TCCI Chief Economist

DEATH and taxes. Said to be the only certainties in life but is raising taxes the answer to the ever-increasing cost of government services?

The Greens leader Nick McKim was correct when he told a recent rally that you cannot divorce the discussion about community expectations for government services from the one about revenue raising.

Mark Bowles - TCCI Chief Economist

There are several options for matching State Government services and revenue. These include taking on debt, more federal funding, raising taxes, growing the economy, improving efficiency, and challenging community expectations.

Anyone with an eye on the current social fracturing taking place in Europe can see that using debt to fund services for an ageing population is not a smart idea.

Closer to home, there will be a shake-up in federal financial relations. However, it is unlikely Tasmania will be better off. While we should argue the case for increased federal funds for Tasmania, especially for infrastructure, the national mood is for more GST revenue to be retained by the larger states, not for more redistribution.

In addition, while federal health reforms are in the pipeline, they will only ease pressure on State coffers if our hospitals operate within nationally efficient benchmarks.

Raising taxes might seem like an easy solution to the current woes. However, an important detail of the tax debate is that the burden of state taxes falls on the workforce, through higher prices and lower wage growth. The exception is land tax, which is shared between landowners and tenants. This was a conclusion of the Henry Tax Review.

This means that it is near impossible for the State Government to increase taxes without also raising the cost of living for those who can least afford it.

Secondary effects of new or higher taxes include less investment and slower economic growth. As we are now witnessing, a slower economy means less government tax revenue. So we would end with a spiral of ever-higher taxes and a shrinking economy.

We are left with three key ingredients to sustain Government services:

One, pursue unashamedly pro-growth policies that allow business to flourish, generating the jobs and wages from which taxes are paid.

Two, improve efficiency by binding public sector wage growth to productivity gains and by cutting ineffective programs, including those pretending to support business.

Three, challenge community expectations. For example, why is it that even the richest in our community can get “free” healthcare, limited only by how long they are prepared to sit in a hospital waiting room?

There are many ways for Government to deliver better community value. Higher taxes are not among them.

From left, Premium Fresh Tasmania owners – brothers Rick, Jim and Mike Ertler

Premium Fresh Tasmania is a family business, owned by brothers Mike, Rick and Jim Ertler.   The company operates its factory on the same family farm that was established over 55 years ago and utilises the latest technology to grow and pack over 40,000 tonnes of carrots, onions, swedes, turnips, shallots, leeks, broccoli, eschalions and beetroot a year.    The company supplies all major supermarkets across Australia and exports to targeted northern hemisphere markets.

Exporting since 2005 but significantly expanding export volumes over the past two years, Premium Fresh Tasmania ships shallots, eschalions, onions and carrots to customers in the international markets of France, UK, Belgium, Japan, Malaysia and Indonesia.   It boasts a team within the workforce purely dedicated to exports and total employment has grown significantly from 159 in 2010 to 193 in 2011.   Market expansion will continue in 2012 with Premium Fresh Tasmania supplying new customers in Germany and the Nordic countries.

Company strengths include innovation, quality control which includes full traceability, and marketing the vegetables’ Tasmanian origin as being a reliably clean, fresh and pure environment.   The export season is January to the end of May where Premium Fresh Tasmania takes advantage of the window of opportunity created by shipping new season product to northern hemisphere markets where fresh vegetables would otherwise not be available or where old season product would be offered on supermarket shelves.

Premium Fresh Tasmania will continue to develop new products for both the domestic and export markets and expanding the volume of current products to fully utilise the existing infrastructure.   Tasmania’s main competitor is New Zealand and to a lesser extent other southern hemisphere countries although it is acknowledged that vegetable exporters in those countries are becoming more professional.

Exporting this year has been difficult because of the high Australian dollar, issues with moving freight from Tasmania to be loaded on international vessels and the adverse weather affected growing and harvesting season however Tasmania’s reliability was evident with Tasmania suffering the least of every other state of Australia.

Extremely delighted and proud of winning the Export Award, the brothers paid tribute to their “fantastic team of people” and particularly the export team headed by Cherie Holloway.   Premium Fresh Tasmania also value the good relationship with their 60 growers.   The staff and growers are their biggest resource in promoting the excellent public image the company enjoys.

Premium Fresh Tasmania is a client of TCCI’s TradeStart Adviser Sally Chandler, having joined the New Exporter Development Program in August 2004.   As the winner of the Tasmanian regional exporter of the year award, the company is now an automatic finalist in the same category of the Australian export awards to be held in Brisbane during December.   We wish them well in the national finals.

Tasmanian asbestos expert Caroline Langley, of Injury Prevention & Management (IPM), said while asbestos was highly toxic and caused a range of often deadly lung diseases, including mesothelioma, asbestosis and lung cancer, there was very little risk if asbestos-containing materials remained in the building undisturbed.

The IPM asbestos team – from left, Richard Jackson, Matt Gmelig, Caroline Langley and John Snooks.

“Potential health problems arise if asbestos fibres are released into the air as a result of disturbance through, for example, contact with power tools during renovations or demolition,” she said.

Asbestos-containing products were widely used in the construction industry throughout Australia between the 1940s and 1980s.

These products are often found in the walls and ceilings of buildings constructed during this period.

They can also be found in roofing, fencing, vinyl floor tiles, brake pads, electrical backing board and potable water pipes.

Ms Langley estimated that in Tasmania more than half of the state’s building stock would feature asbestos.

“Removal of asbestos is always the best solution, but not every business can afford to do this,” she said.

“Asbestos can safely remain in a building, but it must be made safe as far as practicable and the risk of release of airborne asbestos fibres minimised.

“New regulations that take effect from 1 January 2012 will mean every workplace constructed before 31 December 2003 will need an asbestos register.

“The register must include an assessment of the risk of fibre release.

“In addition, the register must be readily accessible to workers, health and safety representatives.

“All asbestos-containing materials must be labelled where it is practical to do so.  The asbestos must also be regularly inspected and the register updated.

“Asbestos-containing materials must be identified before refurbishment or demolition of a workplace.  And the risk of personal exposure must be adequately controlled.

The new regulations will require Tasmanian businesses to have an asbestos management plan.

The plan is a practical “how, when and why” document for decisions about asbestos management in the workplace, including emergency procedures.  It must be regularly reviewed and updated as required.

Ms Langley said removal of asbestos must be undertaken by a licensed asbestos removalist.

“Regardless of the size of the removal task, all asbestos removal must comply with the Code of Practice for Safe Removal of Asbestos,” she said.

IPM offers professional asbestos risk management services for workplaces including:

• Asbestos identification.
• Asbestos registers and risk assessments.
• Airborne asbestos fibre monitoring (control, background and clearance).
• Asbestos education sessions.
• Asbestos Management Plans.

Ms Langley, a certified occupational hygienist, has been providing health, safety and environment advice for more than 20 years in NSW, the ACT and Tasmania.

She is the former national OHS&E manager for the CSIRO, where she was responsible for developing and coordinating the implementation of OH&S and environmental management systems across the CSIRO.  She also managed a team of 10 regional specialists providing internal health, safety, hygiene, environment and rehabilitation consultancy services to the CSIRO Australia-wide.

TCCI CEO Robert Wallace said that regardless of the Qantas dispute, there was a general feeling that increased trade union power was significantly impeding business efficiency across the board.

“There is a great concern in the business sector that the laws are having different impacts across all sectors and that they are particularly imposing higher costs and red tape on small business,” Mr Wallace said.

“Most employers regulated by the Fair Work laws, are in fact, small business operators.  As Tasmania’s business sector comprises mostly small businesses, for obvious reasons we are concerned about the impact these laws are having on their operations and their ability to successfully undertake their business.”

Mr Wallace said that even though the Fair Work laws had been in operation for a short time, there was sufficient data to independently assess the impact of the laws.

“Those impacts on our small business sector are higher labour costs under awards, new adverse action and unfair dismissal litigation, and the compliance nightmare when fair work laws are added to other regulations having to be dealt with by business.

“In Tasmania our small businesses are often owner operators and this added burden on their day-to-day operations may be enough to tip them over the edge.  Coupled with this is the State’s fragile economy and the fact that small business is doing it tough from all sides.

“We strongly urge an independent, wide-ranging inquiry and we will work with our sister body ACCI, to that end,” Mr Wallace said.

TCCI Chief Executive

THE late leader of the Australian Democrats Don Chipp famously said that minor parties were needed to “keep the bastards honest”. However, in the current parliaments, state and federal, the minor parties are NOT working to ensure the government keeps its promises. In fact, they’re doing exactly the reverse.

A couple of recent examples demonstrate very clearly that minority governments are not working well, either for Tasmania or the nation.Locally, we have the Green Ministers distancing themselves from Premier Giddings’ tight Budget and indicating that the harsh expenditure cuts, supported by the TCCI and business generally, would not have occurred had the Tasmanian Greens been responsible for the State’s finances.

Well, the Greens are responsible and as a partner in Government, Ministers McKim and O’Connor participated in framing the Budget and cannot escape accountability.

On a national level, the passage of the carbon tax package, through the House of Representatives also provides clear proof that minority government in Canberra is not serving the majority well.

Coinciding with the Lower House passing the legislation, new, independent research shows that small and medium businesses and their employees are likely to suffer the most under the carbon tax.  The research, from global economic and strategic consultants Castalia, finds that energy intensive SMEs are likely to suffer cuts in profitability of between 10 per cent and 20 per cent under the carbon tax.

The research demolishes the idea that only 500 big companies will pay the tax. It points to trade exposed small and medium businesses being significant losers. They will be unfairly squeezed by costs passed down the supply chain but will be less able to pass those costs onto consumers because of competitive pressures.

The Greens insistence on this carbon tax package shows clearly that minority influence in the current parliament is forcing the Gillard Government to break its promise to the Australian public not to introduce the tax under the current circumstances.

Australia is taking a huge uncalculated risk moving ahead of our competitors by introducing an economy-wide carbon tax that will cost jobs and do nothing itself to improve the global environment because of carbon leakage.

Global trade will simply shift the production of carbon-intensive goods to countries with a cost advantage, being those with no price on greenhouse gases.

Given the heavy (and arguably necessary) household assistance, this carbon tax will not be effective at cutting emissions but it will just fill Government coffers with tax revenue.

There are serious concerns within the investment community that the $10 billion Clean Energy Finance Corporation will distort an otherwise predictable pipeline of renewable energy investment.

The Government knows the tax itself will not be effective. The heavy lifting to cut emissions within Australia will be the costly direct action to close brown coal power stations and the regulated national Renewable Energy Target of 20 per cent by 2020.

Through the imposition of a carbon tax - the price extracted from Prime Minister Julia Gillard to gain Greens’ support for her minority government - Australia is imposing a cost on its own industry in circumstances where governments in competing nations including the United States, China, Canada, Brazil, India and Indonesia are not imposing similar costs.

This grossly distorted and mis-timed carbon tax does not have a mandate from the majority of Australians. Carbon pricing should be deferred until our major competitors agree to act and when a Government is given a democratic mandate by the Australian public.

Managing director Bruno Lei said the company had a fleet of vans that operated from Bellerive, lead by directors with more than 20 years experience in the industry between them.

The Urban Energy team is ready to help business with its electrical needs.

Bruno Lei was a finalist for this year’s TCCI IOOF Tasmanian Business Leader of the Year awards.

“Our experienced staff members are fully qualified, each holding a nationally-recognised industry white card.  We deliver a timely and efficient maintenance service with effective skills in programming, supervision, material procurement, quality control and last but certainly not least, occupational health and safety.

“We offer all residential work, new houses, re-wiring, switchboard upgrades, electrical pre-purchase reports on property, commercial maintenance, commercial light maintenance, shop and office fit out, LED lighting, plus communication and data work.  Basically, if it’s electrical you should contact us - whether your job is big or small!  We work closely with many other trades, so there are other services we can co-ordinate also should you require.

“We service southern Tasmania (urban, suburban and country) and our pricing is competitive, without compromising service and quality and our phone is answered 24 hours and weekends so we are always ready to assist,” Bruno said.

“We’re the preferred electrician of many businesses in Hobart, including a large shopping centre, and have a great level of repeat domestic business also, which shows faith in our company,” he said.

The office is at Shop 7, Level 2, Bellerive Quay where customers can inspect the working display of LED lights.  Urban Energy can provide advice on how businesses can cut their power bill for lighting by more than two thirds.

The  company is online at www.urbanenergytas.com.au and on Facebook facebook.com/urbanenergytas

In releasing the strategy Premier Lara Giddings said it would help all levels of government and the community sector to better understand the pressures facing Tasmanian households.

Ms Giddings said the report by Social Inclusion Commissioner, David Adams, was the first of its kind in the country and would become a resource for all levels of government and the community sector to help shape advocacy, policy and responses to the cost of living challenges

TCCI CEO Robert Wallace said rising living costs were of most concern to households on low and fixed incomes.

“As a caring and connected community, we want to respond to these pressures in the most effective way,” Mr  Wallace said.

“The most effective remedy is the creation of more sustainable, income producing jobs.

“However, rising living costs also affect the attractiveness of Tasmania as a place to live for the workforce, impacting our competitiveness.

“The TCCI welcomes this report because it avoids simplistic cost shifting strategies like price caps, which only delay or transfer cost burdens.

“In particular, the TCCI supports the need for proposed remedial actions to have a clear evidence base, and a focus on improving the resourcefulness of individuals, families and communities.

“Simple and cost effective ideas might yield positive results, such as improving home economics and financial literacy training in schools, as suggested in the report.

“The Henry Tax Review found that households endured the final burden of most state taxes, so taxes cannot be ignored as a living cost.

“Ultimately the only sustainable way for Tasmania to meet costs of living pressures is to maintain and create jobs that produce income. This is where the TCCI’s advocacy focus sits.

“As the strategy states, the goal should be a ‘hand up rather than a hand out’,” Mr Wallace said.

Premier Giddings said it was an issue that stretched far beyond the control of one level of government and she would forward the Report to the Federal Treasurer Wayne Swan and relevant Ministers in the Australian Government for their consideration.

She said the State Government would carefully consider the report’s recommendations, particularly in formulating the next State Budget.

“As Professor Adams states, this is not a rush to simplistic solutions but a considered approach to understand the complexity of the issue and the start of a discussion on how to best use scarce public resources to make a difference,” Ms Giddings said.

“In the face of budget challenges I do not think it is appropriate to create adopt Professor Adam’s recommendation for an Essential Services Commissioner at this time.

“Instead of creating another senior, independent role in Government, we will work closely with the existing Economic Regulator, government businesses and departments to build a better focus on the impact of policy on low income Tasmanians.”

In line with the report’s recommendation, the Government intends to move to establish a Parliamentary Select Committee to look at the effectiveness of the current concessions system and other matters identified in the report.

TWITTER is one of the fastest growing social marketing mediums and it can play a valuable role in your marketing and communication mix.  But it is important to put its value into perspective.

Twitter has grown exponentially over the past five years. In 2006, it was just an idea with three people working on it. Fast forward to today and it has more than 200 million users and the platform could be worth as much $10 billion. Both Google and Facebook are rumoured to be keen to acquire Twitter to access its vast audience and are looking at a price tag of between $8 billion and $10 billion.

Well that’s its takeover value, but what is its real value as a marketing and communication tool? Who uses Twitter and what are they posting? Some facts.

Almost half of the 200 million tweeters worldwide are aged between 18 and 34 (45 percent) and 53 percent of all users don’t have children. Some 54 percent of users are women and 46 percent men and they are spread fairly evenly throughout all income brackets. Tweeters are regarded as the best connected of the connected.

While business has yet to embrace Twitter in a major way, our politicians have quickly appreciated its value. Our globe-trotting Foreign Minister Kevin Rudd is said to have more than one million followers and while that is well short of US President Barack Obama’s 8.1 million, it is a significant number. But both political tweeters are still shy of top of the pops’ tweeters Justin Bieber with 9.8 million followers and Lady Gaga with 10.3 million.

The American digital library Infographics Archive has assembled statistics on what people post. Not surprisingly 40 percent of all tweets can be categorised as pointless babble. Nearly 38 percent is made up of conversational messages between family and friends, six percent is self-promotion and four percent news. Some 8.7 percent of tweets have pass-along value - that is information worth knowing and that can be used to add to your knowledge base, build a brand reinforce communication and help your business or organisation.

It took three years two months and one day from launch to record the one-billionth tweet. Currently, one billion tweets are sent every week. Just one year ago, the average number of tweets sent per day was 50 million. The average number in February 2011 was 140 million a day and less that one-month later, on March 11, 177 million tweets were recorded.

While less than nine percent of tweets having ‘pass along value’ may seem small, this ‘value’ sector is growing, as is the total Twitter population, so it cannot be ignored as an effective marketing and communication vehicle.

* Craig Harding is Marketing Director at strategic communications and marketing consultancy Corporate Communications (Tas) Pty Ltd. Corporate Communications is able to advise clients on developing social marketing strategies and how to best incorporate social media in their marketing and communication activities.

As Chairman of the Tasmanian Chamber of Commerce and Industry and through my own activities, I regularly speak to businesses throughout the State, both large and small, and it usually takes very little time to get to the subject of politics.

Business is despairing at the condition of both state and local government, the embarrassing number of councils and their cost, the quality of our political representatives and the absolute lack of effective vision for any future growth and development in Tasmania.

When I ask the business operators what they have personally done to rectify the situation, I am usually met with a blank stare, or worse yet the usual excuses of “I don’t want to be involved”, or “I don’t like politicians” and the like.

While I can sympathise with some of these thoughts, the inescapable reality for business everywhere is that if we do not involve ourselves in politics, we have no right to complain about the outcomes we receive.

If business does not speak up and put its common sense agenda forward, then others will fill the void and promote their own agendas. Undoubtedly, the most concerning is the persistent extension of Green politics in our State. Make no mistake, these hard-core environmentalists are persuasive, persistent and are doing irreparable damage to our economy, employment and our State.

Now is the time to act and for business and all Tasmanians who want their sensible voices heard, to speak up.

It is council election time again, and we have an obligation to do more than simply sit back and hope we get some better representation.

We need our elected aldermen and mayors to keep it simple and focus on the following three things:

1.     Keeping rates and charges low, and limiting any increases to CPI or less. The business-focused Brighton Council is able to do this, so why can’t others?

2.     Get serious about planning reform and unlock a pipeline of future investment, development and growth.

3.     Realise that the only way our cities and towns improve, and we desperately need urban renewal, is if we can attract new or further investment and capital.

Ask yourself some hard questions about the candidates - would you give them a job? If not then why would you vote for them? If you wouldn’t employ them in your business then why would you have them representing you in some of the State’s largest and perhaps most important businesses?

We need elected representatives who understand business, who have worked in business and above all who have capacity for clear, sensible thinking and success. If we don’t take Council elections seriously, then we will not get serious candidates or representatives.

And remember on voting day, number all the boxes on your ballot paper, as a single vote means you run the risk of favouring parties with multiple candidates.

* Troy Harper is Chairman of the Tasmanian Chamber of Commerce and Industry and Managing Director of Derwent Park Developments Pty Ltd

Officially unveiled by Premier Lara Giddings and Skretting’s Norway-based chief operating officer, Knut Nesse, the installation of a second production line and the upgrading of the existing production line will double the Cambridge plant’s capacity to 140,000 tonnes of fish feed per annum.

The Skretting team

Skretting Australia managing director James Rose said the expansion works were necessary as the plant was running at capacity.

“Our market is expanding by 10 per cent every year,” he said.

“Doubling our capacity sends a very strong message to the aquaculture industry that we believe in its future, and will meet the needs of industry for its next phase of development.

“Importantly, the expansion works were concluded in time for the industry’s peak production season.”

Skretting exports about 25 per cent of its feed to New Zealand.  Over the past 10 years these exports have been in excess of $200 million.

Mr Rose said from a Tasmanian perspective, while the company directly employed 57 people in the state, the industry it supported directly employed 700 Tasmanians and was worth $400 million annually.

“Aquaculture in Tasmania is a strong supporter of the regional communities in which it operates,” he said.

“The fact that we are not only supporting the industry to grow but also the communities where the 700 employees live is a very positive aspect of our business.”

“Being the major supplier to the New Zealand Chinook salmon industry is also a responsibility that we take very seriously.”

Mr Nesse, who is also a member of the executive board of Skretting’s parent company, Nutreco, one of the world’s largest animal nutrition companies, said aquaculture was one of the fastest growing animal production sectors.

“Our customers in this region have expanded significantly over the past few years,” he said.

“This investment clearly demonstrates our commitment to support their growth and to maintain our market leader position in the fish feed market.

“Growth is expected to continue at a high rate for all major farmed species in the coming years.

“This renewed plant will offer our customers great efficiency and flexibility, combined with the highest environmental and feed-to-food safety standards.”

Skretting is the world leader in the production and supply of feed for farmed fish and shrimp, producing 1.4 million tonnes of feed per annum at 21 factories located in the world’s key aquaculture regions.

Skretting Australia supplies 200 different types of feed for fish from hatchery to harvest.

Species catered for include Atlantic and Chinook salmon and trout, barramundi, yellowtail kingfish, Bluefin tuna and native species.