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Monthly Archives: July 2009


July 23, 2009 08:17am

A NEW proposal will see Tasmanian teenagers face restrictions on the number of hours they can work.

The plan will be debated at the Labor State Conference in Hobart this weekend.

Labor will consider capping the number of hours teenagers can be employed to avoid conflict with their schooling.

If the proposal is successful, it will be one of the policies Labor will take to the state election in March.

The conference, at the Hotel Grand Chancellor, will attract more than 200 party members on Saturday and Sunday.

The highlight will be a keynote address by Prime Minister Kevin Rudd, who will greet the rank and file on Saturday morning. Premier David Bartlett will address the conference on Sunday.

State secretary John Dowling said the hot topic would be the election and how Labor would fund its campaign.

“This will see the finalisation of Labor’s platforms before the March election next year, so it is really important,” Mr Dowling said yesterday.

“Interestingly, since David Bartlett became Premier we have had a large number of young people getting involved and participating in the conference, which is great. This is what we are seeing with this year’s conference as well.”

Branches from throughout the state and some unions have tabled a series of motions on issues they want Labor to endorse.

The New Town branch is behind the proposed law to limit the number of hours young Tasmanians attending school can work.

The branch says the laws should also set minimum ages for the types of work youngsters can perform, ensure employers provide appropriate supervision and also protect young workers from unfair dismissal.

The branch’s motion says: “Tasmania has the lowest level of legal protection for children in the workforce.”


• Calls for the State Government to outlaw the publication of school leagues tables from information made available by the Education Department.

• The introduction of laws that would give Tasmanian workers and contractors the first option to carry out work funded in the Federal Government’s $3 billion infrastructure stimulus package.

• A call to lobby the Federal Government to begin the process of becoming a republic.

• A move for all funds generated by electronic gaming machines to be directed into harm-minimisation programs.

• A review of the animal-cruelty laws and penalties, which have been described as too weak.

• The construction of a North-West Coast cycleway.

• The banning of nuclear-armed warships from Tasmanian waters and harbours.

• The reversal of Premier David Bartlett’s controversial decision to axe the Department of Environment, Parks, Heritage and the Arts.

13 July 2009 6:46am

A lobbyist for better standards in the recruitment industry has launched research to quantify the extent to which its bad reputation is deserved, and highlight areas of the recruitment process that need better regulation.

The two surveys – one to measure the experience of jobseekers who apply directly to employers and the other for jobseekers that go through agencies – will hopefully provide some much-needed hard data on the Australian recruitment experience, says Diane Lee, the director of Even It Up!.

“There is a lot of anecdotal evidence out there saying that both direct employers and recruitment companies treat jobseekers in a less than satisfactory way,” she says, so the survey aims to ascertain whether in fact this is true.

“If it is, we then have hard evidence to take to recruitment companies and direct employers – and government – to lobby for a better jobseeker experience.”

The data will also be used as a benchmark against which to measure the industry’s progress towards better recruitment, selection and interview practices in future years, she says. Lee says that while legislation protects jobseekers from overt discrimination during the recruitment process, “anecdotal evidence suggests that discrimination has now gone underground” and is much more difficult to prove.

Calling for regulation
Lee says she is aiming for change “at a macro level, to create awareness amongst organisations and recruiters” and ideally wants recruitment to be regulated in a similar way to the real estate industry.

“If [government] can regulate the real estate industry then they should be able to do something with recruitment. It’s such a high-stakes environment and generally, from feedback, the experience is not pleasant.”

Although the vast majority of content on the Even It Up! site doesn’t reflect well on the recruitment industry (about nine in 10 reviews are negative) Lee believes this is a fairly accurate reflection of jobseekers’ experience.

“I’d love to promote people who do it fabulously,” she says. “I want to get some balance but unfortunately it doesn’t seem I’m able to do that at this particular time.”

She points out that she makes no money from the initiative and views it purely as a community service.

Based on common complaints to the site, Lee recently posted on YouTube a video titled “10 things we hate about recruitment companies”. She says she’s received a positive response from some recruiters who say they want “open conversations about where we can all improve so we can weed out the cowboys and make sure that the good people are represented”.

“[Recruiters] say ‘we actually need to take this on board. Yes, it’s negative but if we want to improve what we actually deliver for our clients and our jobseekers then we need to sit up and take notice’.”

(Among the top 10 criticisms are “baiting” – the video warns jobseekers to beware of comments such as “we had a position come in yesterday that you would have been perfect for”, which it says is a “psychological technique that consultants use to build your hopes and leave you hanging” – and using jobseekers’ references for business development purposes, which Lee says annoys referees and harms candidates’ job prospects.)

Jobseeker charter
Lee has also developed a charter that she hopes to trial with employers and recruitment companies that would make specific promises to jobseekers about recruitment processes and communication.

While still in draft form and open to change pending the results of the surveys, the charter would bind recruiters to:
include as much information as possible in job ads;

keep selection criteria questions to a minimum;

require that applications contain only a CV and/or cover letter ;

exclude from the selection process any tasks that could be verified via a portfolio, track record and/or qualifications;

include on interview panels at least one person with expertise relevant to the job being filled;

reimburse a candidate at an agreed rate for time they spend on a presentation or task during the recruitment process;

not ask any “trick” or irrelevant questions during interviews;

conduct interviews in as informal a manner as possible;

not check references until the employer has made a decision to hire the person; and

always advise by telephone a candidate who has attended an interview and not been selected for the role.

July 13, 2009 – 8:29AM

Workers at a bankrupt French car parts supplier are threatening to blow up their factory unless carmakers Renault and PSA-Peugeot pay them compensation, a union official says.

The 366 employees of New Fabris in central-eastern Chatellerault, are occupying the plant to demand that the auto giants – who accounted for 90 per cent of their business – pay 30,000 euros ($53,600) to each worker.

“The gas bottles are in the factory. Everything has been planned for it to blow up,” unless there is an accord by July 31, Guy Eyermann, CGT union official and secretary of the company works council, told AFP on Sunday.

The Chatellerault factory is thought to house car parts worth about 2 million euros ($3.6 million), as well as a new Renault machine estimated at a further 2 million euros, the union leader said.

“We are not going to let PSA and Renault wait until August or September to recover the spare parts and machines still in the factory,” he warned.

“If we get nothing, they get nothing at all.”

Eyermann said two coachloads of workers had visited Peugeot headquarters last week, and a similar delegation would visit Renault bosses and the French employment ministry on Thursday to try to negotiate a settlement.

They hope to force the state to put pressure on the carmakers, which both received public funds to help them through the global downturn.

The New Fabris workers, whose employer was declared bankrupt on June 16, claim Renault and PSA paid about 30,000 euros to 200 workers laid off from another supplier, the aluminium specialist Rencast.

New Fabris, founded in 1947 by brothers Eugene and Quentin Fabris, started out making sewing machine parts, before branching out into the auto sector, employing up to 800 workers in the 1990s.

Ross Gittins
July 13, 2009

Another week, another round of not-so-terrible indicators about the state of the economy. It’s getting easier to believe and harder to doubt this recession will be a lot milder than we’re used to.

If the recession does prove to be less severe than advertised, both sides of politics will need to review their plans.

Last week brought the remarkable news that the Westpac-Melbourne Institute index of consumer sentiment rose by 23 per cent over the past two months to its highest level since December 2007, with optimists now well outnumbering pessimists.

The number of new housing loans in May was at a 16-month high. And the labour force figures for June showed unemployment continuing to rise quite slowly.

Put that together with recent increases in retail sales, car sales and home prices and you’ve got a picture of an economy travelling quite a bit more strongly than envisaged as recently as the budget in May. The global recession is every bit as severe as we were led to expect, but it seems it hasn’t dragged our economy down nearly as much we feared.

Whereas in early May the Reserve Bank was forecasting that real gross domestic product would contract by 1 per cent over calendar 2009, when we see its revised forecast next month it’s likely to be for growth of about 0.5 per cent, maybe more.

If our prospects really are that much brighter, two main factors account for it. First, continued demand from China has limited the expected decline in our export income. The volume of exports actually rose over the six months to March and seems to have held up since then.

Much rides on the success with which the Chinese authorities can switch from export-led to domestic-led growth, whether from consumption or infrastructure investment. The beauty from our perspective is that wherever they get their growth from, they’ll need lots of steel and energy – the very commodities we supply.

The second factor is the continued strength of consumption spending, explained not just by the cash splash and the huge cut in mortgage interest rates, but by the way this has affected people’s sentiment about the state of their own finances and the outlook for the economy.

It’s always possible, of course, that all we’re experiencing is an Indian summer. The global financial crisis may have more shocks to deliver, or it could be that consumer and business confidence will wilt under the inexorable rise in unemployment yet to come.

But that fear is starting to wear thin. Whereas the budget forecast was for the unemployment rate to reach a peak of 8.5 per cent sometime in 2010-11, the new expectation is that it may not quite reach 7.5 per cent, and will reach its peak a fair bit earlier.

If that expectation comes to pass then, with the rate now at 5.8 per cent, we’ve already come a little more than half the distance from the trough of 3.9 per cent in February last year.

If further evidence confirms the emerging picture of a relatively mild recession, this has wide ramifications.

For a start, it reduces the likelihood of any further cuts in the official interest rate – barring any seriously damaging developments – and brings forward the day when the Reserve will want to start reeling in its monetary stimulus.

Something that’s starting to worry it is the untimely recovery in the housing market. Although it would be desirable to see house prices gently falling back from the excessive levels they have reached, nationwide they’ve actually risen by 4 per cent in four months. House prices are rising in all capital cities bar Perth, auction clearance rates are up to about 80 per cent in Melbourne and, nationwide, prices are rising at the bottom, the middle and the top of the range.

The thought that the lowest mortgage interest rates in 31 years might be starting a new house price bubble is one that central bankers find unsettling. Should these signs continue, it will make them anxious to start the process of getting rates back to more normal levels.

Australia’s interest rates are already high in comparison with those in the major economies. This, combined with our brighter prospects relative to the others, probably explains why our dollar is back up to around (an uncomfortable) US 80c.

If our economy enters recovery while the majors continue to wallow, the gap between our rates and theirs will widen further, probably putting further upward pressure on the dollar. Another consequence of a milder-than forecast recession and earlier-than-expected return to growth is smaller budget deficits than forecast. Already it’s clear the deficit for the financial year just ended will fall short of the $32 billion expected at budget-time.

And if deficits prove smaller than expected, then government borrowing and debt levels will be lower than expected.

If so, this could prove embarrassing for Malcolm Turnbull, whose Debt Truck asserts that Labor’s “debt bombshell” is $315 billion.

Though Turnbull wants the punters to believe this is an accomplished fact, it’s actually what the gross federal public debt (naughty, naughty) was projected to be in five years time.

But if this recession does prove a lot milder than feared, this could also create political problems for Kevin Rudd. Because the punters never think of the “counter-factual” (what would have happened had you not done what you did), a mild recession could leave some people wondering – and an opportunist Opposition questioning – why you ever thought it necessary to spend all the money you did. Rudd’s reply, presumably, would be to claim it was only the Government’s actions that protected us from the global conflagration.

And there’s another downside Rudd needs to ponder. The earlier the economy begins recovering, the sooner the pressure will begin for him to start cutting spending to reel in the budgetary stimulus.

In theory, this shouldn’t be much of a problem: first, because what the budget’s “automatic stabilisers” caused they should eventually take away and, second, because all the discretionary additions to government spending officially labelled as “stimulus” are strictly temporary rather than ongoing.

In practice, however, with every month Rudd stays in office he’s solving this problem or that by making permanent additions to government spending. It’s facing up to the budgetary bottom-line implications of this largesse that will make his life uncomfortable.

It’s beginning to look as though the start of the process of reeling in the budgetary and monetary stimulus may coincide with the election due in the second half of next year.

For the Reserve to be raising rates in two election campaigns in a row at least would demonstrate its political even-handedness. But perhaps Rudd will read the signs better than his predecessors.

Ross Gittins is the Herald’s Economics Editor.

Details here:

Tuesday, 7 July 2009

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Today’s decision by the soon-to-be-scrapped ‘Fair Pay Commission’ is another kick in the guts for working Australians from the Liberals’ WorkChoices, say unions.

More than 1.3 million Australians that rely on minimum award wages, including many low paid young workers, women and migrant workers will suffer.

ACTU Secretary Jeff Lawrence said the Fair Pay Commission had shown no respect for the contribution low paid workers are making to the economy during the downturn and had relied on discredited and flawed research.

“The Fair Pay Commission has saved its worst for last,” Mr Lawrence said.

“The decision means ordinary working Australians and their families are bearing the brunt of an economic downturn they did not cause.

“Many workers have already lost their jobs, had their hours cut and now more than a million families are facing a pay freeze despite rising living costs.

“Only a week after new IR laws came into operation, WorkChoices is back from the dead.

“Working families are again the victims of the unfair wage-setting system established by the previous Liberal Government.

“The real wages of low paid workers have gone backwards since the Commission was established, and today’s decision is another attack on their living standards.

“The costs of rent, food, medicines, education and utilities have all risen in the past year and families need a pay rise to keep up.”

Mr Lawrence said the decision was unwise in the current economic circumstances and rejected the argument that a pay freeze for the low paid is good for the economy.

“A pay freeze will sap consumer demand and undermine confidence. Any green shoots of economic recovery will be nipped in the bud by this unfair and unwise decision.

“It will be felt not only in the homes of Australia’s 1.3 million minimum wage workers, but in the shops and businesses in every main street of every Australian town and suburb.”

Mr Lawrence said the decision runs counter to the economic stimulus strategy, ignores the Federal Government’s submission in favour of maintaining real wages, and even ignores the views of some business groups who supported a modest wage rise.

“There is no credible evidence that modest rises in minimum wages have a negative effect on jobs. This is a furphy put about by the same free market fundamentalists that brought us deregulation and who contributed to the GFC.

“We look to Fair Work Australia’s new wage-setting body to provide a fairer and more rigorous approach.”

Chalpat Sonti
July 7, 2009 – 9:15AM

Spectacular gains by some of WA’s best and least well known companies have contributed to the value of the state’s publicly-listed companies surging $6.7 billion.

Research by Deloitte shows the value of WA’s top 100 ASX-listed companies rose 5.9 per cent in June, the fifth straight month of increases.

Those gains have meant the value of the companies has grown from a low of $72.4 billion, at the depth of the market in November last year, to $11.8.6 billion on June 30, representing a gain of 64 per cent.

Most of the gains for June were driven by the mining sector, Deloitte Perth managing director Keith Jones said.

There were substantial rises from Fortescue Metals Group (44.7 per cent), Red Fork Energy (76.2 per cent) and Mantra Resources (41.5 per cent).

While iron ore producer Fortescue is a household name, Red Fork and Mantra, a US-focused oil and gas explorer and African minerals explorer respectively, are not.

They rank 82nd and 36th respectively on the top 100 list, but their share prices have been buoyed by some promising announcements.

It was a mixed June for WA’s two largest public companies, Woodside and Wesfarmers. Woodside’s market capitalisation dropped $100 million, or 0.3 per cent, during the month while Wesfarmers’ value rose $1.3 billion, or 6.2 per cent.

Patrick Manning
July 7, 2009

IT’S NOT every superannuation fund chief executive who can persuade Al Gore to come to Australia to launch a plan to move the nation to clean energy.

Bob Welsh, head of the $6 billion Vicsuper fund, can – partly because he is one of the biggest local investors in Generation Investment Management, the London-based fund manager that Mr Gore chairs.

At a business breakfast in Melbourne next Monday Mr Gore will launch Safe Climate Australia, a non-profit, non-partisan organisation working on Australia’s move to a zero-carbon economy.

The organisation was inspired by Mr Gore’s “Repower America” plan to transform the US economy in 10 years.

Vicsuper, which has more than 247,000 members, is hosting the launch and has previously backed other programs set up by the Safe Climate chief executive, Brendan Condon.

Mr Welsh, who has headed the former public sector fund since it was set up in 1994, has been a “green super” pioneer. His aim is to make Vicsuper, truly sustainable, and he has been prepared to break a few rules to get there.

Vicsuper has made sustainable investment an integral part of its strategy instead of an option available to members who choose it, as most super funds do.

It now has about $1.4 billion in a range of sustainable investment strategies, including $580 million in listed domestic and international share funds, $92 million in forestry and $250 million in its Future Farming Landscapes program, which is buying up rural land and water in northern Victoria. Another $122 million is committed to sustainable private equity.

Mr Welsh has been prepared to sideline the actuaries who advised, for example, that such venture capital investments were “risky” and had “no track record”.

In late 2007 Vicsuper seeded the Cleantech Australia Fund – which invests in Australian start-ups such as the wave-energy converter Oceanlinx – with $30 million.

“That was really satisfying,” Mr Welsh said. “Because the asset consultants said, ‘Look, this is a first-time approach; we don’t know whether the investment case makes sense’.”

Vicsuper is unusual in another way: it does not provide its performance figures to independent ratings agencies such as Super Ratings, although the figures are available on its website.

“We think it’s important to get people to focus on the long term,” Mr Welsh said. “It is impossible to compare returns unless you have exactly the same weighted cash flows and asset allocation. The league tables can be misleading. We don’t think it adds value.”

Vicsuper has a total of $135 million invested with Generation Investment Management. The fund manager does not discuss its performance figures either, but Mr Welsh said it had been “shooting the lights out” – finance-speak for caning it.

07 July 2009 8:42am

Employers that retrench workers without ensuring their financial wellbeing run the risk of damaging their brands – and facing litigation, says ipac corporate consultant Nola Rihani.

While the majority of employers “have genuine aspirations of a duty of care” for employees they make redundant, Rihani says, many regard the financial issues faced by those departing the responsibility of either outplacement service providers or the workers themselves.

Consequently, retrenched employees are rarely made aware of the financial decisions – relating, for instance, to superannuation and life insurance – that they need to make prior to their departure, she says.

Employees are at risk of missing out on a host of entitlements, she says, and employers can, and have been, held to account for this loss.

In one case, Rihani says, an employer failed to inform a retrenched employee of the option to continue his life insurance policy before the option had lapsed.

The employee had health problems, and the insurance policy he had acquired through his employment was the only one he had been able to obtain.

The employer was found liable for the worker’s loss and ordered to pay more than $1 million in underwriting his insurance, she says.

Save money through redundancy alternatives
Rihani’s comments come after an ipac study – based on a survey of senior HR professionals and outplacement providers from Sydney and Melbourne – revealed that:
many HR professionals and managers are dealing with the redundancy process for the first time;

“ownership” of the process is unclear. With HR moving “towards a more advisory role in the transition process”, Rihani says, laying off workers is often left up to line managers. However, many line managers lack the necessary “tools”;

almost 50 per cent of restructures, which often include redundancies, under-deliver on projected savings;

employers are often torn between the duty of care for retrenched employees and the cost of outplacement and other transition programs; and

the cost of “separation” is getting higher.
Employers, therefore, should explore all alternatives to retrenchment, including redeployment, Rihani says.

(Indeed, as of last week they are legally obliged to do so. See related article.)

She says they could put in place “transition-to-retirement” strategies (in which mature-aged workers are offered “grandparental leave” or other flexible arrangements, but their knowledge is retained), reduce annual-leave balances or freeze salaries.

Other cost-cutting measures, Rihani says, include:
reducing corporate travel or opting for economy fares;

eliminating non-essential expenses, such as “internal entertainment”; and

cutting contractor numbers.
“Even basic things like cutting back on a newspaper subscription can save a job,” Rihani says.

Employees should also be tapped for cost-cutting initiatives and alternatives to retrenchments, she says, and be encouraged to develop and achieve those ideas within timelines. Employees, she says, often come up with proposals that “save the company more than required’.

Best practice process
When forced to lay-off staff, however, employers “can enhance their transition programs with better targeted and relevant financial advice provided prior to the employee’s departure”, Rihani says.

This will not only protect the employer’s reputation, and protect it from litigation, she says, but will give departing employees “peace of mind” and help them to “stretch their transition capital”.

A best practice process, Rihani says, involves addressing all of the departing employee’s financial concerns and ensuring that financial education is a measurable component of the outplacement contract.

Peter Martin Economics Correspondent
July 7, 2009

THE Reserve Bank board is likely to hold its nerve and keep interest rates steady despite new evidence pointing to a hiring freeze and jump in unemployment.

Newspaper and internet job advertisments slipped a further 6.7 per cent in June to roughly half its level of a year ago and the lowest level since the take-up of internet advertising, according to the ANZ employment survey.

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Newspaper job advertisements in the Herald and the Daily Telegraph slipped 1.2 per cent in June to be down 48 per cent on a year before.

An ANZ economist, Warren Hogan, said that while employers had stopped hiring they were still “hoarding labour” and were yet to seriously shed staff.

“For the moment population growth is driving the unemployment rate up rather than widespread job losses,” he said. “The key to the future is whether … labour shedding picks up.”

Forecasters surveyed by Reuters expect a further 25,000 jobs to be lost when the official figures are released on Thursday, which combined with population growth would push up the unemployment rate from 5.7 per cent to 5.9 per cent. Most expect an unemployment rate of 7 per cent by December.

The Reserve Bank board is likely be unmoved by the outlook for Australian unemployment when it holds its monthly meeting in Sydney this morning, focusing instead on improving prospects for China, which is now Australia’s biggest export customer.

Since the bank’s governor, Glenn Stevens, declared China’s recovery to be “real” at a business function in May, Reserve Bank staff have firmed in their view that increased demand by China for Australian raw materials reflected an economic rebound rather than speculative stockpiling.

Australia’s exports to China have hit record highs in each of the past three months, eclipsing exports to Japan.

The Reserve Bank believes that while there might be an element of speculation to these purchases, they are primarily driven by real and probably sustainable demand flowing from the Chinese Government’s stimulus program.

The bank expects the International Monetary Fund to revise up its outlook for China when it reports tomorrow.

At home the Reserve Bank is buoyed by confidence surveys suggesting a return to optimism among businesses and consumers and by some of the results from its business liaison program.

A Treasury report finds conditions in the mining sector better than had been expected and Australia’s retail and construction sectors “buoyant”.

However it finds manufacturing conditions mixed, with “those operating in the food and beverage sector or supplying lower value retailers generally enjoying relatively benign conditions” and “those engaged in the production of consumer durables and business plant and equipment less sanguine”.

But it says even among heavy manufacturers “several contacts believed the bottom of the current economic cycle may have been reached”.

Financial markets expect the Reserve to keep rates on hold today for the third consecutive month, but expect at least one further cut by the end of the year.