Motor Trades Association of Queensland
Annual Report 2009
Contents 1.
President’s Report
6.
Treasurer’s Report
8.
Organisational Structure
10. MTA Institute of Technology 12. Members Services and Support 16. Australian Automobile Dealers Association 17. Automotive Engineers Division 18. Automotive Parts Recyclers 19. Engine Reconditioners Association of Queensland 21. National Auto Collision Alliance 22. Queensland Farm and Industrial Machinery Dealers Division 25. Queensland Motorcycle Industry Division 26. Queensland Tyre Dealers & Retreaders Division 27. Rental Vehicle Industry Division 29. Service Station and Convenience Store Association of Queensland 31. Used Car Division 33. Financial Statements 60. Board Members 2007-2008
President’s Report Whilst there has been economic hardship resulting in closures, downsizing and efficiencies there are wonderful examples of entrepreneurial resilience and initiative.
For the past seven years I have had the privilege of serving members as President of the Motor Trades Association of Queensland. Over that time there has been differing economic circumstances, but 2008 - 09 has proved the most challenging for both our Association and our automotive value chain membership.
The Economy The global financial crisis impacted with a vengeance across our sector. It eroded over the past year approximately twenty five per cent of the automotive trade’s value chain contribution to Queensland’s economy from approximately $16 billion to $12 billion. There was a corresponding decrease in the 60,000 people engaged or employed across the sector. Almost twelve months ago to the day, two of the major credit providers to the automotive sector announced their decision to withdraw from the industry. This necessitated Australia’s franchise dealer network to secure alternative debt funding to sustain their businesses. We were proactive in engaging government and interstate automotive associations to secure the establishment of a Federal Government Special Purpose Vehicle to provide franchise dealers with the breathing space to secure new funding arrangements. Simultaneously, the Association encouraged Federal Government to underpin the automotive value chain during the downturn. This resulted in the Business Tax Break – 50% tax break for businesses with a turnover less than $2 million that concludes on 31 December 2009, and 30% or 10% tax break for businesses with turnover of $2 million or more and the asset bought prior to 30 June 2009. Anecdotal information suggests that this program has aided the automotive value chain in upgrading business assets and the recent new vehicle data indicates that sales are recovering and consumers are re-entering the market. On several occasions over the past year I met or corresponded with senior Queensland Government Ministers to inform them of the grim economic outlook for our membership and their employees in the automotive value chain. Whilst there has been economic hardship resulting in closures, downsizing and efficiencies there are wonderful examples of entrepreneurial resilience and initiative. This was evident from my regional visits to hear first hand member’s issues.
Regional visits My experience over the past seven years indicates that for the Association to be relevant during turbulent change, we must engage in a continuing dialogue with our broad membership and be inclusive.
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President’s Report continued Our new MTA Queensland Constitution is an important document as our entire standing as an industrial organisation of employers depends on being incorporated as a Union of Employers under the State’s industrial legislation. In the midst of economic gloom, accompanied by Member Services General Manager Kellie Dewar and Principal Policy Director Richard Payne, we visited members across all of the Association’s designated districts. The purpose of the visits was to make our Association a more inclusive entity and to hear directly member’s views on Association and automotive industry matters. I was heartened and inspired by member’s resilience and the feedback was invaluable enabling us to match services to needs and to comprehensively represent their views and concerns to all level of governments. Our visits included the Gold Coast, Sunshine Coast, Gladstone, Rockhampton, Mackay, Townsville, Cairns, Atherton, Mt Isa, Longreach, Emerald, Toowoomba and many smaller towns along the way. Member’s prime issues centred on the economy as well as concerns about the loss of skilled tradespersons or employees. As the economy picks up, the shortages of skilled tradespersons for the automotive sector is likely to return and this is a matter that our MTA Institute of Technology is acutely aware.
Constitution / Rules Our new MTA Queensland Constitution has been a work in progress and now The Queensland Industrial Relation’s Commission Registrar has given approval. It is an important document as our entire standing as an industrial organisation of employers and our organisational structure depends on being incorporated as a Union of Employers under the State’s industrial legislation. I acknowledge the contributions of John Hamilton of McInnes Wilson Lawyers in achieving this goal. Of significance is the streamlining of our structure to form two governance entities to introduce efficiencies and immediacy to decision making to advantage our membership. They are the MTA Queensland Board and the Executive of MTA Queensland elected by the Board, consisting of 10 people who have day to day governance responsibilities. The Board meets every three months and the Executive meets as required by the urgency of business. Our new Constitution or Rules is on our website and I encourage members to consider it.
Our Organisation Over the past seven years the automotive value chain has experienced continuing change – technical, systems, models, equipment, communication, workplace relations, and policies. Our organisation has adapted to meet these challenges in the interests of our automotive value chain membership.
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There is one constant – your Association has maintained its focus on its historical purpose and that is to serve and represent our membership. Our structure enables us to service member’s needs by providing skilled and professional staff ranging from Member Services, Technical Services, Legal Advice and Consumer Complaint Resolution, Industrial Relations and Representation. Our officers and staff support serve and represent the 14 industry divisions and members in the five districts with a high standard of professionalism and “old fashioned courtesy and service”, which is missing into today’s world of change.
Training As indicated in the Objects of our Constitution, education and training is a core activity and a specialised service. MTA Institute of Technology (MIT) under the leadership of Managing Director Brett Dale continues to lead the way in automotive apprenticeships and traineeship training in Queensland. This may be attributed to the unique onsite, face-to-face training method offered by MIT. MIT is the largest automotive training organisation in Queensland. It is a preferred supplier for Queensland’s Department of Employment Training - a role it has had for the past 3 years and our unrivalled access to all aspects of the automotive value chain places it in a sound position for the future. MIT has been innovative. For example, over the past four years it has conducted development programs to enable trainers to keep abreast of technical changes in their chosen fields and upgrade their skills in the allied trades. It has introduced a Newsletter to its communication’s program to inform both students and employers of courses and program developments. The first issue – October 2009 – may be found on our website and I encourage members to bookmark it for reference. The global financial crisis impact on the automotive value chain did reverberate on training and industry demand for apprenticeships, but the prospects for 2010 are much improved. We are mindful that the economic upswing will bring demand for skills in the automotive value chain and Brett and his team have the capacity and capability to deliver. Generally, MIT educates over half of all Queensland apprentices and trainees in the qualifications traditional to the automotive sector.
Advocacy Principal Policy Director Richard Payne details in his report our government advocacy on behalf of Members.
organiser, have signed a 10-year agreement for the five-day spectacular which will ‘recolonise how the public and the automotive industry interact’.
Over the past few years we have participated in successive State and Federal Government policy inquiries and reviews covering many matters from the Oilcode, to the Franchise Code, to the Carbon Pollution Reduction Scheme, to Fair Contracts, to the Australian Consumer and Competition Commission’s consideration of the proposed acquisition of the retail assets of Mobil Oil Pty Ltd by Caltex Australia Ltd.
Our ‘new look’ Motor Show will appeal to a broad range of consumers from the young first time buyers to families and the grey nomads. It will be held from June 2 - 6 2010 at the Brisbane Convention and Exhibition Centre and is definitely a date for the diary. I congratulate CEO Ian Field on his dedication and enthusiasm on achieving this outcome.
It is with pride in our capability that I report that our Association has earned respect for its well-reasoned and constructed submissions on behalf of its members, but more importantly in this very tough area of policy we have competed successfully, achieving positive policy outcomes for our membership. As an illustration, the Federal Government has announced significant amendments to the Franchise Code, which parallel our submissions on behalf of our membership.
Over the seven years of my Presidency, Ag Show has emerged as one of Australia’s premier field days hosting both international and domestic guests. Over the threeday event held in September of each calendar year approximately 80,000 people attend.
There is one advocacy stream where we quickly learnt that we were going to lose and that relates to the State Government’s decision to abolish the fuel subsidy. We participated in the review process but it was evident the government had identified it as revenue source at the expense of fuel consumers. We protested the fuel subsidy axing in conjunction with other state peak organisations to no avail.
Q Fleet Unfinished business is the State Government’s involvement in the retailing of second-hand motorcars. We believe that this is not the legitimate business of Government and should be the responsibility of the private sector. I have made many representations both in person and in correspondence but without success on this matter. I urge the President designate to take it up as a priority policy matter and continue to pursue this issue to a successive conclusion.
Motor Show The resilience that is the hallmark of the automotive value chain has ensured that there will be a 2010 Motor Show following the cancellation of the 2009 event due to the global financial crisis. It will be a ‘new look’ Motor Show and the first of its kind in Australia, incorporating attractions and an impressive line up of entertainment events. MTA Queensland and Expertise Events, Australia’s largest independent exhibition and event
Ag Show
Ag Show is a joint venture of our Farm Industrial and Machinery Dealers’ Division (QFIMDD), The Royal Agricultural Society of Queensland (Toowoomba) and Australian Provincial Newspaper’s Toowoomba Chronicle. A major sponsor is The Heritage Building Society, Toowoomba. In September 2009, over 700 exhibitors displayed machinery, products or services to a strong and supportive trade audience indicating that there was sufficient confidence in the agricultural sector to shrug the global financial crisis. I compliment our QFIMD Division on its seventeen years of stewardship with its partners for this important event. It is appropriate that I mention the QFIMD Division’s support for the state’s agricultural industries and attendant communities concerned about the consequences of the irreversible diversion of strategically valuable agricultural land to the extractive mining industries.
Buchanan Street In my 2007-08 Annual Report I foreshadowed that Buchanan Street would be redeveloped incorporating a plan for a 13-level mixed-use building to take advantage of the prime location. The consequences flowing from the global financial crisis for capital raising and other considerations caused the redevelopment plan to be put into abeyance. Buchanan Street currently is tenanted and because of its location on the fringe of the Central Business District it meant it was an attractive proposition for lease.
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President’s Report continued The trend to hamonisation of laws relevant to the automotive value chain such as the Australian Consumer Law means increased centralisation and the need to engage with the Commonwealth and its agencies. New Home – at Wynnum Road Cannon Hill The Board’s decision to lease Buchanan Street provided the unique opportunity to amalgamate MTA Queensland Corporate and in one place under one roof. Excellent premises at 1000 Wynnum Road, Cannon Hill have been leased to serve both our training and corporate requirements. I thank staff members for their professionalism during the transition phase and for their assistance with relocation.
Relationships and New Representation in the National Capital MTA Queensland with The Victorian Automobile Chamber of Commerce (VACC) and the Tasmanian Automobile Chamber of Commerce (TACC), have formed an alliance to establish a presence and an office in the national capital to represent the interests of an automotive value chain that is equivalent to almost half of the national industry. Together we formed the view that it was important to have a presence to facilitate contact with legislators and the public service following the withdrawal of our Association, VACC and TACC from the Motor Trades Association – Australia (MTAA). The trend to hamonisation of laws relevant to the automotive value chain such as the Australian Consumer Law means increased centralisation and the need to engage with the Commonwealth and its agencies. The new arrangement will introduce a new focus on and advocacy for automotive value chain issues in contrast to our previous relationship with MTAA, which we view as predominantly the manager of the motor industry superfund.
Corporate Partners Our Corporate Partners are important to us. In particular I mention the valued relationships with the Commonwealth Bank; Corporate Express; Dun and Bradstreet; MTAA Superannuation Fund; Capricorn Society Limited and Trinity Telecom Pty Ltd.
Executive Team Throughout my seven years as President of MTA Queensland, I have had the privilege of working with fellow Board members
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motivated by the desire to serve and represent the automotive industry value chain. All generously gave their individual and unique skills to advance our Association. I thank my fellow Board members for their support, their unconditional commitment to our Association and in particular to the new governance arrangements through our Constitution.
Thank you Our corporate staff is at the frontline of our Association and I thank them for their never failing courtesy, loyalty, high sense of duty and professionalism to the Board, the Executive and the members. I thank Kellie Dewar, General Manager of Member Services, and her support staff: Ted Kowalski, our Industrial Relations specialist; Russell Sticklen, Technical Adviser; and Richard Payne, Principal Policy Director. I also thank Brett Dale, Managing Director of MIT; and Kathy Winkcup, Chief Financial Officer, for their individual and collective contributions to MTA Queensland. Ian Field has continued to serve the Association as Secretary Treasurer with an impeccable sense of duty and commitment. I thank him for the perspicacity he brings to this position. I especially acknowledge the MTA Queensland Board and the undivided attention given to Association issues – great and small – in a year that has been notable for significant challenges and has been successfully navigated and resolved. Our External Directors – Colin Meng, Paul Moni and Tom Barton, have given generously of their time and talents. Their valuable contributions are appreciated.
Future I pass the baton to the President designate, the new Board and Executive, confident in the future that MTA Queensland will go from strength to strength. We have built the commercialised corporate structure, the governance bodies, the service and training entities and have laid the foundation for ongoing advocacy and representation.
From these strong decisions and actions MTA Queensland will reap the benefits into the future.
And remember that TIME WAITS FOR NO ONE.
A Thought to Share
tomorrow is a MYSTERY
Imagine that there is a clock that credits your account each morning with $86,400.
and
It carries no balance from day to day.
That is why it is called the PRESENT.
Every evening deleting whatever part of the balance you failed to use that day. What would you do? Draw out every cent of course!!! Each of us has such a bank. Its name is TIME. Every morning it credits your account with 86,400 seconds.
Yesterday is HISTORY,
today is a GIFT –
Thank you for the privilege of serving MTA Queensland as the Eighth President for the past seven years. I wish MTA Queensland success into the future and to all members I take the opportunity to wish you a happy Christmas season and a prosperous 2010.
Every night it writes it off, as lost, whatever of this you have failed to invest in good purpose. It carries over no balance. It allows no overdraft. Each day it opens up a new account for you. If you fail to use the day’s deposits the loss is yours.
Greg Klease President MTA Queensland November 2009
There is no going back. There is no drawing against “Tomorrow”. You must live in the present of today’s deposits. Invest it so as to get from it the utmost in health, happiness and success! The clock is running. Make the most of today. To realise the value of ONE YEAR, ask a student who failed a grade. To realise the value of ONE MONTH, ask a mother who gave birth to a pre-mature baby. To realise the value of ONE WEEK, ask the editor of a weekly newspaper. To realise the value of ONE HOUR, ask the lovers waiting to meet. To realise the value of ONE SECOND, ask a person who just avoided an accident. To realise the value of ONE MILLISECOND, ask a person who won a silver medal at the Olympics. TREASURE every moment you have – and treasure it more because you share it with someone special, special enough to spend your time.
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Treasurer’s Report In the past few months we have finalised the management restructure of the Association and this should see considerable savings and improved member services.
This will be the last time that I report to you as Treasurer of the Motor Trades Association of Queensland as I did not stand for election in my division and therefore cannot stand for re-election as Treasurer at this annual general meeting. It gives me great pleasure in presenting the 20082009 financial results, which include the wholly owned subsidiaries MTAQ Ltd, the part owner of MTAA House in Canberra and MTA Institute of Technology Pty Ltd, our training organisation. The past year has been difficult for MTA Queensland, as I’m sure it has been for all our members. As a consequence of the late cancellation of the 2009 Motor Show we lost our booking deposit and of course did not achieve our normal show contribution to the bottom line. This resulted in our recording a loss of $650,000 – a shortfall of over $1 million to the 2009 budget. We also took the opportunity to write off over $300,000 of obsolete equipment assets and other assets as part of the re-location of operations. While the bottom line for the year finished with a loss of $444,000 in all of the circumstances, thanks to a very good result from our training activities, this was an outstanding result. During the year, all training and member services were re-located to Cannon Hill, which also had one off cost impacts but over time will result in many cost efficiencies by combining all operational activities under the one roof. We also spent over $100,000 rewriting the constitution of MTA Queensland to comply with new legislation and to be more receptive to member needs, including the requirement for all elections to be conducted by the Queensland Electoral Commission and for elected regional representatives to conduct regular member forum meetings to get direct feedback on your requirements. On a positive note, going forward we finished the year in a sound financial position with nearly $4.5 million in cash and net assets of about $15 million. Under the new Constitution, there are two (2) independent executive committee positions that were created to ensure continuity of corporate history and to attract independent business advisors to ensure that divisional politics do not override the business of providing the best member services for everyone. We also continue to employ expert policy advisors who have been instrumental in a number of national initiatives in conjunction with VACC and FCAI.
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The Board has asked me to continue for the upcoming year as the acting CEO on a part time basis to ensure the many initiatives put in place by the Board are not disrupted. We continue to assess whether we require a full time CEO. The organisation works well with Kellie Dewar as General Manager Member Services, Richard Payne as Policy Director, Kathy Winkcup as CFO and Brett Dale as CEO and Managing Director of the training business incorporating commercial activities for MTA Queensland. My acting CEO role, in addition to the oversight of activities, is about forging a national agenda and maintaining a Canberra presence with our colleges in VACC and Tasmania. We have taken the first steps by establishing an office in Canberra and holding a joint meeting in Canberra where we established a framework for the setting and implementation of a national operational agenda. I strongly believe that we have the correct model to meet the future needs of members in the Queensland motor industry. Together with VACC and Tasmania, along with any other motor industry organisations that wish to join us, we will establish an effective and motor industry-driven advocacy on a national basis; our structure is sufficiently flexible to meet the challenges of this ever changing world we now face as small and medium size businesses. Acknowledging both my period of service as Treasurer and my not standing for re-election, the Board and Executive Committee encouraged Paul Peterson to attend Executive Committee meetings as an observer to gain an insight into the role of the Treasurer. Paul has demonstrated that he is well qualified to be appointed Treasurer and it is my strong recommendation that Paul Peterson be appointed Treasurer when the Board meets to consider honorary officer positions. I thank you all for your support and fellowship over many years and I look forward to observing from a distance the continued growth and development of MTA Queensland in to the future.
Ian Field Treasurer
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Organisational Structure
Kellie Dewar General Manager, Members Services
Brett Dale Managing Director, MTA Institute of Technology
Emma Pires PA to Chief Executive Member Services
Katie Gould Administration Assistant Member Services
Ted Kowalski Manager Industrial Relations
Neil Short Divisional Executive
Aynslee Bell Divisional Executive
Commercial Business MTA Queensland
Stationery
Russell Sticklen Technical Advisor Stationery Manager
Anthony Smith Business Development Manager
Publications
Michael Taylor Publications Manager
Peter Richardson Art Direction Consultant
Jeff Dunlop Advertising Representative
Jan Klingberg Advertising Representative
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Richard Payne Principal Policy Director
Kathy Winkcup Chief Financial Officer
Joe Newbery Learning and Development Consultant
Pranesh Deo IT
Mirela Pribic Accounts Payable Clerk
Kerry Cook Office Manager Gloria Rogers Compliance Manager
Tony Wilson Senior Trainer Regional Queensland 10 Trainers
Laura Houchen Accounts Receivable Clerk
Leigh Joy Administration Assistant
Magda Gavriel Receptionist
Rob Thompson Senior Trainer Brisbane 17 Trainers Judy Margison Administration Assistant Marcello Riotto Senior Residential Trainer 3 Trainers Leonie Mordue Administration Assistant
Kathleen Selfridge Administration Assistant
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MTA Institute of Technology MIT has again achieved excellent results and recognition as a training provider committed to excellence and industry engagement. We have worked hard to expand our training products and services to ensure that we further contribute to the sustainability of the automotive industry. MTA Institute of Technology’s (MIT) training model remains cutting edge in delivery and content and remains recognised for excellence under the star rating scheme administered by the Institute of Trade Skills Excellence. The year has presented many challenges and rewarding times for MIT. We have achieved record results in performance, both in quality and financial position with a net profit exceeding $1.7m. New business has increased significantly and ongoing growth is anticipated in both our current scope and intended new business products and services.
Operations MIT has continued to deliver training services to our neighbours in the pacific region as part of an AusAid project managed by the Australian Pacific Technical College. The support provided an excellent opportunity for our trainers to export their knowledge and technical skills to neighbouring countries. Our International training model has developed significantly and continues to evolve into the highest quality international student learning model. The arrangement is progressing exceptionally well, with an outstanding commitment to quality training from our partner ensuring that our industry standards are maintained throughout their training experience. Much work has been made in attempting to secure work experience and casual work, which further consolidates the skills and knowledge of our students. MIT would welcome any support from industry, where the opportunity for either work experience and/or part time work is available for our students in and around the Brisbane metropolitan area. Please contact us to discuss further. Our current operational structure is capable of an additional 25% capacity with limited investment, particularly our workplace delivery model. Our move to Cannon Hill has provided great capacity and accessibility to our clients and alternate models of delivery for the domestic students are now being considered.
Achievements MIT has again achieved excellent results and recognition as a training provider committed to excellence and industry engagement. We have worked hard to expand our training products and services to ensure that we further contribute to the sustainability of the automotive industry. These achievements include the following: • Maintained the three Gold Star rating for ‘excellence in trade’s skills training’ - the highest level awarded by the Institute of Trade Skills Excellence. 10 Motor Trades Association of Queensland
• Awarded the apprentice of the year for Central Queensland with two nominations out of the three finalists. Both Stephen Faint and Adele Kirkpatrick are to be congratulated on an excellent result with the award going to Adele. • The development of training products and services aimed at up skilling current trades people for business management and post trade technical skills is now complete and will be made available in the New Year. • Funding for recognition of prior learning and gap training services has been obtained and is suitable for industry personnel who are motivated to obtain part or full qualifications. This is particularly important for businesses who do not have qualified staff, which prevents them from hiring apprentices under a government funded training arrangement.
advanced technical skills required to meet the demands of the latest industry technology. • MIT will also contribute to industry through its trade recognition program which aims to evaluate existing tradespersons on a temporary Visa who seek permanent residency and international tradespersons who seek permanent residency in Australia who require Australian qualifications.
Governance It would be remiss of me not to acknowledge the dedication and commitment of the Board of Directors who work tirelessly to ensure that the strategic plan and corporate governance of MIT is aligned with the Association’s expectation and best practice. The Board of Directors consists of: Mr Tom Barton – Chairman
• MIT remains on the State Government’s preferred supplier list with contracts for UserChoice and skilling solutions.
Mr Glen Ford – Deputy Chairman
• Secured a new training facility at Cannon Hill that has created greater capacity for international and domestic students under a residential model.
Mr Brett Dale – Managing Director
• Completely reviewed all learning and assessment material that will be implemented in the New Year and will see learning experiences enhanced for all apprentices and trainees.
Objectives MIT’s primary focus is to remain flexible to adapt to the changing demands of Industry. The demand for skill shortages will continue to drive the direction of MIT to ensure that industry is provided optimum training products with the flexibility and quality to meet the needs of our members and clients. We remain focused on the global and domestic economy, particularly its impact on the automotive industry.
Mr Mark Brady – Director Ms Kathy Winkcup – Company Secretary On behalf of the Board and management team, I acknowledge the outstanding efforts of both the technical and support staff who work diligently to deliver high quality automotive training and administrative support, which is ultimately responsible for the success of the training operation and most importantly the skilling of industry.
Brett Dale Managing Director
MIT has designed a state of the art facility which is aimed at being operational by 2012. The facility has been designed by lead architects combined with industry expertise to ensure latest technology drives the design and function of the training facility. We have developed several productivity and sustainability initiatives that we will communicate further in the coming months and will include opportunities in the following areas: • Business Management courses specifically designed for our industry, which will be launched in February 2010. • Advanced technical qualifications to be launched early 2010 will provide cutting edge businesses with Motor Trades Association of Queensland 11
Members Services and Support Our new constitution was passed at a Special General Meeting of Members in February and although it incorporates many changes, the objectives of our Association remain consistent.
North, as we are committed to representation in all areas of Queensland. MTA Queensland membership is through a Division established by MTA Queensland with the division representing a primary motor trade activity. The number of divisions is determined by the MTA Queensland Board. In addition to Divisions, members are represented by a District Representative who represent members resident in that geographical region of Queensland, namely: It has been an extremely busy year for the Member Services Department, facilitating our first Annual General Meetings (AGM) and Elections under our new Constitution. Thank you to all members who participated in AGM’s for each Division - your attendance was greatly appreciated. Our new constitution was passed at a Special General Meeting of Members on February 5th 2009 and although it incorporates many changes, the objectives of our Association remain consistent: • to promote, advance and protect the interest of the motor vehicle industry and associated trades or businesses in Queensland and to conserve the interest of Members. • to advocate, advance and protect the interests of employers connected with the motor vehicle industry and associated trades or businesses in Queensland. • to consider and deal with any question relevant to the motor vehicle industry and associated trades or businesses. • to participate in, promote and encourage all forms of education and training supportive of the development of the motor vehicle industry and associated trades of businesses in Queensland.
Building an “inclusive” Membership profile Member Services are keen for your feedback. We will be running a series of short online surveys this coming year to help us understand what is important to you and how we keep the Association relevant to Members for the future. To be relevant, the Association must continue the dialogue with its membership and be inclusive. I urge you to take the time to complete these surveys and have direct input in to your Association.
Extension of Member Representation This year saw the return of a Divisional Executive placement in the regional area from Gladstone to the Far 12 Motor Trades Association of Queensland
• Far North – Cairns and environs • Northern – Townsville and environs • Central – Mackay, Gladstone, Rockhampton and environs • South West – Toowoomba, Dalby, Warwick and west to the Northern Territory border • South East (North) – Bundaberg south to the greater Brisbane border • South East (South) – from the New South Wales border north to the greater Brisbane border (The greater Brisbane area is not identified as a District.) Members elect a District Representative to represent the needs of members resident in a District. In summary, members resident in Districts have three contact points to discuss their needs: • MTA Queensland district staff representative • District Representative • Division officeholders Our District Meeting program highlighted that not all members are aware of the benefits offered as part of your MTA Queensland Membership. Below is a list of our Corporate Partner Arrangements for your reference. Should you require further details, please do not hesitate to contact us. The Capricorn Society is the largest independent automotive parts buying cooperative in Australia. The Society is based on group purchasing to secure price advantage. The Commonwealth Bank offers members some of the lowest eftpos charges in the country. Savings in the thousands of dollars have been achieved by members who opted for the CBA deal. Corporate Express is the leading supplier of a complete range of office consumables, bulk stationery and janitorial supplies.
Dun and Bradstreet is the nation’s foremost credit control and debt collection agency, with an enviable record of service to the recoverables industry. Members are eligible for substantial savings on annual subscriptions. The STAR Workplace Program recognises organisations that are committed to creating high performing and engaged workplaces. This is your opportunity to get the recognition that you and your team deserve. Stand out from the crowd and show your team, future employees and your clients that your business is a STAR. MTAA Superannuation, our superannuation partner has over 200,000 members who are enjoying excellent returns from the Fund. MTEL-Trinity. Telecommunications for MTA Queensland members. Offering a complete range of very competitive products for both Business and Residential customers. Offers include Landline, Mobile phones and ADSL plans. NRMA Insurance has vast experience in the provision of a superior level of specialist insurance services to the automotive industry, and using the buying potential of the member base, can achieve pricing far more attractive than business owners are able to negotiate individually.
Member Services Support In addition to supporting individual members through benefit offers, Technical Support, Industrial Relations advice and Compliance assistance, Member Services provides administration support for the Divisions and Board of MTA Queensland. I would like to thank all of my staff involved in the professional daily operation of the Department. To all Chairmen, Committee and Board Members, I thank you for your input, co-operation and assistance over the past year.
Kellie Dewar General Manager
Industrial Relations With the recent change in the make-up of the Federal Government from Liberal/National to Labor, the national industrial relations scene has changed dramatically. Where previously we had the “Work Choices” system we now are well advanced in replacing that system with “Fair Work.” Both systems cover “constitutional corporations” - essentially pty ltd companies - while sole traders and partnerships remain under the relevant State systems. However, most State governments have indicated they will refer their industrial relations powers to the commonwealth, which will mean basically that all businesses, except government enterprises, will fall under the new “Fair Work” legislation in the near future. One of the most significant features of the “Fair Work” system has been a process called “award modernisation”, which has been under way for over 12 months, and which will lead to a new award system from 1st January 2010. The numerous State and federal awards that have applied to businesses to date will be replaced with modern awards, which will apply to distinct industry sectors or employee categories. The motor industry, for instance, will have only two awards to contend with – the Vehicle Manufacturing Repair Services and Retail Award and the Clerks Private Sector Award. MTA Queensland, along with the other State Motor Trades bodies, has been actively involved in providing input in that process – trying to ensure that existing flexibilities provided in current awards will be preserved in the new modern award/s. The multiplicity of wage rates applying over all the melded awards will phasein over a five year period from 1st July 2010, into a common modern award rate for the various classifications. The rules governing dismissals changed from 1st July 2009, with the removal of the previous exclusion from unfair dismissal claims for businesses employing fewer than 100 employees. The situation now is that businesses employing fewer than 15 employees are regarded as “small business”, and, employees dismissed within their first twelve months of employment in such a business cannot Motor Trades Association of Queensland 13
Members Services and Support
continued
lodge an unfair dismissal claim. In businesses employing 15 or more employees the period of exclusion for dismissed employees is 6 months. This change has resulted in a significant increase in the numbers of dismissal claims being processed by Fair Work Australia. The new system promotes the concept of collective agreements as an option for businesses wanting increased flexibility, while the focus of the earlier system was on individual workplace agreements. Unions can be involved in the negotiation process as bargaining agents at the request of the employees. Each modern award will have an “award flexibility” clause that will allow individual employees to negotiate for conditions tailored to their requirements. The matters open for negotiation are: (a) arrangements for when work is performed; (b) overtime rates; (c) penalty rates; (d) allowances; and (e) leave loading. Such individual “award flexibility” arrangements will have to be documented and signed by both parties but will not require lodgement with Fair Work Australia. While the changes detailed do represent a significant modification to our industrial relations system, it is hoped that after a “bedding-in” period, businesses will find the new system easier to comprehend and certainly more consistent across the States - as each modern award will have equal application in every State.
Policy A summary of 2009 Policy Topics communicated to members and Government bodies is detailed below. Please note: content details may be read from the MTA Queensland website, www.mtaq.com.au We have had many wins for members during the year, while other important matters listed are ongoing and we will continue to work with the relevant authorities to achieve the desired outcomes. It is significant that our Submissions appear to be held in the highest regard by Government authorities as our input is often sought ahead of other industry Associations – recent examples are the Oil Code Review and National Registry of Emission Units.
Member Bulletins / Emails Ted Kowalski Industrial Relations
All Members – General • 03/09 Small Business & General Business Tax Break – Pending Legislation • 04/09 Small Business & General Business Tax Break – Explanatory Memorandum • 07/09 TPA – Clarity in Pricing (New Advertising Regulations) • 08/09 Clarity of CTP for Hire Vehicles (Class 4 Registration) • 10/09 Small Business & General Business Tax Break – Clarification of Legislation • 12/09 Dealer Trade Pales – Conditions of Issue and Use • 13/09 Establishment of Canberra Office • 15/09 Small Business & General Business Tax Break – Hire Purchase and Luxury Car Leases • 17/09 GoVia Road Toll Solutions • 19/09 LPG Federal Grants for Private Buyers • 21/09 MTA Queensland Brochure
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New Car Dealers • 19/09 LPG Federal Grants for Private Buyers
Government Submissions All Members – General
• 23/09 AADA National Representation
• TPA 1974 – Meaning of Understanding
• Aug 19 email: Consumer Credit Bill Exclusion
• Australian Consumer Law – Unfair Markets
Farm Machinery Dealers
• Carbon Pollution Scheme – Exposure Draft
• 01/09 Unconditionally Registered Vehicles – Temporary Authorisation • 16/09 Agricultural and Land Use Conflicts • 25/09 Unconditionally Registered Vehicles – Trade Plate Authorisation • Sept. 18 email: Strategically Valuable Land Use Conflicts Mechanical Repairers • 11/09 Vehicle Repair Register – Abolition • Aug. 24 email: Statutory & Implied Warranties Survey Motor Cycle Dealers • 24/09 Motor Cycle Safety Issues Rental Vehicle Businesses • 02/09 Contract Documentation • 06/09 Rental of Box Trucks • 08/09 Clarity of CTP for Hire Vehicles (Class 4 Registration)
• Carbon Pollution Scheme – Exposure Draft – Fuel Tax Review • Small and General Business Tax Break • Trade Practices Amendment – Australian Consumer Law • Consumer Rights – Statutory & Implied Conditions of Warranty • Draft Regulations – Australian National Registry of Emission Units Auto PartsRecyclers • Improving the Regulation of Written-off Vehicles Farm Machinery Dealers • Strategically Valuable Agricultural Land Use Conflicts Rental Vehicle Businesses • Rental Car Industry Guidance Service Station Businesses • Proposed Acquisition of Mobil Retail Outlets by Caltex
• 17/09 GoVia Road Toll Solutions
• Proposed Acquisition of Mobil Retail Outlets by Caltex – Additional Comments
• 18/09 Rental Car Industry Guidance
• Oil Code Review
• 22/09 TPA – Clarity in Pricing – Potential Breaches with Advertising Service Station Businesses
Richard Payne Principal Policy Director
• 09/09 Fuel Subsidy Scheme Review • 14/09 Fuel Subsidy Scheme Abolition • 20/09 Small Business & General Business Tax Break – Treatment of Retail Fuel Sales • Sep. 14 email: Fuel Security • Oct. 20 email: ACCC Response to Predatory Advertising by Duopolies Tyre Dealers and Re-treaders • 05/09 Waste Tyre Compliance Program • Aug. 31 email: Oversize Tyres Regulation Tow Truck Operators • 14 Jul. 09 Let: Maximum Regulated Towing Fees Motor Trades Association of Queensland 15
Australian Automobile Dealers Association There are many things that we need to do moving forward, the most important from an AADA perspective is to establish an active National Motor Dealer voice.
• Cooperate and liaise with the separate board of MIT through their Chairman Tom Barton • Work with an external events organiser, ‘Expertise Events’, to ensure the AADA Motor Show is not lost, following the cancellation of the 2009 event because of the world economic situation, and that AADA/MTA Queensland income is secure for the next ten years
I come to the end of my AADA Qld Presidency with a sense of excitement. AADA Qld made the decision some time ago that unless we employed someone with the appropriate industry experience to drive the Queensland and National agenda, AADA would never be anything other than just one of the divisions within the motor industry. As a consequence of that decision you went further and approved the appointment of a paid Industry qualified person to represent your policy interests both locally and nationally. In my other role as the Secretary and Treasurer of MTA Queensland, I have been fortunate to work with a board of directors who have taken the proactive stance of driving key industry initiatives and not just accepting what others tell them is the agenda. This resulted in the appointment of Richard Payne as Principal Policy Director for the whole of MTA Queensland, who, together with Wendy Armstrong, our external “political advisor”, has resulted in the Association leading several policies that are summarised on MTA Queensland’s website. Following the resignation of our former full time CEO, the Board decided to restructure the Association to reflect the key drivers of MTA Queensland. These changes resulted in Kellie Dewar being solely responsible for Member Services and Kathy Winkcup being confirmed as Chief Financial Officer. Brett Dale was appointed Managing Director, responsible for all commercial activities. As Managing Director of our most significant commercial acitivity, which operates under the name MTA Institute of Technology, we are able to continue funding member services at the current levels, without the usual upward pressure on membership fees. Other changes under the new Rules include the creation of an Executive Committee, which reports to the Board to provide oversight of the Association’s operations and activities. The Board appointed me to the role of acting Chief Executive Officer and tasked me with the following duties: • Executive oversight of the senior staff 16 Motor Trades Association of Queensland
• Work with VACC and other industry organisations to establish both a Canberra presence and develop a national agenda for the motor industry based on member needs • Executive legal oversight working with our external legal advisors As I receive remuneration for an executive role within MTA Queensland, the advice from Paul Moni, our independent Executive Committee Chairman, was that I should step down from all elected positions and not renominate for any divisional committee or regional position in 2010. Under the new Association rules, I can, if the Board approves, continue though to serve as an independent motor industry member of MTA Queensland’s Executive Committee. At the October 2009 AGM, I came to the end of my many years of tenure with the Association as an elected representative. I am proud to have served as a President of AADA Qld, National President of MTAA and President of MTA Queensland. There are many things that we need to do moving forward, the most important from an AADA perspective is to establish an active National Motor Dealer voice, which is controlled by an industry-qualified person and is receptive to the needs of the Franchise Dealer Industry. The issues facing our members are too important to be relegated to a part time job. In my opinion, the person who runs the national agenda cannot represent the interests of Motor Dealers and at the same time represent the interests of others who may be in conflict with AADA interests. Working with David Purchase, VACC Chief Executive, I am committed to establishing a national motor industry agenda, which is receptive to the disparate needs of the separate State organisations and their Divisions in what is arguably the most important part of the Australian economy. I wish the incoming AADA President and Committee every success and look forward to working with them and all other motor industry interests in my new role.
Ian M. Field President
Automotive Engineers Division Currently we are negotiating with Queensland Transport with regards to the charges that Authorised Inspection Stations are required to charge for the Safety Certificate inspection.
some controversial issue at each meeting. It is extremely important that we are able to negotiate with the various government departments that provide legislation that sits in our workplace.
We are finally holding our Annual General meeting. The reason I make this statement is because our last meeting was over twelve months ago and this was due to several factors. We are the first division to conduct an AGM, with some other divisions still sorting out numbers for their committees. The main contributor was the change of MTA Queensland and Constitution rules, which required us to hold all Annual General Meetings until the new rules were formally approved. Once the new rules were approved we then had to design the process to suit the requirements of the Electoral Commission, because, unlike the past, the Commission actually ran our elections. Because it was completely in the hands of the Commission, some members experienced confusion, but it is my opinion that the elections ran acceptably smooth for the first attempt. We will look at ways of making it easier for members in 2010. There have been structural and administrative changes within MTA Queensland, with the obvious one being the change from being located at West End and Acacia Ridge, to the Training and Administration both located at Wynnum Road, Cannon Hill. The Association has been operating without a CEO, but with a Member Services Executive Officer and an Acting Chief Executive Officer. Our link to Government Departments, policy makers and the media is through Richard Payne. We have also formed an Executive Committee, which deals with the business end of MTA Queensland, but is answerable to the management board of the Association.
As an organisation and as individual business owners we need to be aware of future developments that may impact on our bottom line. Emissions trading and environmental legislation are looming as major factors on future business running costs. If we go one way we could destroy the planet and if we go another way it could be an uncomfortable impost on our business bottom line. My suggestion is to read and listen to all the media reports, then work as an industry group within MTA Queensland to contribute to a sustainable solution. The board of MTA Queensland, which is made up of representatives from all divisions, is very keen to support member’s requirements and be pro-active as a member based organisation. This provides all of us with an exciting opportunity to contribute to change within our workplace by being involved with the Association in all automotive industry issues and changes. This means responding to messages, surveys, etc., and comment on any items that you may have an opinion on. All members are welcome to attend our divisional committee meetings and we also need to encourage others to join. Lets make our association an organisation that all automotive repairers just have to join. In closing, let’s not forget the behind scenes work that the MTA Queensland staff performs. They have the demanding job that provides us with procedures, information, legislation rulings, meeting records, etc. To the MTA Queensland staff, on behalf of my members, I say a big “Thank you”.
Charlie Serchen Chairman
We have achieved some very important results in our time since the last annual general meeting, including the exiting of the Vehicle Register, which now does not have to be completed, provided you have comprehensive computer listings of all your jobs. This saves enormous time for us in the repair industry and saves us duplicating information. Currently we are negotiating with Queensland Transport with regards to the charges that Authorised Inspection Stations are required to charge for the Safety Certificate inspection. We are hoping for a result in our favour. We have also contributed to changes to various sections of the Modification Codes and manage to discuss Motor Trades Association of Queensland 17
Automotive Parts Recyclers Our priority has been unlicensed premises and dealers as well as End Of Life vehicles, Environmental issues and WH&S.
This year has been a year of change for MTA Queensland with our West End office and Acacia Ridge office moving together to Cannon Hill. We have updated our constitution to cater for the currant electoral process. Our president, Mr. Greg Klease, has announced his retirement and Mr. Ian field our secretary/treasurer is standing down from that role. On behalf of the APRD, I would like to acknowledge them both for their time and passion to the Association in making it what it is today. From a divisional point of view, our priority has been unlicensed premises and dealers as well as End Of Life vehicles, Environmental issues and WH&S. I would like to thank the committee for their work and dedication last year. We attended the NTRC forum in Sydney and made recommendations about the WOVR (Written Off Vehicle Register) and the criteria for written off vehicles and statuary write-offs – although the discussion paper released by the NSW RTA that we have made a submission on and forwarded a copy to Queensland transport has overshadowed this. Glen Ford Chairman
18 Motor Trades Association of Queensland
Engine Reconditioners Association of Queensland It is important that we build on local representation through participation at our meetings and anticipated Table Top Expo. Our Division meets quarterly and we would like to see increased attendance. As I have been the Chairman of the ERAQ since 1st April 2009, this is my first Chairman’s Report. I will be continuing in the role for a further two years after I was re-elected at the AGM held Saturday, 10th October 2009. I am using this opportunity to reflect on the past only briefly before moving on to shaping the direction of the Division and format of meetings for the future. Over the past two years there have been some significant changes to our Association and industry. This includes the formation of the Australian Engine Reconditioners Council (AERC) – a body of like-minded representatives from within the industry trying to make valid representation for all ERA members across Australia. It is important that we build on local representation through participation at our Meetings and anticipated Table Top Expo. Our Division meets quarterly and we would like to see increased attendance. Our Division is inclusive, not exclusive to Committee Members - all Members are welcome. A sample of issues discussed at past meetings included: • Packaging of parts, mismatched invoice and box correct wrong product • Trade Recognition and staff training, skills and competency levels within Industry • Quality of parts – push on price reduction may lead to sacrificed quality • Supplier warranty issues • Workshop Equipment standards • Economic and General state of the Industry The format of all our future meetings will include a technical session (see examples below) so please feel free to bring along any technical issues or products you would like to share with the group. Remember, the ERAQ is run by members, so if you are interested in the future of our industry, come along to the meetings or contact me and have your say. Holden Captiva Diesel Engine 2.0 ltr. CDTi. – This engine must be run on synthetic oil. This is true for many of the new diesel engines, eg, The current VW Caddy 1.9 ltr. CDTi is the same. Use of incorrect oil voids warranty. Isuzu 4JX1-TC fitted in Holden Jackaroo 11/’97 2004 – This is a High Pressure Common Fuel Rail engine with the rail being a drilling that runs through the middle of and for the length of the aluminium cylinder head. The drilling passes through each of the four injector holes. The injectors Motor Trades Association of Queensland 19
Engine Reconditioners Association of Queensland
are like the HEUI design with two ‘o’ rings to seal off the fuel and restrict it to the drilling and the holes in the injector body. (Note: Isuzu/Holden have had no end of problems with these ‘o’ rings failing prematurely.) One end of this drilling is in the outside end surface of the head and is an open threaded hole to take a threaded fitting. The other end is sealed with a steel ball (typical of Japanese cylinder heads). This drilling finishes in the water jacket and can be accessed by removing the welsh plug in the end of the head. After approximately 90,000 kilometres and/or if the head has got a bit hot, fuel leaks past this steel ball into the cooling system i.e., the customer will report diesel in the radiator or overflow tank. The solution is to remove the steel ball and drill, tap and plug the hole. Mitsubishi 4M4X Series and Mazda WL-T Engines – The tops of the bores in these engines are notable by several rows of hardened wear pads in the ring turnaround region. The purpose of these pads is to reduce bore wear. The process used here is Laycarb® silicon carbide impregnation. The process can be applied to whole cylinder bores, but is expensive and so in these cases is applied locally for a specific purpose. The application is usually still present at 0.50 mm oversize, but typically is gone at 1.00 mm oversize. Some reconditioners have reported difficulties in maintaining the bore true in this region after a bore and hone. This can be achieved with the correct cutting tips and boring and honing settings. As a Division and Committee, we look forward to bringing some much needed tools to the industry such as Industry Benchmarking Data. Again, participation is the key so when we distribute information we would appreciate it being given your attention for completion and return to the nominated source for collation. Any information submitted remains confidential and anonymous. Next year the committee would like to organise an Engine Reconditioners conference in Queensland. We have spoken to the other state chairmen and they are keen to be involved. This will only take place with involvement from members.
Mark Bryers Chairman
20 Motor Trades Association of Queensland
continued
National Auto Collision Alliance The collision repair industry has endured harsh times with the Global Financial Crisis eroding their bottom lines and there will be no short-term relief from this as the major insurers battle to make margins on their reinvestments. I must thank my fellow board members for endorsing me to review the code and its context and file a report with Kellie Dewar, General Manager Member Services and Richard Payne, Policy Advisor - as this will form part of our review submission.
Firstly, I would like to congratulate Mark Brady for being re-elected as Vice Chairman and Chris Manteit to the position of Secretary. I also welcome all the incoming committee members. Over the past two years the collision repair industry has endured harsh times with the Global Financial Crisis eroding their bottom lines and there will be no short-term relief from this as the major insurers battle to make margins on their reinvestments. Within this period we have seen the formation of three large consolidators using the North American model, hence all have failed. This again proves to me that Australia’s market is totally misaligned with the rest of the world. The only common denominator is that we fix smashed vehicles. It is unfortunate that when the executives of insurance companies travel abroad that they fail to observe the hourly rate. When I was in California in November 2007 the rate for panel ranged between $88 to $102 per hour and the same for paint plus 50% of the hourly rate for paint materials which is “realistic” and that word is clearly spelt out in section 6.2 of our industry code.
As this will be my last term as Chairman I will not be seeking renomination when my tenure expires. The ongoing success of the NACA is only made possible by the tireless work of Kellie Dewar and our divisional manager Neil Short and lets not forget Katie Gould for her promptness and efficiencies. Also, those dedicated committee members past and present. I would like to leave you with a couple of amusing statements by assessing managers, which I am yet to understand: 1. “We only pay for visible sealer” - it is the only kind 3m or Wurth and others produce . . . so what do we use on the areas that are not visible or hidden by trims? 2. “You work with me and I will work with you” – this is the politically correct term for intimidation. Thanks for the support.
David Weatherall Chairman
We as industry have failed to use the code for equitable outcomes in the negotiation process with insurance company representatives and the ACCC has expressed concern that both the insurers and repairers have little understanding of the code and do not use it to resolve their differences. I am pleased to inform you that there is to be an independent review of the code with all submissions from peak industry bodies that would have had to be filed with the external review appointees by the 25th of November and followed by a one on one interview with the MTA Queensland and other State member bodies in Sydney on the 9th of December.
Motor Trades Association of Queensland 21
Queensland Farm and Industrial Machinery Dealers Division With the investment allowance driving new machinery sales, second hand machinery sales quickly became almost nonexistent. This caused the farm machinery industry to see escalating trade in volumes, along with large sums of money tied up in used stock. With all of these factors looming, machinery dealers will need to rise to the challenge and manage their assets to ensure success of their businesses going forward.
This past year has seen many changes in our industry, mainly brought on by the Global Financial Crises (GFC) where government has acted to stimulate the economy and drive growth within the Australian economy at the core roots. Thankfully this was to our benefit in the agricultural industry. The introduction of the investment allowance has seen our agricultural industry sector become more buoyant than it has been for many years. Australian farmers, on the back of good summer and winter seasons have taken advantage of the investment allowance, accepting tax breaks to purchase new machinery that saw tax savings for them of up to 50% on machinery purchases in some instances. This has driven the farm machinery dealers to see record turnover years in their businesses. With every upside there is often a downside. With the investment allowance driving new machinery sales, second hand machinery sales quickly became almost nonexistent. This caused the farm machinery industry to see escalating trade in volumes, along with large sums of money tied up in used stock. With many financial institutions pulling out of wholesale floor plan finance, many dealers struggled with finding alternate options of funding to carry on with business. In fact, many institutions were finding it hard as the GFC was causing them problems as borrowing funds was becoming more expensive and much more difficult to procure. While this period saw housing interest rates at an all time low, the business sector saw very little relief in interest rates for funding day-to-day business operations. The next 12-month period in the agricultural machinery business will prove to be challenging due to: • High second hand inventory levels, and in many cases many at overvalued inventory costs • New product stock on hand increasing due to prior stock shortages where we saw many manufacturers experiencing component shortages and lack of supply, causing many dealers to over order on inventory • the looming threat of an El Nino as this year’s winter season is drying up fast 22 Motor Trades Association of Queensland
The industrial machinery business industry sector continues to be slow as currencies continued to remain low and machinery stocks in the industry are at an all time high. This is due to many dealers over ordering on inventory as the slowdown followed a period where many manufacturers had an inventory ordering lead-time of close to 12 months. The GFC has had a huge effect on infrastructure spending in the industrial sector, hence no local government spending and no new contracts being awarded to drive business in this industry area. Recovery to the industrial sector could be as far away as late 2010 when infrastructure spending is expected to be released for contract by the state government.
Formation of a National Body As all members would be aware, MTA Queensland moved away from our affiliation with the Motor Trades Association of Australia (MTAA) 3 years ago, severing any ties we had with any national body formed under the control of the MTAA. Since then we have seen a strong resurgence from other states to form a National Body in our industry sector. The Victorian Automobile Chamber of Commerce (VACC) and the Tasmanian Automobile Chamber of Commerce (TACC) have also relinquished their ties to the MTAA, as they too saw a need to move from the bureaucratic, rigid, regimented, non-transparent approach shown from that organization. The VACC has taken under its wing a movement of machinery dealers in NSW who have also moved away from the MTAA, along with a group known as Farm Industrial Machinery Dealers Association Western Australia (FIMDAWA) who have also seen the need to formalise a National Body. Representatives from all organisations met on 14th August in Melbourne to move forward to formalise an association that has a national agenda, with the ability to lobby politicians and parliamentarian bureaucrats for and on national agenda issues affecting the Farm and Industrial Machinery Dealer sector issues. This national body would carry some weight in swaying decisions at a federal level. At the meeting we formed a national body, “Australian Ag and Allied Equipment Council” (AAAEC). Mr. Ian Goding was elected chairman. Ian also serves as the Chairman of the Farm Machinery Dealers Division of the VACC. The Vice Chair was nominated and elected and yours truly will undertake that position. Mr. Peter Dunphy was nominated and accepted as the National secretary. Peter is a VACC Division Manager for the FIMDD of the VACC. The balance of the committee of the AAAEC
includes Neil Short (QLD), Garry Gauci (NSW), Bruce Perkins (NSW), John Henchy (WA), Kevin Jones (WA), Barry Whyte (Tas) and Trevor Shipton (NSW). Discussions around the formulation of this national body noted the following requirements: • Adopt a national approach to addressing national issues • Push for harmonization of laws between States with OH&S high on the agenda • Deciding to be a dealer or dealer/manufacturer organisation • Make its dealings transparent and not to be saddled with bureaucracy • Not to plan too far into the future, let the organisation evolve so that contemporary matters of importance can be addressed on a timely basis • It was noted that we are in a generational change, baby boomers who are on the way out in 5 to 10 years, close to retirement, the boomers being rigid in thought processes, with generation “Y” being different in approach, and not wanting to be a part of a regimented, bureaucratic organisation, for continuance into the future of the AAAEC, we see the need to nurture this transition After discussion, national agenda item listed were: • Benchmarking • Online parts locator • OH&S • Transport Departments (Cross Boarder Laws) • Franchise Code of Conduct (To obtain a seat for the AAAEC on the Franchise Council) • Elite Warranty (Outside provider of used warranty in the FIMDI)
MTA Queensland Many members may not be aware that MTA Queensland has relocated from the West End property at Buchanan Street, where we have retained ownership of that building and found tenants that are leasing. We have moved locations of all of the Association’s operations including MIT (Training) from Acacia Ridge to the new location at 1000 Wynnum Road, Cannon Hill, where we share the building with the head quarters of GMH. GMH has the bottom office block floor and MTA Queensland has the balance of the building. The
move has been a fantastic one for the Association as it has brought all operations under one roof, and is much easier and accessible for all staff and visitors as it is only a short distance off the Gateway motorway. I encourage all members to drop in and make themselves known to staff and inspect these excellent facilities.
Queensland Transport The ongoing issue of trade plate use is hopefully getting closer to resolution. I have been working closely with Richard Payne (Principle Policy Officer MTA Queensland) and without his tireless efforts on this issue I would be hesitant to say we would be hopeful of a legislation change in the not too distant future. Be aware that the letter issued by Queensland Transport that allows machinery dealers exemption to move machinery on public roads expired on the 19th August, to which we made them aware, but at the time of writing this report we have had no reply. You should also be aware that you cannot and are not covered for third party damage under the use of the exemption letter in case of an accident. Our best resolution to this issue is that sanity prevails and we get legislation change that allows us the use of trade plates again.
Ag Show Every year we face new challenges and obstacles organising the Ag Show. This year has been harder than most, due to the belief of effects of the GFC. Most major exhibitors had re-booked but in some cases elected to down size their presence. The inclement weather experienced in 2007 and 2008 impacted crowd numbers of those events and I feel it has had a bearing on the thoughts of some exhibitors attending in 2009. In saying that where we have lost exhibitors, we have gained others and site sales as at the end of July were ahead of prior years. We have maintained our sponsorship of 2008 with Heritage again being our major naming rights sponsor, and I encourage our members to remember them when seeking a business finance partner. This year’s Heritage Ag Show was officially opened by Mayor Peter Taylor (Toowoomba Regional Council) at the Chairman’s Lunch on Tuesday, 1st September 2009.
Changes to our Constitution You may be aware that there have been significant changes within MTA Queensland. The Association now has an Executive Committee made up of 7 directors and 1 independent Chairman that report to the full Board. These changes have been based around making the Board a better operation whereby the Executive meets prior to Motor Trades Association of Queensland 23
Queensland Farm and Industrial Machinery Dealers Division continued
Board meetings and discusses issues, so that only issues of operational importance needed taking to the Board will be presented for decisions. Other changes are based around constitutional changes and going forward our QFIMDD division election process will fall in line and be run by the Queensland Electoral Commission in the future. Under this change, we will need to have a nominated committee of our division of 5 people, but will need 12 to attend or attend by proxy at the AGM to have a quorum. From the committee of 5, there will be nominations for an election of a Chairman, Vice Chairman and Secretary/ Treasurer, with the office of Chairman standing for a 2-year period. In saying this, as your elected representative of the QFIMDD, I have been fully involved in the process changes within MTA Queensland. I have over the past period worked very closely with the acting CEO and President in reshaping the Association to a corporate model of governance. My involvement has placed our division of the Association with a recognisable presence. Currently, I hold the position of Vice President, MTA Queensland, Chairman of the MTA Queensland Remuneration Committee, Director MTA Queensland, Director of Ag Sow on behalf of MTA Queensland, and Executive Committee Member and Vice Chair. It has been a pleasure to represent you and your interests in our industry at MTA Queensland, and I look forward to working closely with you all over the next year. If you have any issues arising that you would like addressed by the Association please do not hesitate to contact me.
David K Fraser Chairman
24 Motor Trades Association of Queensland
Queensland Motorcycle Industry Division The State Government is looking with MSWG and the Travel Safe Committee to evaluate motorcycle fatalities, safety and licensing.
Firstly, on behalf of the committee I would like to thank the Staff of MTA Queensland - especially Kellie Dewar and Aynslee Bell - who helped keep the issues of the motorcycle industry alive, and for representing us at government and industry meetings. With only a handful of active dealers, it was challenging to hold a meeting. With the polarisation of the industry I feel this will be an ongoing situation. The QMID and the industry had a fairly issue-free year other than the loss through bankruptcy and other financial strains of 6 larger stores, and the introduction of the well over due LAMS licensing scheme that was probably the highlight of the year. The State Government is looking with MSWG and the Travel Safe Committee to evaluate motorcycle fatalities, safety and licensing. Issues arising from this will include new licensing restrictions, alcohol, dress standards, advertising campaigns and general public awareness, motorcycle identification, driver education, etc. MTA Queensland’s current structure and recent alliance with VACC has put our Association in great shape. I believe the VACC motorcycle division can and should have a great influence on the issues faced by the industry, and how government bodies should be lobbied. VACC is very strong with issues facing motorcycle retailers and with the industry as a whole. It has achieved massive recognition in Victoria and is well respected by the bureaucrats. The future of the QMID is in the hands of it members and with dwindling numbers attending meetings it may be time to look at ways to either strengthen the division or amalgamate with another.
Paul Peterson Chairman
Motor Trades Association of Queensland 25
Queensland Tyre Dealers & Retreaders Division Issues for our industry over the past year or so have once again centred on the Waste Tyre Compliance Program and more recently the issue of Tyre Fitment vs. Axle Load.
It’s hard to believe that we are almost at the end of yet another year, and what a year it’s been. I’m sure everyone’s tired of hearing about the Global Financial Crisis (GFC), but there’s no denying the fact that it is an event that will have certainly affected us all in one way or another and it will continue to be talked about and felt by future generations. While the GFC has had a severe impact on some sectors of the Australian Automotive Industry, from my experience in talking to dealers throughout Australia, the Tyre & Repair Industry has probably fared better than most. Dealers have reported strong sales and profit over the past year, and some have contributed this to fleet companies holding onto vehicles for a little longer and therefore requiring another set of tyres or some small repairs to keep the vehicles in safe running conditions. Our Membership numbers have dropped a little over the past couple of years - we currently have around 115 members. This is due mostly to the K-Mart group of stores reverting back to their parent group Coles Myer for their industry support. On a positive note, we have been successful in gaining new members through our direct marketing initiatives over the past couple of years. Issues for our industry over the past year or so have once again centred on the Waste Tyre Compliance Program (see Member Bulletin number 03/09) and more recently the issue of Tyre Fitment vs. Axle Load. Both of these issues are very important to the Tyre Industry in general and MTA Queensland will continue to work with Industry and Government bodies at all levels to ensure that Members and Consumers interests and concerns are heard. If you would like any further information on these and any other issues that are discussed at committee meetings, please log onto the MTA Queensland website (www.mtaq.com.au) to view and download all Member Bulletins. Alternatively, you could contact the Association directly for a copy to be sent to you. On corporate news, in May this year we saw MTA Queensland Member Services and MTA Institute of Technology (Training) relocate to new premises at Cannon Hill, once again giving us everything under the one roof, which has been very positive for everyone. In closing, I would like to take this opportunity to thank the staff at MTA Queensland and the Committee Members for their support throughout the year and wish them and all of our valuable members a safe, happy and prosperous Christmas period and I look forward to the challenges which lie ahead in 2010. John Ruddick Chairman 26 Motor Trades Association of Queensland
Rental Vehicle Industry Division We have addressed these issues but our main focus is not on the make up of the document itself, rather it is keeping the pressure on the ACCC to police its rules.
During the year our Committee has maintained focus on current issues confronting the Industry as well as looking to be pro active in areas of concern. Let me now cover some of the issues addressed this year.
Interstate and incorrectly registered vehicles. This year, unlike past years, we have noticed what appears to be an improvement in this area. Our surveys suggest that there are more Queensland registered vehicles within company fleets than in the past. We did note a series of letters sent to operators by Queensland Transport asking for Fleet details, etc. We understood the motives behind this but voiced an opinion as to the difficulties faced in adhering to this request and how in the future it could be successfully managed. After the initial letters were sent out we have heard no more and the Committee agreed to let the matter rest. Past experiences suggest that if we do not keep a close eye on this problem a reversal will occur, especially if State pricing moves higher. The situation is by no means solved. Our aim is to keep working to level the playing field for all those rental operators in Queensland that can’t “justify” interstate registered vehicles. The law is clear. If a vehicle is resident in the State for longer than 14 days it must carry Queensland Registration.
Automatic Tolls on Qld Roads In the early stages this presented quite a dilemma and in conjunction with the Toll Authority we set out an advice to our members as to how this could be best handled. We found that one suggestion did not fit all. Small “retail” fleets had different needs to the larger companies that hire to commercial enterprises. Concern was shown that an increased need to provide staff time to do Stat Decs, etc., may be required. I believe that we have worked out the best system for each of us, as we have had no complaints brought to our attention.
Truth in Advertising We have been asked to comment and to supply input into a draft document being developed by the ACCC, which could be described as a “Rental Code of Conduct” and will, we are advised, be eventually written into legislation. Victoria has already taken this step. In May of this year legislation was introduced demanding that the minimum price of the goods that you could purchase must be displayed in all advertising in equal prominence to any other shown pricing. The legislation also focuses heavily on “lost leaders” - if you advertise a product at a price you must have one readily available. We have addressed these issues but our main focus is not on the make up of the document itself, rather it is keeping the pressure on Motor Trades Association of Queensland 27
Rental Vehicle Industry Division continued
the ACCC to police its rules. If you check the Internet, the display on trucks, print advertising and billboards outside Rental agencies this legislation in the main is being ignored. We want to keep pushing the ACCC to police their own rules so that we are all operating from an even playing field.
MTA Queensland The Management of MTA Queensland has been changed. A Committee elected by the board oversees the running of the operation. The training operation is separate and has a board of its own. The main board of directors of which each division chairman holds a position still oversees the running of everything. We no longer have a full time CEO. We have appointed a “Principal Policy Director�, Richard Payne, who is the face of our organization when needed. We have also firmed up closer ties with the VACC in Victoria.
Committee Meeting Attendance All members are invited to attend and I encourage you all to come along. We are always seeking agenda items. We can only address issues if we know what they are. Our Membership ranges from small independent operators to multi national corporate and franchisee businesses. Issues that affect our membership will be varied. If you have a problem or a matter that concerns you, come to our meetings and have a voice. Remember the services that the Association offers and use them to your advantage. Get value for your subscription.
Acknowledgements I would like to thank both my Committee members and the Staff of MTA Queensland for all the support offered during the year and I am sure we are looking forward to an even more productive future. Les Tickell Chairman
28 Motor Trades Association of Queensland
Service Station and Convenience Store Association of Queensland A State Government matter with which we were very proactive on behalf of our Members was the former Fuel Subsidy Scheme. Issues relating to the subsidy commenced in 2007 and concluded in the 2009 State Budget with the decision to abolish the 8.35 cents a litre to fuel consumers. In reviewing my report from last year, I made the statement that 2008 was the most challenging and rewarding in my 20 years in the petroleum industry. I must say that 2009 has been in no way a let down. In fact, 2009 was a continuation of the previous year as many of the matters we were involved with are still on going and will also roll on to the next decade. Compiled below are fuel related issues from both Federal and State Governments, which have been the priorities for our Committee:
Former Fuel Subsidy Scheme A State Government matter with which we were very proactive on behalf of our Members was the former Fuel Subsidy Scheme. Issues relating to the subsidy commenced in 2007 with the Pincus Commission of Inquiry and concluded in the 2009 State Budget with the decision to abolish the 8.35 cents a litre to fuel consumers and apply it as a petroleum tax similar to other Australian jurisdictions. We actively participated in the consultation process that included: • Submissions and evidence to the Pincus Commission of Inquiry • Meetings, discussions and correspondence with the State Treasurer and his staff and Office of State Revenue (OSR) • Submissions to OSR’s consultation paper concerning the visibility of the fuel subsidy to consumers, compliance with the scheme and a suggested “swipe card” for consumers to access the subsidy – our Committee opposed the consultation paper’s proposals and suggested alternative remedies • Additional suggestions in a submission to address the Government’s transparency concerns regarding the fuel subsidy scheme Unfortunately, with this being a State Election year, all matters and submissions were shelved until the election, after which a decision was made with no further consultation to ourselves or any other of the parties involved.
Fuelwatch We provided a submission to the Senate Standing Committee on Economics opposing proposed Fuelwatch due to its anti-competitive structure that had the potential to adversely impact on our membership. We believe that our Submission was one of the leading influences that had this proposal halted. Motor Trades Association of Queensland 29
Vehicle Fuel Efficiency A submission was made to the Federal Department of Environment, Water, Heritage and the Arts’ Vehicle Fuel Efficiency, addressing a range of issues in the consultation paper.
Meaning of ‘understanding’ in the Trade Practices Act 1974 We responded to an Australian Competition and Consumer Commission (ACCC) discussion paper concerning the meaning of ‘understanding’ in the Trade Practices Act 1974 (TPA). We supported a statutory definition of ‘understanding’ in the TPA as our fuel retailing sector had experienced the direct consequences of anti-competitive behaviour based on ‘understandings’.
Caltex Australia Ltd (Caltex) – proposed acquisition of the retail assets of Mobil Oil Australia Pty Ltd (Mobil) We have been proactive on this matter on behalf of members. Initially we wrote a letter to the ACCC Queensland Regional Director concerning the very significant implications for consumers and fuel retailers if the proposed acquisition of Mobil’s retail by Caltex was to occur. We said a transaction must not proceed until an impact statement had been undertaken to determine the effect on the real level of competition in the fuel retailing market. This was followed by a letter to the ACCC Chairman Graeme Samuels articulating that the proposed trade sale would further concentrate market and economic power with the oil majors and the allied chain stores to the disadvantage of consumers and independent service station operators. In that letter we suggested the application of an exclusion zone of some five kilometres radius to prevent three Caltex sites (existing Caltex/Woolworths, an existing Caltex and an acquired Mobil site) operating within the zone. Caltex should be required to sell one of the sites, or failing divestment, the Independent service station operating in the zone that has to compete against the oligopolistic outlets should be able to purchase fuel from Caltex at a similar Terminal Gate Price equal to the lowest of the Caltex’s three outlets. The ACCC’s Merger Investigations Branch sought written comments to a discussion paper concerning the proposed acquisition. We made a fulsome response reiterating the application of an exclusion zone as expressed in our letter. We were surprised and pleased to receive notification 30 Motor Trades Association of Queensland
that the ACCC sought additional comments on specific matters including the extensive research and analysis it had undertaken on the impact of the proposed acquisition on micro-economic areas of three to five kilometres. Again we have responded on behalf of our members. It was expected that the ACCC would have made its findings on the proposed acquisition of Mobil’s retail assets by Caltex on 7th October.
Oilcode In early 2008 we responded to the Federal Department of Resources, Energy and Tourism request for submissions pertaining to the Oilcode review. We raised some key issues on behalf of members that included that independent operators should be reasonably assured that the price at which they buy fuel is transparent and fair, which means opening up the Terminal Gate Price to scrutiny and publication of a minimum price. The Department recently released its response to the Oilcode Review calling for comments to the findings. On behalf of Members we will respond.
Franchise Code We responded to the Joint Committee on Corporations and Financial Services’ call for submission to the Inquiry into the Franchising Code of Conduct. Included in our issues were franchises involved in a large number of modest transactions such as fuel, exit arrangements and renewal.
Drive Offs We are still working on consulting with the Queensland Police Service regarding a Statewide Drive Off reporting system, but as stated earlier, this being an election year, this issue was also shelved. We will continue to work on this issue, which I know impacts nearly every Service Station.
In conclusion On behalf of the Committee, I would like to thank Wendy Armstrong, who has formulated our reports and submissions to Government, and also thanks to Richard Payne, for without both of their passion and drive we would not have the level of advocacy in Government that we have today. I would also like to thank Kellie Dewar and her team at MTA Queensland for their tireless efforts throughout the year, which I feel has made the Association a highly professional organisation. Tim Kane Chairman
Used Car Division The industry is going through many changes and challenges and to strengthen our share of the market we must continue to adapt.
The Used Car Division has been interesting to say the least. Stock has been particularly hard to find, prices have been high and there has been an increasing infringement on our retail market. The industry is going through many changes and challenges and to strengthen our share of the market we must continue to adapt. Sometimes decisions need to be made quickly to prevent the market being eroded from us by the private sales, as this market is increasing – however, figures show the volume is under $10,000 and the Auction Houses are wanting a larger share of the private market. We have had some wins, with The Office of Fair Trading making available on their website a search area for the checking of Motor Dealer’s licenses. This has proved very popular with the Auctions, allowing them to check on prospective buyers. The “Drive Away Price” issue introduced recently has also had a negative impact on the retail used car industry, creating confusion for buyers. We now have a situation where there is no longer a level playing field with regards to advertising. Private sellers can advertise without displaying any Government charges, whereas Motor Dealers have to display the drive away price. This can, depending on the car’s value, mean a difference of up to and beyond $1000, leaving dealers very disadvantaged. As Chairman of the division I thank the committee and staff of MTA Queensland for their support, however, we also need the commitment and support of our members to continue the strength of the division - so I urge members to get involved. As this year is drawing to a close, I would like to wish everyone in the industry a very Happy and restful Christmas and a successful New Year.
Achievements: • Liaising with Department of Fair Trading - Revised subscribed forms / Compliance Issues / Online Dealer Licence Check • Liaising with Department of Transports – Compliance Issues / Written off Vehicle Register • Liaising with Department of police – Roadside Selling • Liaising with Local Authorise – Roadside Selling Daryll Searle Chairman
Motor Trades Association of Queensland 31
Motor Trades Association of Queensland Industrial Organisation of Employers
Financial Report for the year ended 30 June 2009
Contents 34. Income statement 35. Balance sheet 36. Cash flow statement 37. Statement of changes in equity 38. Notes to and forming part of the financial statements 54. Declaration by members of the board of MTA Queensland 55. Independent audit report 57. Accounting officer’s certificate 58. Certificate by members of the board of MTA Queensland 59. Auditors independence declaration
Income Statement For the year ended 30 June 2009
Note
REVENUES
2
2009 $
2008 $
7,821,272 9,684,183
EXPENSES Employee benefits expense
3
(4,973,061)
(4,693,111)
Freight and cartage
3
(46,004)
(61,332)
Depreciation and Amortisation expenses
3
(236,292)
(249,299)
Commissions paid
3
(41,232)
(20,992)
Finance costs
3
(17,457)
(12,898)
Other expenses
3
(2,965,392)
(4,398,355)
Total Expenses
(8,265,039)
9,435,987
PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE
1(b)
(443,767) 248,196 - -
PROFIT ATTRIBUTABLE TO MEMBERS OF THE ASSOCIATION (443,767)
34 Motor Trades Association of Queensland Industrial Organisation of Employers
248,196
Balance Sheet As at 30 June 2009
Note
2009 $
2008 $
ASSETS Current assets Cash and cash equivalents
4
3,876,919
4,022,645
Trade and other receivables
5
1,069,786
1,146,340
Inventories
6
55,293 87,618
Other
7
80,357 86,758
Total Current Assets 5,082,355 5,343,361
Non-current assets Other
8
369,347 267,777
Intangible asset
9
41,899
51,534
Other financial assets
10
4,884,101
5,385,435
Property, Plant & Equipment
11
6,088,853
6,479,289
Total non-current assets 11,384,200 12,184,035 TOTAL ASSETS 16,466,555 17,527,396 LIABILITIES Current liabilities Trade and other payables
12
835,796
756,365
Provisions
13
62,140 33,225
Other
14
100,620 231,607
Financial liability
15
247,375
88,754
Total current liabilities 1,245,931 1,109,951 Non-current liabilities Provisions
13
Financial liability
15
61,515 65,859 110,599
357,974
Total non-current liabilities 172,114 423,833 TOTAL LIABILITIES 1,418,045 1,533,784 NET ASSETS
15,048,510
15,993,612
MEMBERS’ FUNDS Reserves
16
5,380,955 5,882,289
Retained Earnings
17
9,667,555
10,111,323
TOTAL MEMBERS’ FUNDS 15,048,510 15,993,612
Motor Trades Association of Queensland Industrial Organisation of Employers 35
Cash Flow Statement For the year ended 30 June 2009
Note
2009 $
2008 $
Cash receipts from customers
10,551,363
9,402,464
Dividends received
306,424
295,556
Interest received
244,640
249,114
Cash paid to suppliers and employees
(10,937,684)
(8,982,872)
164,743
964,262
(101,570)
(494,203)
CASH FLOWS FROM OPERATING ACTIVITIES
NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES 19(b)
CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment Payment for investments
-
(5,000)
Payment for capital expenditure
(141,009)
(118,261)
Proceeds from sale of property plant and equipment
20,864
43,913
(221,715)
(573,551)
Proceeds from borrowings
(88,754)
446,728
NET CASH INFLOW/(OUTFLOW) FROM FINANCING ACTIVITIES
(88,754)
446,728
Net Increase / (Decrease) in cash and cash equivalents
(145,726)
837,439
Cash and cash equivalents at the beginning of the period
4,022,645
3,185,206
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 19(a) 3,876,919
4,022,645
NET CASH INFLOW/(OUTFLOW) FROM INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
36 Motor Trades Association of Queensland Industrial Organisation of Employers
Statement of Changes in Equity For the year ended 30 June 2008
Asset Revaluation Reserve
Retained Earnings
Total
Balance at 1 July 2007
4,858,951 9,863,127 14,722,078
Add Revaluations
1,023,338
-
1,023,338
-
248,196
248,196
Balance at 30 June 2008
5,882,289
10,111,323
15,993,612
Balance 1 July 2008
5,882,289 10,111,323 15,993,612
Net Profit
Revaluations Net Profit Balance at 30 June 2009
(501,334) - 5,380,955
- (501,334)
(443,768) 9,667,555
(443,768) 15,048,510
Motor Trades Association of Queensland Industrial Organisation of Employers 37
Notes to and Forming Part of the Financial Statements For the year ended 30 June 2009
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES The financial report is a general purpose financial report that has been prepared in accordance with Accounting Standards, including Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. The financial report covers the Motor Trades Association of Queensland as an individual entity. Motor Trades Association of Queensland is a Union of Employers governed by the Industrial Relations Act 1999 within Queensland and the Workplace Relations Act at a national level. The financial report of Motor Trades Association of Queensland complies with all Australian equivalents to International Financial Reporting Standards (AIFRS) in their entirety. The following is a summary of the material accounting policies adopted by the association in the preparation of the financial report. The accounting policies have been consistently applied, unless otherwise stated.
Basis of Preparation The accounting policies set out below have been consistently applied to all years presented. Reporting Basis and Conventions The financial report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.
Accounting Policies a. Associated Entities Motor Trades Association of Queensland owns and controls a number of associated entities. The following are the associated entities: MTAQ Ltd MTA Institute of Technology Pty Ltd All entities have a June financial year end. MTAQ Ltd was the only entity which had any activity for the 2009 financial year. Transactions which relates to these entities are conducted on trust for Motor Trades Association of Queensland and are brought to account by the Motor Trades Association of Queensland. b. Income Tax The association is exempt from income tax under section 50-40 of the Australian Income Tax assessment Act 1999. c. Inventories Inventories are measured at the lower of cost and net realisable value. Costs are assigned on the basis of weighted average costs. d. Property, Plant and Equipment Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses. Property Freehold land and buildings are shown at their fair value (being the amount for which an asset could be exchanged between knowledgeable willing parties in an arm’s length transaction), based on periodic, but at least triennial, valuations by external independent valuers, less subsequent depreciation for buildings. Increases in the carrying amount arising on revaluation of land and buildings are credited to a revaluation reserve in equity. Decreases that offset previous increases of the same asset are charged against fair value reserves directly in equity;
38 Motor Trades Association of Queensland Industrial Organisation of Employers
all other decreases are charged to the income statement. Each year the difference between depreciation based on the revalued carrying amount of the asset charged to the income statement and depreciation based on the asset’s original cost is transferred from the revaluation reserve to retained earnings. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset.
Plant and equipment Plant and equipment are measured on the cost basis less depreciation and impairment losses. The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the assets’ employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.
Depreciation The depreciable amount of buildings is depreciated on a straight line basis with all other fixed assets and capitalised lease assets, but excluding freehold land, is depreciated on a diminishing value basis over their useful lives to the association commencing from the time the asset is held ready for use. Leased assets are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the assets. The depreciation rates used for each class of depreciable assets are:
Depreciation Rate
Class of Fixed Asset
Buildings 5% Plant and equipment 15 – 60% Motor Vehicles 30% Leased Assets 20% Fixtures and Fittings 20% The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains or losses are included in the income statement. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings. e. Financial Instruments Recognition Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below.
Financial assets at fair value through profit and loss A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designated by management and within the requirements of AASB 139: Financial Instruments: Recognition and Measurement. Realised and unrealised gains and losses arising from changes in the fair value of these assets are included in the income statement in the period in which they arise.
Motor Trades Association of Queensland Industrial Organisation of Employers 39
Notes to and Forming Part of the Financial Statements For the year ended 30 June 2009
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued
Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are stated at amortised cost using the effective interest rate method.
Held-to-maturity investments These investments have fixed maturities, and it is the group’s intention to hold these investments to maturity. Any held-tomaturity investments held by the group are stated at amortised cost using the effective interest rate method.
Available-for-sale financial assets Available-for-sale financial assets include any financial assets not included in the above categories. Available-for-sale financial assets are reflected at fair value. Unrealised gains and losses arising from changes in fair value are taken directly to equity.
Financial liabilities Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal payments and amortisation.
Fair value Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models.
Impairment At each reporting date, the group assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether an impairment has arisen. Impairment losses are recognised in the income statement. f. Impairment of Assets At each reporting date, the group reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the income statement. Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs. g. Employee Benefits Provision is made for the company’s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits. h. Provisions Provisions are recognised when the group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured. i. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within shortterm borrowings in current liabilities on the balance sheet. j. Revenue Revenue from the sale of goods is recognised upon the delivery of goods to customers. Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.
40 Motor Trades Association of Queensland Industrial Organisation of Employers
Dividend revenue is recognised when the right to receive a dividend has been established. Dividends received from associates and joint venture entities are accounted for in accordance with the equity method of accounting. Revenue from the rendering of a service is recognised upon the delivery of the service to the customers. All revenue is stated net of the amount of goods and services tax (GST). k. Borrowing Costs Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use of sale. All other borrowing costs are recognised in income in the period in which they are incurred. l. Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Tax Office. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the balance sheet are shown inclusive of GST. Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows. m. Leases Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership that are transferred to entities in the association, are classified as finance leases. Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period. Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the lease term. n. Comparative Figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. o. Capital Management The directors of the association control the capital to ensure that the association can fund its operations and continue as a going concern. The association manages capital primarily through receipt of membership and training revenue and profits generated from business activities. There has been no change in the current year to this approach. p. Critical Accounting Estimates and Judgments The directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the group
Key estimates — Impairment The group assesses impairment at each reporting date by evaluating conditions specific to the group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates. The financial report was authorised for issue on 06 November 2009 by the board of directors.
Motor Trades Association of Queensland Industrial Organisation of Employers 41
Notes to and Forming Part of the Financial Statements For the year ended 30 June 2009
2009 $
2008 $
45,000
45,000
150,978
173,066
36,475
39,687
5,856,009
4,930,276
Sale of publications
303,996
262,394
Sale of stationery
314,727
384,609
Interest from other persons
228,402
278,779
Members subscriptions & entrance fees
821,983
855,453
-
2,315,307
35,000
100,000
MTAA House dividend
226,424
235,556
Loss on sale of assets
(283,925)
NOTE 2: REVENUES Revenues From Operating Activities Agricultural Show Distribution Commissions received Industrial services income Training services
Motor show income MTQ Insurance dividend
(9,434)
Rent
62,675 19,456
Sundry income
23,528
54,033
7,821,272
9,684,183
Accounting & Audit Fees
43,249
39,841
Advertising & Promotion
39,156
78,838
6,668
7,238
20,188
45,873
17,493
17,773
164,647
-
TOTAL REVENUE FROM OPERATING ACTIVITIES
NOTE 3: EXPENSES Expenses From Operating Activities
Affiliation Fees Bad & Doubtful Debts Bank Charges Building Relocation Cleaning
44,914 47,854
Cost of goods sold – Publications
132,600
111,829
Cost of goods sold – Stationery
161,758
204,191
Cost of goods sold - Training
193,766
164,871
Commissions
41,232 20,992
Computer Upgrades
91,911
56,425
Consultants fees
251,827
214,378
Depreciation & Amortisation
236,292
249,299
Director Fees
37,000
29,069
Donations
23,167 61,635
Entertainment
42 Motor Trades Association of Queensland Industrial Organisation of Employers
4,934 27,713
2009 $
2008 $
Fees
13,197 9,715
Fringe Benefits Tax
36,176
Insurance
58,617 54,628
Interest
17,457 12,898
Legal Costs Light & Power
141,024
47,606
188,897
27,542
22,185
Travel Board – Airfares/Accom
101,242
Meetings - Catering Board
26,561
35,536
Travel Staff – Airfares/Accommodation
56,297
145,733
Meetings – Catering Staff
6,145
11,484
51,446
811
640,477
2,097,577
Motor Vehicle - Fuel
37,606
42,416
Motor Vehicle - Other
49,493
18,929
Travel Other Staff & Board Motor Show Expenses
6,252
7,278
Office Supplies
Motor Vehicle – Repairs
31,560
65,141
Packaging & Posting
46,004
61,332
218,722
212,402
Personnel – Engagement
17,905
32,417
Personnel – Long Service
23,890
40,923
3,932,369
3,839,714
Personnel – Salary Sacrifice
72,799
64,654
Personnel – Superannuation
725,281
535,418
Payroll Tax
Personnel – Salaries & Wages
Personnel – Uniforms
12,633
1,060
Personnel – Training
28,856
35,081
Printing & Stationery
23,565
7,778
Rates & Taxes
36,765
35,868
36,179
46,882
Rental on operating leases Rental Repairs & Maintenance Other Security Special Projects Sponsorships
101,833 74,958 42,061
18,440
2,579 1,378 564
11,195
4,231 3,973
Staff Amenities
16,165
Subscriptions
18,855 12,923
Technical Journals
17,888
Telephone/Facsimile Web Site Workshop Supplies Workers Compensation Total Expenses for OPERATING Activities
14,751 9,240
122,700 123,284 29,970
1,793
9,213
8,057
13,360
7,574
8,265,039
9,435,987
Motor Trades Association of Queensland Industrial Organisation of Employers 43
Notes to and Forming Part of the Financial Statements For the year ended 30 June 2009
2009 $
2008 $
Cash on hand
1,300
1,200
Cash at Bank
494,408
632,132
Cash on deposit
3,381,211
3,389,313
3,876,919
4,022,645
322,117
444,602
NOTE 4: CASH AND CASH EQUIVALENTS (CURRENT)
NOTE 5: TRADE AND OTHER RECEIVABLES (CURRENT) Accounts Receivable Less: Provision for impairment of trade receivables
(4,794)
(35,950)
317,323
408,652
Sundry Debtors
687,200
646,238
GST Receivable
53,340
62,938
Unearned Interest on Investments
11,923
28,162
Borrowing Costs
-
350
Loan Receivable
-
-
1,069,786
1,146,340
Total Receivables Total
2009 Amount Impaired
Amount not impaired Total
2008 Amount Impaired
Amount not impaired
155,352
155,352 195,393
-
195,393
Past due [30] days
62,885
62,885 30,248
-
30,248
Past due [30-60] days
28,310
28,310 20,936
-
20,936
Past due [60-90] days
81,818
4,794
77,024 98,005
-
98,005
Past due [>90] days
(6,248)
(6,248) 100,020
35,950
64,070
317,323 444,602
35,950
408,652
Not past due
Total
322,117
4,794
Analysis of Impairment Account Opening Balance 35,950 31,980 Provisions for doubtful receivables 14,526
4,986
Receivables written off during the year (45,682)
(5,571)
Reversal of amounts provided -
-
Closing balance 4,794 35,950
(i) Provision for Impairment of Receivables Current trade receivables are on 30 day terms except for the apprenticeship tuition fees. The total amount for tuition fees as at 30th June 2009 was $220,925, these debts are generally on a six month terms basis. These receivables are assessed for recoverable and provision for impairment is recognised based on historical levels of bad debts.
44 Motor Trades Association of Queensland Industrial Organisation of Employers
2009 $
2008 $
NOTE 6: INVENTORIES (CURRENT) Finished Goods - Stationery
55,293
87,618
NOTE 7: OTHER ASSETS (CURRENT) General Prepayments
80,357
86,758
80,357
86,758
369,347
267,777
NOTE 8:OTHER ASSETS (NON-CURRENT) Capitalised Development Costs
NOTE 9: INTANGIBLE ASSETS Software
103,409 283,304
Less: Accumulated Amortisation
(61,510)
Written Down Value
(231,770)
41,899 51,534
Trade Marks and Logo Costs
-
16,829
Less: Accumulated Amortisation
-
(16,829)
Written Down Value
- -
Total Written down Value of Intangible Assets (a) Movement in carrying amounts
41,899
51,534
-
-
Software Balance at the beginning of the year Additions
51,534
49,504
- 15,247
Amortisation/Write offs
(9,635)
(13,217)
Carrying amount at the end of the year
41,899 51,534
Trade Mark and Logo Costs Balance at the beginning of the year
-
Amortisation
- (16,829)
16,829
Carrying amount at the end of the year
-
-
Motor Trades Association of Queensland Industrial Organisation of Employers 45
Notes to and Forming Part of the Financial Statements For the year ended 30 June 2009
2009 $
2008 $
NOTE 10: OTHER FINANCIAL ASSETS (NON-CURRENT) Investments in Unlisted Entities classified as available for sale Units MTAA House Unit Trust at directors’ valuation, 2008
-
3,880,435
Units MTAA House Unit Trust at directors’ valuation, 2009
3,679,101
-
5,000
5,000
Shares MTQ Insurance at directors’ valuation June 2008
-
1,500,000
Shares MTQ Insurance at directors’ valuation June 2009
1,200,000
-
4,884,101
5,385,435
Shares QASA at cost June 2009
The basis of valuation of Units held in MTAA House is at fair value based net assets as at June 2008. MTAQ Ltd holds 21 units of a total 115 units. The valuation is based on 18.26% of net assets held by MTAA Unit Trust. The basis of valuation of shares in MTQ Insurance is at fair value based on recent sale price of $12 per share. The basis of valuation of shares in QASA is at cost June 2008.
NOTE 11: PROPERTY, PLANT & EQUIPMENT (NON-CURRENT) Land & Buildings at valuation (2008) Less: Accumulated Depreciation Written Down Value
5,800,000 (74,362)
5,800,000 -
5,725,638
5,800,000
Fixtures & Fittings at cost
107,989
122,183
Less: Accumulated Depreciation
(65,693)
(57,020)
42,296
65,163
438,936
541,762
(266,553)
(400,630)
Written Down Value
172,383
141,132
Motor Vehicles at cost
78,125
98,212
(56,961)
(30,279)
Written Down Value
21,164
67,933
Leased Assets at cost
161,868
451,928
Less: Accumulated Depreciation
(34,496)
(46,867)
Written Down Value Plant & Equipment at cost Less: Accumulated Depreciation
Less: Accumulated Depreciation
Written Down Value Total Property, Plant & Equipment Less: Accumulated Depreciation Total Written down value of property, plant & equipment
46 Motor Trades Association of Queensland Industrial Organisation of Employers
127,372
405,061
6,586,918
7,014,085
(498,065) 6,088,853
(534,796) 6,479,289
The basis of valuation of Land & Buildings at valuation (2008) undertaken by an independent valuer in June 2008 by Taylor Byrne Valuers (073815 registered valuation number) a) Movement in carrying amounts. Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year.
Land and Buildings
Fixtures & Fittings
Plant & Equipment
Motor Vehicles
Leased Assets
Total
5,800,000
65,163
141,132
67,933
405,061
6,479,289
Additions
- 5,195 104,359 - - 109,554
Disposals
- (9,363) (32,380) (29,585) (218,923) (290,251)
Revaluations
- (3,772) 22,637
Depreciation Carrying amount at the end of the year
37
- 18,902
(74,362) (14,927) (63,365) (17,221) (58,766) (228,641) 5,725,638
42,296
172,383
21,164
127,372
6,088,853
b) MTAQ has an over draft facility for an amount of $500,000 which remained unused at 30 June 2009. The overdraft facility is secured by the land and buildings which has a written down value of $5,725,638 at 30 June 2009.
2009 $
2008 $
NOTE 12: TRADE AND OTHER PAYABLES (CURRENT) Creditors
206,938 224,083
Accrued Expenses
311,835
202,559
Annual Leave (note 12a)
317,023
329,723
835,796
756,365
62,140
33,225
61,515
65,859
440,678
428,807
58
61
NOTE 13: EMPLOYEE BENEFIT PROVISION Current Provision for Long Service Leave (a) Non Current Provision for Long Service Leave (a) (a) Aggregate employee entitlement liability. Average number of employees during the reporting period
Opening balance at 1 July 2008 Additional provisions raised during the year Amounts used Amounts reversed Balance at 30 June 2009
Annual leave $
Long-term Employee Benefits Current Non-current $ $
Total $
329,723
33,225
65,859
428,807
54,994
36,080
16,695
107,769
(67,694)
(7,165)
-
-
317,023
62,140
-
(74,859)
(21,039)
(21,039)
61,515
440,678
Provision for Long-term Employee Benefits A provision has been recognised for employee benefits relating to long service leave for employees. In calculating the present value of future cash flows in respect of long service leave, the probability of long service leave being taken is based upon historical data. The measurement and recognition criteria for employee benefits has been included in Note 1(g). Motor Trades Association of Queensland Industrial Organisation of Employers 47
Notes to and Forming Part of the Financial Statements For the year ended 30 June 2009
2009 $
2008 $
Other Payables
34,719
5,408
Subscriptions Received in advance
65,901
226,199
100,620
231,607
Current Lease Liability
247,375
88,754
Non-current Lease Liability
110,599
375,435
357,974
464,189
NOTE 14: OTHER LIABILITIES (CURRENT)
NOTE 15: INTEREST BEARING LIABILITIES
NOTE 16: RESERVES Balance at beginning of financial year Revaluation increment in investments Asset Revaluation Reserve
5,882,290 (501,334) 5,380,956
4,858,951 1,023,339 5,882,290
NOTE 17: ACCUMULATED SURPLUSES / (DEFICIT) Accumulated surpluses at the beginning of the year Reclassification of Asset Reserves Net profit attributable to the association Accumulated surpluses at the end of the year
10,111,323
9,863,127
-
-
(443,768) 9,667,555
248,196 10,111,323
Represented By Division Motor Trades Association – Queensland
7,530,181
7,386,263
Australian Automobile Dealers Association (Qld)
1,315,403
1,934,472
17,150
16,236
Queensland Motorcycle Industry Division Rental Vehicle Industry Division Automotive Engineers Division
89
(765)
92,714
86,692
2,626
1,821
National Auto Collision Alliance
10,309
8,028
Queensland Tyre Dealers and Retreaders Division
31,908
29,972
127,593
125,716
30,632
29,497
Auto Parts Recyclers Division
7,553
7,099
Automotive Undercar Division
27,126
26,448
Service Station & Convenience Store Association of Queensland
201,190
209,525
Queensland Farm & Industrial Machinery Dealers Division
273,081
250,319
9,667,555
10,111,323
Engine Reconditioners Association of Queensland
Used Car Division Auto Electrical Specialists Division
48 Motor Trades Association of Queensland Industrial Organisation of Employers
NOTE 18: CONTINGENT ASSETS/LIABILITIES Contingent Liabilities The income tax status for MTAQ Ltd is currently under review for dividends received by this entity. Dividends received for the 2007/08 financial year were $235,556 and an amount of $226,424 was received for the 2008/09 financial year.
2009 $
2008 $
1,300
1,200
494,408
632,132
Cash on deposit
3,381,211
3,389,313
3,876,919
4,022,645
NOTE 19: CASH FLOW INFORMATION a) Reconciliation of Cash Cash on hand Cash at bank
b) Reconciliation of net cash provided by operating activities to operating surplus after income tax: Operating Surplus / (Deficit)
(443,767)
248,196
Non-cash flows in operating profit: Depreciation
236,292 249,299
Decrease/ Increase in Doubtful Debts Loss (Profit) on sale of assets
283,925
9,246
Changes in assets and liabilities: Decrease / (Increase) in receivables
60,315
189,917
Decrease / (Increase) in inventory
32,325
(22,367)
Increase / (decrease) in interest receivable
16,238
(28,162)
7,929
234,202
Increase/ (decrease) in payables
80,547
(174,622)
Increase / (decrease) in provisions
24,569
40,923
(133,631)
217,630
164,743
964,262
Increase/ (decrease) in other assets
Increase / (decrease) in other liabilities Net cash provided by / (used in) operating activities c) Credit-Standby Arrangement & Loan Facilities
MTA Queensland has a bank overdraft facility amounting to $500,000. At 30 June 2009 the facility remained unused. The facility is reviewed annually and interest rates are variable.
Motor Trades Association of Queensland Industrial Organisation of Employers 49
Notes to and Forming Part of the Financial Statements For the year ended 30 June 2009
NOTE 20: RELATED PARTIES a) Officers’ Remuneration and Other Transactions The Board Members’ businesses are all current members of the association and also purchase Stationary from the association which are on standard terms. MTQ Insurance Services Limited paid Motor Trades Association of Queensland dividends to the value of $35,000 in the 2009 financial year while Mr Ian Field was the Treasurer for MTA-Q and a Director of MTQ Insurance. Gregory Klease was paid $8,333.32 and David Weatherall was paid $14,383.82 for providing consulting services to the group before director fees were introduced. Director fees paid during the financial year 2008-09 were $178,326. Apart from the above, there was no other Related Party Transaction during the financial year ended 30th June 09. Names of Officers who held office during the year are: Gregory Klease
Len Daddow
Rodney Pether
David Weatherall
Dean Turner
John Ruddick
Ian Field
Glen Ford Les Tickell
Daryll Searle
Charlie Serchen
Ian Goble
Paul Peterson
Graham Winter
Steve Eaton
David Fraser
Tim Kane
Graham Kirkbride
Mark Bryers
NOTE 21: SEGMENT REPORTING The Association operates in the motor industry sector providing benefits to members of the Association within Queensland.
2009 $
2008 $
a) Amounts contributed / allocated by MTA Queensland Corporate to other MTA Queensland divisions representing $20 membership renewal.
25,720
27,780
b) Success fees at the rate of 36% paid to Corporate division of MTA Queensland for monies raised by divisions’ activities.
14,400
125,897
NOTE 22: INTER-DIVISION CONTRIBUTIONS AND PAYMENTS
The above amounts are eliminated upon consolidation of the Corporate division with other divisions and are not disclosed in revenues and expenses disclosed in Notes 2 and 3 respectively. Refer Note 17 for list of divisions.
NOTE 23: FINANCIAL RISK MANAGEMENT a. General objectives, policies and processes Motor Trades Association of Queensland (MTAQ) is exposed to risks that arise from its use of financial instruments. This note describes the company’s objectives, policies and processes for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented throughout these financial statements. There have been no substantive changes in the entity’s exposure to financial instrument risks, its objectives, policies and processes for managing those risks or the methods used to measure them from previous periods unless otherwise stated in this note. The principal financial instruments from which financial instrument risk arises are: - Trade receivables - Cash at bank - Trade payables - Leased liability
50 Motor Trades Association of Queensland Industrial Organisation of Employers
The Board of MTAQ has overall responsibility for the determination of the MTAQ risk management objectives and polices and, designing and operating processes that ensure the effective implementation of the objectives and policies to the entity. MTAQ’s risk management policies and objectives are therefore designed to minimise the potential impacts of these risks on the results of , where such impacts may be material. The Board receives bi annual reports from the Finance Manager of MTAQ, through which it reviews the effectiveness of the processes put in place and the appropriateness of the objectives and policies it sets. The overall objective of the Board is to set polices that seek to reduce risk as far as possible without unduly affecting MTAQ competitiveness and flexibility. Further details regarding these policies are set out below:
b) Credit Risk Credit risk is the risk that the other party to a financial instrument will fail to discharge their obligation resulting in MTAQ incurring a financial loss. This usually occurs when debtors fail to settle their obligations owing to MTAQ. There is no concentration of credit risk with respect to receivables. The group does not have any material credit risk exposure to any single debtor or group of debtors under financial instruments entered into by the company. The maximum exposure to credit risk at balance date is as follows:
2009
Receivables
2008
328,123 408,652
The company’s most significant customer accounts for $39,875 of trade receivables at 30 June 2009 (2008: $24,994).
Liquidity Risk Liquidity risk is the risk that the entity may encounter difficulties raising funds to meet commitments associated with financial instruments. It is the policy of the Board of Directors of MTAQ, to maintain adequate committed credit facilities. The unused bank overdraft credit facility at balance date was $500,000. The bank overdraft facilities may be drawn down at any time but may be terminated by the bank without notice.
Carrying Contractual Amount Cash flows < 6 mths 6- 12 mths
1-3 years
Maturity Analysis - 2009 Financial Liabilities Trade and other payables
835,796
Lease liability
357,974 357,974 226,291 15,136 116,547
TOTAL
835,796
835,796
-
-
1,193,770
1,193,770
1,062,087
15,136
116,547
Trade and other payables
756,365
756,365
740,480
15,885
-
Lease liability
446,728 446,728 43,902 44,853 357,973
Maturity Analysis - 2008 Financial Liabilities
TOTAL
1,203,093
1,203,093
784,382
60,738
357,973
Motor Trades Association of Queensland Industrial Organisation of Employers 51
Notes to and Forming Part of the Financial Statements For the year ended 30 June 2009
NOTE 23: FINANCIAL RISK MANAGEMENT continued d. Interest Rate Risk The companyâ&#x20AC;&#x2122;s exposure to interest rate risk, which is the risk that a financial instrumentâ&#x20AC;&#x2122;s value will fluctuate as a result of changes in market interest rates and the effective weighted average interest rates on those financial assets and financial liabilities, is as follows:
Weighted Average
Effective Interest Rate
2009
2008
%
%
Floating Interest Rate 2009
Non-Interest Bearing
2008
2009
2008
Total 2009
2008
Financial Assets Cash
3.96 8.12 3,876,919 4,022,645 3,876,919 4,022,645
Receivables
-
- 1,069,786 1,146,340 1,069,786 1,146,340
Total Financial Assets 3,876,919 4,022,645 1,069,786 1,146,340 4,946,705 5,168,985 Financial Liabilities Trade & other payables 835,796 756,365 835,796 756,365 Lease liability
4.29 4.29 357,974 446,728
Total Financial Liabilities
357,974
446,728
-
835,796
- 357,974 446,728
756,365
1,193,770
1,203,093
e. Net Fair Values The net fair values for all assets and liabilities approximates their carrying values. No financial assets and financial liabilities are readily traded on organised markets in a standardised form. Financial assets where the carrying amount exceeds net fair values have not been written down as the company intends to hold these assets to maturity.
f. Sensitivity Analysis Management has performed a sensitivity analysis relating to its exposure to interest rate risk at balance date. The only borrowings are in the form of finance leases for which the interest rate is fixed for the term of the lease, therefore there is no risk to the increase of interest rates to the profit and loss position of the entity. Short-term benefit
Post employment benefits
NOTE 24: KEY MANAGEMENT PERSONNEL COMPENSATION 2009 Total compensation
569,373
268,374
593,613
-
2008 Total compensation
52 Motor Trades Association of Queensland Industrial Organisation of Employers
Note
2009 $
2008 $
33,000
38,301
30,238
7,677
NOTE 25: AUDITORS REMUNERATION Audit Audit of the financial report Non-audit services Other services
Total auditors remuneration The directors are satisfied that the provision of non-audit services, during the year, by the auditor (or another person or firm on behalf of the auditor), is compatible with general standard of independence for auditors imposed by corporations Act 2001. Key management personnel include directors and five key executives of the organisation.
Note 26: Capital and Leasing Commitments Finance Lease Commitments Payable — minimum lease payments — not later than 12 months
270,802
106,215
— between 12 months and five years
116,547
387,350
Minimum lease payments
387,349
493,565
Less future finance charges
29,375
46,837
357,974
446,728
Present value of minimum lease payments
15
The finance lease on office equipment comprises a 5 year lease which commenced in October 2007 for $222,054.81 and January 2009 for $275,066.24. The equipment is being leased directly from the manufacturer with lease payments paid monthly. The interest rate implicit in that lease is 4.20% and 4.37%.
NOTE 27: ACCOUNTING STANDARDS ISSUED NOT YET EFFECTIVE There are a number of accounting standards that have been issued but are not yet effective. The organisation does not expect any material impact on financial statements from the impending changes. However, various additional disclosures will be required in the financial statements in future periods.
NOTE 28: EVENTS AFTER BALANCE SHEET DATE No events have occurred subsequent to the balance date that would require adjustment to, or disclosure in, the financial report.
NOTE 29: REGISTERED OFFICE Motor Trades Association – Queensland 1000 Wynnum Road Cannon Hill QLD 4170
Motor Trades Association of Queensland Industrial Organisation of Employers 53
Declaration by Members of the Board Of MTA Queensland
In the opinion of the board of MTA-Q the financial report as set out on pages 1 to 25. 1. Present fairly the financial position of the Motor Trades Association of Queensland Industrial Organisation of Employers as at 30 June 2009 and the results and cash flows of the association for the year ended on that date in accordance with Australian Accounting Standards and other mandatory professional reporting requirements. 2. At the date of this statement, there are reasonable grounds to believe that Motor Trades Association of Queensland Industrial Organisation of Employers will be able to pay its debts as and when they fall due. This statement is made in accordance with a resolution of the board of MTA-Q and is signed for and on behalf of the Committee by:
Gregory Klease President
Ian Field Treasurer Dated: this 7th day of November 2009.
54 Motor Trades Association of Queensland Industrial Organisation of Employers
Independent Audit Report To the Members of Motor Trades Association of Queensland Industrial Organisation of Employers
Scope The Financial Report and Directors’ Responsibility The financial report comprises the statement of financial position, statement of financial performance, statement of cash flows, accompanying notes to the financial statements, and the declaration by the members of the board for Motor Trades Association of Queensland Industrial Organisation of Employers (MTA-Q), for the year ended 30 June 2009. The board of MTA Queensland are responsible for the preparation and true and fair presentation of the financial report in accordance with the Industrial Relations Act 1999. This includes responsibility for the maintenance of adequate accounting records and internal controls that are designed to prevent and detect fraud and error, and for the accounting policies and accounting estimates inherent in the financial report.
Audit Approach We have conducted an independent audit in order to express an opinion to the members of the association. Our audit was conducted in accordance with Australian Auditing Standards in order to provide reasonable assurance as to whether the financial report is free of material misstatement. The nature of an audit is influenced by factors such as the use of professional judgment, selective testing, the inherent limitations of internal control, and the availability of persuasive rather than conclusive evidence. Therefore, an audit cannot guarantee that all material misstatements have been detected. We performed procedures to assess whether in all material respects the financial report presents fairly, in accordance with the Industrial Relations Act 1999, including compliance with Accounting Standards and other mandatory financial reporting requirements in Australia, a view which is consistent with our understanding of the association’s financial position, and of its performance as represented by the results of its operations and cash flows. We formed our audit opinion on the basis of these procedures, which included: • examining, on a test basis, information to provide evidence supporting the amounts and disclosures in the financial report, and • assessing the appropriateness of the accounting policies and disclosures used and the reasonableness of significant accounting estimates made by the directors. While we considered the effectiveness of management’s internal controls over financial reporting when determining the nature and extent of our procedures, our audit was not designed to provide assurance on internal controls.
Motor Trades Association of Queensland Industrial Organisation of Employers 55
Independent Audit Report continued Independence In conducting our audit, we followed applicable independence requirements of Australian professional ethical pronouncements.
Audit Opinion In our opinion, the financial report of Motor Trades Association - Queensland Industrial Organisation of Employers is properly drawn up: a) so as to give a true and fair view of the organisation’s: i) financial affairs as at 30 June 2009; and ii) income and expenditure and the results for the year; b) in accordance with the Australian Accounting Standards including the Australian Accounting Interpretations; and c) in accordance with the provisions of the Industrial Relations Act 1999. Based on the above scope of work nothing has come to our attention that causes us to believe that the organisation has not kept satisfactory records for the financial year, including records of the: i) sources and nature of the organisation’s income; and ii) nature and reasons for the organisation’s expenditure.
BDO
D P Wright Partner Brisbane Date 10th November 2009
56 Motor Trades Association of Queensland Industrial Organisation of Employers
Accounting Officerâ&#x20AC;&#x2122;s Certificate
I, Kathy Winkcup, being the officer responsible for keeping the accounting records of the Motor Trades Association of Queensland Industrial Organisation of Employers, certify that as at 30 June 2009 the number of financial members of the Association was 1,507, and the number of non-financial members was nil. In my opinion: i) the attached financial report shows a true and fair view of the financial affairs of the Association as at 30 June 2009; ii) a record has been kept of all moneys paid by, or collected from, members and all moneys so paid and collected have been credited to the bank account to which those moneys are to be credited, in accordance with the rules of the Association; ii) expenditure incurred by the Association was approved under the Associationâ&#x20AC;&#x2122;s Rules before it was incurred. iv) with regard to the funds of the Association raised by compulsory levies from members, or funds other than the General Fund operated in accordance with the rules, no payments were made of any such fund for purposes other than those for which the fund was operated; v) all financial benefits granted to employees were allowed under the Associations rules. There were no loans or financial benefits given to persons holding office in the Association; vi) the register of members of the Association was maintained in accordance with the Act.
Kathy Winkcup Chief Financial Officer Dated: 7th November 2009
Motor Trades Association of Queensland Industrial Organisation of Employers 57
Certificate by Members of the Board of MTA Queensland
In the opinion of the board of management the financial report: 1. Present fairly the financial position of the Motor Trades Association of Queensland Industrial Organisation of Employers as at 30 June 2009 and the results and cash flows of the association for the year ended on that date in accordance with Australian Accounting Standards and the Industrial Relations Act. 2. At the date of this statement, there are reasonable grounds to believe that Motor Trades Association - Queensland Industrial Organisation of Employers will be able to pay its debts as and when they fall due. 3. Meetings of the Board of MTA-Q were held during the year ended 30 June 2009, in accordance with the rules of the association. 4. To the knowledge of the Board of Management, there have been no instances where records, rules or copies of them have not been given to the Associationâ&#x20AC;&#x2122;s members under the Act. 5. The Audit report and accounts for the Associations financial year ended 30 June 2009 have been presented to an annual general meeting of the Association, and given to all financial members at that time. This statement is made in accordance with a resolution of the board of MTA-Q and is signed for and on behalf of the Committee by:
Gregory Klease President
Ian Field Treasurer Dated: this 7th day of November 2009.
58 Motor Trades Association of Queensland Industrial Organisation of Employers
Auditors Independence Declaration
10th November 2009 The Directors MTA Queensland 1000 Wynnum Road Cannon Hill QLD 4170 Dear Directors In relation to our audit of the Financial Report of Motor Trades Association of Queensland Industrial Organisation of Employers for the year ended 30 June 2009, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct. Yours faithfully
BDO Audit (QLD) Pty Ltd
D P Wright Partner
Motor Trades Association of Queensland Industrial Organisation of Employers 59
Board Members 2008-2009
Greg Klease President – representing Central Queensland region
Steve Eaton Vice President – representing Far North Queensland region
David Fraser Vice President – Chairman Queensland Farm and Industrial Machinery Dealer Division (QFIMDD)
Ian Field Treasurer/Secretary – representing South East (South) region and President Australian Automobile Dealers Association (Qld) (AADA(Q))
Len Daddow Vice Chairman, Australian Automobile Dealers Association (AADA(Q)
Glen Ford Chairman Auto Parts Recyclers Division (APRD)
Ian Goble Chairman Automotive Undercar Division (AUD)
Tim Kane Chairman Service Station & Convenience Store Association Qld (SSCSAQ)
Mark Bryers Chairman Engine Reconditioners Association Qld (ERAQ)
Paul Peterson Chairman Queensland Motorcycle Industry Division (QMID)
Rod Pether representing North Queensland region
John Ruddick Chairman Queensland Tyre Dealers & Retreaders Division (QTDRD)
Charlie Serchen Chairman Automotive Engineers Division (AED)
Daryll Searle Chairman Used Car Division (UCD)
Les Tickell Chairman Rental Vehicle Industry Division (RVID)
Dean Turner representing South East (North) region
David Weatherall Chairman National Auto Collision Alliance (NACA)
Graham Winter representing South West region
60 Motor Trades Association of Queensland Industrial Organisation of Employers
1000 Wynnum Road, Cannon Hill Queensland 4170 PO Box 560, Morningside Queensland 4170 p: (07) 3237 8777 f: (07) 3844 4488 tf: 1800 177 951 www.mtaq.com.au
MTA Institute of Technology 1000 Wynnum Road, Cannon Hill Queensland 4170 PO Box 560, Morningside Queensland 4170 p: (07) 3722 3000 f: (07) 3722 3030 tf: 1800 884 137 www.mtaq.com.au