Business confidence at three-year high

A KEY business lobby group is concerned about the employment outlook even though the change of federal government has improved overall confidence.

The Australian Chamber of Commerce and Industry's latest survey of investor confidence has found business owners at their most confident since December 2010.

"We are continuing to see this improvement in expectations flying from a new government and a new administration with different economic agenda," chamber chief economist Greg Evans said in Canberra on Monday.

However, improvement in actual trading conditions was more modest.

Expectations for sales, profitability and the investment outlook all grew in the month but expectations for employment deteriorated. The survey's expectation index rose to 59.2 points in the September quarter from 55.7 points in the previous three months, while the actual conditions index crept up to 50.8 points from 49.9 points.

Even so, this was the first time the conditions index had risen above the key 50-point mark, which separates expansion from contraction, since March 2011.

Sales and profitability remained locked at contractionary levels.

Mr Evans said business still faced some fairly stiff economic headwinds in terms of international uncertainty, an Australian economy that is expected to continue to grow below trend and an unemployment rate that could go above six per cent in 2014.

While he believed the full benefit from lower interest rates had yet to be fully locked in, the chances of another rate cut had "probably evaporated".

He said there was still scope for greater competition among banks, particularly in terms of business loans and overdrafts.

Paul Zahra quits as David Jones CEO

PAUL Zahra has resigned as the chief executive of department store giant David Jones.

Mr Zahra is resigning for personal reasons and will step down when a successor is found, the company told the Australian Securities Exchange on Monday after the market had closed.

The man who took over from Mark McInnes in June 2010, following a sexual harassment scandal, will continue working with the full support of the board.

"Whilst much has been achieved and the company is well placed for the future, I believe it's time for a change for me personally," Mr Zahra said in a statement.

David Jones chairman Peter Mason said Mr Zahra would leave the retailer in a solid financial position.

"I thank him for his contribution as CEO," he said in a statement.

"I look forward to working with Paul to ensure a smooth transition of his role to his successor."

US stocks tumble on debt deadline

US stocks have tumbled in early trade with the government having days to resolve the political deadlock over the budget and debt before being forced to default on its bills.

After a weekend that saw no progress in talks between the White House and Republicans, an hour into Monday (local time) trade, the Dow Jones Industrial Average was down 71.70 points (0.47 per cent) at 15,165.41.

The broader S&P 500 lost 7.80 (0.46 per cent) to 1695.40, and the Nasdaq Composite gave up 13.15 (0.35 per cent) to 3778.72.

Investors still showed tentative hopes a deal would be reached by Thursday, the day the US Treasury says it will run out of adequate cash to pay its obligations, including debt service.

Global finance leaders have repeatedly warned a US debt default would generate unfathomable turmoil through the global financial system.

"It would mean massive disruption the world over," International Monetary Fund chief Christine Lagarde said on Sunday.

"And we would be at risk of tipping, yet again, into recession."

Netflix surged nearly three per cent after a report that it was negotiating to place a Netflix app on the set-top boxes of several cable providers.

Chip maker Micron Technology lost another 2.6 per cent after Friday's sharp fall as investors took profits following a sharp run-up.

Facebook shed nearly two per cent, while retail giant Walmart fell 1.2 per cent.

The bond market remained quiet despite the worries about the US budget and debt impasse.

The yield on the 10-year Treasury was marginally higher at 2.69 per cent, while the 30-year was at 3.75 per cent.

How Big Business Could End the Shutdown Overnight

Business leaders have been increasingly vocal in their displeasure with Congress over the ongoing federal shutdown. But so far, there’s one crucial thing they haven’t done: clamp off the campaign contributions that are the lifeblood of American politics.

Members of Congress love to wax patriotic about carrying out the will of the American people, blah blah blah. But money is the thing that really gets their attention. And the business lobby is where the money is. Business groups contribute more than 70% of the donations that fund political campaigns, according to the Center for Responsive Politics. With campaigns costlier than ever, that gives the business lobby considerable leverage in terms of getting their way with politicians.

So if business groups really became determined to end the government shutdown and the standoff over extending the federal debt ceiling, declaring a moratorium on campaign contributions ought to do the trick.

“All it would take are a few of the biggest hitters to pull back,” says Sheila Krumholz, executive director of the Center for Responsive Politics, which monitors campaign donations. “It would be extraordinarily hard to replace that lost money with other money.”

Big business is typically associated with the Republican Party, but business groups give to many candidates. During the 2012 election cycle, about 40% of the donations from business groups went to Democrats, who control the Senate and the White House and therefore oversee many matters business cares about. The rising influence of the Tea Party, and its penchant for disruptive tactics such as shutting down the government, has further weakened ties between business leaders and establishment Republicans (including House Speaker John Boehner) who seem unable to corral their rambunctious party mates.

Business groups often have differing agendas, since the oil industry faces different challenges than pharmaceutical firms, food companies or technology start-ups. But virtually all businesses tend to benefit from predictable government, reliable infrastructure and other factors that have been disrupted by the shutdown. So it’s a unique moment when businesses in general have one huge thing in common: A need to get back to business as usual.

If business groups decided to withhold campaign contributions until Washington resolved its budget issues, they could target Republicans or focus on House Republicans specifically, since the House is holding up a budget resolution. Most analysts think “clean” legislation to reopen the government and extend its borrowing limit--with no strings attached--would pass both the House and the Senate, if a vote was held. But Boehner and other House Republican leaders won’t bring such a measure up for a vote, fearing it might shatter the party’s unity, since some Republicans could join Democrats to pass such a bill against Tea Party opposition.

A moratorium on campaign contributions might not sway Tea Partiers, who tend run against the establishment and don’t usually rely on business donations anyway. But it could persuade other Republicans to break with their Tea Party allies and vote to reopen the government.

A more pragmatic approach, however, might be for business groups to suspend all contributions to Democrats and Republicans alike, taking a “work-it-out, nonpartisan approach,” as Krumholz says. For influential lobbying groups such as the U.S. Chamber of Commerce, the Business Roundtable and the National Association of Manufacturers, that would reduce the odds of making new enemies while showing seriousness about the need to deal with the budget impasse.

There’s already evidence that the shutdown and the threat of a default on U.S. debt, no matter how small, is hurting business. The shutdown has deflated consumer confidence, foreshadowing a cutback in spending that could cut into revenue at many companies. Financial markets are increasingly volatile, and stocks have been registering wild swings triggered by any sign of breakthrough or stalemate in Washington. On corporate earnings calls, CEOs and CFOs repeatedly express their reluctance to spend and invest amid so much political uncertainty.

If the fiscal follies in Washington do ultimately cause a new recession or other lasting damage, big businesses will survive better than most. Many big companies have stockpiled cash and streamlined operations to deal as effectively as possible with economic shocks. But robust profits depend on a healthy economy, not just on the ability to survive turmoil. The politicians don’t seem to have gotten the message yet.

Blucora buys Balance Financial

TaxACT, a subsidiary of Blucora, is acquiring Bellevue-based Balance Financial,

TaxACT, a subsidiary of Blucora, said Friday that it’s acquiring Bellevue-based Balance Financial, which provides Web-based personal finance management tools.

Terms of the deal were not disclosed.

Bellevue-based Blucora, which used to be called InfoSpace, now operates online search business InfoSpace, as well as tax-preparation software company TaxACT.

Balance Financial’s offerings complement TaxACT’s services that are expanding beyond just tax return filings and into areas such as estate planning, according to a news release from Blucora.

In the future, it is intended that Balance Financial and TaxACT will develop a suite of complementary online tools for each of the two businesses.

Balance Financial co-founder and CEO Devin Miller will continue to lead product development and management of the business, while the company and its 11 employees will continue to operate out of their current office in Bellevue.

TaxACT will remain in Cedar Rapids, Iowa.

Bumps and all, MNsure opens for business (update)

More than three years after passage of the federal Patient Protection and Affordable Care Act, Minnesota’s health insurance exchange opened for business on Tuesday. The MNsure website had more than 100,000 visitors on opening day, and more than 500 people created accounts in just the first hour of operation.

“We are very happy and pleased to be open this afternoon,” said April Todd-Malmlov, MNsure’s executive director. “We have had great interest today.”

But the rollout of the health insurance marketplace, where 1.3 million individuals are eventually expected to obtain coverage, left largely unanswered many questions about how well the system will function. That’s in part because the website where people can shop for coverage didn’t go live until after 3 p.m. on Tuesday.

As anticipated, there were some glitches on startup. At least one key feature of the site — the ability to look up whether a specific medical provider is part of the network for an insurance plan — was not working. In addition, the site initially will not be available from 10 p.m. to 6 a.m. each day in order to allow for ongoing maintenance. There were also problems with account creation owing to server problems.

In addition, Native Americans were advised to wait a week before seeking coverage through the state-run exchange, because the computer system was having problems calculating the correct subsidies available for those individuals. MNsure officials indicated that they’ve identified the problems and expect to have them fixed within a week.

Further complicating the rollout, MNsure officials said they would not begin certifying roughly 5,000 individuals — insurance brokers, nonprofit employees, government workers — who will help people obtain coverage until Wednesday.

“We know there’s been a few bumps in the road both for us and for the federal government as well, but we are tracking those, addressing them and fixing them as they come up,” said Todd-Malmlov.

Officials encouraged

Despite the first day turbulence, proponents of the health insurance exchange expressed satisfaction with MNsure’s much-anticipated debut. In particular, they stressed that Minnesota’s exchange will offer the lowest rates in the country for many groups of individuals.

“So far, so good,” said Rep. Joe Atkins, DFL-Inver Grove Heights, the lead author of exchange legislation in the House. “I’m cautious by nature, but optimistic that it’s going to turn out fine. Obviously it’s a long day and a long week and we’ll see how it all shakes out.”

Sen. Tony Lourey, DFL-Kerrick, the lead author of exchange legislation in the Senate, pointed out that plans purchased through MNsure won’t become active until January 1, so there’s plenty of time to work out any kinks. “I don’t think there’s going to be a lot of people closing the deal in these first few days,” Lourey said. “It’s more kicking the tires.”

But skeptics of the viability of a state-run marketplace expressed concern that it was rolled out prematurely in order to meet an arbitrary deadline set by the federal government. Specifically, they stressed concerns about data security given an earlier breach in which personal information concerning more than 1,500 insurance brokers was inadvertently released.

“I think they were under tremendous pressure to comply with the law instead of doing good project management,” said Sen. Michelle Benson, R-Ham Lake, the ranking minority member of the Health, Human Services and Housing Committee. “We’re going to keep finding stumbles and missteps. I don’t think they did good testing on this.”

No rush to acquire coverage

The Anoka County Human Services Center, in Blaine, has set up a room on the fourth floor where individuals seeking coverage through MNsure can learn about their options in the fledgling marketplace. The county is sharing the space with the Anoka County Community Action Program (ACCAP). County workers will enroll individuals who qualify for public plans (i.e. Medicaid and MinnesotaCare), while those who need to purchase private coverage will be assisted by ACCAP employees.

According to Jerry Vitzthum, Anoka County’s director of economic assistance, they’ve added 17 workers to handle the expected influx of people seeking coverage. But at 1 p.m. on opening day, with the enrollment system not yet functional, no one was seeking insurance.

“If the thing works as it’s eventually supposed to, it could make our lives a lot easier,” Vitzthum said. “If it doesn’t work that way, then it could make more work for us. That’s the only concern we have.”

At Portico Healthnet, a nonprofit group in St. Paul that helps people acquire health insurance, the first day was similarly quiet. The group expects to eventually have 15 workers certified to sign people up for coverage through MNsure, but that process won’t begin until Wednesday.

“We’re finished with training,” said Rebecca Lozano, Portico’s outreach manager. “We are ready to hit the ground running as soon as we get the go ahead from MNsure.”

Portico has hired four additional health outreach workers and is partnering with 10 other social service organizations to spread the word about the availability of coverage. “The four community health workers that were hired specifically to do this work will be constantly rotating through these organizations,” Lozano said. “It’s really serving the client to the best of our ability in partnership with these other organizations.”

Debra Holmgren, Portico’s president, said that the hiccups in the MNsure rollout haven’t caused significant anxiety about how the system will ultimately function. “Historically when something new opens up like this, it’s a lot slower start,” Holmgren said. “I think we’re just ready to get started.”

Tags: ACA, ACCAP, Affordable Care Act, Anoka County Community Action Program, Anoka County Human Services Center, April Todd-Malmlov, Debra Holmgren, Health Human Services and Housing Committee, Jerry Vitzthum, Joe Atkins, Medicaid, Michelle Benson, Minnesota Legislature, MinnesotaCare, MNsure, Obamacare, Patient Protection and Affordable Care Act, Portico Healthnet, Rebecca Lozano, Tony Lourey, U.S. Patient Protection and Affordable Care Act

Switkowski appointed new NBN boss

FORMER Telstra boss Ziggy Switkowski has been appointed executive chairman of the new NBN Co board, Communications Minister Malcolm Turnbull says.

"The project needs new leadership," Mr Turnbull told reporters in Canberra on Thursday.

Dr Switkowski replaces outgoing chairwoman Siobhan McKenna and will be joined by current NBN Co board members Kerry Schott and Alison Lansley.

Ms Schott and Ms Lansley are the only survivors of the former NBN Co board, all of which tendered their resignations after the coalition won the election.

Dr Switkowski was one of the most experienced telecom executives in Australia, Mr Turnbull said.

"Dr Switkowski is an outstanding Australian business leader," he said.

He will be executive chairman until a chief executive officer is appointed.

Mr Turnbull said a strategic review was under way to see exactly what was happening with the NBN project.

"In a nutshell ... what the status of the project is at the moment; how much it is going to cost; and how long it will take to complete it on the current plan or the Labor government's plan of a 93 per cent fibre to the premise model," he said.

It will also look at what savings can be made in cost and time, including if there is an increased use of fibre to the node.

Mr Turnbull said it was important to have a clear and accurate assessment as to where the company was at the moment.

"We don't have a blank sheet of paper," he said.

"Labor has made shocking mistakes. There are billions of dollars that Labor has wasted that we will never be able to recover. This has been a shockingly misconceived, wasteful exercise in public policy."

Mr Turnbull said it was important NBN Co "owned" the project. "In the past this project has been riddled with politics," he said.

"What I've said to the company is I just want the plain, unvarnished facts. We do not want spin or for the company to tell us what they think what we might like to hear."

Good Energy launches 7.25% corporate bond

Good Energy Group plc (“Good Energy” or “the Group”), the AIM quoted renewable electricity supplier, said on Wednesday it had launched its first corporate bond, the Good Energy Bonds at a coupon of 7.25% a year.

The launch of the Good Energy Bonds is intended to raise finance for the Group to invest in increasing its own solar and wind generation capacity. The proceeds will contribute to the Group’s overall objective of developing 110MW of its own renewable energy generation capacity by 2016; targeting 50% of its customer’s future electricity supplies.

In 2012 the Company reported annual revenue of £28.2m with profit before tax of £1.4m.

Juliet Davenport, OBE, Founder and CEO of Good Energy said: “We believe this product provides investors and customers with the opportunity to be a part of the development of the UK’s green energy market and Good Energy’s expansion in particular, while also providing a yield backed by a Group which has a strong financial track record.”

Applications for the bond are due to close on 13th November 2013.

Key features:

+The Good Energy Bonds offer investors a coupon of 7.25% per annum, paid half-yearly

+ In addition, any Good Energy customer or generator investing in the Good Energy Bonds will be paid at maturity the equivalent to 0.25% for each year of being a customer and a bondholder

+The Good Energy Bonds have an initial term of four years and are being issued by Good Energy Group

+ Looking to raise £5 million through the Good Energy Bonds, up to an over-subscription maximum of £15 million

+The Good Energy Bonds also provides investors with a strong social return, as funds raised from the Good Energy Bonds will be invested directly in UK clean energy infrastructure

+Investments can be made in multiplies of £500, with no maximum

+The Good Energy Bonds are an unsecured debt of the Company

Good Energy has over 100,000 customers and generators, and has topped the Which? Customer Satisfaction Survey for electricity suppliers for three out of the last four years. It operates a 9.2MW wind farm which provides 16% of its electricity supply, with a further 8.2MW of wind-generated power capacity under construction.  The Group is also now has a wind and solar farm development portfolio in excess of 200MW.

Australia's disappearing jobs

RUBBISH collectors, secretaries and switchboard operators are among the jobs that are disappearing in Australia - fast.

A comparison of Census data between 2006 and 2011 shows there are occupations where the number of people employed across the country has dropped by up to 66 per cent in five years, despite the fact the overall number of people counted has risen 10 per cent.

Occupations that registered the biggest drops include corporate services managers, photographic developers and safety inspectors.

John Spoehr, executive director of the Australian Workplace Innovation and Social Research Centre, said mechanisation was playing a role in the decline in many of the jobs listed, for example sorters replacing rubbish and recycling collectors and other machines taking the place of switchboard operators.

Prof Spoehr said the major drop in corporate services managers - from 21,804 in 2006 to 7365 in 2011 - would have been caused by the global financial crisis but that the high scale of job losses was "surprising".

Jonathan McIlroy, joint managing director of the Executive Assistant Network, said the decline in the number of secretaries - from 94,404 in 2006 to 64,169 in 2011- could be attributed to offshoring and the redefining of job titles.

"The term 'secretary' is demeaning; the connotation is that they're someone who is purely there to do typing and low-level clerical work," Mr McIlroy said.

"It's a hang up from an era that just no longer exists. Now instead you've got receptionist, team assistant, junior assistant, admin assistant."

AUSTRALIA'S DISAPPEARING JOBS

Corporate services managers 

2006 - 21,804

2011 - 7365

Recycling and rubbish collectors 

2006 - 3889

2011 - 2133

Safety Inspectors 

2006 - 5845

2011 - 3365

Photographic Developers and Printers 

2006 - 3285

2011 - 1945

Switchboard Operators 

2006 - 6301

2011 - 3835

Textile and Footwear Production Machine Operators 

2006 - 5073

2011 - 3229

Graphic Pre-press Trades Workers 

2006 - 5052

2011 - 3248

Secretaries 

2006 - 94,404

2011 - 64,169

Metal Engineering Process Workers 

2006 - 14,927

2011 - 10,440

Timber and Wood Process Workers 

2006 - 8166

2011 - 5768

Boat builders and shipwrights 

2006 - 4974

2011 - 3624

Printing Assistants and Table Workers 

2006 - 5967

2011 - 4357

Forestry and logging workers

2006 - 3379

2011 - 2529

Nursery persons 

2006 - 4907

2011 3672

Product Assemblers 

2006 - 32,670

2011 - 24,887

Shearers 

2006 - 4173

2011 - 3203

Toolmakers and Engineering Patternmakers 

2006 - 7348

2011 - 5672

Canvas and leather goods makers 

2006 - 3304

2011 - 2550

Crop Farm Workers 

2006 - 25,541

2011 - 19,855

Meat Boners and Slicers, and Slaughterers 

2006 - 9524

2011 - 7584

Printers 

2006 - 15,315

2011 - 12,498

Debt Collectors 

2006 - 10,144

2011 - 8487

Mixed Crop and Livestock Farmers 

2006 - 41,347

2011 - 34,724

Financial dealers 

2006 - 18,005

2011 - 15,168

Judicial and Other Legal Professionals 

2006 - 9192

2011 - 8032

Paper and Wood Processing Machine Operators 

2006 - 7581

2011 - 6694

Auctioneers, and stock and station agents 

2006 - 3021

2011 - 2709

Occupy Wall St to launch debit card

TWO years ago Occupy Wall Street was a protest movement crying for the downfall of the financial system as we know it. Today it's a bank.

That's right, the group plans to launch its very own financial cooperative providing services to people who might otherwise be unable to get access, New York Magazine reported.

Occupy Wall Street was a peaceful protest movement that began in September 2011 following the global financial recession. The group's goal was the arrest and trial of the businessmen responsible for causing the Wall Street crash, to fight corporate America's influence over the political system and to address the massive disparities in wealth the world over.

Protesters of all ages camped out in Zuccotti Park in New York and refused to move until their issues were addressed. The movement sparked Occupy protests all over the world, including Australia. Of course this ended in tears and police brutality.

While the group was a powerful movement, it is largely seen as a failed one. It's failure is blamed largely on the group's lack of hierarchical structure, it's inability to focus on a single goal and its refusal to appoint a spokesperson.

This YouTube clip from Aaron Sorkin's The Newsroom - while fictional - is a pretty comprehensive summary of everything that was wrong with the Occupy movement:

However three years later the group is trying to address its goals from another angle.

Instead of fighting against the system, the group is trying to work within it to the advantage of the most disenfranchised.

The group this week launched the Occupy Money Cooperative, which is a not-for-profit organisation that offers financial support and products to people who might otherwise not have access to them.

"We're like a bank, but better," the organisation says in an ad on YouTube.

"Like a bank your money will be insured, but unlike a bank you'll get a better deal because the cooperative is run by members which means we don't have to answer to Wall Street or profit hungry directors.

"We'll answer only to ourselves. We'll be in control of the products we offer, the way we operate, the future we create. And membership will be available to everybody, no matter where you live or how much you earn."

The first product the group plans to launch is a cheap, prepaid Occupy branded debit card.

The Occupy cards are free to set up, cost only 99 cents a month, cost $1.95 to withdraw money and 99 cents to check your bank balance.

Occupy critics will no doubt be pleased to see the group trying to change the system from within.

It's a pretty interesting concept that Occupy is toying with, and if it is successful it could potentially open up the floodgates for other not for profits to either get involved or launch their own financial services which would in turn allow the world's least wealthy people to move away from banks and lenders that have been bleeding them dry.

There's one catch.

The group says it needs to raise about $900,000 before it can start offering the debit cards.

"Please donate today and take part in the revolution that will make banking fair, transparent and affordable."

Ironically, the group plans to partner with one of the organisations it claims to despise - Visa - to turn this dream into a reality.

One of the members of the co-op Carne Ross told New York Magazine that the group "had no choice but to partner with that company or a similar one in order to produce a debit card that would be widely accepted".