Convention. Many of you may have unreasonably withhold consent for their

J U L Y 2 0 12

seen the dramatic documentaries of parents hiring ex-military men to try and re-claim their children from their ex partner. You should also not be mistaken in thinking that all developed countries have signed the Convention. Japan, for example, has not signed. However, having to resort to invoking an international treaty obligation to have your children returned should, of course, be an absolute last resort. If there are parenting orders in force then a party is not permitted by Australian law to take or send a child from Australia unless the other party has consented in writing or unless a Court has specifically ordered.

B 2 b I n C a n b e r r a | S u p p o r t i n g C a n b e r r a ’ s 1 0 0 i n 2 0 13

B2B @ CANCER COUNCIL ACT CANADA DAY FUN RUN STROMLO FORREST PARK PHOTOS BY JAMES BALDWIN

F E AT U R E

Member’s Voluntary Liquidation

It is often talked about how easy a company is to set up. Within 24 hours a company can be established and the company can be used. But how easy is it to close down a company? What are the ways to close down a company? And which option is the most appropriate

Why?

Which is the Best Method?

There are numerous reasons for winding up a company, the most common being: • The company has outlived its usefulness and no longer suits its clients’ succession plan. • An owner is choosing a simplified structure which reduces annual compliance costs. • Transfer of capital appreciating assets to a more Capital Gains Tax (“CGT”) friendly environment. • There is paid up share capital and pre-CGT capital reserves free from tax. Outside the liquidation process the distribution of these tax free reserves are likely to have large taxation implications. • Large Division 7A issues exist within the company as a result of the tax free profits being withdrawn from the company. Often businesses are sold and funds are stripped out of company structures resulting in Division 7A issues involving minimum repayments requirements and interest charges.

Deregistration is appropriate when a company ceases to carry on a business, has no liabilities, and has assets of less than $1,000. Deregistration is a relatively simple, cheap and quick method to simplify a client’s financial structure and, once deregistered, there are no more ongoing annual compliance costs. However, if a company has untaxed capital profits in a company, involving either pre-CGT profits or small business CGT concessions – an ASIC deregistration is not an appropriate option. A MVL is the most tax effective way to close down a company with pre-CGT profits or tax free profits as a result of small business CGT concessions. Distribution of either pre-CGT profits or untaxed small business CGT concessions by any other way other than a MVL would result in these payments being treated as ordinary dividends. Treating payments as ordinary dividends (most likely unfranked) could result in shareholders facing large tax liabilities.

How? Briefly, there are two ways to close a company, being: • Deregistration; and • Member’s Voluntary Liquidation (“MVL”) The choice of method to wind up a company is determined by factors including the nature of the assets, level of pre- and post-CGT reserves, amount of share capital and stamp duty depending on the state jurisdiction.

What are the taxation implications of a MVL? When considering the taxation implications of a MVL, the implications need to be considered from two perspectives: 1. The liquidator’s perspective 2. The member’s perspective

The Liquidator’s Perspective When a liquidator is making a distribution to shareholders, they

F E AT U R E need to consider whether a distribution of funds is income or capital in nature. The liquidator makes this dissection based on the records maintained by the company or accountant. When a liquidator distributes a particular fund or account within the books and records (e.g. retained profits, pre-CGT profits), this distribution maintains its character when being returned to the shareholders. This is the Archer Brothers Principle, which continues to be accepted by the Australian Taxation Office (see TD 95/10). In order to makes this dissection, a proper system of accounting is essential to ensure the distribution of profits is made in the correct split of capital and income. A liquidator will make two types of distributions, including Income – if a distribution to members is from income generated by the company, than it will be deemed to be a dividend paid to members out of profits derived from the company (s 47(1) ITAA 1936). Income generated by the company includes income from ordinary concepts, such as trading profits, or income specifically made assessable under the tax acts (.e.g. rental income, interest or dividend income). Distributions of income may be either franked or unfranked, depending on the level of franking credits in the franking account. Capital – items considered capital are: Non-taxable capital gains, capital royalties, pre-CGT profits or profits subject to the 50% small business reduction. The distribution to members can be in many forms. The distribution can be in cash, a distribution of assets via an in-specie distribution accounted for at market value, or a distribution offset against shareholders’ debit loan accounts (where they had previously taken the funds). A liquidator will prepare a distribution statement which will dissect the distribution between income and capital. A member should retain this statement to ensure that these components are correctly disclosed in their tax return.

the 50% CGT discount, the 50% active asset exemption or the $500,000 retirement exemption. Winding up a company has numerous legal and taxation implications which advisors should consider. We welcome the opportunity to discuss with you your role, and the assistance we provide.

An example of the beneﬁts of Members Voluntary Liquidation An accountant contacted us seeking some assistance in relation to one of their clients. The client was a company that had sold its business and was seeking advice as for the most tax effective way to remove funds from the company. The company’s balance sheet was as follows: Net Assets

$1,000,000

Represented by Issued Capital

$1,000

Pre-CGT Capital Profits reserve

$700,000

Accumulated Profits (Fully Franked)

$299,000

TOTAL

$1,000,000

There was only one shareholder of the company, and he acquired his shares before 19 September 1985 (pre-CGT shares). We worked through the calculations, and by liquidating the company via a MVL were as follows:

The Member’s Perspective A member receiving a distribution from the liquidation will need to consider the direct tax implications upon them. The taxation implications for members are separate to the tax implications for the liquidator. The member will receive a distribution statement from the liquidator advising if a distribution is being made, and if one is being made, the composition of the distribution. As outlined above, the distribution will be dissected into the following components: Dividend A dividend will form part of the member’s assessable income for tax purposes. The distribution statement will show the franked and unfranked components of the distribution. Capital The distribution of capital will comprise a return of initial paid up capital, along with any payments deemed to be of a capital nature by the liquidator. If the liquidator determines that a distribution is of capital nature, the members will need to consider the CGT consequences of receiving the distribution, which can include: • A return of capital to a pre-CGT shareholding will generally not be assessable. The instances when pre-CGT shareholding is assessable are when CGT K6 Applies - if 75% of the market value of the company has post-CGT assets, or if the shareholding has changed by more than 50% since the introduction of the CGT rules. • A return of capital to post-CGT shareholding will be assessable in the hands of the member. The member may be eligible to apply

Company closed via Tax Payable

Deregistration

MVL

Saving

$206,778

$44,028

$162,750

Based on this client’s situation, we identified that using a MVL we were able to save them $162,750 in income tax.

Frank LoPilato is a Director at RSM Bird Cameron and provides advice on personal and corporate administration frank.lopilato@rsmi.com.au rsmi.com.au | 02 6247 5988 Rhys Kyburz is a Chartered Accountant with RSM Bird Cameron rhys.kyburz@rsmi.com.au rsmi.com.au | 02 6247 5988

Bird Cameron

Chartered Accountants

F E AT U R E

AINSLIE CELLARS bringing fine wine to the Inner North words by Tim Benson, photos by Jez Rozdarz

Many local Ainslie residents, and patrons from further afield, gathered on Saturday 23 June to enjoy the grand opening of Ainslie Cellars, complete with a BBQ, wine and food tasting, and a great local blues trio.

F E AT U R E

Keith and Kate are looking forward to being at Ainslie Cellars for a long time and developing lasting relationships with their customers, know what they want and tailor their business around that.

he community had come together to celebrate the Ainslie IGA moving its Local Liquor component into a new shop next-door and reopening as Ainslie Cellars. Ainslie Cellars Manager, Keith Mihailakis, said, “The Grand Opening was a great success. It was great to see the Ainslie community and the wider wine loving community, come together and enjoy a lovely Saturday afternoon”. Keith and his partner Kate O’Leary have thrown themselves into the development and operation of the new Ainslie Cellars. “Over the last five years I have developed a real passion for the wine industry. When this opportunity came to expand our liquor section in the Ainslie IGA to this new venue next door I really embraced it. “It was great for us to be involved in the process from the beginning and to come to work and see our ideas being fulfilled. But this is just the start. We want to make it bigger and better,” Keith said. Keith and Kate are looking forward to being at Ainslie Cellars for a long time and developing lasting relationships with their customers, know what they want and tailor their business around that. “We want to provide an improved service to Ainslie, a suburb that traditionally eats and drinks well, as well as to the Inner North,” Keith said. Ainslie Cellars also has a strong focus on the Canberra Region. “We currently have 80 Canberra Region wines and great relationships with most of the local winemakers. We also have an expansive imported wine section and an impressive premium wine range,” Kate said. So what makes Ainslie Cellars different to other liquor shops in Canberra? “We have created something unique at Ainslie Cellars. Somewhere people can come in and say ‘Hi Keith and Kate’ and have a relationship with us – and through this we can help them with their wine and other alcohol purchases,” Keith explained. “Customer service is also extremely important to us. We want to know all of our customers personally and ensure they get the best possible service from us. We also assist customers to take their purchases to

their car – you don’t get that sort of service everywhere in Canberra,” Kate said proudly. Keith and Kate have also endured the arduous task of tasting every wine in the shop. “We make sure that we taste and approve of almost all of the wines at Ainslie Cellars. If we don’t like a wine we won’t sell it,” Keith said. Ainslie Cellars has now been operating for just over two months and has already seen their customer base expanding. “We have a very loyal customer base from when we were inside the Ainslie IGA and we have also seen many new customers since we relocated next door – this is very encouraging for us,” Kate said What new things will we see in coming months at Ainslie Cellars? “We are going to do seasonal tastings and have our range seasonally appropriate. For example featuring Roses in summer and Pinot Noirs in autumn etc. We will also frequently have winemakers at Ainslie Cellars to engage with the customers,” Keith said. In addition to these new activities Ainslie Cellars will also be organising and promoting wine dinners and events with the winemakers. “We are also active in building a database through social media and promoting our wine tastings and specials. We are active on Facebook and Twitter and are about to launch a new website designed by Keith’s brother Nick that will have live inventory and ordering online,” Kate said. Both Keith and Kate are extremely grateful for the opportunities they have at Ainslie Cellars. “I would like to thank my uncle, Manuel Xyrakis, and my mum and dad, Irene and Chris Mihailakis, and my Grandma, family matriarch and owner of the Ainslie IGA, Alice Xyrakis, for their support and confidence in us by adding another chapter to the family business bringing the next generation through,” Keith said. “We would also especially like to thank Frank Arnold from Quantum Ideas for all his work on the making Ainslie Cellars the great place that it is.” If you haven’t already dropped into the Ainslie Cellars at Ainslie shops, do yourself a favour and drop in and say ‘Hi Keith and Kate’.

Third generation actively involved at Ainslie Ainslie IGA Manager, Manuel Xyrakis, is very keen to make the point that the Ainslie IGA was not advocating that other supermarkets should follow suit and move their liquor into separate premises. “We don’t want to set a precedent that you take liquor out of supermarkets. Many supermarkets survive in Canberra because of their liquor sections. We did it because we could do it,” Manuel said. The opportunity arose when the Xyrakis owned shop, next to the Ainslie IGA, occupied by the local pharmacy, became vacant. “We were inundated with people wanting to take over the pharmacy space, but we decided it was time to expand,” Manuel explained. According to Manuel the decision was based on two reasons. “The first was to provide a better range of wine and other liquor and to employ staff with specialist knowledge. The second reason was to free up space in the Ainslie IGA to allow us to create Canberra’s best fresh food sections,” Manuel said. Manuel says that the drive for change came from Keith’s enthusiasm. “Keith’s passion and enthusiasm and involvement in the concept has given me great confidence and invigorated the whole business. “My father said to us that we should never sell out of Ainslie, so it is great to see the third generation of the family, Chris and Irene Mihailakis’ sons, Keith, Dimitri and Nicholas, actively involved in the business,” Manuel said.

Ainlie Shopping Centre 7 Edgar St Ainslie, Canberra 2602 Phone: (02) 6230 6622 info@ainsliecellars.com.au

S u p p o r t i n g C a n b e r r a ’ s 1 0 0 i n 2 0 13 | B 2 b I n C a n b e r r A J U L Y 2 0 12

R E C R U I T M E N T F E AT U R E

Peoplebank accredited a Best Employer

eoplebank is Australia’s largest IT&T recruitment company. We specialise in placements across all vertical markets, and our network of offices extends to Canberra, Adelaide, Brisbane, Melbourne, Perth and Sydney. Peoplebank at a glance; We have over 200 staff, 350,000 quality IT&T professionals in our talent pool, 500 permanent candidates placed each year, more than 3000 contractors on assignment across Australia at any given time, and over 100 preferred supplier agreements. We’ve achieved these results because, quite simply, we’re passionate about people and dedicated to being the best recruiter of IT&T professionals in the business. Something else we are passionate about is our employees. Peoplebank has been named as a Best Employer - 2012 by global

J U L Y 2 0 12

consultancy Aon Hewitt, acknowledging it as a company with high levels of employee engagement that demonstrates outstanding people and leadership practices. Peoplebank is the only recruitment company on the 2012 Best Employers list. Achieving 2012 Best Employer status caps a four-year journey to develop staff engagement as a competitive differentiator in the high-pressure recruitment industry.Peoplebank sees investing in employee engagement strategies is a winwin scenario: because when people are developing and growing, they’re creating more opportunities for the organisation, as well as for themselves.Parallel to these organisation-wide employee engagement strategies, Peoplebank has focused on creating a workplace that advances women at all management levels. These efforts were acknowledged with Peoplebank’s citation

as a 2012 Employer of Choice for Women (EOCFW) by the Equal Opportunity for Women in the Workplace (EOWA) agency. Our Promise At Peoplebank we have a defined set of values to help every employee deliver their best work. It’s called the Promise. The Promise was launched to create a strong, visible differentiation between ourselves and our competitors as a result of delivering an outstanding customer experience for our clients, contractors and candidates. If you would like to work with a recruitment organisation that prides itself on having an engaged workforce with great customer service, contact us today. David Smith, General Manager – ACT (02) 6245 1713 david.smith@peoplebank.com.au

B 2 b I n C a n b e r r a | S u p p o r t i n g C a n b e r r a ’ s 1 0 0 i n 2 0 13

the right person can transform your business speak to the experts

We are Canberra’s leading experts in recruiting qualified, professional and skilled people. We operate across the private and public sectors, dealing in permanent positions, contract roles and temporary assignments. Our service is based on our belief that the right job can transform a person’s life and the right person can transform a business. Our recruiting experts are available in the following areas:

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Accountancy & Finance Architecture Banking Construction Contact Centres Education Engineering Executive Facilities Management

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to find out more about our services and how we can bring you together with the right people contact us at canberra@hays.com.au or 02 6257 6344.

hays.com.au

Human Resources Information Technology Legal Office Support Policy & Strategy Procurement Property Sales & Marketing Trades & Labour

R E C R U I T M E N T F E AT U R E

QUALITY RESOURCES FOR IT AND BUSINESS

t M&T Resources, we believe in smarter recruitment. It’s about constantly seeking knowledge and believing in sharing it. It’s about knowing a better way of doing things, and if not, finding one. Sometimes that might mean having the courage to do things a little differently, but if that’s what sets us apart, all the better. Originally known as SMS Contracting, M&T Resources have been providing high quality IT and business recruitment solutions to the Canberra market for over 10 years. As part of SMS Management and Technology, we are uniquely positioned to assist our clients with innovative and successful resourcing outcomes. We have excellent market knowledge across all IT disciplines and can tap into our personal and professional

networks to ensure we provide the right person with the right skills for the right role. Our expertise and client/candidate rapport were recently recognised at the SEEK Annual Recruitment Awards 2011 where we were crowned Australia’s favourite IT Medium Recruitment company New ways of finding a role and sourcing great talent are challenging traditional recruitment methodologies. M&T are determined to ensure that we stay ahead of the curve and marke sure we provide exceptional service to our candidates and clients alike. Our values as a business are built around RESPECT – Recognition – We acknowledge a job well done, no matter how large or small, Enjoyment – We work hard, but always find the time to celebrate our successes,

Support – We take the time to listen, offer encouragement and help each other, Passion – We strive to be the best we can be, Energy – We have purpose to what we do, Courage – We just do it and Trust – We deliver on what we say we’re going to do. These values define M&T in Canberra and we always strive to deliver with them in mind. When you are next in the market for that contract role or looking for advice on resourcing solutions, call M&T and find out why we like to think we’re a little different. It’s why so many clients and contractors still use M&T as they did 10 years ago. We will make it happen. Ground Floor, 8 Brindabella Circuit Canberra Airport ACT 2609 T: 0 2 6279 7170 | F: 02 6279 7171 canberra@mtr.com.au

R E C R U I T M E N T F E AT U R E

ITCRA delivering specialist support

TCRA (Information Technology Contract & Recruitment Association Ltd.) is a niche industry body representing the unique needs of the ICT recruitment industry. ITCRA Member companies provide their clients with highly experienced recruitment professionals who have an extensive knowledge of the ICT industry. Julie Mills, ITCRA CEO says “In a recent conversation with a major ICT industry player the concept that “specialist roles deserve specialist support” was being discussed and I was outlining that this includes building a knowledge-based relationship with clients to ensure actions are driven by current information, legislative conformity and creative employment solutions. The client concerned reinforced the concept that a true partnership existed between them and their ICT recruitment provider – across WHS, WorkPlace Relations and, most importantly skills management – for them this relationship was an integral part of their business – seems this client really gets it!” Each ITCRA Member company has a thorough understanding of ethical

recruitment and quality candidate selection, and is required to be assessed, via an external assessment process, against the ITCRA Business Diagnostic to ensure compliance and service standards excellence are in place. ITCRA Member companies and consultants are also bound by a stringent Code of Conduct and agree to the Commitment Statement and ongoing review of their understanding of the Code before they can be admitted to the Association. ITCRA Member companies also commit to the ongoing professional development and training of their consultants including participation in the ITCRA Certification program. ITCRA Certified consultants have undergone an external examination and review on ICT Knowledge, Legislation, Recruitment Practices and the ITCRA Code of Conduct before being accredited, which ensures ITCRA Membership and Certification are the ultimate signs of best business and professional practice. www.itcra.com

ITCRA Members in the ACT:

• Aurec • Candle ICT • Chandler Macleod Incorporating Ross Julia Ross • Clicks I.T. Recruitment • Finite IT Recruitment Solutions • GMT Recruitment • Greythorn Pty Limited • Icon Recruitment • Infinite Consulting • Innovative Business Computing Pty Ltd • M&T Resources • Manpower • Omaha IT • Paxus Australia • PCA People • Peoplebank Australia Limited • Stamford Recruitment • Stratagem • Talent International • Whizdom Pty Ltd The ITCRA Member logo is a sign of companies who have committed to the ITCRA Code of Conduct and can be held accountable if they do not uphold the values and standards outlined within the Code.

R E C R U I T M E N T F E AT U R E

MODERATE SALARY INCREASES Canberra’s workforce can expect a moderate salary increase this year as current market conditions remain, according to the 2012 Hays Salary Guide.

ut do not expect any swift or dramatic upswing in global economic conditions says Adam Shapley, Regional Director of Hays in Canberra. “There is no silver bullet over the horizon to wait for,” he said. “Current conditions are here to stay for some time, so the sooner we can adapt business practices to meet the requirements of this – the ‘new normal’ – rather than waiting for a dramatic reversal to the global market to set us on a more secure road, the more effective we’ll all be. “That’s why forward-thinking employers and candidates are going ahead with their hiring or career plans. It’s also why employers are increasing salaries, albeit moderately.” The 2012 Hays Salary Guide reveals salary and recruiting trends for well over one thousand roles across 14 locations in Australia and New Zealand, including Canberra, and was based on a survey of over 1,500 employers as well as placements made by Hays. It found that 46 per cent of employers increased salaries last year between three and six per cent. A further 10 per cent gave an increase above six per cent. But 35 per cent gave increases of less than three per cent, while the final 9 per cent gave no increase at all.The mining and resources

Employer survey result: For which areas have you recently found it difﬁcult to recruit?

J U L Y 2 0 12

industry is the stand out while professional services salaries also performed well, with 53 per cent of employers increasing salaries between three and six per cent and 17 per cent increasing them above six per cent.

the sooner we can adapt business practices to meet the requirements of this – the ‘new normal’ – rather than waiting for a dramatic reversal to the global market to set us on a more secure road, the more effective we’ll all be. Looking ahead, 42 per cent of employers intend to increase salaries between three and six per cent when they next review. A further six per cent will increase above six per cent. But 46 per cent of employers intend to increase salaries less than three per cent and six per cent intend to offer no increases when they next review. Again the biggest increases will be seen in the mining & resources industry, where 55 per cent of employers intend to increase salaries between three and six per cent when they next review. A further 15 per cent will receive increases above six per cent. Professional services, IT & telecommunications and construction,

property & engineering are the other standouts for salary increases in the year ahead. “While the press highlight Western Australia, Queensland and the Northern Territory as firmly in the express lanes of Australia’s economy, the ACT has also performed very well in comparison and employers involved in Australia’s resources boom are not the only ones hiring. Despite negative headlines, the reality is that organisations across most sectors are hiring and specialist professionals remain in short supply – both within and outside our mining and resources industry. “For the most part, candidates with skills in demand have more realistic salary expectations compared to last year. While some employers will increase salaries, the savvier amongst them are designing a comprehensive retention and engagement package that includes not only a realistic salary but also a development pathway and a range of innovative benefits to compete for candidates with the unique combination of skills needed,” he said. The 2012 Hays Salary Guide is available at www.hays.com.au/salary, by downloading The Hays Salary Guide 2012 iPhone app from iTunes or by calling Hays in Canberra on 02 6257 6344. www.hays.com.au

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COVER STORY

MYSKILLS

manager

set to revolutionise the training, recruitment industries and the practice of skills management and employee engagement. Words by Tim Benson | Photos by Andrew Sikorski

T David Greentree

here is a revolution coming in skills management and, founder and developer of MYSKILLSmanager, David Greentree is leading the charge. And like most revolutions the planning and development of this change has come from decades of learning and experience – but when it hits over the next six months, it will fundamentally change the way we, locally, nationally and internationally, look at skills development and management. So what is this revolutionary concept that will assist individuals, business and government to improve workplace performance and productivity? Well, after nearly 50 years of experience of learning on the job and developing national skills and industry training packages, David Greentree is set to launch MYSKILLSmanager to the world. The basic premise for MYSKILLSmanager came from David’s observations that up to 80 per cent of learning and skills acquisition is taking place in the workplace – leaving only 20 per of workplace skills being acquired through external programs.

COVER STORY

Current system

David says that under the current system people are recruited by addressing selection criteria and the provision of their curriculum vita. “Once the individual is in the workplace they are in a sink or swim environment because managers don’t have the detailed information, they can use on a daily basis, to develop and deploy people and their skills,” David said. According to David, many employees also struggle to understand the performance expectations placed upon them because there is no mechanism to measure or develop particular skills. New system

With MYSKILLSmanager employers can convert their current job requirements into a job profile that evaluates a positions competencies based on 17 unique skills.

across those 17 skills. MYSKILLSmanager is a powerful tool that can assist individuals, employers (both public and private), recruiters, universities, TAFEs and other education and training providers, to get the best out of people and the most efficient use of their time and resources. It does this by focusing on the skills required in the workplace and matching people to those skills. ‘Basically MYSKILLSmanager allows you to compare apples with apples’,” David said. Job profiles

This profile breaks down the skills required to perform a job into the 17 skill areas. Assigns a rating out of five for each of the seventeen skills and aligns it to an equivalent qualification level. Skill profiles

This profile evaluates the current skills of an individual against the 17 skill areas – with the option for additional verification from a third party.

These skills are 1

Communication

Reading

Writing

Numeracy

Planning and organising

Problem solving

Sales and customer service

Teamwork

Initiative and enterprise

Training profile

Green skills

Managing people and performance

Project coordination and management

Facilitation

Financial planning and cost control

Digital technology

Technology/equipment/machinery

A job seeker can be directed to an online system where they can profile their personal skill and then submit them to a potential employer. “This enables the recruitment process to focus on matching workplace skills to job requirements,” David said. Once the person is employed MYSKILLSmanager can then be used to track, and give a value to, all learning experience, performance reviews and personal development. MYSKILLSmanager enables the employee to understand the performance expectations placed up on them because there is a systemised, relative skills framework underpinning all of the reporting. “There is nothing like this product on the market today. There are products out there that do personality profiling and look at suitability for jobs but there is nothing that carries through from the recruitment process into the workplace,” David stated. MYSKILLSmanager can either replace current practices in the recruitment process or be used, in addition to, to enhance current processes by better targeting skill levels to jobs. MYSKILLSmanager

MYSKILLSmanager is an online subscription based application that enables people to create job profiles, individual skill profiles and training profiles, based on 17 skills and the option of five levels of performance

JOB PROFILE PROJECT MANAGER RATING 84.6

100

0 1 2 3 4

SKILLS RATING EQUIVALENT TO DIPLOMA FIVE LEVELS

5 6 7 8 9 10

11 12 13 14 15 16 17

SEVENTEEN SKILLS

SKILLS PROFILE DAVID GREENTREE (PROFILE 1977) RATING 52.6

100

0 1 2 3 4

SKILLS RATING EQUIVALENT TO CERTIFICATE III FIVE LEVELS

Self-management

5 6 7 8 9 10

11 12 13 14 15 16 17

SEVENTEEN SKILLS

TRAINING PROFILE DEMONSTRATION VIDEO RATING 67.8

100

0 1 2 3 4

SKILLS RATING EQUIVALENT TO CERTIFICATE IV FIVE LEVELS

This profile sets the particular skills required in the workplace to perform particular jobs and can be used to recommend additional training to meet those requirements. Each of the three profiles have two levels of reporting generated from the skills selection. A standard report consists of the definitions aligned to the skills that the individual has selected. And a detailed report that consists of two aspects of each skill providing more detailed information about the requirements for the skill performance. “We also offer the option to customise each aspect from the detailed report to reflect an organisational context and we can also include a knowledge base that enables people to enter relevant skill development training relevant for each job,” explained David Greentree.

5 6 7 8 9 10

11 12 13 14 15 16 17

SEVENTEEN SKILLS

J U L Y 2 0 12

B 2 b I n C a n b e r r a | S u p p o r t i n g C a n b e r r a ’ s 1 0 0 i n 2 0 13

COVER STORY

Bulldozer driver to CEO

It’s been a wild ride for David Greentree, from driving bulldozers at the age of 12 to becoming an expert in writing national industry training packages – and now CEO of his own company. David was born in Gosford and lived around Tuggerah Lakes with his three brothers and two sisters. His dad was a logging contractor and his mum looked after the kids. “I started driving bulldozers for dad when I was 12. I left school at year 10 because, apart from sport, school wasn’t ringing any bells for me,” David reflected. He moved to Gilgandra with his family in 1964. In 1967 David and his dad started Cyprus pine logging in the Warrumbungles. In 1970 he got a job driving bulldozers for the NSW Soil Conservation Service (NSWSCS). The NSW Soil Conservation Service had 140 bulldozers that they contracted out to farmers to address erosion issues and build farm dams to improve stock management practices. In 1974 David moved to Parkes as a NSWSCS plant (earth moving equipment) foreman. According to David, moving from a small business to a larger organisation increased his exposure to different ways of thinking and communicating – he also says that most of the people he was working with had graduated from Agricultural College. “I would sit on my bulldozer and listen to people,” David said. Because of the new techniques David was developing, to improve standards, a systemised approach and achieve better efficiencies, he began running construction technique workshops for other teams throughout NSW. “At the time we were the only organisation like this in the world,” David said proudly. It was during this time that David started to document these techniques and ‘draw pictures of bulldozers pushing earth around’. In 1977 David was promoted to Field Technician and then in 1980 he was seconded to the Snowy Mountains Engineering Corporation (SMEC) to write a manual for constructing dams for the Thai village people. David went to Thailand for three weeks then came back to Cooma and worked with SMEC and produced the manual that was presented to the King of Thailand and was picked up by the World Bank for distribution to developing countries. In 1985 David was promoted to Construction Advisory Officer for most of NSW and was given the opportunity to study at university. “I was at first excited, but decided after two weeks of wrestling that I would take a different path and establish a training program for people in the industry,” David explained. Before putting pen to paper David embarked on a five-year project to research the skills and knowledge that was missing in the industry. “In late 80s we got $500,000 and produced 21 manuals under guise of The Earth Moving Training Course,” David said proudly.

S u p p o r t i n g C a n b e r r a ’ s 1 0 0 i n 2 0 13 | B 2 b I n C a n b e r r A J U L Y 2 0 12

COVER STORY

It’s been a long journey for David Greentree form bulldozer driver to CEO – but with the knowledge he has acquired along the way he is set to revolutionise the training, recruitment and skills management industries.

In the 90s David was seconded to NSW TAFE to develop curriculum for Soil Conservation culminating in the Certificate II ,III, IV and Diploma in Soil Conservation. After completing this David was appointed to run 21 workshops in the Northern Territory to implement the training program. David then was moved out of the operational side of the department of and into learning and development section. David moved to Queanbeyan in 1996. Around 2000 he started developing national competency standards for the Conservation Earthworks Industry. “I also represented the Department as chair on a national committee formed to develop standards for the Natural Resource Management Industry,” David said. He then went into organisational development – job evaluation programs, industrial relations programs and recruitment systems. “I consider one of my major achievements was the establishment of a job grading system for whole of department consent awards. This led to nine awards being merged into one,” David said. In 2003 David was appointed Chair of a National Industry Reference Group and then Director of AgriFood Skills Australia (one of 10 industry skills councils). In 2004 David became more involved in using technology to establish recruitment and job design online system with the department. In 2007 he was approached by Agri Food Skills Australia to work with them on their national training packages. “As Manager, Training Products and Implementation, this involved extensive research and developing concepts in the understanding of training packages for industry to better understand what was being delivered,” David elaborated. This culminated in the endorsement AHC10 Agriculture, Horticulture and Conservation and Land Management Training Package in 2010. David finished with Agri Food Skills Australia in 2010 to worked full time on developing MYSKILLSmanager. The future for MYSKILLSmanager

“I want as many people as possible to have access to the innovation and benefits of this product,” David said, “And to achieve this we have put the product online and have made it quick and easy to use.” MYSKILLSmanager is applicable across the entire workforce. It is as applicable to project managers as it is to sales staff. “We are also developing MYSKILLSmanager as a phone and iPad application so that if can be accessed across many different platforms.” MYSKILLSmanager is also extremely reasonably priced for this type of product. “It is about a third of the cost of applications that are currently being used in the market and delivers much, much more,” David said enthusiastically. David is very confident about the future. “We project that we are going to have 10,000 users in the next six months. This will include individuals up to employers with 1000s of staff,” David said. “Being a technology company we are positioning ourselves to be at the forefront of the changing demands of the workforce.” It’s been a long journey for David Greentree from bulldozer driver to CEO – but with the knowledge he has acquired along the way he is set to revolutionise the training, recruitment industries and the practice of skills management and employee engagement. David Greentree 0406538849 myskillsmanager.com

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VOX POLI

P Katy Gallagher

aCt Chief Minister

Public or private funding for the arts? You decide.

hilanthropy is an increasingly important source of funding for Australian universities. Today’s universities are in many ways run like businesses themselves and in a highly competitive higher education environment they are diversifying their sources of income beyond Commonwealth funding for Australian students and research grants. International students bring cultural diversity to our campuses, create an army of ambassadors for Australia and are an important source of revenue. Universities also have investments and commercialisation ventures that contribute to their bottom line. And Australian universities, including those in Canberra, are placing an increasing

Zed Seselja

aCt opposition Leader

Should Canberra’s business community subsidise the ANU School of Music?

he Canberra Liberals understand that the Australian National University School of Music is a world class institution which makes a significant contribution to the local arts community and economy, and echo the community’s concerns about losing this significant asset. We believe Government should do all it can to encourage business support for the ANU School of Music, and commend the ACT and Region Chamber of Commerce and Industry for raising a potential $10 million for the School from business and the broader community, at a time when

Meredith Hunter

parliamentary Leader aCt greens

o they shouldn’t subsidise, but yes they should make a contribution. The Commonwealth Government should be paying to provide high quality tertiary education at the ANU School of Music. The Commonwealth has an obligation to provide high quality education and the Greens have long argued that there should be greater funding for all levels of our education sector, including specialist institutions. Universities are not corporations and should not be expected to run like income generating commercial operations. It is very unfortunate that the arts are at times

VOX POLI

emphasis on raising money through philanthropy. In the United States, this is the norm. Philanthropy is embedded in the culture. American universities depend on enormous financial contributions from alumni and business. Giving to US universities exceeded $30 billion last year (according to the Council for Aid to Education), so it’s not surprising Australian universities are following suit. Older universities are seen as having a bit of head start. Our younger universities here in Canberra are working hard to raise money to support their offerings, boost their facilities and offer scholarships to give more students the opportunity a degree can offer. When business and universities work together in this way it helps make sure the wealth that is generated in the community is returned to the community, in the form of social, cultural and economic benefits. Philanthropy is built on a relationship of trust and engagement. I think it is important and mutually beneficial for the business, higher education and wider communities to interact as much as possible. In the case of the School of Music, the ACT Government facilitates much of this outreach through financial support of several

education programs. In fact through the $1.4 million a year Outreach Program, the ANU provides a range of music and visual art programs through the School of Music and School of Art, for access by the ACT community. As an ANU alumna, I’m pleased to see the business community take an interest in my ‘alma mater’. As Chief Minister, I will always encourage the community to get behind our universities’ efforts to raise funds through philanthropy. The University of Canberra for example is currently working to raise money to set up a civil engineering degree, which would bring some much needed new skills to our economy. There is undoubtedly a role for business to play in supporting the educational, research and cultural activities of our universities and benefits for all parties in collaborative relationships between business, universities and the wider community. And there is a role for government in strengthening these partnerships and through them continuing to build our city’s reputation as a creative, knowledge and innovation hub.

many businesses are doing it tough. While private partnerships play an important role in developing the local arts community, they should never be seen as a silver bullet. The ANU is faced with a business community which has little money left over for itself let alone assistance for other organisations, and has lost some faith in the University because of way in which the School of Music cuts were handled. It is up to the ANU to rebuild this confidence with the business community to ensure its future viability. It is also important that the School of Music’s contribution to Canberra is promoted to the business community. For example, the recent 18th Canberra International Music Festival highlighted he invaluable work of the School of Music. The festival boasted 27 concerts over ten days. Twenty-one of those concerts featured students, teachers and graduates of the ANU School of Music, most of whom performed for free. The estimated cost of paying these talented

musicians is $100,000. The School of Music also makes a significant economic contribution to the ACT. It attracts arts tourism, and the school’s programs and staff are turning out excellent quality graduates, many of whom have since built international careers as performing artists as well as teachers, mentors and importantly, ambassadors for Canberra. The ANU’s cuts to the school cast serious doubt over this invaluable contribution to Canberra. The cuts must be considered in the context of these broader implications for the local arts community and economy, and it is up to the ANU to explain these implications to the business and broader community to incite confidence and support. The opportunity is there for the ANU to rebuild the business community’s confidence and to demonstrate why they should invest in the School of Music. I urge the University to take that opportunity.

seen as soft targets for budget cuts and the Greens have argued very strongly against the cuts at the ANU. When you see the community outcry, and the passion that the recent cuts to the School of Music roused, it is clear that the arts, and certainly music, are highly valued by Canberrans. The ACT has a strong and tight knit music community, and the School of Music is a very important part of this community. We don’t believe that there should be a subsidy or that the ANU School of Music should have to rely on contributions from the business community, but there is certainly a proper role for corporate donations to support the arts. On a general level there should be a more conscious effort to promote philanthropy amongst the business community for our great community assets like the School of Music. There was a ground swell of support from the corporate sector in response to these cuts, and it remains to be seen if this energy can

be properly channelled into practical support. There has been some recent concern that despite the goodwill, the manner in which the cuts were announced may have deterred future endowments and donations. These types of community-university relationships are vital, but need to be respected as an enhancement, rather than a replacement source of funding. Additional contributions should be used to fund additional places for those who might not otherwise be able to get a university education, such as indigenous students, students from remote communities or with other special needs or for additional scholarships for the best and brightest to study with the best teachers. Any additional contributions should not be for delivering the core parts of the degree that the ANU should properly fund. It would be a poor outcome if the school of music had to actively fundraise each year to be able to provide basic teaching of degrees.

S u p p o r t i n g C a n b e r r a ’ s 1 0 0 i n 2 0 13 | B 2 b I n C a n b e r r A J U L Y 2 0 12

Bird Cameron

Chartered Accountants

The clock is ticking 30 June is approaching! At RSM Bird Cameron, we will show you how smart planning can get you ahead. Connect with our experts for advice on issues including: • Taxation preparation and planning • Business advisory and business planning • Superannuation • Succession planning

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J U L Y 2 0 12Advisory B 2 b I lnCorporate C a n b e r r a Finance | S u p p o r tl i Risk n g CAdvisory a n b e r r a ’ sl 1 0 0 li nTurnaround 2 0 13 30 Assurance l Business Tax and Insolvency

ADVICE 32 32

ACCOUNTING

BUSINESS SERVICES

CORPORATE GOVERNANCE

ESTATE PLANNING

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STRATEGIC FINANCIAL ADVICE

TRAINING

Business start ups- what to consider by Tony Lopilato, RSM Bird Cameron

BUSINESS LAW Service Agreements and the long arm of the ATO by Cassandra Emmett, Elringtons Lawyers

To pay or not to pay: your duties answer the question By Tony Lane, Kazar Slaven

Managing risks in social media By Phil Butler, Australian Institute of Company Directors

Real estate in self managed superannuation funds By Stephen Bourke, Certus Law

A life changing opportunity â&#x20AC;Ś By Robbie Manzano, Healthy Identity

Is your website working for you? By Sam Gupta, Synapse

Renovate or relocate? By Cory McPherson, Ray White Kingston

Small business, big risks By Sara Caggiano, Perpetual

Rewarding training excellence By Karen Nicholas, Learning Options

ACCOUNTING

BUSINESS LAW

Business start ups what to consider

By Tony LoPilato

After recently being involved in delivering a series of seminars on ‘Starting Your Own Business’ to students of a Registered Training Organization undertaking their Class C Builder’s license, what became apparent was the lack of consideration or misunderstanding surrounding a number of issues, some common to all new businesses.

The old saying that no one plans to fail but plenty fail to plan is still relevant today. A key to any successful business is good communication. This is across all facets of the business from communication with your customers/clients – if there’s a problem or delay, tell them. Communication with your partner – define roles, understand how entering into a business partnership will impact existing relationships; and lastly but by no means least, communication with your advisors. The services provided by many accountants, solicitors and other professionals are similar in nature, the trick is in finding someone you can relate to and who has the time, skills and willingness to assist you. The old saying that no one plans to fail but plenty fail to plan is still relevant today. Statistics indicate a high failure rate of small business. Business planning, the where am I now, where do I want to get to and how am I going to achieve that, is not given the consideration that it is due.Many financial institutions have tightened their lending practices and now require applicants to provide a business plan and cashflow projections as part of their finance application and many of the students weren’t aware of this. There may also exist further reporting obligations in terms of quarterly or half yearly financial accounts required to satisfy lending requirements. It seems there is still confusion around the requirements of superannuation contributions for directors, working family members and for contractors. In simple terms superannuation should be provided for all employees including directors and family members based on the income they are receiving. Likewise if a contractor is principally providing their labour, superannuation contributions should also be made on their behalf. The Australian Taxation Office has recently advised of new reporting requirements for sub-contractor payments in the building and contracting industry. From 1 July 2012, businesses need to report the total payments they make to contractors each year to determine whether head contractors are complying with their obligation to deduct PAYG tax OR pay the 9% superannuation. It is imperative also to ensure authenticity after the ATO found a number of subcontractors using Woolworths Ltd ABN details.

by Cassandra Emmett and Lisa Ward

Service Agreements and the long arm of the ATO

A service agreement is entered into when one party supplies a ‘service’ to another, as an alternative to employment. Common examples of typical service agreements situations are: • law firms and their administrative consultants; • Owners of medical centres and their medical practitioners; and • Principal real estate agents and their selling agents. Entering into a services agreement can have benefits for both parties, however, taxation and compliance issues may develop if you are not careful. Who bears responsibility for any ATO liabilities and for any breaches for non-payment is dictated by who enters into the service agreement. To illustrate, let’s look at a case study. Mario owns a Dental Surgery and has a spare room from which he wants another dentist, Phyllis, to operate. He does not wish to employ Phyllis, so instead they enter into a services agreement. Rather than contracting in her own name, Phyllis decides to enter into the services agreement via the trustee company of her family trust (Clean Shine Pty Ltd). Phyllis and her husband Jim are directors of the trustee company who receives the income from the services agreement and distributes only to Phyllis. Phyllis has forgotten to pay GST and now the ATO are seeking payment. Phyllis is unsure who is liable for the GST and whether her husband Jim can be held liable as a director of Clean Shine Pty Ltd. The answer depends on who entered into the services agreement. If Clean Shine Pty Ltd properly entered into the service agreement with Mario, liability to pay GST rests with Clean Shine Pty Ltd. This does not make Phyllis or Jim liable to pay GST, but failure to comply with GST law puts Phyllis and Jim in breach of their directors’ duties and therefore leaves them open to prosecution, with a likely outcome being an order that they pay the GST plus penalties. The fact that it was Phyllis performing the services and receiving payment through Clean Shine Pty Ltd does not absolve Jim of his responsibilities as a director. Jim has a duty to be aware of what the company is doing and that it is complying with law. If however the services agreement with Mario is unwritten and it is not clear who entered into that agreement, then the ATO may examine the arrangement and determine that Phyllis personally entered into the services agreement, leaving Phyllis personally liable for the GST. Indeed the ATO may also consider that Phyllis’ relationship with Mario is an employment contract, not a services agreement, which removes any liability but creates an obligation for Mario to pay superannuation and leave entitlements.

Bird Cameron

Chartered Accountants

These are just some of the issues that we encounter regularly, should you wish discuss any of these matters further please do not hesitate to Tony LoPilato or Ken Johnston of RSM Bird Cameron, on 02 6247 5988.

J U L Y 2 0 12

Cassandra Emmett Special Counsel & Manager, Business Services Contact Elringtons T: (02) 6206 1300, Level 7, 221 London Circuit, Canberra City visit: elringtons.com.au

B 2 b I n C a n b e r r a | S u p p o r t i n g C a n b e r r a ’ s 1 0 0 i n 2 0 13

BUSINESS SERVICES

Amidst the sea of prognostication regarding the country’s economic outlook, there is a perceptible diversity of opinion as to what the tide will bring business in the next 12 to 18 months. Late last year I wrote of a perfect financial storm on the horizon, however the factors that might drive that storm are largely yet to materialise.

...duties to act with care and diligence, to act in good faith and in the best interests of their company...

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Tony Lane is a senior manager at Kazar Slaven and provides advice to clients in the areas of insolvency, business risk and financial conflict and dispute resolution. For more information, contact Kazar Slaven, Level 3, 11 National Circuit, Barton. T: 6215 8405 F: 6215 8450 E: admin@kazarslaven.com.au W: www.kazarslaven.com.au

CAn BeR

Nevertheless, as insolvency practitioners we are well placed to understand the difficulties businesses are currently experiencing. Unsurprisingly, retail in Canberra is particularly soft, with recent reports suggesting that the softening will continue. Increasing uncertainty, both domestically and overseas, will also continue to adversely impact businesses locally for some time. That said, as increasing pressures on businesses throughout the region mount, it is timely for directors of companies to review their obligations in circumstances of financial stress. The Corporations Act 2001 prescribes certain statutory duties that directors must attend to in the conduct of their businesses. These include the duties to act with care and diligence, to act in good faith and in the best interests of their company, and not to use their position or information to gain advantage for themselves, or cause loss to the company. These duties are supported by well established legal principles that require a director of to act first and foremost in the interests of the company where they find themselves in a position of conflict. Predictably, when the next dollar becomes harder to come by, the temptation to overstep the boundaries increases. In a recent matter, a director of a company became caught between a debt ‘rock’ and a financial ‘hard place’. Faced with a choice to use company funds to pay a debt due by his company to the ATO, or to comply with other tax laws in relation to his personal tax position, the director chose the latter. In doing so he conferred on himself a benefit and caused a loss to the company. Sadly, the director failed to recognise the position of conflict he found himself in and failed to act in the best interests of the company, ultimately to his own detriment and that of creditors. The director could and should have chosen differently. More commonly this is the harsh reality facing company directors With pressures on small business unlikely to be relieved in the foreseeable future, companies and individuals facing financial difficulty are encouraged to consult early and seek advice promptly.

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S u p p o r t i n g C a n b e r r a ’ s 1 0 0 i n 2 0 13 | B 2 b I n C a n b e r r A J U L Y 2 0 12

CORPORATE GOVERNANCE

Managing risks in social media

by Phil Butler

The security risks of participating in social media were again recently highlighted following news of LinkedIn account passwords being compromised and posted online. To support business leaders looking to better understand such risks and to use LinkedIn more effectively, the Australian Institute of Company Directors hosted a briefing last month. While many baby boomers may be sceptical about social media, the briefing reminded us that there are significant opportunities for individuals and organisations to build their networks and profiles online. LinkedIn discussion groups, for example, enable business leaders to engage in serious dialogues on important issues. While the groups do not replace face-to-face conversations, they provide an extended opportunity to debate perspectives with peers (and potential customers) and discover new ideas. Contributing intelligent and considered opinions within discussions can also have a positive impact on employees. What better way for managers and their teams to talk about ideas on an even platform. Of course, in addition to the known security risks, there are other hazards to navigate in this online environment. One, obviously, is that once you have written something, it stands forever and could be used in negative way against you later down the track. Wise counsel suggests that directors approach online discussions as you would approach a business conversation and ensure a level of comfort in who can access your musings (definitely don’t engage in a discussion thread if you don’t have a clear head or if you feel the need to vent pent-up aggression!) While there are a range of features which can be advantageous, such as linking your Twitter account or blog to your LinkedIn profile, the bottom line is to ensure that your profile matches what you would like your personal “brand image” to be – and you have the appropriate security and profile settings enabled. The LinkedIn password issue is a timely reminder of a simple online rule – to have a strong password (think about using a mixture of upper and lower case letters, as well as symbols and numbers) and to change it regularly. Most importantly, for those who are leaders of larger organisations, think about how your profile and any discussion groups you participate in may be viewed from an organisational and reputational point of view. In the online environment, the line between the personal and professional is blurred. While we all have the right of free speech, a radical comment may be viewed as inappropriate by your organisation. A social media policy should be developed and followed, and appropriate governance protocols put in place. Social media provides opportunities to assist your marketing activities and to develop your brand, but it is important to think carefully before you post to ensure the benefits outweigh the risks.

Phil Butler is Manager - NFP, Public Sector & ACT at the Australian Institute of Company Directors.. For more information about AICD ‘s course programs and events, T: 02 6248 5954.

J U L Y 2 0 12

ESTATE PLANNING

by Stephen Bourke

Real estate in self managed superannuation funds

Real estate is an increasingly popular investment option for the self managed superannuation fund (SMSF). As trustees purchase real estate to transfer into the invest¬ment pool of a SMSF they need be aware of the legal ramifi¬cations of such transactions.

Having your lawyer prepare a Declaration of Trust over real estate held by your SMSF is essential. Most trustees are completely unaware of the risks of not doing so. Restrictions within most states prevent a SMSF from registering real estate in the name of the fund. This catches almost all trustees unaware. This means that while you can use the SMSF’s name on the con¬tract for sale, most states and territories will not allow an individual acting as a trustee from registering the SMSF as the title holder of the property. Instead the law requires the trustee to register the property in their individual capacity, not as a trustee or in the SMSF’s name. This means for example that Mr Jones, trustee of the Jones Family Self Managed Superfund, must register the property in his name only, not that of the fund. As a result this means that the investment property that Mr Jones purchased to put in the Jones’ family Superannuation Fund has to be registered with Mr Jones’ own name on the title. This leads to the unfortunate result where Mr Jones’ hard earned superannuation is now up for grabs by creditors. There is one solution to this dilemma. Mr Jones can make a Declaration of Trust over the property. This is a deed that states that the property is held by Mr Jones as a trustee of the Jones Family Superannuation Fund. That deed is lodged with the Land Titles Office and allows the Registrar General to enter a caveat over the property preventing dealings inconsistent with the terms of the host SMSF. The real estate in Mr Jones’ superannuation fund is now fully protected. Having your lawyer prepare a Declaration of Trust over real estate held by your SMSF is essential. Most trustees are completely unaware of the risks of not doing so. Don’t risk failing to execute a Declaration of Trust.

Certus Law specialises in superannuation, trusts and estate planning. Visit Certus Law at Level 5, 28 University Avenue, T: 6268 9090, www.certuslaw.com.au

B 2 b I n C a n b e r r a | S u p p o r t i n g C a n b e r r a ’ s 1 0 0 i n 2 0 13

HEALTH

By Robbie Manzano

INFORMATION TECHNOLOGY

A life changing opportunity …

I established my company Healthy Identity because I have a passion for public health, having spent four years studying human nutrition and coaching science at a university level and additional graduate studies in public health.

My programs not only target nutrition, exercise and lifestyle, but also their social and physical environmental determinants. So, what to do with all this knowledge? For starters, I have developed tailored individualised health programs which target the health determinants; exercise, nutrition and lifestyle. Secondly, I have developed programs to suit groups (such as social and corporate groups) and thirdly I have a larger goal of influencing the wider community through nationwide health promotion. So basically, through Healthy Identity my aim is to improve, maintain and promote health at individual, group and community level. Furthermore, as a qualified Tennis Australia coach, I am able to incorporate tennis into all of the Healthy Identity programs that I have developed. What makes Healthy Identity different? My programs not only target the health determinants; nutrition, exercise and lifestyle, they look further into changing the underlying social, physical and economical environments these health determinants exist in. These include ‘time management’, ‘shopping habits’, ‘food in the workplace’, ‘stress management’, ‘food access’, ‘food preparation’ and ‘health education’. Many health programs concentrate on strict regimes, which are hard to sustain over a long-period of time. This is clear in the failure of many weight-loss programs, as the physical and social environment barriers don’t allow weight loss to transpire. You won’t get any of that spin with me. My programs are designed to enhance health without having to calorie count or follow strict gym session plans. Over the next 12 issues I will be outlining in more details how Healthy Identity can work with you, your business or department and the community, to change lives forever. I believe with the right information, commitment and support, we can start to make lasting life changing improvements in the health of our communities. Please contact me to discuss how I can assist you, your team or your organisation to live a healthier life. Robbie Manzano is founder and managing director of Healthy Identity. Robbie has degrees in Human Nutrition and Coaching Science from the University of Canberra and is currently completing a Graduate Certificate Public Health from Curtin University. robbie.manzano@healthyidentity.com.au 0423 366 014

by Sam Gupta

Is your website working for you?

Each business is unique and each website adds value to their business in a unique way. Most common ways is via online sales or leads. But, that is not all. Your website can work well by educating your customers about certain products or services, or by keeping your customers informed of new trends in the industry or facilitating a client area or intranet for staff. Answer following questions to find out how your website can best add value to your business: 1. Who are the primary website visitors and what are they looking for? Firstly, you need to know who your key website audiences are. Are they customers, prospects, partners, end-users? And more importantly, why did they come to your website? Remember that we are talking about your primary visitors here. Perhaps they are looking for products or services that you offer? Or they are perhaps the end users of your products and want to find out further details on your website. Find out who they are and what do they want. Ideally, you want to solve their problems online (or guide them to) and make their life easy. 2. What’s there to gain? Secondly, it is important to do some costbenefit analysis. You want to be sure that whatever you are doing or want to do, are really going to add value to your business. Be specific and link them to your key performance indicators. Will it generate revenue or leads? Higher customer satisfaction? Save costs? Improve turn-around time? Give you a competitive advantage? In other words, what and how much is the opportunity cost if you don’t do this? Whatever you do, should directly contribute towards organisation’s goals/mission. 3. How can your website help you with it? Thirdly, based on above answers, shortlist the most suitable options for your website. More importantly, if you already have these features; work-out how effective they are. Take your web designer’s help into this. Make sure your website features are fresh and appealing to the target audience. If possible, take your customer’s or end-user’s input to ensure you are on the right track. If you decide to add more features to your website or modify existing functionalities; remember to keep it short and simple. Don’t try to do too many things in one go. Show meaningful information to your visitors. No need to go over-board or be too technical about it. Keep the core objectives and end-users in mind. Often, businesses fail to spread the words about new features. Once you have done the necessary amendments to the website, they need to know, as soon updates are available. You don’t need to have to all the bells and whistles or a brand new design to start marketing. They need to know that your business is continually working out ways act in their interest. Go one step further and start interacting with your customers and employees online. See the difference it will make in your business.

Sam Gupta is the managing director of Synapse Worldwide. Sam would love to hear your thoughts on this advice column. Please contact him on 1300 785 230 or admin@synapseworldwide.com

S u p p o r t i n g C a n b e r r a ’ s 1 0 0 i n 2 0 13 | B 2 b I n C a n b e r r A J U L Y 2 0 12

RESIDENTIAL PROPERTY

by Cory McPherson

Renovate or relocate?

Does this sound familiar to you? You purchased your home some time ago, but time has passed and the family has grown, so has the number of possessions you own. Now what was once a vast space feels like you are living in a match box? What was your study is now the kid’s music room and your study is now the kitchen bench.

When you have all of these pieces of the puzzle, it will go a long way to helping to make your decision. So the question raises its head. Do you renovate and extend, or do you relocate? If you no longer like your neighbourhood and your current block does not have the space to extend, the answer is cut and dry, but it usually isn’t this simple. So here are some things to consider. Do you love where you live -the neighbours, the block of land, the schools the community, or is there another area that would suit your needs better? Perhaps closer to schools, places of work or favourite restaurants. Can you get approval to do the renovation and will you over capitalise if you extend and renovate in your current location? Will the renovation give you a great product? I see a lot of extended houses that have wasted voids where a room may be lost for a stair case, or a new room is just too small to be practical, but that is all the setbacks would allow. These short comings will affect the property’s value when it comes time to sell. The obvious downside of selling is the costs associated which include agents fees, marketing costs, refinancing, legal fees and not to forget, when you purchase your new home ….STAMP DUTY! The offset of this is there are some real advantages in buying up in a down market. (B2B Mag edition 71 page 26) Another point to consider is the increasing costs of renovations and it may mean months and months of living in a construction zone with building dust and contractors walking around in your personal space. If the renovation entails kitchen and bathroom work you may need to find somewhere else to live which will add to the overall cost of the project. You should consult an experienced real estate agent and get realistic figures of the value of your current home as is and with the proposed renovations. You should invest in having plans drawn up to enable builders to quote accurately to see what you get for your money. When you have all of these pieces of the puzzle, it will go a long way to helping to make your decision. At the end of the day, deciding whether to move house or renovate is a big decision and one that will come down to you and your families particular lifestyle needs and the costs involved.

Cory McPherson is the Director of Ray White Kingston 1/28 Eyre Street, Kingston | M 0418 266 698 | T 02 61733000 cory.mcpherson@rwcanberra.com.au www.rwcanberra.com.au

J U L Y 2 0 12

STRATEGIC FINANCIAL ADVICE

by Sara Caggiano

Small business, big risks

There are many different types of insurance a small business owner has to consider. Many of these protect your business assets, but what happens if something should happen to a key employee or business owner? The death, injury or traumatic illness of a key business person has the potential to undermine some or all of your best laid business and life plans. Invariably, this will have a negative financial impact on sales/ profits as well as the business’s capital value and goodwill. Business owners remain underinsured With much of their wealth being generated and locked up in their businesses, small business owners have a number of reasons to protect themselves. Yet according to a survey conducted by the Cameron Research Group*, only 65 per cent of small business owners have life cover, 57 per cent have no income protection cover and 76 per cent have no trauma cover. In general, there is low awareness and understanding about the various types of insurance, the cost and the protection benefits associated with them. What is business risk insurance? Business risk insurance uses a range of policies to create protection strategies specifically related to the needs of business owners. These strategic needs can include: • Funding for equity transfer through the use of Buy/Sell agreements between business owners, triggered in the event of death or disablement of one or more of the owners. • Key person protection to insulate the business from loss of revenue or capital on the death or disability of a principal or “rain maker”. Importantly, a key person can be anyone directly associated with the business whose loss can cause financial strain to the business. For example, the person could be the business owner themselves or someone with specific skills or knowledge which is especially valuable to the business. • Ensuring that your creditors are not the first heir to your estate! Are you protected? Protecting both your business’ profitability and personal wealth through insurance is a key element of a broader asset protection plan. Every business’ circumstances are different and every business owner has unique needs and risks which need to be assessed. * The Cameron Research Group survey, 'The Australian Small Business Market for Financial Services: 2010. Perpetual Private and services are provided by Perpetual Trustee Company Limited (PTCo), ABN 42 000 001 007, AFSL 236643. This article has been prepared by PTCo and is dated June 2012. It contains general information only and is not intended to provide you with advice or take into account your objectives, financial situation or needs. You should consider whether the information is suitable for your circumstances, we recommend that you seek professional financial, tax and/ or legal advice.

Sara Caggiano is a Senior Financial Consultant at Perpetual Private Level 6, 10 Rudd Street Canberra P: 6243 6507 | www.perpetual.com.au

B 2 b I n C a n b e r r a | S u p p o r t i n g C a n b e r r a ’ s 1 0 0 i n 2 0 13

TRAINING

By Karen Nicholas

Rewarding training excellence

This week I was privileged to once again assist with judging the ACT Training Excellence Awards. For 74 years the ACT Training Excellence Awards have been the premier event in the Vocational Education and Training calendar with approximately 500 of the ACT’s leading employers (industry and government), Registered Training Organisations, apprentices, trainees and students attending the awards ceremony and dinner.

CANBERRA'S PREMIER BUSINESS MAGAZINE IS BUSINES

The Training Excellence Awards provide a fantastic opportunity for employers and vocational students to celebrate their successes.

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This is my eighth year as an awards judge and each year the applicants in the student categories never cease to amaze me. These are students who have chosen to follow an education pathway in vocational education, often combining their study with work, combining study with school, or sometimes vocational study with university study. I interviewed the finalists for the Australian School Based Apprenticeships (ASBA) category, an enthusiastic group of young people pursuing careers in business, information technology, children’s services, plumbing and more. Despite being aged around 17, they had already completed their first (and in one case fourth) qualification whilst studying at school, and presented as professional, committed and motivated. Each will make a great future ambassador the ASBA program in the Territory. I am reminded of the responsibility we have as employers to provide not only the opportunities for young people, but to provide a complete learning experience that gives them a solid foundation on which to build their career. There are many strategies that workplace supervisors can use to help support young people studying in the workplace. At Learning Options, we recommend the following to our workplace supervisors: • Appoint a learning supervisor • Appoint a mentor for the learner • Set aside time • Provide feedback. • Schedule work appropriately • Support on and off job training • Include them as a valued team member • Recognise their contribution The Training Excellence Awards provide a fantastic opportunity for employers and vocational students to celebrate their successes. For more information about the awards, contact Cindi Hage at the Training & Tertiary Education Directorate on 6205 7037. For further information about workplace learning including the ASBA program, contact Learning Options on 6260 6677.

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S u p p o r t i n g C a n b e r r a ’ s 1 0 0 i n 2 0 13 | B 2 b I n C a n b e r r A J U L Y 2 0 12

A2B

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

Need to diversify the ACT revenue base finally being recognised CHRIS Fa U L K S

CEO CANBERRA BUSINESS COUNCIL

AFFILIATED WITH

UPCOMING EVENTS 6 August 2012 Connect@ANU – Connecting Business and Science TIME: 5:30 - 7:00pm VENUE: University House, ANU 14 August 2012 Simon Crean MP Minister for Regional Australia TIME: 12:00- 2:00pm VENUE: Hotel Realm

Principal Members ACTEW Corporation, ActewAGL, Blue Star Printing, Brookfield Multiplex Services, Cre8ive, Canberra International Airport, CanPrint Communications Pty Ltd, Elite Sound & Lighting, eWAY, Hindmarsh, ISIS, KPMG (Canberra), Master Builders Association (ACT), National Australia Bank Limited, National Museum of Australia, PricewaterhouseCoopers, Staging Connections (ACT), The Village Building Company, Toshiba (Australia) Pty Limited, TransACT 38

J U L Y 2 0 12

he 2012-13 ACT Budget was handed down on 5 June 2012 by the ACT Deputy Chief Minister and Treasurer, Mr Andrew Barr MLA in a challenging economic environment. The European debt crisis, sluggish recovery in the US and slower growth in China continue to cause volatility in financial markets. At the national level, the 2012-13 Federal Budget delivered a triple whammy for the ACT in public sector job cuts; $177m less in GST revenue and an increase in the Efficiency Dividend from 1.5% to 4%. At the same time economic growth in the ACT has been slowing since 2010-11. The ACT revenue base has not only been hit by contracting Commonwealth consumption, falling revenue from land sales and lower returns on the Territory’s investments but superannuation liabilities have increased. Weak consumer spending and the general economic outlook are continuing to impact negatively on business confidence. The ACT Budget indicated that employment growth in the ACT will be zero in 2012-13. In what is a very difficult fiscal environment the ACT Government delivered a restrained budget with a deficit of $318.3m – an increase of $193m over the deficit estimated for 2011-12. The budget did however begin to acknowledge that the ACT economy is over-reliant on two sources of revenue – Commonwealth Government spending (which is responsible for 50 percent of all economic activity in the Territory) and land sales / property taxes. It recognised that the ACT economy needs to be diversified and the revenue base broadened if the Territory is to continue to have a strong, resilient and sustainable economy. There were a number of innovative measures in the budget to stimulate economic growth beyond the current narrow revenue base. For example, the allocation of $20m to underpin the Government’s Business Development Strategy released in May 2012 was welcome including: • $10m in grants and $2m in payroll tax exemptions to National ICT Australia for research and commercialisation of business products. • $2.6m to develop a city brand to market Canberra nationally and internationally. • $985,000 for a dedicated investment facilitation function • $855,000 to ScreenACT to support creation of

film, TV and digital media in Canberra and the surrounding region. • $830,000 to Innovation Connect, • $600,000 to the Infrastructure Fund to support the development of major proposals focused on new innovation infrastructure. • $600,000 for Clean Tech, • $500,000 to the Canberra Business Development Fund to provide ACT firms with a source of capital funds through equity investment. • $400,000 for CollabIT, linking small and medium enterprises with multi-national corporations, purchasers and other ICT stakeholders. • $300,000 for the My Digital City innovation prize. • $50,000 to an ACT technology incubator feasibility study, which will investigate best practice models for a business incubator. Tax Reform The Council also welcomed the ACT Government’s announcement of a major reform of the Territory’s taxation system. The measures introduced in the budget are the first stage of a 20year program of tax reform and include: • Phasing out of conveyance duty over the next 20 years; the first step involves progressively reducing the rate over the next five years. • Reduction of Payroll Tax – the threshold will rise from $1.5m to $1.75m. • Abolition of duty on general and life insurance over the next five years – a 20% reduction every year. • Abolition of Commercial Land Tax. • Abolition of duty on transfer of subleases. • Increases in General Rates – Commercial. • Increases in General Rates – Residential. • Adjustments to Utilities Tax The fact that the Territory is a city-state positions it well to be able to lead the country in this type of large-scale tax reform. While the specific provisions in the tax reform pack involve a significant redistribution of the property rate burden to the inner suburbs from the outlying suburbs, and from residential ratepayers to business and this may have an impact on incentives to build and invest, nevertheless the overall direction of reform of the taxation system is supported by the Council. For more comment on the ACT Budget and Tax Reform visit: www.canberrabusnesscouncil.com.au

B 2 b I n C a n b e r r a | S u p p o r t i n g C a n b e r r a ’ s 1 0 0 i n 2 0 13

MINISTER’S MESSAGE

New ACT Budget supporting the Canberra economy The 2012-13 ACT Budget that I handed down last month is about supporting the Canberra economy and supporting local jobs.

Quite simply, slash and burn budgeting would needlessly harm our economy. Faced with the Commonwealth’s contraction, the Government made a conscious decision to adopt a fiscal strategy that supports continued economic growth. It is about creating a fairer Canberra, and undertaking the necessary taxation reforms to secure our long-term economic prosperity. The Budget is stimulatory – it encourages business and consumer activity and confidence, and it supports jobs. Quite simply, slash and burn budgeting would needlessly harm our economy. Faced with the Commonwealth’s contraction, the Government made a conscious decision to adopt a fiscal strategy that supports continued economic growth. We are maintaining capital works investment, with a record program of $900 million in 2012-13. We are maintaining the important frontline services that our community expects and deserves. There are new initiatives totaling $155 million over four years, focused on health, education, emergency services, business development, and municipal and community services. The Budget also sets out a measured and responsible plan to return to surplus. In line with our original Budget Plan introduced in the aftermath of the Global Financial Crisis, the Budget will return to surplus in 2015-16. The Budget also begins a process of large-scale reform of the ACT’s taxation system, to make taxes fairer, simpler and more efficient. The key reforms starting in 2012-13 are: Abolishing duty on insurance. This will take place over the next five years, and from October every business in the ACT will see a reduction in their business insurance. Insurance costs for commercial motor vehicles, professional indemnity, public and product liability and employers’ liability will all fall. This reform will reduce business costs

by around $5 million in 2012-13, reduce the barriers to taking out insurance, and provide real benefits for most households. For example, a medium-sized company with an office in Canberra will save more than $1700 next year on professional indemnity, employer liability and vehicle insurance. Conveyancing duties are being abolished. This will take place over a 20-year period, and we have announced an initial five-year plan to abolish the tax, with the reforms aimed at helping small and medium sized businesses first. Land tax is being cut. The amount of land tax paid by landlords who rent out low- and mediumpriced properties is being reduced, and land tax on commercial properties is being abolished immediately. Commercial land tax will be rolled into commercial rates, simplifying and streamlining administration for businesses. Payroll tax is being reduced. The tax free threshold is rising from $1.5m to $1.75m from Sunday. This will give the ACT the highest payroll tax threshold in the nation, and make us the lowest taxing jurisdiction for businesses with a payroll of up to $4.7 million. This particular measure will provide a tax cut of about $17,000 to about 1,865 ACT businesses and exempt an additional 115 businesses. In addition, the ACT Government is: • Aligning treatment of wholesale unit trusts with NSW; • Abolishing duty on short term leases; and • Abolishing duty on transfer of sub leases. Rates are being reformed. This allows for the abolition and reduction of other taxes, and for the system to become fairer. Both residential and commercial rates will become more progressive. Commercial rates will comprise a fixed charge and three thresholds. On average rates will rise, but again this will be linked to property value and is offset by the reductions in insurance costs and stamp duty and the abolition of commercial land tax. The 2012-13 Budget set lays out a vision and the detailed plans that will secure the ACT’s economic strength into the future. If you would like more information on how the Budget affects your business or household please visit treasury.act.gov.au or contact my office: 6205 0011, barr@act.gov.au

ANDREW Barr

ACT DEPUTY CHIEF MINISTER TREASURER MINISTER FOR ECONOMIC DEVELOPMENT

S u p p o r t i n g C a n b e r r a ’ s 1 0 0 i n 2 0 13 | B 2 b I n C a n b e r r A J U L Y 2 0 12

A2B

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

Securing the next generation of your workforce T R E VA R CHILVer

DIRECTOR OF EMPLOYMENT, EDUCATION AND TRAINING

Corporate Sponsors ACTEWAGL, 104.7 / Mix 106.3, Prime TV, The Canberra Times, The Good Guys Tuggeranong, Duesburys Nexia, Synapse Worldwide, B2B in Canberra. Associates and Affiliates Retail Traders Association, Australian Industry Defence Network Foundation Member Australian Chamber of Commerce & Industry

J U L Y 2 0 12

here’s no question that the ACT is staring down the barrel of a skills crisis. The territory has the lowest rate of unemployment in Australia, and Australia’s unemployment rate is, like much of South East Asia, among the lowest in the world. As the crunch looms over ACT businesses, it is critical that all young people are engaged in education, training or employment to make sure we’re taking every advantage possible for the sake of our industries. Businesses interested in supporting disengaged young people for the sake of their business and for the sake of their community should familiarise themselves with the ACT Youth Commitment, which provides a framework for collaborating with the ACT Government to improve engagement with all young people in the ACT.The goals for the ACT Youth Commitment are to: • Ensure that no young person is lost from education, training or employment. • Establish a shared responsibility between those who serve young people including all schools, Canberra Institute of Technology, registered training organisations, community organisations, employers, parents, and government. • Enhance the ACT’s significant record of excellence in educational achievement. • Work to make the transition through education and on to further education and training and/ or employment a positive experience for each young person. The Youth Commitment is underpinned by the ACT Education Act and a range of policies, services, activities and programs operating to support children and young people. The ACT Youth Commitment places the needs of each young person at the heart of our efforts to engage young people. If a student moves from school to further education and training or work, he/she will continue to be accounted for, cared for and supported. How to help It is clear that young people who have access to vocational education and relevant work education programs such as work experience (WEX) have enhanced opportunities and options when it comes to employment post school and continued training. There are a variety of ways as an employer that you can help. Work Experience Program (WEX) The purpose of WEX is to provide guidance for students in the transition from school to working life in the

community and to enable students to test tentative career choices against the realities of the workplace. WEX can be for any student over the age of 14 years. A WEX placement is a short term, unpaid placement where students participate in the workplace as both a learner and an observer. You may wish to refer to the Work Experience Guidelines available on the ACT Education and Training Directorate website at http://www.det.act.gov.au/__data/assets/pdf_ file/0005/19652/Work_Experience_Guidelines.pdf. If you would like further information or are willing to take a student for work experience please contact the WEX administrator on 6205 9352. Structured Workplace Learning Program (SWL) SWL is the workplace component of a nationally recognised industry specific vocational education and training (VET) program. It provides targeted and supervised learning activities contributing to the assessment of competence and outcomes related to a particular industry training package. You may wish to refer to the Structured Workplace Learning Guidelines available on the Directorate’s website at http://www.det. act.gov.au/__data/assets/pdf_file/0011/287777/ SWL_Guidelines_and_Requirements_for_ ACT_Schools_2012.pdf. If you would like further information or are willing to take a student for structured workplace learning please contact a SWL administrator on 6205 7960 or 6207 6344. Work Experience (WEX) and Apprenticeships/Traineeships for Students at Risk of Disengaging from School, Training or Employment. A list of host employers who are willing to support and mentor youth at risk of disengaging from school by providing a WEX placement is currently being compiled. If you are interested in providing a WEX placement for a student who is at risk of disengaging from school or who may be leaving Bimberi Youth Justice Centre please contact the Alternative Education Program Manager on 6207 0196. If you are interested in offering an apprenticeship/ traineeship or employment to a young person who is leaving Bimberi Youth Justice Centre please contact the Transition Teacher at Bimberi on 6207 3528. It has been said many times that it takes a whole village to raise a child. The ACT Youth Commitment gives all members of our community the opportunity to the growth and development of the next generation of entrepreneurs.

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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. 42

J U L Y 2 0 12

xporters have the chance to take advantage of some fantastic free online resources, designed to boost your chances in this year’s ACT Chief Minister’s Export Awards. The most useful tool on offer for entrants to the 2012 awards program is the application assistance, which includes assistance in preparing your application. According to the Manager of the ACT Exporters’ Network, Craig Malcolm, most businesses which took the opportunity to seek help last year found the process extremely useful. “It’s hard for people running a business to find the time to step back and take a critical look at how their business runs and what things are working well,” Mr Malcolm said. “The application process gives businesses the opportunity to examine their operations, determine what is working and what is not, and finish up with a document that summarises the best elements of their business. With the assistance offered by the ACT Government and the Canberra Business Council, this process is made so easy that it would be a disadvantage not to give it a go.” The award’s sponsors also offer a variety of free tools for those businesses looking to start up in exports, or those looking to expand their existing export business. The Australian Export Finance and Insurance Corporation (EFIC) and the Australian Trade Commission (Austrade) both provide great support for local exporters, helping them to secure their business and make sure they are conducting themselves in the most effective way possible. Austrade provide a variety of support for Australian exporters and offers a suite of information, advice and services for exporters, large and small. In their role helping Australian companies to develop their business in growth and emerging markets, Austrade have developed a range of handy online resources for exporters. Austrade’s website provides factsheets on export pricing, freight, risk management, and information on different export markets worldwide. “If you are an Australian business considering export, the Austrade website is well worth a look,” Mr Malcolm said. Austrade also manages the national Australian Export Award programs. Winners of the ACT Chief Minister’s Awards automatically progress as finalists into the national program. Last year, ACT company Aspen Medical won the Large Services national

award. The 50th Australian Export Awards will be held in Canberra at Parliament House on Tuesday 27 November. EFIC is the Australian government’s export credit agency and provides tailored finance solutions to help Australian businesses overcome the financial barriers they face when expanding their export activities. One of the biggest hurdles to an exporter’s business success is a shortage of capital or funding. To help combat this, EFIC works with exporters and their banks, to provide loans, guarantees, bonds and insurance products which can be tailored to meet the needs of both large and small exporters. Its website features factsheets, case studies and details about all the financial and insurance products they provide. “It’s worthwhile for any exporters, big or small, to make use of the assistance that EFIC can provide,” Mr Malcolm said. “These bodies are established to help exporters be competitive in the global market, it’s really up to each exporter to make sure they are taking advantage of it. EFIC is the Australian government’s export credit agency and provides tailored finance solutions to help Australian businesses overcome the financial barriers they face when expanding their export activities. One of the biggest hurdles to an exporter’s business success is a shortage of capital or funding. To help combat this, EFIC works with exporters and their banks, to provide loans, guarantees, bonds and insurance products which can be tailored to meet the needs of both large and small exporters. Its website features factsheets, case studies and details about all the financial and insurance products they provide. “It’s worthwhile for any exporters, big or small, to make use of the assistance that EFIC can provide,” Mr Malcolm said. Austrade’s dedicated exporters’ website can be found at http://www.austrade.gov.au/Export and EFIC’s website is at http://www.efic.gov.au To find out more about the ACT Chief Minister’s Awards, or to enter, visit http://exportawards. eawards.com.au/act or http://www.exportawards. gov.au/apply The ACT Chief Minister’s Export Awards are managed and presented by the Canberra Business Council on the behalf of the ACT Government.

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Stamp duty cut for 97% of properties

ore than 97 per cent of properties sold in the ACT are set to be subject to a lower rate of stamp duty under the ACT Labor Government’s taxation reforms, new figures show. Figures issued to the Legislative Assembly’s Estimates Committee show that 97 per cent of properties sold in the ACT in the 201112 financial year to date (comprising both commercial and residential properties) were valued at under $1 million. As a result of the Government’s cut to stamp duty, all properties valued under $1.2 million will be subject to a lower rate of stamp duty. In the 2012-13 ACT Budget the Government announced the first fiveyear phase of a long-term plan to abolish stamp duty. The rates of stamp duty will fall progressively in coming years. The first cut in

stamp duty occurred on June 6, the day after the Budget was handed down. Examples of the savings include: • A $300,000 home now attracts $950 less stamp duty than before the Budget, rising to a saving of more than $4,000 in 2016; • A $400,000 home now attracts $1,700 less stamp duty, and $5,540 less in 2016; • A $500,000 home now attracts $2,450 less stamp duty, and more than $7,000 less in 2016. Stamp duty is an unfair tax, and poses a significant extra cost burden on people buying a home. The Government’s reform is already making buying a home more affordable for Canberrans. The abolition of stamp duty is just one of the reforms announced by the Government to make the ACT’s taxes fairer, simpler and more efficient. The Government is also:

• Abolishing the tax on insurance premiums; • Abolishing commercial land tax; • Lowering land tax for low- and mediumpriced properties; • Reducing payroll tax; and • Making the rates system more progressive.

For more information on tax reform visit www. treasury.act.gov.au/TaxReform/Index.shtml

More affordable housing for Canberrans

eputy Chief Minister and Minister for Economic Development, Andrew Barr recently issued Phase III of the ACT Government’s Affordable Housing Action Plan. The Plan outlines 14 actions to make housing more affordable, focusing on the key areas of increasing supply of rental accommodation, better utilising existing sites, relieving blockages to affordable purchase and releasing sites for short-term accommodation. “The ACT Government understands the need for Canberrans to have secure housing, whether it is through renting a home, or buying one. The 2012-13 ACT Budget contains tax reforms and targeted assistance measures to make housing more affordable for Canberrans,” Mr Barr said. This Plan furthers the Government’s work in this area and demonstrates the Government’s commitment to providing affordable housing to Canberrans particularly those on lower incomes. The actions, in summary, are: Increasing supply of rental accommodation

• Reduce land tax on properties with average unimproved land values between $75,000 and $390,000. • Encourage institutional investment in affordable rental properties. • Increase the supply of affordable rental properties through transfer of land or surplus properties to the community housing sector. • Investigate a requirement for the delivery of public and community housing stock in large infill and greenfield residential developments. • Better utilising existing sites • Provide grants to small clubs to assess the viability of their sites for residential development. • Assess and consider options for facilitating residential development on underutilised community facility land. • Offer a lease variation charge remission to facilitate redevelopment or adaptive reuse of commercial accommodation that delivers affordable housing. • Relieving blockages to affordable purchase • Introduce variable thresholds for

affordable housing based on dwelling size. • Commence abolition of stamp duty. • Increase property and income thresholds for the Home Buyer Concession Scheme. • Explore options for extending the OwnPlace scheme into englobo and joint venture developments. • Investigate higher targets for affordable housing requirements in englobo releases. • Develop a Sustainable Land and Affordable Housing Guide. • Short term accommodation • Release land for short term accommodation. The Phase III Plan follows on from Phases I and II. Phase I was issued in 2007, and Phase II in 2009. On 12 April 2012, I issued the second progress report on the Plan, which shows that 55 of the 84 initiatives have been completed, with a further 26 either ongoing or under way. After investigation, the remaining three initiatives were withdrawn due to market circumstances. “I am proud of the extensive work undertaken by the ACT Government to address housing affordability,” Mr Barr said.

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STAMP DUTY By Jayson Hinder, Chairman Molonglo Financial Services

n the third of this series I thought I’d discuss one of those elements of tax which, while inevitable for us all, is about as exciting as watching paint peel. Stamp duty is also one of those areas of taxation where, because as citizens we see no immediate benefit, it can feel as though the Government has its hand in our pocket at times when family budgets are necessarily stretched. We all understand that schools and hospitals and emergency services are paid for by taxes. The challenge for government is to determine the fairest way to levy those taxes across the community. Moving away from a transactional tax like Stamp Duty to a land rates based revenue stream seems fairer assuming the method of calculating land values is also seen to be consistent and fair. One would assume that a valuation of each block over the coming years may be necessary to ensure the true value is reflected rather than an arbitrary price per metre etc. The revenue office is clear, if not exciting on the subject of duties. “Duty in the ACT is payable on the transfer, agreement for sale, …… of certain property”. The rate of duty payable will depend on the type of property and its value. We pay duties on Land and improvements, shares units and interests, motor vehicles, Insurance, and commercial leases as landholders. And for those engaged in business or commerce taxes and charges are expected - however, being slugged by stamp duty when engaging in one of the most exciting, but also costly, events in family life, buying a house, doesn’t seem to

have the same commercial flavour and has been another hurdle for many when trying to achieve that age old Australian dream of “a house of our own”.

In the June Budget the aCt government took the somewhat radical step of acting to reduce Stamp duty for aCt home buyers. From 6 June 2012 duty on all homes purchased below a threshold of $1.2 Million will see significant reductions in duty. In the June Budget the ACT Government took the somewhat radical step of acting to reduce Stamp duty for ACT home buyers. From 6 June 2012 duty on all homes purchased below a threshold of $1.2 Million will see significant reductions in duty. Radical in a number of ways. Generally Governments tend not to reduce tax unless the money is made up by an alternate impost, however exceptional times call for creative measures and the ACT government is keen to stimulate the housing sectors and to make housing in the territory more affordable for more people. Cheaper housing has to be a plus throughout the community. So what’s it worth? A family buying a $500,000 house will pay $2450 less in stamp now and $7040 less in four years’ time. On a $400,000 family home the saving is $1700 in

stamp duty, and $5540 in four years’ time. For a $300,000 home the saving is $950, and more than $4000 in four years’ time. The savings are not huge, but they do make a difference and allow more budgetary flexibility for families taking the exciting step into home ownership. This package has the further effect of stimulating the economy, keeping people in current employment and creating further jobs especially in the important area of real estate, building and construction. For a young family it may make the difference between more or less comfort in the home, we’ve all experienced the gradual process from Vinnies or inherited furniture to the excitement of new furniture, so perhaps even the retail sector will benefit as a knock on effect. From the perspective of a community bank any decisions by Government designed to make home ownership easier must be applauded, especially as one of the most pleasant aspects of banking is enabling people to achieve family goals. Community banking, apart from it’s belief in putting profits back into the community, engages on the equally important task of actually building communities. Over the coming years the impact of this policy will increase across the ACT Housing market, and Bendigo Bank looks forward to a long and prosperous association with Canberrans as we work together to build on the valued relationship of trust and moving forward into a better communal future which is at the heart of Community banking.

Jayson Hinder is Chairman of Molonglo Financial Services MFS operate the Calwell, Curtin, Jerrabomberra and Wanniassa Bendigo Community Bank Branches

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PART 2 UNDERSTANDING THE MARKET AND ITS INFLUENCE ON BUYERS

Jason Klose, Managing Director t: 0414 890 286 jason@bbbrokers.com.au www.bbbrokers.com.au

ollowing on from Part 1 - The End Game - Selling your Business, a part of this article stated “the market plays a role in the price you achieve, however what influences the sale price and time to sell the most is how presentable, desirable, marketable and financeable you make it for buyers”. Lets be honest, what buyers see on news each night will be influencing their decisions. The constant barrage of negativity has to have some impact and therefore they start believing it blindly without actually questioning it accuracy. So when a business is ready to sell they need to take what is happening in the market seriously - even if it has not impacted your business. If buyers are being influenced by the bad news, you need to have responses to the following: • Is the current market impacting your business? • How has it impacted your business? • Can you clearly support what you say with facts?

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ICONIC QUEANBEYAN RESTAURANT If you have been looking for a proﬁtable restaurant, with little owner involvement and includes a near new ﬁt out of the whole premises- this is the restaurant you have been looking for.

Buyers do not mind if the market has impacted your business as it is expected. However what they are interested in is the level of impact and how strong your business is to survive through it. With the above in mind, sellers need to understand the current market is the smallest of their concerns when selling. The biggest impact is not what is happening in Europe, the retail vs internet or even the Australian dollar. These are just hiding what is coming next. From 1 July 2012 until the year 2029, there is going to be a constant supply of businesses on the market. The first of the baby boomers turned 65 years old in 2011 and population statistics show the birth rate of baby boomers growing every year for the next 18 years. Therefore it is going to be a buyers market for sometime.

good businesses will sell. Armed with this knowledge sellers need to ensure they structure their business properly to give it every chance of selling. This includes pricing the business accordingly, financials up to date, secure leases, openness during the sale process and understanding what is motivating the buyer to consider your business. Good businesses will sell. The market will play a role in the price you achieve, however what influences the sale price and time to sell the most is how presentable, desirable, marketable and financeable you make it for buyers.

PROFITABLE CIVIC BEAUTY SALON Businesses like this don’t come along very often, but every now and then one will come onto the market that shines above the rest. the owner has put in place a business model, a client database of over 6,000, and a marketing system that allows for an owner to work on the business (not in it). this business has operated for over 20 years in a prime city location. Loyal and qualiﬁed staff are in place so you only need to work part time. turnover 2011 $478,423 owner takes over 6 ﬁgures for 20 hours per week

Lease $760 per week | Price $175,000 + SAV

CANBERRA CERAMICS AND BATHWAREONLINE.COM.AU

Owners Return for 2011 $230,000 - little owner involvement

Canberra Ceramics is a very well known business within the Canberra region. Its current location on gladstone Street in Fyshwick has been a tile shop for almost 40 years. open 5 1/2 days a week. Very good business for someone working in the construction industry or a DIY.the business also saw the need for a website to reflect the nature of the product it was selling to a broader australian market. www.bathwareonline.com.au was born and at the same time www.bathwareonline.com was also registered. active websites selling products around australia since July 2011. Business is providing the owner very good 6 figures every year. Fit out of approximately $500,000, further details provided on financials on making a time to meet.

Sales for 2011 $1,711,000 | Gross Profit 2011 67% Rent per week $2,250 + GST | Offers Over $600,000 + SAV

New 4 year with 4 year option lease. Lease $2,300 per week | Price $365,000 + SAV

this restaurant has traded under the same name for 35 years in Queanbeyan and very iconic with both Queanbeyan and Canberra.

Contact Jason Klose on 0414 890 286 for more information or visit www.bbbrokers.com.au

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Commercial Deakin 12 Napier Close Investment opportunity • Unit 8 - Leased for $39,742* per annum + GST • Units 4 & 5 - Leased for $54,034* per annum plus GST • Long term tenants in all units • Allocated on site parking

Sale By Negotiation View By Appointment Andrew Smith 0409 600 417 6162 0681 rwcanberra.com.au

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Queanbeyan 9 Lorn Road Owner occupy or invest • • • •

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Sale By Negotiation View By Appointment Brad O’Mara 0402 343 771 Andrew Smith 0409 600 471 6162 0681 rwcanberra.com.au

Commercial Canberra