EXECUTIVE DIRECTORS REPORT
The latest announcement by ACTEW to again delay the introduction of Stage 4 water restrictions until March 2008 has been welcomed by all business and the Canberra community. Recently, I was pleased to advise of successful negotiations on Stage 4 Tier 1 exemptions with ACTEW that has provided security for members.
Unfortunately, the threats to member’s livelihood still remain should our dam levels reach the critical 30% level. Whilst we all pray for additional rainfall, ACTEW must commence discussions with all stakeholders on the impact the removal of all exemptions under Stage 4 Tier 1 will have on business and families in Canberra.
In a recent submission to the ACT governments Independent Committee (IDC), chaired by Mr David Dawes, I advised that the Goulburn community had been on Level 5 restrictions for some time now. Through discussions with MTA-NSW on the measures implemented by the council with respect to restrictions, it would appear that the Goulburn council adopted a far different strategy than that proposed by ACTEW. It would seem that the council strived at all cost to keep the business community viable. A similar approach adopted by ACTEW would certainly be welcomed by all.
IAG Real Time Real Money Announcement
IAG announced on the 28th August 2007, that following successful Real Time/Real Money trials in Sydney, they will proceed with a staged implementation across Australia of Real Time/Real Money commencing in October 2007 ending in June 2009. Repairers will have the option to either participate immediately or opt out at any stage up to June 2009, at which stage IAG will only except quotes based on Real Time/Real Money.
Canberra is scheduled for April 2008 which will allow sufficient time for any issues with the times guide or shop rate would be corrected. MTA-ACT in association with MTA-NSW will be running information sessions closer to Canberra’s implementation date.
NEW WAGE RATES
New Wage Rates from 1 October 2007
Members please note that there has been a wage increase awarded by the Australian Fair Pay Commission (AFPC) and Industrial Relations Commission.
These new rates are effective from the first full pay period on or after 1 October 2007.
The new rates were emailed/faxed to members on Monday 17 September 2007. If by chance a member didn't receive them, please phone Helen at the MTA Office on 6241 6266 for another copy of the pay scales.
$1000 TAX FREE BOOST
The Federal Government will give all 1st and 2nd year apprentices under 30 years of age a tax free $1000 wage 'top up'. In addition, apprentices in their 1st and 2nd year can receive up to $500 each year, without any age restriction, towards their TAFE or other training fees. These incentives commenced on 1 July 2007.
The wage 'top up' is also viewed by the Federal Government as an additional incentive to attract young people into technical and trade training which have been designated as 'skills shortage trades'.
When do the incentives commence?
The initiative will commence from 1 July 2007. Both new and existing apprentices may be eligible. New and existing apprentices will receive their first payment from January 2008.
Who is eligible?
All 1st and 2nd year apprentices under the age of 30 who are undertaking a trade apprenticeship in a designed skills shortage trade (identified below) will be eligible to apply for the incentives.
What is a Skills Shortage Trade?
The Migration Occupation in Demand List (MODL) provides a comprehensive list of all the trades that are currently designated as a 'skills shortage trade'. The MODL can be viewed online at www.immi.gov.au/skilled/general-skilled-migration/skilled-occupations/occupations-in-demand.htm Below are some of the designated skills shortage trades in the automotive industry.
Auto Electrician, Boat Builder & Repairer, Electrician (Special Class) Fitter, General Electrician, General Electronic Instrument - Tradesperson, Metal Mechanics (First Class), Motor Mechanic, Panel Beater, Pressure Worker, Refrigeration & Air-Con Mechanic, Sheetmetal Worker (First Class) Toolmaker, Vehicle Body Maker, Vehicle Painter and Welder (First Class).
How much will apprentices receive?
The apprenticeship wage 'top up' is $1000 p.a. tax free for each of the first two (2) years of an eligible full time apprenticeship. This wage top up will be paid in 6 monthly instalments of $500. Part-time apprentices will receive payments of $500 annually.
How do apprentices claim the payment?
The Australian Apprenticeships Centre will send a claim form to apprentices who are eligible to apply for the payment. Both the apprentice and their employer will need to complete it before returning it to the Australian Apprenticeship Centre for processing.
Payments will be paid directly into the apprentice's bank account.
LICENCED MOTOR VEHICLE DEALERS BEWARE
Odometer tamperer banned for life
A Brisbane motor dealer has been permanently banned from the motor
industry after his company sold 25 cars with odometers wound back, one
by as much as 219,000 kilometres.
Fair Trading Minister Margaret Keech said the life ban imposed on Wayne
John Cooper, 38 of Bardon, was a victory for consumers.
"Mr Cooper's disqualification by the Commercial and Consumer Tribunal
comes after he was fined $30,000 in the Brisbane Magistrates Court when
he pleaded guilty to 25 criminal charges.
"Mr Cooper was a director of a company that made false representations
about the history of several motor vehicles.
"His company Chamino Pty Ltd, which traded as Coops Motor World,
repeatedly ripped-off customers, selling vehicles with odometers wound
back by an average of 95,000 kilometres."
The Office of Fair Trading investigated Mr Cooper after a customer
complained about a car he had bought.
"The customer bought a car with an odometer reading of 133,000
kilometres but the day after he noticed a service entry in the car's
logbook for 152,000 kilometres," Mrs Keech said.
"The customer contacted the service station where the service was
carried out and was told the car was last serviced at 214,000
kilometres.
"Office of Fair Trading inspections revealed the extent of a
long-running scam.
"We won't tolerate odometer tampering, and offenders face fines,
permanent loss of their licence and possibly jail."
MTAA SUPER
PROTECTING YOUR INCOME
As a nation that is chronically underinsured, it seems that income protection insurance is something that most of us would rather not think about.
But, with the average Australian mortgage at approximately $215,000 (monthly repayment of $1,515) and the estimated cost of raising a child from infancy to adulthood at around $500,000 per child, life insurance becomes an important consideration.
What would happen to you, your family or your business if you were to become seriously injured and unable to work? Who would cover your mortgage payments, debts, or your children’s school fees?
Life insurance provides financial protection when life doesn’t go according to plan.
In all likelihood your most important financial asset is your ability to earn an income. However while the majority of people insure their homes, cars and other valuables few consider income insurance.
Most people believe they can get by with assistance from the following sources:
• their family
• their savings
• the Government, in the form of a disability support pension
• their employer, in the form of sick leave
• their insurance, through workers compensation, Total and Permanent Disablement (TPD) compensation, TPD cover, sickness & accident
• their superannuation benefits
While there is merit in all of these, they may not always be reliable. Savings within Australia are traditionally very low. The government disability support pension lasts for 6-12 months, pays an amount of no more than $15,000 per annum which scales down over time. There is limited sick leave with most employers. Super benefits are held until retirement age, only accessible as a special dispensation arises and which doesn’t cover short term disability.
Income Protection insurance will pay a benefit, usually monthly if you are unable to work because of illness or injury and can provide security to an individual in their time of need.
Members of the MTAA Superannuation Fund can apply for the following income protection cover:
• Up to 75% of your salary with a maximum monthly benefit of $20,000 per month.
• Benefit period up to 2 years
• Select cover in units of $250 per month with a minimum of 3 units required.
• Waiting periods of 30 days, 60 days and 90 days.
• Premiums are based on your occupation (Manual or office based).
Case Study using MTAA Super Income Protection Scales
Joe is a mechanic who will be turning 32 at his next birthday and has a gross income of $50,000 per annum. He decides he wants a waiting period of 30 days and full 75% of salary covered.
To work out the number of units required, Joe calculates 75% of his $50,000 annual income and then divides this by 12 to give his monthly benefit. Dividing again by 250 will give him the number of units he requires.
Calculation
$50,000 x 75% = $37,500
$37,500 ÷ 12 = $3,125
$3,125 ÷ 250 = 12.5 Units is the level of cover Joe requires. This is rounded up to 13 units.
Joe then multiplies the number of units by the applicable rate from the ‘general’ premium scale which is 0.39. The ‘general’ scale is generally for people working in a trade environment, and the non-manual scale is for non-manual workers.
13 x 0.39 = $5.07 per week to insure 75% of his gross salary.
For less than the price of a cup of coffee per day, Joe can rest assured he has an income to cover living expenses should an illness or accident happen to him that would stop him from working.
Based on the above example Joe has protected 75% of his income for a maximum period of 2 years commencing 30 days after he is unable to work.
Note: Insurance cover is subject to policy terms and conditions.
Important notice about advice:
This article contains a fictitious case study and general advice only. It does not take into account your individual objectives, financial situation or needs. Before acting on this advice you should assess whether it is appropriate for you. Either see your Financial Adviser or MTAA to discuss your particular circumstances and options available to you. You should also consider the relevant Product Disclosure Statement (PDS) before making any decision about a product detailed in this article.
Contact MTAA Super on 1300 362 415 for more information or visit www.mtaasuper.com.au for a copy of the Insurance Handbook.
ATO UPDATE
Use ordinary time earnings to calculate super guarantee
The Tax Office is reminding employers that from 1 July 2008 they have to use ordinary time earnings as defined in the superannuation guarantee law to calculate super guarantee contributions.
Ordinary time earnings are generally what employees earn for their ordinary hours of work. This includes over-award payments, commissions, shift allowances and paid leave. It excludes such things as overtime.
Most employers use ordinary time earnings to calculate super guarantee contributions. However, some employers are calculating super guarantee contributions on earning bases contained in:
• an industrial award
• an existing employment agreement
• a fund’s trust deed, or
• a law of the Commonwealth, States or Territories.
All employers should check their current superannuation arrangements now to see if they are using an earnings base other than ordinary time earnings to calculate super contributions.
To see what is included or excluded from ordinary time earnings, employers can refer to the free guide Checklist for salary or wages and ordinary times earnings on www.ato.gov.au by searching for “ordinary time earnings”.
From 1 July 2008, if the super contribution percentage in a specific earnings base is below the minimum 9%, employers will have to pay extra to meet the minimum 9% and avoid additional super guarantee charges.
Employers should think about building the increased super guarantee contributions into their workplace bargaining processes and payroll system now, to be ready for 1 July 2008.
The change to the law has been made to make sure all employees are treated the same for super guarantee purposes.
Motor vehicle companies may pay super contributions under an award which states that commission for salespersons is excluded from ordinary time earnings as defined in the relevant award. From 1 July 2008, commission must be included when calculating super guarantee contributions. Bonuses are often paid by employers in a number of industries; however, many industries do not include bonuses when calculating the super guarantee. From 1 July 2008, there is a requirement under super guarantee law for the super guarantee to be paid on bonuses that relate to specific performance criteria.
For more information on ordinary time earnings and the super guarantee, visit the Tax Office website www.ato.gov.au or call 13 10 20.
DAYLIGHT SAVING
Daylight Saving will commence on the last Sunday in October. On Sunday 28 October 2007 at 2.00am all clocks must be put forward by one hour to read as 3.00am. Daylight Saving will be extended by one week and will end on 6 April 2008, the first Sunday in April 2008.
Shift workers on duty that night are to be paid according to the clock. (Therefore, an employee who works seven (7) hours shall be entitled to be paid for eight (8) hours. Note: Casual Console Operators and Driveway and Roadhouse Attendants, or employees called out for emergency roadside service or tow truck work should be paid according to time elapsed (at the appropriate rate).
MTA.ACT GOLF DAY
Here's a date for the diary!
MTA.ACT Golf Day is on again - bigger and better than ever! Thursday 15 November 2007 at Gold Creek Country Club is the date and venue. Great Day! Great Prizes!
Nomination forms will be mailed to all members and invited guests during October. Start organising your team NOW!
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