(November) Franskston & Mornington Peninsula by Keith Platt

A voice for business: frankston & Mornington Peninsula

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Putting Hart into boats sailing through the financial crisis creating delight your customers deserve to be delighted when they do business with you

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CONTENTS

whO/whaT/whErE

Features for busin ess: franks ton & Morni ngton Penins ula noveMber 2010

Law review:

sailing thro ugh the fi nancial cris is creating delight

your cust to be deligomers dese hted whe rve do busi n they ness with you

Columns TPGD 0120BT/2

dollar rise

our risin g like crea dollar can be m, of a goo too much d thing...

4 6 8 14 18 23

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Cover: Boat builder Mal Hart is a lifelong Mornington Peninsula resident whose early years were spent on and around the bays. His favourite haunts were Western Port ‘s mangroves.

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Puttin H art into bogats

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A voice

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Frankston Council raises concerns about transport infrastructure connecting Melbourne and the Port of Hastings - Page 8

Hart & Sail:

TONY MURRELL KEITH PLATT MARG HARRISON DAVID HILET MELANIE LARKE SIMON BROWN Design MARLON PLATT

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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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BusinessTimes / ISSUE 6 / NOVEMBER 2010

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Search for buyer FRANKSTON landmark the Peninsual Centre is again up for sale. Carrum Downs-based real estate agency Nichols Crowder is calling for expressions of interest until the end of November for the 12-storey Nepean Highway frontage building. Geoff Crowder says a $20 million conversion could see the building transformed into 90 apartments with ground level shops. Current owner Asian Pacific Building Corporation three years ago paid $11.25m for the Peninsula Centre and received council backing for an upmarket hotel.

Council ambassador staff members are operating from an office in Keys St. The Young St. shopfront was opened in 2002 after council and police launched a pilot project aim at making the streets of central Frankston safer, especially around the rail and bus stations. The office doubles as a customer service outlet for parking related matters as wells as rate, pet registration and HACC service payments. The announcement by Police Inspector Jeff Millar that more police resources have been dedicated to Frankston and numbers will increase from January 2011 will put even more pressure on the Young St premises. Inspector Millar has given a commitment to Frankston City Council that police will be located at the Safer City Centre, from Monday to Saturday. Council agrees that an extended police presence would improve perceptions of safety around the transit interchange. Ongoing costs of the centre are about $45,000 a year, mainly for rent, and this has been allocated in council’s 2010/2011 budget. The cost to fit-out a new, bigger, centre is estimated at $100,000, including IT, disability accessible toilets, automatic sliding front door, and suitable front counter, lighting and fit-out.

We’ve got you covered! Computer & Office Solutions for Small Business ‘Safe’ shop bulge Computers Peripherals FRANKSTON Council’s overcrowded Safer City Centre in Young St will remain for at least another year to allow appraisals of the ambassador program and a six-month trial of security contractors. The office can accommodate parking officers contracted by council, one security person and the ambassador officers completing daily reporting sheets. However, space constrictions prevent it being a base for the parking officers, all the security contractors, ambassador officers and police on the beat.

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We’re smartphone fanatics: survey OUR obsession with mobile internet-connected ‘smartphones’, like iPhone, has reached new heights, with Australians admitting to using their devices in bed, on the loo and, alarmingly, when behind the wheel, according to Telstra research released 5 October. Telstra Consumer Executive Director Rebekah O’Flaherty, said the first Telstra Smartphone Index revealed that smartphones go wherever we go. “Whether we’re at home in front of the tele, in the bathroom or in bed, Telstra’s research suggests smartphones have become an indispensible way for Aussies to get connected and access the information, entertainment and news that matters to them,” Ms O’Flaherty said. “Over the past 12 months we’ve seen huge growth in the popularity of smartphones and they now make up more than half of all Next G handset sales in Telstra Stores Australia-wide.” Telstra Smartphone Index reveals: • Smartphones are our new bed buddy: More than half of smartphone owners admit to using their phone in bed, with women the most likely offenders (54 per cent versus 49 per cent of men).

• We love throne-surfing: Almost one third of Aussies have used their smartphone to surf the web while on the toilet – although only one per cent admit to doing so regularly. Additionally, men are more avid loo-surfers (38 per cent have used their phone on the toilet versus 22 per cent of women). • Smartphones don’t make us smart drivers: One in five Australian drivers admit to surfing the web on their smartphone while driving – despite this being illegal in all states and territories. Smartphones are not just for Generation Ys. Almost one in five Aussie smartphone owners are over 50, and 41 per cent are over 40. The research suggests smartphones are beginning to eclipse PCs as the preferred way of accessing certain online content. Nearly 25 per cent of smartphone owners visit social networking sites like Facebook on their mobiles, more than on a computer. More women use social networking sites. The survey found around 10 per cent are more likely to do their online banking from their phone than on their PC,” she said.

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ONLY 28 per cent of small and medium businesses (SMBs) are active in social media, according to Optus Business Social Media Index. A national survey of 380 Australian SMBs revealed that more than 50 per cent are not taking advantage of social media as a marketing tool to promote their business. The Optus Business Social Media Index, in association with Council of Small Business of Australia (COSBOA), found that 28 per cent of SMBs use social media, investing on average 6.6 hours or more a week. However, 56 per cent of SMBs do not use it at all nor do they have any nearterm plans to start. More than 50 per cent of SMBs not involved in social media believe that social networking is not appropriate for their industry, while 25 per cent believe there is no clear way to build a business case for an investment in the area. On the other hand these nonusers cited customer satisfaction measures (44 per cent) and sales data (37 per cent) as key measures of success that might convince them to use social media in the future. In the next 12 months, a further 16 per cent of SMBs plan to use social media.

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Bad service … we’re outta there

‘Sadly Australians have found complaining directly to organisations difficult and frustrating.’ The good news for businesses is that customers are more forgiving of poor service if they have generally experienced good service with the company over time. Almost nine in 10 consumers (86 per cent) report they’re willing to give a company a second chance after a bad experience if they’ve historically experienced great customer service with that company. “These findings demonstrate the importance of building relationships with customers, rather than approaching service as a transaction”, says Christine Wakefield, Vice President of American Express World Service in Australia. “Lapses in service standards happen, but if customers realise these incidents are the exception and not the rule, they will be more understanding. When bad service is received, the barometer reveals that Australians are unlikely to provide direct feedback to the business. In fact, compared

to the other nations surveyed, Australians are among those who are most unlikely to speak to a company supervisor about the incident and even less inclined to write a letter or an email to the company. Rather, people are more likely to complain about the incident among their own social circle, speak negatively about the company if asked, or recommend their friends, colleagues or family avoid the establishment. “Sadly Australians have found complaining directly to organisations difficult and frustrating. Not only is it almost impossible to find out who to complain to, when Australians do complain often nothing is done or in some extreme cases, retribution is meted out by staff who have not been adequately trained in the art of good service”, Brett Whitford, founder and Executive Director of the Customer Service Institute of Australia. More than half of Australian consumers expect something in return after a poor customer experience, yet interestingly financial compensation rated second to an apology. American Express’ tips for businesses to make amends for poor service: 1. Acknowledge the poor service experience by providing an apology and the assurance it won’t be repeated. Ideally the apology should be given by the person at fault, however can also be given by a manager or person in-charge. 2. Resolve the issue speedily, effectively and courteously. The consumer has already been inconvenienced, so the faster they can leave feeling the matter has been resolved, the better. 3. Identify the factors that contributed to the poor service experience. Was it a knowledge gap, a process failure or a systems fault? Once identified, measures can be more easily put in place to rectify the fault.

Jobless at 5.1 per cent The Australian unemployment rate remained at 5.1 per cent in September, according to the Australian Bureau of Statistics The ABS reported the number of people employed increased by 49,500 people to 11.325 million, seasonally adjusted, in September.

Contact us BUSINeSS and service groups are welcome to provide BusinessTimes with details and dates of their activities. Send information plus contact details to news@businesstimes.net.au Fax: 035979 7944. Phone: 035979 7744

• See Management: Customer delight – Page 10

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THIS year’s opium poppy crop in Afghanisatn is reported to have been cut by half. However, the loss is due to nature and not the efforts of Australian, United States or other Western forces whose countries feel the downside of the heroin trade. The poppies have been hit by a naturally-occurring rot. But, as in most markets, there is always and upside for the astute. Heroin prices are rising on the back of the shortage, encouraging Afghan farmers to plant more crops. Afghanistan is thought to supply at least 80 per cent of the world’s heroin.

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AUSTRALIA is one of the least tolerant nations when it comes to receiving bad service, second only to Mexico, with almost nine in 10 Australians having ceased doing business with a company following poor service. The findings were released 14 October in the American Express Global Customer Service Barometer, a survey conducted in Australia and 11 other countries, exploring public attitudes and preferences towards customer service. The barometer reveals that generally most Australians (48 per cent) will allow two poor customer service experiences before blacklisting a company. A less forgiving 28 per cent are only willing to excuse one service lapse.

Poppy profits

November 2010 | Frankston Peninsula BusinessTimes | 7

iNfraSTrUCTUrE

MORNINGTONâ&#x20AC;&#x2122;S Safe Harbour plan is heading for the rocks after a damning reaction from Mornington Peninsula Shire Council. The council will tell an independent planning panel that the harbour plan should be â&#x20AC;&#x153;substantially reviewedâ&#x20AC;? and made smaller. A report to councilâ&#x20AC;&#x2122;s 18 October development assessments committee â&#x20AC;&#x153;strongly recommendsâ&#x20AC;? a substantial review of the safe harbour plan, including a marine precinct plan by Parks Victoria and a coastal management plan by the council as well as community consultation processes. Mornington Yacht Club, through its private company â&#x20AC;&#x201C; Mornington Boat Haven Ltd â&#x20AC;&#x201C; is proposing a marina for 210 boats. Community reaction is divided. Council stated it would not form a conclusive view until it received the Panel Report and the Minister of Planningâ&#x20AC;&#x2122;s Assessment of the Mornington Safe Harbour environment effects Statement. It acknowledged an apparent range of benefits associated with the proposal, but said it was unable to offer support because the planned Pleasure Boat Facility would not provide a net community benefit. â&#x20AC;&#x153;There is no adequate strategic planning justification that warrants the extent of the proposed rezoning,â&#x20AC;? the report to council stated â&#x20AC;&#x153;The proposed development would cause an unacceptable level of detriment to the Schnapper Point area.â&#x20AC;?

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Freight planning ignores FRANKSTON Council has criticised a state government discussion paper on future freight movements in Melbourne claiming it ignores the Port of Hastings. Council says that because Hastings has been commissioned as Melbourneâ&#x20AC;&#x2122;s second port it should be immediately included in any metropolitan freight planning. Frankston described the absence of any mention of Hastings as â&#x20AC;&#x153;a glaring omission that reduces the credibility of the entire documentâ&#x20AC;?. â&#x20AC;&#x153;The Port of Hastings is close to the metropolitan area and any increase in freight movements at the port will directly impact on (Melbourne), particularly in the south east,â&#x20AC;? council said. â&#x20AC;&#x153;It is critical the road and rail infrastructure to the port be provided urgently along Western Port Highway or Peninsula Link alignment.â&#x20AC;? Council added that any further use of the Frankston line for freight would not be acceptable. The council is offering in-principle support for development of a â&#x20AC;&#x2DC;hybridâ&#x20AC;&#x2122; network using both rail and road for metropolitan freight movements. However, while supporting a rail link from Hastings, the council doesnâ&#x20AC;&#x2122;t want increased freight rolling through Frankston on the existing Frankston-Stony Point line. On this point the council has a strong ally in the South East Melbourne Councils group, which also opposes any significant increase in freight movement along the line linking the city with Western Port. The Victorian Freight Futures document concedes that Stony Point line is inadequate for long-term rail movements to the Port of Hastings The Shaping Melbourneâ&#x20AC;&#x2122;s Freight Future discussion paper released by the government in April acknowledges that planning for freight in the

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metropolitan area has reached a critical stage. Melbourne Intermodal System Study (2008) predicted freight throughput from the Port of Melbourne would increase from just over two million Twenty Foot Equivalents (TEUâ&#x20AC;&#x2122;s â&#x20AC;&#x201C; a standard sized shipping container, which is used for measuring and comparing container volumes) to eight million TEUâ&#x20AC;&#x2122;s by 2035. â&#x20AC;&#x153;While the Port of Hastings may not be included in the area defined as the metropolitan region, it is located just outside â&#x20AC;Ś and will create significant freight volumes once it becomes fully operational,â&#x20AC;? according to councilâ&#x20AC;&#x2122;s response to the government. â&#x20AC;&#x153;A rail link from the Port of Hastings to an appropriate location such as the proposed (freight) terminal in the South East metropolitan region of Melbourne must be planned.â&#x20AC;? The council â&#x20AC;&#x153;strongly suggestsâ&#x20AC;? that the development of the Melbourne Freight Terminal Network (MTFN) is evaluated against a triple bottom line approach, to ensure that the financial, social and environmental costs are identified and made available to stakeholders during the planning process.â&#x20AC;? Frankston City Council acknowledged in-principle support to the proposed MFTN to manage growth of freight movement, but added that costings and details required more scrutiny. Council said it supported the current VicRoads planning study investigating a proposal to develop Western Port Highway to freeway standard between South Gippsland Hwy, Lynbrook and Cranbourne-Frankston Rd, Langwarrin. In a â&#x20AC;&#x153;messageâ&#x20AC;? that prefaced the discussion paper document that sparked Frankston Councilâ&#x20AC;&#x2122;s reaction, Road and Ports Minister Tim Pallas and Public Transport Minister

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Harbour plan rethink

Port of Hastings Martin Pakula predict Melbourne’s population will pass five million by 2030 and seven million by 2050. The subsequent paper states that it covers only the metropolitan area and appears to ignore any major developments of the Port of Hastings. A submission recently made to the Port of Melbourne Corporation (PoMC) by infrastructure and stevedoring company Asciano argues that it would be cheaper to upgrade the Port of Geelong than spending $11 billion at Western Port. Two other companies, Shipping Australia and Westgate Ports have also put forward proposals which could vastly increase the throughput of containers at the Port of Melbourne, further easing pressure on the need to develop the Port of Hastings. Westgate Ports is owned by Salta Properties, the company that owns land at Lyndhurst which it is promoting as being suitable for an inland port. If developed, the three inland ports proposed in the government’s discussion paper would reduce the number of truck movements to and from the Port of Melbourne using the government’s preferred “intermodal” (road and rail) method of transport. The PoMC – which manages the Port of Hastings – has already undertaken studies which show that with this system the port can cope with the expected rise in container traffic while reducing truck journeys by up to 35 per cent; cutting diesel fuel use and reducing carbon emissions by up to 17 per cent; and reducing transport costs by about 10 per cent. “This work independently confirms the outcome of earlier modelling undertaken for the Department of Transport (Melbourne Intermodal System Study 2008) which

Freeway fencing

Tugs at Crib Point.

concluded that adoption of an intermodal system could generate positive economic benefits and reduce truck trips to and from the port from an estimated 12,000 trips (daily) in 2035 to 6000 trips …,” the discussion paper states. A map on page 14 of the discussion paper shows two-way transport movements between the Port of Hastings and Dandenong and Frankston and Melbourne but does not mention the role of Hastings. On Page 51 the discussion paper outlines a scenario in 2035 in which the Port of Melbourne, Australia’s largest container port, is “nearing capacity” handling eight million TEUs a year while “a new container terminal has recently been commissioned at the Port of Hastings to provide the next major tranche of capacity for Victoria’s international trade, which continues to grow steadily”.

MOTORISTS aren’t the only drivers interested in work on the $759 million Peninsula Link Project – golfers driving off the tees at Centenary Golf Course adjacent to the freeway route are also monitoring progress. Containment fencing along several fairways, including the practice fairway, is needed to separate flying golf balls and vehicle windscreens. How and where the fence is built could affect the income of council and the golf course operator, D & S Golf, which collects about $90,000 a year from teaching and ball hire on the practice fairway. Council will negotiate with Linking Melbourne Authority (LMA) for fencing along the entire length of the boundary of the freeway and golf course, preserving the practice fairway. LMA and freeway builder Abigroup have outlined several options for fencing, including a cost-free option that council does not favour because it would mean losing the practice area – and therefore loss of annual income. For many years council has leased freeway reserve land off the Department of Sustainability and environment that forms part of the practice fairway. Centenary Park is considered one of the best public golf courses in Victoria based on course condition and the teaching academy operated by D & S Golf.

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November 2010 | Frankston Peninsula BusinessTimes | 9

maNagiNg

Creating delight for your customers Every business knows how important their customers are to their business success, but what business processes do you have to take you down the path towards creating customer delight? The first step towards customer delight is having a process to measure just how pleased, or not, your customers are with your products or services. While this sounds simple, very few businesses have any processes to talk to their customers and gather feedback about their experience with your business. Many retail businesses don’t even have basic information on customers to help them understand why people are using their business. Today, while more people are accustomed to sharing some personal information, including email addresses, this is a complex issue that needs to be handled sensitively if your customers are going to support sharing of any personal information. If you do have a customer list, there are several alternatives that can be used to gather their feedback, but even this is often difficult to stimulate. An ideal way to gather feedback is to get the owner/manager personally involved in collecting the information. Unfortunately, many owner/managers are so involved IN the business that they don’t take the time to work ON the business. Allocating a block of time, like an hour a week, to interview customers briefly as they leave your premises, will give you valuable opinions that can be used to improve your products/services. The next step is to eliminate the customer dissatisfaction. A dissatisfied customer can do enormous damage to your business as they are likely to tell as many of their friends as possible. Remember “misery loves friends” and stories of bad experiences can be retold over a coffee for many weeks. There are many measures of potential dissatisfaction and these should be discussed and identified for your business. Obviously, the quality to your product/service is important, but in many businesses, time is increasingly a very important source of issue when customers are prepared to go to a competitor who can meet their time constraints. Once you have reduced or eliminated

Hamish Petrie* business Consultant

‘Remember, ‘misery loves friends’ and stories of bad experiences can be retold over coffee for many weeks.’

dissatisfaction, then you can focus on meeting customer expectations. This means that you are able to supply the right product/ service with the right quality at the right price within the right timeframe. This is a moving target as yesterday’s standards can quickly be superseded by new higher expectations as your competitors and technology change the rules of business. Again, this is an area where the owner/manager should take time out to study what is happening in the competitive landscape, particularly if your business has a fashion dimension. This can be done by researching competitors’ offerings, watching related businesses and dreaming about how to apply ideas and technologies to your business. In this way, you can sustain your business by being able to help to shape customer expectations for future products and services. Small business owners are usually strongly identified with their business and it is often difficult to separate the reputation of the business from the reputation of the owner. In these cases, it is critical to ensure that any employees of the business are completely in harmony with the owner so that they can act as an extension of the owner. This personalisation of the relationship between the owner, the business and the employees can really help to create a consistent and predictable

10 | BusinessTimes Frankston Peninsula | November 2010

interface with customers. This usually results in a high level of customer satisfaction and repeat business. Once you have mastered meeting expectations, then you are ready to create customer delight. This is the fun part when you understand your customers so well that you can predict what will put a smile on their faces. One technique is to do something completely unexpected and significant enough to stimulate the customer to go out and tell their friends about it. Recently, a new boutique grocer opened in our neighbourhood. After my wife had shopped there a couple of times, the owner gave her a bunch of flowers when she was leaving the premises. She was overwhelmed and took great pleasure in retelling the story many times over the next few weeks. If the owner did this 200 times, then he quickly developed 200 ambassadors in the neighbourhood for a total marketing cost of around $1000. I wasn’t surprised later to see that they had been voted as Melbourne’s best new food store in “the 2011 foodie’s guide to Melbourne”. Doing a little extra is a great technique to create delight, and this need not create a significant cost for the business. But why is customer delight so important? Once you have business processes that can create customer delight then you have the highest probability that your customers will remain loyal to you, give you all of their business and tell you if they have any concerns about your business. This will result in your greatest chance of building and sustaining a valuable business and lifestyle. Action Planning Questions: 1. Do you have a list of your regular customers and how do you keep it up to date? 2. Do you have an active process to gather feedback from your customers including personal discussion with your owner/ manager? 3. What are your main potential sources of customer dissatisfaction, and how do you measure them? 4. How do you monitor competitor offerings so that you can ensure that you retain your existing customers? 5. Are your employees empowered to do something extra to create customer delight? *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.

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Our dollar: is it too much of a good thing? Like double cream a strong currency can be too much of a good thing. While importers are now smiling, exporters are gritting their teeth wondering whether the Australian dollar’s strength is temporary, a step change or, perhaps a bit of both. Some bank economists are arguing that the Australian dollar is 30 per cent over-valued against the US dollar on an historical basis with a few expecting it to retrace to more “normal” levels. Nothing is impossible, but post the GFC the word “normal” doesn’t seem to apply. The US has just posted a $1.3 trillion budgetary deficit and owes $13 trillion about the same as its annual GDP. About 10 million people are on unemployment benefits and the White House is about to stimulate the economy again by creating billions more dollars at the stroke of a keyboard. It gets worse: currency traders and bankers world-wide will watch with alarm as Republicans sweep into Congress owing their seats to the Tea Party movement. It is one thing to shrink the size of government, but when men wearing wigs demand a 1786 style economy, the US dollar will have even fewer friends. This almost ensures that the Australian dollar holds around parity or even shoots higher. The impact on our Top 50 will vary widely but whether corporate operations are diversified across the globe or focused on the US, the impact is considerable. Industrials like Ansell, Cochlear, Brambles, Computershare, Boral, and Westfield lack the compen-

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from the falling $US. Apple is now within months of surpassing Exxon’s $330 billion value as its 25 per cent after tax margins stun investors. And Apple is not alone. East coast bankers may have blown up the US financial system, but west coast geeks understand the value of the net. It is no surprise that high profits are flowing to the likes of Google, Amazon, Oracle and E Bay. All beat recent analyst estimates. This leaves Australian investors with some widely different choices. Our national metals and coal strategy is still a winner but the currency translation is capping returns. Some property assets in the US could be attractive for high yield, but before assuming that the $A will fall back and produce the best of all possible returns, it is worth pondering the disengagement of the Apples from the core US economy. Apple’s design is from San Francisco, but the assembly is largely in China and will never come back when wages there are $100 a month. So this is one strategy: great design, low costs, global marketing and price setting. Ours relies on fundamental demand, but shifting currencies and wide price variability. But the second strategy is not all bad. Our region has five economies with populations three or more times greater than our own and some of these like India and Indonesia are still at early stages of western style demand. In mobiles, office towers and kitchens that is a lot of copper, gold, silver and nickel - not to mention all those metals with unpronounceable names.

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November 2010 | Frankston Peninsula BusinessTimes | 11

COVER STORY

HART & SAIL

Piloting a course through the GFC WORDS/IMAGES: KEITH PLATT

AL Hart started boat building in Diane St, Mornington, in 1983 making small off-the-shore cedar boats in a 200-300 square metre factory. The boats were of a class that he had sailed himself and orders came from acquaintances. But Hart had bigger things in mind. “I begged [Susan Day Cakes founder] Alf Neate to build his first Morning Mist, a 46ft Farr design cruising yacht. “Neate said ‘if you do that, we’ll need to get you a proper factory’ which ended up being 500 square metres in Bruce St with an office. “I knew Neate through sailing and he took me under his wing - I have fond memories of him.” Every Friday night during the 12 months it took to build Morning Mist Neate would come to see how his boat was progressing, bringing along two boxes of cakes and a carton of beer. At that stage Hart had a tight knit workforce of six, mostly working on Neate’s boat. He now has 36 regulars, including 20 full timers. “I bring in others when they’re needed. “Boat builders can be transient, they generally like to sail and travel. “The whole scene has changed. The industry can take you anywhere in the world. There are professional sailors earning half a million dollars a year. It’s a very big industry world wide.” Hart built other boats for Neate, including a Farr 50 racing boat which came second overall in the 1992 Sydney to Hobart. “Alf Neate has meant more to my business life than anyone. He gave me the opportunity to prove myself. He was very inspirational, a mentor.” Hart, who “didn’t enjoy school in general”, left The Peninsula School, Mt Eliza, at 15 to finish his studies at trade school. As a youngster growing up at Crib Point

and Hastings he lived and breathed boats. He sailed at Somers Yacht Club and remembers improvising with an umbrella as a sail to cross the narrow strip of water in his father’s dinghy to Sandstone Island in Western Port. “We would also row out to help people stuck in the mud. We lived in the mangroves.” Hart, the youngest of three boys, was always involved with boats, being taken onto to pilot boats by father Frank, harbourmaster at the Port of Hastings. “Sailing was a natural progression, I wanted to go to sea at some point. I was not interested in fifth or sixth form.” His first job in the boat industry was as apprentice to a boat builder in Seaford, making off-the-beach boats. The “hard slog” ended badly with his employer going out of business before the apprenticeship was finished: “Boat builders are renowned for going broke. A lot of the guys have passion but little business sense.” Hart had also been “a bit despondent”, with his employer wanting him to work Saturdays for a meagre $23 a week. He heard about morgue workers being paid $200 and approached an undertaker for a job, but was told he needed a

12 | BusinessTimes Frankston Peninsula | November 2010

driver’s licence and never went back. His search to make more money led him to “taming the cargo”, securing coils of steel in ships’ holds. “I was part of a six-man Painters and Dockers Union team for a few years. It was a fairly tough industry.” When the ships were not in port, Hart built houses as a carpenter. The experience and money he’d earned allowed him to rent the Diane St factory “to follow my passion building custom boats. I tried to stay away from production boats and sell something special”. “Early in the 1980s I realised timber boats would struggle and there was a need to make composite boats. “The industry was changing, fibre glass was coming in and timber going out. “I hired a couple of Kiwis – because New Zealand was way ahead – to come and show us how to do composite boats. “We are now one of the leaders in Australia, doing our own in-house research and development. “We work closely with manufacturers, always looking for better systems, how to achieve a better product. “The high tech composite industry is all about strength and weight.” That early investment and research

into composite technology (“the exotic end of the material spectrum”, according to the company’s website) has paid off, with Hart Marine having an international reputation as being forward-thinking. At one stage it was contracted to send a 10-man team for 18 months to pass the technology on to a Malaysian boat builder. “We believe we are one of the world’s best boat builders,” Hart said. His interest in cycling as a way of staying fit led him to manufacture carbon fibre bicycle wheels which have since sold world wide. “I met an Australian guy who was buying wheels in New Zealand, so I took it to another level.” Hart, now 46, says a major turning point came in his late 30s when, worried and under financial pressure, his wife Lizzie packed him off to a Queensland health resort. The treatments put him back on course and he came home determined to stay fit. “Running a business is a tough game. To be successful you need to be physically and mentally fit, able to withstand pressure. “As a small business operator you need everything going for you.” Hart rides a road bike 30-40 kilometres up to four times a week.

“When young you think you’re indestructible. If you get through unscathed and you’re reasonably sensible, you’ve passed a major hurdle.” Hart has long been linked with a series of boats successfully sailed by Mornington skipper Grant Wharington which generally go under the name Wild Thing, plus whichever sponsor has stepped forward in a particular race or year. One of the Wild Thing boats competed in a race that Hart counts as among his greatest achievements: the 1995 Melbourne to Osaka double-handed race. He wanted to win at least one division but managed the hat trick, with Hart Marine-made boats winning three divisions in the 5500 nautical mile race which is held every four years: Wild Thing, A division (setting a race record); Fast Forward B; and Priscilla C. Hart was aboard Priscilla - Queen of the Ocean with factory manager Paul Scholton and remembers the experience as a “fantastic adventure, one in which I’d always wanted to compete. It was a highlight, a fairy tale come true”. Before leaving work on a Friday night as the finishing touches were being made to Priscilla, Hart was asked what colours he wanted below deck, “whatever’s

available” was his parting response. He arrived at work on the Monday to find the interior a bright pink, just the colour for a long, possibly stormy ocean voyage. After winning the race Hart, who had stretched his finances to build Priscilla, was able to sell the boat “that looked like a brothel” in Japan. The buyers inquired about the origin of the boat’s name and were told Priscilla was “a very beautiful woman”. Hart later sent them a copy of the film, The Adventures of Priscilla, Queen of the Desert. Despite the widely-publicised feats of the succession of Wild Things and the earlier Morning Mists, Hart says the success of his business does not rest on the performance of any single boat. “It hasn’t been easy. We nearly went broke a few times, but you need to analyse why and make sure it doesn’t happen again. “I built a factory and had to sell it and in the late 1980s we were paying 21.5 per cent interest on our overdraft. “We were building two big boats and the clients didn’t proceed, so we had to go and chase work. The thing is, you can’t give up.” Hart Marine sailed through the 2008 global financial crisis with barely a hiccup. A decision to “get into the commercial market” was already underway because Hart felt the yacht market was reaching a bit of a pinnacle in Australia”. With a 12-month lead-in, the contract that enabled Hart to survive the GFC came from the Port Phillip Bay Pilots. He had successfully tendered to built two new boats for the privately-owned company which brings ships to dock in Port Phillip and Western Port bays. The $5 million contract saw Hart team up with French-based naval architects Pantocarene to meet the pilots’ exacting demands. “We hope to get more pilot boat orders. We’re talking to about a dozen parties from all over the world. “The designer has been out here to look at the boats and told me ‘Mal, you’ve built the best’. The next six months will tell the story now that the first two are in service.” The pilot boat contract was particularly gratifying to Hart who, while holidaying in Queenscliff as a boy, had watched the orange and black boats surge through the Rip to meet ships waiting to come through The Heads.

November 2010 | Frankston Peninsula BusinessTimes | 13

COVER STORY

“The pilot boats are steeped in history and are a huge part of the life of Queenscliff [where they are based]. “To pick up this work - my brother is a sea pilot and dad had been at sea and was a harbourmaster - seemed like part of the family tradition. “To be involved in that meant more to me than any other job. “I wasn’t building for someone’s ego, I was building for a company steeped in tradition.” Hart Marine’s latest shed in Mornington’s light industrial area limits the length of boat that can be built to about 33 metres. “I have been asked to build larger, but I don’t want to be everything for everyone. I’m happy specialising in the 12 to 24 metre market.” Although he’s moving more towards commercial boat building, the shed is still a launching pad for sailors’ dreams. A 15 metre catamaran awaiting its final fit-out belongs to a couple planning to sail with their children around the world. It is a $1.5 million project that will take 12 months to complete. Hart says boats are “a lot more

accessible today” as people have more disposable income. A project Hart is enthusiastic about involves a move away from sail to power. He is floating the idea of making classic speedboats, the kind of craft usually associated with princes and film stars racing through the deep blue of the Mediterranean off the south of France. The 12 metre boats will be made of a composite for strength with a wooden veneer for looks. Two inboard 450hp diesel motors will push them along at more than 40 knots. Hart reckons they could get from Sorrento to Melbourne in 45 minutes and be able to handle the Port Phillip “chop”. “I’d like to build five or 10. The first will be on spec, but I don’t think it will

take long to sell. “I’ve got a gut feeling about the industry and what people want.” Hart said the “retro classic speedboats” would cost about $600,000 and is “amazed at at the wealth out there”. [Italian boat builder Riva in September teamed up with London-based Australian designer Marc Newson to make a limited number of the $1.5m “classic lakeside design” Aquariva speedboats.] “People are saying ‘if I don’t travel first class, the kids will’. That type of thinking is prevalent – live for today, instead of being the richest bloke in cemetery. “The money they spend [with me] makes the wheels go round and keeps 25 guys employed.”

Quakes, tsunamis, all in a day’s work MT ELIZA man Chris Scurrah is no stranger to natural disasters. During his 13 years operating a surf charter boat company from the Indonesia island of Sumatra he has taken part in many rescues, stiched up injured surfers and arranged emergency evacuations. But it is the problems caused by the Pacific’s notorious Rim of Fire that register on an international scale. Scurrah was at sea when the 2004 Boxing Day tsunami hit Sumatra. The wave bounced across the Indian Ocean, leaving 230,000 dead in 13 countries. Within days he had returned to his home port of Padang, filled his boat with supplies and headed out to the isolated islands that he knew were not being given attention by authorities overwhelmed by what was happening further north in Aceh province. Three months later an earthquake killed thousands on the island of Nias, another popular surfing destination off Sumatra. In September 2009 Scurrah and his staff dashed from Sumatran Surfariis’ Padang office seconds before it collapsed in yet

CHRIS Scurrah delivers aid to island communities after the 2004 Boxing Day tsunami.

another earthquake. This time at least 1000 people died and Scurrah opened his rented home to staff and friends. Late last month Scurrah was again at sea with surfers who had chartered his boat Southern Cross when a 7.7 magnitude earthquake struck off the southern Mentawai island group. Scurrah, with his boat anchored in

14 | BusinessTimes Frankston Peninsula| November 2010

about six metres of water, felt the first of the minor shocks and was underway to deeper water within minutes of feeling the following, much bigger tremor. After a reasonably good night’s sleep Scurrah and his guests had an early morning surf, oblivious to the carnage the resulting tsunami caused to villages and other boats in the Mentawais. Just a couple of hours sailing time north, two other surf charter boats anchored off a surfing break called Maccas, were smashed into one another by the three meter high tsunami, resulting in the 23 metre luxury boat MV Midas catching fire and its crew and passengers escaping with their lives. Scurrah’s email tells the story: “Just before 3am a quake launched me out of bed, been six months without a shudder and my heart raced, crew were excellent and we motored out to deep water in less than five minutes. Slept from 330-600 there and had good waves. “About eight or nine pm we got access and it all started, heard oz’s ex pm mentioned my name on the news wu 16

NETwOrkiNg

MONASH BUSINESS BREAKFAST:

Jane Shelton, CEO of Lif.Be In It, was guest speaker at Monash University Peninsula Campus Business Associates breakfast at Long Island Golf Club on 19 October. 1. Ms Shelton is pictured with Martin Doulton, Director of Monash Sport, Peninsula Campus. 2. Robin Cocks, National Bank Frankston, Rebecca Rakine, of Mt Eliza Business School, Simon Murray, general manager of facilities and hotel at Mt Eliza Business School. 3. Gerard Richards, of Market People, Melboune, with Kim McConchie, of National Bank Frankston.

HATS ‘N’ HOOVES LUNCHEON: The annual Mornington Racing Club’s Hats ‘n’ Hooves fundraising luncheon attracted nearly 300 fashionistas on 22 October. The luncheon, celebrating the Spring Racing Carnival, benefited Peninsula Hospice. 1. Marie Bayne, Kim Michod, of Peninsula Hospice, and Yvette Stacey. 2. Linda Voight, of Fitted for Work, Karin Hann, president of Frankston Business Chamber, and Gabe North, marketing manager of Bayside Shopping Centre. 3. Proud mum Marie Bayne with son Fraser, CEO of Mornington Racing Club. 4. Emma Prentice, of Prentice Real estate, Ingrid Maynard, of Harvest Management, and Nikki Seagren, of Vision Finance. 5. Sonya Mane, Kevin Wrightand Lina Luppino 6. Megan Shannon, race club events manager, celebrity milliner Peter Jago and comedian Denise Scott 7. Cheryl Carey and her cousin Linda with Peter Jago.

PrOPErTY

Just what the doctor prescribes THIS property at 57 Aster Av is in the heart of prime industrial patch, Carrum Downs. The site’s location, minutes from the Frankston Freeway/ EastLink interchange, makes the 34-kilometre journey into Melbourne’s CBD simple. Since its construction in 1998, this 2000-square-metre building has been home to medical suppliers Ausmedic, securing an annual net rental return of $141,818. As part of public American Corporation Patterson Companies – whose medical component of their business reported sales of U$426 million (A$461 million) last year – Ausmedic has offices throughout Australia. This property recently underwent an extension to allow the company’s growth and a new lease on the Industrial One zoned land was signed three months ago. Touted as a great investment opportunity with sure tenancy, this property is being offered for private sale with an asking price of $1.75 million. Details: contact Josh Monks (0409 335 179) or Nichols Crowder (9775 1535). November 2010 | Frankston Peninsula BusinessTimes | 15

Law

Debt recovery MANY businesses maintain tight controls on debtors and rarely have bad debts. In some instances, a debt is not paid because it is disputed. Businesses which have only the very By Robert White* occasional bad debt or have a debt which is disputed should retain a solicitor to assist them. A solicitor, rather than a debt collection agency, will be able to guide the business through the procedures and costs associated with the court process. Those costs can be significant, particularly when the court proceeding that has been taken for the recovery of the debt is defended. Care needs to be taken to ensure the costs are not disproportionate to the amount in dispute. A solicitor experienced with the court process will be able to advise and guide the business through the complexities and costs associated with the court process. What about those businesses which have a number of bad debts and require an ongoing debt recovery service? Should those businesses engage a debt recovery agency or should they engage a solicitor? The starting point to answer this question is to consider the nature of the usual debts the business incurs. Are the debts small consumer debts? For example, a veterinary surgery may have a dozen pet owners a month who fail to pay accounts ranging between $100 and $400. By contrast, a wholesaler of hardware materials may only have commercial customers who have completed credit applications but each month, has a number of customers fail to pay within terms: the amounts may range between $1000 and $10,000 or more. The veterinary surgery with the number of small consumer debts, may decide to subscribe to Veda Advantage and list its debtors as defaulting debtors. Listing a bad debtor will alert other creditors who conduct credit searches that the individual has an unpaid debt and banks and other financial institutions will not finalise loans to individuals who have such adverse credit listings. This often results in the debtor belatedly paying the outstanding debt to clear his/her poor credit rating. It is unlikely that the veterinary surgery would want to initiate legal action for the recovery of its outstanding debts. The cost

of legal action is disproportionate to the size of the debt. The surgery is better advised to engage a debt recovery agent who will make written and telephone demands and will retain a percentage of debts recovered, but otherwise charge no fees. The hardware wholesaler is in a different situation. The wholesaler should be prepared to incur the costs in taking legal action to recover its outstanding debts. You would therefore think that a business like the wholesale hardware business with many significant debtors each month would be inclined to deal directly with a solicitor experienced in the court process rather than a debt collection agency which must itself engage a solicitor to initiate legal action. Interestingly, many such businesses engage a debt recovery agent, perhaps believing that there is a cost savings. Perhaps they believe the collection agency will provide a service additional to pursuing the debt through court processes. Is there a costs saving or other benefit? Care needs to be taken in understanding the service being offered by a debt recovery agency. It will attempt to recover the debt by making an initial demand but if unsuccessful, after obtaining instructions from the client, will instruct its own solicitor to issue legal process. The agency will have told the client that it is only charging the client its “out of pockets” and that its service is otherwise “no win/no fee” but what this means is that it will pass on its solicitor’s costs as an “out of pocket”. Those costs will almost always be the same as the costs the business would have incurred had it instructed its own solicitor. While the costs may be the same, it should be remembered that if, after the issue of the legal process the debt is ultimately recovered, the agency will then charge its commission (in addition to the legal costs incurred). Solicitors are not allowed to charge commission and the effect is a much smaller net recovery to the client who engages the debt collection agency than the client who engages the lawyer direct. Services offered by a collection agency may be attractive to some clients. Many agencies provide online access to files so that clients can readily find out where their matter has reached in the debt recovery process. Collection agencies may be better able to produce monthly reports and other information which many solicitors will be reluctant or unable to provide.

16 | BusinessTimes Frankston Peninsula | November 2010

One argument which collection agencies will make is that because they only are remunerated when a debt is recovered, they work harder to recover the debt than the solicitor who has no such interest in the recovery outcome. They will argue (and it is true ) that the solicitor is paid whether or not the debt is recovered. This argument fails to take into account that the business client is still paying the same legal costs to the agency’s solicitor. Further, by being remunerated by way of commission rather than fees for service, agencies are more inclined to encourage clients to pursue debts which are unrecoverable or encourage clients to issue legal proceedings when that is not the best commercial option. Solicitors do not depend on commission and they do not have the same incentive to encourage a business with debtors to continue to attempt to recover an unrecoverable debt. There are many businesses with repetitive commercial debt recoveries who would find that directly engaging a solicitor experienced in debt recovery rather than a debt collection agent would result in significant costs savings. Robert White is a Partner in White Cleland Lawyers. rbw@whitecleland.com.au Tel: 9602 4022

Leasing and duty payable THE State Revenue Office (SRO) has clarified the operation of lease provisions in sections 7(1)(b)(v) and (va) of the Duties Act 2000. The ruling provides By Richard guidance on the operation Goldsmith* of the lease provisions and outlines the factors which it will take into account in determining whether stamp duty will be applicable to specific leasing arrangements. The lease provisions apply to arrangements where a lease has been used to affect the transfer of valuable rights or an economic benefit in the underlying land. The purpose of the provisions is to ensure that certain lease arrangements concerning land in Victoria are not used to avoid duty. What do the lease provisions do? The lease provisions will apply to a leasing arrangement (including a grant, transfer, assignment or surrender of a lease) if any payment (monetary or non-monetary) is made over and above rent, and the lease arrangement has the effect of transfer-

ring valuable rights and/or benefits in the property. The SRO considers that such a payment is for the acquisition of these valuable rights, and is in addition to the rent payable under the lease, which is often minimal. When does liability arise? Liability will arise in circumstances where payment (monetary or non-monetary) is made over and above rent for the acquisition of rights and/or benefits in relation to land in addition to the right to use the land under the terms of the lease. For example, the granting of a long term lease to develop a property in exchange for a premium payment (close to the market value of the property) will attract the duty. Also, other leasing arrangements such as the granting of a concurrent lease where the payment reflects the net present value of income from the property would fall within the lease provisions. The right to purchase, options to purchase and the right of first refusal will also be caught by the lease provisions, where the leasee has made payment (monetary or non-monetary) over

and above rent for acquisition of these rights. There is no distinction between land used for commercial and residential purposes. However, duty does not apply to ordinary leases only requiring payment of rent, or a transfer of lease as part of a sale of business. What about retail leases? A lease under the Retail Leases Act 2003 would generally not be dutiable because the Retail Leases Act 2003 prohibits the payment of ‘key money’, being money payable by a tenant by way of a premium for the granting of a lease, an agreement to grant a lease, an option for the renewal of a lease or consent being given to the assignment of a lease or to the sub-leasing of premises. However, arrangements that circumvent this prohibition may result in such leases being dutiable under the lease provisions. Where consideration is paid for the transfer or assignment of a lease under the Retail Leases Act 2003 duty may be payable. Factors taken into consideration The SRO has indicated that it will take a common sense approach, and consider the following circumstances when making a

determination: the nature and circumstances of the transaction as a whole; the nature and value of rights and benefits acquired; the amount of the payment made in respect of the lease; the amount of rent payable under the lease and whether it is at a market rate; and the term of the lease and ability of the leasee to extend possession. There are exemptions from the application of the lease provisions, including residency rights in a retirement village, options in a lease granted before 21 November 2008, existing exemptions and concessions applicable to dutiable transactions, caravans and where duty has already been paid in respect of a lease. What happens next? The new measures apply retrospectively from 21 November 2008, so taxpayers who have entered into, or are negotiating a lease of land or a transaction to acquire dutiable property in Victoria should review their position in light of these changes to the law. * Richard Goldsmith, of Carroll Goldsmith Lawyers. Tel. 5975 7588.

Working with tsunami aftermath 14 tv and the media weren’t too happy I didn’t have a sat phone.” As related in the August 2010 BusinessTimes cover story - “Working offshore” - Scurrah faces some extraordinary obstacles, quite often without warning: there was an incindary bomb thrown at his office door; jam karet (rubber hours - having difficulty in setting a reliable time for deliveries); taxes, including high charges for businesspeople arriving and departing the country; and scurrilous tipoffs to authorities and police which can prompt unecessary, time consuming investigations. Part of the allure of Sumatra for surfers are uncrowded, quality waves found on the reefs of remote, offshore islands. Communications are not always possible, although telecommunications towers have sprung up among the palms since the 2004 tsunami, and it was no surprise that Scurrah, his crew and passengers were out of touch for 24 hours. Australian news bulletins were quick to seize on the “missing” boat story and Scurrah’s parents and friends kept their

fingers crossed, although most had faith in his ability to avoid trouble. Two days after the latest tsunamai Southern Cross and its passengers had arrived at the worst hit villages, delivering food, water and comfort. Sumatran Surfariis also sent an aid ship from Padang. Scurrah’s October 28 update: “We picked up about 18 people from a wooden canoe who were in a bit of strife, they [were] from Betuwonga, south end of Maccas bay. They said no deaths, but damage. “Greenbush Bay village was really in need of a hand. They are just stunned still and, although their wells are contaminated and there are flies and stink coming off the bloated corpses, they wanted to stay in their village until missing people turn up. I guess to bury their dead, too. “We did what we could there and I’ve asked Budyadahri [the Sumatran Surfariis aid boat] to head there, but they are being run by Red Cross and must follow that course of action. There were 52 houses and a church and even 200 metres back

it’s hard to see much of the old houses or roofs. It’s wiped clean. “They said 142 dead, 50 missing and there were about 25 people we gave water, juice, biscuits, muesli bars and clothes. “Next village along is hard to see, its east of Greenbush Bay and down the bottom of a bay with a river running out. Its harder access ... no real sand beach unless you go way up the river.This village is called Mutu Baru Baru or something like that. They had a hill nearby with uncontaminated water, but all buildings again completely wiped away. They said 180 of their 307 population are dead. The military had taken most bodies away, but more rot and no real toilet system. “Obviously water and shelter are first needed and some cups to share round the water. Water filters would be great, shovels, pretty much everything is gone in the worst villages, including a lot of their coconut trees (income) and all that’s been left has been their water up to now. Our guests are being awesome.” Visit Sumatran Surfariis website to donate.

November 2010 | Frankston Peninsula BusinessTimes | 17

Expert, Approachable, Responsi

CONTriBUTiONS

The value of trusts

manner then you may need to be operating Buy-sell agreements through discretionary trusts. PEACE of mind in case a business partner If you are already operating in a trust dies or is permanently disabled. structure, your Trust Deed should be When people own a business that they reviewed (especially those drafted before have worked for years to build up, and they September 1985) and updated if necessary own that business in conjunction with other so that Trustees have sufficient flexibility in people, what would happen to the business if determining how the income and gains of the one of those partners dies or is permanently Trust are distributed. disabled. If you were to die you would Over the life of a discretionary trust naturally want your wife/husband to receive (which can be up to 80 years) many factors your share of the business you have worked will change, including taxation legislation, so hard to build. However, what is the value ATO rulings, and case law. of your business. The surviving proprietors These changes may require your trust deed argue that theits value of the business is to be updated to ensure thatFor it still all provides legal servicesmay a business and people need diminished now that you have departed. all the benefits intended. 1954 Assuming the value of the business can Intelligent and progressiveEst. clients of be agreed, will the business have the funds financial services practices will continue to available to pay to your wife/husband. “complicate” their affairs with trusts; and www.whitecleland.com.au What would happen if one of your rely upon their advisers to stay abreast of the business partners died. Their wife/husband laws and offer timely advice. could choose to take an active role in your Level 3, 454 Nepeanbusiness, Hwy Frankston 2323 Dereen Wallace – Senior Accountant even if they9783 are not qualified to, or MBA Business Solutions more importantly, even if you did not want 342 Main Street, Mornington. them to. To overcome all of this you could Level 8, 256 Queen use Street, Melbourne 9602which 4022 is a contract Tel 59 70 8100 a Buy/Sell Agreement,

THE Australian Tax Office ( ATO ) has made operating through a trust more difficult as it attempts to avail itself of more tax revenue through personal tax rates being higher than company tax rates. Because the use of discretionary trusts often produces a desirable tax outcome, the ATO does have a strong focus on them; and it is more important than ever that good advice and careful management are utilised. But despite the extra complexity that the ATO has put on trusts with its recent activity, trusts remain the favoured structure for growing businesses and investments. Of all structures available, only properly drafted family/discretionary Trusts can deliver: • asset protection • taxation flexibility • access to the full range of CGT concessions • estate planning opportunities • asset control If you are serious about growing your wealth in an asset-protected and tax effective

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Ahhh romA the Buontempo Brothers are Busy selling their Doing busin pasta to italy ess on the seas of Sum atra mcdonAld & szeps & son stars Back THATmother together I.T. for play at frankston WO RD arts centre COMPUTERS SILVER LINI AND FAST ARE ThE liviNg CARS NGS

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The program has been heavily subsidised by the Victorian Government to make the costs affordable, year one costs approximately $500 excluding GST (depending on number of participants). The program is due to start early 2011.

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AS it appears more likely that the outer south east of Melbourne and the Mornington Peninsula have seen off the worst of the GFC, it is time to reflect on a significant section of the workplace that

1047

Repaying loyalty

their jobs!” In fact, it was employees’ sense of loyalty (especially long term employees) that caused them to stick by their employer in tough times. It’s time now to repay that loyalty. Think of a reward you can give to say ‘thank you’. It doesn’t need to be an increase in salary, although this would be a very good strategy as the employment market continues to blossom, salaries are rising again. If it is financially responsible for you to do so, give your best and loyal employees a salary increase of between four per cent and six per cent. A client recently arranged to send each of the 14 staff members and their family on a free accommodation holiday to the Gold Coast. The employer owns an apartment in Broadbeach so he sacrificed the rental income as a way of showing that the loyalty was appreciated. It was reward that will ensure increased loyalty!

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has, in many of cases, been forgotten or ignored over the past 18 months. Your employees! As many business owners and managers have spent a considerable amount of their time working on and restructuring their business, they may have ignored the needs of workers. Mostly this has not been deliberate – market conditions in most businesses have meant that owners and managers have overlooked the people that should make their businesses successful. Putting aside the financial rewards of being employed, most employees seek some level of emotional reward. It goes beyond the simple pat on the back. Employees have been seeking some level of certainty in their employment. At the height of the GFC, most employees were reticent to move, a case of the devil you know... Many employees took on extra responsibilities after businesses downsized their workforce. Often this was done for no additional financial reward. Some in the old school would say: “They have kept

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that sets out exactly what the rights and obligations of each partner are in the event of the death or permanent disablement of another partner. Basically it means that on the death or permanent disablement of one of the partners, his/her share will pass to the remaining partners and the wife/husband of that partner will receive payment for that equity. Funding is usually by way of insurance policies held by each partner. These insurance policies are noted in the Buy/ Sell Agreement as having been taken out to cover the partner’s equity in the business.

hEaLTh

Fitness is not the same as health SomE 20 centuries ago, the Chinese – then undeniably the world’s most advanced society – became singularly obsessed with the pursuit of long life – even immortality. OK, the peasants working the fields weren’t overly interested in any such theoretical discussions, as they were too busy surviving, but it was a hot topic among the educated classes, and the schools of influential philosophers who were indulged in the courts of various rulers and emperors. (You’ve probably even heard of one such adviser – Confucius.) To cut the story short, the entire treasurehouse of Chinese medicine – as Chairman Mao once described it – is built upon the idea that each human should have a long, healthy lifespan of 100 years. That is, unless they waste their vital energy. So in pursuit of longevity, practitioners of Chinese medicine and in related fields developed various life-enhancing practices. One example is qigong (literally: energy work), a gentle exercise system not dissimilar to the yoga styles from other parts of Asia. The idea of this and other customs that extended to dietary considerations and sexual practices was to maximise health for as long as possible, and hence allow a person to live their allotted 100 years. This was a stream of knowledge that came to understand a great deal about human

Michael Ellis*

medicine in common with all medical systems advocates regular exercise as essential to health, it is unhappy with the sort of extreme exercise that seems to be considered healthy in our society. While daily activity is recommended, and should include the movement necessary to do one’s daily work, it need not be unduly intense. In fact, in ancient China people were cautioned against extraneous exercise because it was seen as a drain on the reserves of vital energy needed to maintain good health. Those who were required to exert themselves strenuously in their work were seen as unlucky and unhealthy. Some (not all) martial arts involved gruelling practices and extraordinary physical hardships but they were more influenced by the imperative for defence than concern for the health of the practitioners. The point is, the Chinese had no interest in “extreme” sports or training. They did not run marathons, or do triathlons, or climb mountains, or lift heavy weights, or endure months of demanding pre-season football training in the summer heat. These types of activities, while producing physical fitness, also drain vital energy and may ultimately undermine health.

Chinese Herbalist

health and how to maintain it – substantially more, one could argue, than any medicine system before or since. Western medicine has come to understand an enormous amount about the anatomy of illness, but in comparison next to nothing about health. (It is improving.) Followers of Daoist philosophy – many of them Chinese doctors – took pride in their longevity, and indeed archives reveal that many did live considerably longer than their counterparts in Western countries, some even to their century. And we’re talking here about 10 to 20 centuries ago – while Europe was languishing in the Dark Ages. It’s something of a myth, by the way, that life expectancy is substantially increasing. The increased average lifespan in these times is more due to reduced infant mortality – which increases lifespan averages enormously – than to any improvement in “health” in the advanced years of life. (References available.) To cut to the chase, while Chinese

20 | BusinessTimes Frankston Peninsula | November 2010

‘It’s something of a myth, by the way, that life expectancy is substantially increasing.’ The Chinese would expect people engaging in such pursuits to be less healthy in older age, and to die younger. In the West, athletes continually push the bounds of physical human ability in speed, strength and stamina. But unless one is training to be a professional athlete, this amount of exertion and effort is over-using one’s reserves of vital energy that may be needed for other activities in life – especially one’s life work. The ancient Chinese called these secondary pursuits “going sideways”. Quite often you hear of a person suffering a health crisis, perhaps even a fatal one, and friends and family say: “But he was so fit!” Yes, but it’s not the same as being healthy. *Michael Ellis is a registered Chinese herbalist in Mt Eliza. www.mtelizaherbal.com

Blink of an eye approach to driver fatigue A COMPANY that produces equipment to monitor driver fatigue claims it would be false economy to make a GPS (global positioning system) mandatory in trucks. The federal government is being asked to introduce laws for GPS as a way of combating driver fatigåue by tracking truck movements and ensuring drivers take regular breaks. Richmond-based Optalert says this approach does not measure a driver’s fatigue level from the moment he or she gets behind the wheel. The company has hired Melbourne-based public relations company Write Connections to promote its views and product. Optalert makes spectacle frames fitted with tiny invisible light emitters and receivers that measure the blinks of an eye 500 times a second. The information is transferred to a dashboard-mounted indicator which scores a driver’s drowsiness level from 0 to 10. The data can also be sent to management through the internet. In a news release Optalert CEO John

Prendergast states he supports the National Transport Commission’s desire to decrease fatigue -related accidents in the transport industry but “the current approach is fundamentally flawed”. “GPS is an undeniably useful technology for managing on time deliveries and informing fleet management on the whereabouts of its drivers and machinery... But to suggest that GPS can make the highway safer by preventing fatigue is quite misguided.” Instead of taking driver fatigue into consideration mandatory GPS “makes the assumption that drivers are always fit for work when they start their shift and fails to consider influencing factors outside of the workplace. We’ve seen drivers close to a fatigue-related accident after only 30 minutes on the road – nowhere near the proposed nine-hour GPS guide that is being discussed as the cut off point by those pushing for mandatory use of telematic technology (GPS). In fact, we have statistics that show

the majority of incidents occur within 45 minutes of leaving the depot.” The National Transport Commission’s “Draft National In-Vehicle Telematics Strategy: The Road Freight Sector” gives the following case study in support of making GPS mandatory: Energy distributor Cootes Transport Group uses technology to roster drivers, schedule loads and manage regulatory compliance. Drivers swipe their identification tag and key in ‘events’ – like the arrival at a terminal to load. Global positioning system data is used to verify driver movements. If a driver fails to take a mandatory rest break, a prompt will appear on their personal digital assistant (PDA). Cootes general manager Greg Niven said an electronic system allows the operator to manage compliance with fatigue laws in real time, rather than responding to events after they have happened. But, drivers are still required to complete paper work diaries because their electronic systems are not formally recognised by governments.

Frankston Arts Centre would like to thank all its Partners for their support of...

SEASON 2010

Principal Partner

Major Partners

Community Partners

Principal Media Partners

TOORAK COLLEGE Business Partners

FAC PRESENTS 2011 is coming soon. Hear about it first – call 9784 1060 or register online www.artscentre.frankston.vic.gov.au

Frankston Arts Centre bookings and enquiries: 9784 1060 or www.artscentre.frankston.vic.gov.au November 2010 | Frankston Peninsula BusinessTimes | 21

NEwSwHeels

Safe, but not so staid

Styling of the latest Volvo SUV is avant garde and shows the company has long since departed from its staid ways.

The Volvo XC60 is described by its designers as being a cross between a coupe and an SUV. But, we feel it’s a genuine SUV (Sports Utility Vehicle) because there’s plenty of usefulness in its design. Whereas Volvo’s larger SUV, the XC90 is a family wagon, the XC60 certainly has a sportier note in its makeup. The styling is significantly bolder than anything offered by Volvo before. The front grille is big, stands tall and has a large Volvo ‘iron mark’ symbol in the centre. The wedge shape of the body as it tapers to the rear works well. The very Volvo taillights make full use of the big ‘shoulders’ of the chunky wagon body. The new turbo-diesel engine for 2010 retains the same five-cylinder layout and 2.4-litre capacity as the one it supersedes, but is an all-new design with twin turbochargers rather than the single turbo of the previous engine. Engine output is 151 kW which is pretty impressive from an engine of this size. However, torque is the biggest feature of any turbo-diesel and the new Volvo powerplant achieves a strong 420 Newton metres at 1500 revs. And the diesel holds onto that pulling power until the engine is spinning at 3250 rpm. We found the XC60 to be in this range of engine revolutions virtually all the time during the road test, so were always getting the best from it. Response to the accelerator pedal is pretty quick, but even with two small turbos, there’s inevitably some lag before

Ewen Kennedy Motoring Journalist

the engine is giving its best. When sitting inside the car it’s only at start-up and at idle that you’re aware that the D5 isn’t a petrol unit. Volvo claims its XC60 may be the safest car on the road today. A statement we take seriously because the Swedish company is certainly not one to boast without backup. Major safety items include front, side and curtain airbags, ABS brakes with emergency brake assist, stability and traction control, lane departure warning, collision warning with automatic braking, blind spot information system and driver alert control. There’s also an impressive system called City Safety that strives to eliminate all low-speed crashes by applying the brakes should the Volvo sense it’s closing too fast on a vehicle in front in city and suburban traffic conditions. We have tested this against soft objects and came away amazed by the way the Swedish car slows abruptly and avoids hitting the dummy vehicle in front. On our recent road test we were impressed by the low levels of noise

22 | BusinessTimesFrankston Peninsula| November 2010

intrusion and by the fact that the XC60 is almost car-like in the way it handles bends. Naturally, you can feel that it has a higher centre of gravity than a pure passenger car, but the levels of road grip are much higher than those likely to be attempted by the average owner. Inside, there’s genuine space for four adults, and a fifth still has a decent amount of room to move. The front seats are large and support reasonably well, though a little more side support would have been appreciated during spirited cornering. Though it’s not really intended to be an off-road vehicle, Volvo XC60 has aboveaverage ground clearance of 230 mm. Indeed that gives it more distance off the terrain than many dedicated 4WDs. We have road tested it in mild off-road areas and the traction on offer is enough to let it through without missing a beat. Front-wheel-drive Volvo XC60s are available in some other markets and may come to Australia as our importation tariffs are now the same for these vehicles as for the all-wheel-drive models. (Until the start of 2010 4WDs could be imported into Australia at a cheaper rate than cars, but that situation has now been evened out.)

volvo xC60

AT A GLANCE

MODEL RANGE Volvo XC60 3.2-litre petrol wagon: $57,150 (auto) Volvo XC60 D5 2.4-litre turbo diesel wagon: $59,950 (auto) (Not including government and dealer charges) FEATURES Standard features (all models): ABS brakes, air conditioning, auto transmission, CD player, central locking, cruise control, dual front airbags, front side airbags: stability control, traction control. ENGINE: (Volvo XC60 D5 2.4-litre five-door wagon) Capacity: 2.400 litres Configuration: Transverse, five cylinders Head Design: DOHC, four valves per cylinder Bore/Stroke: 81.0 mm x 93.2 mm Maximum Power: 136 kW @ 4000 rpm Maximum Torque: 400 Nm @ 2000-2750 rpm DRIVELINE: Driven Wheels: All-Wheel-Drive Manual Transmission: Not offered Automatic Transmission: Six-speed FUEL CONSUMPTION: Type: Diesel –Combined Cycle (ADR 81/01): 8.5 L/100km

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FOR LEASE

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parking for customers to front and two tandem staff car parking spaces at rear off sealed lane way. North facing building will have invalid W.C., sink, Hot Water Service, Suspended plaster ceiling with concealed lighting throughout and split system air conditioning, automatic front door and essential services installations (ﬁre extinguishers and exit lights etc.) ready for your ﬁt out. Estimated completion late 2011

New Tilt Panel Factory FOR SALE OR FOR LEASE - HASTINGS Sale: $420,000 to $450,000 + GST Lease: $700 P/W+GST & Outgoings Group of three new tilt panel factory to be built

approx 270 - 299 square meters. Be your own landlord and save on stamp duty or Lease a brand spanking new factory and owner will build to your requirements. Located in side street off Main Road

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New self contained office suite of 184m2 with angle parking for customers to front and 4 dedicated car spaces at rear for staff. With auto electric door to front, M & F toilets, full shop front and floating plaster ceiling with concealed lighting. Landlord will consider rent free period for set up and may be prepared to contribute to fitout for the right tenant willing to make a long term commitment. Enquire now available 1st September 2010

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