The apparent US-China trade war is not necessarily new but something that has been growing for some time.
We believe that this may get worse before it gets better and as many economists are suggesting could have a negative impact of up to .5% on our GDP. There are a couple of reasons behind this prediction, President Trumps complaints about China are largely correct and in order for China to respond they would need to make fundamental changes to their economic system.
The US trade deficit with China last year was $US375b, which is unsustainable by any measure.
The Australian Journalist Greg Sheridan sights five key reasons or complaints against China.
One: Beijing steals US intellectual property through cyber and other espionage means.
Two: Beijing often makes it a condition of US investment in China, and access to the vast Chinese market, that the US company involved fully transfers the intellectual property involved in the product. Once the IP transfer is complete, the American firm is often shown the door, to find it now faces internationally a lower-cost Chinese competitor that possesses all its industrial secrets.
Three: Beijing erects innumerable and unbeatable non-tariff barriers to prevent foreign competition in any Chinese market it wants to protect. These are almost impossible to police and even if they are dismantled they can be reimposed at a moment’s notice.
Four: Beijing often sells products at a loss to sustain domestic factories and secure foreign market share. This is the textbook definition of dumping.
Five: every Chinese company has at its core a committee of the Chinese Communist Party and is required to serve Beijing’s strategic interests.
These features are fundamental to the Chinese economy and so are not going to change anytime soon. This being the case any so-called trade war will have a long way to run.
The point is that we will, no doubt get caught in the cross hairs so we need to be alert but not alarmed and gear ourselves accordingly if we start to cop any fallout.
Whilst there has been much talk about an increase in the casualisation of the Australian Workforce the actual rate of casual employment has remained steady at 24%-25%, according to data from The Australian Bureau of Statistics.
Importantly there is no definition of casual employment in current awards or agreements.
In the broad sense a casual employee is one who has no expectation of ongoing work and in particular no set hours of work. In reality this is the test of a true casual.
Critically in a recent Full Federal Court decision in WorkPac Pty Ltd v Skene  FCAFC131 the court found that Mr Skene while designated a casual employee, had worked regular hours and was therefore entitled to annual leave.
For all employers the message here is clear, in that, we would recommend a review of any employee categorised as casual who has been employed for 12 months or longer, with particular attention to the hours they have worked over that period.
In circumstances where there have been regular and consistent hours then you should seek advice with respect to the status of any such employee.
Employers should not, therefore, use the term casual, for convenience and should make sure that a casual employee fits within the meaning as described above.
Finally we do understand that this ruling may be appealed to the High Court, but pending any appeal the current judgement and its implications stand.
There has been some interesting articles recently, particularly by The Australian columnist Adam Creighton who has argued for changes to the compulsory superannuation system to make it a voluntary system.
In these circumstances an employ could elect to take the equivalent of the current 9.5% levy as salary or part thereof and make voluntary contribution at whatever level the employee deems fit.
There are a number of notable commentators such as Alan Kholer and Terry McCrann who see merit in this argument. Indeed in support of this British author Nicholas Morris has written a book, titled Management and Regulation of Pension Schemes: Australia-A Cautionary Tale, warning other countries to avoid a system of compulsory superannuation.
From the governments point of view conversion to such a system would be simple by simply allowing employees to complete an online form, print it, sign it and give it to the employer requesting some or all of their superannuation be paid as wages or salary.
This would have a significant impact, particularly for low income works as the potential wage increase would be closer to 10.5%. This is because employers are obliged to pay 9.5% of the total remuneration as superannuation.
In addition such a move would also stimulate the current stagnant wage growth as well as stimulating the overall economy through increased consumer spending.
Will it ever happen? Don’t hold your breath but as indicated the idea has significant merit.
After yesterdays team meetings it’s critical that I ensure everything starts moving along as promised. Anyone in business needs to ALWAYS make sure they’re living up to their word whether it’s about setting rules or delivering on a promise to a team member, supplier, client or the like.
A drop in credibility or integrity has the potential to create havok in your business.
Much has been written recently about the underpayment of wages, which in some cases has been defined as “wage theft”.
The suite of awards that are in place either federally or from a state point of view are the minimum standard that apply to a particular employer or industry, not covered by an enterprise agreement.
Employers who underpay their staff are exposed to both fines and repayment of the underpaid wages. There are a number of cases and enquiries into this practice at present. For instance the Queensland Government is conducting hearings with a view to criminalising what the define as wage theft. This may mean that employers could face a jail sentence if convicted of underpaying wages.
The National Retail Association refers to this as non compliance rather than wage theft, principally because of the complexity of the award structure, where many employers unwittingly underpay their staff.
Similarly The Australian Industry Group says that criminalising underpayments “would represent a major unnecessary and unwarranted change to the industrial relations system”
The point here is that it is all employers responsibility to ensure that they are operating on the correct award and that their employees are being remunerated accordingly.
Also, importantly in the event of a Labor government federally there will be a strong push from the union movement to bring in changes such as criminalising underpayment of wages.
Check your award and wage structure!!
Your Team Have the Answer to the Success of Your Business | Let’s Be Frank | Ep 06
Without a team of skilled, motivated and dedicated people, the success of our business is hindered but not only that, you may have that exact team but still be hindering your own business success.
Because despite all of that, the environment you create, the expectations you set and the amount of time you spend understanding the expectations of your team play an absolutely pivotal role in efficiency, performance and resulting profitability.
On another note, if a team member or team aren’t performing to 100% of their ability it is 100% your fault, not theirs.
It is somewhat heartening to note that in spite of the ructions in Canberra our new Prime Minister in his address yesterday signalled out small to medium business as the engine room to growth.
The new Prime Minister has indicated that “a new and exciting tax policy for small and medium sized business” was being formed.
This will come under the direction of Minister Michaelia Cash and whilst we await details there are indications that the legislated tax cut to 25% will be brought forward and that further consideration may be given to a reduction to 22.5% and or a possible 20%.
Given that there are some 360,000 taxpaying small businesses in Australia there is a strong argument that reducing the tax rate will encourage additional employment and investment.
In addition small business accounts for approximately 45% of the 12 million strong Australian workforce so if while there is a cost or drop in taxation receipts from small business there is the potential this may be offset from PAYG receipts arising from increased employment.
We share this view that any tax cuts for small to medium business will have a stimulatory effect and for us in WA when combined with the growth in GDP numbers, (as outlined yesterday) creates the environment for strong growth and profitability.
Plan ahead and plan for growth!
I will happily work 100 hours a week for my business, but sometimes, you need to try and beat your mates at golf…. unsuccessfully… You win this time Simone Sichel….. this time…
It is good to finally see some positive signs in the WA economy with ABS figures indicating that the states domestic economy grew by .2% during the June quarter. Whilst this may appear to be very small it is significant in that we have been in negative territory for the past four years.
When we combine this with nominal GDP growth of 4.7% nationally the indicators are very good for business.
In addition to GDP growth public companies included in the ASX 200 index have generally reported increased profits (78% of those listed). This is also an important indicator as it flows into increased dividend distribution to shareholders and increased investment by these companies.
Similarly business conditions and confidence are at a 20 year high.
While these figures are all sound the majority of people pay little attention to them as they often don’t see them as having a direct impact on either their business or personally.
The reason we should take note of these figures is that they are important in terms of future planning. In a sense many of us have had to bunker down over recent years whilst the economy has been in negative territory, however with the economy now picking both at the State and National level we need to adopt strategies to exploit it.
Any business looking at their growth prospects in the coming years should take account of these figures and develop their marketing plans, which may encompass such things as new products and plan for greater growth and profitability than they would do in a recessionary economy.
What does expansion look like for you and how far ahead are you planning? Expansion provide some very strategic benefits when done correctly, not just from the viewpoint of bigger business + more client + more revenue but in relation to the fact that there are many incentives that you can take advantage of if you pay attention.
In this case, due to a 19.4% vacancy rate in Perth CBD, it’s incentives relating to CBD office space and landlords ‘desperation’ to get tenants in!