Address:
Unit 9B Clock Corner
521 Beams Road
CARSELDINE QLD 4034

Ph: 61 7 3863 3933
Fax: 61 7 3863 3833

Copyright ©
Brisbane Business Solutions
Site Map   |   Disclaimer
Software solutions for accountants by Acclipse

Navigating Your Business

The two major issues on the horizon, which could have a significant effect on SMEs, are the carbon tax and mineral resources rent tax.  Both of these are taxes that could have significant impact on your business’ operations.  In this issue of Business Plus+ we have included some comments on the proposed carbon tax.  We recommend that all SMEs start thinking about what effects the proposed carbon tax will have on their business and start to plan now for strategies to minimize this effect. 

There are also a number of other issues affecting the economy that could (and will) affect some small businesses over the balance of this year and into 2012.  The Australian dollar continues to rise against the US dollar resulting, not from the strength of the Australian economy, but obviously from the weakness of the USA economy.  An American economist, visiting Australia last week, forecast the Australian dollar could go as high as $1.70 to the US$1. 

What effect will this have on your business?  If you are an exporter, the returns are going to be very low.  If you are an importer, you should be able to introduce product into Australia at a very cheap rate and, if you are a local manufacturer in Australia, you will need to be prepared for a possible major challenge from imports (unless you are producing very unique products within Australia).  Reports from Federal Treasury indicate lower household spending as many Australians are cautious about extending debt levels, when there is obviously a lot of uncertainty in the world.

The government has forecast that its debt will increase by $24.2B to $106B by 30 June 2012.  The interest rates on these borrowings is staggering and, when combined with forecast inflation rates, will more than likely lead to higher interest rates later in the year. 

Another ongoing problem for small businesses is securing skilled labour.  The government has announced a change for the recruitment of skilled persons wishing to migrate to Australia.  If you are trying to employ skilled personnel, then perhaps you should have a closer look at the government's proposals relative to the online matching system which will allow employers to “cherry pick” from the government’s database of skilled persons wanting to migrate to Australia.  If you are interested in employing apprentices, we would suggest that you closely follow the developments on the overhaul of the apprenticeship scheme that the government has announced. 

What could emerge as the biggest problem is in China, where it is reported that the Chinese government is attempting to clamp down on domestic inflation.  These measures could slash the demand for Australian minerals and other products.

Now is the time to sit and reflect on these various matters and consider how your business might be affected.  At this time of the year, many businesses seek advice from their accountants on their planning for a new financial year and we would be happy to have planning discussions with you.

Carbon Tax Impacts

The government appears to be proceeding with the concept of introducing a carbon tax which could commence in Australia as early as 1 July 2012.  Have you considered what impact a carbon tax will have on your business?

The government has announced a commitment to reduce Greenhouse Gases (GHG) by 5% by 2020 (from 2000 level).  This is equivalent to 160M tonnes.  The government intends to apply a fixed price for the first 3-5 years then move to a cap and trade system.  During this initial fixed price period, businesses will have no ability to use international greenhouse gas emissions units they earn from other countries.  There is some good news for farmers in that the government appears to be heading towards a decision that carbon units, created under the carbon farming initiative, may be used by liable entities to reduce their carbon tax.  More than 50% of Australia’s total emissions are produced by stationery energy (electricity industry etc.) with transport generating approximately 14%.  The other generators are agriculture and de-forestation 20%, industrial processors 5% and waste 2%.

The government expects that approximately 1,000 businesses will be liable for carbon tax.  The exact price is being widely debated in Australia at present.  The general consensus seems to be that it will be approximately $20/tonne.  The government is proposing some industry assistance but will that cover the costs inputs to your business?  Therefore the questions you need to consider are:

• What is the impact of the carbon price on your supplier price increases?
• Can you pass on any carbon tax that you are charged to your customers?
• If you are negotiating long term contracts with your customers now, can you include clauses to cover the introduction of a carbon tax?
• Have you identified opportunities for government assistance?
• If so, have you made approaches, commenced lobbying etc., to government departments to gain assistance for problems you envisage your industry will suffer?  
• What changes will you make in your day to day business operations to reduce Greenhouse Gas emissions?
• Are there opportunities for your business to switch to “low carbon” products or other alternative products?

A good question would be “Why act now?”  With the current government there is no doubt that a carbon tax is on the horizon.  In every business, systems take time to plan and implement.  Culture within business organisations and suppliers and customers take time to change.  You might gain a competitive/first mover advantage by starting to plan for the introduction of the carbon tax now.   There might be some opportunities for cost cutting.  The world is moving to a carbon restricted economy.

If you would like to have discussions with us relative to planning for the carbon tax, please do not hesitate to contact us.

For more information contact us for a copy of the Paper 031-001 – Carbon Tax Introduction.

Are References Worthwhile?

Some commentators believe that references are “not worth the paper they are written on”.  When you contact a referee, ask them specific questions such as;

• How long did the applicant work for your organizations?
• In what capacity?
• Does the referee care to comment on the qualifications and experience of the applicant?
• Would they re-employ the applicant in his/her former position? (probably the most important question).
• Was the applicant a team player?
• Did the applicant exercise initiative in his/her job? 

There are significant benefits from the utilization of a referee’s form that you could prepare and send to the referee to complete.  This will reflect the referee's true thoughts of the applicant.

If you would like to receive a copy of a Referee's Form, please contact us.

For more information contact us for a copy of the Paper 017-020 - Referees Form and Form 017-020a Referees Form.