Why Business Acumen supports the digital Manufacturing Toolbox

BUSINESS ACUMEN is getting right behind the Manufacturing Toolbox (see special report in the #86 print edition) because we understand that this platform can turn the tide in favour of an Australian manufacturing renaissance.

That’s a big call, but it is – amazingly – evidence-based.

Indeed, the digital Toolbox platform itself has evolved out of probably the most comprehensive research ever conducted on Australian business and its adoption of technology.

The evidential statistics: more than 50,000 deep surveys of businesses of all shapes and sizes across Australia over a 15-year period – all charting the specific technologies and services those businesses have utilised and how they rate them over time – combined with more than 300 detailed business case studies. Geoff Grantham.

From all this a digital platform has been developed by a small Brisbane-based company, Digital Business insights (DBi), whose leaders John Sheridan and Geoff Grantham firmly believe the Manufacturing Toolbox can be the catalyst for Australian industry development and growth in ways that have only become available with the digital revolution. 

Mr Sheridan is a former advertising industry creative director who has devoted the past 15 years of his life to researching and understanding the digital revolution with a view to ‘creating something’ which will help Australian businesses creatively build capability and resilience.

These digital platforms, starting with the Manufacturing Toolbox and planned to extend into other industries and specific regions – are all joined up.

Mr Grantham is a web sage and online learning systems expert who has been involved in computing hardware, software and web development for more than 35 years. His career has ranged from early PC and IBM clone development to developing global online multi-lingual training for the motor industry.

They are the antitheses of how industry support has occurred in the past ... mainly top-down government-driven financial incentive-based structures.

This Toolbox – and the many to come – have developed from the grass roots. Every step forward has been tested and augmented by key partnerships. 

Those partnerships, as you will read in the special report, involve best-of-breed organisations which have not only the wherewithal to positively influence the industry, they have the passion and desire to see Australian manufacturing succeed and grow like it has never managed in our history.

DBi is the first company Business Acumen has ever reported upon which is approaching the problems facing Australian industry by harnessing the potential of digital technologies and methods in a truly joined-up way.John Sheridan.

There are tools available and being developed now – including 3D printing, robotics and new material and biological sciences – which, if embraced and innovated by a multitude of agile Australian manufacturers will create superb new products and markets.

The key to how successful that drive is relies upon the capability of those businesses to adapt and grow. That is, they have to become better businesses, more agile, with access to appropriate knowledge, networks and – of course – growth capital.

They also have to be able to effectively seek new clients and showcase to potential new markets, both national and international. They have to be able to communicate and collaborate with others in their industry, plus those outside their industry who can help them.

These vital things are what the Manufacturing Toolbox does.

It is probably the most comprehensive and innovative platform for business development ever created.



Whistle while you work on ethical problems


WHISTLEBLOWER protection and legislation is one of the major transformative issues facing Australian business today – and yet it is faint on the radar screens of business leaders.

The business behavioural impacts of recent information passed on by whistleblowers to media outlets have been massive. They have prompted calls for a Royal Commission into Australia’s banks. They have resulted in a Royal Commission into Australia’s union movement. 

Perhaps most spectacularly, the ‘perfect storm’ created by the anonymous whistleblower who released the Mossack Fonseca Panama Papers has rocked banks, governments – witness the resignation of Iceland Prime Minister Sigmundur Davíd Gunnlaugsson – the world’s leading business advisory firms and many of the business world’s high achievers.

And there is a lot more to come.

The Panama Papers are the basis for revelations that will play out for many years – and yet Mossack Fonseca is said to be only the world’s fourth largest organiser of ‘offshore’ low tax jurisdiction companies. Unquestionably, similar organisations, and the banks that have facilitated these transactions, will be shoring up their security (and grip on staff behaviour) to prevent whistleblower action against them.

Questionably, while it makes ‘business’ sense to boost such security, it realistically makes just as much sense for them to examine their own ethics. Right now.

Astute business leaders need to find where their companies are verging on the unethical and change that behaviour. Use this period of time as a catalyst for urgent change.

Business leaders devote so much time and money to building their brands without looking clearly for the simple ethical lapses that can sink those brands.

Change now will be the only possible defence against any revelations of poor company behaviour.

“We have just become aware of the problem and are conducting a review …” or statements of its ilk hold little traction, compared with companies acting on internal whistleblower information early, fixing the problems with staff and customers – and then openly explaining what has been done to solve such problems.

Surely, this is where company websites and social media programs earn their place in company budgets?


Australian business leaders have an opportunity to lead the world in this area, thanks to an Australian Research Council-facilitated project with four national universities (see story page 3).

The Whistling While They Work 2: Improving managerial responses to whistleblowing in public and private sector organisations research project is calling for Australian business leaders to complete two online surveys that will help shape recommendations on both whistleblower protection legislation and the development of strategic programs to assist business in ethical governance areas.

The research team, headquartered at Griffith University, has already said it would use the results to help develop and write the replacement to the Australian Standard on Whistleblower Protection Programs (AS 8004), which was published in 2003 but is currently withdrawn.

Astute business leaders will surely get behind this research project as this is an area in which time really is of the essence.

Just ask leaders at the Commonwealth Bank, Westpac, NAB, ANZ, 7-Eleven, Woolworths, Coles, Volkswagen and a host of others how much impact a small number of errant staff behaviours can cost in brand reputation and recovery.

Early action collaborating with, and addressing the concerns of, whistleblowers would, in every case, have been a far better alternative than the fallout of ignorance or cover-up.




Infrastructure finance innovation goes begging


QUEENSLAND, and indeed Australia, has been hearing a lot about ‘innovation’ lately – especially about finding innovative ways to fund infrastructure.

Business Acumen has written about and followed a Queensland company, Infrastructure Financial Opportunity (IFO), for the past two years with great interest. This company, developed by former banker David Wallader, is collaborating with a unique European-based infrastructure funding platform that trades an underpinning bank guarantee – usually more than €100 million (about A$155 million) – and builds major infrastructure utilising the profits from this secure and audited financial trading. 

According to Mr Wallader, the trading platform is only available to private companies, only handles large infrastructure projects, is regulated by international monetary compliance authorities including the United Nations, World Bank and the International Monetary Fund, and cannot be accessed directly by government or for military infrastructure.

But Australian governments at all levels do need to understand this system for this country to utilise it – because governments eventually end up owning this infrastructure after the ‘lease period’ for the developer expires.

Here’s how it works: A large Australian construction company may contract with government to develop, say, a rail system.

All the usual approvals apply, but it is the construction company which provides, say, a A$200 million bank guarantee – which is traded to fund this particular, say, A$1 billion project. At the completion of the project, which is conducted in the usual way, using the trading returns to service ongoing payments, there is no debt.

The developing company holds rights to operate the infrastructure for a set period (often 30 years and occasionally shorter periods) and at the end of that period the rail system is owned by the government.

Seems pretty innovative.

But Mr Wallader cannot get a decent hearing. He has been blocked by corporate middle management and dozens of disbelieving public servants and government officials for the past two years (ironically, they are often communications people). These ‘gatekeepers’ often remark to him that “it sounds too good to be true” and information about IFO seems never to be passed up the line to decision makers and government ministers.

Business Acumen, in an effort to help cut through, even recommended two leading figures in the resources sector meet Mr Wallader, briefly, to understand the IFO system and how it might be applied in Queensland. One of these resources leaders refused such a meeting on the basis that it was not core business for his organisation … without even knowing what it was about.

This ‘innovative’ organisation is now viewed in a very different light by Business Acumen.

That’s the trouble with innovation: it’s different. Without knowing how it works, it can seem too good to be true.

Business Acumen hopes this comment will at least help Mr Wallader to be heard at the right levels … the very business and government leaders talking so enthusiastically about ‘innovation’. For Queensland’s sake. For Australia's sake.


You can bank on the wails – just ask the tellers

EDITORIAL >> Investigating poor behaviour and the predatory profit culture of the banks doesn’t need to wait for a Royal Commission – authorities should start now by asking ‘the tellers’ what banking practices make them feel ‘uncomfortable’.


THERE used to be a catchcry for the old Bank of New South Wales: “you can bank on the Wales”.

Of course Australia’s first bank, the Bank of New South Wales is no more.

Today, it is Westpac … which stands for, vaguely, the big bank of the Western Pacific region, as explained eloquently and expensively by brand management gurus way back in 1982. Those in the know kept the ‘W’ from ‘Wales’ and stylised it a bit as a logo – but soon the wails began.

Back in the days of banking on the Wales, it was all about over-the-counter customer service and business leaders getting to know their bank managers – and vice versa – in order for orderly, safe and profitable bank-customer relationships to ensue. Local knowledge and local relationships were the key to what ensued (and probably the key to who were and were not sued). 

It was personalised banking, in a way that is rather different from the understanding of ‘personalised’ digital banking today. Face-to-face contact with a bank has become rare, by design, in this online age.

Australian bankers were a respected and protected species, especially in the orbit of the Big Four. Tellers told you straight. Bank managers actually managed their banks and their key customers.

ATMs and CFDs and LVRs and ‘financial instruments’ and online banking and ‘customer relationship managers’ and ‘business banking specialists’ and  ‘financial advisors’ and ‘vertical customer offerings’… were banking ‘innovations’ designed to improve the customer experience and relationship. The only acronym gone forever was the IOU.


Fast forward to today, where the banking sector is probably an even more protected species than ever – witness the Australian Government’s willingness to guarantee the big banks’ loans and deposits during the Global Financial Crisis with public money – and stories like those on page 4 of this edition bear witness to heavy decline in public ‘respect’.

Most telling, perhaps, are the ‘tellers’. The banking staff who are experiencing a creeping crisis of confidence. But they cannot ‘tell’.

They, on the front line of customer service, bear the brunt of this loss of public and small business confidence in their banks ‘doing the right thing’.

They are the ones being ‘incentivised’ and – in many cases – cajoled to ‘sell’ and ‘upsell’ customers into other ‘services’ offered by the banks. Insurance. Travel money. Superannuation. Share trading. Debtor finance. Offset accounts. Special credit cards … reverse mortgages to little old ladies so far miraculously unencumbered by household debt …

The bank front-liners are the ones who know the ‘sneaky’ costs and charges embedded in so many of those bank-brand products. They see the subtle changes made to small-print product disclosure statements (PDSs) that usually work for the bank’s profitability and often directly against a customer’s best interests.

How can a bank customer service person explain the downside of a few key lines in a PDS, to a customer, at the same time as they are being driven and paid by the bank to engage and refer that customer up the line?

How could a bank customer service specialist explain to a small business person how the points they are earning, and the interest-free period on their loyalty credit cards, are being counterbalanced by fees and ever-changing definitions of what, precisely, is treated as a cash advance (that attracts 20-plus percent interest immediately)?

It is going to become even harder for banking staff to hold their heads up high as the bad behaviour of the once-trusted brand they work for is opened up by round after round of ASIC and ACCC investigations. Forget the issues around banking behaviour during the GFC and crises like the Storm Financial failure, the daily chicanery at customers’ expense that is coming through in these investigations will be far more profound.

Recent talk of an expensive Royal Commission into Australian banking culture would be like kicking a result into the never-never. How many customers beset by bad banking behaviour – witness the Commonwealth Bank insurance payout delays to the terminally ill, exposed recently – are going to last long enough, financially or physically, to see justice? That’s the game.

In fact, all authorities like ASIC and the ACCC need to do is ask the tellers, in confidence. What have they seen their own banks do that makes them feel uncomfortable?

These conflicted tellers will tell, in confidence, just as long as they believe they are protected. Set up a Parliamentary committee, use the powers of ASIC, APRA and the ACCC and be efficient and timely in resolving these issues.

Watch how quickly things change in banking behaviour when these core issues are directed back up the line from whence they came – and where they are truly to blame.

Do tell. Do Australia a favour.



Tight fisted spending: the business mental illness

EDITORIAL >> AUSTRALIAN business at all levels seems to be afflicted by a strange wasting disease. It’s not physical – it’s fiscal.

Anyone with any sense in business is thrifty. We at Business Acumen are too.

However, our observations are that this elemental business common sense has deteriorated into a mental affliction that makes little sense and very few cents. In fact, it seems to be a huge factor holding back business progress at all levels in Australia. 

Business people we talk to, right across the spectrum, say it simply: “Nobody wants to spend any money.”

Here’s our theorem (and, because we are Australian and like to colourfully tell it like it is, let’s call it the Spending Sphincter Syndrome):

We think business leaders in Australia were so spooked by the after-effects of the Global Financial Crisis (GFC) – the ensuing tightening of the big banks on business lending to SMEs; the loan-valuation ratios squeezes that took vital cash out of the system; and the record numbers of business failures and insolvencies – that all those panicked savings measures and ‘emergency’ financial procedures that were driven during that crisis have not come off.

Of course there are other ongoing disruptions – not the least of which is the impact of digital technologies and those pesky new business model challengers – that are helping to perpetuate the Spending Sphincter Syndrome.

It’s like a black cat ran in front of all our commercial vehicles at once – business leaders have left their handbrakes on as a prudent precaution.


We have been seeing it in the very basic and crucial area – for us – of subscriptions. We charge $99 a year for a combined print and digital/online subscription and $49.50 for the digital-only.

Most business people agree that this is not a lot of money – a tank of petrol – and there is a very high chance that knowledge found within Business Acumen’s print and digital pages will help to leaders form strategies and introductions worth, well, more.

Acumen has always helped to create business opportunities through knowledge and publicity.

Not only that, we instigated a policy in 2015 of actively prioritising content featuring our subscribing and allied companies – especially member organisations of Queensland Leaders, NSW Leaders and Victorian Leaders – and we have made a point of alerting potential new subscribers to this advantage.

We thought we were imagining things when some of Australia’s, and the world’s, biggest companies – who were contacting us seeking free publicity, generated by PR companies on huge monthly retainers – produced these peculiar e-mail responses:

Major PR agency, in behalf of a multi-national client: “Unfortunately I don’t think this spend is something we will have budget for, but thank you for sending over the details – I will keep them on file …”

Direct from the communications department of a major international airline: “Our advertising plans and budget for the remainder of the financial year have been allocated and set in place … We also would not be in a position to become a subscribing organisation.”

One of the world’s biggest software companies: “We don’t have any budget for subscriptions …

PR company for one of the world’s biggest accounting firms: “… if our client is interested, we will contact you …”

One of Australia’s biggest construction companies: “We’re not looking to add any new subscriptions at the moment but please do feel free to follow up in 2016.”

One of Australia’s biggest accounting software companies: “I spoke with my manager about this and unfortunately it’s not something we can go ahead with right now. But thank you so much for keeping on my back about this. As soon as we have allocation for this, I’ll get back to you.”

One of Australia’s top project management companies: “I have had feedback from the MD and we are not going to subscribe.”

A declining Australian industry association: “Thank you for the information however at this stage we are not looking to take on a subscription.”

The communications department of a top-two Australian telco (the other one is a multi-subscriber): “Thank you for reaching out however at this stage we will decline your offer.”

PR representative of a major publicity-hungry Australian online retailer: “No thanks re [client] subscribing.”

PR company specialising in financial services area: “It’s a no on this occasion.”

Top-level superannuation company: “I have spoken to the CEO and unfortunately we are not interested at this time.”

Australian business software company: “We completely understand what you have outlined, however we will not be subscribing. We appreciate the articles that you have published and ones you may do in the future.”

One of the banks owned by one of the Big Four banks: “Thanks for the opportunity but we’ll pass on the subscription - however, I do hope you editor finds our research interesting enough to report on it.”

And last, but certainly not least, from a representative of one of the world’s largest and most profitable technology companies: “The feedback from our team … is that as the current budget stand[s] for this financial year – they are not in a position to subscribe. This is on their radar for next financial year, so perhaps they will revisit then.”

These are just a few glaring examples. As we have featured all of these companies in coverage over many years and continue to be kinder to them than they are to us, we have not named them.

We have certainly modified our views of these organisations and how they are currently doing business.

We present these written responses to illustrate the pattern that bedevils business in Australia in a much wider sense.


Sadly this kind of affliction is not just rampant in the media area, judging by feedback we get across the small business spectrum. In different ways, most small businesses are finding the same impacts of this anti-spending syndrome.

In every case, this is the result of an edict from company leaders that there is no extra-budget spending to be made, no matter what the opportunity or the marketing consequences.

“We are not spending money outside budgeted amounts.”

“We will not take on any new commitments.”

“We cannot let spending get out of hand at this time.”

“We run a tight ship.”

“No-one is authorised to spend outside budget.”

In every case, these companies have the idea that not spending, no matter how small, is prudent and managers down the line are rewarded for being brutally tight. There are positive consequences for this within the company, no matter what the negative consequences are externally.

In many cases, an opportunity is not communicated up the line, to where it should be dutifully considered, because those below know what the sphincter-tightened answer will be and it is easier – and more career prudent – to say no at the source.

Be fiscally prudent (and the word embedded in prudent is ‘rude’)

While this mood works in a crisis, for a short period of time, it is anti-growth and anti-innovation. It stifles the development of new business relationships.

As one frustrated software developer CEO – a subscriber, who asked not to be identified – so eloquently put it during a recent interview: “I am sick of hearing how companies want to ‘go forward’ with us or ‘form an alliance’ or ‘develop a relationship’ or ‘collaborate’ with us – but don’t want to spend any money right now or ‘haven’t got a budget’ for it.

“However, they do ‘want to work with us’ … so if we would care to do a bit of preparatory work for them, there may be budget allocated in the future.

“What is going on? How is not paying any money at all actually construed as doing business in Australia?”

Diagnosis: Australian Spending Sphincter Syndrome. (Acronym intentionally not used).




Transfer pricing costs you and I dearly


THERE is unlikely to be a small business owner in Australia that is not furious with Australian authorities for allowing international organisations – and some Australian ones – to ‘transfer price’ their way to paying hardly any tax on the profits they earn in this country.

That is money being generated in Australia and going out of Australia without the Australian public getting its fair clip. The difference has to be made up by businesses – mostly small businesses – that trade here … fairly.

It has been going on for decades – and transfer pricing has been the subject of dozens of unheeded warnings in Business Acumen magazine articles over the past 10 years – but it has been exacerbated recently by multi-national digital commerce. 

It is easier than ever before to set up in a low tax jurisdiction like Singapore (where multinational entities may have negotiated extra special low taxation deals to use the island national as a financial transfer hub), sell goods and services in Australia through a locally-registered wholly-owned entity, and then transfer most of that money back to Singapore without paying tax on it. 

The way it works is, the Australian entity does not make much of a profit because it has to service loans or licensing fees (or some other legally-acceptable costs) to its offshore owner, which is based in a relatively low tax jurisdiction.

Simple, and it has been going on for decades.

It is not just the Googles, Apples, Microsofts – some Australian-grown entities now have elaborate structures that could do the same thing. James Hardie Industries, for example, became based in the Netherlands and in 2010 moved to Ireland to enjoy the lower tax advantages of being an international company.

If these big, clever organisations are taking billions of dollars out of the economy while paying but a small fraction of tax receipts – some, in the case of American Express, for example, have recently been alleged to have moved more than A$8 billion offshore without paying any tax at all on it over seven years – then the Commonwealth income burden falls squarely on Australian small and medium enterprises (SMEs). 

Let’s put it another way: it is entirely possible that the Singapore Government has made more money out of American Express sales in Australia over the past decade than the Australian Government has.

Author and Fairfax columnist John Birmingham recently wrote furiously and personally of this issue, when he discovered the interest on his credit card for one year was greater than American Express’s profits tax payments over the past seven:

“Would it make you even a little bit angry if you knew that not only did Amex decide paying tax was optional on the $8 billion it booked in that seven year period, but it also put its hand out for a $3.3million refund? … Does anybody else get angry about the way that companies like Amex – and Apple and Google and all the miners and all the banks and Ikea and News Corp – seem to have decided some time ago that the cost of civilisation was something they did not have to bear? No? … Pay some goddamned tax, you bastards …”

So, are Australian SMEs effectively subsidising the market for international entities to capitalise on?

Certainly seems that way.

It is becoming an unforeseen consequence of certain free trade agreements? That needs a closer look.

A burning question is why the ATO has been so toothless on this issue, when in recent years it has been coming down increasingly harder on collections from Australian SMEs?


A very comprehensive investigation of PayPal and eBay’s operations and structures in Australia by Fairfax Media and University of New South Wales Business School accounting academic and chartered accountant Jeff Knapp – all from what is on public record – are revealing.

And maddening, indeed, for Australian taxpaying businesses that are left after having survived and transcended the disruption that global organisations like these have wrought.

The idea that change in the digital age is inevitable is manageable, but to find that these disruptors are not playing morally fair in terms of their taxation obligations in Australia makes your average Australian business leader furious.

When you see the numbers involved – and then see that they actually out-strip the Federal Government’s declining share of corporate tax receipts and annual deficits – there is an equation that does not add up.

Fairfax business journalist Michael West wrote: “So it is that an investigation by Fairfax Media and University of NSW accounting academic Jeff Knapp found PayPal rakes out 86 percent of its revenue to an associate in Singapore, and countervailing its duties under the Corporations law, fails to disclose sufficient details of the arrangements.

“Over the past nine years, the electronic payments firm has paid more than $1 billion of its $1.2 billion in revenues to its parent and associates in Singapore leaving very little to be taxed in Australia. PayPal claims that these payments, the bulk of which are made to PayPal Private Limited, its immediate parent company, are for ‘services provided in accordance with Service Provider Agreements for the processing of, and supporting the online payments business’.

“These ‘service payments’ made up $245 million of PayPal’s $291 million in total revenue last year. Back in 2006, they were $33 million of $36.5 million, so PayPal relentlessly jacks up the fee to its parent company every year. What dramatic increase in ‘service’ warrants this $212 million rise in ‘service’ fees, you can only wonder.”

This is business journalism at its best and to be admired, at a time when this craft’s very existence is threatened by the industry disruption that these ‘transfer pricing’ local taxation avoiding multi-nationals have wrought.

Meaning, organisations like eBay were instrumental in carrying the so-called ‘rivers of gold’ classified advertising trade away from traditional media organisations like Fairfax – the rivers that funded no-fear-no-favour investigative journalism – and replaced it with nothing apart from vaporous tax behaviour.

Fairfax also revealed eBay, as the leading player in ecommerce in Australia, with a 20 percent share of the market has paid only $6.2 million in company tax over 12 years – about $500,000 a year. That’s because eBay Australia, which is ultimately owned by eBay Inc, claims the $300 million-plus in annual revenues it bills actually belongs to its Swiss business and only $40 million of it is Australian taxable (which is ironic, while the ATO has simultaneously stepped up its surveillance of the eBay platform to catch out Australian micro-businesses not meeting their GST liabilities ...)

Evidence Mr West quotes from University of NSW researcher Jeffrey Knapp highlights what a blatant ruse all this is and asks big questions of the ATO’s capabilities in its digitally disrupted home environment:

“Further, the amount of profit PayPal makes in each year is less than the interest income they generate for their cash on deposit. They claim they are making losses before interest and taxes. The key is this; in 2014, their profit margin is one percent of sales. That’s their net profit margin.

“But in the US, they currently have a proposal to split eBay (PayPal’s ultimate parent company) and PayPal [this occurred on July 21 in the US – editor]. In the offer documents, they show the income statement of PayPal Holdings for 2014. This shows a profit margin of 15 percent.”

Can the cost of providing the same electronic payments service in Australia really be 15 times more expensive than in other countries, on average?

The Fairfax comment is priceless: “That is, if you believe these financial statements, if you believe that PayPal’s 86 percent revenue rake to Singapore is a bona fide transaction, rather than a tax ruse. These financial statements, signed off by PwC, have all the hallmarks of yet another multinational robbery perpetrated on the Australian taxpayer. Though Knapp puts it rather more delicately: ‘The net profit margin of one percent in Australia and New Zealand versus 15 percent worldwide … it just indicates that the inter-company charges put in place for this company are not commercial, they are not market-based’.”


To scope out the bigger picture, Mr West’s Fairfax reports showed there were 7834 International Dealing Schedules lodged with the ATO – which are required and take into account international royalty and interest payments -- by taxpayers in a single year in Australia. These covered international related party deals (IRPD), totalling $272 billion. Singapore was the destination for about 33 percent of total IRPD expenditure, while Switzerland accounted for about 35 percent.

If those amounts for Singapore and Switzerland were determined to be taxable at the company profits tax rate, for example, about $55 billion would be going the Australian Government’s way – quite handy when the country is running an annual deficit of about $40 billion.

The Fairfax Media report outlined that between 2006 and 2012, the IRPD dealings of multinationals rose by 64 percent, from $154 billion to $253 billion, and now account for about 7 percent of their total income and expenses. The increase in business turnover, when matched to this transfer of royalties and interest payments, is where some tough conversations have to take place between Australian authorities and these companies.

So-called tipping points are difficult to determine in this era of digital disruption and fancy financial instruments. International transfer pricing is only part of the story that encompasses Australia’s small-to-medium enterprise extinction events of recent years.

But one tipping point can be pinpointed: the degradation of the Australian employment environment – and that stems from business leaders’ appetite for growth and creating jobs.

The recent tax and investment concessions from the Federal Government show that the matter is being taken seriously, at last.

But confidence to grow is unlikely to bloom in the SME sector until the operating playing field is level. That means eliminating these absurd and debilitating international transfer pricing regimes.

If the multinational companies that engage in these schemes really care about their Australian customers – and the Australian society that offers them business hospitality – they should sportingly volunteer to play on the same field and under the same rules.

Being shamed into it is going to cost a lot more in brand restoration.

Spending tens of millions of dollars in Australia on so-called ‘corporate social responsibility’ programs does not forgive repatriating hundreds of millions of dollars out of this same economy, untaxed, to offshore tax havens.



Advancing manufacturing


WE WELCOME our subscribers to the first of our four special report editions (print and digital) of Business Acumen for 2015: Advancing Manufacturing.

We have borrowed the clever term, ‘advancing manufacturing’ from an interview we conducted with QMI Solutions chief executive Gary Christian, featured in the print and digital editions, whose organisation prefers to use it over the more usual ‘advanced’ manufacturing reference. 

QMI is probably Australia’s leading technology diffusion organisation. Started by the Queensland Government 23 years ago to assist the development of manufacturing in the state, it introduced a form of 3D printing to Australia and helped that technology gain traction, especially as a prototyping aid.

It has since adopted and introduced manufacturing systems such as Lean and Core Value to Australia and has worked with a wide range of manufacturers to help them innovate for local and international markets.

QMI is eminently qualified to go against the prevailing wisdom in Australia and declare that ‘manufacturing’ is not dead or dying … it is transitioning. It has a bright future, especially in particular niches where Australian businesses have a world lead – and there are several.

Manufacturing is advancing in this country.

It can, and it must. 

Manufacturing must advance, if Australia is to have any hope of improving and recovering its employment base. According to QMI, for every job created in manufacturing, five are created in the broader economy. Manufacturing is moving up the food chain.

To say this, in this country at the moment, is to invite the scepticism of political and economic commentators who seem blindsided by the abandonment of large-scale motor car manufacturing here by Ford Australia, General Motors Holden and Toyota.

Let’s face it, it’s not a good thing that this is happening – but neither is it the end of manufacturing here to service the auto industries of the world. Ford and General Motors are both retaining their advanced design studios here to service their global markets – a move up the food chain.

Many of Australia’s auto component manufacturers still lead the world – companies like PWR Performance Products (which designs and makes cooling system technologies for road vehicles and F1, NASCAR and World Rally Championship race teams, as well as military use), EGR (which designs and makes OEM and aftermarket body components for over 50 auto brands globally) and ARB Manufacturing (which designs and makes high quality aftermarket off-road vehicle components and equipment) – and they are extending their expertise into other areas such as construction and aerospace.

There are many others quietly achieving, growing, and employing.

And that is just in the ‘declining’ automotive manufacturing sector, without mentioning the heavy vehicle sector, bus constructors, and mining transport vehicle sectors.

Once you start to consider other niches in which Australian companies hold a distinct design-build advantage – such as medical technologies, food manufacturing, renewable energy systems, materials science, nanotechnology and agribusiness technologies – there is a lot to be excited about in Australian manufacturing.

From what you will read in our special report, the future of manufacturing in this country requires energy and capital to develop.

Not simply the type of low-cost energy and monetary capital advantages that the US has used to great effect in its manufacturing-led economic rebound.

Australia is different – a small market that has an imperative to export to large markets for success.

We need entrepreneurial energy and intellectual capital in abundance, to succeed. Read all about it in this special edition of Business Acumen.

*Business Acumen subscribers have online access to extended and supplementary online coverage of this special report. Subscribe now and enjoy an unfair advantage over your competitors.





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