Monthly Archives: July 2017

Interest rates remain on hold as lending restrictions take effect

The Reserve Bank has left the cash rate on hold at the record low of 1.5 per cent for the 15th month in a row, as economists warn any lift in interest rates would hit consumers, leading to slower economic growth and fewer new employment opportunities.

Tighter lending practices and housing market slowdowns in Sydney and Melbourne have had the desired effect of a rate rise, without impacting broader spending across the economy, a factor the central bank is keen to avoid in an environment of non-existent wage growth.

Retail figures released by the Australian Bureau of Statistics last week showed yet another month of sluggish results, with a fall in food, clothing and department store sales. At the same time new figures from CoreLogic revealed house prices in Sydney retreated for the second month in a row while Melbourne growth slowed to 0.5 per cent in October.

CoreLogic’s head of research Tim Lawless said the slowdown in house prices has helped to alleviate some of the pressure to raise the cash rate.

“Considering the household savings ratio is at a 5 year low and an increasing amount of debt is concentrated in residential mortgages, household balance sheets will be tested when interest rates eventually start to rise,” he said.

According to household income estimates from the Australian National University, Sydney households are dedicating an average of 48.4 per cent of their annual household income to mortgages, 10 per cent above the national average.

“Keep in mind these measures are for owner occupier mortgages which currently enjoy record low rates, so if interest rates were to rise it would likely suck demand out of the economy with mortgagees spending a higher proportion of their income to service mortgage debt,” said Mr Lawless.

Save money with today secure providers

Just a few short years ago, the image of an IT department for small and medium businesses was one of Dilbert-looking technicians noodling around with Cat 5 cable and speaking in a blend of Klingon and Robot. In other words, IT seemed completely remote, complicated and inaccessible to most employees. Additionally, each new hardware and software deployment, including installing malware protection, could take weeks to manually implement across the enterprise, and rarely went smoothly.

One solution – outsourced IT – has found greater acceptance in the past few years as its benefits have become more tangible to even small businesses. It is estimated that globally, 74 percent of companies use some form of outsourced IT solution, up 25 percent from 2009.

Read further for compelling reasons why a small or medium business should consider the IT-outsourcing trend.

 

Cost savings

Moving IT off-site can save an SMB thousands of dollars per year. As most business decisions are predicated on the bottom line, this is often the main driver in the decision to migrate. Areas of savings include:

Reducing hardware expenses. Servers, storage, cabling, cooling, and datacenter square footage expense can now be on a cloud vendor’s dime, not yours.

No salary or benefits expenses for IT employees.

Potential tax savings by converting capital expenditures (servers), that depreciate slowly over time, to a monthly cost which can potentially be deducted in the current tax year.

 

The latest software versions – hassle-free

Outsourcing IT means software, including malware protection for endpoints, can be updated automatically by the provider. This obviates the need for a local tech to run around taking workstations offline for upgrades.

Furthermore, updating software not only unlocks newer features, but also closes exploits in older versions that might allow hacker penetration. So it’sworth exploring any platform that can make this process painless and automatic, such as a cloud service.

 

Focus on your business, not technical issues

Anyone who survived working in Corporate America from the 1980s onwards is familiar with the spectacle and lost productivity that accompanies the proverbial “system going down.”

When outsourcing IT to the cloud, this nightmare occurs less often as data is often distributed redundantly across many servers that are monitored constantly, leading to greater stability and uptime, and less worrying about IT matters.

 

Improved security

Reputable outsourced IT providers are dead serious about security against malware, zero-day hacks and other intrusions and constantly monitor and update their protection schemes.

For most SMBs, outsourcing will provide a more frequent and secure back-up solution than their existing IT setups. Furthermore, as the data is kept off-site, it is well- protected from a local catastrophe, such as a fire or flooding.

 

No new employees to manage when scaling up

Scalability is easy with outsourced IT – simply contact the vendor for more storage, memory and processors as needed. There is no longer any need for job postings, interviews, expensive training, personality clashes, worker’s compensation or other common HR issues and liabilities just to get tech personnel to handle the increased operations.

Instead, you can focus your payroll budget on production or sales staff that directly drive revenue.

Investment In Endpoint Security

Trojans, worms and spyware sound like elements straight from a summer blockbuster, but the kind of action/adventure they provide on your PCs, Macs, smartphones and tablets make them more like a horror movie.

By deploying effective endpoint security, you can help prevent attacks and keep your users safe from viruses and other malware, such as spear phishing and advanced persistent threats. Today’s  state-of-the-art endpoint security has come a long way from its early roots in “antivirus” and has morphed into a complex suite of sophisticated protections against modern threats.

But good protection isn’t free; so, how can you save money, while still protecting your computers? Here’s how to reduce your investment….

 

Keeping users safe

In an ideal world, users would be perfectly security conscious. These mythical users wouldn’t:

  • Click on suspicious links.
  • Open file attachments emailed by criminals pretending to be their friends.
  • Respond to phishing messages that appear to be from a bank.
  • Disable software updates because warnings and reboots are annoying.
  • Disable a security product because it slows down their PC.
  • Install free software from an untrustworthy developer, because their friend liked it on Facebook.

Sadly, our world is less than ideal. Much, much less: A recent report said that 86 percent of U.S. businesses surveyed had lost sensitive data during the previous year.

User awareness training helps, but it isn’t sufficient. That’s why your endpoints need securing. Doing so helps prevent your users from accidentally exposing sensitive business information, such as your  banking credentials, secret-sauce recipes or future product plans.

 

Save time and money on endpoint security

Your challenge is to protect your users while minimizing costs: How do you save time and money, while keeping your company safe?

Sharemarket breaks through 6000 for first time since 2008

Australian shares rose on Tuesday to a near 10-year high, breaching the psychologically important 6000-point level, tracking global moves in equity markets.

The benchmark S&P/ASX 200 rose 0.81 per cent, or 48.42 points, to 6,002.20, its highest level since February, 2008.

After breaking through, it immediately retreated below 6000. At around 1:10pm, it is trading at 5998.50 points.

The benchmark has increased nearly 6 per cent so far this year, and is on track for a second year of gains.

“We are at a stage where although 6,000 is a psychological level, it is defined mainly by the valuations, which are quite stretched,” said Mathan Somasundaram, market portfolio strategist at Blue Ocean Equities.

The positive start was expected after the lead from Wall Street and gains in oil prices overnight, Macquarie Wealth Management division director Martin Lakos said.

BHP climbed 2.9 per cent, Rio Tinto rose 2.2 per cent,. Newcrest advanced 2 per cent and Fortescue rose 4.1 per cent.

Energy firms were also on the move, with Woodside up 2.3 per cent, Santos up 2.5 per cent and Origin up 1.6 per cent.

Banks were also supporting the benchmark, with CBA up 0.5 per cent, ANZ higher by 0.7 per cent, NAB advancing 0.4 per cent. Westpac couldn’t join in with the gains, however, trading flat.

Earning personal services income

At the same time the GST system was introduced the personal services income rules were also introduced. Where a business is caught by the PSI rules there are severe tax limitations placed on that business.

Where a business receives more than 50 per cent of its income from a contract purely for the supply of labour, which depends on the skills or expertise of the contractor performing the work, then all of the income under that contract is classified as PSI.

The stricter tax rules apply to a personal services business. The first step of assessing if a business is a PSB is that it earns PSI. A business is not classed as a PSB where it can show it passes the results test by:

  • Being paid to produce a specific result rather than billing for hours worked.
  • Provides the equipment or tools necessary to produce that result.
  • Any mistakes made must be fixed by the business at its own expense.

If a business fails the results test, and 80 per cent or more of the income is earned from one client and its associates, it will be classed as a PSB.

If less than 80 per cent is earned from one client the business will not be classed as a PSB if it passes one of the following final 3 tests:

  1. The PSI income was earned from two or more unrelated clients.
  2. At least 20 per cent of the income earned was generated from work done by either employees of the business or other contractors.
  3. The business is operated from premises that are used exclusively by the business, the premises are separate from the owner’s home, and the premises are physically separated from that of clients.

If the business is classed as a PSB it cannot claim a tax deduction for:

  • Rent, mortgage interest, rates or land tax related to the owner’s home.
  • Payments to a spouse or associate the support work such as secretarial and bookkeeping duties.
  • Expenses that could not generally be deducted by an employee.

In addition the PSI earned by the business must be allocated to each individual who performs the services, after being reduced by allowable deductions. Any payments made to working employees of the business must have tax deducted as if they are an employee, and any profit must be declared by the individual earning the PSI.

Nuclear firm TerraPower and the China National Nuclear

Bill Gates’ nuclear firm TerraPower and the China National Nuclear Corporation have signed an agreement to develop a world-first nuclear reactor, using other nuclear reactors’ waste

TerraPower chairman Bill Gates and Chinese premier Li Keqiang signed a joint venture agreement to create the Global Innovation Nuclear Energy Technology company, which will build a Travelling Wave Reactor and commercialise the technology.

This joint venture aims to design and construct multiple nuclear power plants generating around 1150 megawatts over the next two decades which utilise this fourth generation nuclear technology.

It expands a joint technology agreement between the two businesses signed in 2015.

Fourth generation Travelling Wave Reactors would differ from third generation, more traditional light water nuclear reactors, as they would not require enriched uranium to generate energy, and could instead use waste uranium

Travelling Wave Reactors would require less fuel per kilowatt-hour of electricity than light-water reactors, due to TWRs higher fuel burn, energy density, and thermal efficiency.

It is also safer as spent fuels, such as depleted uranium, from other reactor types could be recycled without separating out plutonium, and could operate without refuelling for up to 40 years.

TerraPower states that the US currently holds approximately 700,000 tonnes of depleted uranium, and the reactor would only need eight tonnes of this material to power 2.5 million homes for a year.

Changes to operate legally in Australia

Amazon has been told that its contracts for its marketplace for small business need to be changed to meet Australian rules.

Kate Carnell, the Australian Small Business and Family Enterprise Ombudsman, has written to Amazon to ensure the company complies with Australia’s unfair contract terms legislation.

Under Amazon’s US terms and conditions, the company reserves the right to refuse service, terminate accounts, terminate rights to use Amazon services, remove or edit content, or cancel orders at its sole discretion.

“This may be considered unfair as action can be taken by one party, Amazon, but not the other party, the vendor, to terminate the contract,” she says.

“I’ve requested that Amazon review the terms and conditions in use for standard form contracts in its Australian operations to ensure they comply with the unfair contracts terms legislation.”

The US online retail giant is building momentum, hiring more staff and establishing a fulfillment centre in Victoria, to pursue the retail dollar in Australia in a big way.

Part of the big push, according to Amazon, is “opening up the opportunity for thousands of Australian businesses to sell at home and abroad through Amazon Marketplace”.

Carnell says the pending arrival of Amazon Marketplace in Australiais an opportunity for many small businesses to compete online and extend their reach.

However, Carnell has reminded Amazon that it has an obligation to treat small businesses fairly in accordance with Australian law.