Biosecurity levy must not go ahead: industry

Australian industry groups have joined together rejecting the flawed biosecurity levy. They have issued the following statement:
The Australian Government announced a biosecurity levy in the 2018 budget due to be implemented this July that is significantly flawed.
As Australian industry participants we would like to formally register our deep concern regarding the proposed biosecurity levy and urge the Government to remove it from the 2019 Budget.
Industry welcomes the Government’s recognition on the need for an Industry Steering Committee to better inform Government on improving the proposed Biosecurity levy scheme design.
This announcement is acknowledgement the current proposal is flawed and fails to recognise the damage the levy would do to the competitiveness of the freight supply chain, key export industries and the cruise sector, as well as the higher costs for consumers.
While no announcement has been made regarding the membership of this Committee or its Terms of Reference, it is essential that participants represent all industry groups who form part of Australia’s biosecurity and that this Committee be given enough time to consider and present a workable proposal for the Government’s consideration.
To ensure the Committee has flexibility in developing a fair and equitable model, it is therefore imperative that this Biosecurity Levy be removed from the 2019 Budget to enable this work to be completed.
The protection of our natural and agricultural assets is vital to this country from both an environmental and financial perspective. The industries represented in this statement are part of Australia’s biosecurity system and take their roles seriously. Which is why we believe in impactful and informed solutions to strengthening Australia’s biosecurity system.
Industry’s main concerns with the process to date are:

  • The rushed nature of a tax designed without fully understanding the potential for far-reaching economic consequences.
  • Additional and unnecessary costs – particularly to Australia’s tourism, manufacturing, agriculture, mining, energy and construction industries.
  • Flow-on costs to consumers.
  • Confusion as to why a new biosecurity tax is required over and above the Australian Government’s biosecurity charges that are currently in place for sea-freight (extensively reviewed in 2015-16) and the passenger movement charge for the cruise sector.
  • That a biosecurity risk assessment and regulation impact statement has not been undertaken by the Australian Government to inform the development of the proposed biosecurity tax.
  • A lack of clarity on how the Australian Government would collect the proposed tax.
  • No guarantee that all revenue raised by the proposed new tax would be used to support Australian biosecurity measures.

We urge the Government to remove the proposed levy from the 2019 Budget and provide a genuine opportunity to industry to help design a fair and equitable model that improves Australia’s biosecurity ability.

Record iron ore export out of Port Hedland

Two million tonnes of iron ore was exported out of Port Hedland for the first time overnight.

The milestone was achieved on the morning and evening tide on 28 April 2014, resulting in a total of 2,028,105 tonnes exported.

As a result, the port managed 24 vessel movements in the 24 hour period.

It is understood iron ore production capacity expansions from the port's major users, BHP Billiton, and in particular, Fortescue Metals Group is behind the increased export volumes.

 The month of April also saw a new record achieved for the largest amount of product exported on a single tide, with 1,111,109 tonnes on 6 April 2014.

However it’s not all good news for Australia’s best-known commodity.

Iron ore prices took another slide overnight, down 2.3 per cent to US$108.60.

As a result, iron ore miner shares were down in early trade with BC Iron losing 3.3 per cent, FMG down 2.5 per cent and Mount Gibson Iron Limited also down 2.5 per cent.

As always, the major diversified players were more sheltered with Rio Tinto down 1.1 per cent and BHP 0.7 per cent.

The skittish reaction to the iron ore spot price fall comes amid mounting speculation a flood of oversupply will come online, coupled with credit worries out of China.

Reuters reports China’s banking regulator has urged local authorities and banks to step up investigations into iron ore financing deals in a bid to minimise default risks.

This raised fears that commodities-backed financing will halt and cause an oversupply as ore is sold from ever-growing stockpiles.

New EFIC research shows Aussie SME exporters optimistic on Asia and Oceania growth

An Export Finance and Insurance Corporation (EFIC) report reveals that Aussie SME exporters’ confidence has risen, with 36 per cent of active SME exporters expecting overseas sales to increase in the next 12 months. Overall, 94 per cent said exports will increase or stay the same.

The research surveyed 853 active SME exporters to seek their views on international growth in the face of challenging domestic conditions. 

As a result of an expected increase in sales, 30 per cent of SME exporters surveyed also anticipate the profitability of their international operations to grow in the next year, with a total of 95 per cent expecting profitability to grow or remain the same.

When asked to identify which export markets would be most important in 12 months’ time, the SME exporters, who generate an average 13 per cent of their annual revenue from overseas, largely pointed to regional opportunities. Nearly 80 per cent think Asia and Oceania will be the most important market over the next year, with China, India and South Korea all expected to become more important.

Even for most of those who aren’t predicting growth over the next year, it is ‘business as usual’ with 58 per cent expecting overseas sales to stay the same and 65 per cent anticipating no change in the profitability of their international operations.

Currency in the shape of the falling Australian dollar was overwhelming identified by SME exporters as the reason for increases in overseas sales at 71 per cent. Many SME exporters of all sizes also noted the negative effect a dropping AUD/USD rate is expected to have on their cost base. 

The research also asked SME exporters to identify the factors that they believe impact on competitiveness, with market access (54 per cent), access to finance (28 per cent), and logistics seen as the main impediments. Almost 20 per cent expect access to finance to get more difficult over the next three months, and get harder going forward.

When it comes to expected changes in the cost of exporting, smaller SMEs anticipate an average increase of 9 per cent compared to the largest SME exporters who forecast an average increase of 5 per cent.

EFIC Managing Director, Andrew Hunter said the research had shown access to finance was perceived by Australian SMEs as an increasing obstacle to overseas growth. SME exporters report that difficulty in accessing finance can hold them back from maximising opportunities in foreign markets. 

This indicates a key role for external bodies, from both Government as well as industry bodies, including EFIC, Austrade and DFAT to help SMEs access much-needed funding and market access, as well as provide advice and education on overseas expansion.

He added that despite these challenges, the research is testament to the robustness of Australia’s small exporters in the face of rapidly changing markets. Exporters are predicting the highest growth in overseas activity to be in agriculture, forestry and fishing, mining and construction.

Cutting freight subsidy will harm Tasmania: exporter

One of Tasmania’s biggest exporters has criticised the recommendations made in the Inquiry into Tasmanian Shipping and Freight.

The ABC reports that Paper giant Norske Skog’s general manager Rod Bender gave evidence at the Productivity Commission inquiry and said that companies will not want to do business in the state if subsidies decrease.

As PS News reports, the Commission’s draft report found that there are problems with the design and operation of the Tasmanian Freight Equalisation Scheme (TFES), Bass Strait Passenger Vehicle Equalisation Scheme (BSPVES) and the Tasmanian Wheat Freight Scheme (TWFS).

According to Commissioner Karen Chester, the schemes are outdated and they do not achieve what they are intended to achieve.

Bender challenged the conclusion that exporters are being over compensated by the schemes. He said that rather than being overcompensated by 33 per cent, as the draft report concludes, Norske Skog is actually under-compensated by 27 per cent.

"Businesses like ours will make different strategic decisions about either coming to Tasmania in the first place, or investing here and building on their operations that exist already," Bender said.

"I think what you'll find is businesses will largely look to schemes like this, important schemes like this to make sure that they're making prudent decisions strategically."

North Queensland coal export terminals close as cyclone approaches

Glencore and BHP have suspended shipments at their ports as Cyclone Dylan bears down on the North Queensland coastline.

The tropical low is about 250km northeast of Townsville and is already recording winds of 120km/h.

The storm is expected to form into a category one cyclone this afternoon, before it makes landfall somewhere between Lucinda and Proserpine in the early hours of Friday morning.

Glencore's Abbot Point terminal, BHP Billiton's Hay Point terminal and the Dalrymple Bay terminal have all suspended shipping as a result of the cyclone, Platts reported.

Around 20 ships that were waiting to load coal exports at the Dalrymple Bay terminal moved further out to sea this week because of rough seas.

The terminal are not allowing ships to berth until the storm passes.

A total of 31 ships were not able to load cargoes at the three affected Queensland coal terminals, representing about 4.5 million Mt of coal exports.

Port Hedland breaks iron ore export records, again

Port Hedland has posted another record month of iron exports to China, with 25.2 million tonnes of the steel making ingredient that sailed away easily beating the previous record highs of 23 million tonnes set in both May and June this year.

Shipments to China rose by 10 per cent as miners move to optimise efficiencies and increase production to take advantage of a stable iron ore price.

Iron ore production capacity expansions from the port's major users, BHP Billiton, and in particular, Fortescue Metals Group is behind the increased export volumes.

October's result comes on the back a productive year for one of the world’s largest iron ore terminals, with record levels set in April, May and June.

The port’s general manager said exports are not showing any signs of slowing down.

"We're expecting further targets, uptrends for the next year and we're forecasting about 320 million tonnes of port throughput for the 2013/ 2014 financial year,” John Finch said.

"We're still fielding a lot of enquiry for demand. Not only have we got the large iron ore players BHP and FMG in the port at the moment, but we've got Hancock Prospecting and the North-West Infrastructure Group planning their new developments for the next few years ahead as well,” Finch said.

The continuing price strength of iron ore comes as the slowing demand from China usually seen at this time of the year has failed to come into play.

"China has been restocking after record levels of iron ore imports over the past few months," Deutsche Bank strategist Xiao Fu said.

"We expect the pace of restocking could slow. However, we are still below the 2011-12 (inventory) peaks, which suggests that the restocking cycle could last for another two or three months.                                                                

Environment Minister to visit Abbot Point as decision on approval looms

Federal Environment Minister Greg Hunt will visit Abbot Point coal terminal today as the decision to approve or reject its proposed expansion draws closer.

Hunt last week delayed making a decision on the project until December 13, stating more time was needed to assess its potential impacts.

Hunt is expected to meet with the fishing industry, tourism operators and business representatives during his tour.

The $6.2 billion expansion of the coal port would see four additional coal terminals built; which would provide an extra annual capacity of 120 million tonnes and would support the developments in the Bowen, Surat, and Galilee Basins of Queensland.

Combined with other port expansions, this latest development would make Abbot Point one of the world’s largest coal ports, boasting seven terminals and a capacity of almost 300 million tonnes annually.

There is strong support from Bowen locals who want to see the expansion go ahead with more than 600 hundred people attending a rally in July urging the Federal Government to back the project.

However environmental activists are calling on the expansion to be dumped with concerns that dredging at the site will have widespread impacts.

WWF Australia spokesman Richard Leck said the government would have no choice but to dismiss the proposal, The Chronicle reported.

“Once all impacts are fully considered, we believe the government will have little choice but to eventually reject this application for Abbot Point and rule out Reef dumping altogether,” Leck said.

While Greens Senator Larissa Waters has also called on the government to reject the project.

“There’s a proposal for three million cubic metres of dredging in the Great Barrier Reef world heritage area and then dumping that sea bed right back into marine park waters,” Waters said.

“The sediment doesn’t sit where it’s placed, it can move.”

Government to look at potential exports stopped for security reasons

Federal Defence Minister David Johnston plans to look into the practice of blocking potential exports of defence industry products for security reasons. 

Adelaide Now reports that the national defence export control office has the power to prevent exports for security reasons. As a result, the business goes elsewhere.

Senator Johnston has experience working in the defence sector and he wants to ensure that no potential exports are prevented unnecessarily.

"We want you to invest, we want you to make a profit and we want to assist you to export," Senator Johnston said in Adelaide last week.

He pointed to the example of a Western Australian company which wanted to export $27 million worth of a particular type of metal it wanted to export to the Middle East but was not permitted to do so. 

He said that the company had no avenue to question the decision or to lodge an appeal against it.
"I think that's an area where I am going to make some significant changes in the way we go about our business,” Johnston said.

"So the challenge for me facilitating what you do out there in this very important area is to have an export office that is quite dynamic, that anticipates the problems, and understands that you must succeed in your commercial endeavour."

However, Defence Teaming Centre chief executive officer Chris Burns said he had only had one experience of the export control office preventing an export on such grounds.

"We need to look more closely into what the causes are before we say it's a particular office," Burns said.

"I would certainly say the experience we had with a South Australian company, it wasn't the export control office, it was the (former Defence) minister sitting on the clearance."

Gap widens between SME business needs and government policy

A recent study reveals the hidden potential in mature SME businesses across the country, and what needs to be done to help these businesses grow further.

The author of the study, Mike Boorn Plener, of Business Connector in Sydney says: “When we started the study we intended to get a pulse on what’s happening right now across this very important section of the economy, but I was surprised by some of the findings.”

"Manufacturing and industrial companies, excluding tech and medico tech, tend to build a larger base before they go offshore," Plener told Ferret.

"The current offerings like the Export Market Development Grants (EMDG) is actually better suited to those companies, compared to other high growth SMEs, where export can often be on the cards to scale revenue even when you're a micro business of sub five people". 

Some of the key findings of the study (conducted through September 2013) include:

  • The economic outlook is bright, with 53% of business owners expecting significant growth in the next two years
  • 74% of significant SME businesses have undeveloped or underdeveloped potential waiting to be realised and commercialised
  • The majority of business owners cannot fully identify and quantify IP, thereby essentially ‘leaving money on the table’
  • 61% of businesses sit on mostly undeveloped export potential (compared to less than 10% of all Australian businesses being exporters), revealing a major gap waiting to be closed
  • Only 29% of business owners have the necessary contacts to take advantage of government assistance and funding

Plener is Executive Producer of Grants Connector, which addresses these issues for SMEs. While the focus is on grants and government assistance, it covers topics from business planning to export development, and includes 10 expert speakers from government and advisory firms.

“Business owners are seeing that traditional options for getting finance are dwindling and often do not know that there are over 600 government funding options available – and furthermore don’t know how to start the process,” said Plener. “Through Grants Connector we’re closing this gap by bringing the experts to the SME community.”

So how important are grants in helping SMEs grow and take on the world? Andrew Dowling, founder of Tapestry, has this to say: “Commercialisation Australia funding has allowed us to develop the platform for Tapestry and take the first steps into the US market. The assistance and guidance from Commercialisation Australia’s case manager has been invaluable, and the process has been great for our growth”

“While many people see a grant as a grant, the flow-on effect has been profound. CA worked as a strong sign of credibility as we were going to the US market. Especially if you have a corporate target market, getting any kind of competitive funding will be seen as a mark of approval,” concludes Dowling from Tapestry.

Download the brief study summary.

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Toyota makes two-millionth locally built car for domestic market

Toyota Australia has posted a manufacturing milestone with the production and sale of its two-millionth locally built car for the domestic market.

The achievement coincides with the 50th anniversary of Toyota car manufacturing in Australia.

Today, Toyota Australia produces Camry, Camry Hybrid and Aurion sedans as well as four-cylinder petrol and hybrid engines across seven plants on its 75-hectare site at Altona in Victoria.

Locally built Camry – the country's best-selling mid-size car – has been built here since 1987. Production of V6 Aurion began in 2006 and Camry Hybrid in 2009. Toyota is the first and only vehicle manufacturer to build a hybrid car in Australia.

In 2012, Toyota delivered more than 101,000 cars from the Altona plant of which approximately 70 per cent were exported.

Late last year, total production of Toyota cars in Australia passed the three million mark, including 1.03 million for overseas customers and almost 1.98 million sold locally.

The company’s attitude to exporting contrasts with the position of one of the other two local auto manufacturers, General Motors Holden.

Holden has rejected the Abbott government’s demand that it export more vehicles. The government says that it will only continue to provide the sector with assistance if auto makers increase exports. 

Unlike Toyota, Holden says that the plan is not in its interests because Australian-made cars are too expensive to export.

The company claims high local production costs and the high Australian dollar mean that it would not be able to meet the government’s export targets.

The third local manufacturer, Ford Australia has already decided to cease its Australian manufacturing operations in 2016.


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