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business & Leisure: Frankston | Mornington Peninsula | Dandenong

September 2013 | $4.95 (GST inc.)

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ISSUE 38 / SEPTEMBER 2013

FRANKSTON / MORNINGTON PENINSULA / DANDENONG

TONY MURRELL KEITH PLATT MARG HARRISON DAVID HILET MELANIE LARKE SIMON BROWN Design MARLON PLATT

Publisher / Director Editorial Director Sales Director Managing Director Material production / Prepress

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Inside Going overseas: Joe Samara takes companies to the Middle East.

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Departments TV success: Media agency interviews make prime time.

News Busy Bites Networking snaps Business Directory

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Columns

Email: General: inquiries@businesstimes.net.au Editorial: news@businesstimes.net.au Advertising: sales@businesstimes.net.au Artwork: production@businesstimes.net.au Internet: www.businesstimes.net.au

Networking: Ivan Misner Health: Mike Ellis Markets: Richard Campbell Managing: Hamish Petrie

BusinessTimes is published 11 times a year by BusinessTimes Pty Ltd and printed by Galaxy Print & Design, 76 Reid Parade, Hastings, Victoria 3915. Postal: PO Box 428, Hastings, Victoria 3915 Tel. 03 5979 3927 Fax. 03 5979 7944

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DISCLAIMER: Information in BusinessTimes contains general advice only. No article or column has been prepared taking into account any individual reader’s financial situation, investment objectives or particular needs. Readers should personally consult professionals for advice on any matter, including investment, health and the law. While all care is taken, BusinessTimes accepts no responsibility for errors or omissions in the published material. Views expressed are not necessarily those of BusinessTimes Pty Ltd. All content is copyright.

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February 2013 | Frankston / Mornington Peninsula / Dandenong | BusinessTimes | 3

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FUTURE TRADE

Decade to build new port The state government is planning for the Port of Hastings to begin easing the load at the Port of Melbourne from the mid2020s. At that stage a road and rail transport corridor will be used to carry goods from Hastings to Dandenong. The government’s Victoria – The Freight State report includes the Western Port Highway being upgraded to “full freeway standard”. When fully operational, the Port of Hastings is being designed to handle nine million standard-sized containers a year. The port is also being designated for bulk and general cargo. The release of Victoria -The Freight State last month coincided with the Port of Hastings Development Authority seeking consultants to conduct site investigations in preparation to expand the port. Authority CEO Mike Lean sees calling for tenders as “a significant new milestone in the evolution of the port”. He said the authority, tenderers and government agencies

would work to ensure “that any potential environmental impacts are well understood and managed during investigations”. “Our approach at every stage will be to avoid or minimise any environmental impacts and we are confident that these works can be conducted safely and with minimal impact,” Mr Lean stated in a news release. The work programs covered marine and land geotechnical investigations and a marine geophysics survey. The results would provide the authority with “critical contemporary baseline data required to inform port expansion planning over the next four years”. “These investigation works will be vital to ensuring that we have a comprehensive understanding of the conditions that exist both on land and under the sea bed as we get on with the job of planning to expand the port,” Mr Lean said. It was “vital” to accelerate the expansion of the Port of Hastings “if Victoria is to retain its status as the nation’s freight and logistics capital and secure our economic future”.

Expansion seen as a threat to bay ecology shipping traffic in Western Port could reach local shorelines within minutes and high conservation areas within less than six hours,” VNPA spokesman Simon Branigan said. “We aren’t talking about oil tankers, but rather heavy fuel oil and diesel spills from container ships and port support vessels.” The research modelled six oil spill scenarios based on 27 previous oil spill accidents across Australia since 1970. Computer modelling tracked the spills over a two‐week period from two locations within Western Port. “The modelling shows Phillip Island Nature Park is vulnerable to oil spill contamination, and French Island Marine

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The federal government is being pressured to undertake an environmental assessment of Western Port before any expansion of the Port of Hastings. Environmentalists fear the port expansion requires major dredging, clearing of mangroves and road and rail transport corridors through Gippsland, the Mornington Peninsula and suburban Melbourne. The Victorian National Parks Association says research has shown the bay’s “globally significant marine and coastal wetlands” face “huge damage” from oil spills. “The new research found that even relatively small amounts of oil spilled from

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BusinessTimes Frankston / Mornington Peninsula / Dandenong | September 2013

National Park is also at high risk of exposure. It also highlighted the fact that once oil is in the water it will be hard to stop,” Mr Branigan said. “Any proper assessment must consider environmental impacts, all risks and alternative port locations with links to national transport planning.” All of Western Port is listed under the international Ramsar convention. It is home to 32 species of migratory birds protected by international agreements, making its waters and shorelines subject to national environmental laws. The VNPA says the port expansion plans will see shipping traffic increase from less than 100 ships a year to 3000.


Mr Lean said Victoria – The Freight State confirmed an expanded Port of Hastings was “critical to securing the economic vitality of Victoria and cementing Victoria’s status as the freight and logistics capital of the country”. The plan “underscored” the need for the expansion by the mid2020s “to accommodate significant growth in container trade … including bigger vessels carrying larger loads”. “With the Port of Melbourne expected to reach capacity by the mid-2020s and Victoria’s container freight task projected to quadruple by 2050, the expansion of the Port of Hastings is essential to meet the freight challenges of the future,” Mr Lean said. “The plan confirms that with existing deep water access and sea and land-side infrastructure located at the doorstep of key consumer markets and growing manufacturing areas to the south and east of Melbourne, expanding the Port of Hastings is the logical step for securing Victoria’s freight and logistics sector.” Mr Lean said the geotechnical works would “give us an upto-date baseline of important information such as soil and rock characteristics of the local land-side and marine conditions in the port development site and surrounds”. “For more than 40 years, Hastings has been identified as the site for a major port and industrial development and more than 3000 hectares of land is zoned for port-related use. We are looking forward to finally realising this vision and to creating a world-class facility to help secure Victoria’s economic future.”

The proposed road and rail corridor linking Dandenong and Hastings.

NG I R SP IALS C 9/13 E P $ /0

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September 2013 | Frankston / Mornington Peninsula / Dandenong BusinessTimes | 5


BUSY BITES

Don’t call – it’s the law Australian Communications and Media Authority investigations have found Teleus Pty Ltd, a telecommunications provider, and Flexi Marketing Solutions Pty Ltd, a promoter of holiday accommodation deals, made calls to numbers on the Do Not Call Register. “Investigations have identified the two businesses that have missed the mark with their telemarketing,” said acting ACMA chairman Richard Bean. “It’s against the law, it’s a waste of time and money – and it’s a threat to your reputation telemarketing to consumers who don’t want to hear from you.”

Rosella brands flies on Rosella, the iconic Australian tomato sauce, soup and chutney brand which took pride of place in Australian homes for almost 120 years, has been saved from extinction. Rosella products will live to see another day after Australian family-owned business Sabrands stepped in and bought the label after production ceased earlier this year. Sabrands said it now had “the privilege of becoming guardians to this iconic brand, which has been loved by five generations of Australians”.

FUTURE OFFICES DESIGNED AROUND FLEXIBILITY, CONNECTIVITY Office space is being reshaped to give employees digital connectivity and the freedom to work in either formal or relaxed settings. Rising rentals are driving the trend to small offices as businesses embrace a new dimension of open plan spaces with multiple connectivity points, allowing employees to work from anywhere at any time. Office fitout specialist FDC Construction & Fitouts have created workspace choices for Sydney corporate health management company, Injury Treatment Physiotherapist and Injury Treatment’s managing director Jeremy Keane believes the new flexibility will increase employee morale, productivity and engagement. “We are seeing an emergence of a new generation of corporate culture that focuses on team outcomes over hierarchy or individual achievement. This has a positive impact on the office atmosphere, increases leader access, clears internal communication channels and promotes equity, giving a platform to a more innovative, responsive and flexible workforce.” FDC boss Ben Cottle said the futuristic ‘lifestyle workplace’ has been used as inspiration for the new CBRE office in Sydney’s CBD. He said the concept of activity-based working

has been taken to the next level with open plan spaces, lounge areas, conferencing pods and traditional private desks, encouraging employees to move and work from whichever space they feel most comfortable. Productivity has increased while the environmental impact has been minimised, with a decrease in energy consumption of 61 per cent (based on a comparison of April 2012 and April 2013) and a drastic reduction in paper usage. The George St office has a space saving of almost 30 per cent while staff has access to a 65 per cent increase in meeting rooms.

SMEs ARE LEAVING FRAUD DOOR WIDE OPEN, SAY ADVISORS An increasing number of SMEs are failing to protect themselves against the risks of employee fraud according to accounting and advisory firm William Buck. Head of the firm’s audit focus group, Leo Tutt, said many SMEs were overlooking basic control procedures, leaving the door open for opportunistic employees. “Across our firm, there’s no doubt we’re hearing about more cases of employee fraud than ever before,” he said. “Whether it’s a lack of understanding or putting

n Bizzquiz Cameron Taylor started his career in the 1980s as an apprentice with Michael Flouch in Mornington. He then moved to The National Golf Club and Peter Rowland Catering. By the time he was 21 he had started The Grainery, a deli and catering business. Then came Conrad’s Alfresco, at Mt Eliza, and, in

too much trust in their employees, many business owners are failing to identify and rectify weaknesses in their processes. “Generally, there’s always some sort of control flaw or failing that enables fraud to take place.” Tutt said some of the ‘red flags’ for fraud that business owners should be looking out for include inconsistent results with expectations or trends, key people never taking leave, a lack of documentation for transactions and a failure to complete timely reconciliations.

2003, Verde Restaurant. Verde was sold in 2011 enabling Taylor to focus on the old Boathouse Restaurant in Frankston and later launching the Crackerjack Waterfront Cafe at Seaford. I dreamed of being ... a rock star. My first paid job was ... my own gardening round with my dad’s lawnmower. In 10 years I will be ... one year away from retirement, I hope. Our business planning entails ... balancing the wage structure through the use of trainees and apprenticeships. Tip for success ... Don’t rely on banks and [remember] your landlord thinks of himself first.

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I am inspired by ... businesses that create niche ideas and implement them successfully. Anyone starting a business should ... reconsider, it’s a very tough economy and it will take some time to turn
 around. I’ll know I’m successful when ... the bank doesn’t own my house. My mother and father always told me ... to look in the classifieds and pick the industry with the most jobs on offer. I wish I had ... bought that block of land in Shoreham rather than the Cordia Turbo. I wish I had not ... developed a taste for red wine and blue cheese.


SHOPPERS STILL ONLINE DESPITE RETAIL DOWNTURN Australian consumers are still spending despite the tough time being experienced by domestic retailers . The problem, according to retailers, is that traditional customers are seeking bargains on overseas shopping websites. A drop in the Australian dollar is making overseas purchases more expensive and may curtail buying activity, but the $1000 GST-free threshold remains an attraction to online shoppers trawling beyond our shores. The Age reported on 19 August that overseas retailers avoided paying the GST on more than $6.2 billion worth of goods shipped to Australian shoppers last year. The Australian Bureau of Statistics (ABS) estimated that domestic online retail sales in 2012-13 totalled more than $4.5 million. ABS estimated that the value of goods imported under the low value threshold (LTV) was more than $6.2 billion in 2011-12. e-books, films, apps and online papers were not included in the estimate. The big numbers are fuelling the anger of Australian retailers struggling through a protracted downturn in consumer spending. They want the government to scrap the $1000

Look for inconsistent results with expectations or trends, key people never taking leave, a lack of documentation for transactions and a failure to complete timely reconciliations.

employer can take, such as enforcing compulsory annual leave, ensuring there are clear reporting channels and senior management takes an active interest in monitoring fraud. “Most importantly though, having internal controls in place, as well as implementing third-party checks are the best ways of managing fraud.” Tutt highlighted external audits as being extremely effective in helping business owners manage employee fraud. “The key thing that external audits provide is independent assessment and comparison to best practice.”

Dandenong office A 16,000 square metre commercial building will be built on vacant land near Dandenong train station. ASX-listed Cromwell Group purchased the unbuilt office complex as part of a $77 million deal from EPC Pacific last month. It will accommodate 850 staff from the Australian Tax Office. The new building is one of Places Victoria’s biggest commercial initiatives in the $500 million state government initiated redevelopment program to reinvigorate Victoria’s second city. The project is part of the state government’s redevelopment of land between the station, Dandenong Plaza and Robinson St commercial area.

Chamber golf day Frankston Business Chamber is hosting a golf day on Friday, 18 October, at Peninsula Country Golf Club, Skye Rd, Frankston. Registration opens at 11.30am with tee-off starting at 12.30pm after a light lunch. Prizes include a car for a hole-in- one sponsored by Jeff Wignall Group.  Details: Greater Frankton Business chamber info@ frankstonchamber.com. au or 97881 1422.

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“Employers need to focus on having processes in place to prevent fraud from occurring, rather than trying to deal with it after the fact,” he said. “Training in fraud awareness, a fraud policy and conducting pre-employment and employee screening are all ways of proactively managing the issue. “There are other more practical measures an

GST-free threshold on goods bought from overseas websites by Australian shoppers. However, the Productivity Commission report on retail found that while lowering the threshold to $20 would raise more than $550 million in tax revenue, it would cost more than $2 billion collect. Undeterred, the the nation’s biggest retail lobby group, the National Retail Association, criticised Australia Post in 2011 for what it saw as its assistance to the growth of offshore online retailers at the expense of local shops and jobs. Shadow treasurer Joe Hockey said in 2011 that retailer’s claims about losing serious business to overseas online retailers were exaggerated. “I think when it does come to clothing there is a significant threat to the industry from internet sales but we’ve all got to become more competitive,” Hockey was reported as saying. “We can’t close our eyes and think the internet’s going to go away and we just need to adapt and find new ways of being competitive.” Bigcommerce.com claims that the number of online retail entrepreneurs is up 200 per cent in two years and that Aussie online consumer confidence leads the world.

September 2013 | Frankston / Mornington Peninsula / Dandenong | BusinessTimes | 7


NETWORKING

Award-winning Bathurst winemaker Mike Burleigh praised the philosophy and format of Frankston Wine and Food Society at its second lunch at The Boathouse Restaurant on 31 July. Mr Burleigh said that the lunch was one of the best organised functions he had attended – “and I have been to a few”. 1: Boathouse Gallery co-owner Brian Mellady (centre) with Proudly Frankston convenor Alan Wickes (left) and wine and food society president Kevin Johnson. 2: Winemaker Mike Burleigh, of Winburndale Vineyard (right) with his brother-in-law Tim Berger (left) and wine and food society committee member Irene Day. The Orphans of Ghana charity Ball and auction was held at Mornington Race Course’s Gunnamatta Room on 10 August. 3. Vanessa Mangan, of The Vintage Emporium, Tyabb, with milliner Annette Sanfilippo 4. Judy and Michael Ellis, of Mt Eliza. Michael is the BusinessTimes health columnist. 5. Susie and John Morgan, of Wise Choice catering and event management, a sponsor of the charity ball. 6. Friends Wendy Saville (left), D’nes Eden, Sally Jinks (front) and Vanessa McDonough, 7. Weekly lunch meeting at Mornington Golf Club on 7 August. Garry Ebbott, of Melbourne Office Supplies, (left) with Emma Morris, of Travel Counsellors, and William Luke, of Pinant Financial Planning. 8. Wayne Lock, of SWAT Business Solutions, and Steve Gagliardi, of AllStates Safety Services.

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9. Pitcher Partners hosted a VIP opening of their Dandenong office at Arco Restaurant, Dandenong on 8 August. Greg Pierot (left) and Steve Dodd, of Business 500, with Assunta Pellicano, of Pellicano Builders at Pitcher Partners’ VIP office opening. 10. Jill Walsh, general manager of the ARM group of companies, Dandenong, with Norman Mills, managing director of Boss Polymer Technologies (left) and Adrian Boden, executive officer of South East Melbourne Manufacturers’ Alliance (SEMMA) 11. Ian Stewart and Melanie Kent with Joh Brazzale of Pitcher Partners 12. Gerard Kennedy, principal of M + K Lawyers, with Pitcher Partners’ Melanie Kent (left) and Rachel Doran. 13. Vincent Taranto with Nunzio Pellicano, of Pellicano Builders, at Pitcher Partners’ opening. 14. Frankston Business Chamber held its monthly networking night at The Good Guys, Frankston, on 20 August. Karin Hann, CEO of Frankston Business Chamber (left), with David Begg and Debbie Smith, of SBI Websites, and Michael Drew, of LeManns Go Karts. 15. David and Norma Extance, owners of Signarama Frankston. 16. Bruce Billson MP for Dunkley, with Karen Hann, CEO Frankston Business Chamber and Colin Brockman, of Ican Consultants.

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CALL NOW FOR YOUR FREE BUSINESS HEALTH CHECK 1800 134 820 September 2013 | Frankston / Mornington Peninsula / Dandenong BusinessTimes | 9


NETWORKING

Body language to avoid Body language can be an extremely powerful attraction or deterrent when it comes to building business relationships. There are basically four body language cues to avoid while networking. People check you out visually within the first seven seconds of meeting you. Could you be unknowingly undermining your networking efforts through your body language? If you are, meeting with new prospects or planning to host a mixer at your place of business, you’d better make sure you are not discouraging people from approaching you because of your body language. Eye contact. Are you making good eye contact throughout the conversation? Or are you looking behind the person to see who else is in the room? Some of the most powerful and successful business leaders in the world are known for the impressions they make during face-to-face meetings. Their eyes never waver from those of the person they are speaking to, making that person feel they are – at least for that moment – the most important person in the room. It’s something that anyone can do, with a little practice. Arm movement. What are your arms doing? Are they folded (“I’m bored”) or tucked behind your back (“I’m interested”)? Networking events are a great opportunity to learn more about what potential prospects need, so you can help fulfill that need. If you converse with your arms in a position that gives even a subliminal impression that you are not at all interested,

Dr lvan Misner*

Networking specialist

Tired, bored ... or both. This is not a look for successful networking

you’re not going to learn much at all. Your stance. Are you standing in a manner that is open and welcoming, or blocking people out of your conversation? Are you leaning on something, as if bored or tired? Are you unable to shake hands because you’re juggling a plateful of food? Facial expressions. Are you smiling, or holding back a yawn? Are you showing interest? What does your face say? Maintaining an interested facial expression goes hand in hand with maintaining eye contact, as already discussed above. It should go without saying that yawning

while someone is talking to you is a great way to shut them down immediately, but I have seen it more times than I can count while observing conversations at networking events. Try these two actions in the next few weeks to help ensure that you are making positive and powerful first impressions: Look in the mirror before leaving the house and ask yourself: “What message am I sending to those who are meeting me for the first time? What opinions will they have of me before I even open my mouth?” First impressions are strong, and much of your future success at sharing referrals with people you are meeting for the first time rides on how you come across. You will want to leave them with the impression that they just met a person who is alert, interested, knowledgeable, honorable, and – most importantly – trustworthy. Become more aware of your body language by getting feedback. What are you saying without speaking a word? Before you host your own event, take someone with you to a networking function and ask them to provide honest, direct feedback on your body language. Some people are very good at noticing any “red flags” and hopefully you are both comfortable with them sharing what they notice with you. It might help to provide them with a small checklist of the four factors discussed in this article. A little feedback can go a long way to helping you present yourself in the best way possible. *Dr. Ivan Misner is a New York Times bestselling author.  He is the Founder and Chairman of BNI, the world’s largest business networking organisation.  Dr. Misner is also the Sr. Partner for the Referral Institute, an international referral training company.

Online and up to the minute Businesses have a new promotion option. along with the hard copy of our magazine, our new website offers effective and attractive advertising opportunities.

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10 | BusinessTimes Frankston / Mornington Peninsula / Dandenong | September 2013


local government

PARKING PLAN BY MAY

OFF THEIR TROLLEYS

Central Frankston’s parking needs will be identified in a report to the council next May. The report will assess parking supply and demand based on development potential identified in Frankston Central Activities Area’s (FCAA) structure plan. Also, the report will: • Review car parking rates included in the planning scheme and determine whether any should be varied;

Frankston Council is targeting abandoned shopping trolleys by tightening local laws. A new amendment allows officers to issue infringement notices to store operators for each trolley “not collected in a timely manner”. Retailers have agreed to work with council on an education campaign to encourage shoppers to return trolleys to stores and trolley bays.

Call 1800 NOVABK that’s 1800 668 225

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Mornington Peninsula Shire said it expects the state government to quickly flag any proposals for commercial development in the 560-ha Point Nepean National Park. Council wants regular reports “at the earliest opportunity” about responses to the government’s call for expressions of interest for investment at historic Quarantine Station. Council is the owner under trust of the neighbouring 20 hectare Police Point Park.

• Identify sites for construction of new car parks; • Estimate the cost of car spaces based on construction and land costs; • Determine the share of costs to developers and the community; and • Identify implementation mechanisms. A consultant, expected to be engaged by the end of September, will produce a draft report for pubic consultation by January and the final report in April. A state government grant matched by council will help fund the plan.

www.novabk.com.au

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Retailers previously combined to have a full-time collection in central Frankston. However, current collectors work for individual stores so they drive past trolleys belonging to other retailers. In the past 12 months about 425 trolleys were impounded and 231 were released, costing traders $52.50 for each one. In the same period 102 trolleys were sent for crushing.

LEASES FOR TRANSFIELD Transfield has renewed five-year leases for two depots with Mornington Peninsula Shire. Annual rent on the depot in Watt Rd, Mornington, if $142,000 while that for the one in Pound Rd, Hastings, is $20,000. Transfield last year won three 10-year maintenance contracts with the shire worth $192 million. The latest leasing arrangement came in the same week that Transfield downgraded its profit forecast for the year to $62m-$65m and announced it would shed 113 jobs. The company had previously estimated its yearly profit at $85m-$90m. • 2328

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After 28 years internationally and 15 years in Australia BNI is the world’s  most successful Referral Organisation.   Members in this region reported over $9 Million in generated business  from BNI last year. We build referral networks around your business and you benefit with  long  term referral partners that lead to business and profit growth.   Why not attend a meeting your local area where you can meet and  connect with other local business and see what opportunities await you  and your business.   For your nearest group see our website or call 9782 0555

BRACE

iding • Advice on prov • Traineeships

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in RSA, • Short CoursesHandling od Fo d, First Ai ly in & Working Safe • Construction

SkillsPlus is excited to announce its partnership with BRACE Education and Training. BRACE has an extensive history of providing high quality training support to businesses across Victoria’s Western regions and is now combining with SkillsPlus to collectively offer a broader range of services to more businesses across the state. For more information on how SkillsPlus and BRACE Education & Training can help your business, please call us on 03 9784 0400 or visit our website at www.skillsplus.com.au

 September 2013 | Frankston / Mornington Peninsula / Dandenong BusinessTimes | 11  


feature: CLOUD SEEDING

nature WORK IS IN THEIR

The company run by husband and wife team Travis and Kylie Robertson stretches from the elemental to the cloud. Clearing weeds and restoring bushland seamlessly meshes with information accessed from the cloud by portable devices – smart phones and tablets. After years working for another company in the same field (Kylie, 10 years, and Travis, 5), they decided it was “time to do it our way” and eight years ago established SEEDS Bushland Restoration and Environment Education. The Robertsons remain on good terms with their former employer and believe there is enough work for both companies to survive and thrive. When they decided to go it along they were living in inner Melbourne, commuting daily to the Mornington Peninsula. Their first major job, clearing roadside weeds, led to more offers of work and a decision to live on the peninsula. A rented house in Mornington became their office and depot, with equipment and chemicals stored in the garage. They banked on their reputation to bring in more work and drew up a business plan that involved a staff of four “at the same time as having our kids”, Kylie says. “Within six months we had six people [working for us] and quickly outgrew the house, so we moved to [a rural property at] Moorooduc. It was just too hard in residential Mornington for six people to find a park every morning.” SEEDS has now been at Moorooduc for seven years, based in a portable classroom brought from Point Nepean National Park where it had been earmarked for demolition. Eradicating weeds, preventing erosion and restoring bushland is

Kylie and Travis Robertson started their business, SEEDS, eight years ago, undertaking bush

BY KEITH PLATT

e

p rewarding for the committed environmentalists. The Robertsons use “low environmental impact” chemicals and reduce their carbon footprint by planting trees. Satisfying as it is, working in the environment comes with its own hazards and occupational health and safety requirements are one of the major considerations of any job. “We have a duty of care to employ contractors who are working in a safe manner and check that they meet standards and requirements,” Kylie Robertson says. The OH&S manual for each job runs from 30 to 140 pages and includes a safety analysis, assessing each site for the impact of fire or any other type of emergency. SEEDS now has 16 employees, many who are “out in the bush each day - kind on an ideal job”. Computer tablets issued to teams working at remote sites carry all the details of the job, enabling them to keep an eye on weather or

12 | BusinessTimes Frankston / Mornington Peninsula / Dandenong | September 2013

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bushland restoration and environment education. Today the company has 16 employees.

emergency alerts and have mapping and GPS capabilities. “Any inspectors attending the work site can be shown our OH&S plans and site audit,” Trevor Robertson says. “We’re tech savvy.” “Everyone here is passionate about the environment and conservation, it’s what keeps you going all these years,” Kylie says. “It can get frustrating wanting things to shift in the environment on a bigger scale. Sometimes that’s to our detriment, being sensitive and caring so much for the environment.” A new direction for SEEDS has been environmental education, installing an “audio trail” along a boardwalk at Mt Martha for the Balcombe Estuary Rehabilitation Group (BERG). Audio recordings describing the environment at various points of the trail can be accessed by pointing a smart phone or tablet at a QR code fixed to a post. There are two choices at each of the nine audio stations, one that gives information about the location’s natural, historical and cultural significance for grown ups and the educational walk, guided by Wally the Swamp Wallaby, for five to 15 year olds. The success of the audio trail follows the failure of what seemed

a good idea to create another type of interactive environmental experience. The Robertsons bought a glass-bottomed boat capable of carrying 22 passengers over reefs and seabed. During the trip groups would listen to a marine biologist. “Someone had to be there all the time and the biologist went off and got another job,” Trevor Robertson says. Schooling the children from home added pressure to the running of SEEDS which saw the Robertsons take stock and acknowledge that bushland restoration “was 95 per cent of our business, it was our core”. “But we would love the audio trails to become part of our future,” Kylie says. “It can be hard working in the bush for so many years and these little projects help keep staff happy. “It’s also essential for the environment that people understand it and the value for mental wellbeing of spending time there.” From the Robertsons perspective, their job is all about avoiding “nature deficit disorder”. The rewards include providing healthy environments where people can enjoy the benefits of “green time”.

September 2013 | Frankston / Mornington Peninsula / Dandenong BusinessTimes | 13


OVERSEAS OPPORTUNITIES

Making the right connection BY KEITH PLATT Joe Samara is an international businessman. Smart phones, computers and, most importantly, connections in North Africa and the Middle East, make him invaluable to Australian companies seeking Arab markets. Samara has proved many times over that selling a good product can be achieved by knowing the market. 
 Distance is no problem, provided the item being introduced and sold is needed and approaches are made to the right potential customers. Although he operates from an upstairs room in his Frankston home, Samara’s overseas contacts and extensive knowledge over the past 33 years of how business operates in Middle East have made him a go-to man. He has “introduced” a range of products and technologies to the Middle East region - Saudi Arabia, AUE, Kuwait, Jordan, Bahrain, Egypt, Qatar, Lebanon, Oman and Syria. He lived in the region from 1984 to 2004. Samara chooses not to describe himself as a middleman or broker. He is more easily classified as running a “business introduction and advisory agency”. If you have a product that he believes can find a sales niche in the Middle East, he will contact suitable interested companies and accompany you on the first business trip to assess the market. Samara was born in Palestine and served with the British army’s Arab Legion from 1953 to 1970 before retiring as a lieutenant colonel. 
 He met his wife Diane, an Australian, while she was working as a nurse in Britain. They came to Melbourne in 1972. Samara says that he made “strong connections” through his military service with governments and commercial and industrial leaders throughout North Africa and the Middle East. He joined McDonalds Fast Foods in Melbourne in 1972 and over the following four years opened, operated and supervised many restaurants, including ones at Frankston, Noble Park, South Oakley, Swanston St, Geelong, Ballarat, Bendigo, St Kilda, Croydon

‘Export grants are available through Austrade and I select only companies that have potential, so there is no time or money wasted.’ and Nunawading. He says McDonalds owes its success to founder Ray Crock, an ex-military man, hiring former soldiers as company executives to manage “regimentally”. In 1978 Samara joined the non-government aid organisation Australind and managed the first refugee camp in Bangladesh after the war between India and Pakistan. “In 1980 I took the owners of a

14 | BusinessTimes Frankston / Mornington Peninsula / Dandenong | September 2013

Dandenong company making electrical automatic entrances to Saudi Arabia. In 1982 the company completed a $6 million contract to supply and installed 600 automatic entrances at Riyadh International Airport,” he says. That same year Samara was appointed vice-president of a Saudi industrial group that, by 1986, had 1200 staff and had established an aluminium and stainless steel fabrication division and glass processing plant. Another joint venture (building car covers) followed in 1992. “There was a construction boom in Saudi and the Arabian Gulf region and a need for everything to be imported,” Samara says. “Between 1982 and 2004 we were living in Saudi Arabia at compounds for executive expats.” Since 2004 Samara has continued


WORK-LIFE BALANCE

assisting Australian companies to export products, technology and know how to Saudi Arabia and the region. He established business relations with Austrade and the Victorian Department of Innovation. Australian companies he has helped “penetrate” Middle East markets over the past nine years include Ultra Tune in Saudi and Bahrain; MT Data for vehicle tracking; National Safety Agency for police and safety agencies; and Eco Australia for waste management in Saudi (landfills, domestic waste and construction waste). “I look to see what is needed in the region and find Australian technologies to suit,” Samara says. “I approach Australian companies and arrange for them a fact-finding mission to present their technologies and know how to interested local companies. “The product and know how is transferred to local committed companies in the region through exclusive distribution or joint venture legal arrangements.” Samara says he normally pays his own way for the first overseas visit. Over the years Samara has been invited to join the joint boards of the Australians and overseas companies. “I then have a responsibility to both companies and they feel comfortable together.” One of his latest projects is working with Melbourne’s Royal Botanic Gardens to introduce its Children’s Ground concept to the Al Hasa region in Saudi Arabia. “The plan is to replicate the interactive children’s play area but with trees and shrubs able to survive the desert environment. Hopefully, it will spread to other municipal regions and provide children with something to learn.” Samara has been building his “niche” in the Middle East since 1982. “Export grants are available through Austrade and I select only companies that have potential, so that there is no time or money wasted. “There have been no big failures and I will always know from the first visit if there is potential. “It is important to select the right Middle Eastern partner so there is a long lasting business relationship. “This is the experience I have gained over 35 years.”

Young pros say success is more than work Young professionals want employers to look beyond the workplace when considering career development, according to research commissioned by Certified Practising Accountant (CPA) Australia. The report into understanding the motivations of young professionals by the nation’s peak accountancy body revealed a clear message about the value of a “whole person” approach to up-skilling and career progression. Australia’s young professionals “want it all, but want it on their own terms” with personalised options for their needs. They expect organisations to value their career and personal goals in equal measure, recognising them as time-poor individuals with many demanding roles, within and beyond their work. CPA Australia said it has refined the foundation level of its CPA Program in the wake of the report’s findings. Foundation level is a stepping-stone that helps formalise training and provides a pathway to becoming a Certified Practising Accountant (CPA). The foundation level allows young workers to do things on their terms by providing both flexibility and convenience through a choice of study and exam time lines and distance learning. Rob Thomason, CPA’s executive general manager of business Development, said: “As a result of the research, we better understand the mix of ambition, personalisation and mentoring that young people are seeking in the accounting industry. “Staff want to keep up with their peers and differentiate themselves, while having access to mentors and networks – and it’s as much about their journey as their destination.” Thomason said that understanding what drives young professionals and providing up-skilling opportunities with flexibility and convenience was beneficial for all. “Employees want more guidance and organisations stand to reap ongoing benefits by assisting staff to formalise their training. Teams that train together, work better together.” The report found employees in their 20s and 30s had key needs and mindsets, including: • Work-life balance: Family and health are priorities

• Financial security: Comfortable work and family life to maintain a successful life • Recognition of the whole person: Support from the workplace in reaching career and personal goals • Inspiration: New thinking and development of new skills • Choices: They need the organisation to consider them as a time-poor individual with various roles and responsibilities The report also found that helping staff to up-skill and formalise qualifications increases the organisation’s output, ethics and governance. Melissa Mariani, assistant accountant at Phillip Island National Park, works in a small team so her role is varied and practical. “I’m not just looking at numbers and putting it in a report, so further education was essential for me. Working on Phillip Island meant distance was an issue but the foundation level allowed flexibility that I needed. “Not only did I gain additional knowledge but confidence in the knowledge I’d already acquired through my work. “One day I’d like to be the financial controller here, and the foundation level will definitely help me progress my career.” Mariani said. The report gathered insights from employers and young professionals transitioning from tertiary education into their first years of employment.

September 2013 | Frankston / Mornington Peninsula / Dandenong BusinessTimes | 15


We’re on our way ... to help you achieve your business goals.

RedBalloon founder Naomi Simson features in the TV series Top Brand.

‘Top Brands’ a Virtual success Mornington Peninsula digital media agency The Virtual Network will have its new series Top Brands screened on Melbourne’s Channel 31, premiering on 2 September. Based on interviews with entrepreneurs and business leaders behind iconic Australian brands, the 12-episode series will air on the prime 7pm slot on Mondays. Presenter Chris Blaber said Top Brands was expected to reach around 300,000 viewers over the next three months across Victoria. Sharing their strategies and views on a chieving success are RedBalloon founder Naomi Simson, Vaughan Bowen of the $1Billion ASX-listed M2 Telecom Group (Dodo & iPrimus Telecom Parent Company), cartoonist and National Living Treasure Michael Leunig, Collingwood Magpies CEO Garry Pert and Fernwood Fitness visionary and multimillionaire Diana Williams. “The series started as just a small fun idea that was designed as an online and email newsletter series to give business advice to our clientele… I could never of dreamt that it was going to reach hundreds of thousands of people and get this type of success,” Blaber said, a digital marketing strategist. “When Channel 31 contacted us to say they loved the series and wanted it to go to air as their major prime time program it was quite a shock”. Top Brands will be repeated throughout the week on Channel 31. For details visit www.TheVirtualNetwork.com.au/TopBrands or follow the series on twitter @TVN_Media.

Some of our experts Professional solutions for the South East

Pitcher Partners, a leading Melbourne accounting, audit and advisory firm, has been helping businesses like yours for more than 20 years. And soon, we will be opening an office in the South East Region to provide practical business advice and professional solutions in a location that’s convenient to you.

DOES OUTSOURCING REALLY AD UP?

For more information contact David Knowles or Vicki Macdermid on

(03) 8610 5000

Level 1, 80 Monash Drive, Dandenong South Vic 3175

Independent Member of Baker Tilly International

2322

www.pitcher.com.au/southeast

Barb Scott* Business owners will have probably heard that one of the secrets to business success is to delegate, delegate, delegate. Also, these owners would be painfully aware of the hours wasted trying to manage a long list of repetitive, uninteresting but totally necessary tasks. While annoying, ignoring these administrative tasks is risky. Owners end up with their paperwork in chaos, the Tax Office and the accountant on their backs, no idea if they are making a profit or, worse, causing the business to fail. If you don’t have anyone who can take of this work, you end up having to cram it into your already busy day. Outsourcing may be one way you can relieve yourself of the pressure and reclaim some precious time.

16 | BusinessTimes Frankston / Mornington Peninsula / Dandenong | September 2013


PROFESSIONAL SERVICES

Making a decision about outsourcing really comes down to a question about how much you value your time. Outsourcing is not just a time-management issue: money can be saved, too. *Barb Scott, is director of Admin Angels, www.admin-angels.com.au

low cost virtual offices A virtual office at Peninsula Serviced Offices Frankston offers businesses a professional image with an impressive business address, phone number, mail services and telephone answering service, all from any location. The virtual office concept targets start up companies, businesses operating a home office, as well as business people travelling frequently or operating in greater Melbourne. The serviced office team of Christine McGrattan and Sarah Dimitri offer support as clients grow their businesses. Clients have access to onsite facilities

including corporate boardrooms or meeting rooms, secretarial and administrative support as well as a free gym membership. The six virtual office packages can be tailored to client business requirements ensuring they receive a level of services required to grow a business in a cost effective way. For details about virtual offices contact Asian Pacific Serviced Offices, 9863 7888 or enquiries@asianpacificservicedoffices.com.au.

super guarantee changes There are two main changes to Superannuation Guarantee Contributions (SGC) from 1 July – the percentage increased to 9.25 per cent and the employee upper age limit of 70 was removed. So, what do you do if you are a salaried employee of your own business by way of a company or a trust, and you are more than 70 years old? It could become an administrative burden to handle this SGC if you do not have an existing superannuation fund in

Incorporating Houlgate Saint-Pern

existence. Mornington-based MBA Business Solutions see these possible solutions: • Structure your business so that no salary is paid; instead you receive either dividends or trust distributions. • If this is not possible (e.g. your business derives its income from your personal services), then there are two options to discuss with your financial adviser: - Establish a Self Managed Superannuation Fund (SMSF) which can receive the SG contributions, then pay you a tax free pension; or - If the amount of contribution does not warrant the expense of operating a SMSF, then you could consider opening a Retirement Savings Account (RSA) in which to deposit the contributions. See APRA for recognised RSA providers - http://www.apra.gov.au/super/pages/listof-institutions-offering-retirement-savingsaccounts.aspx

A Paris Group firm

Incorporating Houlgate Saint-Pern

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› Individual & Business Tax› Individual Returns Financial& Business Tax Returns › Property Investment Specialist › Property Investment Specialist Taxation › Trusts & Structuring Advice Call the office today and arrange › Trusts & Structuring Advice Call the office tod › Business Valuations your no obligation appointment. › Business Valuations your no obligatio › Financial Planning › Financial Planning 342 Main Street, Mornington 342 Main Stree › Superannuation & SMSF› Loans Superannuation & SMSF Loans team@mbabus.com.au team@mbab 342 Main Street, Mornington, 3931. › Succession Planning www.mbabusinesssolutions.com.au › Succession Planning www.mbabusinesss › Estate Planning Tel 59 70 8100, Email team@mbabusinesssolutions.com.au › Estate Planning A Paris Group Firm A Paris Gro 2330

Your Local Specialists

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September | Frankston / Mornington Peninsula / Dandenong BusinessTimes | 17 Accounting team members - Jason Beare, Dereen2013 Wallace, Amy Bignell and Irena Lioudvigova.


HEALTH

Did your footy team get up? If your premiership hopes are in mothballs, maybe you had the consolation of your political team winning. Most of us were barracking for one on election night. It always feels good to be on the winning side. We feel somehow elevated and vindicated. Why is that, I wonder? Is it some sort of hangover from more tribal times? A victory for the clan? (Regular readers have probably picked up by now that I’m into my psychology.) When you’re in the crowd at the football, cheering on your team, why do you interpret every incident diametrically differently to opposition supporter in the next seat? Why is every umpire’s call for your team justifiable, and every free kick the opposition’s way a rank injustice? How can those supporters not see that our team is in the right. And how come everything Kevin Rudd gestured was 24-carat gold but everything Tony Abbot repeated was a simplistic three-word slogan? Was it because we were dispassionately weighing up their arguments, or because we made up our minds long ago – perhaps our parents even made them up for us – and we simply barracked all the way through the election campaign. A psychologist will tell you that this is all about a phenomenon known as confirmation bias, which is our natural tendency to see only the facts that fit our beliefs and to ignore any that do not. Me? I believe Collingwood is good and Carlton is evil. Therefore, coach Mick Malthouse once he departed the Magpies and joined the Blues was instantly sitting at the right hand of Satan, and anything IRD LYB EAR CIALS SPE

Michael Ellis*

Chinese Herbalist

he says or achieves now I will interpret through this filthy lens. Now when I hear a talkback caller label him Mick Itsnotmyfaulthouse, I love it. Working as a doctor is just like being a detective. A patient comes in with a collection of symptoms, often seemingly unconnected, and you have to organise them into a meaningful pattern that allows you to form a diagnosis. A big danger for beginning practitioners is to land on a diagnosis too hastily, to ignore ambiguous signs or one odd symptom that doesn’t quite fit the picture. When you do, you can just about guarantee that your diagnosis will turn out to be wrong. The odd symptom was the key. Your confirmation bias blinded you to its significance. There are many other dangers inherent in this simple psychology. For example, it allows us to keep hold of fanciful religious beliefs even in the face of overwhelming evidence to the contrary. This is not dangerous in itself, unless they become extreme beliefs (like thinking that Carlton is OK). But it does allow us to delude ourselves. After all, when you boil them down, hardly anyone’s religious belief is the same as the next person’s. We can’t all be right and it’s entirely more likely that we’re all wrong. As I’ve written before, we

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believe what we wish to be true. A wise person once noted that on a very basic level, we are what we remember – our identity depends completely upon all of the events, people and places we can recall – to which I might add, we are also what we believe. Confirmation bias is big in the media, not only in the place you’d expect it either (the Opinion pages) but even in news reports. That’s because it is impossible for anybody, including a journalist, to see events any other way than through the prism of their existing memories and beliefs. The way an article is angled, the language the writer chooses, the emphasis given to facts, will always be coloured by the reporter’s belief system (and then by that of their editors). Really, there is no such thing as unbiased reporting; it’s a journalism school ideal. Putting all this together, it is no wonder that it became impossible to discern the truth in the Essendon supplements scandal. The truth may have been out there, but it was obscured by the biases of the various reporters (many of whom start out with club allegiances) and the outlets presenting it. At one point, one major media group was set on running the case for the prosecution and the other the case for the defence – neither really presenting the objective truth. Supporters mostly split down club lines, Bombers on one side and non-Bombers on the other. It was impossible to find anyone you could be confident was presenting a reasoned position, because of all the confirmation biases at play. Is there a health message in all this? How about this one: don’t believe everything you think. * Michael Ellis is a registered Chinese herbalist in Mt Eliza. Visit: www.mtelizaherbal.com.

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MARKETS

Value leverage and staying power Funds management can be a very good business. As long as the market has faith in a manager’s ideas, methods and nose for value, fund owners can extract extraordinary leverage. Kerr Neilson co-founded Platinum Asset Management (PTM) less than 20 years ago. His 57.8 per cent is now worth almost exactly $2 billion. Neilson’s reputation as the BT head dealer who anticipated the 1987 crash put the wind behind Platinum’s sails for many years. Its international funds became standard issue for financial planners. Neilson doesn’t claim perfection and is frank about the inevitable selection or timing mistakes, but the record is exemplary across 10 funds with annual performance of eight over 11 per cent. Neilson’s recent China report is sharply etched, pointing to the key issues of the great credit expansion (now 200 per cent of GDP), industrial over-capacity, rising wages and “late payment”. He sees the sprawling SOE’s as sucking up economic oxygen and believes the transition from asset investment to consumption to save the economy will be “bumpy”. Despite this strong record and $20 billion under management, many planners and institutions have switched their vote to two new heroes, Chris Mackay and Hamish Douglass at Magellan Funds Management. Both are very experienced investors with a strong belief in the “value investing” approach of Warren Buffet and his partner Charles Munger of Berkshire Hathaway fame. (Neilson is more of a trader and hedger). Initially support was low but their relatively simple three-pronged stratagem of contra-cyclical investment in big US and international brands, stocks that would lift

Richard Campbell* Stock Analyst

with a recovery in US housing, and stocks controlling electronic transactions gradually became a winner on steroids. The massive stimulus offered by ultra low interest rates underwrote share prices and an avalanche of in-flows began. As funds rose from $3 billion to the current $16-17 billion, investors grasped the leverage potential. On top of base fees charged no matter what happens, performance fees are charged on bettering market performance by 10 per cent plus some. The share price rose three-fold, then seven-fold. Next year profits are expected to double which explains the big gap between earnings per share and the share price – over 40 times. Magellan is enthusiastic about the resilience of US corporations and the US system, but whether it comes to grips with the next phase as QE “tapers” is another matter. The US Reserve now has to gradually off-load all the securities it has been buying with “stroke-of-the- keyboard-money” and not puncture markets. One fund manager that does have “value investment” characteristics itself is our own big financial brand AMP but, as the latest result shows, a strong brand is not quite not enough. On one measure profit fell 10 per cent. It is growing solidly with funds flow up 20 per cent this year and it has the largest fleet of financial planners, but its roots are

still in insurance which is no longer popular. Many are cashing in term policies. There is also fundamental incompatibility between the insurance mind-set and the rapidly growing Australian interest in DIY superannuation. AMP is going after that market in a facilitation role, but so are many others. Challenger Financial Services (CFG) is taking a more specialist approach with its annuity products. It writes about 80 per cent of all the local annuities – often recommended by AMP planners. With the increasing volatility of the Australian share market, compatibility with pensions and demographic changes as the baby boomers retire, annuities are growing rapidly and still represent only about two per cent of fund flows. Challenger’s retail and wholesale product flow was up 18 per cent. It is also adding boutique fund managers to get some of the performance leverage enjoyed by Platinum, Magellan and their ilk. FUM jumped 44 per cent this past year to early $50 billion, making it ninth in size and already half AMP’s FUM. Now CFG holds more than $1 billion in capital and cash more than required under APRA’s rules so the financial advice industry has new-found confidence in the way these long dated cash flows will be supported. CFG is conducting a buy back, feels confident enough to lift the payout and will part-frank dividends next year. In a country which is overly weighted to shares at a time when the US market looks heady and much of China’s infrastructure debt is non-performing, it may become a lot more fashionable to hold annuities. * Richard Campbell is Executive Director of Peninsula Capital Management, Tel. 9642 0545. rcampbell@peninsulacapitalmanagement.com.au

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CONSUMERS BRIGHT ABOUT FUTURE

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Australian consumers polled in early July believed the economy will brighten over the next five years, providing welcome news to retailers. Australian National Retailers Association (ANRA) CEO Margy Osmond said the 9.2 per cent surge in outlook recorded in the latest Westpac Melbourne Institute Index of Consumer Sentiment was the “only real ray of sunshine”. Osmond said the fall in the index by 0.1 per cent to 102.1 in July indicated that “consumers seem to be holding their breath on most major spending with a range of factors creating uncertainty”. “Usually a bellwether for shifts in spending, the deterioration in family finance predictions this month is concerning and illustrates how fragile consumers are in the current economic conditions. “Partnered with the continued political uncertainty, the Reserve Bank of Australia’s decision to keep the cash rate on hold at 2.75 per cent this month has done little to move sentiment. “Retailers will look to the federal government and the RBA board to give consumers some certainty in the second half of the year. “It’s the small wins that will keep retailers upbeat, figures showed consumer confidence remained in positive territory in July with the data showing optimists edged out pessimists and remains consistently higher than 12 months ago. “Although consumers lowered their expectations, ‘time to buy major item’ indexes remain at high levels overall, which highlights that people are saying they’re generally comfortable to go out and purchase ‘lumpy’ household items – dropping by a small margin of 1.7 per cent in July,” Osmond said.

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Australians should consider contributing a proportion of any tax refund to their superannuation nest egg after some basic forecasting suggested that doing so could deliver a significant

20 | BusinessTimes Frankston / Mornington Peninsula / Dandenong | September 2013


NEWS & CONTRIBUTIONS

understood how much money they would need at retirement age in order to meet their lifestyle goals (51.6 per cent), but only one third of respondents (32.1 per cent) said they were making extra contributions to their super fund. To estimate what a contribution of half the average tax refund would look like at retirement age, Club Plus Super assumed that half the average tax refund for the year ending 30 June, 2011 (for individuals receiving a refund and according to the ATO) earned a rate of return of seven per cent a year (the 10-year average return a year from the default investment option of the median super fund according to SuperRatings as of 30 April, 2013) and compounded that figure for a period of 35 years. Club Plus said that while the final return was an approximate figure and may vary due to a number of factors, it does suggest a significant future return that may encourage Australians to look at their tax returns a little differently this year.

JOBS UP AND JOBLESS, TOO Australia’s seasonally adjusted unemployment rate increased 0.2 per cent to 5.7 per cent in June, according to the Australian Bureau of Statistics (ABS).  The ABS reported the number of people employed increased by 10,300 to 11,668,500 in June. The increase in employment was due to increased part-time employment, up 14,800 people to 3,524,100, offset by decreased full-time employment, down 4400 to 8,144,500. The increase in total employment was mainly driven by increases in female part-time and male part-time employment. The number of people unemployed increased by 23,700 people to 709,300 during the month. The ABS monthly seasonally adjusted aggregate hours worked series showed an increase in June, up 8.8 million hours to 1,638.6 million hours. The seasonally adjusted labour force participation rate increased by 0.1 per cent to 65.3 per cent. 

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future return. Club Plus Super, an industry super fund with more than 100,000 members, has found that if half of the average tax refund of a 30-year-old was invested into the average default fund as a one-off payment, it could be worth about $12,791 when the contributor was 65. “That figure relates to investing half of one year’s tax refund but if individuals used this strategy for a decade, it may equate to a future return closer to $100,000,” said Club Plus Super CEO, Paul Cahill. “While it’s easier said than done to invest half of one’s refund, the reality is that most Australians won’t have the money they need for a comfortable retirement, so tax refunds could prove to be very valuable in addressing this problem.” Recent independent research commissioned by Club Plus Super suggested that most Australians aren’t making extra contributions to their superannuation. Of the 843 fund members surveyed, more than half of the respondents

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MANAGING

Stimulating discretionary effort Every day, your people make a large number of decisions about how they will do their jobs. Little decisions like “how hard will I work today”, “will I just do the minimum necessary to stay out of trouble” or “will I put in some extra effort, today”. Throughout each day, they make numerous decisions to either reinforce their earlier decisions or change them to increase or decrease their work efforts. As a business leader, your role is to try to ensure that they are always biasing these decisions to really make the extra effort to help your business succeed. Traditionally, many businesses operated by having very clear expectations for every employee with clear job descriptions and defined performance expectations. Employee behavior was measured against expectations and there were negative consequences when an employee did not perform as expected. These organisations would perform acceptably if they had effective supervision, but without it, the employees were not really motivated to do more that the minimum needed to say out of trouble. If you want to create an environment where your people make extra effort, the first step is to identify the systematic barriers that prevent them from doing so. For example, one barrier is our traditional system for payment of overtime, particularly where the overtime is needed because of process upsets, mistakes and other reasons within your operation’s control. In fact, employees who are asked to work overtime to fix these sorts of troubles are often motivated to create the troubles just to get the extra money associated with the overtime. I had an opportunity during my career to transition a large group of employees from an overtimebased system to an annualised salary system. After this was completed, there were many stories that came out about how they had manipulated the overtime system by creating business upsets that resulted in increased overtime. Once the financial rewards of overtime were removed, the operations generally were much smoother. Examples like this can illustrate just how important it is to challenge the basic systems of work if you are to stimulate the contribution of your people. A further key step is to create an environment where everyone knows that

Hamish Petrie*

Business Consultant

It is not easy to create a business environment where all of your people are happy to contribute to their fullest extent every day, but the efforts are well worth while and can be measured in terms of smoother operations, reduced supervision, higher productivity and happier people. they are respected, even to the extent that they know that they can debate a business issue openly, even criticising the business leader’s decisions, without fear of negative consequences. This is not easy to do and it takes continuous positive reaffirmation from the leader for this to be created and sustained. Obviously, this is an important step towards building trust so that they can feel that it is safe to make a comment or contribute an idea outside their normal job scope. When this occurs initially, it is critical that the business leader respects the positive intentions by protecting and nurturing the contributor and the idea. These contributions are opportunities for learning and business leaders must control their first desire to just evaluate the idea before thoroughly understanding it. Once you start this process of encouraging greater participation in operational decisions, it is important that you reinforce behaviors that you want to be more wide spread. This can be done best by using real examples where you can reward the individual contributor and then tell the story to the whole organisation. Rewards do not have to be entirely financial, as, often, non-financial rewards can have greater impact because your people see that the extra personal credibility as desirable. Some organisations have tried this with formal Employee of the Month type processes, but you need to be very careful with these, as they can be difficult to sustain. They can have a positive impact in their early days, but often lose credibility over time as the initial sponsor loses enthusiasm or a new leader lacks commitment to really support

22 | BusinessTimes Frankston / Mornington Peninsula / Dandenong | September 2013

the process. It is much better to have an informal process, where the business leader has a monthly checkpoint to reflect on the latest examples of discretionary effort and to choose one or more that will have credibility within your team. A perpetual issue that causes major stress within organisations is the conflict between committing more time to help your business verses having more personal and family time. I have struggled with this throughout my career and it is never easy to manage. As a business leader, it is really important to recognise this, and to try and find a way to get your people’s families on side, so that they can understand and support those occasions when your people chose to work longer hours to help your business. Again, it is the non-financial things that you do that will really make the difference. Recently, I was reminded of an occasion when I had sent bunches of flowers with a personal note to the spouses of my team thanking them for supporting their partners after a difficult period at work. Apparently, this did make a real difference at the time and was accepted as a great example to emulate. It is not easy to create a business environment where all of your people are happy to contribute to their fullest extent every day, but the efforts are well worth while and can be measured in terms of smoother operations, reduced supervision, higher productivity and happier people. Action planning questions: 1. Can you identify specific barriers that prevent your people from fully contributing to your business success? 2. How could you create a system based on an annualised salary that would eliminate the business upsets that increase unscheduled overtime? 3. Have you chosen a specific recent example of discretionary effort and rewarded it publically? 4. Do you have a monthly reminder to seek out examples of discretionary effort for recognition and reward? 5. What have you done to show the families of your people that you appreciate them? *Hamish Petrie had a 37-year corporate career including 25 with Alcoa Inc. His latest position was VP People and Communications for the Global Alcoa Corporation based in New York. He can be contacted at hamish@nitroworld.net or on 0404345103. © Hamish Petrie 2013


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Business Times september 2013