Commerce & Industry

V O L U M E 5 - W I N T E R 2 0 1 2 - $ 9 . 5 0 P E R E D I T I O N - $ 3 6 A N N U A L S U B S C R I P T I O N

A U S T R A L I A N C H A M B E R O F C O M M E R C E A N D I N D U S T R Y

IS ThE FAIR WORk IR SySTEM

FAIR?

who will invest in australian manufacturing?

the rocKY roaD to wh&s harmonisation

1 chief executive’s message

2 the economY UNREFORMING THE TAX SYSTEM

4 features IS THE FAIR WORK IR SYSTEM FAIR?

WHAT THE CARbON TAX REAllY MEANS FOR bUSINESS

WHO WIll INvEST IN AUSTRAlIAN MANUFACTURING?

14 the worKplaceEMplOY OUTSIdE THE bOX

HARMONISATION OF WORKplACE HEAlTH ANd SAFETY lAWS – A pACIA pERSpECTIvE

TO GO WHERE NONE HAvE GONE bEFORE - THE WHS HARMONISATION JOURNEY

THE EYE OF THE (IM)pERFECT STORM

22 international affairsAUSTRAlIA ANd THE INdIAN OCEAN RIM - A NEW bUSINESS FRONTIER

THE CHINA CHAllENGE: pROTECTING YOUR bRANd IN CHINA

THE TRANS-pACIFIC pARTNERSHIp: STRATEGIC bENEFITS ANd lONG-TERM COMMERCIAl GAINS

ASIA pACIFIC lAbOUR MARKETS ANd bEYONd

28 acci networKbUIldING pROdUCTS: A COMplIANCE FREE zONE?

MOvING pEOplE 2030 TASKFORCE: A TRANSpORT plAN FOR THE FUTURE

AUSTRAlIAN bUSINESS HONOURS KEN COURT AM

A CAll TO ACTION ON MANUFACTURING

vISIT bY THE US CHAMbER OF COMMERCE

JEREMY GUTSCHE, TRENd HUNTER

dR CHRIS pETERS AM CANbERRA CITIzEN OF THE YEAR

FAREWEll TO JUSTICE GEOFFREY GIUdICE AO

AIST’S SUpER GRAdS

contents

CommerCe & IndustryPublished by the Australian Chamber of Commerce & Industry (ACCI)

ISBN 9780646534091

edItorIal InquIrIesImogen Reid Manager, Marketing and Membership Services P: 03 9668 9950 E: [email protected]

desIgn3 Degrees Marketing 3dm.com.au

No part of this publication may be reproduced in any manner or form without written permission from ACCI.

The views expressed in Commerce & Industry are not necessarily those of the editors or the Australian Chamber of Commerce & Industry.

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what the Carbon tax really means for busIness

p.8

COMMERCE & INDUSTRY wINTER 2012 1

THIS EdITION OF COMMERCE & INdUSTRY COMES AT A TIME WHEN bUSINESS OWNERS ANd MANAGERS ACROSS AUSTRAlIA COUld bE FORGIvEN FOR THINKING THEY lIvE IN A pARAllEl UNIvERSE.

Mid-year, the Reserve Bank Governor was inviting us to see the Australian economy as a glass half full, but at the same time the central bank was (wisely) reducing interest rates because the glass was also half empty.

In June, the Australian Chamber of Commerce and Industry attended the Prime Minister’s Economic Forum, in Brisbane. Understandably Prime Minister Gillard and Treasurer Swan exhorted the business sector to boost confidence by talking up the strength of our economy relative to many other nations, especially those in Europe. Yet, while the official statistician delivered the news that the economy was growing well, the data also told us that growth over the past quarter was mostly in the resource sector. At least 70% of the economy was actually performing below trend.

These mixed messages are not evidence of a parallel universe but rather a very uneven national and global economy in

the wake of the global financial crisis. It is these ups and downs that make it hard for businesses to plan, for markets to recover, for bankers to free up lines of credit and for consumers to shake off the blues.

It also makes the traditional tools of regulating the economy, such as central decisions on interest rates, government stimulus packages or national tribunal rulings on minimum wages very blunt instruments. What is needed in one sector, or can be afforded, isn’t the case in another region, sector or enterprise.

My challenge, and that of your Chambers of Commerce and industry associations over the past few months has been to get that message out to our governments, politicians and bureaucrats. Business advocacy and representation doesn’t always deliver instant results but it needs to be undertaken because a strong economy with plenty of jobs only exists if there is a strong and profitable private sector.

ACCI has had recent successes, but conditions remain tight. Convincing the Reserve Bank to cut interest rates by 50 basis points in May 2012 and then another 25 points in June reduced the cost of doing business, even if most banks kept some of the cut to prop up their own funding costs. The Prime Minister and Premiers agreed in April to form a COAG Business Advisory Council and meet with business leaders before making decisions about regulation and red tape. We were also able to shave a lot of dollars off the minimum wage rise that was ordered by Fair Work Australia in June, even if the rise was still too high for some smaller businesses in the slower lanes.

Despite these wins, July 2012 sees new costs – especially the carbon tax and extra labour costs. These issues are featured in articles in this edition of Commerce & Industry.

It seems that when it comes to governments and regulation, it is a case of one step forward and two steps back. The result is that we have become a high cost country in which to employ and do business. Historic cost advantages such as low energy costs on the back of abundant fossil fuel reserves, are being taxed in a way that isn’t the case

in competitor nations. I think that is a mistake, whatever one’s views about global warming.

I received this message loud and clear when returning from Europe and Asia in June. In Europe I was thankful that we had a thriving resource industry and manageable government debt, and keen to make sure that we did not live beyond our means.

In Asia I was upbeat because growth and entrepreneurship weren’t dirty words. However, when I was told that Australia would miss out on capital investment in key industries like manufacturing because of our high costs I felt that we needed to do much more to lift competitiveness and productivity.

Even though some of the big decisions that affect the world economy are made in far away political forums like the G20, and by regulators and central bankers in New York, Brussels and Shanghai, our economy – like politics – is also local. There is plenty we can each do today in our own enterprises to try to be more efficient. Making sure our key staff are trained for the right skills, and working in a culture that values productivity and reward for effort is a good start.

The truth is that there isn’t likely to soon be a time when the economy flattens out to an even, certain trend. We will have to get used to the lumps and bumps, and push governments to give business the flexibility and tools to make the necessary adjustments.

Welcome to the new economic order. Those that best adjust will survive. And that goes for politicians as well.

a worD from our chief executive

EFIC dId morE than FInanCE oUr ContraCt

When we won the contract to be part of the supply chain to the massive Queensland Curtis LNG project, we were delighted. This was an opportunity to further establish our track record and reputation within the oil and gas industry in Australia.

However, like other suppliers, we were required to provide performance bonds in support of our contractual obligations. We also needed to ensure that we had access to additional working capital for other contracts. Yet, as a company without a

long trading history in Australia, we couldn’t get sufficient bonding or bank finance for our needs.

Luckily we knew in which direction to turn. With the support of EFIC’s export working capital guarantee and bonds, we were able to meet the financial requirements and demonstrate our company’s ability to take on such challenging projects.

overcoming financial barriers for exportersVisit efic.gov.au/acci

thEY EnablEd It.

Cory Stevens, Managing Director, Lean Field Developments

EFICAds11_LeanField_ACCI_201207.indd 1 1/05/2012 5:35:45 PM

By Peter Anderson, chief executive, Acci

2 COMMERCE & INDUSTRY wINTER 2012 COMMERCE & INDUSTRY wINTER 2012 3

the economy

At the June Economic Forum the Prime Minister put the issue back on the agenda, but with a sting. Any future company tax cut would have to be funded by raising some other business taxes. That’s not the business vision for reform.

Worryingly, we saw not just backsliding when it came to pledged tax reform. The budget also ushered in a significant expansion of middle-class welfare. The major new spending commitments in the budget came in the form of $2.1 billion for a new Schoolkids Bonus, $1.8 billion to increase the rate of Family Tax Benefit A and $1.1 billion to expand welfare payments. However, the $5 billion in new welfare expenditure was less than one quarter of the $22.4 billion in new spending announced over the forward estimates, much of it on a broad array of social programs.

There’s nothing fundamentally wrong with a desire to implement new social programs but when it becomes a question of sacrificing the growth dividend from economic reform in order to engage in doubtful spending, those actions should properly give rise to heightened concern on behalf of the business community.

The Henry Tax Review recommended a medium term objective for the company tax rate of 25 per cent and the government’s initial response to that review was to promise to reduce the rate to 28 per cent by 2014-15. The climb down to 29 per cent followed axeing of

Treasury’s flawed Resource Super Profits Tax.

Instead of the promised reduction in the company tax rate, the business community were expected to be consoled with the introduction of a modest carry-back of loss provision for the corporate sector. That measure, welcome as it is, came at a cost of $714 million over the forward estimates

period, leaving companies short-changed to the tune of in excess of $4 billion relative to the loss of the 29 per cent company tax rate.

Companies will now be allowed to carry-back losses of up to $1 million, providing a maximum tax benefit of $300,000. For large corporates this will be of marginal benefit and in the case of most small businesses will be out of reach given two-thirds of them aren’t incorporated and are therefore unable to receive any benefit.

It is interesting to note that, while the government remains committed to the worthy goal of restoring the budget to surplus in 2012-13, the recent budget saw it spend two dollars for every three that it raised in new taxes or saved in reduced expenditure.

A deterioration in the economic outlook and major heads of revenue left the government needing to find the savings necessary in order to get over the line on their surplus objective for 2012-13. The Treasurer has publicly committed the government to cutting further if conditions worsen in order to realise this goal. Tightening fiscal policy into a weakening economy at the same time as monetary policy is moving toward a more accommodative stance sees the two arms of macroeconomic policy moving in opposite directions, the merits of which are debateable.

As it stands the government has promised to deliver the fastest fiscal consolidation in Australia’s history. Moving from a deficit of $44.4 billion in 2011-12 to a wafer thin surplus of $1.5 billion in 2012-13 will see a huge turn-around in the budget position of +3.1 percentage points of GDP and this will weigh heavily on overall economic activity. If the economy slows in response to the negative developments in Europe, tightening fiscal policy further by raising taxes or cutting public sector investment in order to realise the 2012-13 surplus objective will further dampen growth.

Stepping back to gain some perspective on the last few years we see that the third largest fiscal stimulus package in the OECD, designed to ameliorate the impact of a forecast severe recession in Australia, was followed by the subsequent failure

to wind back government spending. This has seen four large deficits. In turn this has led to less capacity to deliver promised reforms to the tax system that would do much to underscore the growth in Australian living standards and diminished the fiscal space to combat any prospective financial crisis.

All of which serves to illustrate the importance of constant resolve when it comes to the difficult task of tax reform and maintaining fiscal discipline. However, the current political and budget situation leaves the prospect of meaningful tax reform a long way off.By Burchell Wilson, senior economist, Acci

unreforming the tax sYstem

companies will now be alloweD to carrY-bacK losses of up to $1 million, proviDing a maximum tax benefit of $300,000.

“TAX UNREFORM” WAS pRObAblY THE bEST SUMMARY OF THE MAY FEdERAl bUdGET. WITHOUT A WORd OF WARNING, THE GOvERNMENT SCRAppEd ITS AlREAdY lIMITEd COMMITMENT TO CUT THE COMpANY TAX RATE FROM 30 TO 29 pER CENT IN 2013-14 ANd WITH IT WENT THE pROMISEd HEAd START ON THIS MEASURE FOR SMAll bUSINESS. THE lOSS OF THE pROMISEd REdUCTION IN THE COMpANY TAX RATE AddS A TOTAl OF $4.8 bIllION TO THE TAX bIll OF AUSTRAlIAN COMpANIES OvER THE FORWARd ESTIMATES pERIOd.

while the government remains committeD to restoring the buDget to surplus in 2012-13, the recent buDget saw it spenD two Dollars for everY three that it raiseD in new taxes or saveD in reDuceD expenDiture.


feAtures

IN FEbRUARY, ACCI lOdGEd A dETAIlEd 200 pAGE EvIdENCE-bASEd SUbMISSION TO THE REvIEW pANEl ANd FOllOWEd THIS Up WITH SUpplEMENTARY WRITTEN ANd ORAl SUbMISSIONS. ACCI’S SUbMISSION FOllOWS EXTENSIvE ENGAGEMENT WITH ACCI NETWORK MEMbERS, EMplOYERS (SMAll, MEdIUM ANd lARGE FIRMS REpRESENTING All MAJOR SECTORS OF THE ECONOMY) ANd MEMbERS OF THE WIdER IR/HR/lEGAl COMMUNITY SINCE 2008/09.

ACCI’S SUbMISSION OUTlINES MAJOR pROblEM AREAS EMplOYERS HAvE EXpERIENCEd SINCE THE lAWS COMMENCEd IN JUlY 2009 ANd MAKES OvER 75 SpECIFIC RECOMMENdATIONS TO AMENd THE lAWS TO ENSURE THAT THEY MEET THE GOvERNMENT’S COMMITMENTS TO INdUSTRY AS CONTAINEd IN ITS KEY 2007 FORWARd WITH FAIRNESS pOlICY plATFORM, WHICH UNdERpINS THE ACT.

ACCI’s submission includes research and analysis on the impact of the laws, based on international best practice, findings and recommendations of inquiries, media reports, company annual reports, surveys, Tribunal decisions, court decisions, applications made to FWA and evidence provided to Parliamentary Committees. The evidence-based submission also relies on information provided to ACCI through its National Annual Wage Review Survey. It also builds upon ACCI’s most recent policy Blueprint dedicated to the burgeoning services sector “Services: the New Economic Paradigm” launched in 2011, which clearly highlighted that service sector firms need to be able to react in a more dynamic way compared to other industries. Inflexible labour rules, which operates on a “one size fits all” basis or a 9am to 5pm, Monday to Friday paradigm, do not reflect the evolution of the sector and specific needs of firms operating in the services sector.

Whereas twelve months ago the Review risked being desk top bureaucratic exercise, the new Minister – to his credit – announced an independent Panel and terms of reference that allow problems within the government’s system to be identified – even though those terms of

reference are not wide enough to open a broader debate about changes to the architecture of the system itself.

Employers have given the new workplace relations system a fair go for more than three years, and employers are giving the Review an equally fair go. ACCI’s comprehensive submission is based not on ideology but on the back of evidence and feedback through monthly meetings and working parties with Industry Associations and Chambers of Commerce around the country on practical issues affecting both employers and employees.

Key themes In our feedbaCK have been:

• A number of targeted changes are required to calibrate the system to ensure that the workplace regulations reflect the modern Australian workplace, which in turn, will help drive increases to productivity, efficiency, and employment opportunities;

• The system has introduced new labour costs and has made dealing with workplace relation issues more costly. A relevant survey of HR professionals found that labour costs had increased (58.5%) as opposed to decreasing

(2.2%) and industrial relations issues cost more (62.2%) as opposed to costing less (2.6%);

• The bargaining system is process driven, open to tactical manipulation and removed from how the majority of the modern economy operates, which is largely non-unionised and non-collectivist in structure (trade union membership in the private sector hovering at around 14% with most coverage occurring in the public sector);

• In a number of key areas, the system is less flexible than 20 years ago. Once again, HR professionals reported that labour flexibility and productivity has decreased and not increased; and

• The national system, which is still widely supported, has not yet adapted to large non-union service industries formerly under state systems.

Leaving aside any changes to the architecture of the system, there are many problem areas within the government’s own policy construct that should be changed – including changes to simply meet the commitments that provided to employers in 2007 and 2008.

is the fair worK ir sYstem fair?

the review

THE GOvERNMENT IS REqUIREd TO CONdUCT A pOST IMplEMENTATION REvIEW OF THE FAIR WORK ACT 2009. AS A RESUlT OF THE THEN pRIME MINISTER, HON. KEvIN RUdd Mp, GRANTING AN EXEMpTION TO THE FAIR WORK bIll 2008 FROM OFFICE OF bEST pRACTICE REGUlATION REqUIREMENTS.

ON 20 dECEMbER 2011, THE MINISTER FOR EMplOYMENT ANd WORKplACE RElATIONS, HON. bIll SHORTEN Mp, ANNOUNCEd THE dETAIlS OF A REvIEW OF THE ACT, INClUdING THE TERMS OF REFERENCE.

THE MINISTER INdICATEd THAT THE REvIEW WOUld bE CONdUCTEd bY RESERvE bANK bOARd MEMbER dR JOHN EdWARdS, FORMER FEdERAl COURT JUdGE, THE HONOURAblE MICHAEl MOORE ANd NOTEd lEGAl ANd WORKplACE RElATIONS ACAdEMIC pROFESSOR EMERITUS RON MCCAllUM AO.

background

By dAniel mAmmone, director WorkPlAce Policy, Acci


feAtures

WHIlST ACCI MAdE A NUMbER OF SpECIFIC RECOMMENdATIONS IN ITS SUbMISSIONS TO THE REvIEW pANEl, THERE ARE bROAdlY TEN AREAS WHERE THE pANEl SHOUld RECOMMENd CHANGES WITHIN THE EXISTING ARCHITECTURE OF THE FAIR WORK SYSTEM. THEY ARE:

These include:

• Promises to employers that there would be no labour cost increases from moving across to so called new “modern awards”;

• Promises that there would be no extension on the right to strike or the

• Right of union entry; and

• Promises that there would be no general over-award arbitration.

Self-evidently, a new Minister, the establishment of the inquiry and the known problems being experienced by industry all create expectations that something beneficial will emerge from the Review.

As for the Review process itself, the employer community has been provided with a robust opportunity to put forth its case for change with the Panel members demonstrating that they have heard employer concerns and are aware of the significant pressure points within the system, whether they arise as a result of the deliberate policy changes that occurred as part of the Forward with Fairness ALP policies, decisions of the Tribunal/courts, or from unintentional consequences.

In short, there are changes required in all key areas of the fair work system, including the agreement making and bargaining framework, the dual safety net of modern awards and the National Employment Standards, unfair dismissal laws, the general protections (adverse action) framework, right of entry and industrial action.

unfaIr dIsmIssal system

Consider one part of the system, which is a particular concern to the SME sector, the Fair Work unfair dismissal system is generating over 3,000 applications per quarter and the latest figures released by Fair Work Australia suggest that the trajectory is on a steady incline. This should be compared to the 6,707 applications made in 2004/5 under the pre-WorkChoices laws, the Workplace Relations Act 1996. The latest record figures are also concerning given that Fair Work Australia’s own research found that 76% of employers surveyed wanted to avoid the “cost, time, inconvenience or stress of further legal proceedings” by settling the claim before arbitration with most matters settling with some form of monetary compensation given to the employee. Obviously, this isn’t the way a fairly balanced unfair dismissal system should operate. And whilst the employer experience of “go away money” is not new, the promises made to industry of removing go away money from the unfair dismissal system are far from a reality.

IndustrIal aCtIon

In a second area, the latest industrial disputes data is also concerning when a crucial sector of the economy, such as coal mining, experienced its highest number of working days lost per thousand employee for the quarter under the Act. This comes on the back of ACCI research which examined the number of protected action ballot orders (which allows unions to take lawful industrial action) granted by Fair Work Australia and found that it has significantly increased under the Fair Work system with 271 orders granted in 2006/7 to 926 orders granted in 2010/11. The Federal Court decision in JJ Richards confirms that unions can take strike action without bargaining commencing. In ruling against the employers’ appeal, the Court pointed out that the employer arguments did have merit and that there were problems of government policy not reflected in a consistent manner under the Act. This decision needs to be addressed as a priority by the government, particularly as crucial parts of the economy and individual businesses can now be exposed to significantly disruptive and costly union industrial action, in circumstances when bargaining hasn’t commenced and when the union only represents a minority of the workforce.

modern awards

A third area of concern, particularly to SMEs, is the inbuilt inflexibility of modern awards and the “one size fits all” prescription of award terms. For example, it took five separate proceedings (including appeal processes) before Fair Work Australia and the Federal Court to validate a common sense proposal by the retail industry (supported by employers, employees and parents), for secondary school students to have an opportunity to work after-school for 1 and half hours in the general retail sector, in circumstances where the business could not provide 3 hours of work because it closed at 5.30pm on weekdays. The new three hour minimum engagement rule had a real and not a hypothetical negative impact when two teenagers in Terang (regional South Western Victoria) lost their casual jobs as a result of the new modern award operating in the early part of 2010. Unions opposed the retail industry applications and vigorously subjected the two young employees who lost their jobs to cross-examination in Fair Work Australia. It is unfortunate that the apparent threshold to change modern award provisions are so high that such sensible proposals can be subject to significant opposition. ACCI has recommended to the Review Panel that the Productivity Commission should be charged with reviewing modern

awards and terms, such as minimum engagement clauses, in order to ensure that modern awards operate as a safety net only and do not unnecessarily impede the opportunity for employers to offer valuable working opportunities and restrict established work practices which works for the employer and employees.

ACCI has also recommended that the Productivity Commission follow up on its recent Australian Retail Industry Inquiry, with a dedicated inquiry into the impact of the minimum wage system, including how minimum wage decisions of Fair Work Australia particularly impacts award reliant sectors, such as the services sector and small business who predominantly employ award-reliant workers. As ACCI’s survey research indicates, it is the SME sector that ultimately bears the brunt of wage decisions, year in year out, with no exemptions or modified application of wage increases based on economic circumstances affecting the industry (it is generally a macro economic assessment of the state of the national economy, which washes out the impact on struggling sectors or cohorts of particular industry sectors). Minimum wage decisions, particularly those which are in excess of changes to the cost of living, do have negative impacts for owner operators, customers and employees when costs need to be absorbed or passed on in some way.

ConClusIon

In the same way that COAG deregulation commitments need to be followed up with action, so too should changes to workplace regulation. Industry expects that the Review Panel should make recommendations of substance, which will make a real impact on how employers are able to deal with employment arrangements at the enterprise level. It is essential that government action in the form of amendments to the Act needs to be followed up by bipartisan support in the floor of the Parliament.

Industry is hopeful that any changes that may occur as a result of the government’s Review of the Fair Work system will go some way to building much needed business confidence and providing employers with the capacity to reflect so called “workplaces of the future” now, rather than later. Until that happens, many employers are rightly able to claim that they are still looking for fairness under the Fair Work system.

Transfer of business rules, which requires enterprise

agreements to transfer to a new employer (who buys an existing business) when an employee continues to work for the new employer, should revert to the former High Court test;

For enterprise agreements, replace the better-off-overall

(BOOT) test with a global no-disadvantage test (NDT) and allow non-union greenfields agreements (the former allowed a trade-off between financial and non-financial benefits and the latter remains crucial to the resources and construction sectors);

Limit protected industrial action to matters pertaining

to the employment relationship (for example, this would not allow union strikes to occur over commercial arrangements between the employer and contractors);

Allow wage determinations to exclude and exempt

industry sectors based on economic conditions in those sectors, and provide a wage – superannuation trade off as a result of the increase in the Superannuation Guarantee Levy from 9 to 12%;

Make the existing individual agreements called “Individual

Flexibility Arrangements” workable (for example, subject these agreements to an NDT and provide a 2 year nominal life);

Modify the rules compelling bargaining with unions in

non-unionised or minority unionised

business (this also appears contrary to the principle in Article 4 of the ILO’s Right to Organise and Collective Bargaining Convention which calls for “voluntary negotiations”);

Make industrial action a last resort – if good faith bargaining

is truly the working principle. Decisions which allow unions to “strike first and bargain later” (as occurred in the JJ Richards case) need to be amended;

Valid reason or compliance with other laws should be a

complete defence to unfair dismissal actions (procedural deficiencies in a termination shouldn’t turn a valid dismissal into an unfair one, particularly where it is found to involve serious misconduct in the workplace. This disproportionately impacts SMEs who do not have the resources and capacities as larger firms’ possess, including access to dedicated HR professionals and legal advice);

Limit the general protections framework to unlawful

termination only and reinstate former Freedom of Association protections, or remove the current reverse onus of proof (this is in addition to building into the system higher barriers to entry such as increased filing fees for applications and caps on compensation payouts);

Restrict rights of union entry to workplaces with union

members and require union officials to meet minimum requirements that apply to government workplace inspectors.

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acci’s comprehensive submission is baseD not on iDeologY but on the bacK of eviDence anD feeDbacK through monthlY meetings anD worKing parties with inDustrY associations anD chambers of commerce arounD the countrY on practical issues affecting both emploYers anD emploYees.

ten KeY areasfor change


feAtures

The nature of Australia’s economy with one of the highest trade to GDP ratios in the OECD and our reliance on fossil fuel means that we have more to lose than just about any other developed country in adopting an onerous carbon pricing regime.

Moreover, the Australian economy has been built on access to affordable and secure energy supply, and a carbon price places both inherent economic advantages at risk.

Imposing an energy tax on the manufacturing sector in particular, which is already reeling from the severe adjustment pressures, is hard to comprehend. Perhaps even more difficult to fathom is the rationale of Australia’s trade union leadership in backing a policy which so decisively threatens job security across their membership.

ACCI does not consider that we should shirk the task of reducing the growth of emissions, but our members - comprising some 350,000 businesses,

which is the largest of any business group - have indicated mitigation should only be achieved through efficiency and technology improvements. This is what we regard as the operation the market: business responding to the demands of the community, customers and consumers to deliver products and services but with a greater awareness of the principles and energy efficiency and, hence, lower carbon intensity.

Enduring change and progress in industrial development has never happened via government wielding a large stick in the form of a punitive tax or regulation. This approach is more likely to lead to economic dislocation and job losses, and deferred investment or the relocation of business outside the application of those rules.

By contrast, there are innovation, technology and efficiency measures that will deliver sustainable and affordable reductions in emissions without a harsh adjustment task imposed on the wider economy.

Those who doubt this can happen should consider that, between 1990 and 2008, Australia has recorded a 17 per cent reduction in CO2 emissions per unit of GDP, even without an explicit carbon price. Whereas the USA has recorded a 31 per cent drop in the same measure, again without intervention of costly government regulation or taxes.

However, an unfortunate aspect of the policy debate in Australia is that if you do not support the current carbon price model, then your position is unfairly presented as either opposing a reduction in emissions, support for a much costlier approach or, indeed, that you’re a climate sceptic.

ACCI rejects each of these elements as a mis-characterisation. Those that oppose the unilateral carbon price have also been labelled as opponents of economic reform and accused of somehow abandoning adherence to market based approaches. Firstly, no other economic reform over the past 30 years has explicitly recognised at the outset that it will lead to a long term productivity decline, a fall in real wages and a decline in living standards. This is what the government’s own modelling concludes.

On market based approaches, this term is greatly abused, when in fact the proposed carbon pricing model relies on a tax and a regulation to alter economic behaviour.

The point is, what might be labelled as a so called market based mechanism can lead to a detrimental economic outcome, as is the case with the unilaterally imposed carbon tax.

Of course, the arguments are well known, yet we remain concerned the carbon tax will send jobs off shore by effectively taxing our export industries, and giving a tax break to imports. It will over time encourage the closure of local plants or limit their future expansion and it will foster the export of emissions to less environmentally regulated countries. Needless to say, the virtuous Europeans are a good example of the later phenomena.

Some other business organisations have formed a view that the best policy response is to introduce a $10 per tonne carbon price. We don’t share this view. It is an unhelpful compromise that promotes uncertainty and business will still factor into their investment decisions the worst case price outlook as their new base case.

As we all know over the past 50 years or so, the relative contribution of the manufacturing sector has declined both in terms of jobs – in the 1960s one in four jobs related to manufacturing; today it is more like 1 in 11 – but also measured in

terms of economic output. In the 1960s, 25 per cent of economic output was represented by manufacturing; today it is just over 9 per cent. And this is not necessarily a failure of policy, but due to a range of factors common in many developed countries.

Growth – that is growth in services – as income grows, so does consumption of imports, the impact of international competition with the removal of trade barriers and growth of offshoring and Australian companies basing their operations elsewhere.

What we need to avoid is deliberate policy choices such as a carbon tax which unnecessarily damages our cost competitiveness.

The effect of the doubling of energy prices to 2015 from 2010 levels, and increases beyond 2015 - much of which is attributable to carbon mitigation policies - will continue to impact on the competitiveness of our industries. It continues to be a matter of policy perplexity that we endorse and greatly accept the economic dividend from the export of affordable energy in the form of coal and LNG consumers in Asia and elsewhere - and without any carbon sanction – yet, if the same fuel is consumed domestically by our industries or consumers, and in much smaller amounts, it will carry the cost of the world’s largest carbon tax.

In wider policy responses to the position of the manufacturing sector, ACCI is less driven by the view that we need to implement a stand alone manufacturing policy as a primary response. First and foremost is dealing with our wider economic challenges. This is the best mechanism to deal with all sectors of the economy and help the sustainability of manufacturing.

It includes restoring the budget to balance to alleviate the pressure on both interest rates and the exchange rate; it includes a commitment to smaller government and lower taxes; adopting a competitive taxation system that fosters productivity by providing for incentive, risk taking and greater workforce participation and, with reference to manufacturing, a more competitive depreciation regime is also required to encourage investment in capital.

Clearly, a unilateral carbon tax should not be introduced. We need to have continued investment in skills and education. We need to lower the burden of regulation and introduce more rigorous requirements governing requirements for cost benefit analysis and regulatory impact statements. And we need to prioritise the provision of infrastructure to ensure the highest yielding and most

By GreG evAns, director economics And industry Policy, Acci

SINCE THE EARlY 2000s, ACCI HAS MAINTAINEd A CONSISTENT pOSITION TOWARdS CARbON pRICING: THAT

THE UNIlATERAl AdOpTION OF A dOMESTIC CARbON pRICING MECHANISM WIll plACE TOO lARGE A COST ON THE ECONOMY ANd IT SHOUld ONlY bE CONSIdEREd IF

ANd WHEN A bROAd bASEd INTERNATIONAl COMMITMENT INvOlvING dEvElOpEd ANd dEvElOpING

COUNTRIES IS AGREEd.

the point is, what might be labelleD as a so calleD marKet baseD mechanism can leaD to a Detrimental economic outcome, as is the case with the unilaterallY imposeD carbon tax.


feAtures

productive investment is built first, and also adopt sound principles in the provision of energy to ensure continued access to affordable and accessible energy resources, regardless of the fuel source.

To help quantify the impact, in October 2011, ACCI released an independent research report on the impact of the carbon tax on mid sized companies by global consulting firm of Castalia Strategic Advisers. In summary, the report found that, under a $23 a tonne fixed carbon price, firm profitability will be reduced by between 10 to 20 per cent in the examined sectors of plastics manufacturing, food processing and chemicals and manufacturing businesses. If the carbon price were to rise to $45 a tonne, firm profitability will be reduced by between 20 and 50 per cent.

In the short term, capital investment in the SME sector has already been sunk, the burden of adjustment is likely to fall disproportionately on employment as those firms adjust to a permanent loss in competitiveness; whereas, in the medium term, the impact of the carbon price is more likely to be on both investment and also employment.

Moreover, the research may have understated the final impact as it accepted the Treasury’s optimistic assumptions on energy prices and to our knowledge did not account adequately for the impact of carbon pricing on inputs other than direct energy costs.

In addition to this study, the Australian

Food and Grocery Council have indicated a carbon pricing scheme will cost the food and grocery manufacturing industry the equivalent of 4.4 per cent of operating profits before tax - assuming that that commences inside 2012/2013.

Other organisations have also done work, including our particular members - the Housing Industry Association and Master Builders - where they concluded in the building sector that many building inputs using the construction of a typical new residence will escalate that price adding thousands of dollars to total building costs.

Additionally, a report conducted by SFS Economics (commissioned by the Australian Trade and Industry Alliance) examined the relevant reach of Australian’s carbon pricing proposal compared with the European model. It found, among other things, that Australia’s carbon tax will add new costs to manufacturing firms employing more than 1 million Australians. But only firms and sectors employing 93,000 Australians will be eligible for assistance to reduce the loss of competitiveness in domestic and global markets. This accounts for only 8.9 per cent of all manufacturing jobs.

In the EU scheme, competitiveness safeguards in the form of free permits will be provided to firms that employ approximately over 14.5 million, which represents some 42 per cent of all manufacturing jobs. So, protection in Australia in terms of assistance goes to 9 per cent of employees in manufacturing.

In Europe it goes to 42 per cent.

Further, in the European scheme, 48 per cent of manufacturing value added is covered by industry assistance, whereas in Australia only 20 per cent of value added will be covered by assistance.

Other measures indicate the relatively mild impact of the European scheme, raising $1.53 per capita compared with $475 in Australia. On average in the first few years in Europe, it generated something like $763 million per annum compared with $8.3 billion when the trading scheme commences in Australia. And the share of exports covered by the allocation of permits was 73 per cent in Europe compared to 16 to 19 per cent in Australia.

Proponents of a carbon price often argue that green jobs will be created to replace conventional brown jobs. However, studies found that, across a range of European countries where governments have invested in the renewable energy sector, for every so called green job created another four jobs are lost somewhere else in the economy. This is due to the opportunity costs associated with directing large capital flows to economically inefficient areas and the lasting impact is much higher energy prices becoming entrenched in the economy.

Typically, construction jobs are created but long term employment is largely a pipe dream. None better illustrated this than the announcement last year of 150 megawatt solar power station in

Moree at the staggering capital cost of $923 million, of which $426 million was provided by the Commonwealth and State governments. Such is the scale of this project, it will require some 645,000 photovoltaic panels. When asked by a journalist where would the panels be sourced from, would they be sourced locally, a consortium representative responded somewhat apologetically and apprehensively, “Unfortunately not the panels will come from overseas”. The message is “don’t expect your clean energy future to be the green jobs bonanza heralded by some; well, at least not for the jobs in Australia”.

We consider it important that ACCI continues to provide policy leadership to the business community by highlighting the negative impact on carbon pricing on Australian business, especially as it affects both direct energy costs and the higher costs of other inputs.

We continue to be concerned by the Treasury modelling of the government’s scheme, which demonstrates it will lead to lower real wages, lower productivity and lower overall living standards. And we will continue to advocate the need to abolish the clean energy future legislation as it will impose severe and ongoing adjustment costs on the Australian economy.

It should be clear to all policy makers that adopting a carbon pricing regime which will significantly escalate the direct price of energy and all other inputs to manufacturing will only weaken the most vulnerable sectors.

in aDDition to this stuDY, the australian fooD anD grocerY council have inDicateD a carbon pricing scheme will cost the fooD anD grocerY manufacturing inDustrY the equivalent of 4.4 per cent of operating profits before tax - assuming that that commences insiDe 2012/2013.


feAtures

nor will they delay capital investment until we get our house in order. They are getting on with business. They are global in outlook and see horizons well beyond our shores. Africa, the Middle East, South America are all trading partners for Asian commerce and capital.

This means that Australia has to be competitive and productive to be in the game. Trade with Asia has to be more than commodity prices for iron ore.

A challenge in dealing with Asia is one of scale. Do we have the capacity to supply the dimensions they require? Asian importers of wine did not talk about requiring dozens of crates, they talked in shiploads. When I mentioned that some parts of regional Australia required new urban buildings I was told (quote) “We don’t just build buildings, we build cities.”

Perhaps the most profound message I picked up in Asia was a concern that Australia does not fully understand the mutuality involved in trade and commerce: we want our cake and to eat it too. We want Asian nations to give the green light to Australian companies to access their markets, to invest in their property and sell to their customers, but we turn a bit icy to Asian investment on our shores.

These are fair critiques. Trade is a partnership. It would be a big mistake for our nation if we spurned legitimate and wealth creating Asian investment in Australia because of snobbish or neo-colonial attitudes about western investment being better than eastern investment. If we did that, in a generation’s time our children will be given the task of rectifying the wrong of their parents’ generation. Just think of past attitudes to Japanese investment, and see now how we would not have key elements of our CBD development, logistics infrastructure or tourism facilities if it had not been for some of these past investments.

The Free Trade Agreement the Australian government recently signed with Malaysia

is an excellent example of leadership on this front. Once implemented, Australian companies will be able to invest in Malaysia and retain majority ownership.

Finally, in Shanghai, I met with the Director General of the Shanghai Municipal Government Financial Services Office, Dr Fang Xing-Hai. This is the authority which authorises Chinese investment above a certain amount in foreign countries like Australia.

Dr Fang said, straight out, that regrettably, Australia is not an attractive place for investment in manufacturing.

Let me repeat, one of the world’s biggest investors from a trading city of world renown and from a nation that will soon be the number one economy in the world is telling us that Australia is not a place where overseas investors would want to invest capital in plant, equipment or employing people in our manufacturing industry – an industry that is still one tenth of our industrial base.

Dr Fang’s message was clear: Asia is not waiting for Australia.

“Why?” I asked. I was told equally politely, that our market was too small and our labour cost structure and our regulations were too high. He made specific reference to our employment regulations, and the capacity of employers in Australia to take action against poor performing workers.

A Chinese official thousands of kilometers away, with authority to recommend investment in Australia, raising some of the very regulations that we domestically are seeking to be changed.

Whether Dr Fang is right or wrong, we need to be aware that our labour market regulation does matter to overseas investors because they impact on business efficiency. In short, his message was that our manufacturing industry is becoming less and less globally competitive, except in some niche areas.

In thinking further about this sobering

message, I realised it was not just Dr Fang who was telling me our manufacturing industry lacked competiveness. It was also my own members, starting with our small business manufacturer in Queensland, whose thoughts I mentioned earlier.

Hence, I ask ‘Who will invest in Australian manufacturing?’

We do not have overseas investors or our own private companies falling over themselves to do so. Remember it is the Australian taxpayer that recently co-invested big dollars in the automotive industry.

My point is this. Given that we do not and should not compete with Asian countries on labour costs, we need to make every other post a winner if we want to keep producing goods and services and compete in international markets.

That is why acting unilaterally to remove one of our historically competitive advantages, low cost energy sourced from our abundant coal supplies, by placing a carbon tax on our economy is a mistake.

This echoed a similar message I received from the President of the International Organisation of Employers, a Malaysian businessman, who invested in the hospitality industry in Sydney only to pull out due to high costs, excessive regulations and a bad attitude amongst staff unwilling to reach the skills standards expected in the higher end of the Asian hospitality industry.

Without getting our domestic house in order to lift our productivity and competitiveness, we will not realise the full potential of Australians investing in Asia, or Asia investing in Australia.

This is an extract from Peter Anderson’s address to the Plastics and Chemicals Industry National Conference, held in Sydney.

AT THE RECENT NATIONAl ECONOMIC FORUM, pRIME MINISTER JUlIA GIllARd EXHORTEd THAT bUSINESS SHOUld SpEAK MORE bOldlY AbOUT AUSTRAlIA’S pOSITIvE GROWTH.

Yes, it is true that we must speak positively about our good fortune and the things we are doing well. But we must also speak openly about why we still see Australian manufacturing move to Asia, why some food manufacturers see New Zealand as a better destination for doing business, and why we struggle to secure overseas investment in Australian manufacturing on our shores. While Australia’s economy is growing, our global competitiveness is slipping.

The answer lies in understanding the competitiveness challenge – and a big part of that is productivity. In my references to productivity I refer to it in the broad sense – not just the output from an employee, but all of the factors that impact efficiency and output: business systems, skills for the job, regulation compliance and red tape.

Last year I received a letter from a frustrated small and medium business manufacturer in Queensland. He said, and I quote:

“Small and medium sized businesses have been working to constantly reduce profit margins in their efforts to remain ‘in the game’, whilst ‘on costs’ have continually increased. Many manufacturers with established overseas markets left our shores and took their operations into other less hostile environs. Those that have stayed have been forced to fight what seems a losing battle with ever increasing compliance regulations and associated costs, ever rising operational costs with materials,

power, fuels and labour and a diminishing market share due to ‘the China Factor’.”

My recent trip to Asia reinforced this as I spoke with:

• Representatives of the Chinese government and its powerful Minister of Commerce;

• Representatives of Chinese Business and trade organisations;

• Australian businesses doing trade in China;

• Australian and State government representatives based in China and;

• Chinese businessmen interested in investing in Australia.

The insights of these interactions were

extraordinary.

In Asia, in contrast to Europe, there is entrepreneurship, there is more confidence. Growth has slowed a little in China, and a bit more in India, but remains respectable. And it is not just Asia, China or India. Indonesia, on our doorstep, is impressively growing and industrialising. Thailand is a haven for manufacturing.

I am pleased that the Australian Government encouraged a focus on Asia at the recent Prime Minister’s Economic Forum, as well as through the Australia in the Asian Century Review by ex-Treasury boss Ken Henry.

A key lesson that should be echoed in this work is that neither Asia nor China is waiting for Australia to come to them,

‘Who Will Invest in Australian

Manufacturing?’By Peter Anderson, chief executive, Acci

when i mentioneD that some parts of regional australia requireD new urban builDings i was tolD (quote) “we Don’t just builD builDings, we builD cities.”


the WorkPlAce

emploY outsiDe the box

IN MARCH 2012, THE AUSTRAlIAN CHAMbER OF COMMERCE ANd INdUSTRY (ACCI), AlONG WITH THE MINISTER FOR EMplOYMENT ANd WORKplACE RElATIONS, HON. bIll SHORTEN Mp lAUNCHEd EMplOY OUTSIdE THE bOX: THE REWARdS OF A dIvERSE WORKFORCE. THE lEAdERSHIp dOCUMENT CAllS ON AUSTRAlIAN EMplOYERS TO EXpANd WORKFORCE pARTICIpATION bY EMplOYING ‘OUTSIdE THE bOX’ WHEN THEY NEXT RECRUIT.

With ageing demographics, sluggish productivity and forecast skill shortages, industry needs to think laterally and long term when it comes to recruitment. Lifting labour force capacity is not all a question of government or government money. New approaches and business leadership from within the private sector is required.

Members of the ACCI’s Employment Education and Training Committee determined the need for the new approach at its meeting in November last year, and then had extensive input into the development of the material. Chair of the Committee and ACCI Board member, Mr Peter McMullin said “it is crucial that

all sectors of the labour market be fully utilised to meet the needs of business and promote growth. Employ Outside the Box encourages employers to develop innovative strategies to attract and retain valued employees to bolster Australia’s flagging participation rate. Australia needs to increase participation amongst mature aged people, women with caring responsibilities, indigenous Australians, people with a disability, and from the unemployed including youth.”

Launched alongside Employ Outside of the Box was the “Business Case for Recruiting and Retaining Mature Aged Workers”, which is the first of an accompanying series of employer guides.

The next two guides to be developed will be for the indigenous and disabilities cohorts.

At the ACCI General Council meeting at the end of March, the documents were strongly endorsed, and a commitment was made by the member associations to provide leadership on the message and disseminate the information to their members. This will be done through the co-branding of the employer guides.

The documents were developed in answer to a gap identified by ACCI that existing materials in the participation

area concentrated on the benefit to the individual. Whilst this benefit is very important, documents aimed at employers should focus on the business case. Hiring someone from outside the traditional pool of workers isn’t about taking a risk or an act of charity. It makes sense from an economic as well as a business perspective to embrace the opportunity to diversify the workforce, secure future skills and boost the nation’s economic prosperity.

The extent of the problem presents a stark reminder for employers seeking to fill vacancies in the future:

• The population’s median age in 2010 was 36.9 years, up from 32.1 years in 1990, and this is expected to continue to rise.

• The workforce aged over 45 is now around 31% and those under 25 only 17%.

• By 2050, nearly one-quarter of the population will be aged 65 and over, compared to 13% today.

• By 2050, there will only be 2.7 people of working age for every person 65 and over, compared to 5 people of working age today for every person 65 and over.

• Today’s older workers intend to retire later, at around 64 years for men and 62 years for women, compared to 58 years for men and 47 years for women in 2007.

• Increasing the participation of mature age workers by 5% in the next 40 years would increase real GDP per capita by 2.4%.

To address the shortfalls created by retirement of our aging workforce and the new jobs created in the economy calls for a radical rethink in human resource strategies. Future competitiveness is likely

to rest substantially on the performance and productivity of Australia’s workforce and on the more effective use of its potential workforce.

Although part of the answer comes from migration, the supply of overseas labour to meet our domestic skills needs is by no means assured. Australia faces increasing competition from other economies seeking skilled migrants. Also, the economic growth of emerging economies which are often the source countries for skilled migrants will encourage more nationals to remain in their home country.

With only 65% of Australia’s working age population seen as being in the labour

market this leaves considerable untapped potential for building the nation’s wealth and meeting the skills and labour needs of the nation’s businesses. The 35% of the population that is not currently in the workforce is made up of groups such as stay at home parents, people with disabilities, early retirees and other disengaged people. Many of these people have the capacity to find and keep a job and make a valuable contribution to the nation’s wealth if they are given the support and opportunity required to make the transition into work. Not included

in the 35% of non-participants, but still an important source of future labour, is the 630,000 unemployed Australians who represent some 5.3% of Australia’s twelve million strong labour force.

Although Australia’s workforce participation rate increased from 61.3 per cent in 1980 to 65.2 per cent in 2012, it still compares unfavourably with other prominent OECD countries. Employ Outside the Box and the accompanying employer guides set out a strong case to tackle our relatively low participation rate head on.

To receive a copy of Employ Outside the Box, visit www.acci.asn.au

By Jenny lAmBert, director, emPloyment, educAtion And trAininG, Acci

although part of the answer comes from migration, the supplY of overseas labour to meet our Domestic sKills neeDs is bY no means assureD.

Pictured (left to right): Peter Anderson, Chief Executive, ACCI; Peter McMullin, President, VECCI and The Hon. Bill Shorten MP.


the WorkPlAce

The Plastics and Chemicals Industries Association (PACIA) has been actively involved in two of the government’s priority areas for reform – the harmonization of occupational health and safety laws and also the reform of chemicals and plastics regulation. The regulation of chemicals and plastics has long been the subject of concerns about inconsistency, complexity and fragmentation, and in 2006, the Council of Australian Governments (COAG) identified chemicals and plastics as a “regulatory hotspot” for reform.

The reform processes have highlighted 3 key areas that significantly impact on success:

1. the ComplexIty of regulatIon

The chemicals and plastics industry is directly impacted by more than 144 pieces of regulation at the Commonwealth, State/Territory, and in some cases at the local government level. Each piece of regulation is commonly complex and voluminous. The Work Health and Safety reforms encompass some 1366 pages of documentation:

- Model Work Health and Safety Bill: 203 pages

- Model Work Health and Safety Regulations: 554 pages

- Codes of Practice: 609 pages

We know that in the case of companies registered under the National Industrial Chemicals Notification and Assessment Scheme that more than 93% are small to micro businesses with turnovers of less than $5million. The complexity of regulation for such businesses, indeed all businesses, remains a major challenge.

In its 2008 report on chemicals and plastics regulation the Productivity Commission found that current regimes are broadly effective in managing risks to health and safety, but efficiency can be improved through national uniformity in most areas.

In progressing reforms it is apparent that there is increasing need to embrace approaches that keep-it-simple if we are to achieve the objectives and outcomes that are desired.

2. defICIenCIes In regulatory ImpaCt analysIs

PACIA fully supports the Australian

Government’s regulatory impact analysis (RIA) requirements, which are intended to achieve better regulation by supporting:

• Sound analysis. The case for acting in response to a perceived problem, including addressing the fundamental question of whether regulatory action is required, needs to be demonstrated. The analysis should also outline the desired objective of the response, a range of alternative options to achieve the objective, and an assessment of the impact of each option, and should be informed by effective consultation.

• Informed decision making. To help decision makers understand the implications of options for achieving the government’s objectives, they should be informed about the likely impacts of their decision, at the time they are making that decision.

• Transparency. The information on which government regulatory decisions are based should be publicly available

Currently the Consultation Regulatory Impact Statement (RIS) for National Harmonisation of Work Health and Safety Regulations and Codes of Practice, fails to achieve those outcomes.

Industry also remains concerned with the adequacy of the earlier Safe Work Australia RIS on the Proposed Revisions to the National OHS Framework for the Control of Workplace Hazardous Substances and Dangerous Goods. This RIS was challenged as inaccurate by industry, government departments and agencies, yet it continues to be the cornerstone justification for aspects of the Hazardous Chemicals laws.

There is need for a higher profile of the Office of Best Practice Regulation in ensuring that the Government’s requirements for regulatory impact analysis is understood by Departments and Agencies and that compliance is achieved.

3. meChanIsms to aChIeve natIonal ConsIstenCy

The 2008 Productivity Commission report on chemicals and plastics regulations identified:

“National consistency and overall effectiveness and efficiency in chemicals and plastics OHS regulation would be

enhanced by an intergovernmental agreement between the Commonwealth, state and territory governments to implement national standards and codes of practice without variation.”

At the macro level such approaches are in place but based on recent experience with the implementation of the Australian Dangerous Goods Code 7th edition and attendant legislation industry remains concerned that national consistency will not be achieved. An important component is the use of model regulation rather than template regulation. PACIA promotes template law – whereby the law is developed only once, and can be adopted by reference by State and Territory jurisdictions, as a more efficient and effective process to drive consistent laws across Australia

PACIA commends the active role played by the Australian Chamber of Commerce and Industry (ACCI) as a key member of Safe Work Australia, along with other industry, union and government representatives. ACCI communicates extensively with its members to ensure industry issues are understood so they can be effectively and constructively communicated in the tripartite processes, to support the development of workable and sound national workplace safety laws.

PACIA has valued the opportunity to represent industry on three specific Safe Work Australia Temporary Advisory Committees, covering Hazardous Chemicals, Major Hazard Facilities and Lead. In general, those tripartite committees have worked very collaboratively and have provided very constructive environments in which to debate and generally resolve different technical views and issues.

1. The Plastics and Chemicals Industries Association (PACIA) is the peak national body representing the chemistry industry in Australia. PACIA members include chemicals manufacturers, importers and distributors, logistics and supply chain partners, raw material suppliers, plastics fabricators and compounders, plastics and chemicals recyclers and service providers to the sector.

by Margaret Donnan, Chief exeCutive, PlastiCs anD CheMiCals inDustries assoCiation1

REFORM IS URGENTlY NEEdEd – NOT ONlY bECAUSE OF THE COST IMpACTS OF THE CURRENT FRAMEWORKS ON bOTH INdUSTRY ANd GOvERNMENTS – bUT AlSO bECAUSE THE CURRENT COMplEXITY WORKS AGAINST COMplIANCE, ANd UNdERMINES THE HEAlTH ANd SAFETY OUTCOMES WE All WISH TO ACHIEvE.

Harmonisationof workplace health & safety laws

a pacia perspective


the WorkPlAce

q & a with business sa q. what are the most sIgnIfICant Changes that your members are lIKely to or have experIenCed If any, wIth the IntroduCtIon of the new whs legIslatIon?

WHS legislation will have a dramatic impact on business with increased compliance paperwork and administrative duties. It has been felt that the time also required to fully understanding the impacts on individual business will place additional burden on employers. This relates to the sheer volume of this package, over 600 pages of Regulation and moving towards 50 Codes of Practice when all are completed.

Another significant change will be the introduction of infringement notices, employers may be at risk of infringement when safety standards are exemplary due to bad administrative process.

South Australia does not currently have Union Right of Entry provision under the OHS act, this is a significant change. While it can be argued that URE can occur under industrial matters therefore this will have a limited impact, reality will be greater business disruption on suspected breaches.

Another significant change for South Australia under model legislation will relate to control of a work site, current OHS provides clarity around who is in control. This is complicated even more when looking at sights with multiple PCBUs.

Some specific industry comments have also included:

• An increase in the level of detailed audit and inspection requirements for a range of plant

• Costs of compliance may be high in specific regions/areas where certifiers are not easily available or there is no test equipment /trained staff within 100 -1000 km of the employer – e.g. Lung Function test needs spirometry testing to ensure quality and consistency of results(which may also vary due to natural causes, age, height and culture –so interpretation is critical as is availability)

• Removal of Australian Standards and independent verification in all cases for registered plant

q. how wIll thIs ImpaCt your Industry members?

Members have commented that more time will be needed on red tape

compliance issues that do not directly result in improvements to health and safety, detracting from the time they have to run their business. This is of concern for small and medium organisations.

Currently impacts are the unknown, with each industry sector trying to initially grapple with the overarching concepts. Specific industry changes are of great concern, with businesses not sure how they will quickly absorb the information needed.

Some specific industry comments have also included:

• One member site work delayed for 3 days in NSW 2nd week after WHS Act in force, confusion amongst majority of members apart from the 10% large commercials, difficulties in establishing who are Officers for medium size businesses. Significant increase in time for Officers to maintain due diligence. Extreme concern on the safety integrity levels of registered plant

q. what general advICe would you gIve your Industry members In order to meet theIr oblIgatIons under the new whs legIslatIon?

Each industry sector will be working with members in the transition of this legislation. For South Australia the challenge has been that while harmonisation has been part of the COAG agenda and a major piece of work by SafeWork Australia, there has been NO identified money to support industry associations in developing and delivering training to business.

Some industry associations are working on the development of emerging and current technologies such as the use of smart phone applications and tablet applications to record and document processes.

One key industry association is encouraging members to check safety engineering calculations very carefully.

Another association is supporting the following approach initially start with a plan – rate your business on “Compliance at A Glance-How do You Rate?”(SA, Vic, NSW and Qld safe work authorities Serious About Safety Chart) Identify practical measures such as regular inspections Safe work procedures, training and consultation over a very basic plan, then prioritise what needs to be done and when

q. what Is your estImatIon of Costs assoCIated wIth the ImplementatIon of the new whs legIslatIve paCKage?

Individual industry sectors and business structures will all have different associated costs.

Comments to date include:

Meat industry- it could be an increase of around 5%.

MBA comments - Unable to establish at this stage. Residential costs estimated from total non compliance for WAH is $5 -$6,000 for scaffolding. Estimated extra time of supervisors and managers in smaller to medium business to check and document is likely to add 1 day a week in time. Wages around $90-$100,000 = 48 days (holidays excluded) = $13,150

MTA comments - this task is too hard for Employer organisation. It is hard for an employer assess the cost - even where he is compliant with current legislation- as there are many unknown issues with codes of practice being unfinished. Also the writer has a list of current OHS records of compliance in SA but no one has the list required for WHS records.

HIA comments via Hansard – “Again, reputable consultants Hudson Howells have been commissioned by, I believe, the Housing Industry Association. Their assessment, in letters that the HIA has written to members of parliament, is that if this bill is adopted in South Australia it will lead to up to 12,500 job losses every year, annual economic damage of up to $1.4 billion and the destruction of home affordability for thousands of young South Australians”. And “The international quantity surveyors Rider Levett Bucknall have confirmed the estimates of the HIA in a report to the HIA, with their own estimates being slightly different—that is, an increase to the cost of a single storey dwelling of $20,088 and an increase in cost of a double storey dwelling of $28,450”.

q. what are the benefIts of the harmonIsed paCKage? what are some of the mInuses?

A clear benefit for cross border business development can be supported as a benefit to harmonisation, however this would also need to also transpose into fees and licences which has not been the case to date.

South Australia has many implied duties of the Act and Regulation however it seems that this package has been designed with large static businesses in mind.

Many of the Codes of Practice and Regulatory requirements will not be reasonably practicable for small

employers in building and construction. And Asbestos and earthmoving equipment standards will be lower than we have now.

q. what should happen now?

South Australia is still in the debate stage within the Legislative Council.

This process while it may seem to have taken a long time from inception the volume of material and information requires and extensive campaign to educate and advise employers it would be

beneficial if this was supported.

Due to the complexity of the Regulations and CoP discussion has started within the State at the need to start reworking these codes into practical guidance as this is lacking,

Business want to get on with running the business this package is not looked at favourably as supporting better safety management; instead it reflects greater regulatory control with limited additional safety benefits. Business does not want workers to get injured.

q. what are the most sIgnIfICant Changes that your members are lIKely to or have experIenCed If any, wIth the IntroduCtIon of the new whs legIslatIon?

The single biggest issue will be for our members to understand their obligations and duties as PCBU’s and Officers. In particular, understanding what due diligence means and ensuring that PCBU’s and Officers are able to evidence compliance with the Act’s requirements in this regard.

q. how wIll thIs ImpaCt your Industry members?

There will be a need for board members, directors and business owners to review governance and business processes so that WHS responsibilities and duties are clearly identified and actioned in a practical and proactive way.

q. what general advICe would you gIve your Industry members In order to meet theIr oblIgatIons under the new whs legIslatIon?

We would advise our members to ensure that PCBU’s and their officers take immediate steps to appraise themselves of their obligations, to access the wealth of information that is available and to consider having a WHS audit undertaken of their current OHS management system to

understand what actions may need to be taken to comply with the new Act.

q. what Is your estImatIon of Costs assoCIated wIth the ImplementatIon of the new whs legIslatIve paCKage?

It will vary from organisation to organisation depending on the extent to which they comply with the present legislative regime.

q. what are the benefIts of the harmonIsed paCKage? what are some of the mInuses?

The benefits of the new law is for employers who have workplaces in different States. Another benefit is the wealth of free information that is available from all State jurisdictions which will aid our members in their understanding of the new Act. Obviously there will be some direct and indirect costs associated with having to update existing systems but these should not be excessive and viewed as part of the organisation’s continuous improvement processes.

q. what should happen now?

While the TCCI has lobbied the Government for an operative date of 1 January 2013 our members need to start work now on understanding their obligations as PCBU’s and Officers and satisfying the due diligence requirements of the Act before it comes into operation.

By neil mckinnon, chief executive officer, tcci

q & a with the tasmanian chamber of commerce anD inDustrY


the WorkPlAce

WHIlST AUSTRAlIA CONTINUES TO EXpERIENCE EXCEpTIONAl GROWTH OFF THE bACK OF A SECONd RESOURCES bOOM, SKIllS SHORTAGES IN THOSE pROFESSIONS SUppORTING THAT bOOM, ANd RElATEd pROFESSIONS CONSUlTING IN THE bUIlT ANd NATURAl ENvIRONMENT, IS EXpECTEd TO CONTINUE.

There is a distinct disconnect between how many professionals we have entering the industry – a figure already dangerously low – and the number of those which stay in the profession.

In a somewhat disturbing trend, of those people with formal engineering education who are active in the workforce, only about 55 per cent remain employed in engineering occupations.

There are so many questions our industry needs to address: With the current global-scale shortages, how do we attract the best professionals? How do we keep these professionals throughout the lifecycle of their career? What reskilling do we need to provide to get professionals back into the industry? How can we create a bridge between the private and public sectors to allow our professionals to experience both?

Most importantly is the age-old question:

‘why aren’t women more involved?’

We know that in considering these questions even now, we are having a conversation which is long overdue. However, as an industry I think that we have found ourselves in the eye of the (im)perfect storm.

The supply pressures and the skills shortage mean we are faced with an opportunity for change and innovation to take hold.

The retention of current employees and the ability to attract new employees to the industry is increasingly critical to achieving a competitive advantage. Workforce diversity is an important element of this.

Whilst gender is perhaps the most glaring issue, it is important to ensure that diversity in the broadest sense is embraced – both diversity in equal employment opportunities and diversity in business practice such as flexible working arrangements.

A more diverse talent pool with flexible working arrangements broadens the perspectives available to decision-making processes and enhances employee experiences and satisfaction, with flow-on affects for growth and productivity.

Already in our industry there is a high level of awareness and activity in this space of workforce diversity, focusing particularly on gender diversity.

In 2011 Consult Australia conducted a survey of over 15,000 professionals to measure the extent to which women are represented in the industry, with a focus on technical and managerial roles. The research marked a critical point as it gave our industry a clear mandate for collective action, supported by objective data.

From this mandate, Consult Australia released Diverse Approaches, a thought-leadership report that critically examines the workforce diversity issue. In it we look at business best practice, the action of our own member firms, and the initiatives of other professions and sectors. Visible leadership from the top, setting targets and measuring progress, and attracting and retaining talent are marked as critical for business success.

By no means have we released this report as a result of inaction within the industry – but in recognition of the opportunities for improvement.

Many of our firms – from sole practitioners to our large multinationals – are committed to addressing the workforce diversity issue and have been proactive in developing and implementing their own programs and campaigns. However there hasn’t been a cohesive approach across industry or buy-in from all players.

In March of this year, three of Consult Australia’s member firms were awarded with the Employer of Choice for Women citation from the Equal Opportunity for Women in the Workplace Agency (EOWA): AECOM; Arup and Sinclair Knight Merz. Critical to the provision of this Award was leadership buy-in – which was clearly marked by the strong commitment of these firms’ CEOs to both the development of the report, and its launch in Sydney.

I believe our industry is truly committed to making a diverse workforce a reality. In recognising those who have already excelled in this area, and those who are keen to make a change, next we will be developing a toolkit to help share best practice so firms can get a greater understanding of how change can be achieved.

With this in mind Consult Australia looks even further into the future and asks what is next? Will we be inspired by the Male Champions of Change and look within ourselves to our men to champion a more diverse workforce? Would training courses in diversity be of value? Can we look to school and university educators to be advocates for our industry and encourage female participation?

Here we are faced with an area for improvement that goes hand in hand with an opportunity to gain a competitive advantage. We find ourselves now in the eye of the (im)perfect storm. Whether you are a CEO and make change a reality or whether you are an employee who can bring this issue to the table – it is up to us all to seize this opportunity and make diverse workforces a reality.

By meGAn motto, chief executive, consult AustrAliA

the eYe of the (im)perfect storm

THE AUSTRAlIAN CHAMbER OF COMMERCE ANd INdUSTRY IS AUSTRAlIA’S lARGEST ANd MOST REpRESENTATIvE bUSINESS ORGANISATION. WE HAvE bEEN WORKING, WITH SAFE WORK AUSTRAlIA (SWA), TOWARdS THE HARMONISATION OF WORK HEAlTH ANd SAFETY (WHS) lAWS ACROSS AUSTRAlIA.

ACCI supports harmonisation but not at any cost. The aim of the package should be to improve safety in Australian workplaces not just harmonisation for the sake of consistent laws. ACCI believes there is still some way to go to achieve its desired aim.

An immense and sustained effort has gone into consolidation of the voluminous detailed information that existed in the various jurisdictions. ACCI members have been heavily involved in reviewing, commenting and advocating on the package at every stage.

ACCI has held and consistently raised concerns that the political timeframe has constrained the achievement of the best outcome.

More time would have allowed development of practical legislation that

could have been tested for workability in a wide range of workplaces.

Safe Work Australia is the national policy body responsible for the development and evaluation of the model Work Health and Safety laws. The Commonwealth, States and Territories remain responsible for regulating and enforcing work health and safety laws in their own jurisdictions.

The model Work Health and Safety legislative package consists of a model Work Health and Safety (WHS) Act, supported by model Work Health and Safety (WHS) Regulations, and model Codes of Practice. The package is being adopted in each State and Territory jurisdiction with some “local” variations.

The Work Health and Safety legislation and 11 Codes of Practice came into effect on 1 January 2012 in New South Wales, Queensland, the Australian Capital Territory, the Commonwealth and the Northern Territory. Links to the legislation packages in these jurisdictions are on ACCI Website under the tab “News & Progress on WHS legislation”. The legislation has not yet been adopted in the other jurisdictions. Everyone involved (the Jurisdictions, SWA, ACCI and ACTU) continue to work towards improving the package.

ACCI encourages members to prepare regardless of whether it is currently adopted in their jurisdiction.

In respect to the practicability of the package ACCI believes the workplace would be better served with industry-specific short guides rather than large codes of practice. Each guide would need due consideration by its industry but would be specific to the industry, short, sharp and therefore readable and useable.

ACCI remains concerned that whilst the current harmonised legislative package may benefit large companies, especially those that cross State and Territory boundaries, it will cause new administrative imposts and costs for small business.

The Decision Regulatory Impact Statement (RIS) commissioned by Safe Work Australia, significantly

underestimates the costs to industry. Cost estimates assume a reduction in injuries from harmonised legislation and this is by no means certain. The RIS has also had to make wild estimates as the regulations were continually and substantially reviewed after public comment before the RIS was completed.

The RIS continues to insist that the WHS package will have a “minor impact” claiming that there is only small wording change to policy intent. But small changes can have major impacts.

The claim that the package will incur a $3 per employee cost vastly underestimates the repercussions of the proposals. There are added administrative issues especially record keeping, training, retrofitting and more. These are all costs to industry and particularly burdensome for small business. This has not been adequately considered in estimating costs.

Anne Bellamy represents ACCI on Safe Work Australia forums.

By Anne BellAmy

to go where none have gone before - the whs harmonisation journeY

acci has helD anD consistentlY raiseD concerns that the political timeframe has constraineD the achievement of the best outcome.


internAtionAl AffAirs

WITH A pOpUlATION OF 1.3 bIllION, A MANUFACTURING WORKFORCE OF OvER 112 MIllION WORKERS ANd FORECAST RETAIl SpENdING OF US$4.3 TRIllION bY 2015, CHINA IS AN ENTICING MARKET FOR bRANd OWNERS. OppORTUNITIES ARE NOT WITHOUT CHAllENGES, HOWEvER, ANd WHETHER THEY ARE lOOKING AT MANUFACTURING IN CHINA OR SEllING INTO THE CHINESE MARKET, AUSTRAlIAN COMpANIES WHO IGNORE THE CHINESE TRAdE MARKS ANd INTEllECTUAl pROpERTY lANdSCApE dO SO AT THEIR pERIl.

Chinese trade mark law demands that brand owners take a proactive approach. Unlike most Western jurisdictions, where trade mark rights are based on use (a ‘first-to-use’ principle), China is a ‘first to file’ jurisdiction. Registration takes priority and unregistered trade marks are not recognised, even if they have been actively used for a period of time. It is therefore paramount that companies looking to enter the Chinese market file trade mark applications as early as possible, preferably prior to market entry.

Filing early is one thing, knowing what to file is another. No matter how strong a company may consider its brand, it will still need a localised Chinese version

of that brand. If it does not proactively create a Chinese version, the Chinese consumer will give it one. For example, in China, the French fashion house Hermes is known as ‘Aimashi’ – a transliteration / translation that means ‘officials who love horses’. The problem for Hermes is that while it had registered its ‘Hermes’ name as a trade mark in China, it failed

to register its Chinese version. Instead, the ‘Aimashi’ trade mark was registered by a local manufacturer and Hermes’ attempts to cancel that registration and take control of its brand have so far been unsuccessful. So, in approaching the China challenge, brands must expand their view of what needs to be protected and incorporate local language and cultural considerations.

Even brands who have their manufacturing in China but who don’t actually sell into the Chinese market can’t afford to ignore Chinese trade mark law. In Australia (and in many other countries), there are laws and regulations that allow brand owners to request that Customs seize infringing and counterfeit imports at the border. Chinese custom regulations enable the holder of a Chinese trade mark to not only stop infringing imports from entering the country, they also enable infringing exports to be seized before they leave the country. This applies even if the goods are not intended for the Chinese market. So, brands who only manufacture in China cannot assume that trade mark registration is unnecessary and that they are beyond the reach of Chinese trade mark laws.

China poses some unique challenges for Australian brands. By getting a real understanding of the Chinese intellectual property law system, playing within that system and dealing with those challenges in a proactive manner, Australian companies can take and maintain control of their brand in China.

Victor Ng is a Registered Trade Marks Attorney.

By victor nG, director, mArkWell intellectuAl ProPerty lAWyers

the china challenge: protecting Your branD in china

in china, the french fashion house hermes is Known as ‘aimashi’ – a transliteration / translation that means ‘officials who love horses’.

IN RESpONSE TO THE ‘AUSTRAlIA IN THE ASIAN CENTURY’ WHITE pApER ANd REvIEW bY KEN HENRY, ACCI pROpOSES A bROAdENING OF AUSTRAlIA’S TRAdE vISION INTO THE EMERGING MARKETS OF THE INdIAN OCEAN RIM, TO COINCIdE WITH AUSTRAlIA TAKING THE CHAIR OF THE INdIAN OCEAN RIM REGIONAl GROUpING IN 2013.

An Australia-Indian Ocean rim regional trade agreement, provided it is comprehensive, would neatly parallel the Australia-ASEAN FTA and the development of the Trans Pacific Partnership. This would provide Australia with regional trade impetus to developing markets in our north-west, our north and our east.

As an emerging market, ACCI’s analysis is that the Indian Ocean Rim holds good prospects for Australian investment as the 21st century develops and the global economy recovers, despite languishing as a poorer cousin in trade policy and community focus.

Australia should have an ambitious agenda and ideally be seeking a regional free trade agreement as the major goal.” Much as we have seen over the past decade, tremendous benefits accrue from the rise of countries in Asia, so we must

be prepared for the opportunities that will arise from the development of the Indian Ocean Rim countries.”

A scheme for the Indian Ocean Rim, modelled on the existing APEC business travel card scheme, would also add immediate value to Australian businesses seeking to expedite business travel throughout the Indian Ocean Rim countries.

Increasingly business is mobile and agile and investment will move around the world to places where it is most efficient for a return on investment. Our primary challenge is to maintain a globally competitive business environment, and this requires being ahead of the curve in our strategic and policy planning.

To read ACCI’s full submission to the ‘Australia in the Asian Century’ white paper visit www.acci.asn.au.

By BryAn clArk, director, trAde And internAtionAl AffAirs, Acci

australia anD the inDian ocean rim - a new business frontier

australia shoulD have an ambitious agenDa anD iDeallY be seeKing a regional free traDe agreement as the major goal



In addition to Australia’s ongoing efforts to find a way forward in world trade talks in Geneva, the Government is also actively seeking alternative ways in which to engage with emerging and established economies within our region. The Trans-Pacific Partnership (TPP) Agreement negotiations have become a key trade priority for Australia, focussing on developing a high quality, comprehensive regional agreement that further progresses the APEC vision for an economically integrated Asia-Pacific community.

The current TPP negotiating parties are Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Singapore, Peru and the United States. Being a participant in TPP negotiations since the beginning has enabled Australia to seize a strategic opportunity to shape emerging regional economic architecture and increase economic integration and liberalisation in the Asia-Pacific. Opening up trade in goods and services, boosting investment flows and promoting closer links across a range of economic policy and regulatory issues will open markets, create jobs and make it faster, easier and cheaper to do business overseas. Australia’s trade with current TPP negotiating parties constituted 21.3% of our total trade in 2011, and our trade with the Asia-Pacific region as a whole accounted for 70.9%. Furthermore, TPP economies accounted for a quarter of global GDP for that year.

Market access is affected by more than just tariffs, so TPP parties are paying particular attention to behind the border impediments to trade and investment. This will include strong commitments in areas such as import licensing, quantitative restrictions, transit formalities, customs fees and charges, consular transactions and technical barriers to trade. In this way, we are working to reach an outcome that truly eliminates barriers to access to foreign markets and ensures small to medium sized businesses are able to take full advantage of the benefits in the agreement.

Leaders of the TPP countries met during the APEC Leader’s Summit in Honolulu in November 2011 and announced the broad outlines of the TPP, including a commitment to conclude as rapidly as possible. To achieve this, negotiators are meeting regularly to advance text across more than twenty working groups. Negotiations began in Melbourne in March 2010, and the eleventh round returned to Melbourne in March this year. The thirteenth round in San Diego, California was held between 2 – 10 July.

One forward-looking aspect of the TPP is a commitment from current parties to expansion of membership over time to other Asia-Pacific economies. This aim of creating a ‘living agreement’ has attracted the interest of other countries in the region, with Canada, Japan and Mexico

having all formally expressed interest in the negotiations. Australia has welcomed the interest shown by these countries, and is reviewing their capacity to meet both the ambition and timetable set for the negotiation. Final decisions on new membership will be taken by consensus of existing TPP parties. As an interesting aside, if Canada, Japan and Mexico joined the TPP, the negotiating parties would account for 38.2% of world GDP as of 2011.

Another innovative feature of the TPP is the active and regular involvement of stakeholders. The Gillard Government Trade Policy Statement of April 2011 makes it clear that transparency is one of the five principles underpinning Labor’s approach to trade policy. Australia has been actively engaging in a comprehensive consultation process with stakeholders to ensure that our business and broader community sectors have a say in the development of negotiating priorities. Negotiators welcome submissions and meetings with interested persons at any time. In

addition, regular meetings are held in capital cities around the country, as well as forums at each negotiating round.

The Melbourne 2012 negotiations included a full-day stakeholder program set across two rooms with over sixty presentations. Stakeholders were also able to meet directly with delegates both in the margins of the round and at a formal function attended by officials from all parties and Australia’s Trade Minister, Dr. Craig Emerson. A new format for stakeholder participation was introduced at the twelfth round in Dallas, allowing for one-on-one stakeholder engagement with negotiators from all nine TPP members. Many of the more than 300 registered stakeholders participated in this event which allowed for more tailored discussions and direct input to negotiators on specific issues.

A particular area of the Agreement that has attracted attention recently is Australia’s position on Investor-State Dispute Settlement (ISDS) provisions. Australia is no longer seeking ISDS in trade agreements. The position is consistent with the Productivity Commission’s Report on Bilateral and Regional Trade Agreements, which found that there was no evidence that ISDS provisions have a significant impact on investment flows. A key reason for our opposition to ISDS is that the Government does not support provisions that would confer greater legal rights on

foreign businesses than those available to domestic businesses. Continued strong growth of foreign investment into Australia is evidence of the stability of the Australian investment environment and the confidence in our legal system. Similarly, Australian investors will continue to benefit from the strong investment protections that Australia seeks to include in trade agreements, which can be pursued by diplomatic representations or through a state-to-state dispute settlement framework.

Independent preliminary research undertaken by International Economics Professor Michael G. Plummer (John Hopkins University School of Advanced International Studies) and his associates has already concluded that the long term economic benefits of the TPP will be significant. The TPP has the ambitious goal of greater integration of the Asia-Pacific’s diverse economies, ultimately delivering tangible and valuable gains to Australian businesses. For this reason, the rapid conclusion of TPP negotiations remains a priority on the trade agenda of the Gillard Government.

Hamish McCormick is the First Assistant Secretary for the Office of Trade Negotiations at the Department of Foreign Affairs and Trade and Australia’s Chief Negotiator for the TPP. For more information on the TPP or to make a submission go to: http://www.dfat.gov.au/fta/tpp/

the trans-pacific partnership: strategic benefits anD long-term commercial gains

bY NEGOTIATING THE TRANS-pACIFIC pARTNERSHIp AGREEMENT, AUSTRAlIA IS AddING A NEW dYNAMIC TO ITS FREE TRAdE AGREEMENTS, REMOvING TARIFFS ANd bEHINd THE bORdER IMpEdIMENTS TO TRAdE ANd pROMOTING ACCESS FOR AUSTRAlIAN bUSINESSES TO dIvERSE ECONOMIES AROUNd THE ASIA-pACIFIC.

one forwarD-looKing aspect of the tpp is a commitment from current parties to expansion of membership over time to other asia-pacific economies.

By hAmish mccormick, first

AssistAnt secretAry, office of

trAde neGotiAtions, dePArtment

of foreiGn AffAirs And trAde



We should not lose sight of the forest from the trees in critiquing the conduct of labour markets and the role employers have played.

By growing its economies, Asian nations have created jobs and taken millions out of poverty and established a more broadly-based middle class. Education standards have lifted and many more people share in higher living standards.

Yes, there is unrest and there is inequality and there is impatience. Some of this has not been the experience of Pacific countries, for example. But the Asian success reminds us that there is no free lunch – its success is largely built on work and investment.

There is a huge challenge to absorb more and more young people into productive work, given our relatively youthful region. Policy responses need to be tailored. The coming years will require more adaptability, more agility, more flexibility in markets, more job readiness, more responsiveness – not less.

The International Labour Organisation’s (ILO) desire to put a social face on globalization is not inconsistent with these notions – Australia, for example, shows it can be done – but it needs to be done in a way that respects the Asian approach, the aspirations of developing countries and the Asian culture of self reliance. Asia is not one conglomerate (indeed that is a strength) and Asian employers do not wish to inherit the problems of overregulated and calcified labour markets in parts of Europe. Thus, the ILO needs to apply its universal principles, especially its rights-based

approach, in a thoughtful and calibrated manner when it comes to Asia – lest it compromises jobs growth in the name of ‘decent work’.

Having cautioned against over-regulating Asian labour markets in the manner of some European nations, I make three observations:

The ILO rightly points to the issue of cross border labour migration, and the way that migration of this nature is common in Asia. Whether economic migration or migration to fill skills gaps, the Australian nation as a whole needs to reflect more deeply on this development in our region. Many thousands of Australians work in Asian countries, especially in the growing professional services industries and service sectors. Australians in the built environs industries, for example, have much to offer, especially as Asia urbanises. In Australia we cannot rightly expect other Asian nations to take in our workers, but to then turn our back on those who want to work in our industries at home. While labour migration needs to be progressed in an orderly way which retains integrity to policy and programmes, it also needs to be supported by local communities. These aspects of the ILO are timely, and send a message to the Australian community that skilled and semi-skilled workers in our Asian region add value to labour markets where skills gaps and skills deficits exist and where they cannot be effectively remedied from local labour markets. A more mature debate on this issue will be needed in Australia, especially if our economy, again, fires up to capacity.

Asia Pacific Labour Markets

and BeyondBy Peter Anderson, chief executive, Acci

I reaffirm ACCI’s support for capacity building of employer organisations, at home and in our region. Last October, ACCI extended our capacity-building services to support the development of advocacy skills in public affairs, at a workshop for Australian business associations in Canberra.

Our horizon on capacity building extends beyond our borders. In conjunction with the Australian government and employer colleagues in New Zealand,

the Australia ILO Partnership Agreement includes provision for a Pacific Growth and Employment Project, which will be jointly administered by ACCI and the ACTU. This will allow employer and trade union organisations to create linkages with businesses that have the potential to employ larger numbers of indigenous workers from the Pacific Islands.

I was delighted that the Deputy Prime Minister of East Timor, H. E. Jose Luis Guterre highlighted to us the formation of the Chamber of Commerce in his nation. As His Excellency said, this will

allow for collective dialogue between his government and employers on important economic, trade and social policy. I am pleased to advise that this work has a significant Australian connection. The Victorian Employers Chamber of Commerce and Industry (VECCI), one of my member organisations, has played a pivotal role in bringing this about.

Finally, I note the ILO’s remarks about freedom of association in the region. As global spokesperson for employers in the ILO’s Committee for Freedom of Association I am only too aware of the gravity and consequences of some of these breaches. I am also aware that the Asian region has a lower level of complaints against governments for freedom of association breaches than some other regions. The reasons for this are complex, so I don’t suggest that unreported breaches don’t occur. I do however wish to mention two very serious cases that are on the public record. Over many years and at the highest of levels, the ILO has taken global leadership in trying to bring about a greater recognition of the rights of freedom of association in Myanmar. That some progress has now been reported, and that some people of conscience, including people of industrial conscience, have had death penalties commuted or been released from prison terms is a sign of hope. So is the recent visit of the US Secretary of State.

Yet where hope emerges, in other parts hope is challenged. The case concerning Fiji, reported to the ILO Governing Body last November, are a timely reminder that even close to home there are breaches of the most fundamental rights of organisation and association. I continue to urge the Fiji government to reflect on those conclusions – which we did not take lightly – and to respect the fundamental role freedom of association can play in bringing about cohesive societies and workplaces.

This is an excerpt from a speech delivered by ACCI Chief Executive Peter Anderson to the 15th Asia Pacific Regional Meeting of International Labour Organsation, Kyoto, Japan.

there is a huge challenge to absorb more anD more Young people into proDuctive worK, given our relativelY Youthful region. policY responses neeD to be tailoreD. the coming Years will require more aDaptabilitY, more agilitY, more flexibilitY in marKets, more job reaDiness, more responsiveness – not less.

THE ASIA-pACIFIC REGION HAS bEEN plACEd UNdER GREAT pRESSURE SINCE THE 2008-09 GlObAl ECONOMIC CRISIS. AT THAT TIME, ANd IN SUbSEqUENT YEARS, ASIA bECAME A bUlWARK AGAINST GlObAl RECESSION. WE dId MUCH RIGHT IN THE REGION dURING THIS pERIOd, dESpITE THE HARdSHIpS ANd lOST JObS, SAvINGS ANd bUSINESSES. THE UNdERpINNING AGIlITY OF ASIAN MARKETS ANd ECONOMIES WAS AN IMpORTANT STRUCTURAl AdvANTAGE. ASIA CONTINUEd TO GROW JObS dURING THE CRISIS, AlbEIT AT A SlOWER RATE.


Acci netWork

Most of us have a story about an encounter with non-genuine consumer products, often purchased on an overseas holiday. A brand name watch that doesn’t keep time, a DVD that fails just before the final scene. The reality is that we know what we are getting and expect as much when we pay next to nothing - and if the product lasts then that’s just a bonus.

But would we feel the same way about a power point or structural steel in our family home?

There is no doubt that the problem of non-genuine and non-tested building materials and components making their way into residential building is growing. This has been on the agenda of our building & manufacturing members for some time, but it should equally be of

interest to consumers and policy makers.

There is extensive use in building of imported products and components in Australia, some of which can be cheaper, and many of which may also meet local standards – even if we are not always sure which ones.

What we do know for certain is that the cost of failure and subsequent replacement of substandard materials – and the damage they can cause - will invariably outstrip any initial savings on the original purchase. And in the case of structural materials, or electrical and sanitary components particularly, the potential cost to the health and safety of our staff or customers is far greater.

So what we are saying is simply that regardless of where something is manufactured, it should meet Australian standards. Unfortunately though, it would seem that the evolution of compliance and enforcement in Australia has not kept pace with changes to our economy and how or where products are manufactured or sourced.

Such is the extent of this problem, it was the central theme of the Housing Industry Association’s third annual Building Better Cities summit in Melbourne during April.

This year’s summit was titled ‘Building Products: a compliance free zone?’, and brought together a well-credentialed array of Australian and International experts from across a range of disciplines all relevant to the topic.

Scoping the extent of the use of non-compliant materials in Australian residential construction was one of the first challenges faced by the summit. It became obvious from the evidence tabled by a number of presenters that there are products being used in Australia that are not fit for their intended purpose.

The other fundamental problem identified by the summit was that inconsistent compliance regimes have led to an uneven playing field between the manufacturers that comply with standards, and those that do not. Manufacturers who do the right thing are being disadvantaged against those that neither invest in producing products that meet Australian standards nor programs to demonstrate compliance.

At the end of the summit, I announced a number of initiatives on behalf HIA that we intend to pursue to address this problem. And the post-summit feedback to these proposals has indeed been encouraging.

The flagship of the HIA response will be the development of options for an industry led product registration scheme. Through interrogation of the register, builders, certifiers and consumers can all be satisfied that a product is compliant and fit for the purpose and conditions under which it will be used. It would most likely be supported by a manufacturer applied compliance mark to show it conforms to a credible product standard.

To be a success, such a scheme will need the buy-in of government as well as industry, so it will require an extensive consultation process. But the extent of the problem means that we can’t afford to ignore it.

In addition to exploring a product compliance register, HIA has undertaken to:

• Further scope the extent of the problem by seeking feedback from manufacturers and builders;

• Work with the Australian Building Codes Board (ABCB) in their review of the existing Codemark and Watermark certification schemes;

• Work collaboratively with existing credible industry based compliance programs to ensure their ongoing success; and,

• Develop an industry education and information program to increase the understanding amongst builders, contractors and suppliers about the importance of compliance.

We are in the business of supplying innovative and world class housing to the residential sector. It is essential to the sustainability of our industry into the future that our customers have confidence in the product they are buying.

But leadership from industry shouldn’t be seen by governments, or enforcement agencies such as the ACCC, as an excuse to abrogate their responsibilities to the community. No one would suggest this is going to be a simple fix, but public safety and basic fairness to manufacturers who are struggling with a high dollar dictate that they have an obligation to contribute.

Conversely, the challenge for industry and regulators is to ensure that the outcome is not just more bureaucracy and red tape. Solutions will need to have a positive cost-benefit and not result in a burden on those manufacturers already complying, who may be seen as the easy targets.

The rise of the internet and accompanying web based commerce tools has transformed the nature of trade from an enterprise to individual level - but perhaps product compliance hasn’t caught up yet.

There are a lot of locally manufactured and imported materials – premium or budget - that help Australian industry build quality homes, provide goods and services to community and drive the economy. Not everything cheap is all bad, but that doesn’t mean it’s all good either.

The question is how can we be sure if they are not all subject to the same transparent compliance regime?

shAne GoodWin, mAnAGinG director, housinG industry AssociAtion

builDing proDucts: a compliance free zone?WITH MORE ANd MORE bUIldING pROdUCTS bEING MANUFACTUREd OFFSHORE, ANd INCREASEd ACCESS TO THESE pROdUCTS, THE NEEd TO FOCUS ON COMplIANCE WITH STANdARdS ANd ENSURING A lEvEl plAYING FIEld FOR AUSTRAlIAN MANUFACTURERS HAS NEvER bEEN GREATER.

we are in the business of supplYing innovative anD worlD class housing to the resiDential sector. it is essential to the sustainabilitY of our inDustrY into the future that our customers have confiDence in the proDuct theY are buYing.


Acci netWork

IN THE COURSE OF OUR lObbYING IN CANbERRA THE bIC TAKES A STRONG FOCUS ON bUIldING OUR STRATEGIC pARTNERSHIpS ANd bROAdENING OUR MOvING pEOplE MESSAGE bEYONd A pURElY TRANSpORT ANd MOdAllY FOCUSSEd vIEW OF THE WORld.IT IS AlSO THE TIME FOR GOvERNMENT TO pROvIdE REAl SUppORT FOR A SECTOR WHICH IS AbSOlUTElY FUNdAMENTAl TO THE AUSTRAlIA ECONOMY ANd COMMUNITY - THAT’S IF JObS, SKIllS, TRAINING OppORTUNITIES, EXpORTS ANd WEAlTH CREATION MATTER.

The Bus Industry Confederation1 (BIC) takes a view that the way people and goods move is fundamental to the way we live, our economic productivity and growth, our environment, our community and the quality of life expectations we have as a nation.

As a result the broader issues base we deal includes public transport systems, climate change, cities, population, energy security and more.

In addressing these issues we have worked with groups including the Australasian Railway Association, Australian Local Government Association, cycling groups, Heart Foundation, and International Public Transport Association to make sure the ‘Moving People’ public and active transport message gets a fair hearing in the corridors of power.

2012 marks the year leading into the federal election and with this in mind the BIC is partnering with a range of organisations in developing a Moving People Taskforce which will present our vision for Moving People in 2030 to all levels of government, including The Federal Parliament.

This Taskforce and its parameters was announced to Federal Parliamentarians and the Minister for Infrastructure and Transport and the Hon. Anthony Albanese MP, at the Annual Bus Industry Dinner in Canberra in March this year.

The report of the Taskforce will be launched at the BIC National Conference

in Canberra in October.

Partnership with government also plays a strong role in getting results for the industry and through the year the BIC will be working with Infrastructure Australia as a member of the Public Transport Reference Group involved in developing a National Public Transport Strategy.

This National Public Transport Strategy from the Federal Government will represent a landmark in the BIC’s lobbying efforts in Canberra and a historic national view and planning approach to passenger transport in Australia and should feed into the recently announced Urban Policy Forum formed by Minister Albanese.

By establishing a framework for how the Federal, State and local governments measure the benefits of public transport, fund public transport, and design and plan public transport projects the strategy will not only move us towards a minimum acceptable standard for public transport service delivery, but will also assist our lobbying message that investment in public transport is a no-brainer for any government regardless of who is in charge.

the bus Industry ConfederatIon1

The BIC, based in Canberra, is the peak body representing the interests of Australian bus and coach industry operators, manufacturers and suppliers.

The BIC is the voice of an industry which safely carries more than 1.5

billion passengers a year over almost 20 billion kilometres and employs more than 40,000 people in bus and coach operations, manufacturing and technology.

Further information about the BIC and our activities is available at the BIC’s Ozebus website www.ozebus.com.au.

To contact BIC email [email protected] or call (02) 6247 5990.

By michAel APPs, executive director, Bus industry confederAtion

moving people 2030 tasKforce: a transport plan for the future

partnership with government also plaYs a strong role in getting results for the inDustrY anD through the Year the bic will be worKing with infrastructure australia as a member of the public transport reference group involveD in Developing a national public transport strategY.

australian business honours Ken court amMEMbERS OF THE AUSTRAlIAN CHAMbER OF COMMERCE ANd INdUSTRY, MET TO HONOUR THE CONTRIbUTION MAdE bY MR KEN COURT AM AT A dINNER IN pERTH.

Ken was awarded ACCI’s Service Award designed to recognise and pay tribute to the voluntary service and special contributions people have made to the work of ACCI and the Australian business community. Ken Court has dedicated over (30) years of service to ACCI and the Chamber of Commerce movement in Australian and the Asian region.

President of the Australian Chamber of Commerce in 1983 until 1985, Ken then went on to become an ACCI and Australian business representative in the forums of the Confederation of Asian Chambers of Commerce and Industry (CACCI), work he still continues today.

ACCI President Richard Holyman acknowledged that “Ken was instrumental in building Australia’s business network with Asian Chambers at a time when Australia was opening itself up to globalisation and integrating our economy into Asia.”

“He remained involved to preserve and oversee the development of the foundations he laid. Ken also had a catalytic role in the creation of the Australia Taiwan Business Council, of which Ken became Chairman.”

In 2010 Ken was appointed President Emeritus by CACCI in recognition of his continued participation in the projects, programs and annual gatherings of the Confederation.

“Ken is not only a wonderful Western Australian but an Australian business ambassador. His service sets an example on how senior office-bearers of Chambers and business associations can take important and constructive roles in setting the direction of the organisation and mentoring younger people both during after their formal tenure.” Mr. Holyman said.

The Awards were first launched in 2009. Ken Court is the fourth recipient. Pictured (left to right): Richard Holyman, President, ACCI; Ken Court AM and Peter Anderson, Chief Executive, ACCI


Acci netWork

bUSINESS CONdITIONS CONTINUE TO pRESENT A MAJOR CHAllENGE TO AUSTRAlIAN MANUFACTURERS. SURvEY AFTER SURvEY pAINTS A pICTURE OF UNCERTAINTY, TIGHTER MARGINS ANd dIMINISHING ORdER bOOKS. FOR bUSINESS IT IS THE TIME TO bUCKlE dOWN, FOCUS ON EFFICIENCIES ANd pUT A lOT OF EFFORT INTO INNOvATION RIGHT ACROSS THE bUSINESS, INClUdING MARKETING ANd SEllING STRATEGIES.

It is also the time for Government to provide real support for a sector which is absolutely fundamental to the Australia economy and community - that’s if jobs, skills, training opportunities, exports and wealth creation matter.

Here are a few ideas (from a very large list) that Government should act on urgently:

1. Be very clear and public about its vision for the Australian economy, say 5 and 10 years out;

2. If that vision is for Australia to have a vibrant, healthy and innovative manufacturing sector, then do things that will enhance the sector here and don’t do things that will encumber the sector here, by adding to the cost of doing business in Australia.

Two obvious, current examples – Government procurement must be recognised as an investment in the future of Australian industry and the contracts with Australian suppliers should recognise this (need to be demanding on quality, delivery, price, etc); and on the ‘dark’ side, now is a very bad time to be introducing a carbon tax unless driving more businesses (and jobs) off-shore is an acceptable outcome.

3. Now is a good time to invest heavily in infrastructure, the type that will enable greater business efficiencies going forward – such as transport, communication and skill training/retraining. Business cases should be mandatory and transparent for all large infrastructure proposals, but the pressure must be on to get things happening – the timing is urgent, both for the construction and activity phase.

4. Do not allow the ridiculous situation

with the GST exemption on imported goods below $1,000 to continue. How can we maintain a tax system that actually discriminates against local suppliers and local retailers? – job losses, job losses and more job losses!

The defence that it may cost more to rectify the inequity than the revenue Government will raise is irrelevant. With the increase in internet shopping, fairness in the application of the GST system must be a non negotiable for good governance. Gerry Harvey had it right when he publically raised this massive inequity (and, for the media, it’s never good policy to shoot the messenger!).

5. Australia should revisit the merits of having a freely floating exchange rate – perhaps a ‘dirty float’, where we smooth out some of the extreme fluctuations and retain a more acceptable (& predictable) relationship with our major trading partners, may now be more appropriate.

The thing about being less than 2%

of the world economy and having a currency that is something like the 5th highest traded, is that it allows others (‘the market’) to control what is a major factor in the competitiveness of Australia’s tradeable sector – whether against imports here or our exports in foreign markets.

The US has forced the $US down with a flood of money, the Japanese likewise with the Yen, the Chinese control the Yuan and the major European economies (Germany, France and Italy) all benefit by the Euro being hammered down by the debt problems of the southern Eurozone countries. The $AUD, on the other hand, is ramped up by the marketplace because of our resource wealth, even though that sector is not where the jobs (in large numbers anyway) are.

Sure, the cost of imported inputs into the manufacturing process go down when the $AUD is high, but the big downside is a much greater incentive to take more and more manufacturing (and service) activities off-shore. In sectors such as food processing, the high $AUD is creating very real challenges.

6. Finally, take country of origin branding at the product and produce level seriously. Being Australian is an advantage in most marketplaces and our manufacturers should have access to a trade mark which the Government and its agencies are actively promoting in markets all around the world.

Because of its enormous market capital, strong connection to Government and very widespread use, that symbol should of course be the AMAG logo.

ON 10TH MAY, ACCI pRESIdENT, RICHARd HOlYMAN TOGETHER WITH A STRONG CONTINGENT OF ACCI MEMbERS ANd SENIOR STAFF MET WITH A vISITING dElEGATION FROM THE U.S. CHAMbER OF COMMERCE OvER A bREAKFAST FORUM HEld IN CANbERRA. THE CHAMbER WAS vISITING AUSTRAlIA TO EXpORT bUSINESS OppORTUNITIES ANd dEvElOp dIAlOGUE SURROUNdING THE NEGOTIATION OF THE TRANS pACIFIC pARTNERSHIp (Tpp) WITH NATIONAl pOlITICAl lEAdERS.

The U.S. contingent, led by Tami Overby, vice president for Asia at the U.S. Chamber of Commerce, comprised Jeremie Waterman, executive director for China and senior policy adviser for Asia, and John Goyer, senior director for Asia. Representatives from the U.S business community were also present from the resources, financial and health care sectors including Conoco Phillips, URS, Citi, Time Warner, Chevron, Dow and Accuray.

As vice president, Ms Overby is responsible for developing, promoting, and executing programs and policies

relating to U.S. trade and investment in Asia. She works closely with Chamber member companies, business coalitions, AmChams, government leaders, and business executives to achieve their business objectives in what is becoming an increasingly important part of the world. Ms Overby and her team have been credited with leading the ratification of the recently signed United States- Korea Free Trade Agreement.

The discussions touched on a wider range of topics but covered the general economy, Australia’s investment environment, political developments and

the TPP. ACCI was pleased that in many cases, common interest and mutual agreement was easily found.

ACCI embraces these international opportunities as a means to fostering greater understanding of our global partners in both trade and policy respects. The U.S. Chamber is ACCI’s mutual partner in international fora such as the International Chamber of Commerce, International Organisation of Employers and the OECD Business and Industry Advisory Committee.

By BryAn clArk, director of trAde And internAtionAl AffAirs, Acci

visit bY the us chamber of commerceBy iAn hArrison, chief executive, AustrAliAn mAde AustrAliAn GroWn

a call to action on manufacturing

Now working with the Industry Capability Network to maximise

Australian content in major projectsTo find out more, or to register to use the Australian Made logo, visit www.australianmade.com.au or phone 1800 350 520

5625

AM


Acci netWork

jeremY gutsche, trenD hunter

JEREMY GUTSCHE IS AN INNOvATION EXpERT, THE AWARd-WINNING AUTHOR OF ‘EXplOITING CHAOS: 150 WAYS TO SpARK INNOvATION dURING TIMES OF CHANGE’, ANd THE FOUNdER OF TRENdHUNTER.COM, THE WORld’S lARGEST ONlINE NETWORK FOR TRENd SpOTTING ANd INNOvATION.

how does trend hunter worK?

We have a global network of 100,000 people who find ideas in pop culture, fashion, design, technology – whatever might be innovative, and we post those into a portfolio. There’s a whole other side for businesses where we filter through the noise and look for the patterns of opportunity, which are published in trend reports and newsletters. Large companies like Nestle, Kelloggs, and Fortune 500 brands pay us to recreate Trend Hunter for their own innovation teams. As for me, I’m a guy who spends a lot of time researching chaos and innovation. So I talk to companies about how you can use these periods to reinvent.

Can you expand on thIs Idea of exploItIng Chaos?

When there are periods of chaos in business and society, the natural reaction is to become overly conservative in your actions. The skill is to see how your needs are evolving, and innovate to update. When your competitors are conservative as well, it creates a double-sized opportunity. If you look back historically, you see companies like CNN, MTV, Microsoft, Burger King, FedEx and Apple – they all began in periods of global recession. After all, people still purchase and consume in periods of change.

A good example is Fortune magazine, which commenced 13 months after the 1929 Wall Street crash. It was actually priced at one dollar per issue, which could buy you a wool sweater in those times. But they grew their subscriber base to 500,000 and $7 million in modern day

profits. How could they achieve this profit during the Great Depression? The reason was they were solving a new need. People were losing jobs through decisions being made behind boardroom doors in New York City. Fortune magazine provided a glimpse behind those boardroom doors – and that’s what people will pay for.

you see faIlure In a posItIve lIght. why?

Failure is an outcome of experimentation. The better you become at something, the more successful and complacent you become. You don’t feel as though you have to change. One of my favourite case studies I’ll discuss at the Congress is Smith Corona – inventor of the typewriter. They had a hundred-year history of inventing everything in the

typewriter space, from spell checkers to word processors. Along the way they became fixated on pursuing the rational outcome, which is to make the best typewriters in the world. They actually pulled out of a joint venture with Acer to develop computers. By comparison to the typewriter, the new realm of computers seemed too risky. Put yourself in the shoes of a Smith Corona manager. Which team would you want to be on? The team that makes the most profit, gets the big bonuses, and can pay off the mortgages - that’s the typewriter team. Or do you

want to take a risk on an unknown commodity. More on that case study at the Congress!

You have to force yourself to consider new opportunities that may result in failure. As I say, ‘Win like you’re used to it, and lose like you enjoy it.’

how Important Is the Consumer In your thInKIng?

I think it’s important to have customer obsession. This is something that any business can do. It’s the chance to make a connection with your customer, especially in times of chaos. If you attempt to understand the customer through trend spotting or personal connections, you can better understand how their needs are evolving. I have

a good case study involving the head designer of General Motors. He designed a vehicle called the ‘Escalade’, which became an icon in rap culture, but that wasn’t the intention. When I asked him how it happened, he said it was a happy accident. The car had been designed for 45 to 60-year-old males. Now, he could have had his team conduct research, or a survey, or visit dealerships. Instead, he chose to personally visit the most dangerous neighbourhood of Detroit. You can imagine what sort of person would be driving the car – a drug dealer!

He found a car with its owner and said, ‘Hello young man, I designed this vehicle, and was wondering if I could ride with you for the day.’

This process appears difficult, but it enables a much deeper understanding of the customer world, and what makes your customers think differently. The General Motors example happened seven years, and over that time, the Escalade has enjoyed high sales because they keep thinking about how to position the car for that demographic.

what role does organIsatIonal Culture play?

I adhere to the saying that culture eats strategy for breakfast. It’s something that comes from outside the Ford strategy war room. It doesn’t matter how good your PowerPoint slides or Excel model are. What matters is whether you can mobilise your team to obsess about the customer, to tolerate failure, and really be passionate about taking things to the next level.

what effeCt Is soCIal medIa havIng on emergIng trends?

The answer is speed. One of my favourite

case studies is a tongue-in-cheek story we published five years ago. The half suit. A suit that cuts off at the waist, and is ideal for webcam meetings while working at home. When published, it had 33 million impressions in six months. Since then, Google and Facebook have emerged. To put it into perspective, Kony 2012 had 120 impressions in two days. They had political leaders and celebrities – even Justin Bieber – tweet about it. It was passionate, and it felt authentic.

There are two important points. Firstly, if you can make a real connection, your story will travel faster than it ever has before. The second point is that you can test which messages sell. In word-of-mouth days, you could never really quantify what messages were most successful. Today, you can study which messages are working, and think about a different style of communication. We choose words carefully at Trend Hunter to maximise impact. That’s a skill I’ll definitely explore at the Congress.

Are there similarities between business in Australia and your native Canada?

I think Canadians and Australians are very similar in their thinking, which at times can be conservative. There’s an interesting parallel about how we can motivate our managers. We can take a more aggressive approach to business, and push out of our comfort zone, especially in times of chaos.

Jeremy Gutsche will present at the Australian Chambers Congress on Day 2, Friday, 17 August 2012.

For more information, visit: www.businesscongress.com.au.

By Ashley Penny, communicAtions mAnAGer, nsW Business chAmBer

‘i aDhere to the saYing that culture eats strategY for breaKfast.’

‘You have to force Yourself to consiDer new opportunities that maY result in failure. as i saY, ‘win liKe You’re useD to it, anD lose liKe You enjoY it.’


Acci netWork

SUpER GRAdS IS NOT JUST ANOTHER GRAdUATE pROGRAM. ANd WORKING IN THE NOT-FOR-pROFIT SUpERANNUATION SECTOR IS NOT JUST ANOTHER JOb.

AIST’s Super Grads program is committed to identifying and developing the skills and abilities of idealistic and motivated people, who genuinely want to make a difference to the quality of retirement for all Australians, present and future. The program is designed to fast-track the development of the next generation of industry leaders, and is run in conjunction with the Australian Chamber of Commerce and Industry, Australian Council of Trade Unions, and Industry Super Network.

The Super Cadets program was established in 2004 and relaunched as Super Grads for 2012 to assist young people in developing a career in the not-for-profit superannuation industry, and to bring fresh ideas and new perspectives to super funds and related organisations

within the sector.

Since inception, the Super Grads Program has helped launch the careers of over sixty employees in the not-for-profit superannuation industry and in 2012, industry funds, public-sector funds, and related organisations in the industry welcome their fourth group of graduates, 19 in total.

The 2012 program kicked off formally in March with a week-long residential program that exposed the ‘grads to the history of the superannuation industry and the not-for-profit sector’s role in the industry more broadly, and they were thrown in the deep end trying to get their heads around super’s notorious acronym-filled lexicon.

Added to this, the grads also completed AIST’s RG146 (essential knowledge for anyone in the industry) and we are pleased to say that after lots of study everyone passed their final assessment.

Since then the Super Grads group have been lucky enough to attend the Conference of Major Super Funds (CMSF), a national gathering of over

1200 industry professionals, where they got first-hand insights from many of the speakers in private group catch-ups after each session. And if all that wasn’t demanding enough, one grad also took part in the CMSF Super’s Got Talent competition, winning first prize with her rendition of Queen’s Crazy Little Thing Called Love.

Over the next eight months the Grads will enjoy two one-week placements in different related organisations to help them gain a wider a understanding of the industry, another educational residential program, and undertake group projects focussed on enhancing the role of the not-for-profit super sector.

Applications for the 2014 program open early next year, and will be hotly contested – over 500 submissions were received for the 2012 program, and only 19 were accepted into the program.

For information on the Super Grads program, visit www.aist.asn.au, email [email protected] or call 03 8677 3800.

ACCI HONOUREd lONG SERvING FAIR WORK AUSTRAlIA (FWA) pRESIdENT JUSTICE GEOFFREY GIUdICE AO AT A RECENT EvENT IN MElbOURNE.

The dinner, attended by over 400 people, was hosted in conjunction with the Australian Council of Trade Unions and the Australian Industry Group in tribute to the contribution Justice Giudice has made whilst at the helm of FWA.

Justice Giudice is credited with the introduction of the Fair Work Act and modern award system as well as steering the institution through sometimes difficult circumstances.

Peter Anderson, ACCI Chief Executive complimented the outgoing President during his address to a Ceremonial Sitting of FWA:

“I think I can speak on behalf of many, that there is an authority but humility in the manner in which Geoff has presided. This is a characteristic of leadership that has strengthened, not weakened, the institution.

We thank Geoff for his stewardship, and for his contribution to the orderly application of law and industrial conduct through these demanding cycles of change and counter change.

No doubt future challenges for industry and the system lie ahead. However that future shapes or moulds this tribunal, its arbitral arm is left in good shape by the President.”

aist’s super graDs

farewell to justice geoffreY giuDice ao

CHRIS IS TRUlY A lEAdER OF bUSINESS. HE lIvES ANd bREATHES FOR HIS lOCAl bUSINESS CONSTITUENCY ANd SHOWS US HOW EMplOYER REpRESENTATION SHOUld INGRAIN ITSElF INTO bROAdER COMMUNITY vAlUES. THIS WAS NO bETTER IllUSTRATEd THAN ON 12TH MARCH WHEN CHIEF MINISTER KATY GAllAGHER ANNOUNCEd CHRIS AS CANbERRA CITIzEN OF THE YEAR FOR 2012. THIS ACCOlAdE IS A GREAT CREdIT TO CHRIS ANd HIS TIRElESS WORK IN CANbERRA FOR THE COMMUNITY AT lARGE.

Chris is responsible for founding the Indigenous Business Chamber of Australia, which provides support for indigenous business people and others with an interest in indigenous enterprise. Chris has also made significant contributions to youth at risk and is a member on GreaterGood - Canberra’s public charitable foundation.

The Chief Minister said that “Dr Peters is admired as a person who is altruistic and is someone who has difficulty saying no to anyone who seeks his assistance or knowledge. I am delighted to announce him as the 2012 Canberra Citizen of the Year.”

This is the 36th year that the Canberra Citizen of the Year has been awarded.

Dr chris peters am canberra citizen of the Year

Applications

close

Monday 22nd

August 2011

20 Super jobs FOR

20 Super graduates!

• SuperGrads2012Program• PositionsinBrisbane,Sydney,Canberra,

Melbourne&Adelaide• CareersinFinance,Investments,IT,

Compliance,Policy/Research,Marketing,Communications,ClientServices,MemberServices,HRandSales

• Includesfullyfundeddomestictravelfortraining&conferences

• Workandstudywithfullsupportofyouremployer

• Nationallyrecognisedqualification

AreyoupreparedtomakeaSupermove?

Super Grads 2012 is offering careers in Australia’s world-class not-for-profit superannuation industry.

The world of superannuation has undergone many changes and will continue to change the lives for all Australians - including you.

Make no mistake – we are seeking the next generation of leaders! We are looking to develop super stars who are genuinely committed to “making a difference” to the quality of retirement for working Australians and their families. Salaries range from $45K - $55K plus superannuation. To apply or for more information, go to www.aist.asn.au/supergrads.aspx

Super Grads is an AIST initiative, delivered in conjunction with ACCI, ACTU and ISN.


Acci netWork

acci general council Dinner march 2012HOSTEd bY THE CCI WA

2

40 COMMERCE & INDUSTRY wINTER 2012

Acci netWork

ACCI NATIONAl MEMbER NETwORk: bUSINESS SA ChAMbER Of COMMERCE & INDUSTRY QUEENSlAND

ChAMbER Of COMMERCE NORThERN TERRITORY NSw bUSINESS ChAMbER TASMANIAN ChAMbER

Of COMMERCE & INDUSTRY ACT & REGION ChAMbER Of COMMERCE & INDUSTRY VICTORIAN

EMplOYERS ChAMbER Of COMMERCE & INDUSTRY ChAMbER Of COMMERCE & INDUSTRY wESTERN

AUSTRAlIA ACCORD - hYGEINE, COSMETIC AND SpECIAlTY pRODUCTS INDUSTRY AGRIbUSINESS

EMplOYERS fEDERATION AIRCONDITIONING & MEChANICAl CONTRACTORS ASSOCIATION AUSTRAlIAN

bEVERAGES COUNCIl AUSTRAlIAN DENTAl INDUSTRY ASSOCIATION AUSTRAlIAN hOTElS ASSOCIATION

AUSTRAlIAN INTERNATIONAl AIRlINES OpERATIONS GROUp AUSTRAlIAN MADE, AUSTRAlIAN GROwN

CAMpAIGN AUSTRAlIAN MINES & METAlS ASSOCIATION AUSTRAlIAN RETAIlERS ASSOCIATION

bUS INDUSTRY CONfEDERATION CONSUlT AUSTRAlIA hOUSING INDUSTRY ASSOCIATION lIVE

pERfORMANCE AUSTRAlIA MASTER bUIlDERS AUSTRAlIA MASTER plUMbERS & MEChANICAl

SERVICES ASSOCIATION Of AUSTRAlIA NATIONAl bAkING INDUSTRY ASSOCIATION NATIONAl

ElECTRICAl & COMMUNICATIONS ASSOCIATION NATIONAl fIRE INDUSTRY ASSOCIATION NATIONAl

RETAIl ASSOCIATION OIl INDUSTRY INDUSTRIAl ASSOCIATION phARMACY GUIlD Of AUSTRAlIA

plASTICS & ChEMICAlS INDUSTRIES ASSOCIATION pRINTING INDUSTRIES ASSOCIATION Of

AUSTRAlIA RESTAURANT & CATERING AUSTRAlIA AUSTRAlIAN fOOD & GROCERY COUNCIl

AUSTRAlIAN pAINT MANUfACTURERS fEDERATION VICTORIAN AUTOMObIlE ChAMbER Of COMMERCE

Commerce & Industry

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