Westpac has announced plans to topple NAB as Australia’s biggest lender to business by 2017, as competition between banks over the SME sector heats up. The bank has already increased the number of business lenders and appointed Julie Rynski as its first senior executive to manage the sector. “We believe we can significantly expand our share of the market after investing in our business banking arm,” Westpac’s head of business banking, Jason Yetton, told Fairfax. “It's a big market, growth is improving, and I think we've got a good capability in this segment.” China records strong export growth in November China’s General Administration of Customs has released figures showing a 12.7% year-on-year increase in exports during November, beating analysts’ forecasts. Total exports for the month increased to $US202.2 billion, while imports were up 5.3% year-on-year to $US168.4 billion. China’s overall trade surplus was up to $US33.8 billion, up from $US31.1 billion in October and significantly above the median forecast of $21.7 billion tipped by economists. Labor calls for partial renationalisation of Qantas Shadow treasurer Chris Bowen has called on the government to consider all options to help Qantas, including a partial renationalisation, after ratings agency Standard & Poor’s downgraded its credit rating to junk status. “A small stake would send the signal to debt markets around the world and to finances that this was a body with which the government had a keen interest. That is one of the options on the table that we'd look at constructively,” Bowen says. However, his call has been dismissed by Prime Minister Tony Abbott, who says the government’s job is to create an environment in which the airline can operate profitably. “Businesses have to operate profitably and in the end they have to operate profitably because of their own decisions and from their own resources,” Abbott says. Overnight The Dow Jones Industrial Average is down to 5186.0. The Aussie dollar is up to US91.36 cents.
Australia has secured an historic free trade agreement with its fourth-largest trading partner, South Korea, with the Abbott government claiming the deal will grow exports to the nation by 73% over the next 15 years. The deal will see South Korea scrap tariffs on a range of Australian commodities, including wheat, sugar, dairy, wine, horticulture, seafood, resources, energy and manufactured goods. However, it acknowledges that some sectors, including steel, auto manufacturing, steel, textiles, clothing and footwear will face increased competition from Korean businesses. “Independent modelling shows the agreement would be worth $5 billion between 2015 and 2030 and boost the economy by around $650 million annually after 15 years,” Prime Minister Tony Abbott says. “We wish to appreciate the impact upon our budget and our economy, not least of all we want to ensure that Australian jobs are supported and maintained and Australian opportunities are available in the future to make sure our national interest is advanced,” Opposition Leader Bill Shorten says. Qantas warned its debt could be downgraded to junk bond status Moody’s has warned embattled airline Qantas it is considering downgrading its credit rating to junk bond status, with the ratings agency tipping a full-year loss of up to $868 million. The news comes as Qantas warned of a first-half loss of up to $300 million, its first since being privatised, with the carrier announcing plans to axe more than 1000 jobs. The airline is also considering sell-downs of its Jetstar businesses in Australia, Singapore and Japan, as well as a partial sell-off of its lucrative frequent flyer program in a bid to shore up its position. Holden set to announce it is pulling out of Australia early next year Holden has reportedly made the decision to shut down its Australian operations as soon as 2016, with an announcement set for early next year. Citing “senior government ministers”, the announcement was set to be made this week, but was delayed on account of continuing discussions with the government. A decision to pull out would cost South Australia 13,200 jobs, along with $1.24 billion in economic activity. Overnight The Dow Jones Industrial Average is down to 15810.9. The Aussie dollar is up to US90.67 cents.
Mining tycoon Andrew “Twiggy” Forrest has publicly backed a controversial decision by Treasurer Joe Hockey to block the takeover of GrainCorp by US agribusiness giant Archer Daniels Midland. In a speech to the Australia-China Senior Business Leaders' Forum, Forrest pointed out that of 130 foreign takeover bids reviewed since the September election, the GrainCorp takeover was the only proposal rejected. “In the case of GrainCorp, the decision was necessary given the concentration of power in a near monopoly situation. “The upshot is whenever you have got such concentration of market power there, consideration needs to be given to more than one set of stakeholders, the shareholders.” ANZ hit with massive class action over bank fees ANZ has been hit with the largest consumer class action in Australian history, with law firm Maurice Blackburn taking action over excessive bank fees. Andrew Watson, the head of class actions at Maurice Blackburn, says the bank’s fees don’t accurately reflect the costs of minor transgressions. “The fees range, but $25 to $35 is the sort of range for fees that are imposed, so you might be a dollar over on your account or a day late in your payment and the banks will slug you with a fee that's out of all proportion to what it costs them for that minor transgression," he said. "We think it's worth [in total] about $50 million, but overall we're running a case for 170,000 bank customers against eight major banks, and that's worth about $220 million." Virgin attacks federal help for Qantas Virgin chief executive John Borghetti has called for Virgin Australia to receive the same support from the federal government as its arch-rival, with Treasurer Hockey refusing to rule out using public funds to prop up Qantas. “There have been media reports that the government offered comfort letters to Qantas’s credit rating agencies, prior to our capital raising,” Borghetti says. “I would also note that if Virgin Australia had been afforded the benefit of such a letter, it would have enabled us to achieve superior outcomes from both the recent debt bond issue undertaken in the US market and the capital raising that is underway.” Overnight The Dow Jones Industrial Average is down to 5314.3. The Aussie dollar is up to US91.36 cents.
When Gabrielle Thompson and Shannon Gunn quit their jobs as shoe designers for a big company a few years ago and decided to branch off on their own, they knew they needed to build up their business skills quickly. “We’re definitely designers first, and we weren’t especially business-minded,” says Thompson, who says the training programs and incubator programs they went through were critical to the ongoing success of their shoe and accessory label Tom Gunn. “It’s no good designing beautiful things if you can’t get it out there and get it sold,” says Thompson. “We had a lot to learn about managing the business side, how to bring your product to market, and cash flow. Cashflow is always a challenge for fashion business.” The pair graduated from the Creative Enterprise Australia Fashion Incubator run by Queensland University of Technology in 2010. Thompson and Gunn share the designing, but have separate areas of business responsibilities. Thompson says Gunn looks after the finances, the stores, visual merchandising and marketing, and she looks after the production and manufacturing. One of the key challenges they’ve had to grapple with as fashion design entrepreneurs is manufacturing issues. They did their own manufacturing until they realised the required price-point was just too high and then went searching for Australian manufacturers, but ended up having to go with a Chinese manufacturer. “Before us, there weren’t really independent shoe designers in Australia,” says Thompson. “Shoes are quite hard; there is no manufacturing so it’s hard to start selling as you grow. We have to go overseas. It’s a big step to start out.” In March this year their creative work was recognised by winning the fashion category in the 2013 QANTAS Spirit of Youth Award. They will be mentored by the team at Zimmerman for the next year. They now have over 15 stockists and have launched their own boutique in Fortitude Valley, Brisbane. They successfully ran a Melbourne pop-up store last year and plan to launch a Sydney one soon. “We’d love one in Sydney and we’re working on it. But it’s quite complicated because we really need to work in it and on it ourselves, so we need to get down there and no one wants to lease something residential for such a short time,” says Thompson. She adds that organising insurance for short periods, and creating a quality fit-out that matches the price range of their stock (shoes can be over $400 a pair), is challenging too. “The whole experience has been a dream come true. A dream with a lot of hard work!” says Thompson.
Surfwear giant Quiksilver has missed second quarter revenues and sales targets, announcing that it will dump non-core brands and liquidate excess inventory, placing further pressure on embattled rival Billabong. Quarterly losses at Quiksilver blew out to $US32.4 million, up from $US5.1 million a year ago, as revenue fell 6.8% to $US458.7 million. “Asia-Pacific revenues fell 9%, with the shortfall driven by headwinds in the Australia wholesale market. But we were pleased to see solid positive comp store sales growth in our full-price retail stores in that market,” Quiksilver chief financial officer Richard Shields said. Echo attacks Crown as Sydney casino battle intensifies Echo Entertainment chairman John O'Neill has lashed out at James Packer-controlled rival crown, alleging the casino giant is waging a “smear campaign” against Echo chief executive John Redmond as part of its campaign to win a second Sydney Casino licence. According to reports, the leaked emails allegedly detail an internal investigation by Echo into whether Redmond fell asleep in one of the bars at its Star Casino just weeks before taking over as chief executive. “These allegations are entirely baseless and the timing of this cheap smear campaign comes as no real surprise," Mr O'Neill told The Australian. Virgin looks to spread its wings further into Asia Virgin Australia is looking to begin running flights to Singapore using its long-range Boeing 777 or A330 aircraft in a bid to strengthen its alliance with Singapore Airlines. For its part, Singapore Airlines has purchased 19.9% of the shares in Virgin, with Virgin in turn recently cleared to take a controlling stake in Singapore Airlines controlled low-cost carrier Tiger Airways Australia. The move comes as Qantas moved its new international hub to Abu Dhabi in the United Arab Emirates. Overnight The Dow Jones Industrial Average lost 0.06% to 15,238.59. the Aussie dollar is down to US94.64 cents.
Boeing has warned of delays in deliveries of its 787 Dreamliner jumbo jets, with the aircraft grounded by air safety regulators in several countries as a result of overheating batteries.
China’s State Council has unveiled new energy conservation plans that would see the nation dramatically cut the growth rate of its coal consumption.
Australian musician Clare Bowditch will accelerate the development of her side project Big Hearted Business after smashing her $26,450 target on local crowdfunding platform Pozible.
G’Day USA has returned with a vengeance in 2013, with more than 25 events set to showcase Australian business capabilities, marking the 10th anniversary of the promotion vehicle of all things Australian.
Businesses large and small are rushing onto Twitter and Facebook in an attempt to engage with customers.
The healthcare and social services sectors now employ more people than any other industry in Australia, according to results from the 2011 Australian census.
Climate Friendly, a business that helps households and companies reduce their contribution to climate change, has been named the City of Sydney Business of the Year 2012.
I see so many start-ups that simply waste money, unintentionally (I've invested in them).
In the previous post on Being Unique I discussed what a unique selling proposition (USP) is and how vital it is to a successful business.
Prime Minister Julia Gillard has urged business and union leaders to “speak up” for the Australian economy in order to take advantage of the opportunities provided by Asian markets.
Australia needs to review the level of assistance given to specific industries to better help businesses that are struggling, according to a Productivity Commission report.
Facebook’s share price slumped by 11% on its second full day of trading, sparking debate that the tech giant’s stock was given an overvalued initial price.
Google is asking the High Court to overturn a finding that it published misleading and deceptive advertisements, in a case that will have big ramifications for online advertising.
The Federal Government has announced it will fast-track the assessment process for skilled US workers coming to Australia. Under the agreement, US tradespeople will able to complete a skills assessment before coming here. It will mean faster processing times for 457 visa applicants and better job security. The changes are designed to deal with the skills shortage in the construction and resources industries. Jetstar faces fine over pilot pay Qantas offshoot Jetstar could face hefty fines if allegations are proved that it hired trainee pilots from New Zealand on individual contracts but did not pay them superannuation and charged them for training in Australia. The Fair Work Ombudsman launched legal action yesterday against Australian companies Jetstar Airways Pty Ltd and Jetstar Group Pty Ltd, and New Zealand entity Jetstar Airways Limited. Ombudsman Nicholas Wilson alleges Jetstar Airways Limited breached workplace laws when it hired the trainee pilots on individual contracts in New Zealand, when it was foreseeable they would work predominantly in Australia. Rates tipped to remain on hold Economists are not expecting the Reserve Bank to cut interest rates today, despite a low inflation rate creating favourable conditions. According to the monthly TD Securities-Melbourne Institute Inflation Gauge, the annual rate of inflation has reached a two-year low of just 1.8%. However, none of the 24 economists surveyed by Bloomberg are expecting the RBA to cut the official cash rate when the board meets later today. Overnight The Australian dollar has risen after the release of strong manufacturing data in the US. At 6.30am, the local unit was trading at 104.27 US cents, up from 104.07 cents yesterday.
Liberal premiers are working to take control of the Federal-state agenda to overcome obstacles in the Gillard Government’s process, and pursue new reforms following the election of Queensland Premier Campbell Newman.