Morris Finance News

Petrol Prices take a dip

Petrol Prices across Australia have plummeted down to 2009 levels with some locations nearing $1 per litre mid August. Additionally, cheap fuel days seem to have shifted from Fridays or Saturday towards Sunday and Monday.

Why Have Prices Dropped?

There are several reasons for the recent decline in pump prices:

1. Global Issues: As the US economy continues struggle, investors are becoming concerned about the implications of this to the oil demand and overall global economy.

2. Aussie Dollar: the strength of our currency definitely plays a part in lowering prices. The prices for petrol we receive from Singapore are the lowest we’ve paid in almost 8 months.

3. Competition: The cheaper wholesale rates are allowing providers to be more competitive, resulting in lower prices at the pumps.

What does it mean?

Motorists are saving an average of $8 per month in comparison to June statistics. Besides helping families and drivers across Australia, this also has positive effect for our economy. With consumers feeling more confident and optimistic, retailers and investors hope this will translate to increased spending and market activity.

RBA Leave Interest Rates Unchanged.

At its meeting today, the Board decided to leave the cash rate unchanged at 4.5%.

Important Accounting Dates for September

September will be an easy month for lodgements with just one date:

21 Sep 10

Activity statements

August 2010 monthly activity statements: final date for lodgment and payment.

The Role of Finance - Glenn Stevens

Recently, Governor Glenn Stevens delivered a speech titled The Role of Finance. It was delivered at a lecture in commemoration of Australia’s great scholar, writer and economist Edward Owen Giblin Shann. The speech was a brilliant overview of finance and its role in society form early origins to modern implication and future evolution.

To formulate the speech, Glenn Stevens broke down the larger topic of “What is the Role of Finance” into four questions:

1. What are the desirable functions of the financial system, and how did they evolve?
2. What problems are inherent in finance, and what issues do they raise for policymakers?
3. What questions arise from the growth and change of the financial system over the past couple of decades?
4. What are the challenges as we look ahead?

Below are the key elements from each section of the speech. For the full details, we recommend you read the full document which can be found on the official RBA website.

The Functions of the Financial System and its Origins

What is it that we need the financial system to do?

I think we can outline five key functions. We want it to provide:
i. a reliable way of making payments (that is, exchanging value);
ii. a means for pricing and pooling certain types of risks;
iii. a way of transferring resources from savers to borrowers;
iv. a way of transferring the returns back again, which requires that the savers’ money is not lost and which, in turn, requires monitoring of borrowers and managers; and
v. liquidity.

These are very valuable things for a community to have. The modern economy could not have developed without these capabilities arising in the financial system.

We tend to think of financial activity and innovation as very recent, but in fact the history is a long one. Borrowing and lending is almost as old as civilisation itself, with financial activities such as taking deposits, making loans and facilitating transactions dating back at least to 18th century BC Babylonian records.

The need for credit facilities, expansion and short terms financing lead to development of a proper banking system. In Australia, this was marked with the formation of the Bank of New South Wales in 1817 and its responsibility to issue paper currency.

The Problems of Finance and Development of Regulation

As banking developed, it became more leveraged. No longer was it a case of a few wealthy individuals risking their own money in enterprises akin to venture capital funds – accepting the risk and illiquidity that went with it. Now, in their more developed form, banks raised deposits from the public – redeemable at their face value, at notice or at call.

Glenn Stevens also raises the point that the history of finances is also one of regulatory response. As an inseparable aspect of finance, regulation prompts further innovation, and has its own pronounced cycles. In the 1930s, regulation become increasingly intrusive, running economies on direct intervention rather than price mechanisms.

Questions Arising from the Growth of Finance

The past 20 years has seen a major increase in the size and breadth of activity of the financial sector in most economies, as well as acceleration in the globalisation of finance. Total assets of financial institutions relative to the size of the economy have increased from the equivalent of around 100 per cent of annual GDP in the early 1980s to almost 350 per cent in recent years.

There are at least two potential problems in a world where the finance sector becomes ‘too big’.

1. Since finance has its own cycles of risk, crises and de-leveraging, a crisis in a financial system which is larger than the economy risks destabilising the whole economy. Financial crises often rely on the general public for support and restoration which can have crippling economic effects. This was seen recently in several North Atlantic countries.

2. A large financial sector can make incomes less stable and draw in too many resources which would otherwise be employed for a higher social purpose; there are more PhD physicists, mathematicians and engineers working on options pricing rather than increasing then increasing the productivity of our economy.

These negative “side effects” of finance have prompted Financial Services Authorities around the world to question whether the liberalisation of the sector has gone too far. Glenn Stevens predicts this question will continue to be highly debated over the next few years.

Looking Ahead

Where then does this leave us?

The regulatory cycle has come fully around. After two or three decades of liberalisation and allowing markets and private agents in the financial sector more sway, the international debate has of late been consumed with issues of financial regulation: how to re-design it, and generally increase it.

The objective should not be to suppress finance as it was for the majority of its history. After all, finance matters and can make a make a massive difference to economic development and ordinary lives.

Therefore, the objective should be to preserve the genuine benefits of an efficient and dynamic financial system, while restraining or punishing behaviour which can lead to economic instability.

5 Ways to Stay Motivated at Work

We all have times when we don't feel motivated in our job. This can be a certain time of the day, a gap between projects or an uninspiring series of tasks.

Although it's easy to blame your boss or manager, you are predominantly responsible for keeping up your motivation. Different tactics work for different people, and below are some tips to help keep your spirits up and increase your productivity:

1. Plan Your Day

Select several things you want to accomplish on a particular day. It's better to have two or three tasks (depending on the time required) than a two page to-do list. Make sure you know exactly how to get the job done, and clarify anything you are unsure of. By being fully aware of what's ahead, the task will feel manageable and not so daunting. It will also help you work efficiently because you will be aware of all the elements which need to be completed.

2. Break Up Your Day

It's hard to keep motivation up when you are doing the same things over and over again. Scheduling in breaks is just as important as allocating tasks. Have a cup of tea, read a quick news update or walk over to a colleague. It will encourage you to work more productively because you will have a regular break you can look forward to.

3. Know Your Limits

Doing too much, all the time will inevitably leave you feeling burnt out and unmotivated. When you do too many tasks, you lose focus of what your goals and key roles are. You are always busy "being busy" but probably not utilising your unique strengths for which you were hired.

Step back and assess all the tasks you are doing. Are all of them your responsibility? Often, we take on work to help out colleagues, or just because it lands in our inbox. Learn to delegate and assess what is and is not your responsibility. This will leave more room for tasks you enjoy, which are usually the ones you were hired to do in the first place!

4. Remind Yourself Why You're There

Even in your ideal job, you will have times when you are not motivated. It's important to remind yourself why you are at your current job. Is it a step on your career path? If so, how can you prove yourself and create opportunities to make sure you keep moving towards your ideal position. Are you in it just for the money? Then focus on your personal goals which will benefit from your income. Find out about incentives and increments, as well as the expectations you need to meet to get to the next level.

5. Reward Yourself

Finally, the simplest and often most effective tip: reward yourself for completing objectives and meeting goals. Most organisations have rewards or incentives which you can work towards, but it's easy to do it for yourself. It can be as simple as a sweet treat towards the end of the day to keep you productive in the afternoon or a new book if you finish all your weekly tasks.

Most importantly keep a positive attitude and try to associate with others who have the same mindset.

iPhone 4 - is it worth it?

On July 30th Australians joined the millions of other iPhone4 owners across the world. While there has been a significant amount of controversy surrounding the release (mostly thanks to the antenna issue), Telstra recorded the highest amount of pre-orders for this smartphone. The major carriers have also updated their plans to cater to the increasing data usage among buyers.

To help you decide whether it’s worth the upgrade we’ve rounded up all the stats on the iPhone4:
Scroll through or use the quick links below.

iPhone 4 Features
iPhone 4 Plans & Prices
Should I Upgrade?

iPhone 4 FEATURES

Speed & Multitasking: This is the feature all iPhone users have been holding out “4”. With the increased speed of the Apple A4 chip which powers the phone, users can seamlessly jump between programs, without lag time. This means you can receive Skype calls while using another programs, and flick between apps and emails. The battery has also been upgraded to increase life.
* While iPhone 4 users have had no trouble with the new iOS 4.0 software, 3GS users upgrading to the software have reported issues.

Display: The “Retina Display” on the new iPhone4 has the highest resolution screen on a phone. The 960x640 resolution, 3.5 inch screen offers significantly crisper images than the previous models. See the demo comparison here.
It mean less zooming, and less squinting for those of us who do a lot of reading and emailing, and unprecedented image clarity for those who snap and share photos.

Thin-ness: The new iPhone 4 is thinner but sturdier than the previous versions. It uses glass for its front and back plates, which Apple has said is 30 times stronger than plastic. Made from the same materials as helicopters and high-speed trains, it’s chemically strengthened to be durable and scratch resistant.

HD Video/Still Camera: The quality and functionality of the HD Camera means you no longer have to carry a bunch of devices. The iPhone4 can capture a photo or video as well if not better than your entry level camera or video recorder. Plus, it offers features to make it easier to edit and share your images:
- Edit on the phone to turn video clips into a movie
- Share a movie instantly over messenger for live feed, send pre-recorded movies via email, or upload just about anywhere
- Self portrait video mode lets you see yourself while you record

Video Chat: The iPhone4 has two cameras, on the front and back of the phone, so you can record yourself while viewing the incoming video. With a tap, you can switch between cameras to flick between filming your face, and your surroundings. Video chat comes ready to use, and doesn’t need any account set-up.
* Video chat can only be accessed on WiFi and with other iPhone4 users. However, the feature’s popularity will increase as it is released to 3GS users.

*Antenna: The antenna and reception issue has been blown out by critics. However, that’s not to say the issue does not exist. Apple can’t deny users complaining about poor reception. What Apple can do, is hand out free cases to prevent the problem for buyers. Since cases are only being supplied to those who buy before September 30, 2010 suggests a manufacturing fix may be on the way. If you can’t hold out for the potential fix, the millions of current users say the phones other features still make it a remarkable tool despite the small flaw.

iPhone 4 PLANS & PRICES

The following carriers are offering locked plans on a 2 year contract. Apple is selling the phone unlocked for $859 (16 GB) or $999 (32 GB).

Telstra More details.	$49 - $400 calls, 200MB data $79 - $750 calls, 500MB data $99 - $1000 calls, 500MB
Optus Optus plans include unlimited mobile access to Facebook, Twitter, LinkedIn, MySpace, eBay and Foursquare. On the $49 plan, there is an $8/month for 16GB iPhone 4 and $15/month for 32GB model. This is $10 a month on the $59 cap for the 32GB model. More details.	$49 - $450 calls, 1GB data $59 - $550 calls, 2GB data $79 - $800 calls, 2GB data $89 - Unlimited calls, 3GB data Timeless Extreme Plans: include unlimited talk, text, video calls and MMS) $89 - 3GB data $99 - 5GB data $129 - 6GBdata
Three On the $39 plan, customers must pay $10 a month and $14 a month for the 16GB and 32GB versions, respectively. On the $49 plan the monthly installments are $5 and $10, respectively, while the phone is free on the $79 plan. More Details.	$39 - $200 calls to VF/3 + $150 calls to any network, 150MB of data + bonus 1GB $49 - $270 calls to VF/3 + $350 calls to any network, 250MB of data + bonus 1GB $79 - $450 calls to VF/3 + $650 calls to any network, 1GB of data + bonus 1GB
Vodaphone On the $29 plan, customers must pay $18 and $24 a month for the 16GB and 32GB versions, respectively. On the $49 plan they pay $5 and $10 a month, respectively, while on the $69 plan the 32GB version has a monthly installment of $5. The phone is free on the $79 and $99 plans. More Details.	$29 - Unlimited calls to VF/3 + $180 calls to any network, 50MB of data + bonus 500MB $49 - Unlimited calls to VF/3 + $450 calls to any network, 500MB of data + bonus 1GB $69 - Unlimited calls to VF/3 + $650 calls to any network, 750MB of data + bonus 1GB $79 - Unlimited calls to VF/3 + $800 calls to any network, 1GB of data + bonus 1GB $99 - Unlimited calls to any network, 2GB of data + bonus 1GB

SHOULD I UPGRADE?

I don’t have a Smartphone: If you are waiting for the perfect time or perfect model to change to a smart phone, stop waiting. Phones are coming out constantly and updates are inevitable. By getting the iPhone 4 you have access to the latest features and apps.

I have an older 3G model: If you are on an older model you are probably nearing the end of your contract. This is the perfect time to upgrade. New iPhones are faster and offer better connectivity to help you make the most of new features like multitasking.

I have a 3GS model: The latest iPhone models are still relevance because they allow you to install updates to use 4.0 technology and apps. If you have a lot of time left on your contract, and are not “gadget-crazed”, you can wait until the 5th generation comes out. (Likely to coincide with the end of your contract.)

If you already have an iPhone 4: we’d love to hear your thoughts. Give us a call, drop us a line or come in to show off your new toy.

What Are Residuals?

"What is a Residual?" is one of the most frequently asked questions we receive at Morris Finance. A residual is a lump amount of your purchase that is deferred until the end of your contract. It reduces your total repayment amount, therefore lowering repayments, and making the item more affordable. By offsetting your end of term balance, you also create flexibility within your cashflow.

When your lease comes to an end the residual amount remains. Most commonly, people choose to trade in their existing vehicle or equipment for a new one. The sale price pays off the residual and you are able to get a brand new vehicle or equipment while maintaining similar repayment amounts. Residual amounts can vary between 25% to 50% of the purchase. At MFL, we attempt to match the residual to the asset’s anticipated trade-in value so that you are not left with a short fall to pay at the end of your term. Alternatively, if you choose to keep your vehicle or goods, you can refinance the residual amount. This will create equity and build ownership towards your goal, but increase the amount of interest paid over time.

What's the difference between a Residual and Balloon?
They are different terms to describe the deferred amount of your purchase. A residual refers to the estimated value of the purchase at the end of your Lease contract. The term balloon is often used in Hire Purchase scenarios, where you pay out the balloon to own the vehicle at the end of the term.

To discuss the best possible facility for your purchase or answer any further questions, contact one of the New Business Specialists at Morris Finance.

RBA leaves rates at 4.5% for 3rd consecutive month.

For the third consecutive month, the Reserve Bank of Australia has left interest rates unchanged at 4.5%. Although the announcement comes as a relief to consumers, it is not a surprise; economic data from the previous quarter revealed that inflation rates were lower than expected. Treasurer Glenn Stevens stated that current rates were in line with average trends over the past decade, and at an appropriate level.

Although Glenn Stevens’ summary of the meeting gave little away about RBA’s future intentions, economists are predicting rates could remain unchanged until 2011. The main factor to get rates moving again would be a raised inflation reading at the end of third quarter in October.

On another note, the concern over house prices and “the bubble” have seemed to subside with Stevens saying that "credit outstanding for housing has continued to expand, but the upward pressure on dwelling prices appears to have abated." He showed more concern towards business credit, highlighting that conditions remain difficult in some sectors.

Banks and major lenders are expected to follow suit and keep rates on hold. What this means for Morris Finance is the ability to continue offering highly competitive rates for our clients. Ask our staff for detailed information.

Important Accounting Dates for August

Morris Finance would like to remind all our clients and readers of the important lodgement dates coming up for the month of August. For more information, visit ato.gov.au.

11 Aug 10

Activity statements
Quarter 4 (April - June 2010) activity statements: final date for electronic lodgment and payment. Refer to Lodge your activity statements online for information on your eligibility for this later due date.

14 Aug 10

PAYG withholding
Final date for lodgment of the PAYG withholding payment summary annual report. Use this to report amounts withheld from salary and wages and other payments. These amounts are reported at label W2 of the activity statement.

Superannuation
DASP data records that form part of the PAYG withholding payment summary annual report.

21 Aug 10

Activity statements
July 2010 monthly activity statements: final date for lodgment and payment.

GST
Final date for eligible monthly GST reporters to elect to report GST annually.

28 Aug 10

Superannuation
Superannuation guarantee charge statement - quarterly (NAT 9599, PDF 136KB) (if required contributions were not made by the due date) for quarter 4 2009-10 (1 April - 30 June) to be lodged and paid to the Tax Office. The SGC is not tax deductible.

Morris Finance gets involved!

Morris Finance has always placed community involvement high on the priority list. Even throughout the turbulent times of our previous 2009-10 financial year, we managed to support a variety of great causes locally and Australia wide.

Aside form the rewarding feeling of enhancing the community in which we live and work, the fund raising efforts have also been great for our business. The casual and relaxed atmosphere of these events has allowed us to get to know clients and form business relationships. It’s also a great way to expose our brand and personally communicate to people what we are all about.

Some event highlights form the previous year include:

VECCI’s Annual Golf Day at 13th Beach which raised funds for the Children’s Ward at Geelong Hospital. Aside from participating, MFL donated a Queensland holiday to encourage people to enter in the “Hole in One” competition, raising further funds for the charity.

NAB Charity Auction where businesses donate and bid on items to raise funds for a number of local charities including Headspace, Kids Plus, Michael Carmody Foundation and the Barwon Health Foundation.

Breast Cancer Research Raffle to which MFL donated the top prize of a holiday worth over $2000.

Our community commitments and corporate responsibility trickles down from the very top, starting with CEO Ian Murray. In his spare time, Ian takes the elderly and disabled on board his award winning yacht Cinquante. The most recent commitment of Morris Finance is from Managing Director Nathan Murray who has got on board with Geelong MPs to develop local career opportunities.

To get involved or to find out more information about upcoming events contact us or give us a call.

2010-11 Financial Year Tips

At the start of a new financial year, it’s important to assess your business and set a plan to move forward. As you are creating your “new year’s resolutions”, it is important to take into considerations recent policy changes and ATO’s objectives for the coming year.

Your Business Objectives:

Dedicate time to review you business in order to maintain progress over the next financial year. Based on the current economic climate, these are key areas that businesses should look at while planning for the coming year:

Profitability: Assess the profitability of your business, identify your highest yield consumers, and then create a plan to target then throughout the year.

Cashflow: If your business relies on a bank or another lending institution, prepare your cashflow to handle interest rate increases later this year and in 2011.

Staff Retention: as industry sectors improve, it is expected that there will be increased demand for quality staff. Retain your top performers by reviewing pay packages and training opportunities early in the year, before they receive a rival offer.

ATO Changes & Objectives:

In order maintain a compliant business, familiarise yourself with the following areas which have recently undergone policy changes. You should also be mindful of the sectors which ATO is targeting in their tax time crack down.

Wages & Awards

Fairwork and the ATO will continue to keep a watchful eye on businesses, especially SMEs, to ensure employees are paid correctly. Minimum wage has been increased to $569.90/week, and the shift to the Modern Awards system started July 1st. In order to achieve a smooth transition process, businesses will be allowed to phase in the new awards through 20% increments. Get the Modern Awards Fact Sheet.

Losses & Fringe Benefits

ATO says businesses continue to submit improper claims in these areas, in particular claiming losses that aren’t eligible. They will also be targeting luxury cars that have been claimed under business, so make sure you keep a very thorough logbook this year.

Consumer Credit

The National Consumer Credit code has been undergoing a changeover from state to federal government. Major reforms for SMEs kicked in July 1st, including regulation changes to penalty clauses, limitation of liability and one sided variation clauses. Sign up to our newsletter to read more about the changes in our next issue.

At Morris Finance, we consider it our responsibility to be aware of the latest policy changes and maintain appropriate accreditation. You can visit our Associations page to view our membership details or contact us for more information.

Success for MFL at the Geelong Centrelink Expo.

Last Thursday, Nathan Murray, Melanie Tink and Jim Climpson headed to the Geelong Arena to represent Morris Finance at the Centrelink Job Expo. Over 8,000 people attended the event which advertised over 1000 jobs. The expo attracted government officials including MPs Simon Crean, Darren Cheeseman, Robert Myles and local Mayor Cr John Mitchell.

This was the 24th event of its kind in Australia. As a response to the large attendance and successful results, the government has approved the funding for a further 19 similar events this year. As the headline in the Geelong Advertiser of the 1,333 jobs advertised at the Expo, 775 were filled on the day.
Managing Director Nathan Murray represented Morris Finance in interviews with Chanel 31, K Rock FM and Centrelink officials. He discussed the exposition's positive effects on the greater community of Geelong as well as the benefits for local business.

At the show, Morris Finance received over 80 applications for employment, spoke with several promising candidates, and expects more resumes / inquries to be emailed through over the coming weeks. It was also a great opportunity to promote the company in Geelong. Although Morris Finance has been based in Geelong for 12 years, their core business is Australia wide and have only recently started marketing in Geelong.

From the attending businesses, Morris Finance Ltd was selected by Centrelink officials to conduct a follow up discussion later this week. Nathan Murray will meet with MP Simon Crean to discuss the positive outcomes of the Centrelink Jobs Expo, and the benefits it will have on the local community.

If you have any enquiries regarding the expo or would like to follow up on your job application please contact our office.

Today: Morris Finance at the Expo

Morris Finance representatives will be at the Centrelink Job Expo today. Over 10,000 people are expected to attend the Geelong Arena, with over 1,000 jobs on display. Visit www.centrelink.gov.au for more info, or pay us a visit at the show.

Say Hello to Melanie Tink & Jim Climpson at the MFL display.

Interest Rates Remain at 4.5%

The RBA announced yesterday, after their monthly board meeting, that the cash rate will remain at 4.5%. This is the second consecutive month that rates have not been lifted.

Tax cuts put $$$ in your pocket

July has started off with a bang, as we head into a new financial year, with a new prime minister. The recent flurry of events has overshadowed the arrival of the latest tax cuts.

On July 1st, the third and final tax cut from the Rudd Government came into effect. The following changes will add a bit of extra padding to our next pay packet. How much will depend on you income bracket.

tax free threshold increases to $16,000
30% tax threshold increases to $37,000
38% tax rate drops to 37% for those earning $80,00-180,000

Therefore, if you earn $100,000 your weekly savings will increase to just under $10 a week. It won’t make or break your budget, but can make a difference if used creatively. Subscribe to a new magazine or take some new contacts out for coffee each week. Read James Thomson’s article for some other ways to squeeze the benefits out of this tax cut.

Lower income earners will have more noticeable savings. For a family with a combined income of $85,000 the tax cuts can mean a weekly saving of around $40, or $2100 annually. This will vary depending on the tax brackets of each income source.

If you are thinking of really harnessing your savings, Morris Finance can answer your question and provide investment options and opportunities.

Tax Payable in 2010-2011 (TheAustralian.com.au)
Annual Income	Extra $ in your pocket
20,000 - 35,000	150
40,000 - 60,000	450
70,000 - 80,000	300
100,000	500
120,000	700
150,000	1000
180,000+	1300

Important Accounting Dates for July

It is the first month of the 2010/11 financial year. Make it your resolution to keep track of the important lodgement dates and keep your business compliant. Morris Finance will post mothly dates that you need to be aware of.

14 Jul 10

PAYG withholding
Payers must issue PAYG withholding payment summaries to payees (that is, employees and other workers).

21 Jul 10

Activity statements
June 2010 monthly activity statements - final date for lodgment and payment.

Quarter 4 (April - June 2010) activity statements containing a monthly GST obligation - final date for lodgment and payment.

To ensure you receive the correct amount of credit in your income tax assessment, finalise all your PAYG instalments before you lodge your tax return.

Quarter 4 (April - June 2010) consolidated instalment activity statements - final date for lodgment and payment by a head company of a consolidated group.

28 Jul 10

Activity statements

Quarter 4 (April - June 2010) activity statements - final date for lodgment and payment.

To ensure you receive the correct amount of credit in your income tax assessment, finalise all your PAYG instalments before you lodge your tax return.

PAYG instalments

Quarter 4 (April - June 2010) instalment notices (forms R and T) - final date for payment and, if varying the instalment amount, lodgment (two-instalment payers are also required to pay 25% of their PAYG instalment liabilities).

To ensure you receive the correct amount of credit in your income tax assessment, finalise all your PAYG instalments before you lodge your tax return.

GST instalments

Quarter 4 (April - June 2010) instalment notices (forms S and T) - final date for payment and, if varying the instalment amount, lodgment (two-instalment payers are also required to pay 25% of their instalment liabilities, and four-instalment payers are also required to pay the final 25% of their instalment liabilities).

Superannuation

Superannuation guarantee contributions for quarter 4 2009-10 (1 April - 30 June) are to be made to the fund by this date.

If an employer does not pay the minimum superannuation guarantee contributions for quarter 4 by this date, they must pay the SGC and lodge a Superannuation guarantee charge statement - quarterly with us by 28 August 2010. The SGC is not tax deductible.

For more information visit ATO.

Revenue Forecast: How will your industry perform this year?

We’re on the brink of a new financial year, and the statistics for Australia are looking pretty good. Next year’s economic growth is anticipated to reach 3.7%, putting Australia ahead of most advanced global economies.

The recently released IBISWorld statistics cast light on the industries that will contribute to this growth. It also points out industries that will experience negative growth.

Top 5	Bottom 5
Organic Farming	Insulation Services
Online Information Services	Wired Telco Carriers
Insurance Brokerage	Paper Manufacturing
Mobile Telco Carriers	Video Hire Outlets
Alternative Health Therapies	Grape Growing

The Top 5 Growing Industries:

Organic Farming +15.1%
The organic industry is gaining momentum as our disposable income increases sand we become more conscious of health and environmental impacts of what we eat. As the likes of McDonalds and other large corporations catch on to this trade we will see rapidly rising demand for the production of organic goods.

Online Information Services +8.7%
As multimedia devices flood the communication and become more affordable, the demand for information on the go will get even higher. With easy access, consumers are going online for information and resources. The flow on effect of this is already being seen as companies and advertisers look for ways to target consumers online and through software applications on the devices.

Insurane Brokerage +7.2%
In the coming year, Insurance carriers are likely to recover some of the underwriting capacity lost in recent investments. As insurance brokers work on a commission basis, revenue growth will lead to increased wages and employment.

Mobile Telecommunication Providers
The explosion of handheld devices that are dependant on data plans will fuel revenue growth for the telecommunicating providers. Users are also ditching their landline connections and relying on their wireless devices.

Alternative Health Therapies +6.5%
The trend that is driving organic production will also benefit the alternative health industry. As consumers become more aware and comfortable with alternative therapies, demand will increase. Most major health insurance providers are now adding this to the coverage policies, again increasing consumption in this sector.

The Negative Growth Industries

Insulation Services -24.1%
The government rebates and support have been the major factor in the raid growth of this industry over the past 3 years. With the withdrawal of subsidies, employment numbers are expected to drop as the market competition increases with independent contractors and DIY buffs.

Wired Telecommunication Carriers -4.8%
The same trend that is driving the wireless carriers is doing the opposite for those still offering wired services. Consumers’ devices encourage on-the-move use, and wireless plans cater to this trend with reliable and affordable plans.

Paper Manufacturing -3.1%
Yet another industry that suffers with the rise of versatile and affordable technology. The iPad craze has won over readers and content producers alike, bringing more media online and reducing the need for print. In addition, over 50% of Australia’s paper products are now made from imported material as publishers struggle to compete with the much cheaper online medium.

Video Hire Outlets -3.1%
Media streaming and downloads have been around for years now, both legally and illegally, however only recently have they been drastically reducing revenues for the likes of video hire businesses. This is again due to better technology which allows users to view the media on a range of devices without compromising quality.

Grape Growers -3.0%
90% of our grapes are used in the production of wine. Unfortunately for the growers, Australian wine has been selling cheaply or not selling at all. The high autralian dollar means tough times ahead for our wine growers in this competitive industry.

Breaking News: Australia's New Prime Minister

Julia Gillard is Australia's new leader.

Just before 10am today, after a whirlwind of political events, Julia Gillard became the first female Prime Minister of Australia. Subsequently, Kevin Rudd became the first Prime Minister to be deposed before the end of his first term.

Gillard was elected unopposed after Kevin Rudd chose to step down before the leadership vote in Canberra this morning. Treasurer Wayne Swan was also elected unopposed as Deputy Prime Minister.

Morris Finance will be keeping our clients and readers up to date as these events continue to unfold.

iPad Summarised

View: iPad Features iPad Plans iPad for Business

It has been a few weeks since the iPad hit Australian stores on May 28th. Now that the line ups have died down, and delivery companies have had a chance to breathe, you can take a look at what the madness is all about; that is, if you aren't reading this on an iPad already. Statistics alone say a lot, with over 2 million units sold as of June 1st. (U.S. release date was April 1st for wifi model followed with the 3G model on April 30th)

Is it just a bigger iPhone?

The answer is no. Initially, critics were quick to criticise the lack of features in comparison to the iPhone, even though these products were never meant to compete. Apple's challenge was to see if they can create another product category to sit between the phone and laptop.
While the iPhone will continue to dominate the mobile market, the iPad's larger size will make it ideal for reading, browsing and gaming. In business it will assist anywhere we can currently use a notepad, or clipboard as well as allow for easy on the go presentations. There is also an opportunity for the iPad to lead the way in getting the older Australians online. The simple interface, no keyboard or mouse, and large screen will be great for arthritic hands and less intimidating for those not familiar with technology.

FEATURES

Size:
Weight:
Screen:
Capacity:
Battery:
Connectivity:

242.8mm x 189.7mm, 13.4mm thick
680g (WiFi) or 730g (3G)
9.7" or 1024 x 768 pixels
16 to 64GB
10 hours, or 1 month in standby
Bluetooth, Wi-Fi or 3G

Some users are questioning the growing list of features Apple has chosen to exclude from its latest creations.

The iPad does not have:
- camera or phone
- usb drives or memory card reader
- support for flash (although Apple has release CS5 conversion software for apps)
- multi-tasking
- only iTunes option for video and music

The features and hardware that are included have been methodically thought out to clearly differentiate the iPad form other products. Apple's ingenuity is that they have created, and dominated, a new product category without compromising the sales of their other devices.

PLANS

All four major major telecommunication companies are offering a range of plans for the iPad. Telstra, Optus, Three and Vodaphone have confirmed they will not be selling the iPads in stores, but certain locations will have the official MicroSIMs.
Plans vary from monthly, post and prepaid, all with slight differences that can make an impact on the total cost.

Telstra - expensive, limited plans. Best coverage.

The iPad plans follow the Telstra trend where customers get fewer options, that are generally more expensive than competitors, but have the best coverage. The three advertised prepaid plans are $20, $30 and $60 for 1, 3, or 6GB respectively, with a $30 starter fee. Company reportedly has two other plans not adverted on its site of $80/ 9GB and $100/ 12GB both expiring in 30 days.

Optus - the biggest range of plans.

Optus has plans starting at $15 for 500MB, and 1G sign up bonus. The catch is you must use the bonus gig within 15 days.
All plans have a $30 starter fee, and monthly options are $20, $30 and $60 for 2, 3, or 8GB respectively.

Vodaphone - best of both worlds, no roaming fees.

With a starter plan of $9.95 for 250MB, and $49.95 for 30 days of unlimited data, Vodaphone is looking pretty attractive. Another benefits is the lack of roaming fees, meaning users can browse just about anywhere without extra cost, although speeds will be slower.

Three - best budget plans for metropolitan users.

The company has kept up with its reputation as the budget telco, with a free starter pack and 500MB plans for $15. Three is known to have a limited coverage area, so users need to consider their location as roaming fees will quickly exhaust your plan.

FOR BUSINESS

The ATO has confirmed that businesses will be able to claim iPad purchases in tax deduction, following same procedure as a laptop. This means software, data usage and other operating costs will also be eligible. The ATO has yet to make a statement regarding salary packaging including the iPad, with major companies such as JetStar already incorporating the new gadget into their business procedures.

Essentially, iPad can replace anything from a notepad, clipboard or screen. The technology is already being considered for use in restaurants, hospitals and onboard airplanes.

Whether its right for your business will depend on how you it can add value to your customers. Without a though out purpose, it can quickly become an expensive impulse buy.

NEW! Morris Finance now offers Insurance.

In a continued effort to increase convenience for our clients, Morris Finance will now offer insurance options for new and existing clients. By bringing more services under one roof, we will achieve a faster, more efficient application and settlement process for vehicles and equipment.

The following is a breakdown of some of the popular insurance choices we now offer. For a comprehensive breakdown, or a specific enquiry, please feel free to contact our New Business Specialists.

Motor Vehicle Insurance
Insure your vehicle against accidental damage, fire or theft. This cover protects you for up to $20 million in claims made against you, including damage to property, or other vehicles. Further benefits are also available, just ask our staff for the details.

Gapcover Insurance
Protection for the “gap” amount between your comprehensive insurer’s payout and the remaining loan balance on the vehicle. Applicable when the vehicle is classified as a total loss due to accidental damage, fire or theft. (Subject to policy benefit limits.)

Loan Protection Insurance
Cover to protect your loan repayment obligations in the event that you become involuntarily unemployed, or unable to work due to sickness or other unexpected circumstances.

Purchase Price Insurance
Protection for the difference between your comprehensive insurer’s settlement and the price you originally paid for the vehicle. Applicable when the vehicle is classified a total loss due to accidental damage, fire or theft. (Subject to policy benefit limits.)

Contact us for more information.

Both Sides of the Mining Tax

The introduction of the Resource Super Profits Tax (RSPT) has ignited a media war which has obscured the real facts and motives behind the scheme.

Since the government is now in talks with mining industry heads to review the new system, it shows that the miners have some legitimate concern. Treasurer Wayne swan admitted that some very high profit mining companies will indeed pay up to 58% tax, but maintained that the Australian mining industry will remain profitable.

Miner’s Concerns

Not all minerals are equally profitable and quarries with high commodity low value resources will be hit hardest.
The tax hurts the miners competitive advantage against countries like India and Brazil, predominantly for exports to China
The new tax structure will affect funding applications for new project
“Super” profit is considered anything over 6% return on initial capital investment: not far enough the average return of an average bank bond

Government’s Objectives

Low value commodity mineral miners taxes will only be affected if high profits are achieved
Profit system” follows the taxing evolution already adopted by many developed countries as a more fair distribution of funds than the current royalties system. In countries where the profit tax is lower, it is usually combined with other royalties schemes and different company taxation systems.
Current royalties system for natural resource industries makes it harder for new companies with marginal profits or losses to get in the game. The profits system will help small to medium sized projects to have equal funding opportunities.
Current royalties arrangements for private companies aren’t flexible with changing profit margins. The new system ensures a more fair return, with more profits resulting in a greater contribution.

Looking beyond the dramatic television ads, the new RSPT has actually won support of major economists and the heads of MCA (Mineral Council of Australia). The current negotiations will revolve primarily around the threshold considered to be “super” profits (currently at 6%). The 40% tax rate remains non-negotiable.

Compare the arguments for yourself at:
www.futuretax.com.au
www.keepminingstrong.com.au

End of Financial Year Tips & Checklist

Welcome to the last month of this financial year. We have gathered some useful information to help you and your business take advantage of any available tax strategies and maximise efficiency during this time.

The first, and most obvious, step is one that many businesses tend to overlook: Get your accounting books in order! This will allow you to clearly assess your tax exposure and determine what exemptions and deductions you can claim.

Once you have done that, investigate the following options to find out if your business is eligible:

R&D Tax Credit

45% Refundable tax credit (more benefit for smaller businesses).
40% Standard tax credit (more benefit for larger businesses).

Criteria: aggregated turnover less than $20 million p.a.
Read our earlier article or visit www.innovation.gov.au for more information.

Export Market Development Grant

50% grant of promotional expenses.

Criteria: Annual income under $50 million and promotional expenditure over $10,000.
* First time applicants can combine previous years expenses to meet the $10,000 requirement.
View applications forms & facts.

Tax Back on Business Assets

50% tax back on for tangible assets acquired before December 31, 2009.

Criteria: Under $2 million turnover. Asset must be ready to use by December 31, 2010.

30% tax back for tangible assets acquired before June 30, 2009.
10% tax deduction for all other investments.

Criteria: all businesses with turnover above $2 million.

Entrepreneurs Tax Offset

25% tax offset on payable tax.

Criteria: turnover under $75,000.
More information on the ATO website.

Division 7a - Loans

Loans or payments to Shareholders could be considered unranked dividends (Shareholders get taxed).
Avoid tax: make all new loans under a complying agreement or repay before lodging company tax return.

We also found a great Checklist combined by independent accounting consultant, Sophie De Sommerville.
Dowlnload Checklist.

Morris Finance will be fully staffed during this month to handle all questions and finance inquiries.
Please feel free to contact us.

Important Accounting Dates for June

Luckily, this month there is only one lodgment date to be aware of - leaving you plenty of time to get your finances in order for the end of this financial year.

21 Jun 10

Activity statements
May 2010 monthly activity statements: final date for lodgment and payment.

30 Jun 10

End of financial year.

For more information visit ATO.

RBA Keeps Interest Rates at 4.5%

Finally, a pause.

The Reserve Bank of Australia announced they will not be raising interest rates this month. The cash rate remains at 4.5%, but economists are speculating it will be back on the move before we know it.

View the RBA Media Release.

Advanced Car Features

Over 80% of Australians travel for work or business by car, with Sydney and Melbourne having the highest commute times. To appeal to the commuter population’s need for comfort and convenience, car manufacturers have developed new features and improved existing options. Features previously limited to luxury cars are now more affordable, and available from the majority of manufacturers.

Common Useful Features:
Satellite Navigation
Hands Free Phone Integration
Extensive Stereo Controls on Steering Wheel
Satellite Radio
Multiple AV outlets

We also came across some less know technological innovations that we hope will become mainstream in the near future.

Personal Car Communicator
Several years ago Volvo started to develop their safety technology to address personal security concerns of drivers. The new Personal Car Communicator (PCC) is an advanced, pocket sized controller which provides a range of information about the car through LED light signals.

Did I lock the car? The PCC will be able to tell you if the car is locked or unlocked. It remembers the last locking action (whether by remote or internal lock). So even if you are no longer near your car, the PCC will tell you whether it is locked or unlocked.

Intruders Heartbeat Sensor: Volvo has developed a heartbeat sensor built into the car. When you are within 60-100m from the car you can press the info button which will flash red if the heartbeat sensor has been activated and there is someone inside the car.

Light the way: When approaching the car, you can use the PCC to turn on all the lights (including interior lighting). This is useful to when approaching the car at night and a handy trick to find your car in a poorly lit parking lot. When leaving the car, you also have the option to leave lights on for 30-90 seconds lighting the way while you make your way inside.

Other Info: Options include a level meter, which alarms you if the car has been raised in an attempt to steal the wheels. Extensive locking controls enable you to program the car so it locks automatically after 30 seconds of moving. This ensures peace of mind for travellers in unsafe areas.

Night Vision
Commuting frequently through rural areas? Several car manufacturers offer a night vision monitor allowing you to see people and animals over 300m ahead. Using a front mounted infrared camera, images can display on a mounted screen or in your navigation device.

Blind Spot Monitoring: While parking sensors have become fairly common, the new feature emerging among manufacturers like Ford and Holden is radar technology for blind spots. The sensor notifies drivers of a car in their blind spot with a light in the side mirror, and well as an alert when activating turning signals.

Morris Finance deals with a variety of manufacturers and vehicle types. As well as finding the best rates, our specialists can often provide useful information about the vehicle category of interest. If you are considering a new vehicle, contact one of our New Business Specialists to get started.

Federal Budget for You and Your Business

Last week, Wayne Swan presented his third Federal Budget. There were no major surprises, since most benefits affecting small businesses were disclosed during the Henry Tax Review. Overall, the budget was tame and conservative as predicted, with the government clearly focused on one goal: to get Australia back into surplus as quickly as possible.

How it affects Businesses

Tax reduced from 30% to 28%. Affects small businesses 1 July 2012. For larger companies tax will gradually reduce down to 28% by 2015.
Depreciable assets of up to $5000 (up from $1000) can be immediately written off for small businesses
$660 million for training and apprenticeships
Transport industry to benefit from a planned spending of 5.6 billion on infrastructure in the next decade. This is funded by the Resource Profits Tax, and will commence with a $700 million fund n 2012.
Infrastructure spending to aid residential developers in rapidly expanding areas and speed up building process
Interest withholding tax phased down from 5% to 0% by 2012 in an effort to increase competition in banking centre
Crack down on compliance issues especially in the cash industry where business will face more frequent and strict checks, limiting the chance of tax evasion.

How it affects Individuals

1 July 2013: The superannuation guarantee (SG) rate will increase gradually from 9% to 12%
1 July 2011: 50% less tax on investment interest up to $1000
1 July 2012: work related expenses, including managing taxes, can be claimed up to $500, increasing to $1000 by 2013
Australians over 60 receive unlimited tax free income from pension investments

Programs & Services Initiatives

Renewable Energy Future Fund will help businesses become more energy efficient
Apprentice Kickstart Program to get 22,500 apprentices to SMEs
New National Business Registration system meant to save small businesses up to 1.5billion over the coming 8 years by easier search and access to regulation and requirements changes
Businesses Mediation Services will receive increased funding, especially beneficial for franchisees

Wayne Swan praised the Australian economy which remains among the strongest in the world. To continue the positive momentum, the government will focus on saving rather than spending. The government expects the economy to be at a $2 billion surplus as soon as 2012-13. An impressive feat, seeing as the current fiscal deficit is estimated at $39.6 billion.

To find out more about the government’s plans and timelines, visit the comprehensive website, appropriately titled budget.gov.au.

NAB and the Commonweath Bank have both been busy reviewing every detail of the budget and condensing it into easier-to-read data. You will find it conveniently broken into sectors, so you can choose reading material accordingly.
NAB Budget Reviews
CBA Budget Reviews

With most changes taking affect after 2010, you have plenty of time to catch up on your reading. Morris Finance will continue updating our clients on the government’s latest moves.

Henry Tax Review Benefits Cashflow

Treasury Secretary Ken Henry recommended that small businesses should be able to claim purchases of up to $10,000 in full the year they are acquired. The government has taken this suggestion on board, but reduced the purchase amount to $5000. If the plan is passed by the parliament, small businesses will be able to take advantage of this new system as early as July 1st 2012.

Cash flow Benefits
This new way of claiming back tax will help small businesses maintain their cash flow when acquiring business assets. With the aid of finance, small businesses can distribute the cost over several years, while getting the full tax benefit in the first year.

An example of this is a business that updates five computers each costing $4000 and a printer/copier costing $4500. If this purchase was financed via a chattel mortgage, over four years at an interest rate of 9 per cent with no residual, the annual cost would be approximately $7260. At a tax rate of 30 per cent the saving made in the first year would be $7350. (source: theage.com.au)

If you would like to find out more about Chattel Mortgage facilities or other options that will enable you to take advantage of the new tax rules, talk to one of our new business specialists today.

Interest Rates up to 4.5%

The Reserve Bank lifted interest rates today for the third consecutive month. The cash rate is now at 4.5%, with Glenn Stevens stating that it is finally at “average levels.”

This means an additional $50 per month for Australians with a $300,000 25 year mortgage.

Rates are now higher than they were at the end of 2008 and economists are finally tipping a pause for the hikes in June, according to The Age.

Henry Tax Review

While most Australians were enjoying a sunny weekend, the government was behind closed doors in Canberra, preparing a response to the Henry Tax Review. The policy was released on Sunday May 2nd, in what was rumored to be the biggest tax-related event of this generation.

The GAIN:
The aging and low income population sectors will benefit form the review’s changes. Small businesses were also given something to celebrate.

SUPERANNUATON: The age restriction increased from 70 to 75. Australians over 50, who have less that $500,000 in super fund, will be given a concession rate to contribute and additional $50,000.

INSTANT WRITE-OFFS: Small Businesses will be able to claim the full amount for new assets worth up to $5000 in the same year they’re acquired.

The PAIN:
Miners were hit the hardest, but companies are also winging with higher contributions and no significant tax cuts.

40% TAX on profits form mining companies

SUPER CONTRIBUTION from employers to be lifted to 12% by 2020, benefiting workers but burning companies and impacting salary negotiations.

CORPORATE TAX: The 30% corporate tax rate will be reduced by 2% in 2015. A disappointing alternative to the proposed 25% corporate tax structure.

Overall, the government’s much anticipated response was relatively tame. Out o the 138 recommendations by Treasury Secretary Ken Henry and his team, less than 2 were fully adopted. Here are some of Henry’s suggestions that the government has skipped over:

congestion taxes on toll roads and mass-distance-location pricing for heavy vehicles, so that big trucks pay for their wear and tear on roads.
a more fair, volumetric based tax system for alcohol
40% discount to individuals for net interest income, residential rent and capital gains
a national land tax of 1% applying to all land regardless of use
removing Medicare levy

Read more about the government’s limited response to the Henry Review on the Business Spectator.
Or visit the official treasury website for the full documents.

Important Accounting Dates for May

Below are the accounting dates you need to be aware of for this month. For more information visit ATO.

12 May 2010

Activity statements
Quarter 3 (January - March 2010) activity statements: final date for electronic lodgment and payment. Refer to Lodge your activity statements online for information on your eligibility for this later due date.

21 May 2010

FBT return
Due date for lodgment of 2010 FBT return and payment if required.

Activity statements
April 2010 monthly activity statements: final date for lodgment and payment.

28 May 2010

Superannuation
Superannuation guarantee charge statement - quarterly (NAT 9599, PDF 136KB) (if required contributions were not made by the due date) for quarter 3 2009-10 (1 January - 31 March).

The SGC is not tax deductible.

Flight Ban Recap: Ailines lose $1.7 Billion

Last Wednesday, flights over Europe resumed following 5 days of closed airspace over Europe due to the eruption of an Icelandic volcano. This was the largest disruption in air space traffic since the terrorist attacks in US on September 11, 2001.

Airlines are far from being in the clear, with tough weeks ahead restoring schedules and tallying up the losses. Qantas CEO Alan Joyce estimates that the airline was losing $1.5 to $2 million per day during the closure, totalling at least $10 million so far. The only “gain” from the chaos seems to be a small opportunity for some positive PR. The CEO emphasized that “the large bulk of this cost we have incurred in looking after our passengers, which amounts to $700,000 a day.” Joyce also stated that Qantas will not lift fares in an attempt to recover losses from the disruption. Meanwhile BA has been rumoured advertising economy fares for $12,000 London to Sydney.

Who Suffered?

$1.7 billion approximate total loss for global airlines, with Singapore airlines suffering the worst financial damage
6 million passengers were directly affected, with at least 3 more weeks of disrupted schedules and full flights
No compensation: many passengers will not receive compensation for expenses during the disaster, with volcanic eruption classified as an “act of god” by many insurance policies.
Perishable Goods producers who rely on air freight for fast transport were not able to save their goods.
Manufacturing was disrupted. Nissan stopped production for a full day because they could not import components.
Events such as the MotoGP in Japan have been called off due to stranded equipment and team personnel

Who Benefitted?

Accommodation: hotels had an influx of traffic paying premium, last minute rates. In Hong Kong, high demand pushed prices up to $4000 per night.
Alternative transportation providers benefitted from passengers flocking to trains and buses to get home.
Car Hire companies continued to charge regular rates, but made money from customer’s fees that were forced to keep cars longer during the air ban.
Fuel Savings of $110 million a day for airlines was a minor benefit in comparison to the losses
Students on school trips welcomed the excuse to extend their sightseeing.

Coming Weeks
To restore schedules, airlines will prioritize original bookings with any leftover seats going to stranded passengers. Larger planes will be used on some routes to increase capacity, and clear airports. Airlines, particularly in Europe, will be attempting to receive compensations from the government, claiming that the ban was excessive and prolonged the damage.

ANZAC Day

Morris Finance will be closed on Monday, April 26th 2010 for ANZAC Day.

We wish all our clients and their families and happy and safe long weekend.

As a proudly Australian company, we are encouraging all our staff, clients and their families to help celebrate the achievements of our nation by supporting local events.

In Geelong, the ANZAC Day Parade will commence on Malop Street outside Office Works at 11.00am and proceed along Malop Street, left into Gheringhap Street and concludes in Johnstone Park for a Commemorative Service.

For other locations, and a full schedule of services and events please visit the Council Website.

Bubble Trouble

The housing bubble worries have been brewing for some time now, especially after prices soared over 13% last year. However, on March 29th RBA Governor Glenn Stevens brought those worries to the surface with his first ever TV interview on the Sunrise Morning Show.

Stevens’ choice to emphasize his concern over the ballooning house prices in such a public way should be taken as a warning. After all, the man who essentially controls interest rates is telling us that they will continue going up until more people are sitting down at auctions. "Once the emergency has passed and things gradually look more normal, it's not wise to leave interest rates right down at rock bottom any longer than you need... you shouldn't assume they'll stay that low because that assumption will prove to be unfortunate."

Treasury secretary Ken Henry also voiced concerns that investors, frustrated with unreliable superannuation systems, are treating the property market as a safe haven.
In his interview, Stevens echoed Henry point: "I think it is a mistake to assume that a riskless, easy guaranteed way to prosperity is just to be leveraged up into property. It isn't going to be that easy," he said.

The rest of the world has faced a harsh realisation that property is an investment and therefore a risk. Sometimes, a bigger one than you bargained for. The US may be the most recent and drastic example, but it is not the only one.

US houses are now at 1970s prices
German house prices have been falling since 1991
The Swiss endured 11 years of dropping prices in the 90s and are still recovering
Japan’s prices began to drop 15 years ago and are still falling

This explains why the Japanese are not flooding the Australian markets like the Chinese investors, although both have borrowing rates below 2%. Many japanese investors have been burnt and are no longer disillusioned about the safety of property investment. On the other hand, the Hong Kong and Australian house markets remain one of the few to continue booming. The question is, for how long?

Although it is still possible that the bubble will burst, a slow deflation is more likely. Demand will be curbed by rising interest rates and falling loan approvals. CBA’s chief economist Michael Blyth believes Australia is on the verge of significant housing supply which will also relieve the demand.

For now, since the future of “the bubble’ remains hard to read, it may be wise to follow the RBA’s advice and stick to the cautious side.

Revised R&D Credit Benefits SMEs

Here is the recent timeline of changes and amendments affecting the Research and Development Tax Credit Scheme:

December 2009:
The government puts forth a first draft of proposed changes to the Research & Development Tax Credit. This is followed by heavy criticism, mainly caused by the new definition of eligible activities.

Old legislation stated that activities deemed “innovative” or “risky” qualify for the credit. According to the first draft, companies would now have to satisfy both criteria to apply for the credit.

February 2010:
In response to the proposed changes, and resulting outcry, the Australian Industries group steps up to the plate, releasing “Remedies for the proposed R&D Tax Credit Scheme”:

Here are the highlights from the group’s report:

AIG questions the reasoning, and consequences of forcing companies to justify activities as both innovative and risky, instead suggesting to shift the focus to dealing with inappropriate claims.
New accelerated depreciation program for environmentally “green” capital investments
Recommendation for new program to up-skill employees for “sustainability” and more support to kick start apprenticeships
Funding for TradeStart Export Advisors who are a key support for SMEs

During the media release, AIG Chief Executive Heather Ridout voiced the group’s concerns regarding the government’s first draft: “if enacted, the incentive for industrial R&D would be substantially reduced. In so doing, it would slow business-led productivity improvements and future economic growth. Reversing the positive trend that has occurred in Business Expenditure on Research & Development (BERD) in Australia over the past twenty years would be a most unfortunate outcome. Australia continues to lag the OECD average on this important indicator and should be making every effort to close this gap.”

March 31, 2010:
The government releases its second exposure draft, revealing the Treasury’s decision to abandon the initial changes in favour of a new, much broader eligibility definition that will be easier for SMEs to understand and access.

Instead of classifying activities as “risky” and “innovative”, the new draft states “activities must be experimental whose outcomes cannot be determined in advance… and must use a systematic progression of work that is based on existing scientific principles. [The activities] must be conducted for the purpose of generating new knowledge (including knowledge about the creation of new or improved materials, products, devices, processes or services)".

Already, there has been some initial backlash, particularly from Pricewaterhouse Coopers, saying that the new definition will prevent businesses from claiming R&D expenditures to improve existing products.
Yasser El-Ansary, tax counsel at the Institute of Chartered Accountants in Australia, has worked closely on the report and defends the changes: “The package is a significant leap from where we were in December 2009. It's clear the Government is focused on rebalancing and retargeting the R&D tax credit for the SME market, rather than the big end of the market. It's much broader than it was before and not only that, it's much easier to understand. That's one of the objectives here – to make the R&D tax credit more user friendly."
He acknowledges the PWC concerns but maintains that the Government’s decision to focus on core R&D spending is partially in response to businesses that “push the boundaries” in terms of what constitutes as appropriate research/development under current laws.

“The reality is that there will be a narrowing of the eligible expenditure. I don’t think that’s an accident.”

View the full second draft for the proposed R&D terms for more details. You can also speak to one of our advisors if you’re considering financing equipment and machinery for research purposes.

Interest Rates Rise to 4.25%

The Reserve Bank lifted interest rates to 4.25%, a 25 basis point increment since last month’s rise. This marks the 5th cash rate increase since October 2009, with the average monthly mortgage bill going up around $200.

The RBA cited similar reasons for their decision as in previous interest hikes:

The world GDP is expected to close at trend pace this year
Asian financial sectors are not impaired, leading to strong growth and demand for raw materials.
Concerns regarding foreign debt issues seem settled for now
Inflation has declined and is expected to be consistent with target in 2010
Interest rates are still over than average

In the minutes from previous months’ meetings, RBA Governor Glenn Stevens warned that rates will continue to rise through the year. The message is don’t get too comfortable at 4.25%, as it might not last long.

Best Gadgets of 2010

The world of technology is bursting at the seams with its latest wonders. The 2010 Consumer Electronics Show featured some of the coolest toys for today’s business professional. Here are the gadgets that we’re keeping our eye on:

Asus Eee Keyboard PC:
As the name implies, this is a fully functional PC built into a keyboard. It features a small built in screen which doubles as a touch pad to control apps or complete tasks while on the move. Choose the wired or wireless option to connect to any nearby screen and you’ve got a portable media centre at your finger tips.

Apitek Pocket Cinema:

The key feature of this pocket sized device its inbuilt projector, allowing you to share your images, videos or presentations on any flat surface. It’s also capable of recording HD videos and capturing 8MP photos.

Plastic Logic QUE Pro Reader:
Competition for digital ‘pads’ is getting more intense, from the iPad to Amazon’s Kindle, but Pro Reader is first to target working professionals. With a shatter-proof 10.7” screen, 8GB of memory, WiFi and Bluetooth, it’s definitely road worthy. The point of difference is that its display mimics the print version of the reading material in colour, texture and layout. It’s already won support from the likes of Wall St. Journal and Fast Company.

4G Phone Era:
The highly anticipated release of 4G (fourth generations) phones will overshadow the stir created by the Google Nexus at the start of 2010. 4G phones promise data transfer speeds of 100Mbps, compared to current phones which offer a max of around 384 Kbps. In real world terms, this means you would be able to download a full length DVD movie in about one minute.

Ford MyKey:
A new system designed to put parents at ease while the kids are borrowing the family car. MyKey will allow parents to limit audio volume and restrict speed, encouraging safer driving and better fuel economy. The feature will debut this summer with the release of the 2010 Ford Focus. 75% of parents polled liked the system’s features, and over 50% said they would allow kids to use the car more frequently if it had MyKey. Not surprisingly, 67% of teens said they wouldn’t want the system in their car. However, if it meant greater driving privileges, most teens reluctantly accepted the MyKey features.

Important Accounting Dates for April

Here are the important accounting dates from the ATO to keep your business compliant throughout April:

APRIL 2010

21 Apr 10

Activity statements
March 2010 monthly activity statements: final date for lodgment and payment.

Quarter 3 (January - March 2010) activity statements containing a monthly GST obligation: final date for lodgment and payment.

Quarter 3 (January - March 2010) consolidated instalment activity statements: final date for lodgment and payment by a head company of a consolidated group.

28 Apr 10

Activity statements
Quarter 3 (January - March 2010) activity statements: final date for lodgment and payment.

PAYG instalments
Quarter 3 (January - March 2010) instalment notices – forms R and T. Final date for payment and, if varying the instalment amount, lodgment (two-instalment payers are required to pay 75% of instalment liability by this date).

GST instalments
Quarter 3 (January - March 2010) instalment notices – forms S and T. Final date for payment and, if varying the instalment amount, lodgment (two-instalment payers are required to pay 75% of instalment liability by this date).

Four-instalment payers to pay a further 25% of their instalment liability.

Superannuation
Last day for superannuation guarantee contributions to be made to a superannuation provider for quarter 3 2009-10 (1 January - 31 March).

If an employer does not make the minimum superannuation guarantee contributions for quarter 3 by this date, they must pay the SGC and lodge a Superannuation guarantee charge statement - quarterly (NAT 9599, PDF 136KB) with the Tax Office by 28 May 2010. The SGC is not tax deductible.

30 Apr 10

Superannuation
Lost member report for the period 1 July 2009 to 31 December 2009.

Visit the ATO official website for more information.

Easter Trading Hours 2010

It's that time of year again when the offices of MFL will be closed for public holidays.

Please be advised the office will be closed on the below dates and will re-open for business on the 6th of April 2010.

Friday 2nd of April - Closed for Easter Friday

Saturday 3rd of April - Closed for Easter Saturday

Sunday 4th of April - Closed for Easter Sunday

Monday 5th of April - Closed for Easter Monday

Remember daylight savings finishes on the 4th of April 2010 and our office will re-open at 8.30am on Tuesday the 6th of April 2010.

The Management and Staff would like to wish all our customers and suppliers and their families a Safe and Happy Easter.

Who's Buying What?

The various demographics of Australia reacted differently to the economic downturn. CBA’s new Economic Vitality Report “Viewpoint” looked at spending trends over the past year.
Chief Economist Michael Blyth commented that “contrary to many perceptions, the GFC had a divergent impact across different age groups in terms of perception as well as income and spending patterns, including the effect on employment, disposable income and consumer confidence.”

Youth Hit Hardest, but most optimistic.
A key finding was that younger Australians aged 18-24 were hit hardest by the crisis, yet retained some of the highest confidence levels. Full time employment in the age group dropped 8.9%, much higher than the 0.5% drop experienced by the overall population.
This was caused mainly by older generations remaining at work instead of retiring, due to damaged supers.

The older they get, the more they spend.
It was the older generations that recorded the highest increase in spending.
Demographics aged 65-74 recorded an increases of 28.2%.
Those aged 75-80 increased spending by a whopping 46.8%.
Although the increase is partially accredited to the pension in raise in mid 2009, the trend is likely to continue as Australia’s population keeps aging.

What we bought more of…
Based on ABS statistics and a recent CommSec report by Craig James, here are the top 10 categories that saw an increase in spending over the past year:

Boats, Caravans, Bikes
Water and Sewage Fees
Sporting/Recreational
Electricity, Gas, Fuel
Medicine
Audio Visual
Beauty Salons
Entertainment Admissions
Water and Transport
Housekeepers, gardeners etc.

39.1
17.7
16.9
14.0
13.6
13.2
12.6
10.9
10.7
10.4

* Percentages based on comparison with previous year.

Consumer and business confidence levels continue to follow the same trends, both rising steadily.

Read the full CommSec article and introduction to Viewpoint.

Do you dread the Business Plan?

“Running or starting a business without a business plan is like walking through the dark without a torch. You can probably go a long way using just your senses and relying on basic instincts. But operating in such a manner leaves you wide open to the risk that something will get in your way (like a competitor) and you probably won't see it until it’s too late. And just imagine all of the opportunities that are just waiting to be grasped - but without a torch (or business plan) how will you see and take advantage of them?”

With all the recent changes in the economy, it is a good time to pull out your business plan and give it a thorough evaluation. It is a common misconception that business plans are one of those nuisances that have to be checked off the “to-do’ list when you first start your business. In fact, many businesses start and function without a plan.

However, even if you’re already running a successful business, formulating your thoughts and objectives into a plan will undoubtedly shed some light on areas you haven’t considered. It’s also a great idea to involve your staff, as they may know the consumer more intimately and be able to provide insight into market trends.

If you just can’t bear the thought of document writing, make it an informal session. Here are some key topics and questions that we would suggest for discussion:

Your Services:

Outline the products/ services you currently offer
What is your value proposition?
Do you compete on price or quality?

Your Target Market:

Who is your typical customer?
What problems are you solving for your consumer?
Can you create new or innovative ways to make your customer’s life easier?
Can you expand you services/products?

Your Competition:

Evaluate your competition by establishing their strengths, weaknesses and market share.
How can you use this to your advantage?
How have they come out of last year’s economic downturn?
What are your competitors doing differently? Why do customers choose them?
Are there any new competitors?

Moving Forward:

Evaluate your business: what’s working, and what isn’t?
Do you just claim to deliver a promise to your customers, or do you actually do it?
How are your customers changing?
How is the industry changing?

Now, write it down and create some objectives. Make some short and long term goals and write down things you can do to accomplish them. Be realistic. If you want to look more professional, but hate wearing suits, start with some company polos. Most importantly, don’t file the plan in the furthest drawer. Revisit it often, and stick to the changes you decided to make.

Here are some helpful links to get you started:
A five step Business Plan from Commonwealth Bank
Templates and Checklists form business.vic.gov.au

FWO Visits Clipsal 500 V8 Race

Earlier this year, the Fairwork Ombudsman inspectors announced that they will conduct 50,000 workplace visits throughout Australian businesses. This shocked and created some uneasiness with most SME’s.

However, chief FWO officer Bill Loizedes was quick to respond ensuring that the visits “are meant to be non-confrontational and they are educative." He assured businesses owners across Australia that inadvertent or even deliberate breaches of the law will likely result in a friendly chat, with legal action being a last resort.

Their primary interest throughout this campaign is NES (National Employment Standards) and ensuring all workers are getting the minimum wages, obligations and working conditions to which they are entitled.

On March 5th, the FWO announced a new tactic to help them focus on NES compliance. They will be targeting major events across Australia starting with the Clipsal 500 V8 Supercar series that runs March 10-15th. These events generally involve a lot of casual and youth workers and inspectors will be checking wage records and time sheets for appropriate shift and break times. In cases where there is an issue, the FWO officers will notify the stall owner and encourage them to fix the problem voluntarily. However, where deliberate foul play is suspected, a full audit may be launched.

Following the main events, the inspectors will be heading to the surrounding restaurants, cafes and entertainment venues. Unions and businesses in the targeted areas have been warned.

Want the full details about the Clipsal500 visit? Read the official FWO Media Release.
Or, find more information and upcoming plans on the FWO website.

Commercialisation Grant Accepting Applications

The government’s Commercialisation Australia grant is now accepting applications. Although economic concerns may have overshadowed the scheme’s commencement in January, businesses are rapidly starting to take notice of this opportunity now that 2010 is well underway.

The grant is filling the void of the Commercial Ready program that was cancelled during budget cuts in 2008. This new program comprises of $196.1 million funding dollars until 2013, and 82 million for each year thereafter.

Competition is expected to be fierce, with demand that has accumulated over 2 years without funding in this area. However, the merit-based program's payoff is worthwhile. Up to 2 million dollars is available for companies to boost new products or services.

The programs consists of 3 major components:

Skills and Knowledge support to help build the skills, knowledge and connections required to commercialise new ideas.
• Up to $50,000 to pay for specialist advice and services
• Up to $200,000 over two years to assist with the recruitment of experienced executives
Proof of Concept grants of $50,000 to $250,000 to test the commercial viability of a product, process or service
Early Stage Commercialisation repayable grants of $250,000 to $2 million to develop a new product, process or service to the stage where it can be taken to market.

Eligibility
There have been some businesses that have made the mistake of applying for the grant to use towards marketing or sales plans for existing products. This confusion may be due to the name, which would be more accurate if called the Pre-Commercialisation grant, since funding is intended primarily for innovation and product development.

Some eligible expenditures include:

Product development
Testing and documentation
Tooling-up for full scale production
Market validation
Execution of IP strategy

The grant is open for non tax-exempts companies; for more specific details and alternatives, visit the www.commercialisationaustralia.gov.au.

Interest Rates Rise to 4%

A media release was issued at 2:30pm to announce that the Reserve Bank of Australia has raised the cash rate by 25 basis points to make it 4%.
This change will be effective tomorrow, March 3rd 2010.

Several factors contributed to the board’s judgment to increase rates:

National conditions in 2009 were not as tough as predicted
Unemployment rates peaked lower than expected
Economic growth has been close to trend since the start of the year
Lenders are relaxing policies to allow for easier borrowing
Investment in natural resources is strong

The first 2 months of 2010 show that foreign economies are stronger, and the world GDP is expected to rise and close at trend pace at the end of 2010. As a result, governments around the world are withdrawing stimulus packages and lessening the degree of financial support.

The board reiterates that “interest rates to most borrowers nonetheless remain lower than average. … With growth likely to be close to trend and inflation close to target over the coming year, it is appropriate for interest rates to be closer to average. Today’s decision is a further step in that process.”

Read the full press release.

Reserve Bank Meeting Today

The Reserve Bank Board meeting will be held today at 2:30 pm AEST in Sydney. To raise or not to raise interest rates is the question Australia will be waiting for.

Check back to the Morris Finance News section for any updates and outcomes of the meeting.

Important Accounting Dates for March

As promised, Morris Finance will continue to post monthly accounting dates to help keep your business compliant.

March 2010

21 Mar 10*

Activity Statements
February 2010 monthly activity statements: final date for lodgment and payment.

31 Mar 10

Income tax
Income tax return and payment for superannuation funds with total income in excess of $2 million in latest year lodged (excluding large/medium business taxpayers).

* Denotes lodgment or payment may be made on the first business day after the due date.

For more information, visit the official ATO website.

Government Grants

Many people underestimate the financial resources available for Australian businesses. There are state and federal grants for all industry sectors; you just need to find them!

We have listed some that may peak your interest, but you can do an easy search online using the government’s thorough Grant Finder Tool.

Apprenticeships

The government provides funding starting from $1250 as an incentive for businesses to take on apprentices. In high demand professions, the amount can be up to $4000. There are also additional incentives for rural areas, as well as hiring youth and mature apprentices.
Visit www.australianapprenticeships.gov.au for more information or to apply.

Fuel Tax Credits

As of 2009, the eligibility criteria for fuel tax credits was broadened to include vehicles and equipment from lawn mowers, to bobcats and forklifts.

You can also claim fuel tax credits if you are a:

• householder using fuel to generate domestic electricity
• non-profit organisation not registered for goods and services tax (GST) and operating emergency vehicles or vessels.

Get more information on the ATO website.
View the Complete Guide.(PDF)

Export

The grant aims to help Australian exporters by reimbursing up to 50% of expenses such as samples, logistics, communication, reps and tradeshow fees. The funding was increased by 50 million in 2009, and the minimum amount you need to spend to qualify was cut down to $5000.

Get more details online at Export Market Development Grant

There are also assistance programs that are specific to each state. Check out the state websites for more details:

VIC: www.business.vic.gov.au
NSW: www.business.nsw.gov.au
ACT: www.business.act.gov.au
QLD: www.business.qld.gov.au
WA: www.smallbusiness.wa.gov.au
SA: www.southaustralia.biz
WA: www.wa.gov.au/governmentservices/business
TAS: www.service.tas.gov.au

Morris Finance can help you arrange the remaining funds needed to implement the grant money into your business venture. Just contact one of our staff members for more information.

Seasonal Cashflow Crisis

The post-festive season is upon us, and it doesn’t come bearing gifts. During the three months following Christmas, businesses often experience delayed payments and a strained cashflow, leading to 1095 insolvencies in March of last year.

Unfortunately, there is no single factor to blame. With summer holidays, absences of key staff and fewer trading days in December/January, people aren’t getting paid, and therefore neither are their bills!

If you hadn’t prepared in advance for the tight months, there are still some tips for your business to maintain control until the money starts rolling again:

- Try to get through to your larger and prompt-paying customers first. Consider offering a discount for early payments so that you have some cashflow.

- Assign someone to the phone to contact all debtors. This way, you’ll be at the front of the line when bills finally start getting paid.

- Minimise inventory replenishments and buy only what you absolutely can’t live without for the next 2 months.

- If you can’t make your payments and are unable to postpone, consider finance options, such as invoice financing, to get you through until the cashflow resumes.

Remember, this is bumpy time for most SMEs, so your best bet is to run lean, keep on top of your debtors and maintain the good standing of your business.

ATO Warning: Home Loan Scam

The Australian Tax office published a media release on December 22nd 2009 regarding Sham Mortgage Arrangements. This may be especially relevant now during the financially tight post-Christmas months. Since mortgage repayments are a significant financial burden, scams that promise to help pay them off faster can be very attractive.

ATO advises that under normal circumstances, home loan repayments, and their relative interest, are not tax deductible. Therefore, any scheme promising to avoid interest, through refinancing and third party investments, will face close scrutiny and hefty fines from the ATO.

“These arrangements are essentially about people refinancing their home loan and establishing what appears to be an investment loan to fund the purchase of shares in a bogus company,” said Mr D’Ascenzo, the government Tax Commissioner.

D’Ascenzo also commented that the ATO is contacting 140 people already involved in such arrangements, and urging anyone else to come forward. People that voluntarily contact the ATO before they get audited will be entitled to a reduction in any penalties that may otherwise apply.

You can contact the ATO for more information about this matter on 1800 177 006.
Alternatively, visit the media release on their website at ato.gov.au.

National Car Sales Up 3.3%

Last week, the Australian Bureau of Statistics released the seasonally adjusted data for 2009 car sales. The figures show that sale of new cars rose by 3.3% with a total 89,741 vehicles sold. Toyota had the highest sales last year, while the Holden Commodore remained the most popular car for the 14th year in a row.

According to CommSec, car affordability is the best it has been in 34 years. The ABS results show that several popular car models, such as the Lancer and Corolla are actually cheaper now then in previous years.

The strong Australian dollar and increasing foreign competition has prompted car dealers to drop their prices. In additions, as of January 1st import tariffs have been slashed from 10% to 5%, resulting in further price reductions, notably from Honda, Mazda and Porsche.

Although the government stimulus boosted sales in 2009, a healthier job market and the recovering economy will ensure the industry’s profitability in 2010. CommSec is expecting sales to continue to rise, reaching an 8% increase this year.

Interest Rates to Remain at 3.75 %

The Reserve Bank of Australia has kept interest rates on hold at 3.75 percent today, delivering surprise relief for cash-strapped homeowners.

The RBA had been widely expected to hike rates by 0.25 percent - which would have piled an extra $60 on to the monthly mortgage repayment bill for variable rate customers with a $400,000 loan.

The surprise move to keep rates on hold follows an unprecedented three consecutive rate rises from the RBA. Glenn Stevens, governor of the central bank, said today it was still too early to see the effect of the earlier rate hikes.

“With the risk of serious economic contraction in Australia having passed, the Board had moved at recent meetings to lessen the degree of monetary stimulus that was put in place when the outlook appeared to be much weaker,” he said.

“Lenders have generally raised rates a little more than the cash rate over recent months and most loan rates have risen by close to a percentage point.

“Since information about the early impact of those changes is still limited, the Board judged it appropriate to hold a steady setting of monetary policy for the time being,’ he added.

Earlier this morning Prime Minister Kevin Rudd fuelled fears of a rate rise by urging the Big Four banks to temper their reaction to any rise from the RBA.

"Let's face facts, any increase in interest rates has an effect and hurts working families, that's the truth of it," Mr Rudd told the Nine Network.

He asked the banks to follow National Australia Bank in promising to keep interest rate adjustments within any official rate rises.

NAB's promise, announced over the weekend, follows the public outrage sparked in December by three of the big four banks raising interest rates by more than the central bank.

Mr Rudd warned the banks today not to underestimate the impact of the public's attitude to rate moves.

Westpac slugged its mortgage holders with a 45 basis point increase following the RBA's 0.25 percent rise in December, while CBA and ANZ raised rates by 37 and 35 basis points respectively.

NAB however, matched the RBA's move and sought to poach new customers from rivals amid the public backlash.

RBA governor Glenn Stevens became the first central banker from the G20 to push up rates last year after the economy dodged a technical recession and began showing signs of a recovery.

Mr Stevens warned homeowners last year that as the economy rebounds, he would seek to haul interest rates back towards more normal levels – seen as around 5 percent.

Meanwhile, central banks in the US, the UK and Europe all continue to keep their benchmark interest rates at historic lows.

Announcing the RBA’s decision to keep rates on hold today, Mr Stevens warned that further rises were on the horizon.

"If economic conditions evolve broadly as expected, the Board considers it likely that monetary policy, will, over time, need to be adjusted further in order to ensure that inflation remains consistent with the target over the medium term,” he said.

Important Accounting Dates for February

As a convenience to our clients and site visitors, Morris Finance will be posting upcoming ATO Lodgement Dates at the start of each month. Check back for updates on these and other important news.

February 2010

21 Feb 10*

Activity statements
January 2010 monthly activity statements: final date for lodgment and payment.

28 Feb 10*

Superannuation
Superannuation guarantee charge statement - quarterly (NAT 9599, PDF 136KB) (if required contributions were not made by the due date) for quarter 2 2009-10 (1 October - 31 December).
The SGC is not tax deductible.

Activity statements
Quarter 2 (October - December 2009) activity statements: final date for lodgment and payment, including electronic lodgments.

GST
Annual GST return (option 3) or Annual GST information report (option 2): final date for lodgment and payment (if required) if you do not have an income tax return lodgment obligation.

PAYG instalments
Quarter 2 (October - December 2009) instalment notices – forms R and T. Final date for payment and, if varying the instalment amount, lodgment.

GST instalments
Quarter 2 (October – December 2009) instalment notices – forms S and T. Final date for payment and, if varying the instalment amount, lodgment.
Four-instalment payers to pay a further 25% of their instalment liability.

Income tax
Income tax return lodgment and payment due date for self-preparing entities that were not due at an earlier date.

Income tax return lodgment and payment due date for large/medium entities and self-managed superannuation funds (taxable and non-taxable) that are new registrations.

Income tax return lodgment due date for large/medium business trust clients that were non-taxable in the prior year (includes new registrants).

*Denotes lodgment or payment may be made on the first business day after the due date.

Visit the ATO official website for more information.

Morris Finance Cinquante Wins Sydney 38 Championship at Audi Victoria Week

The skipper and crew of defending champion Cinquante went out on Corio Bay today determined to hang on to their narrow points lead in the Morris Finance Sydney 38 One Design Series at Audi Victoria Week.

'We were three points up on Another Challenge this morning and we needed to go out and do the right thing, keep our nose clean and not make any stuff-ups,' said Cinquante’s skipper Ian Murray after returning to Royal Geelong Yacht Club marina this afternoon.

'We had a long wait for breeze, but when it did come in, it built to 20 knots and was fairly constant; a lot better than the past two days.

'We sailed fairly conservatively and stayed in front of Another Challenge; we were third and they were fourth or fifth.'

'It has been very close racing, all of the boats have been within a few hundred metres of each other on the runs.'

In fact the racing in the ten-boat one-design keelboat fleet was so close that Another Challenge crossed the finish line today in a dead heat for fourth with Audacious. Although this was not enough to lift Another Challenge to the top of the overall pointscore, it did secure second overall for skipper Chris Lewin and his young team from Royal Brighton YC, just half a point clear of Challenge, the Sandringham YC entry skippered by 82-year old yachting legend Lou Abrahams and helmed during this series by Scott Walton.

Winning skipper Ian Murray praised his crew, including tactician Tim Davis and his stand-in for today, Brent Frankcombe. 'Tim had to fly to Singapore last night, but Brent finished racing yesterday in the Moth class series, so he came along today and did a great job.'

Murray, whose company Morris Finance is the series sponsor, has owned the Sydney 38 Cinquante for five years and said, 'It’s a good boat and we always keep our equipment and sails up to scratch. That way you don’t have breakages and it can also give you a small edge with speed, which makes a big difference when the racing is so close.'

Fourth overall was the Sandringham YC Sydney 38 Sierra Chainsaw (Mel Mollison), followed by Audacious (Greg Clinnick).

See "Ute" Out There!

The new Morris Finance Holden Utes are out and about.

Don’t hesitate to approach them – they won’t bite, or try to sell you anything!

They are branded vehicles used to promote our corporate image up and down the eastern seaboard of Australia - most of our business is down in this area.

The first Ute hit the roads in late 2008, after months of perfecting the design; it was a huge success!
We have since been overwhelmed with the amount of calls and emails that mentioned the new four-wheeled member of the Morris Finance Team.

The car’s growing popularity prompted us to acquire another Ute at the end of last year. You will now see both cars around town or in your local area.

The Holden Utes are part of an ongoing corporate image campaign that is evolving the Morris Finance Ltd. brand.

Morris Finance Signs on for 2010 Audi Victoria Week

Morris Finance Ltd has signed on as Class Sponsor and Event Partner for the 2010 Audi Victoria week. The event commences in Geelong, Victoria at the Royal Geelong Yacht Club on the 23rd of January 2010.

Audi Victoria Week is Australia's largest sailing event, first being held in 1844 and officially established in 1859. It is also one of the nation's oldest sporting events. Officials are expecting over 450 yachts, 4500 competitors and over 100,000 visitors from Australia and abroad for the four day event.

The partnership includes the naming rights of the Sydney 38 One Design category and will be known as the “Morris Finance Sydney 38 One Design Class Series.”

Audi Victoria Week is the ‘Melbourne Cup’ of the sailing world with seriously fast racing, a gala-like atmosphere and an abundance of waterfront activities and entertainment. It is a ‘must do’ event and the place to be in January.

The event is also close-to-heart for all at Morris Finance, with company CEO Ian Murray scheduled to compete in the Morris Finance Sydney 38 One Design Class Series aboard his yacht Cinquante. After winning last year’s event Ian is looking for a back-to-back result this year.

"Boat Manager and Crew Member Tim Davis has put a lot of time into getting the boat ready for the event and we are confident we are heading in the right direction of achieving this year’s goal," Mr. Murray said.

Having just completed in a successful Sydney to Hobart, Mr. Davis believes the team have the right ingredients to contest the championship series for another year which ends on Australia Day 2010.

Morris Finance will be in full flight at the event with give-aways and promotion staff in attendance. If you would like to come aboard and meet the crew please do so on any of the four days and you may even get a chance to experience what it is like to sail one of these racing yachts.

The first Race on the calendar for the team is the traditional Melbourne to Geelong passage race on the Saturday the 23rd.

We hope to see you there.

Making 'Cents' of Economic Data

As promised, we are following up on the release of several economic indicators. Australian Industries Group, the Bureau of Statistics and Census Australia released performance reports for manufacturing, trades and services, and well as new building approval data and home sales figures.

Below is a brief summary of the indicators:
(For more information about each indicator, view our previous post.)

Performance of Manufacturing Index (PMI)

The Australian Industry Group’s Index slipped 2.7 points, down to 48.5, putting it below the 50 point mark that separates expansion and contraction. According to the Group’s CEO, Heather Ridout, the decline confirms that the recovery of our economy remains patchy, most likely due to a weak global economy and rising interest rates.

Graeme Billings, PricewaterhouseCoopers Global Head of Industrial Manufacturing, had advice for Australian businesses, which will face competition from lower cost economies while our dollar remains strong:

“The key to successfully navigating these difficult conditions is a strong focus on cost and cash flow management," said Billings.

For more information visit www.aigroup.com.au

Home Sales Figures & Building Approval Data (Housing Industry Association)

The HIA figures show a slight 0.3% rise in home sales, with a 4.9% decline in the multi-unit sector grossly responsible for the modest result, according to the report figures. HIA’s chief economist Harley Dale predicts “tight rental market conditions over 2010.” However, he goes on to say that overall, “leading indicators are pointing to a recovery in new residential construction.”
Commsec’s chief economist Craig James echoes Dale’s positive outlook for Australia’s builders. Figures show that, “new approvals to build homes have risen by more than a third, while loans…to build new dwellings are at the highest levels in 15 years,” says James.

The reserve bank has already lifted rates 3 times, up to 3.75%, with a 50/50 chance of another hike in February. And, as more people feel assured with the recovery of the US, demand for new homes and renovation should advance.

For more information visit www.hia.com.au

Performance of Services Index

The Commonwealth Bank Index fell for the 9th consecutive month down to 39.5 points (far below the 50 point level indicating expansion.) with activity down in 8 of the 9 sub-sectors.
AIGroup’s CEO Heather Ridout commented that, “business-related, property and wholesale services are very weak, while consumer-related ones such as retail, were steady in December.” She continued to caution that although cafes and accommodation picked up during the holiday season, the index is not growing, “just contracting at a slower pace.”

Therefore, remain conservative, and have a good understanding of your cashflow needs.

International Trade & Retail Sales Figures

The Australian Bureau of Statistics announced a higher-than-expected 1.4% increase in sales across all retail industry groups. According to The Australian, previously surveyed economists were off by 1%, or with their average prediction of a slight 0.3% rise. The healthy sales fuelled the Australian dollar above US92 cents, leading up to the Reserve Bank’s first Board Meeting of 2010 next month. There is no definite indication that the bank will raise rates up to 4%, which would easily make it the highest rate in the developed world.

Visit Australian Bureau of Statistics at www.abs.gov.au

Overall, the results show a recovering, yet fragile economic climate at the start of 2010. However, particularly in the Australian economy, car sales continue to soar, and there is a rise in apartment approvals. This means that although major project approvals and large scale planning is held back by the weaker global economy, local markets are benefitting from consumer confidence. At Morris Finance Ltd., we are seeing this trend first hand with a continuing increase of new inquiries. Our advisors are always available to answer questions regarding finance for your business, working with your cashflow and industry conditions.

Kick Start 2010

The holidays give us all a chance to rest and relax, and get a fresh start to the New Year. The government is already running full steam with several big announcements and reports due to come out next week.

We’re giving you the heads up on these important dates, so that you can keep your business ahead of the competition.

Monday January 4:

Performance of Manufacturing Index (PMI)
The Pricewaterhouse Coopers PMI is a seasonal composite of Australian Manufacturing based on indices for production, new orders, deliveries, inventories and employments rates. If offshore manufacturing affects your business, take advantage of the report’s summary of other leading countries’ statistics. A PMI reading above 50 points indicates manufacturing is expanding; below 50 points that it’s declining.

For more information visit www.aigroup.com.au

Tuesday January 5:

Home Sales Figures (from Housing Industry Association)
The HIA’s Economic Group is Australia’s leading provider of housing statistics including industry conditions, emerging trends, future scenarios and forecasts. The report can help shed some light on this year’s expectations if you are involved with the building industry.

For more information visit www.economics.hia.com.au

Wednesday January 6:

Building Approval Data
Judging from November’s better-than-expected Building Approval Data, 2010 should have a ‘hot’ housing sector. However, as interest rise for the 4th month in February, it will add some negative pressure to the upwards trend.

Visit Australian Bureau of Statistics for the release and more information.

Performance of Services Index

The Australian Industry Group’s index, in association with Commonweath Bank, gives a clear picture of the national services sector, which accounts for a significant amount of Australia’s GDP.

Visit the PSI page at www.aigroup.com.au

Thursday January 7:

International Trade & Retail Sales Figures
As one of Census’ most known reports, it provides an overview of the country’s retail trends, which have been favourable over the last few months. Released monthly, it will show the effect that rising interest rates will have on sales.

Visit Australian Bureau of Statistics at www.abs.gov.au

Check back soon for more tips to keep your business in top shape, and further analysis on the above indicators. If most of the indicators show positive results, and you are in a confident position with your business, it may be a good time to start thinking about expanding. Feel free to ask our Advisors about the cashflow necessary for expansion, and ensuring your business is equipped to handle an increased demand.

Merry Christmas

The Management and Staff at Morris Finance would like to wish you and your family a Happy and Safe Christmas Day.

We extend our best wishes to you for the Holiday Season, and the upcoming New Year.

Morris Finance Ltd is excited about a bigger and brighter 2010, and we look forward to dealing with you in the coming year.

Merry Christmas.

It's business as usual this festive season at MFL

It's business as usual this Christmas / New Year at Morris Finance Ltd.

Morris Finance Ltd will be open for business as usual on all days over the festive season apart from the normal public holidays.

If you need a quote for new plant and equipment or you would like to make an arrangement with our office please call the main switchboard on 03 5223 3453 and our staff will only be too happy to assist you with your inquiry.

Please find below our trading hours for the festive season and we hope you and your family have a safe and happy new year.

Week One: 21st December 2009

Monday 21 December 2009
8.30am to 5.00pm

Tuesday 22 December 2009
8.30am to 5.00pm

Wednesday 23 December 2009
8.30am to 5.00pm

Thursday 24 December 2009
8.30am to 12.00pm

Friday 25 December 2009
Closed

Week Two: 28th of December 2009

Monday 28 December 2009
Closed

Tuesday 29 December 2009
8.30am to 5.00pm

Wednesday 30 December 2009
8.30am to 5.00pm

Thursday 31 December 2009
8.30am to 12.00pm

Friday 1 January 2010
Closed

Week Three: 4th of January 2009

Normal Trading Hours Commence Monday to Friday 8.30am to 5.00pm.

MFL signs on as Event Sponsor for RGYC World Championships

The recent visit by Tiger Woods is soon to be overshadowed by Australia’s own Vanessa Dudley. With a sailing debut at the young age of 9, Vanessa has grown to conquer some impressive sailing challenges:

• Skipped 18 ft Skiffs on the Grand Prix Circuit
• Sailed 94 ft catamarans across the Atlantic
• Raced in 15 Sydney to Hobarts

Having competed in countless national and international dinghy titles as well as off shore races, Vanessa remains grounded, maintaining that previous achievements are simply preparation for her Masters Debut at RGYC.

For years, Vanessa has brought her passions and expertise to the Australian Sailing Magazine, and she continues to be actively involved in the Australian sailing community.

We are honoured and excited to have Vanessa Dudly as our guest speaker during the Morris Finance Masters Regatta in Geelong.

For more information, visit www.rgyc.com.au

Mid Year Forecast: What it means to you.

Last month, the Federal Government released its mid-year Economical and Fiscal Forecast with some changes in comparison to the outlook earlier this year. Treasurer Wayne Swan commented that the economy is now predicted to grow 1.5% in 2010 and 2.75% in 2011, as opposed to previous estimate of 0.5%.
Some predicted effects on our economy include:

- Lower unemployment (down to 6.75%)
- Higher growth
- Lower debt & deficit

However, the treasurer was quick to note that the economy is still operating below capacity and the hard times are far from over. The decreased worked hours during the previous financial year (especially in trades) will put a damper on the coming year, with the weakest expected GDP growth in 50 years. Although manufacturing activity has started to stir, it has not resulted in reversing the effects of recession. A long, sustained period of new production orders will be needed to stop the falling employment rate in the industry.
We will see some changes as the government attempts to control their deficit while maintaining the economic uplift:

- Reduced stimulus programs (predicted decrease in 1st Home Owners grants and withdrawal of 50% Business investment allowance)

- Increased interest rates (Westpac's chief economist Bill Evans claims the maximum rise to 4.5%, although top economists are predicting figures between 5-5.5%)

Overall, improvements will continue in the coming year, but you should continue to approach business with a conservative frame of mind. If you have maintained control the economic downturn, the increased throughput in 2010 should put your business in a favourable position for growth towards the end of next year.

Morris Finance Ltd Annual Dinner

The 2009 Morris Finance Ltd Annual Dinner has been deemed a success. Held at the Sheraton Geelong on the 28th of November the event was attended by 130 clients and associates.

The guests were kept entertained throughout the night with Simon Madden acting as the MC - introducing, interviewing and getting a laugh from the speakers.

The evening started with an interview from Nathan Murray, giving the guests a chance to see what the company’s Managing Director is all about. This was followed by Nathan’s father and CEO Ian Murray who presented the company results for 2009 and gave insight into the companies plans for the coming year.

Morris Finance Ltd extends a special thanks to V8 Supercars’ Jason Richards and Media Manager Graham Sattler of Brad Jones Racing. Jason delivered a captivating account of his now-famed racing career, sharing crash stories and victory memories.

The dinner culminated with a “thank you” from Nathan Murray addressing all the associate companies for their continued efforts in working for and with the business.

Morris Finance is looking forward to another successful year, wishing clients and associates a safe and happy holiday season and new year.

Three Benefits of the Governments 50% Investment Allowance

With one month left before the goverment's 50% depreciation grant runs out, you've probably already purchased your vehicle or equipment, or have decided on what you will purchase.

If you're still unsure, the below example may spark and idea as to how this tax break can help you and your business get some new equipment!

You may have had your trusty old ute for a couple of years and it is serviceable and will last another year or two. It still runs ok, but is starting to show signs of getting tired. If you haven't considered a new vehicle as a replacements, you may be shocked at some of the benefits and savings!

Do you realise that if you purchased say a new Toyota Workmate for around for $25,000-00 you can claim $12,500-00[ that is HALF] as a tax deduction this financial year. This has a threefold effect:

1. You reduce your taxable income for the year ending 30/6/10

2. The vehicle only owes you $12,500 -00 in the first year

3. You reduce your vehicle repairs and downtime immediately

Even as this limited offer comes to a close, we continue to receive many inquiries as to how this can be applied to certain businesses and purchases. Morris Finance can clear up some of your confusion with "no obligation" advice should you require any further information.

Christmas Trading Hours Dec / Jan 2010

It's business as usual this Christmas / New Year.

Morris Finance Ltd will be open for business as usual on all days over the festive season apart from the normal public holidays.

If you need a quote for new plant and equipment or you would like to make an arrangement with our office please call the main switchboard on 03 5223 3453 and our staff will only be too happy to assist you with your inquiry.

Please find below our trading hours for the festive season and we hope you and your family have a safe and happy new year.

Week One: 21st December 2009

Monday 21 December 2009
8.30am to 5.00pm

Tuesday 22 December 2009
8.30am to 5.00pm

Wednesday 23 December 2009
8.30am to 5.00pm

Thursday 24 December 2009
8.30am to 12.00pm

Friday 25 December 2009
Closed

Week Two: 28th of December 2009

Monday 28 December 2009
Closed

Tuesday 29 December 2009
8.30am to 5.00pm

Wednesday 30 December 2009
8.30am to 5.00pm

Thursday 31 December 2009
8.30am to 12.00pm

Friday 1 January 2010
Closed

Week Three: 4th of January 2009

Normal Trading Hours Commence Monday to Friday 8.30am to 5.00pm.

Can Spending Now Lead to Saving?

Tips that keep your best interest at heart.

The recent gloom of our economy is clearing with consumers and businesses alike anxiously anticipating a fresh and bright economic climate to emerge in the coming months. Morris Finance has derived some useful tactics to help our clients take advantage of this dynamic economic season and establish solid groundwork for the future of their business.

- With the economy showing even the slightest chance of recovery, the government will be reluctant to give out any more tax cuts, and increase their own deficit.

- Speculations of increased interest rates will be realised as Governor of the Reserve Bank looks to curb the trend towards inflation.

- To secure a favourable interest rate, acquire any business equipment or capital now. You will save money both immediately, through government incentives, and over time, through locked lower interest rates for the term of your contract.

- Check the regulations on all assets in your business including equipment, vehicles and machinery. The government regularly updates requirements on the age and equipment specifications, as well as introducing new rebates to assist businesses in meeting the new demands.

- If you will need to update or acquire new equipment in the near future, be proactive and do it now. Take advantage of lower interest rates and be prepared to meet the increased demand of the rising economy with new and efficient equipment.

- Leverage off outside sources for finance and maintain the balance of your existing cash flow. This will enable you to devote your undivided attention to smoothly absorbing the influx that comes with increasing market and consumer confidence.

Isn't it annoying?

You have searched around for some time looking for a piece of equipment or a motor vehicle for your business. When you have finally found the perfect item, and arrange the finance, there is always some holdup. It generally takes a week to get approval and then additional time to get it settled before you can collect your item and start using it. By this time, the shine has gone off the initial purchase.

Don’t despair! Morris Finance has one of the fastest finance approval turnarounds in the finance industry. We can arrange approval within 24 hours (providing we have all the information required) and you can collect your new purchase and be utilizing and earning you income within 2 days.

For further information ring Abby on 1300 4 Morris today and get things rolling FAST!

Investing is a Serious Business!

Investing your hard earned funds is a serious business. If you build up funds for an investment through hard work, or if you are lucky enough acquire funds through other means, the last thing you want is to loose them in a shaky investment.

Firstly, following your investment you want to be sure that your funds will be returned to you on maturity. Alternately, you want to check that the company you invested with is still operational and profitable allowing you to reinvest the funds with confidence.

Secondly, you want to ensure that your investment is earning you a good return to endeavor to allow for inflation. For example, if inflation is running at 4% PA and you are earning 5% PA on your investment, after paying tax on your interest from your asset is virtually reducing in value. [I.e. purchasing power]

MORRIS FINANCE LTD is a leading commercial finance and leasing company in its field. It is offering astute sophisticated investors* the chance to earn good interest rates in the current market.

Our Current Rates are listed below on all amounts over $500,000.00.

Indicative Interest Rates

Term 12 months …………………………….Rate 6.75%
Term 24 months …………………………… Rate 7.50%
Term 36 months …………………………….Rate 8.00%
Term 48 months …………………………….Rate 9.00%

Should you wish to make any enquiries about our attractive investment rates or Morris Finance Ltd please telephone us today on 5223 34533.

* Special conditions apply; minimum investment $500,000-00 offer is made to sophisticated investors under section 708 of the Corporations Act.

Time Is Running Out!

By now most have heard about the Federal Government hand-outs to small business in the form of a 50% tax deduction and depreciation allowance for new vehicles and equipment. What a lot of people don’t realize is that this allowance ends on the 31st DECEMBER 2009!

If you intend to purchase any new chattels for your business, do it now as now that the financial situation has improved and the reserve Bank is increasing interest rates to stop inflation - hard to work out isn’t it? There will be no extension of this tax deduction and we cannot see it coming our way for a long, long time. Get in now before it is too late.

You will be surprised when you do decide to purchase an item you had your eyes on that it may not be available, or you will have a long wait before you can obtain it for your business. Motor vehicles are a prime example. Due to the tax concessions and resultant consumer demand, the thousands of surplus stocks vehicles that had built up in the financial downturn have been cleared. In some cases there is now a waiting time of 2 to 3 months for popular brands.

After speaking to may small business owners, there appears to be a lot who still do not understand how this government incentive works, meaning they are missing out on this once in a lifetime hand out. We have experts in this finance area and invite everyone to telephone us on 1300 4 MORRIS for no obligation advise on the subject, who knows we may also be able to arrange the best interest rates available to assist you to with your new vehicle or business equipment.

ACT NOW BEFORE IT IS TOO LATE!