Upskilling SMEs … DIY super booms … NSW Labor ignores business … Online property classifieds giants roar … Demand for broadband soars

More assistance with skills needed, thanks!

Many small and medium-sized businesses are in desperate need of a new management skills program to help them take on overseas competition and engage with global supply chains, says the chief executive of Australian Industry Group (AIG), Heather Ridout.

As pressure mounts on the Federal Government to do more to assist business in an election year, AIG has put forward a detailed list for the May budget which covers water, transport, R&D concessions and a skills program. “I think the skills program has a good chance of getting up,” she says. “There are some programs in Victoria and Queensland, though not much in NSW.”

AIG wants a program that bridges state and federal governments and would entitle companies with less than 50 staff to access a network of advisers, including management consultants, to assist with growth. Companies would pay half the costs. Programs like this are very popular in Ireland, Britain and the US, she says.

Ridout says the program would have strict performance measures. “In the UK, the Manufacturing Advisory Service reports to Parliament on the value and jobs created by the program.”

AIG also wants to maintain the 125% tax incentive, but build in incremental incentives up to 200% for companies that spend more on R&D. The group, which claims to represent more than 10,000 employers, is also pushing for the tax on dividends paid from companies’ overseas income to be removed. AIG also warns that the backlog of infrastructure projects is pushing up costs in the construction sector.

Meanwhile pressure is growing on the Federal Government to set up a strategy to coordinate the upgrade of water and transport infrastructure.

Business groups are also warning against an ad-hoc spending spree by the Government and are calling for a more measured, coordinated approach to infrastructure.

Feedback: Do Australian small and medium businesses need more management skills and would a program like this assist you, or just help fatten the pockets of management consultants? Send your comments to feedback@smartcompany.com.au

DIY Super is booming

Australia’s DIY superannuation sector is booming, and it’s going to get even bigger in the coming months. New figures from the tax office show that self-managed superannuation fund (SMSF) account balances per member have shot ahead by $54,000 in the 15 months to September 2006, and they will continue to soar as fund members make the most of the Federal Government’s radical changes to superannuation.

The new figures show that after a flat period in early 2006, the number and size of SMSF funds has exploded, cementing them as a favourite for independent Australian investors. Almost one quarter of Australia’s superannuation savings is held in SMSFs.

Moreover, being to the end of September 2006, the figures do not take into account the rush of money streaming into superannuation as individuals take advantage of the $1 million window for after-tax contributions that was announced in September 2006.

As the nation’s richest investors pour money into DIY superannuation, regulators are poised to increase their policing of the sector. The vast majority of DIY investors have their money in self-managed funds; the average fund has 1.9 members.

Separately, the surge in DIY super funds represents a substantial challenge for larger retail, corporate and industry funds, the traditional repositories of superannuation money.

But the rest of the industry may not have time to prepare a counter-attack to the DIY super boom. The increase in super money in the 15 months to September 2006 held by the average DIY fund member represents almost as much as most people have accumulated in their entire lives. The universal average value of superannuation accounts among all Australians is $63,000.

While stronger investment returns will underpin the growth in the asset value of DIY funds, they are also due to be greatly boosted by individuals taking advantage of the $1 million window for after-tax contributions, which closes on June 30. The size of that boost will be known in April, when the tax office releases figures to the end of March.

— Alan Kohler, Eureka Report

NSW ALP silent on business needs

Business groups are criticising NSW Premier Morris Iemma’s failure to acknowledge the difficulties New South Wales businesses are facing in his ALP campaign launch speech yesterday.

Iemma announced $2 billion over four years for schools and millions of dollars to improve water infrastructure, but did not directly address business concerns.

New South Wales Business Chamber chief executive Kevin MacDonald says: “The number one issue for whoever is elected is on March 24 is renewal and revitalisation of the NSW economy.”

Businesses will be looking at the policies of both parties on occupational health and safety, tax cuts, improvements in the performance of government and further investment in economic infrastructure, MacDonald says.

Master Builders Association executive director Brian Seidler says Iemma should have acknowledged that the building industry has been one of the hardest hit by weak economic conditions in NSW.

“It’s a concern that the building industry has not been identified as the one area that needs some help, given that it’s a key pusher of growth and employment in this state,” he says.

Motor Traders Association (NSW) executive director James McCall says: “The biggest thing affecting small businesses is the treatment of small business by big business. There is a great necessity for the State Government to legislate to protect small business from the excess of big business because the Federal Government won’t.”

Online giants spoil property launch

Entrepreneurs interested in marketing and advertising strategies will no doubt be following the pitched battle erupting between media giants Fairfax, James Packer’s PBL and emerging high flier RealEstate.com.au.

There is speculation that PBL will launch its new online real estate business, My Home, in the next few weeks. In preparation, competitor realestate.com.au has been running a “My home sucks” campaign while Fairfax is set to introduce a website called Adore Property, which focuses on selling expensive Sydney property.

Both competitors also say they are creating new products and services in preparation for the third giant entrant into the online property ad market. “We have girded our loins for combat,” Jack Matthews, chief executive of Fairfax’s digital division told the AFR. Chief executive of realestate.com.au, Simon Baker, says his company will continue to create confusion in the market with the “my home” promotion.

State governments would reap windfall from their emissions model

Up to $20 billion could flow into state government coffers from the sale of permits to greenhouse gas emitting businesses if a proposed carbon trading scheme is introduced.

Under the model, businesses would compete in an auction to buy permits that would allow them to emit greenhouse gases above a certain level. The size of each state government’s windfall would depend on the number of permits auctioned.

Money raised from selling the emission permits could be used to help “households, regions or small businesses” cope with increased costs, especially higher electricity prices, resulting from the scheme, according to a discussion paper by combined state government think-tank the National Emissions Trading Taskforce.

The discussion paper says the trading model could be implemented as soon as 2010 and would seek to reduce greenhouse gas emissions by around 60% from 2000 levels by 2050.

Meanwhile, Federal Environment Minister Malcolm Turnbull has expressed support for a carbon trading model formulated by high profile Australian National University economist Warwick McKibbin.

The McKibbin model works by setting a price on carbon to deter emissions, rather than imposing a Kyoto protocol style limit.

State government leaders have previously said they will act to limit greenhouse gas emissions if the Federal Government fails to implement a national carbon trading scheme.

Prime Minister John Howard has established a second taskforce on emissions trading, which is due to report by the end of May 2007.

IT news

Australians are heading to the internet in droves. Australia had a total of 6.7 million active internet subscribers in September 2006 — over half a million more than in March 2005, according to the ABS. Just under 60% of these subscribers had broadband connections, compared with 30% at the end of March 2005.

There were 5.8 million household subscribers and 826,000 business and government subscribers; approximately 2.8 million subscribers used a dial-up connection and digital subscriber line (DSL and ADSL) was used by almost three million broadband subscribers (77%).

The highest proportion of internet subscribers were in New South Wales (33%), followed by Victoria (24%), Queensland (20%) and Western Australia (11%).

In a sign that the industry is consolidating, there were 467 internet service providers operating in Australia at the end of September 2006, 32% fewer than in March 2005.

Australia is following the US trend in rushing to high speed services. ITWire reports residential subscriptions to broadband internet services surged 20% in 2006 to exceed 50 million US households, according to “Digital Lifestyles: 2007 Outlook”, a new study from Parks Associates.

The report estimates US residential broadband subscriptions will surpass 60 million households by year-end 2007, accounting for 55% of all US households.

In Australia, wireless internet is growing quickly. The number of wireless broadband subscribers grew nearly 400% to 186,000 in the 18 months to September 2006, according to the ABS. They now account for 5% of all users.

For more details click here.

Economic roundup

New building approvals in Queensland dropped dramatically in December 2006, ABS data released on Monday shows.

Total building approvals dropped from 3344 in November to 2862 in December. Just $293 million in non-residential building was approved in December, down almost $400 million from the previous month.

However, other economic indicators were fairly positive in the sunshine state, unemployment keeping steady on 4% and retail turnover lifting from $3.858 billion in November to $4.656 billion.

The sharemarket is going strong again this week, the S&P/ASX 200 recovering from the profit taking of late last week to sit at 5995.30 at 12.30pm on Monday.

Looking overseas, the Indonesian economy recorded gross domestic product of 6.1% in the final quarter of 2006, resulting in annual GDP of 5.5%, while per capita income rose 24%.

The Indonesian Government says its economy will grow 6.5% to 7% in 2007.

And in the US, stock prices rose across the board last week, the Dow rising by 1.5%, Nasdaq by 1.5% and the S&P 500 by 1.2%.