Tasmanian Business Reporter September 2018
Welcome to the September edition of the Tasmanian Business Reporter. After a crazy week in Federal politics, this month you'll read about the Tasmanian Chamber of Commerce's request to new Prime Minister Scott Morrison for action on more than $133 million of promises made to Braddon in July's by-election. You'll also find details of Tasmania's construction boom, which is predicted to continue for the foreseeable future, the launch of I-PREP, a University of Tasmania program set to align businesses with talented international students and a powerful column from TCCI Chair Susan Parr reinforcing the Chamber's call for local council amalgamation.
Welcome to the September edition of the Tasmanian Business Reporter.
After a crazy week in Federal politics, this month you'll read about the Tasmanian Chamber of Commerce's request to new Prime Minister Scott Morrison for action on more than $133 million of promises made to Braddon in July's by-election.
You'll also find details of Tasmania's construction boom, which is predicted to continue for the foreseeable future, the launch of I-PREP, a University of Tasmania program set to align businesses with talented international students and a powerful column from TCCI Chair Susan Parr reinforcing the Chamber's call for local council amalgamation.
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4 <strong>Tasmanian</strong> <strong>Business</strong> <strong>Reporter</strong> - SEPTEMBER <strong>2018</strong><br />
THOUGHT LEADERSHIP<br />
Over-representation<br />
breeding self-interest<br />
Susan<br />
Parr<br />
TCCI Chair<br />
TASMANIA is growing like<br />
Topsy who is outgrowing her<br />
clothes, shoes and bed.<br />
Like Topsy, Tasmania now<br />
is outgrowing our governance<br />
systems and our capacity to<br />
manage and plan across a<br />
range of current and future<br />
challenges.<br />
Tasmania’s population is<br />
just over 500,000. We have<br />
29 councils with 263 elected<br />
members. The oft repeated<br />
motherhood statement that<br />
“local government is the tier<br />
of government closest to the<br />
people” and therefore is the<br />
“most representative” is too<br />
readily accepted.<br />
Having so many elected<br />
members for such a small<br />
state raises the question of<br />
“who is representing whom or<br />
what?”<br />
It is clear that with such a<br />
concentration of representation,<br />
self-interest, personal<br />
preferences and philosophies<br />
assume an importance that is<br />
disproportionate to the total<br />
community interest.<br />
I believe that it has encouraged<br />
<strong>Tasmanian</strong>s to think<br />
that, if as an individual, I do<br />
not like or approve of a proposal,<br />
then I can expect it to<br />
be stopped or significantly<br />
modified.<br />
Because a candidate for<br />
election only needs a very few<br />
votes to succeed, the whole<br />
community perspective is not<br />
rigorously considered.<br />
There is no incentive to<br />
consider how neighbouring<br />
municipalities might be impacted,<br />
so the whole state<br />
continues to have absurd differences<br />
in service provision.<br />
The recent deplorable results<br />
of local government<br />
performance in governance,<br />
financial planning and the<br />
provision of services is a<br />
By TOM O’MEARA<br />
THREE local authorities would<br />
replace the state’s 29 councils in a<br />
bold new plan floated by the <strong>Tasmanian</strong><br />
Chamber of Commerce<br />
and Industry.<br />
With the <strong>Tasmanian</strong> economy<br />
at its strongest in recent history,<br />
the state’s peak business organisation<br />
has called on the State Government<br />
and Labor Opposition to<br />
reform local government once and<br />
for all.<br />
TCCI CEO Michael Bailey<br />
said the chamber’s vision would<br />
improve efficiency and provide<br />
greater transparency.<br />
The TCCI has been a strong advocate<br />
to restore State Parliament<br />
to 35 seats, and now it wants to review<br />
what it says is an antiquated<br />
and inefficient local government<br />
sector.<br />
Mr Bailey said the system was<br />
not based on modern best practice.<br />
“The days have gone when every<br />
town in Tasmania needed a local<br />
council and it is time to ensure<br />
there is more transparency in the<br />
sector,” he said.<br />
“In Victoria rate capping is now<br />
a way of life, with consumers and<br />
business able to compare their<br />
council performance with others<br />
through the “Know Your Council”<br />
website.<br />
“Not only are consumers and<br />
business able to compare rates in<br />
their municipality with those paid<br />
T A S M A N I A’ S L E A D I N G B U S I N E S S P U B L I C A T I O N . C I R C U L A T I O N 12,000 M O N T H LY<br />
Call for council cull<br />
in neighbouring council areas,<br />
but they are also able to compare<br />
the services offered and make informed<br />
decisions about what their<br />
local government area delivers.<br />
“There is no way to do that in<br />
Tasmania.”<br />
Tasmania has 29 councils, and<br />
263 councillors, for a population<br />
of just over 500,000 people, ranging<br />
in size from under 1000 people<br />
on Flinders Island to more<br />
than 67,000 people in Launceston.<br />
“We have 4000 local government<br />
employees, 23,000 State<br />
Government employees and<br />
just under 3500 Commonwealth<br />
Government employees, which<br />
equates to one employee for every<br />
Continued page 2<br />
How<br />
TCCI<br />
MEMBERSHIP<br />
benefits your business<br />
The <strong>Tasmanian</strong> Chamber of Commerce<br />
and Industry is an independent<br />
membership organisation that<br />
positively leads and supports the<br />
<strong>Tasmanian</strong> business community.<br />
TCCI provides valuable support to its members<br />
through advocacy and a range of programs<br />
and services including:<br />
> Customised membership to achieve<br />
your business objectives<br />
> Workplace relations advice<br />
> Workplace health and safety<br />
> Networking and promotion<br />
> Training and workforce development<br />
> Events<br />
<strong>Tasmanian</strong> Chamber<br />
of Commerce and Industry<br />
Hobart | Launceston<br />
Ph: 1300 559 122 www.tcci.com.au<br />
AUGUST <strong>2018</strong><br />
AXE THEM<br />
O\<br />
TCCI floats<br />
radical reform<br />
29 to 3<br />
JOIN TODAY!<br />
Last month’s <strong>Tasmanian</strong> <strong>Business</strong> <strong>Reporter</strong>’s coverage<br />
of the TCCI campaign launch.<br />
warning that we cannot continue<br />
as we have. The system<br />
is broken and threatens the future.<br />
Tasmania has a unique<br />
opportunity to create a more<br />
capable, better skilled and<br />
informed local government<br />
system to serve the 500,000<br />
people who live here and to<br />
ensure that services provided<br />
by local government meet the<br />
current and future needs of all<br />
<strong>Tasmanian</strong>s.<br />
It is time to bite the bullet.<br />
www.tcci.com.au<br />
A fair price for<br />
your business<br />
Dean<br />
Demeyer<br />
<strong>Business</strong> Broker<br />
WHEN it’s time to sell<br />
your business who should<br />
advise you on the eventual<br />
asking price – an accountant<br />
or a business broker?<br />
Some accountants specialise<br />
and have appropriate<br />
qualifications in<br />
valuing businesses.<br />
There are other professionals<br />
however who are<br />
better at providing you<br />
with the market value.<br />
Professional business<br />
brokers deal every day<br />
with buying and selling<br />
businesses. They have<br />
access to databases of<br />
sales, current market<br />
multiples for all industries,<br />
and knowledge of<br />
lender’s idiosyncrasies -<br />
all necessary to evaluate<br />
what a buyer may offer<br />
for your business in the<br />
current market. Knowing<br />
how buyers are thinking is<br />
useful.<br />
For example, an accountant<br />
will generally evaluate<br />
your business on the basis<br />
of its value on paper. This<br />
process relies on historical<br />
financial data and<br />
commonly used return on<br />
investment multipliers.<br />
Let’s say the net profit<br />
is $100,000 and the ROI is<br />
33 per cent. The accountant<br />
will say the business is<br />
worth $300,000.<br />
A broker will use a<br />
similar process but also<br />
take into account current<br />
market trends, the bank’s<br />
appetite for lending to that<br />
industry, the number of<br />
buyers enquiring about that<br />
industry to obtain a more<br />
realistic price. So the 33<br />
per cent ROI may actually<br />
to be closer to 40 per cent<br />
altering the listing price to<br />
$250,000.<br />
Dean Demeyer is<br />
a chartered accountant<br />
and licensed business<br />
broker<br />
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