Swan promises and renigs

Wayne Swan has given tax relief to SMEs with one hand and taken it with the other.
The SME community should feel pretty special. In a Federal Budget that contains relatively few spending initiatives for the 2012-13 year, the Treasurer has put Government support for small business firmly in the spotlight by formally announcing the loss carry-back tax break for companies 90% of which it estimates will go to businesses earning under $2 million.
It's a policy the tax experts and industry advocates are broadly supportive of. While businesses have long been able to carry tax losses forward and offset them against future profits, the ability to carry tax losses back and claim refunds against tax paid on profit in the past is just as important as it provides relief to businesses when they need it most.
"Our multi-speed economy is putting pressure on businesses that aren't in the fast lanes," Swan said in his Budget speech.
"Our $714 million loss carry-back scheme will support businesses in need, to help them compete. We'll encourage companies to invest and innovate by offsetting a current year tax loss of up to $1 million against tax paid in previous years; a refund of up to $300,000."
It's a good measure, but the devil is very much in the detail when you look closely at the ledger of new spending and saving measures for 2012-13.
The measure will cost the Government just $6.7 million next financial year – close enough to nothing in the context of the Budget – and most eligible companies won't be able to access the tax break until 2014.
And then there's the little matter of paying for the loss carry-back tax break.
In order to fund this initiative, the Government has decided to dump the long-promised company tax cuts (30% down to 29%) that were supposed to start kicking in from July for companies with under $2 million in turnover.
That's very disappointing, given the fact that these company tax cuts have been sold for the best part of two years as the business community's dividend from the mining tax.
Scrapping the tax cuts means that $316 million in relief that would have gone to small business in 2012-13 is gone (remember, small business got a one-year head start on the cut).
But the loss carry-back will deliver just $6.7 million in relief.
In terms of new measures announced in this Budget, that's a $310 million turnaround for small business in terms.
True, small businesses will from July be able to access a $6,500 immediate asset write-off and a special $5,000 immediate deduction on the purchase of motor vehicles. These measures, which were announced well before today's Budget, are worth around $1 billion in 2012-13, according to Treasury.
But they will only be benefit businesses that have ready money available to buy assets and make investments. How many SMEs will be in a position to access these benefits remains to be seen.
Of course, in a Budget with $32.6 billion of cuts over the next four years, it was inevitable that SMEs would be required to shoulder some of the burden. And the fact that the small business community has at least got something in return – the loss carry-back initiative – is welcome.
But the decision to axe the tax cuts does represent something of a broken promise for the small business community.
While it is true that the Government has struggled to get the company tax cut past the Opposition and the Greens, it is also true that the Greens were prepared to support the cut for small business and even enlarge it to cover SMEs with up to $5 million in turnover.
Swan could have done a deal, but in the end he's decided that Labor's surplus was much more important.
The loss carry-back tax break is good policy, even if it has its limitations. The tax write-offs and immediate asset deductions are welcome.
But Swan and his small business ministers have spruiked the company tax cuts for the best part of two years – and now they are gone.

RBA

The Reserve Bank of Australia (RBA) has dropped the official cash rate by 50 basis points at its Board meeting today, from 4.25 per cent to 3.75 per cent.

This decision was based on information suggesting that economic conditions have been somewhat weaker than expected, while inflation has moderated.

In the Residex release of its March housing market statistics and commentary last Friday, Residex CEO John Edwards predicted today’s outcome.

“The interest rate reduction is going to provide the much needed consumer confidence boost. Without some form of stimulus, we would have been likely to continue seeing housing values decrease across much of Australia. Today’s RBA decision should stop the heavy adjustment process which would have otherwise been inevitable in the Melbourne market, and it will help push all markets which were passed the bottom of the correction phase”.

Mr. Edwards went on to say, “Depending on the content of the upcoming Federal Budget and its assessed impact, a further 25 basis point adjustment could come in June”.

Residex does not expect the rate adjustment to cause significant house price rises in most markets due to unaffordability issues which will still remain.

How to kill a nations entrepreneurial spirit

Seven companies, BlueScope Steel, Amcor, CSR, Rheem Australia, Capral, Boral and Incitec Pivot demand a government commitment to overhaul four areas: anti-dumping and industrial participation, industrial relations, access to energy and resources and regulation.
The seven companies make up a business coalition known as Manufacturing Australia which is meeting  today in Sydney.
In a communique issued from the meeting, Manufacturing Australia says, “Australian manufacturing is fighting multiple fires on multiple fronts, beset by challenges from high input costs and excessive or inconsistent regulation to the high Australian dollar.
“There is no ‘silver bullet’ solution to the sector’s challenges, but one thing is certain: the pattern of allowing Australia’s iconic manufacturers to decline, before being rushed into intensive care to be patched up with taxpayer funded subsidies, is simply not sustainable.
“As a nation, we must not allow the current difficult economic challenges to support a dangerous line of argument which contends that Australian manufacturing is beyond saving.”
The communique calls on the government to reduce the amount of cost, time and resources spent on administration and compliance with the Fair Work Act by removing the legislated default of third party employee representation.
It asks the government to strengthen anti-dumping regulations and to roll back manufacturing regulations generally especially where the regulations add no economic value or competitive advantage.
Finally, the communique criticises Australia’s energy policy.
“Australia is squandering one of its key competitive manufacturing advantages through shortsighted energy policy that favours sending our abundant natural resources overseas at the lowest point in their value chain, while other nations reap the benefits of adding value to our resources.”

Opportunity

An entrepreneur sees an opportunity and grasps it...

The mining boom is radically changing regional labour markets. In turn,
cashed-up employees are driving a surge in regional property markets.

Everyday we hear more and more stories about how the mining boom is
transforming regional areas. Perhaps we haven't seen anything like it in
Australia since the gold-rush.

Indeed, reports of astronomical salaries suggest that quite a few people
are striking it rich. And yet mining companies are still complaining about
chronic labour shortages.

In the Bowen Basin for example. there are an estimated 1500 open positions.
BHP's joint venture coal mines have 750 vacant jobs in central Queensland
while Rio Tinto has 530 vacancies at its global operations. The Queensland
Resources Council found that there were 4924 current internet job
advertisements for the mining industry in Queensland with 1300 posted in
just one week!

This has sparked a pay war between companies and between states, with
recruiters now offering big incentives to get the right people for the job.
According to recruiters Robert Walters, project managers in mining can
now earn more than $500,000 a year, while a mine deputy can get $200,000. 

Labourers are getting $100,000 and dozer drivers are earning
$50 an hour.

"I've seen sign-on bonuses for 50 per cent of a salary," Robert Walters' head of
mining and engineering Adam Harris said.

He said some executives were getting their home loans repaid, others had
their children's school fees covered and huge bonuses were being paid to stay
beyond three or four years.

The surge in cashed-up workers is of course driving a boom in resource properties.

Add to the mix growing frustration locals have with a fly-in, fly-out workforce.
Some complain that these transient workers, many of whom fly home for the
weekend, drain council resources without contributing anything in return.

In fact, Isaac Shire Council, in the heart of the Bowen Basin, has gone so far
as to call for a cap on non-residential workers.

"Our population is only 21,500 and there are 9000 itinerant workers and they
are using all our facilities," Isaac Mayor Cedric Marshal said. "The boom is going at
100 miles an hour. I think we need to take a serious look at it."

If caps are implemented, this will only drive property prices further.

There is gold in them there hills...

What is an entrepreneur?

A great description of an entrepreneur by Bill Zeng is
"Great entrepreneurs usually have something in common: great intellect and intuition as well as the capacity for original thought and the ability to inspire. They are the ones that tend to see direction from chaos and uncertainty that others don’t see."
I concur, most definitely  an entrepreneur has a fertile mind that finds a way through or around adversity and difficult situations or obstacles leading to a new answer or creative solution.
Its also most important to be aware that an outcome will most probably be something totally unique and unexpected as the thinking that lead to the original problem can't find a solution, only a new way of thinking will provide the solution.
Who was it that said "creativity is the mother of invention"?

Women Board members

Over the past year, 26pc of all non-executive director appointments in Britain's biggest 100 companies were female. In contrast, just 9pc of executive posts went to women, a report by Norman Broadbent found.

In the FTSE 250, those figures are 24pc and 7pc respectively.

Neil Holmes, of the search firm, said: "We are finding that women are appearing on shortlists, but the supply on the executive side is still lower than it should be and this requires companies to invest in long term cultural changes.

"This must be about quality derived from retention and experience, and not about tokenism."

The study also warned FTSE 100 companies will fail to meet Lord Davies' targets for getting more women on boards by 2015, just a year after they were introduced.

~New Year~

The tide has turned, the time is NOW

a new life awaits, so take a bow

step into a new life

Enjoy!!