We would like to take this opportunity to wish you all the very best for the festive season and a happy and successful New Year. We would also like to thank you for your continued support throughout the year. Please note that the office will be closed from 5.00pm on Tuesday 21 December 2010 to 9am on Tuesday 4 January 2011.
Paid Parental Leave Scheme
The Paid Parental Leave ("PPL") Scheme commences from 1 January 2011 and employees have had the opportunity to register for the PPL Scheme as of 1 October 2010. The PPL Scheme remains voluntary for employers up until 1 July 2011. If employers choose not to administer the payments up until 1 July 2011 the Family Assistance Office will pay the employee directly. From 1 July 2011, the employers must administer the payment to the employee. No action is required by employers until 1 July 2011 however a proactive approach to the PPL scheme is recommended to ensure a smooth transition to the Scheme.
The following should be done now to prepare for the Scheme:
- Consider the chances of employees taking PPL and what impact this could have on the business.
- Gain an understanding of the obligations under the PPL Scheme.
- Determine whether registration to the scheme should be undertaken prior to 1 July 2011 and communicate this to employees if the situation arises.
- Review administrative and payroll software procedures for any changes that may be required.
- Employers can register now for the PPL Scheme with the Family Assistance Office
Education Tax Refund
Legislation has recently passed to expand the Education Tax Refund so that school uniforms are included as eligible expenses. The refund will be available for school uniform expenses incurred from 1 July 2011.
The Year That Was - 2010
2010 was certainly an improvement on 2008 and 2009, however there were still many problems affecting Small Medium Enterprises (SMEs).
Economic growth was approx. 3%, and unemployment approx. 5.1%. The inflation rate is just under 3%, cash rate (as set by the Reserve Bank of Australia) was 4.75% on the 6 December (not quite the 5% forecasted at the beginning of the year) but it is expected to continue to rise in early 2011.
The relationship between the Australian dollar and US dollar has fluctuated; it is currently around 98¢ to the US$1. The strength of the Australian dollar, as compared to forecasts at the beginning of the year (when most economists thought it would average at around 82¢ for 2010) indicates the strong pressure being suffered by the US economy, higher interest rates in Australia and Australia's safe haven image.
The Chinese economy has continued to grow and this has been the most significant event that has enabled Australia to avoid many of the problems associated with the global financial crisis. Banks have continued to tighten their lending criteria and, unfortunately, liquidators are forecasting increased activity for their profession during 2011. The Fair Work Act is now fully operational and a number of prosecutions have already been conducted against small business and significant fines assessed for alleged misdemeanours against the Fair Work Act requirements. This highlights the necessity for SMEs to be fully aware of their obligations under the Fair Work Act, or to retain competent industrial relation advisers.
The economy is still running on a two speed basis around Australia, with Western Australia and Queensland benefiting from the mining boom, but even within Queensland there are still major problems with some mining operations not back to full production and the high value of the Australian dollar is causing havoc for many tourism operators.
Cashflow management continues to be the No. 1 concern for many small businesses; debtors' days' outstanding is still very high (approx. 54 days) and, with banks adopting tighter lending criteria, it highlights the necessity for SMEs to be very vigilant in their cashflow management activities.
If you would like to discuss any aspects of your business' preparation for 2011, please do not hesitate to contact us.
Avoiding Christmas Function Problems
Work related functions and events are a major high risk zone for businesses. Just think of the problems that have occurred at one major retailer in the last year. With Christmas 2010 fast approaching, perhaps it's appropriate to review planning for Christmas functions. A recent webinar conducted by Workforce Guardian titled "Christmas Headaches - Functions and Events" referred to the following issues:
- A significant number of complaints and law suits relate to events organised by an employer.
- Protecting employees' health and safety is the employer's responsibility.
- Workplace policies should still apply at a Christmas event, where the same responsibility applies to the employer as it would if the event was held on the employer's premises.
- If an event is being held at the company's premises, it will be considered a work event.
- If a work related activity is being organised at off-work premises, in virtually every case, it will be considered a work event.
- If managers are going to leave the function and no senior person is left in charge, then the function should be shut down.
- Care should be taken when hosting events at another venue. Even when the event has finished and some employees have moved to another venue, if the manager "shouts drinks" and the company pays, should any problems emerge from that post function event, the company will probably be responsible.
Workforce Guardian advise that, by making appropriate preparation, you can prevent disasters from occurring including:
- send out an email in advance, advising of the event and indicating to employees that normal workplace behaviour standards will be expected at the work related event;
- plan the event in advance because employers have a responsibility relating to protection of employees;
- if you are going to hold a work event in a large bar area that you cannot restrict other people from attending, then perhaps you should move to another site where you can control access to your event;
- prior to the event, have a meeting with the venue management, advising them what your employment policies are and, in particular, insist that food is served with alcohol; and
- a senior manager should be in charge and he/she should adopt a no drinking stance for that function.
Courts have ruled that employers are responsible for safe onward travel after a work sponsored event. Think about providing taxis for your employees/spouses/partners to ensure their safe return to home.
Investment Allowance Reminder To Install The Asset
Installation by 31 December 2010:
If you are an eligible small business (turnover under $2M) and you ordered an eligible asset, for investment allowance purposes, prior to 31 December 2009, you can claim the 50% investment allowance if you install the eligible asset by 31 December 2010.
If your turnover is over $2M:
If you ordered an eligible asset prior to 31 December 2009 and your turnover is over $2M per annum, you can claim 10% investment allowance, if you install the eligible asset by 31 December 2010.
Managing Cashflow In Holiday Period
A number of industry commentators have indicated that they believe that sales in the Christmas and New Year period this year will be lower than many business people's expectations. This looming problem will place additional pressure on many businesses to effectively manage their cashflow over the next 3 months. Some suggestions for effective cashflow management at this time include:
- prompt despatch of invoices as soon as a sale is complete (rather than waiting till the end of month);
- prompt despatch of November debtors' statements;
- follow up any overdue amounts;
- closely monitoring stock re-orders to determine whether stock reordering can be delayed until the following month so as to move the cashflow commitment away from the holiday period;
- contacting major suppliers now and making arrangements for delayed payments for stock purchases; and
- preparing a realistic cashflow forecast covering the next 3 months (if the cashflow forecasts indicate that short term financial assistance will be required, contact your bank now to discuss assistance).