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THE NEWS WRAP: ACCC blocks Macquarie Generation sale

3:26PM | Tuesday, 4 March

The Australian Competition and Consumer Commission has blocked a $1.5 billion takeover of New South Wales government-owned power generator Macquarie Generation by AGL, citing market concentration concerns.   “The proposed acquisition would result in the largest source of generation capacity in NSW being owned by one of the three largest retailers in NSW,” ACCC chairman Rod Sims says.   “With this acquisition the three largest retailers in NSW would own a combined share of up to 80% of electricity generation capacity.   “This is likely to raise barriers to entry and expansion for other electricity retailers in NSW and therefore reduce competition.”   Building approvals jump nearly 7% in January   Building approvals have jumped by nearly 7% seasonally adjusted during January, a faster rate than many economists had expected, according to new figures from the Australian Bureau of Statistics.   Approvals for detached houses were up by 8.3%, while apartments and other dwellings were up 4.6%.   In another piece of good news, the ABS figures also show Australia’s current account deficit shrank by 19% to $10.1 billion during the December quarter, with increasing exports and declining imports.   Facebook looks to purchase drone aircraft maker   Facebook is gearing up for another major takeover, with TechCrunch reporting the company is planning to launch a $60 million takeover of Titan Aerospace.   Titan manufactures solar-powered near-orbital drones that can fly for up to five years continuously, with the social media giant reportedly interested in the aircraft in a bid to bring affordable internet access to 5 billion people worldwide who still lack connectivity.   The project is set to compete against Google’s Project Loon R&D program, which aims to use hot air balloons to provide connectivity to remote areas.   Overnight   The Dow Jones Industrial Average is up to 16416.8. The Aussie dollar is up to US89.52 cents.

The Australian tech start-up brain drain: Why are our founders heading overseas?

2:27PM | Wednesday, 19 February

It’s a conversation that regularly occupies the Australian start-up community. Despite several smash hit start-up successes, why do so many of our most successful and innovative start-up leaders take their talents overseas?   Mick Liubinskas, mentor at Telstra accelerator Muru-d and Pollenizer, believes the Australian “brain drain” to abroad (predominantly America) is a result of limited resources and small populations.   He suggests that while the accessible market in Australia is small in one sense, it ought to be regarded as an invite to lift our eyes to others.   “Part of the problem with Australia is our home market isn’t big enough to build a massive company, but it’s not small enough to make start-ups realise they have to be selling globally from the beginning,” Liubinskas says.   Limited population mass is never a death sentence. Liubinskas suggests Australia could learn a lot from countries such as New Zealand and Israel, where tiny populations have installed an accepted wisdom that start-ups need to roll-out their services internationally as quickly as possible.   It is not difficult to understand then why “global from day one” has become a mantra for the Australian start-up community.   But having the capital to establish local sales teams in large markets can be challenging. For many lean start-ups, relocating is the most achievable option.   One example of this is online business development marketplace Elto, which launched here in 2011 and followed their customer core, moving to San Francisco early this year.   Co-founder and chief executive Ned Dwyer told StartupSmart that despite Melbourne’s impressive track record with similar start-ups, it made sense to run their company from the country (and time zone) where 60% of their customers and all their major partners were.   Another key reason behind the move was to avoid regulatory challenges. Dwyer says the regulatory environment in Australia “has made things a little bit complicated for us.”   “We registered our company first in the US then created an Australian subsidiary for our local operations. We're meeting more and more companies who are doing this to make it easier to take US-based investment,” he says.   There are many other factors behind why start-ups regularly leave Australia. One of them concerns accessibility of funding, and all too often involves investors with business expertise in the right fields.   Nitro co-founder and chief executive Sam Chandler told StartupSmart many start-ups who have big ambitions have no choice but to leave Australia because the mid to later stage funding options simply aren’t available.   Launched in Melbourne in 2005, Nitro turned over $25 million 2013. Like Elto, the company is now headquartered in San Francisco.   “In the intervening period between when we moved in 2008 and today, later stage funding has basically fallen in total capital commitment,” Chandler says.   Information released by the Australian Bureau of Statistics revealed this week confirmed this. The total amount of new money committed to venture capital industry has fallen significantly, by 77% in 2013.   While Nitro were seeking skilled software marketers rather than capital when they moved, Chandler says the capital ecosystem is the biggest issue for Australia needs to fix, as soon as possible.   “As long as there isn’t an effective capital ecosystem that helps start-ups transition from early stage into the larger scaling stages, the talent and the capital will flee the country,” he says.   “The lack of government support for start-ups and early stage investors won’t hurt Australia this year, or even next. But over the coming 10, 15, 20 years, the nation will pay the price because it takes years for innovation to return on investment.”   Catherine Eibner, lead start-up advisor at venture technology accelerator Blue Chilli, agrees that the exodus of larger tech start-ups to more welcoming markets is a significant concern. Albeit, she says, one Australia can overcome.   “I strongly believe you can build a global company anywhere, especially at the beginning -- when you’re refining the idea and testing product market fit.   “It’s not just about simpler regulation. The bigger issues are access to capital and resources. We’re seeing a lot of both of the latter at the very early stages now,” she says.   Training, attracting and retaining technical talent to Australia are ongoing challenges. Convincing bright people to join emerging companies in a country still finding its start-up feet is another.   Dilip Rao, outgoing chair of Asian-focused entrepreneurial network TiE, has been building tech businesses in Australia for 30 years. He is heading to Silicon Valley to launch his next start-up.   “All start-ups look for three things in the market: markets, money and muscle,” Rao says. “The biggest challenge here is cultural. My mindset is not to look to the government to do anything, because frankly governments don’t have much to do with the success of start-ups.”   Without significant action to bolster all three resources required for a vibrant, self-sustaining ecosystem of fast-growing and lucrative tech companies, Rao says rapid cultural change is unlikely, although he remains hopeful.   “Changing attitudes and growing an ecosystem takes time, success and people coming back,” Rao says. “Maybe 2014 will be the year of inflection, and I’ll be very sorry I left at exactly the wrong time. Here’s hoping.”   We're keen to keep covering this discussion. If you have ideas and opinions to share on this issue, please get in touch: [email protected]

Funding flow slows to Australian venture capital and private equity

2:56AM | Friday, 14 February

New capital committed to Australian venture capital and later stage private equity funds slumped by $2.4 billion in fiscal 2013, down 77% on the previous financial year, the Australian Bureau of Statistics has revealed.   Australian Private Equity and Venture Capital Association chief executive Yasser El-Ansary told StartupSmart the data reinforced the need for the federal government to recommit to funding its Innovation Investment Fund and support the sector.   “We really need to get more serious here in Australia in delivering changes to our innovation framework to support investing in venture capital,” he says.   The data shows there was $704 million in new commitments made to venture capital and private equity in the 12 months to June 30, 2013, down from $3.087 billion in the previous year.   “This is the largest decrease we have seen since we first started publishing this data for the 2004-05 financial year," Tracey Rowley, assistant director of Research and Development Surveys, says in a statement.   "It appears Australian funds found it difficult to attract further capital from investors on the back of a peak capital raising period last financial year.”   El-Ansary says part of the problem attracting investment has been ongoing uncertainty in the global economic outlook, with investors being cautious about where to invest their funds.   He says he hopes the federal government resists any temptation to cut funding to the IIF as it seeks to find budget savings.   “Putting money into venture capital is hugely important to supporting innovation in Australia,” El-Ansary says, pointing out the country is currently witnessing a structural shift in the economy, especially in manufacturing.   “Government support is really a key part of the armoury that helps venture capital funds raise money from a raft of other private sector investors.   “It’s an important symbolic outcome.”   Total funds committed to venture capital and private equity funds in fiscal 2013, which comprises all money promised to funds over their lifespan, was $19.75 billion, up 3% on the previous year.

Unemployment reaches 10-year high, but it isn’t the Great Depression yet

2:28AM | Tuesday, 18 February

The unemployment rate yesterday jumped to a 10-year high of 6%, in line with predictions from economists and the Reserve Bank.   Australian Bureau of Statistics figures show the unemployment rate rose 0.1% in January, seasonally adjusted.   It’s the highest rate of unemployment since July 2003 and the Australian Bureau of Statistics estimated 3700 jobs were lost last month.   AMP Capital chief economist Shane Oliver told SmartCompany unemployment could reach as high as 6.3%.   He says yesterday’s rise was “consistent with what economists had been allowing for”.   “The RBA has signalled it was expecting higher unemployment too,” he says.   “What was disappointing was the lack of jobs growth. We thought it might go up and it’s something most economists had been looking for.”   Driving the rise in unemployment was a decrease in full-time employment by 7100 people.   The total number of unemployed people reached 728,600, according to the ABS.   However, it wasn’t all bad news. The number of hours worked increased 1%, seasonally adjusted, rising by 20.5 million hours to 1.635 billion.   The loss of full-time jobs was also partially offset by a rise in part-time employment by 3400 positions, seasonally adjusted.   Oliver says there is no need to be alarmed by the rising unemployment rate as it’s generally the last economic indicator to improve.   “As bad as the job figures are, they are always one of the last economic figures to turn around. The RBA had scope to leave rates too high for too long because unemployment figures were alright, now they’re just catching up,” he says.   “Now it’s a case of the poor economic conditions catching up with the labour market. But with the housing recovery underway and improved business hiring plans, all of those things tell me while unemployment will get worse before it gets better, in the second half of the year it will come down.”   On a state basis, unemployment in New South Wales remained steady at 5.8%, but it was bad news for Victoria where it rose by 0.2 points to 6.4%.   In Queensland unemployment also edged higher, up 0.2 points as well to 6.1%.   Tasmania once again recorded the highest unemployment rate in the country, but it remained steady at 7.6%.   The only state to record a drop in unemployment was South Australia, which fell 0.2 points to 6.6%.   Oliver says Australians can take comfort in the strong company results being reported to the Australian Securities Exchange at the moment.   “Had all the news from corporate Australian been poor, we might have been worried. But there isn’t as much negative commentary as there was six to 12 months ago, so that suggests economic momentum has already bottomed,” he says.   “Companies wouldn’t be giving out as high dividends if they were overly concerned.”   But Oliver says it will take a while for the unemployment rate to drop back to the 4% lows recorded pre-GFC.   “At the moment companies seem to be biting the bullet and getting their costs down… whereas in 2010 we had an employment bonanza,” he says.   “About three years ago everyone was complaining about the two-speed economy. The mining states were doing well, but everyone else was doing it tough… but it think we’re headed to a more balanced economy, which is something to be celebrated rather than being gloomy about it.”   This article first appeared on SmartCompany.

THE NEWS WRAP: Hockey identifies $130 billion in assets for privatisation

2:28PM | Thursday, 13 February

Federal Treasurer Joe Hockey has identified up to $130 billion in state and federal government assets that could be privatised in order to find new infrastructure investments.   “We need to facilitate private-sector investment in infrastructure and in Australia in particular, because mining investment is coming off,” Hockey told Fairfax.   “We've got to recycle precious capital – taxpayers’ capital. It's not a case of selling the family jewels, it's asking another member of the family to buy the jewels so that we can then go down the road and buy some more.   “We're not selling assets particularly to reduce debt, we're selling assets to allow us to put money into other things that are going to build the economy of tomorrow.”   Unemployment hits 6%   Australia’s unemployment rate has hit 6%, its highest level since July 2003, with 3700 jobs lost in January, according to new Australian Bureau of Statistics figures.   The figure shows 7100 full-time positions were cut, while 3400 were added, as the participation rate remained steady at 64.5%.   Victoria, traditionally a manufacturing state, recorded an unemployment rate of 6.4% – its worst since January 2002, while Western Australia saw a seasonally adjusted jump in its unemployment rate from 4.6% to 5.1%.   Tasmania recorded the worst unemployment rate at 7.6%, although this is down from 8% earlier this year.   Victorian Premier hailed as a hero for $22 million SPC Ardmona pledge   Victorian Premier Denis Napthine has announced it will chip in $22 million to refit SPC Ardmona’s food processing plant, with parent company Coca-Cola Amatil chipping in a further $78 million.   The deal specifies at least 500 staff will have to be employed at the plant for a minimum three years, and the cash payment will be repaid by the company if it leaves Shepparton within the next five years.   “This co-investment will deliver a bright future for SPC Ardmona. It is a great day for jobs in Shepparton and the Goulburn Valley, a great day for SPC Ardmona, a great day for our fruit growers and fruit industry and a fantastic day for Victoria,” Napthine says.   Australian Workers Union state secretary Ben Davis praised the state Liberal government for the pledge.   “Denis Napthine has done what Tony Abbott should have done, and there is a real lesson in this for the Abbott government – this is how you support businesses that are doing it tough,” Davis says.   Overnight   The Dow Jones Industrial Average is up to 5319.8. The Aussie dollar is down to US89.9 cents.

ABS online sales data released for the first time: reveals spending of $2.738 billion

1:32AM | Thursday, 9 January

Australians spent $2.738 billion in online sales between March to September last year, according to figures released today by the Australian Bureau of Statistics.   The ABS retail trade data has for the first time included a separate category for online sales in a time series from March 2013 to September 2013.   The data shows the proportion of total retail turnover, which was derived from online retail sales has varied from 1.7% to 1.9% between March and September 2013.   ABS statistician Paul Slater told SmartCompany the new information provided a measure of what proportion of domestic retail sales is derived from online retail trade.   “It will help measure the response of Australian retailers to the online opportunity,” Slater says.   The statistics are intended to assist in the development of microeconomic policy and follow on from data released last year which found 1.8% of retail turnover in May 2013 was derived from online retail sales and of that percentage, 40% was from pure play online retailers.   But the figures do not include international retailers’ online sales in Australia.   “The existing publication is designed to measure sales by Australian resident businesses so sales by overseas retailers would be out of scope,” Slater says.   He says there are “no plans at the moment” to incorporate international sales into the figures, an omission which the Australian Retailers Association has highlighted.   Russell Zimmerman, head of the Australian Retailers Association, told SmartCompany he welcomes the additional information but “it would be lovely” to get figures on international sales as well.   “The real assistance is going to come once we get some real comparatives going and can see how online is trading year on year, that will assist retailers who may be sitting on the fence and deciding whether to get into the online space,” Zimmerman says.   The ABS release follows the publication yesterday of National Australia Bank’s online retail sales index which recorded total online retail spending for the 12 months to November of $14.6 billion.   “The improved growth trend for online retail sales reflects almost uniform improvement in conditions at category level. In year-on-year terms, the rate of growth was up to 10.7% – faster than that observed in some recent results,” NAB said in a statement.   This article first appeared on SmartCompany.

Top five areas to start a business in 2014

1:03PM | Sunday, 5 January

When it comes to starting your own business, it can be a challenge working out what sectors have the best potential.   Business evolves with changes in technology, global developments and the whims of customers.   We spoke to Brad Callaughan, of business advisors Callaughan Partners, about which business sectors might fire in 2014 and provide lucrative opportunities.   IT and technology   Callaughan says apps and website development will be a lucrative area to start a business as internet use continues to grow.   The latest figures from the Australian Bureau of Statistics in October showed broadband downloads in the three months to June 30 surged by nearly 60% on the same period last year. Mobile handset downloads have also surged as the number of people with smartphones increases.   Businesses are also increasingly taking up technology. The Sensis e-Business Report for 2013 found that 98% of small to medium enterprises have a computer, up 3% from last year, 69% have a laptop, up 10% from 2011, and 41% own tablet computers.   The report also found small business internet penetration has grown to 96% from 23% in 1997, with 60% using a website to promote themselves.   “As there is more demand for apps with each business and the development of new apps to make life easier, there will be an increase in the demand for companies that can service this area,” Callaughan says.   “Website and IT support will again be winners with the changing technology environment.   “There will also be an increase in online activity, so business will need to be up-to-date with technology and have the best equipment to be able to support this infrastructure.”   Baby boomers   It’s well documented that Australia has an ageing population.   A recent Productivity Commission report says that the number of people aged 75 years and more is expected to rise by 4 million from 2012 to 2060, increasing from about 6.4% of the population to 14.4%.   Callaughan says our ageing population and Baby Boomers have “always provided numerous business opportunities”.   But he suggests people think outside the box of just aged care housing and consider the numerous needs people have as they age and move into retirement, highlighting travel as a potential area ripe for growth.   “There will be more opportunity for services like tours and travel agents that cater to travel for retirees,” he says.   Fitness, health and beauty   With Australia ranked as one of the fattest countries in the world, the fitness and healthy living industries are likely to remain popular, and lucrative, fields to start a business.   Industry researcher IBISWorld estimates the gym and fitness industry makes $1 billion in annual revenue and is expected to grow by 4.8% a year over the next five years. IBISWorld also estimates the hairdressing and beauty services industry rakes in annual revenue of $4 billion, with the sector expected to grow by 1.3% a year for the next five years.   “Healthy living is becoming more popular but there is still a lack of knowledge surrounding clean living,” Callaughan says. “There will be opportunities within this sector to create businesses that can educated and provide healthy living services, including gyms, health food providers, consultants and pre-packaged food.”   He recommends looking to the US to see how they have approached the sector.   Callaughan says fitness, health and beauty can also tie in with the ageing population.   “There could be opportunities for gyms that cater to over 50s that have certain machines that help you work out but don’t cause injuries. You will also not have to compete with other young gym goers.”   Freelancing   Freelancing has become a popular buzz-word recently, as websites that link people to work on projects rise in popularity.   The successful listing of Australian-based online site Freelancer.com this year has also sparked interest in this way of working.   Freelancer’s shares surged to as high as $2.60 on the Australian Securities Exchange from their initial public offering price of 50 cents. The shares have since retreated to trade at around $1.05 at December 12.   “I just feel that with the recent success of Freelancer there will be more businesses looking to enter this area,” Callaughan says.   “There will also be more businesses that become freelancers and offer services to a larger range of businesses.   “The range of services that will be offered will also be expanded to include everything and anything that can be outsourced for not only businesses but individuals as well.”   Online retail   Australians have embraced online retail and are spending billions of dollars through the internet.   And it’s a trend that’s continuing to grow, albeit at a slower pace recently than seen previously.   According to the National Australia Bank’s Online Retail Sales Index, Australians spent $14.4 billion online in the 12 months to October, equivalent to 6.4% of traditional retail spending. It says monthly online sales grew by just 0.3% in October, the same as September and only marginally better than August when sales fell 0.2%.   Callaughan says online selling has taken off and will continue in 2014.   “There will be many opportunities open up in this field with even the large department stores moving to online retail,” he says.

THE NEWS WRAP: Coles and Woolworths close to fuel docket deal with the ACCC

12:29PM | Tuesday, 3 December

The Australian Competition and Consumer Commission is close to reaching a deal with Coles and Woolworths over fuel docket vouchers, which could place a cap on discounts.   A deal would see the competition regulator continue to allow the retail giants to offer discounts, while preventing the offers spiking to 40 cents off per litre.   It is hoped a deal, which could be announced by Christmas, will take the political heat out of the issue, after independent retail groups called on both sides of politics to outlaw the practice entirely prior to the last election.   Retail sales figures beat forecasts   Australian retail sales beat analysts’ forecasts during the month of October, according to new figures from the Australian Bureau of Statistics.   The figures show a 0.5% increase for the month, following a rise of 0.9% in September, beating analysts’ forecasts of a 0.4% rise.   The result marks the sixth consecutive month of increases in retail sales, with results up in all states and territories except South Australia.   Dick Smith shares expected to trade strongly after listing   Shares in electronics retailer Dick Smith are expected to trade strongly after listing today.   The mid-cap retailer expected to reach a market capitalisation of $520 million just one year after being sold to private equity firm Anchorage Capital Partners for just $94 million by Woolworths.   “We are opening a fair few stores in coming days,” Dick Smith chief executive Nick Abboud says.   “Eight shops in basically four weeks, it's fairly significant. There wouldn't be many retailers opening eight shops in four weeks and this is where the excitement is for us, and more so for fiscal 2015 because you get a full year [of new stores].”   Overnight   The Dow Jones Industrial Average is down to 15903.6 The Aussie dollar is up to US91.42 cents.

How to hire the right people for your start-up

10:39AM | Monday, 14 October

We all know about the ‘war for talent’ and the importance of getting the right people to join your team, but in a start-up it can make all the difference between whether you succeed or fail.   Particularly in the early days, the days are long, the budgets are tight and the chances are if you’re lucky enough to be drawing a salary, it will be small, as profits are put back into the business. According to the Australian Bureau of Statistics, over half of businesses fail within three years in Australia, so it’s important you hire the right people to give your business the best possible chance.   I set up the Zendesk Melbourne office in 2011 with two people that I had hired over the phone: a salesperson and a customer support person. Since that time we’ve grown to 30 people in Australia and 45 across the Asia-Pacific region. Next year we will double that number. It doesn’t matter who you’re hiring, here are a few things to consider:   1. Hire for attitude   You might be running a technology start-up, having developed some incredible software that is set to transform businesses all over the world. The potential candidate doesn’t need to know everything about the technology or your market, they just need to have the right attitude and you need to be confident they’ll get the job done. You don’t need ‘thinkers’, particularly in the start-up phase, you need doers, and lots of them.   2. Find the self-starters   Hire people who don’t necessarily have the ambition to run their own company, but have a high self-esteem, who push your organisation to do right by your customers, and take pride in seeing a job done well. People talk about team players, and it’s important the candidate can work in a team, particularly as there aren’t too many places to hide as a start-up. You need people, particularly in sales roles, who can motivate themselves, take the knocks and get straight back up again.   3. Forget the questions   My hiring routine for many years has been to meet candidates at the office and talk about our company while introducing them to various members of the team. I learn a lot from first impressions, especially from how and who the candidates choose to interact with, and perhaps the intimidating experience of running up and down stairs with me talking. Then it’s coffee time, with a couple of slightly left-of-field questions, to see again how they react. I have only ever scared one candidate away.   4. Be flexible with the role   As start-ups and business owners, you wear many different hats, so it’s important to define the role you want your candidate to fulfil initially, but also for them to understand that it will evolve. Do they understand what the job involves? Have you been honest with them about what your expectations are? And that they can influence and make their own role as the company grows? So many businesses will embark on a search but won’t determine who they’re looking for. The candidate might be able to fulfil the role but would they fit culturally in your organisation?   5. Don't settle   It’s tempting to hire someone because they’re available and you need someone as soon as possible. But don’t settle. Be sure that you think they’re the best person for the job and your start-up and if they’re not, you might need to so some additional work to ensure you find the right person. Good people and great people make all the difference.   6. Have some fun   It’s important to have fun, so take a break and ensure your team enjoys their work. Nobody can sustain working all hours around the clock. It’s important to take a break, have a beer and recharge. Your team are your best ambassadors for your company, so if they’re enjoying their work, chances are they’ll tell someone about it and that person could be your next superstar hire.   Michael Folmer Hansen is vice president and Asia Pacific managing director at cloud-based customer service software provider, Zendesk.

THE NEWS WRAP: Unemployment rate “unexpectedly” falls, again

10:29PM | Thursday, 10 October

Australia’s unemployment rate has dropped to 5.6%, with the number of people employed growing by a seasonally adjusted 9100 in September, according to the latest monthly labour force figures from the Australian Bureau of Statistics.   The figures show the number of people in full-time work increased by 5000 while the number of part-time positions was up by 4100. However, the participation rate dropped to 64.9%, its lowest level since November 2006.   Unemployment fell in South Australia (6.8% to 6%), Western Australia (5% to 4.6%) and New South Wales (5.9% to 5.6%), remaining steady in Queensland, Tasmania and the Northern Territory, and increased in Victoria and the ACT.   Woolworths calls on liberalisation of WA retail laws   The West Australian Chamber of Commerce and Industry has joined Woolworths in calling for more flexible retail trading laws, saying small businesses could adapt their business models to compete with a “less-restrained” Woolworths.   “A Woolworths petrol station can sell film and flash bulbs on Sundays before 11am, but it's illegal to sell a memory card for a digital camera at this time; can sell cigarettes before 8am on Mondays, but it's illegal to sell nicotine patches at this time,” a Woolworths statement says.   “Those small businesses that are in competitive markets are the ones that have become most productive and most efficient over time because they've had to, to survive,” WA Chamber of Commerce and Industry chief economist John Nicolaou says.   Potential reprieve in negotiations over US debt ceiling   US House Speaker John Boehner has proposed a short debt-limit increase with no policy conditions attached, providing a temporary reprieve from the threat of a US Treasury debt default.   While Boehner’s proposal would not end the US government shutdown, it would provide more time for negotiations over an increase to the US debt ceiling, providing a month-long reprieve from the threat of a debt default.   “The president is happy that cooler heads at least seem to be prevailing in the House, that there at least seems to be a recognition that default is not an option,” says White House press secretary Jay Carney.   Overnight   The Dow Jones Industrial Average is up 2.2% to 15126.1. The Aussie dollar is at US 94.53 cents.

THE NEWS WRAP: Twitter files papers for $US1billion IPO

10:25PM | Thursday, 3 October

Social networking giant Twitter has filed papers with the US Securities and Exchanges Commission ahead of an IPO in which it seeks to raise $US1 billion.   The company revealed that it had 218 million users as of June 30, compared to around 1.2 billion for Facebook and 240 million for LinkedIn.   Twitter also revealed it lost $US69.3 million during the first half of 2013, compared to a $US49.1 million loss for the same time last year, but revenues grew to $US254 million from $US122 million.   Turnbull names Switkowski as new NBN chairman   Communications Minister Malcolm Turnbull has named former Telstra and Optus chief executive Ziggy Switkowski as the chairman of NBN Co.   The German-born nuclear physicist replaces current NBN chairwoman Siobhan McKenna, while also temporarily replacing Mike Quigley as chief executive until a full-time replacement is appointed.   “In appointing Dr Switkowski to the board as chairman, we're appointing one of the most experienced telecom executives in Australia ... someone who's been the CEO of not just Telstra but Optus as well, a very distinguished company director and chairman," Turnbull says.   Retailers renew calls for GST threshold cut as online shopping figures are released   The Australian Bureau of Statistics has released figures showing consumers spent more than $7.6 billion on online retailers on purchases below the $1000 GST threshold, prompting calls to remove the low-value threshold.   Australian Retailers Association executive director Russell Zimmerman says the higher than expected sales point to an uneven playing field in the sector between local retailers and overseas-based online retailers.   “The concern isn't that people are spending money online – either locally or overseas. The concern is that it's not a level-playing field,” Zimmerman says.   “We believe that the firm of online [shopping] generally will grow, and as that figure grows, there will be a bigger loss of income to the states and territories if they don't do something about the low-value threshold.”   Overnight   The Dow Jones Industrial Average is down .9% to 14996.48. The Aussie dollar is at US93.96 cents.

THE NEWS WRAP: Myer calls on Abbott to curb penalty rates as its profits fall 8.7%

9:46PM | Thursday, 12 September

Myer has reported its full year profits fell by 8.7% to $127.2 million, with chief executive Bernie Brookes blaming penalty rates for the result.   Brookes used the announcement to call on the incoming Abbott government to restrain from further penalty rate increases.   “The increases in penalty rates that we've suffered under, through the general retail award and the Fair Work Act, have been substantial,” Brookes said.   “They've made us uncompetitive on a world scale and our view is that we're not looking for a winding back of those penalty rates.   “What we are looking for is stopping the continued escalation of them, particularly on Saturdays and Sundays, and after hours during the week.”   Unemployment rate hits 5.8%   Australia’s unemployment rate hit 5.8% in August, a post-GFC record, with youth unemployment climbing to a massive 17.3%.   The figures from the Australian Bureau of Statistics also show 2600 full-time jobs and 8200 part-time jobs were lost, with a further 7.8% of the workforce under-employed.   The unemployment rate in Tasmania hit 8.6%, with a further 18.5% under-employed.   Bega launches $320 million takeover bid for Warrnambool Cheese & Butter Factory   Dairy giant Bega has launched a $320 million takeover bid for Warrnambool Cheese & Butter Factory, based in south-western Victoria, offering 1.2 Bega shares and $2 cash for each Warrnambool share it doesn't already hold.   Bega currently owns 18% of Warrnambool, while rival Murray Goulburn Co-operative (which trades as Devondale) is the second largest shareholder with 16.3%.   A takeover deal will see Murray Goulburn become Bega’s largest shareholder, while also gaining $18 million in cash from its rival.   “If you seriously look at the dairy industry, it is a truly global industry. There's a great opportunity out there in the marketplace, but there's also significant competition. And when you have a look at that competition it's generally very scaled competition,” Bega chairman Barry Irvin says.   "This deal is about making sure we can take our place."   Overnight   The Dow Jones Industrial Average is down to 15300.64. The Aussie dollar is down to US 92.66 cents.

It’s going to be a Good Day Girl: New fashion business has designs on tailored profits

8:07AM | Tuesday, 6 August

A fashion start-up is seeking to chart new territory around the challenges Australian retail is facing by offering a limited edition pre-order salon service partnered with an online offering.   With the website launching tomorrow, Good Day Girl will offer 20 items per season, each available in five fabrics for pre-order to the purchaser’s exact size. Each season will be open for orders for three weeks only. Customers will receive their garments six to eight weeks later.   The new initiative was formed six months ago when Eclettica’s Alexia Gnecchi Rusconi and Mr Rose’s Sophie Toohey joined forces.   “We’re two independent small businesses merging into one. It’s about collaborating and using our strengths to get more done. We were both doing a thousand things and were keen to do a few less,” Toohey told StartupSmart.   The latest figures released by the Australian Bureau of Statistics show Australia’s retail sector is continuing to struggle, with sales in June flat compared to May. Clothing and soft goods sales were down 0.2% in June from the previous month.   Toohey says because they will only be making items that are ordered, they’ll avoid the problem of excess stock.   “This is about keeping it really tight, and we’ll be working really close with our customers for future season designs,” Toohey says. “We won’t be left with surplus, and that’s the biggest drain in retail business, offloading excess stock. It’s sad when you design, create and make it and then have to work out how to get rid of it.”   They’re also banking on the burgeoning online and pre-order purchasing.   “We’re hoping that because of how online retail is going pre-order, other consumers will get to understand the benefits, especially those who have issues finding clothes that fit them well,” Toohey says, adding they’re offering sizes four to 20.   Good Day Girl customers can buy online or in their Paddington boutique. Clothes will be made in Sydney and China.   “We’re launching a two-pronged approach, website but also salon experience,” Toohey says.   “Customer service background is essential to us, and we want to develop personal relationships with our customers whether it’s online, chatting through the site, or in the salon.   Toohey says they’re hoping to reach 100 customers for their first season, and they’re confident they can, as they have all the customer details from their previous fashion businesses.   Toohey adds the feedback they’re receiving from their customers suggest the personal focus, styling support and ability to make sure clothes fit is increasingly important to customers keen to avoid mass-produced retail.

Airtasker and CareerOne partner to expand job opportunities

7:35AM | Wednesday, 17 July

On-line Australian start-up Airtasker has joined forces with internet job search website CareerOne to make short-term work opportunities available to full-time job seekers.   Airtasker, which was founded last year, connects people and businesses seeking to outsource everyday tasks such as deliveries, office work or odd jobs around the house with trusted, reliable people able to complete those tasks.   Under the partnership, CareerOne’s 1.3 million monthly job seekers will be paired up with relevant task-based employment opportunities on Airtasker while searching for full-time jobs on CareerOne.   Airtasker’s co-founder and chief executive, Tim Fung, explained to StartupSmart that under the partnership, if someone searched for a media job on CareerOne, tasks on Airtasker that might relate to the search, such as a graphic design project, would show up in the search results.   “We get to distribute our content in a really big user environment,” he says of the connection with CareerOne.   Fung says revenue generated under the partnership would be shared between Airtasker and CareerOne but declined to provide details.   He says CareerOne, which is a joint venture between News Corp and Monster Worldwide, is not taking any equity in Airtasker under the deal and that Airtasker would remain an independent start-up and everything on its platform “stays as is”.   CareerOne’s chief executive, Karen Lawson, says in a statement the partnership with Airtasker enabled job seekers to tap into all types of employment opportunities in one place as the number of casual and flexible job types grow.   “Employers, whether they be businesses or individuals are increasingly looking for people to help with individual tasks or short-term projects,” she says.   “The burgeoning ‘task economy’ is a natural extension of the online job market and we see plenty of opportunity for both job seekers and employers to benefit by making it easier for them to connect.”   The statement says that, according to the Australian Bureau of Statistics, 13.1% of the workforce were looking for more work or were “discouraged” jobseekers unable to find work because employers consider them too young or old, lack necessary training or experience, or cannot find a job locally.   It says the figures signal an emerging opportunity for more flexible, task-based employment for Australians seeking additional work.   Fung says Airtasker is looking at opportunities to expand overseas.   Airtasker generates revenue by taking 15% of the final price agreed for a task to be completed between the person needing a task done and the person who completes the task.

Commercialisation Australia quarterly snapshot reveals $178.1 million going to 430 companies

7:45AM | Friday, 12 July

The latest edition of Commercialisation Australia’s Value Proposition publication has revealed where government funds are going to support start-ups at the commercialisation stage.   New South Wales received the most funding, with $56.8 million going to 110 companies. Queensland has the most businesses and researchers funded, with $36.1 million going to 114 companies.   Businesses focused on health and medical ($44 million), business and communication ($29 million), and energy, mining and resources ($26.1 million) are receiving the majority of the $178.1 million in funding.   The leading industry achieving funding in South Australia ($5.4 million), Victoria ($11.7 million) and New South Wales ($16.1 million) was health and medical.   Mining, energy and resources was the leader of industry investment in Western Australia, at $10 million. Only two companies in the Northern Territory received funding, totalling $650,000.   The defence and security industry received the most investment in the Australian Capital Territory with $2.4 million, and food and agriculture in Tasmania at $887,000.   Of the 430 businesses or researchers receiving funding, 18% are in regional Australia.   Doron Ben-Meir, chief executive of Commercialisation Australia, wrote it was hardly surprising regional small and medium-sized business had more negative views about the economy than metropolitan ones, according to recent findings of the Australian Bureau of Statistics.   “Aspiring entrepreneurs in the vastness of regional Australia confront many challenges not faced by their city contemporaries, from a lack of readily available to expert advice to a plethora of communication and transport issues,” he wrote. “Yet the regions have a critical role to play in keeping the economy vibrant, with primary industries alone making up close to two-thirds of Australia’s exports.”   David Mac Smith, a Commercialisation Australia case manager, described access to capital as especially hard.   “Money is always an issue, because access to funding is significantly worse than in the cities,” Smith says in the magazine.   “One of the consequences of this undercapitalisation is that businesses grow at a slower rate.”   The full report and previous issues can be downloaded here.

The News Wrap: RBA says slower economic growth the norm

7:20PM | Wednesday, 3 July

Reserve Bank of Australia governor Glenn Stevens says slower economic growth is likely to be the norm and warned both major parties not to deviate from commitments to return the budget to surplus.   "The importance of a strong commitment to fiscal responsibility will, if anything, be heightened in the future, given that significant challenges exist over the medium term in funding government initiatives that the community appears to want," Stevens said in a speech to economists.   Stevens also stressed the importance of “principled and consistent” policy-making to help revive business and consumer confidence.   Retail sales figures show consumers keeping wallets shut   Australian shoppers are continuing to keep a tight rein on their spending, according to the latest retail sales figures.   Australian Bureau of Statistics figures show retail turnover barely rose in May, gaining only 0.1%, seasonally adjusted. The bureau also revised down the previous two months, with April now recorded as a 0.1% fall and March a 0.6% fall.   ''The broader picture is that while consumers are spending, they are selective with where they spend their money. And retailing has been missing out,'' said CBA economist Gareth Aird.   Chinese targeting mining sector   China’s state-owned enterprises and private companies are preparing to buy and invest in distressed mining assets ahead of a forecast return to higher commodities demand, The Australian reports.   It says fund managers, bankers and transactional lawyers are indicating that activity is starting to pick up again.   “Our prediction is that some time in the next six to 12 months, China’s new leadership will ramp up the economy again,” private equity fund manager and China-watcher Jason Chang says.   Overnight   The Dow Jones Industrial Average closed up 0.38% at 14,988.55 points. The Australian dollar is down 0.02% at US90.86 cents.

THE NEWS WRAP: Banks attack hack notification law

6:23PM | Sunday, 23 June

The Australian Bankers Association has attacked a proposed new law forcing its members to notify customers when their security has been breached by hackers.   The bill is one of 50 being considered by Parliament in its final sitting week before the federal election on September 14.   “The real cost to banks involved with this legislation is the actual notification to affected customers," ABA policy director Ian Gilbert said.   "The breach may have arisen beyond the bank's control. For organisations with large customer bases, the notification requirement may result in a disproportionate cost compared with the possible harm caused by the breach."   Jobs growth in the retail sector   The retail sector added 34,000 jobs during the May quarter, with the number of people working in the sector up 47,000 year-on-year, according to the Australian Bureau of Statistics.   The jobs growth coincided with a seasonally adjusted 3.1% year-on-year growth in retail turnover during April.   “In real terms, sales in the year to March were stronger for durable items like vehicles (up 17%), furnishings and house equipment (up 4.1%) and service items such as health (7.1%), education (up 2.8%), insurance and finance (up 3.4%), communications (up 2.6%) and recreation and culture (up 0.8%),” said Citi economist Josh Williamson.   Another Newspoll disaster for Gillard as Conroy considers new media reforms   Labor’s primary vote has fallen to just 29%, while Julia Gillard’s support as preferred prime minister fell from 35% to 33%, according to the latest Newspoll, which also shows the government now trails the opposition 57% to 43%.   Meanwhile, Communications Minister Stephen Conroy has flagged the possibility of taking further media reforms to the federal election, after the government’s previous media reform package failed to gain support from key independent MPs in March.   “Obviously the policies weren't able to pass Parliament, they are dead, we wouldn't be proceeding with them or pursuing them. So we are having discussions among ourselves about what to take forward to the election," Conroy said.   "We have to reconsider all of the options, reconsider what we think we can achieve, and that's what I'm talking to my colleagues about at the moment."   “Labor's media regulation package was a classic example of Conrovian over-reach and mismanagement. Labor do not understand the importance of free speech and the primary role an independent media plays in our democracy," shadow communications minister Malcolm Turnbull said.   Overnight   The Dow Jones Industrial Average closed up 0.28% to14799.4. The Aussie dollar is buying US92.24 cents.

THE NEWS WRAP: Rupert Murdoch divorces Wendi Deng

6:32PM | Thursday, 13 June

News Corporation chairman Rupert Murdoch has filed divorce papers in the New York Supreme Court, ending his marriage of 14 years to his third wife, Wendi Deng.   Deng is best known for preventing comedian Jonathan May-Bowles from throwing a pie at Murdoch at a hearing into the News Corp phone tapping scandal.   News of the divorce comes as Murdoch prepares to separate News Corporation into an entertainment company called 21st Century Fox, which will hold the company’s film and television assets, and a “new News Corp” which will own its publishing interests.   AustralianSuper in the market for a merger   AustralianSuper chief executive Ian Silk has revealed the $62 billion super fund is looking at mergers and acquisitions, with the $1.6 trillion retirement savings sector set to consolidate over the coming years.   “It's pretty clear that the regulators and public policy is pushing in the direction of a smaller number of large funds rather than a large number of smaller funds,” Silk says.   “If we are true to our label and true to our beliefs that we exist only for the benefit of members, then we should continue to grow so long as that growth adds value for members.”   Slight improvement in unemployment rate, due to lower participation   The unemployment rate fell slightly, from 5.6% in April to 5.5% in May, reducing the prospects for further Reserve Bank rate cuts.   According to the Australian Bureau of Statistics, the drop was led by 0.1% drop in the participation rate, with the number of full-time jobs down by 5300, offset by the creation of 6400 part-time jobs.   The shift to part-time work was reflected in the number of hours worked, which fell 0.7% to 1.63 billion hours for May.   Overnight   The Dow Jones Industrial Average is up 1.21% to 15,176.08. The Aussie dollar is up to US96.47 cents.

THE NEWS WRAP: One in four Aussie workers miss out on overtime pay: Report

5:23PM | Sunday, 5 May

More than one in four Australian workers are not being paid for their overtime, according to newly released figures.   The Australian Bureau of Statistics data shows that one in three employees spend more time at work than they are contractually obliged to.   However, 26% of the workforce, around 800,000 people, do so without compensation, with female employees more likely than their male counterparts to do unpaid overtime.   Pacific Brands’ warning about major retailers   Pacific Brands chief executive Peter Bush has warned about the growing market power of Coles and Woolworths, along with the potential damage they could inflict on smaller suppliers.   "I am not a big believer in regulation. I am a big believer in self-regulation. But I am also someone who believes everyone should have a fair go. And I think the important thing in this process is that there needs to be a level playing field… I am certainly not convinced there is," Bush says.   “If you are a small supplier and you want to have your product listed with the major chains – anywhere, whether it is in liquor, apparel or on the supermarket shelf – it’s going to cost a lot of money. It is pretty tough.”   Abbott under pressure over paid parental leave scheme   Tony Abbott is coming under increasing pressure from economic dries within his party and conservative think tanks to abandon his paid parental leave scheme, with Coalition MP Alex Hawke writing an essay attacking the proposal for the Institute of Public Affairs’ IPA Review.   “As the Labor Party continues to expand the welfare state and re-regulate our labour market, the Liberal Party must be mindful not to join them in adding to the burdens on our businesses… At a potential cost of $4.3 billion, a parental leave scheme at full pay would be an unjustifiable impost on business at a crucial time in the economic cycle,” Hawke says.   “Alex Hawke is saying what many Liberal MPs think and privately admit - Tony Abbott's paid parental leave scheme is unnecessary, unaffordable and unjustified," IPA Review editor James Paterson says.   “It is a truly bizarre situation to have the Liberal Party going to the next election promising a higher rate of company tax than the Labor Party, particularly when Australia already has one of the highest rates of company tax in the world.”   Overnight   The Dow Jones Industrial Average is up 0.96% to 14,973.96. The Aussie dollar is up to US103.13 cents.

Why Australia’s not as expensive as you hear

4:55AM | Friday, 26 April

On Wednesday, the Australian Bureau of Statistics released the latest update on its quarterly inflation gauge, the consumer price index.   Consumer Price Index figures tend to overestimate inflation because they assume people keep buying the same thing in the same quantities even as it gets more expensive. But no one’s got much incentive to do that this year. Inflation’s only risen 2.4% all up, and has slowed to 0.4% this quarter.   The Reserve Bank of Australia aims for an inflation figure between 2-3%, which means we’re comfortably in the safe zone.   You wouldn’t know that from some of the headlines we’ve read.   A report released by Deutsche Bank got a wide run in the media this week. It showed, supposedly, that Australia was the equal most-expensive developed country in the world (tied with Japan).   It’s not the first such report to show this. Only last month, the Economist Intelligence Unit said Sydney was the third most expensive city in the world, and Melbourne the fifth.   But don’t believe the headlines. There’s something profoundly disingenuous about the way these indexes are reported on.   They’re intended to be useful for multinational corporations thinking about where it’s cheapest to send their staff. A large company expanding into Belgium, for example, wants to know how much it’ll have to cough up to set up an executive in relative comfort there.   Such surveys don’t take into account average wages in Australia, which determine whether or not people afford the high prices. They just take the price of various things, convert to US dollars, and compare. It’s not a complicated or nuanced analysis – you could do it in a few hours if you wanted to. But given the way journalists report on these things, it’s free publicity, so hey, why not.   With a high Australian dollar, it’s no wonder Australian goods come up expensive on such surveys.   I’m not saying these surveys are useless. For multinational corporations typically earning money in American dollars anyway, they serve a purpose.   But they mean nothing to Australians who live and earn in Australian dollars.   The only reason we’re more expensive than other countries is because we have more money: our economy is at its long-run average and our currency is near record highs. Unemployment is low, as are interest rates. We can afford to spend a bit more, and we do. And our high currency, while it makes things more expensive for multinationals expanding here and gives our exporters some grief, actually makes things cheaper for us to buy things off the internet, and so helps keep inflation down.   If you were in the United States, the cheapest place in the developed world according to Deutsche Bank, your business would be struggling, if you’re not entirely out of work. But, yes, food and accommodation would be cheaper.   Australia’s not expensive for us. And it isn’t getting that way either.   This story first appeared on SmartCompany.

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