A voice for business: Frankston & Mornington Peninsula
OCTOBER 2010 | $4.95 (GST inc.)
Race clubs’ in trifecta
stately street developer takes heritage into design for new apartment block
port progress
Merger on course for success
new boss will decide development time at western port
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CONTENTS
who/what/where
Features Artist Adriano Gemelli takes out a patent to protect his artistic endeavours - Page 21
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TONY MURRELL KEITH PLATT MARG HARRISON DAVID HILET MELANIE LARKE SIMON BROWN Design MARLON PLATT
Publisher / Director Editorial Director Sales Director Managing Director Material production / Prepress
Racing merger: A track winner
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Lively Lexus: Two of a kind
Departments
Columns
Busy Bites News Networking Contributions Arts
Managing: Hamish Petrie Health: Mike Ellis Motoring: Ewen Kennedy
6 4, 8 12 18 21
BusinessTimes / ISSUE 5 / OCTOBER 2010
BusinessTimes (Frankston/Mornington Peninsula) is published 11 times a year by BusinessTimes Pty Ltd and printed by Galaxy Print & Design, 76 Reid Parade, Hastings, Victoria 3915. Postal: PO Box 428, Hastings, Victoria 3915 Tel. 035979 7744 Fax. 035979 7944
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Cover: A merger with Melbourne Racing Club has seen former Mornington Racing Club CEO Fraser Bayne take on the role of general manager events and sales for Mornington, Caulfield and Bet Fair Park at Sandown.
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NEWS
GFC and govt damage family business plans MANY Victorian family business owners have been forced to shelve retirement plans because of a dramatic fall in the value of their business and their retirement savings. Because aged business owners are working longer, succession planning in many Victorian family business operations is in disarray. Ms Sue Prestney, Principal, MGI Melbourne and MGI Australasia Executive Chairperson, says it’s not just the Global Financial Crisis (GFC) that’s causing financial and management difficulties for small business – it is the laws and regulations that continue to be imposed by the government. Prestney called for all political parties to have a major re-think about their attitudes to family businesses. Australia has two million family business operations, worth $1.5 trillion, and these businesses have been badly bruised by the GFC, according to results of The MGI Australian Family and Private Business Survey 2010. The survey was undertaken by RMIT University and supported by MGI, an interna-
tional accounting firm specialising in advice to family and privately-owned businesses. Ms Prestney said that having seen a substantial reduction in the value of their businesses and their retirement savings as a result of the GFC, family business owners also have to deal with: • Maximum deductible contributions to superannuation for intending self-funded retirees over the age of 50 being reduced by 50 per cent (from $100,000 to $50,000) from July 2009 and will be further reduced to $25,000 from July 2013. “This comes at a time when business values and retirement savings have fallen and therefore substantially reduces the prospect of financial security ...,” Prestney said. • The Australian Taxation Office issuing a ruling in June, 2010, that will substantially increase the rate of tax payable on earnings retained for business investment by family businesses that have chosen to operate through a Family Trust. This has retrospective elements for the businesses involved.
Major findings of The MGI Australian Family and Private Business Survey 2010 were: • In 2006 a total of 75 per cent of owners were considering selling their operation if approached. In 2010 this figure is down to 61 per cent. • Previously 17 per cent of owners said they did not have enough funds for retirement. This has increased to 31per cent on the back of reduced investment values. • Concerns about the future financial performance of the company jumped from 31per cent to 54 per cent. • Just under half of owners said they would still be working beyond 65 with one third saying they needed the ongoing income or to sell the business to fund retirement. • Succession planning is now a major concern for 20 per cent of businesses, a jump from nine per cent. • 35 per cent of sons are involved in the family business but fewer than six per cent of daughters.
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• • • • •
Market the first port of call for PoMC
THE future of the Port of Hastings and the way industry and business operate in Melbourne’s southeast depends of the Port of Melbourne Corporation. The PoMC set an end of September deadline for submissions on the future use of the state’s premier port, Melbourne, and will be reviewing the feedback. The “market sounding” exercise sought options to increase container capacity instead of redeveloping Webb Dock once full capacity was reached at Swanson Dock. PoMC CEO Stephen Bradford, in a 19 August news release, said that by 2020 there would be 4.4 million containers passing through the Port of Melbourne and “we need to ensure the port, as a key component of our economy, is capable of achieving the next stage of container capacity development”. A spokesman for the PoMC, which also controls the Port of Hastings, said it would not be making any comment on any proposals until after the closing date
for submissions on 30 September. Already one company has publicly suggested upgrading the Port of Geelong before spending more money on upgrading infrastructure to connect Hastings to industrial areas to the north, despite the natural deep water advantages of Western Port. The plan, if adopted by the PoMC, could set back development at Hastings by at least a decade. Although dredging estimated at $360 million will be required at Geelong, infrastructure and stevedoring company Asciano says the economic advantages far outweigh the $11 billion Western Port option. Asciano says Geelong already has the vital road and rail infrastructure in place to justify its development as Melbourne’s next major port. Asciano, parent company of Patrick Stevedores and transport company National Rail, has about a 30 per cent interest in the Port of Geelong which, in
its publicly-released strategy, it says could be expanded, dredged and up and running within five years. Asciano’s strategy, A Port Plan for Victoria’s Future, acknowledges Hastings has the capacity to handle all of Victoria’s container needs, but maps out various scenarios to show the benefits of waiting until at least 2030 and also avoiding spending an estimated $1.3 billion redeveloping Webb Dock in Melbourne. Salta Properties earlier this year proposed building a $750 million inland port on 187 hectares of land at Lyndhurst, just south of Dandenong. It said containers could be taken by existing rail lines from the Port of Melbourne to Lyndhurst from where goods could be easily collected and distributed by trucks. Salta also said it had land at Altona for another inland port to service Melbourne’s industrial west. The inland distribution centres would ease traffic congestion emanating from the Port of Melbourne and also provide the extra storage space that would be necessary if the Port reached its projected import and export levels. Salta’s executive chairman Sam Tarascio envisioned stevedores DP World and Patrick loading ships’ cargoes onto trains from the Victoria Dock rail terminal for transport to the two inland ports. Asciano says Hastings could be developed by 2022 when an upgraded Swanson Dock nears full capacity but cautions “it would be prudent to discard the option of fast-tracking Hastings due to the significant funding requirements in the short to medium term and the difficulty in delivering the project within the required timeframe … the early development of Hastings appears not to deliver the best long term outcome when compared to expansion of Swanson Dock in conjunction with Geelong”. “Medium term development of Geelong Port and then Port of Hastings would match Victoria’s broader freight and transport plans better, and create investment and jobs in regional Victoria. “It would mean that further container port and freight development can occur where costs can be reduced, traffic congestion minimised, jobs needed, where rail infrastructure is available and with a long term configuration in mind.”
October 2010 | Frankston Peninsula BusinessTimes | 5
BUSY bites
Looks count
Apartment backdrop for stately street ONE of Frankston’s most stately streets is set for redevelopment. Many of the once-grand houses on the high side of Davey St that commanded views across the city centre towards Melbourne and Port Phillip are now up for sale. Rising above the footpath and fronted by a row of Norfolk Island pines, the two-storey houses are mainly occupied by medical suites. However, it was inevitable that such prime real estate would come under scrutiny and now Frankston Council has been asked to approve an eight-storey apartment block at 10-12 Davey St. Ross Voci of the South Melbourne-based PNP Property Group said the building will be the first of its type in Frankston and named Airio Rise, after his late father. If given the nod, the $13-$16 million 20-metre high building will rise up behind the existing houses, facing out across Frankston and, at the rear, Frankston Park football oval. Selling agent will be Adrian Foster at Hocking Stuart, Frankston. The marketing plan includes advertsing in metropolitan newspapers and on the internet. Airio Rise residents will have their own website, power-saving electrical appliances and recycled waste water being used on landscaped areas. The design of the proposed building incorporates the 1930s era houses, which will be restored on the outside and completely renovated inside and used as shops and offices. Plans drawn up by Yellow Woods Architects and submitted to council include 45 apartments, two levels of basement parking, an 80-seat licensed restaurant and up to 12 serviced offices.
A walkway leads from Davey St to Bay Lane at the rear. The apartment site is one two of the six houses included in a heritage overlay. The land was among the first offered for sale in in 1854 and was among the first sold within Frankston, although it remained largely undeveloped until the 1930s. The house at 10 Davey St was built in 1938 by Dr Stella Altman, number 12 first appeared on the city’s rate books in 1937 with Eric Hall listed as owner. Part of the significance attributed by councilemployed heritage consultants Bryce Rushworth Pty Ltd to houses in Davey St lies in the fact that there are no other comparable building stock or streetscapes in the city. In recommending a heritage overlay, the consultants stated: “The precinct retains its inter-war and immediate post war architectural character to a high degree of integrity and demonstrates a range of handsome building styles. “The precinct is of historical significance for its ability to demonstrate the settlement pattern of Frankston with affluent housing development typically occurring on the elevated ground above the low lying Frankston township. “The precinct is also of some local interest for its long and continuing association with Frankston’s medical fraternity, with some buildings being used as doctor’s surgeries as well as residences.” The one exception was number 16 which “could be demolished subject to an appropriate replacement”. The consultants recommended council
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AUSTRALIAN women are feeling increased pressure to look good in the workplace for fear of being passed over for promotions or not being hired. Acccording to cosmetics distributor the Heat Group an online poll of 500 women showed that 85 per cent believe there is greater pressure on women to be attractive at work compared to men, with 30 per cent having personally experienced appearance-based discrimination. “These results are a disappointing reminder of workplace discrimination in Australia. All employees have the right to trust that they will be rewarded for their work and not their looks,” Heat Group managing director Gillian Franklin said. She said 18 per cent of Australian women would consider or have already had a cosmetic procedure to improve their appearance in order to get a major promotion at work. The poll also showed that 40 per cent of women knew a female who had been hired or promoted because they were physically attractive. Despite increased pressure to look good, more than half the women polled supported an employer’s right to deny employment to someone based on their appearance including age, weight, clothing, piercings, body art and hairstyle.
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TAFE building deal
investigate ensuring the preservation of the streets Norfolk Island pines. Mr Voci said his company’s property subdivision arm had completed more than 30 developments in Frankston and Seaford . “Our focus in the Frankston area was initially triggered by the release of the transit city TAFE to bay structure plan back in 2004, which highlighted the potential for this underdeveloped bayside city to become one of Victoria’s great water cities.” He said researching the Davey street area “reminded us of the very early days of Port Melbourne and South Melbourne.” Mr Voci said surveys by Hocking Stewart showed that many residents in large family homes on Oliver’s Hill and in Frankston South now wanted smaller dwellings in the same area. To comply with local planning concerns his company had “listened closely to the authorities and addressed all their concerns where possible”.
PART of Chisholm Institute’s new $19 million Trade Training Centre at Frankston campus will be built on adjacent Samuel Sherlock Reserve. Frankston City has delegated CEO George Modrich to finalise a lease with the TAFE college subject to approval from the Department of Sustainablity and Environment. Council’s other stipulations are that the new centre occupies no more than 2318 sq m. of the reserve and that the building does not impact on plans for a regional aquatic centre on the reserve. The proposal is to lease the land to the Institute for 21 years, with the land reverting to council at the end of building’s economic life. Council will ask the college to make available for community use a similar size piece of land.
Risk attention
“Our design incorporated the heritage buildings right from the initial concept stage. “I firmly believe that the front of Davey St’s heritage facades should remain unchanged and be refurbished to return them to having their original appeal. While the heritage precinct does not include numbers 6 and 16, I believe that the future of the street should include that the buildings on these properties should be preserved and not be demolished to further preserve the heritage appeal in this area.”
AN survey of executives worldwide released August 11 revealed that attention to risk management has significantly increased as a result of the global downturn and the many high profile risk management failures in the financial services industry. Companies are actively identifying and addressing their own risk management issues more than ever before, according to Korn/Ferry , a US research institute.
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NEWS
Lack of family-friendly workplaces leading to a steady loss of talent, says expert Professional women in their 30s are opting out of full-time work at an alarmingly high rate. Only 38 per cent of Generation X, tertiary qualified women participating in a long-running University of Melbourne study work full-time, compared to 90 per cent of Generation X, tertiary qualified men. The findings are among the latest to emerge from Life Patterns, Australia’s longest running study of the lives of young people. Professor Johanna Wyn, Director of the Melbourne Graduate School of Education’s Youth Research Centre, leads the study. She says Australia’s lack of family-friendly workplace policies is to blame for the low participation rates of highly qualified women in the workforce. “When we started this study in the
early 90s, young women who had gained tertiary qualifications were the most likely of any social group to put the highest priority on gaining a career position. “If we fast-forward to 2010, the majority of these same women are no longer participating in the workforce. Indeed, full-time employment for women, 13 years after leaving secondary school, is inversely related to level of educational qualifications. “We have a mis-match between educational and workplace policies. While our young women are encouraged to excel academically, when its time to start a family, there is very little support available from employers and more traditional attitudes to gender roles seem to prevail. So unfortunately, we find our workforce losing huge numbers of talented individuals.”
The study shows workplace policies have also taken their toll on the health of Generation X. Comparisons with a similar Canadian study show Australians report much higher levels of poor mental and physical health. “The newly de-regulated workforce of the 90s meant young Australians were working longer hours with less job security. As a result, the majority were not able to establish long-term partnerships, marry and have children as early as their Canadian counterparts, leading to more stress and less support for the Australians,” explains Professor Wyn. These latest findings are contained in the new book: The Making of a Generation: the children of the 1970s in adulthood, written by Professor Wyn and Professor Lesley Andres from the University of British Columbia.
Activating business: a call to ‘Be in it’ Frankston Council, business and sporting groups are being urged to back the Active Frankston campaign which aims to see “everyone to do a little bit more rather than watching the telly and seeing a few elite sportsfolk do a lot more than the average”, according to Lois Gray, executive officer Faculty of Business and Economics at Monash University’s Peninsula campus. “For the business community this will mean a happier, more productive
workforce and consumer base as well as an opportunity to generate business networks that profit from more active vibrant local communities. The business of being active is more than just opening the store, it builds active citizens who benefit from active communities of interest and generate a safe, smart and successful set of active citizens.” The Monash breakfast is at Long Island Golf Club on Tuesday 19 October, call Narelle Krueger, 9904 4074.
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BUSINESSES in Frankston and on the Mornington Peninsula are being urged to join a public keep fit campaign. Dr Jane Shelton will outline the benefits and operation of the Active Frankston campaign at this month’s Monash Business Breakfast. A former CEO of ‘Life. Be in it.’ International Pty Ltd, Dr Shelton is now at Marshall Place Associates working with consulting teams to bring to market various management assignments.
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Frankston heritage sites (clockwise from top left) Frankston Park Gates; Nepean Highway comfort station; 8-18 Davey St; Frankston Pier and St Pau;’s Church of England.
Heritage sites are ‘listed’ FRANKSTON City Council has moved to protect the town centre’s history, identifying 11 sites of heritage significance. The sites, which include the Playne St Comfort Station, are included in a Planning Amendment C53, requiring approval by the State Planning Minister. Three central Frankston churches and a row of houses in Davey St are among the heritage listings. The 11 sites were identified in the Frankston Central Activities District Heritage Review completed last year.
They include Frankston Park Gates, corner Bay St South and Plowman Place; St Paul’s Anglican Church, 1 High St; Frankston Railway Station - Signal Box; the properties at 8 to 18 Davey St; Frankston Primary School’s 1889 Wing, Davey St; St Francis Xavier Church, Davey St; St Andrew’s Uniting Church, 16-18 High St; Grimwade Clocktower, Nepean Highway; Comfort Station, Playne St; Former Post Office, 2-4 Davey St; and Frankston Pier. Much of the panel hearing was devoted
to consideration of the row of former residences in Davey St, near the old Post Office. The Panel concluded that, on balance, the relatively intact nature of the precinct and its heritage significance offset arguments relating to loss of development opportunities, possible loss of value and conflict with other planning policies. The council agreed that amendment C53 would have beneficial environmental impacts by protecting buildings of heritage significance, providing a visual link with earlier periods in Frankston’s development.
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October 2010 | Frankston Peninsula BusinessTimes | 9
managing
Building a high performance team MOST organisations realise the importance of having teams of people that can implement their business strategy irrespective of how much change occurs with the team members. Team members come and go so the challenge is to initially design a team that can implement your strategy and sustain its performance. The initial challenge is to be able to break down your business strategy into the critical components that can be implemented. This may be a manufacturing process where you start with your customers and work back through your value adding processes to your raw material suppliers. It may be a service proposition where you work from the customer back to your service staff and your functional professionals and or franchiser. At each stage, it is important to determine which measures are the best to represent your strategy and the timeline for achievement of specific milestones. These key performance indicators (KPIs) become the focus for your people, so choosing the right parameters with an optimum amount of stretch is critical to create a positive drive for change. The primary issue is to decide on a structure that can connect your strategy to your teams and individual jobs. This stage must be done cleverly as a poor selection of the structure will result in major complications later in the business. For example, do you have a manufacturing team with a separate sales team reporting to the top or do you choose to have smaller general manager roles where manufacturing and sales come together lower in the organisation? Both structures can work well, but both will deliver different experiences to the people in the teams. The next challenge is to select the people for these roles. There is a wide range of considerations when selecting individuals. For example, if you want a team that can perform immediately, then experience and specific job knowledge are
Hamish Petrie* Business Consultant
‘Empowering your team members to stop their work when they encounter a problem is important.’ more important. But if you are building a team to change the way your processes operate then creativity and risk-taking may be more important. When you finalise the selection of people for your positions, it is important to reflect on the choices that you have made and identify any risks that you have taken. If you have chosen a team with lots of experience, then conflict of ideas may be significant as the experiences have resulted in different concepts. If you have chosen a more creative team, then the risk may be that they will be too creative and not be able to deliver early. In any case, you need to design a business process that will reduce the potential for these risks to negatively impact the business. This is an area where the business owner or team leader can visibly support the new team members. This is particularly important if they place a high risk candidate into an existing team without a support process. The classic issue is to place a woman into a traditional male team culture and then wonder why team performance is disrupted. Once you have chosen the team members then the real fun begins. The team leader role is the key to this process to build connections in the team to deliver the strategy. Here, each
10 | BusinessTimesFrankston Peninsula | October 2010
team member should see the specific connections between the work that they do and the business strategy. They should also understand their connections to their internal customers. Once these connections are clearly defined individuals can analyse their own work to ensure that they can standardise each component of work and commit it in writing. This step can be time consuming but it is important if you are seeking to save time, quality and cost for each component. This standardised work needs to be tested upstream and downstream in the business process to ensure that it will work under normal circumstances and to also decide what protection may be needed for the abnormal circumstances. Empowering your team members to stop their work when they encounter a problem is important so that the organisation can learn from the problem. Rather than just a quick fix, each problem should be studied so that its true source can be identified and a permanent remedy designed. Once all of this has been done, then every member of the team should understand how their work connects to your internal and external customers and to your business strategy. Toyota was one of the early organisations to show how well this could be done and many organisations have benefited by learning from its production system. Obviously, measurement of current performance is critical and KPIs are the fundamental tool to help the team understand how well they are working at present and how big a gap they have to close to reach their strategic targets. Action planning questions: 1 Do KPIs directly connect to your business strategy with the optimum amount of stretch? 2 Have you connected your strategy and KPIs to each team and to each team member? 3 Is each team members’ work designed and standardised to support internal customers? 4 Do you have an individually designed process to support each new team member? 5 Have you studied Toyota’s systems of work and decided how they could apply to your business? *Hamish Petrie had a 37-year corporate career including 29 years with Alcoa Inc. His last position was as VP–People and Communication for the global Alcoa corporation based in New York, NY. He can be contacted at hamish@nitroworld.net or on 0404 345 103.
markets
Gold: we’re spoiled for choices As gold moves higher no one can say investors lack choice. Our 350 or so gold listings outnumber North American gold stocks three to one. Certainly Canada and the US offer more stocks of global scale, but those gold giants chomp through billion of tons of ore a year and need constant inventory supply to maintain their values. Australia serves as a good conveyor belt. Newmont gobbled up Normandy, for example, and now the latest example was Goldcorp’s dazzling $3.6 billion bid for Andean Resources. The Andean bid came a shock – a double shock, not simply for the size of the bid and the eight-fold gain in the price over two years, but because this seemed plainly unfair. Few had heard and it wasn’t even in production. To add to its obscurity it wasn’t even a local. It was operating in the remote and windy plains of Patagonia. There’s another twist as well. Not only are the Canadians knocking off the next generation of our best gold stocks our investment funds are almost invariably precluded from investing in them. They fail the size test, then even if they have world-class gold discoveries they fail the cash-flow test. For many funds there’s also the minerals test. Minerals are risky
Richard Campbell* Stock Analyst
and gold worse. Consequently, the broker research efforts focus on stocks that do fit with fund mandates. This produces the ironic consequence that companies bruised and bloodied by their US exposures get a lot of attention, but investments benefiting from the slow train-crash that is the current United States economy get little or none. The exception to this is Perth. It is well known there that we are the world’s second largest gold producer and gold ’s export value is more than wool, wine and dairy combined. It is also true that there are many gold nuances and varieties. Some have low grades and low cost, others high grades and high costs. Many have nil or low
debt, a few pay dividends and others are setting themselves up for take-over. Many are like Andean, operating off-shore due to the generally declining grades in Australia, the slow approval processes and the relatively more attractive conditions in places like West Africa where at least 30 local companies are exploring or producing. This is a serious national effort, but the average superannuation investor will see no benefit from it. One explanation for the lack of effort may be less to do with the technical complexities of grade, processing, forward sales and so on, than a deeper distrust of the irrationality of gold. As an investment it is s a paradox. Some reserve banks don’t believe it; others do. Some are increasing their holdings. Most are sitting pat. It is part consumer item, part currency. It earns no interest, costs money to store, is hard to transport safely and in general points back to a crude past where nations stole it, hoarded it, settled debts with it and used it as the value base of their currency. Haven’t we gone past all that? Sadly no. For 40 years we have tried a currency system which has no reference to gold or anything of tangible value and it worked while the rules were followed. But the inevitable happened. Once again bank executives became wildly avaricious. To pay absurd bonuses they lent money they didn’t have. Essentially the US government is now doing the same. US interest paying debt is up to $13 trillion and that doesn’t count unfunded pension liabilities. To produce the activity that will generate the taxes to pay this interest, the US Treasury is now creating money by decree. While deflation holds, this monetary magic might work, but those with a sense of history know that this is not the way to treat a currency. Across the border from Canada there are communities who can’t afford dental care, fire services or school teachers. A stench is rising. It is more than likely one of the giant gold companies will emerge again and snap up one of our obscure West African “juniors” and think they got a bargain.
*Richard Campbell is Executive Director of Peninsula Capital Management, Tel. 9642 0545, 350 Collins St, Melbourne, 3000. email: rcampbell@peninsulacapital.come.au
October 2010 | Frankston Peninsula BusinessTimes | 11
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Coach and former AFL player Terry Wallace, left, Jerome Breen, Jerome Breen’s Driving School, and fortmer AFL great Stan Alves at the Menzies pre-grand final fundraising lunch at Frankston RSL.
At the Monash Business breakfast held at Steeples, Mornington, are, from left, Simon Gitshim, Mornington Racing Club, guest speaker Charles Davidson of Peninsula Hot Springs and Terry Sparks, T J Sparks Real Estate.
State Liberal candidate for Frankston Geoff Shaw with former AFL Bulldogs footballer Doug Hawkins at the Menzies’ lunch.
Noeleen Langford, Fairfax Media, Frankston Business Chamber vice-president Michelle Braggins and Sina Summers, True Leadership.
Anrew Tan, Members First, and Lyndon Cleary, of Victorian State Home Loans, at the Menzies Grand Final preview.
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October 2010 | Frankston PeninsulaBusinessTimes | 13
FEATURE
Racing merger a track winner A day at the races usually means a chance to dress up, stand around with friends and pontificate on various reasons for a horse to be a sure thing. Names, jockey’s colours and past form are all rolled into the mix of a formula that, if a real one did exist, would make betting redundant. There is no such thing as a foolproof system.
14 | BusinessTimes Frankston Peninsula | October 2010
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Fraser Bayne ... ‘there was 97 per cent vote in favour of merging Mornington Racing Club (above) and Melbourne Racing Club.
ack of a foolproof system has never stopped anyone from taking a punt. The actual race around a grass track seems simple enough – saddle up a bunch of horses, assign a colourfully dressed rider to each, lift the barrier and watch ‘em go. The reality is that the art of running a good race meeting is the end result of a lot of careful planning and hard work. The race is just the tip of the racing iceberg. All punters want to do is turn up on raceday, have a good time and, hopefully, go home with a shirt on their back. Fraser Bayne, Mornington Racing Club’s CEO for the past two years, knows a bit about presenting a smoothrunning raceday without revealing to racegoers or involving them in the myriad activities that contribute to the net result. Walking around with him near the end of a midweek training session shows his affinity with horses and the people who bring them to the standard required to win races. Brought up in a horse-owning family at Tyabb, Bayne is easy around the highly strung beasts that carry the hopes and dreams of so many. He pats horses as we stroll near the mounting yard and has an easy familiarity with their strappers and jockeys. Out on the track where he is showing why Mornington is delaying the first races of the season, he pauses while a jockey brings his mount around the inside sand-covered training track. Once horse and rider have galloped safely past, Bayne kicks the ground covered with new kikuyu and rye turf and drained by 22 kilometres of new piping. He says the works will make Mornington an all-weather track, doing away once and for all with the “heavy” tag it has worn and the unwanted and costly cancellation of race meetings (four in the past three years). “We want to make sure it’s ready, so we’re holding the first meeting in October instead of the scheduled one on Grand Final day on September 25,” Bayne says. The decision to hold off for a month was made easier because a merger with Melbourne Racing Club in August cleared the way for the scheduled meeting to be held at Betfair Park (formerly Sandown) near Dandenong, including the running of the $100,000 R M Ansett Classic. Whichever horse wins the classic avoids having to go in the ballot for next year’s Mornington Cup. The decision to merge Mornington with Melbourne Racing Club followed just over a year of negotiations. Bayne says the merger was committee-led and will enable Mornington to bring forward elements of its blueprint for the future. The “non-negotiables” in the merger included Mornington retaining its name and history, which date back to 1899. “The committee then felt comfortable about putting it to the members who voted overwhelmingly [97 per cent] in favour of the merger,” Bayne says. The merger came into effect on August 1, although it could take until the end of the year for all contracts and agreements to be completed. “I believe it’s put Mornington in a very strong position October 2010 | Frankston Peninsula BusinessTimes | 15
FEATURE
within the merged entity. It was a sound business case. We’ll get a significant return.” From the members’ point of view the merger allows them to attend races at Betfair Park and upgrade their membership to include Caulfield without paying a separate $500 fee. While horse racing is the most celebrated and glamorous part of Mornington Racing Club’s activities, the largest proportion of revenue comes from its pokies venues, Steeples Tabaret (opened 1997) at
Mornington and Stoney’s Club at Bacchus Marsh (bought in 1999). Racing-related income comes from memberships (2200 current), turnstile receipts, corporate hospitality and food and drink sales, and a percentage of turnover from on-course bookmakers (0.9 of 1%) and TAB (4.25%). On top of that comes the non-raceday events which use the racing club’s facilities (various-sized conference and dining rooms) and property, including a Sunday market, the
cool climate wine show (judging and awards presentation dinner), the Solar music festival, schools’ cross-country races, RACV rally, weddings and other celebrations. “These events are something that I intend to aggressively grow,” Bayne says. “There are 120 a year now and we can easily take another 40 at least.” While income also comes from the trainers and owners of the 300 horses trained at the course each a week as well as a subsidy from Racing Victoria, there is a $200,000 a year deficit on maintaining the track. “But it’s in our interests to look after the training group as they are the product providers. We provide the best facilities as there is no better advertising than having a group one winner trained here.” The merger with Melbourne Racing Club also means a change in direction for Bayne who now takes a “narrower but deeper role” as general manager events and sales for all three courses - Mornington, Caulfield and Betfair. “I’ll be excited to see how these metropolitan clubs operate and bring some of that expertise here to Mornington, which is
Mornington Racing Club Why would you celebrate Christmas anywhere else? Friday 26 November & Friday 10 December 2010 Why not join in the Christmas Celebrations at the Mornington Racing Club, with a private table, private marquee or with a group in the Mornington Racing Club Marquee. With great food, entertainment and non stop action both on and off the track – celebrating Christmas at the Mornington Racing Club is a perfect way to entertain clients, colleagues and friends this festive season.
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16 | BusinessTimes Frankston Peninsula | October 2010
not really country or regional. Peninsula Link will bring it within 40 minutes of Melbourne, making it a lot more suburban than other country courses.” Bayne was imbued with an interest in horses from early age by his parents who “had horses” at their Tyabb property. His father Fred runs a pharmacy in Hastings and as recently as early August had a winner with the Jason Warren-trained Garter Girl at Cranbourne. “We had horses and I developed the thrill of watching them on the track,” Bayne says. A self confessed “sports fanatic” Bayne draws a line along his career path with his placement with the Victoria Amateur Turf Club while studying for a Batchelor of Business and majoring in sports management: “Now, 18 years later, my employer is the Melbourne Racing Club. “I’m a bit of a purist and had grandiose plans of being a bloodstock agent so I went on to study at Marcus Oldham College, but ended up being an event manager.” The events which he managed included a horse expo at the Melbourne Exhibition centre, a fashion week, Australian music week and various exhibitions. The chance to move back into the world of racing came when the then CEO of Mornington Racing Club Michael Browhill left to take up the top job at Moonee Valley. With the merger of Mornington and Melbourne racing clubs, a new track on his home turf and a new position, Bayne is ready for the next turn in his career.
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For further information please contact the events team on (03) 5975 3310 October 2010 | Frankston Peninsula BusinessTimes | 17
CONTRIBUTIONS
Securing business
A DETAILED, affordable and easy to maintain integrated security management can be vital to a businesses ongoing success. Security should be part of any strategic business plan. Threats to a business or organisation are diverse and any pre-emptive security solution must also incorporate diverse elements. Many business owners want freedom and peace of mind that business is still operating efficiently while they are not there and remote access through the internet to camera systems can provide a solution. Cameras should be placed in vulnerable areas, such as a showroom, storeroom, point of sale or any internal and external access areas. Security systems can be programmed to be monitored from anywhere in the world by laptop, iphone or mobile device. This remote access allows staff management and alarm verification.
Access control systems can also be used to track and restrict access to certain areas of a business at specific times. A monitored intruder alarm system is an essential part of any security management plan, not only to deter intruders but also to limit access to authorised users and give owners the peace of mind that the premises are safe when nobody is around. By Greg Flood, Eclipse Security Systems, 9796 4700, www.eclipsesecurity.com.au.
the best home made Gelato or that you provide the best dog grooming service around or that you’re the best beauty therapist in town. You can tell them all that but I can guarantee the first question they’ll ask is “says who?” And that’s fair enough. When you think about it - what are the questions you ask when you’re looking to buy a product? Let’s say you want to buy a new barbecue – there’s absolutely no doubt that every barbecue company brochure, ad or website you look at will tell you it has the best barbecues on the market. Naturally you’re going to ask why? If a company’s ad, brochure or website is well written it should be able to answer that question. When it comes to writing about your product or service you need to be able to do the same. It’s not good enough to write “because the barbecue is made of quality stainless steel” or that it “has five burners” or that it “has a wok burner”. You need to write why these things are good to have in a
Please explain
IT’S not all about you. I know this sounds harsh, but I mean it in the nicest possible way. When you own a business it’s natural to feel passionate about what you do. It’s also normal when you write your ads, brochures or website to want to tell the world how great your product and/or service is. In the end though, the customers aren’t really interested in you telling them that you, for instance, make
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18 | BusinessTimesFrankston Peninsula | October 2010
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barbecue and what’s in it for the customer. The ad might be giving you all the amazing features of the barbecue but not telling you why they make a difference. The reasons why are called the benefits – and it’s the benefits that are all important when you are writing about your product or service. So how do you sell the benefits? Let’s look at our barbecue’s stainless steel feature. What are the benefits of stainless steel? It lasts longer, which means you won’t have to buy a barbecue again for a while which ultimately saves money. Bingo! You’ve touched on the proverbial hip pocket nerve and, let’s face it, saving money is a big benefit in anyone’s language. So when you’re writing any advertising material for your company use the tried and tested equation – features + benefits = sales. It’s a formula for success. By Linda Suttie, jotcopywriting, 0418 137 605, www.jotcopywriting.com.au.
Patent need for protection
“Intellectual property law uses a lot of words. Mostly they are boring. It is difficult to understand why some people get so excited about them. It must be something to do with the money.” – From a speech by the Honourable Justice Robert French of the Federal Court of Australia.
YES, it’s a fact – it is all about the money. But then, isn’t everything? Let’s say your company’s research and development team has developed an innovative new product. You want to export it to the world and you are therefore considering where you will sell and who you will sell to but you must also protect what you are selling. In a world where more and more products and services are becoming commoditised, and where Australian companies are competing in a very tough global marketplace, innovation is the key to survival for almost every company – and therefore understanding how global business law applies to protect innovation and control export is critical. Assume your product’s immediate appeal is for use in one particular market (say automotive), but it also has potential application in the marine market. The distinction between these applications and the technology that underlies them will
need to be part of your business strategy when negotiating with potential agents or distributors. You therefore need to analyse carefully what technology (or intellectual property) you are offering to each market segment and distinguish these within your planning. To do this properly you first need to understand what you have done to protect the intellectual property in your innovation as that intellectual property is a valuable business asset which can be commercialised in multiple ways. So, just what are you doing to protect this business asset before you think about exporting it? Have you given a thought to protecting it – both in Australia and in the markets you are proposing to export to? Or are you relying on the approach of finding your distributor first and if that is successful then making and selling the product and hoping that your competitors will leave you alone long enough so you can sell more? Given the market potential for your new product, the aggressive competition you will face especially in the export market and the real risk of reverse engineering, ignoring IP protection strategies is just not clever. At the outset, you should be asking: “Is this product of such potential value and significance that it is worth protecting as a patent?” If so, do you understand the requirements for patent protection, the significance of disclosing details of your innovation before a patent is applied for or the advantages you get from having monopoly rights over that innovation through a patent? If you don’t protect it, what are the implications for your business if this innovation falls into the hands of your competitors? If patent protection is not available or commercially viable, what are the other strategies you could employ to protect your innovation and your market and how do these vary from country to country? Patents are not necessarily the right (or the only) answer for every innovation. There are many laws, conventions and treaties covering global business law. As Justice French has put it, the law does indeed use a lot of words and some people do find them (mostly) boring. But there are people out there who actually get very excited about these words and these laws. They have the skills to help you protect the value generated by the innovative and creative efforts of your business and to give
your business the edge in when you decide to tackle an increasingly competitive global environment. Innovate, protect and export - or perish. By Malcolm Taylor, Masters in Global Business Law and partner at White Cleland Lawyers. mjrt@whitecleland.com.au.
Compliance culture
DEVELOPING a compliance culture in your business can prevent an inadvertent breach of the law and the consequences that follow. You can reduce these risks by having a compliance program in place – systems and procedures an organisation incorporates into its business to avoid breaching laws applying to its commercial activities. A compliance program will help: 1. Identify relevant laws that apply to your business activities; 2. Identify areas of your business where you may be at risk of breaching those laws; and 3. Put in place systems and procedures that will reduce the risk of a breach. Some industries have specific statutory requirements that must be met, while others that are less regulated are still obliged to comply with legislation that applies to all. The law does not discriminate when it comes to applying legal obligations and a compliance program that can effectively identify those legal obligations that may provide you with an opportunity to reduce your risk. To be effective a compliance program should be incorporated into the way an organisation conducts its business, and to achieve this, an organisation must develop a compliance culture. The development of a compliance culture in a business is as integral to the running of a successful business as its marketing plan. The compliance program must form part of the usual business practices of the organisation, and become part of its business culture. A further advantage of having a documented compliance program in place is that, in the event of an inadvertent breach of the law, the presence of such a program may mitigate the penalty. By Richard Goldsmith, Carroll Goldsmith Lawyers, 5975 7588. www.carrollgoldsmith. com.au
October 2010 | Frankston PeninsulaBusinessTimes | 19
health
The chill wind that ills It’s not so cold now, right? But it is windy. It might seem obvious to state that the almost-gone winter is the season of coldness, summer is the season of heat, and spring is the season of wind. ‘Standing in the north wind is more dangerous than standing in front of 100 archers’ - ancient Chinese saying. Michael Ellis*
Chinese Herbalist
Two issues back I wrote about cold and how it is the creeping enemy of health. I will add a little more to that discussion shortly, but first something about “wind”, a fascinating concept in Chinese medicine’s worldview. In nature, wind is simply the movement of air caused by temperature variations. The bigger the variation, the stronger the wind. So between the heat of summer and the cold of winter, we should expect wind. And wind, according to Chinese medicine, is the most “pernicious” of all the climates in its effects on health. That is because it intensifies the other climates: cold is so much colder, a hot day so much more extreme. Common human experience has it that unpleasantly cold and hot temperatures are intensified when accompanied by wind. Cold wind blows through inadequate clothing and “chills us to the bone”. Chinese medicine has noticed over 20 centuries of clinical practice that colds and flus - and their more serious sequellae - are more prevalent in the windy season. Spring is characterised not only by windy conditions but also by changeable weather - a few days of warmth, followed by a south-westerly change and return to winter cold, then back to warmth - and this is the problem. This period of changeability is when everyone’s defences are easily compromised and we all tend to catch colds. Start taking notice if you don’t believe me. It happens year after year. The ancient Chinese - and just about every other folk medicine tradition - thought of catching a cold as being invaded by “wind”. After all, the symptoms of colds and flus are very much like having “wind” trapped inside the body - aches and pains that move
students that they first study meteorology. “One should be on one’s guard against the most violent changes of the seasons,” Hippocrates said. (He was on to something.) In Asian cultures, wind is accepted to be an agent of disease. That is why many Chinese people are fastidious about dressing warmly and wearing a scarf to protect the neck and head when it’s windy. Especially when the lingering winter chill still lurks in the air. • Which brings me back to a post-script to my August column on “cold”. Recently my wife injured her knee skiing and five days later presented to a physiotherapist, who made a perfectly competent diagnosis (strained medial ligament, possible minor cartilage damage) and provided a list of suggested remedies. On top of that list was “icing”. Now here, in my view, is a classic example of where Western medicine has missed something. around, coming and going unpredictably, When we hurt ourselves, our body’s a stiff neck, headache, sudden sneezes … a self-repair mechanism clicks in, flooding the disease that can move and spread unpredictinjured area with extra blood and fluid to ably. generate extra warmth and carry the nutrients When one has a cold, most will agree necessary to accelerate tissue repair. that being exposed to the wind makes the And what do we want to do? Ice it. symptoms feel worse. Find me the scientific research that proves Hence the ancient Chinese saying: ice is a good thing to do for injuries. “Standing in the north wind is more After all, it’s now such standard practice dangerous than standing in front of 100 that as soon as anyone hurts themselves in archers.” any setting, the informed cries of “ice it” (For north, we can transpose “south”, since quickly follow. we’re in the southern hemisphere.) I seriously doubt that credible research Of course, Western medical science has exists. long established that weather conditions play I have searched and can find only the no role in disease, right? opposite: experts who question the benefit of We may still describe ourselves as “under icing injuries. the weather” when unwell, but we don’t catch Chinese medicine holds that icing not colds by getting cold: that’s an old wives’ tale. only does not help - apart from when acute It’s all about germs - viruses. swelling or bleeding is so severe it poses The ancient Chinese had no notion of a health threat in itself - but it introduces microscopic pathogens - viruses - that entered another pathological agent into an already the body and caused illness. compromised area. But they did understand that illness could I am not advocating the use of heat in place be airborne - that you could catch something of ice, as that can easily exacerbate an acute “on the wind”. injury. And as far as I know, every naturalistic But I’m prepared to say this: icing injuries medicine system held weather conditions and is overrated, usually unnecessary and even their effects on the body to be an important unhealthy. explanation of ill health. Even Hippocrates, the father of the Western * Michael Ellis is a registered Chinese herbalist in Mt Eliza. www.mtelizaherbal.com medical tradition, suggested to prospective
20 | BusinessTimes Frankston Peninsula | October 2010
THE arts
Patented art THERE’S nothing new about rip-offs in the art world, but protecting yourself with a patent is the businesslike approach being taken by Adriano Gemelli. The Hastings-based painter and sculptor more than a decade ago hit upon
a way of using reflective holographs on a one-dimensional lane. His colourful, highly textured works created in a Hastings factory visually change as the viewer moves around them - a break with the artful trick of having
the eyes in a portrait follow you around the room. Gemelli knew he was onto something different, saw that it could have commercial possibilities and wanted to make sure he was part of any success it reaped from the mainstream media, particularly advertising. In 1998 he succeeded in having his technique patented. Although Gemelli’s works have been popular in the one-off commission field, big business is yet to come knocking. “It’s a dynamic medium which I’d love to expand into other areas but am held back by economics.” Gemelli says he has worked out a process for making prints of his creations but, again, lack of money holds him back: “I need a sponsor - a patron would be even better.” Gemelli’s works will be exhibited at Frankston Arts Centre 16 October- 25 November. Richard Gemelli and Sir Humphrey Cold Paws in their factory studio at Hastings.
Christmas parties to wow, excite & impress! End of Year Break-ups, Banquet Dinners, Cocktail Celebrations, Gala Balls...
...be it an intimate occasion or a grand scale event, the Frankston Arts Centre offers you and your guests a unique and flexible Christmas party experience, with seating for up to 500 guests and cocktail style events for up to 1,000. Black Tie Catering, Frankston Arts Centre’s on-site caterer, will provide diverse and delectable menu and beverage options to suit all tastes and budgets. Telephone:
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Email: function@frankston.vic.gov.au Web: www.artscentre.frankston.vic.gov.au October 2010 | Frankston Peninsula BusinessTimes | 21
newswheels
Economy rules in a luxury market It takes some degree of bravery by a car company like Lexus to pit its latest car against the vehicle it replaces. After all, the new car should embarrass the old one which means they are almost denigrating their own product. But that’s just what Lexus did at the Australian launch of the all-new Lexus RX450h (h standing for hybrid). We were able to road test the new Lexus hybrid against the old RX400h at Sydney’s Eastern Creek race track, both on the track and sliding around a skid pan. We also did some road testing following the track time. The Lexus RX450h is Robinson Crusoe in the luxury SUV segment, its petrol-electric powertrain being pitted against a raft of diesel-powered vehicles. And, in any case, there was not too much too wrong with the now-superseded RX400h. The new RX450h is clearly a generation ahead of the old – the aspects you discover on the skid pan and track, that are primarily handling, braking and passenger comfort when the car is pushed to the limit. On road, the difference is marked. Here we found out the big difference is a real-world, hip-pocket one: economy. Now using an Atkinson cycle engine, the second-generation RX hybrid is capable of fuel consumption as low as 6.4 litres a 100 kilometres. That’s in the same ball park as small, four cylinder cars and well under the already impressive 8.1 litres/100 km achieved by the RX400h. And this from a three-engined SUV that weighs more than two tonnes, has the power of a V8 but with low emissions. The RX450h incorporates a number of changes from the RX400h, the only vehicle to which it can be compared.
Ewen Kennedy Motoring Journalist
One thing that has not changed is the unique configuration. A 3.5-litre V6 petrol engine driving the front wheels, along with a 123 kW/335Nm electric motor, and a 50kW/139Nm electric motor to power the rear wheels. The two electric motors have slightly increased power, while the petrol engine is an all-new affair using Atkinson cycle technology to achieve 183 kW at 6000 rpm and maximum torque of 317 Nm at 4800 rpm. The theoretical combined system output of 220 kW gives it significant grunt, however not all motors will be peaking at the same time, so the number varies according to driving conditions. The RX450h zooms to 100 km/h in just 7.8 seconds, which will see many a car off at the lights. In our road test were able to achieve 7.4 litres a 100 km on the plains areas outside Eastern Creek, moving up only a little to 7.9 litres/100km as we headed into the Blue Mountains foothills. We have little doubt 6.4 litres is achievable given relatively flat roads and a moderate driving style. This low fuel consumption means the Lexus RX450h is Australia’s first hybrid
22 | BusinessTimesFrankston Peninsula| Octobber 2010
Lexus RX is modern in its looks, and ultra modern under that sleek bonnet.
vehicle to be exempt from the Federal Government’s LCT (luxury car tax). The SUV set an official 6.4 litres/100km to come well under the 7.0 litres/100 km cut-off. This exemption equates to more than $4000 enabling the hybrid to enter the market with a recommended retail price of just under $90,000. Statutory and dealer charges have to be added to that figure, but that $4000 makes a big hole in them. The Lexus RX450h will emit almost 1.6 tonnes less CO2 than the petrol-powered Lexus RX350, and significantly less than its diesel-powered rivals. According to John Roca the new Lexus RX450h will, in a single year of motoring, save the same amount of carbon emitted from eight return jet aircraft flights from Melbourne to Sydney. The RX450h will have a three-model line-up (unlike RX400h that had just one, the Sports Luxury). The RX450h is offered as Prestige ($89,900) Sports ($96,900) and Sports Luxury ($107,900). These are rrp prices only and do not include state government charges, or delivery costs, which vary from state to state. The RX450h now features 10 airbags, up from seven in the RX400h. The Atkinson cycle engine seems to be quieter than the engine it replaces and this leads to better NVH, (noise, vibration,
harshness) and leads to less noise intrusion into the cabin. Power is run through a continuously variable transmission (CVT) which is seamless, but still retains some of the slipping-clutch feel that is inherent in these gearboxes - but that’s only when you plant the right foot. The real differences in driving feel between the two vehicles are in ride and handling. Built on a new, stiffer, chassis, and with a new suspension, the RX450h’s ride is flatter and smoother under hard cornering. The rear suspension has made the changes possible and features a trailing-arm type double-wishbone arrangement. This system also allows for the coil springs and dampers to be set below the floor, adding increased luggage space. The car sits on a
lower centre of gravity and has a 25 mm longer wheel base as well as wider track front and rear. This is all fine-tuning from the previous model and adds up to a better handling vehicle. The front suspension spring rates have been revised along with other improvements related to durability.
There is a lot less spring in the front, noticeable under heavy braking, which gives the vehicle a lot more stability. Before the Lexus RX450h July release orders had already been taken for the first three months allocation of 60 cars a month, mostly from Lexus RX350 owners.
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