Welcome

A 'no frills' budget, tax reviews and a looming election have certainly kept the Australian business market on its toes in the last few months. Meanwhile the tumult of the European financial markets reminds us that no country, currency or government is immune to the flow-on effects of the global financial crisis.
Close to home, changes brought about by the Budget and The Henry Tax Review, will keep business from the top end of town to the sole trader, occupied on a practical level.

With over 720,000 small companies poised to benefit from new tax rates, this measure, we hope will trigger renewed optimism and wise spending decisions in the market.

Best wishes for 2010,
Diane Humphries, CPA
Director | Cameron Recruitment

Budget time and The Henry Tax Review 2010

The May budget did not produce any shocks to the market but let loose a grab bag that attempts to appease all sectors of the market and takes on some of the key findings of The Henry Tax Review.

Headline items:

Tax changes

It's good news for taxpayers, bad news for tax agents and accountants. 6.4 million people could choose the new Government option, introducing a standard deduction clause for taxpayers that will allow them to deduct $500 of work-related expenses from 2012-13. The allowance will increase to $1,000 from 2013-14. The 30% tax threshold for all taxpayers increased from $35,000 to $37,000.

Skills

The Government will spend more than $660 million in training, apprenticeships and adult literacy and numeracy programs in the next four years.

Financial services

The government will encourage savings by providing a 50% tax discount on the first $1,000 of interest earned on deposits, bonds, debentures and annuity products. There will also be a phase down on the interest withholding tax rate on interest paid on offshore borrowing, to encourage foreign institutions into the market.

Small business Vs big business

The Federal Government has given small business a boost in its response to The Henry Tax review, cutting the corporate tax rate by 2% from 2012 and allowing the immediate write-off of assets worth up to $5,000.

The cut comes in response to findings from The Henry Review which suggested the current rate of 30% is too high compared to other OECD countries (that rate is about 5 percentage points higher than average for small to medium sized countries).

The most controversial issue is that larger mining companies will be slugged with the new 40% super tax on profits under the new Resource Super Profits Tax in order to fund the Government's new initiatives.

The Government has framed the reform as a "stronger, fairer, simpler" tax system. Many mining companies both in Australia and overseas strongly disagree.

The new tax is set to deliver the Government an extra $9 billion in revenue by 2013-14, offsetting the costs of the response of the various new initiatives. The most costly of these is the cut in the company tax rate, which will cost $2 billion by 2013-14, while the instant write-off scheme will cost $1.03 billion.

Corporate Tax

All businesses will see their tax rate reduced to 29% from the 2013-14 year, with a further 1% cut to follow during the 2014-15 financial years. Small businesses (those with turnover under $2 million) will receive the full benefit from July 1, 2012.

The reduction to 28% will now put Australia's corporate tax rate below those of Spain, New Zealand, Luxembourg, Norway and Mexico. Around 720,000 small companies are set to benefit from the measure.

Superannuation

The superannuation guarantee levy will be increased to 12% from the current rate of 9% over the next decade, with the first two increments worth 0.25% to be introduced on July 1, 2013 and 2014.

The extra contributions are set to generate an extra $10 billion in superannuation by 2020 and $35 billion by 2035.

The perfumed boardroom

The scarcity of women in Australian boardrooms has finally captured the attention of industry and regulatory leaders. Men currently dominate the board rooms of Australia's top 200 listed companies, with women comprising about 8% of directors and 2% of chairs, according to the Equal Opportunity for Women in the Workplace Agency.

A recent report by Goldman Sachs JB Were states that closing the gap
between male and female employment rates "would boost the level of
Australian GDP by 11% ".

The effects of this status quo pushed Woolworths and IAG chairman and former QANTAS CEO James Strong to call for greater diversity on boards and for it to become a management priority.

"There's no question that the current situation is not acceptable. There are not enough women on boards. It's similarly not acceptable the rate at which they are coming through the pipeline."

Late last year, the Australian Institute of Company Directors launched a major program to boost the number of women in Australian boardrooms.

The AICD recommends that boards set targets for female representation, in line with their particular industry, and publish statistics on the number of women among its executive and board ranks.

Other AICD measures to improve workplace and boardroom "diversity" include having more family-friendly work policies, mentoring programs for female directors and databases of likely female candidates for board roles.

The situation also moved the ASX Corporate Governance Council in early May to recommend changes in areas including gender diversity. Under the proposals, ASX-listed companies would have to establish and disclose a diversity policy, including measurable objectives for gender diversity. They would then have to report annually on their achievements against the target as well as on the proportion of women employed at various levels in the organisation.

The Council also recommends expanding the principles and recommendations to include consideration of diversity in candidate selection processes for board appointments.

It would certainly push Australia into line with international practice.
Norway introduced legislation in 2002 that required 40% of all board members
to be women, with Spain and the Netherlands following suit. Other countries contemplating passing similar laws include Belgium, Britain, Germany, France
and Sweden.

Australian Sex Discrimination Commissioner Elizabeth Broderick said, "we need to kick start this process of gender equality", fully supporting the view that quotas are a useful means of forcibly imposing greater equality between men and women in the boardrooms of the nation.

Cameron Recruitment would be interested in your views on the effectiveness of a quota system as described.

Time to think about social media at work

The humble resume may fast become an endangered species. Recruiters and HR executives have long recognised the limitations of the traditional resume which includes issues associated with validating resume information or the lack of guarantee that the contents of the resume will be complete, relevant, or accurate.

In market situations where there is a skills shortage making poor hiring decisions proves to be a costly mistake. Which is why the hunt for resume alternatives is on the rise.

The fast pace of change in recruiting is being driven by technology and social networking. The once mandatory CV is being superseded by a number of developments. Here are a few to keep an eye on.

LinkedIn:

With over 50 million profiles and 60,000 people signing up everyday, LinkedIn is the hub for professional online networking.

Unlike Facebook, it is light on the personal details and heavily targeted at the professional business user. Viewed as a public online calling card for your professional history, and a high activity trawling site for recruiters and head hunters, there is a strong level of accuracy when posting details of employment history. Publishing details in the public domain means people are more likely to keep the truth in check compared to a resume they send to an employer privately.

Video Resume

While still an emerging concept, it is primarily used by international head hunters and globally focused job seekers. A video resume allows the viewer to see and hear a candidate talk about their capabilities and work history as well as provide answers to common interview questions. Some candidates are starting to include a link to video footage on their standard CVs.

Uniform online applications

Many companies with strong online identities such as Fairfax Media and the ABC, request candidates complete a standard online application form, with drop down boxes and little or no free-text entry required. Many even disregard the need for a cover letter. This has the double benefit of easily and clearly enabling candidate comparisons as well as avoiding employer data entry or document screening chores.

Assessment centres

Often used in high-volume recruiting opportunities such as travel, call centre, customer service or defence service roles. Assessment centres allow prospective employers to observe a candidate's abilities and aptitude in a simulated work environment. With the focus on practical role plays, this removes the reliance on well-practised answers or standard reference check questions.

Online reputation

Being head hunted is always flattering, but the difference these days is how quick and easy it is to identify candidates that are both eligible and suitable purely through their online presence.

Being an active blogger or expert in your field or being quoted in the media can build an overall view of your expertise. Moving forward your digital footprint will prove more important, as increasingly, employers will go online first to find out about brand "you".

Seeking Speakers

As part of Cameron Recruitment's regular breakfast series we are holding a seminar on "Selling HR to the Board". We would love to hear your experiences and now seek board members, senior managers and HR professionals as speakers who have been successful in "selling" HR to their organisation.

Please contact Kylie Petroff
on or call 8853 7838.