Business Times August 2012

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creating an effective business culture

city changes the management structure

how the new federal tax impacts on council rates

recruitment boss talks about caring and success

A visionfor jobs

bUSineSS & LeiSUre: Frankston | Mornington Peninsula | Dandenong

management

dandy market

carbon tax

2 | BusinessTimes Frankston / Mornington Peninsula / Dandenong | August 2012

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ISSUE 26 / AUGUST 2012FRANKSTON / MORNINGTON PENINSULA / DANDENONG

DISCLAIMER: Information in BusinessTimes contains general advice only. No article or column has been prepared taking into account any individual reader’s financial situation, investment objectives or particular needs. Readers should personally consult professionals for advice on any matter, including investment, health and the law. While all care is taken, BusinessTimes accepts no responsibility for errors or omissions in the published material. Views expressed are not necessarily those of BusinessTimes Pty Ltd. All content is copyright.

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Features

BMW X5The upgraded X5: more power and less fuel.

16 LOCAL GOVERNMENT:Carbon tax not the only impact on council rate rises.

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1460

AUGUST 2012 | $4.95 (GST inc.)

creating an effective

business culture

city changes the

management structure

how the new federal

tax impacts on council

rates

recruitment boss talks

about caring and success

A visionfor jobs

bUSineSS & LeiSUre: Frankston | Mornington Peninsula | Dandenong

management

dandy market

carbon tax

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HIRING AN APPRENTICE OR TRAINEE?

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COVER: Recruitment agency owner Courtney Rowe feels a strong obligation to her clients, candidates and staff: SEE P.12

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BusinessTimes | 3August 2012 | Frankston / Mornington Peninsula / Dandenong |

TaxationConsulting

BusinessAdvice&Coaching

Superannuationincludingselfmanagement

Auditing&Corporategovernance

Budgeting&Cashflow

Bookkeeping&Payroll

StrategicWealthManagement

InvestmentConsulting

Super&PensionStrategies

SelfManagedSuperannuation

PersonalRiskInsurances

EstatePlanning&BusinessSuccession

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THE carbon tax will cost ratepayers in Frankston, Dandenong and Mornington Peninsula council areas between $450,000 and $1,254,000 this financial year.

The three councils will absorb the non-waste related carbon tax costs within their rate increases.

Carbon tax costs associated with waste management will be incorporated in the garbage charge paid by ratepayers, a service priced on a cost recovery basis.

Adding to waste costs is the state govern-ment’s increased Land Fill Levy.

The levy is rising from $44 a tonne to $48 a tonne (a 10 per cent increase). This follows an increase of $14 a tonne (or 47 per cent) last year.

The levy reflects the cost of disposing resi-dential waste to landfill.• FRANKSTON The carbon tax will cost Frankston Council and its ratepayers $1.254 million, accord-ing to the city’s proposed 2012/13 budget.

Council estimated the waste related com-ponent of carbon tax at $804,000, a cost

incorporated in the garbage charge paid by ratepayers, with the service priced on a cost recovery basis.

The non-waste aspects of the tax include a direct cost to council in higher electric-ity and gas prices, adding $450,000 to the city’s costs.

How carbon will costIndirect costs will rise as council’s sup-

pliers pass on increases in their cost base. Council said It was difficult at this point to

estimate the net cost of these non-waste carbon tax impacts, but modelling had forecast that they would amount to a combined increase equivalent to one per cent of council rates.

“The non-waste components of carbon tax are essentially being borne by council within its 2012/13 rate increase,” the council said.• DANDENONG The City of Greater Dandenong estimates its carbon tax bill will be $988,000.

Council estimates the waste related com-ponent of carbon tax impacts at $640,000 and this cost increase has been incorporated into the garbage charge.

The non-waste aspects of the carbon tax include a direct cost for council in higher electricity and gas prices that have added $348,000 to council’s costs. Council will face

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How carbon will cost ratepayersfurther costs as suppliers pass on increases in their cost base.

“It is difficult at this point to estimate the combined net cost on council of these non-waste carbon tax impacts, but modelling has forecast about $750,000, equivalent to one per cent of council rates,” the budget papers state.• MORNINGTON PENINSULA Mornington Peninsulla Shire has budgeted $450,000 for the direct impacts of the carbon tax in 2012-13.

“While the direct impact … on areas such as electricity (in particular street lighting) and gas have been budgeted for, the cost of the tax on other contracts and services purchased by council is not accurately known at this stage,” council stated in its budget papers.”

Any further impact would be managed as new and existing services or purchases were undertaken or amended, council stated.

FRANKSTON, Dandenong and Mornington Peninsula area ratepayers face bills totalling nearly $17 million to cover the unfunded gap in the Defined Benefit Superannuation Scheme for council employees.

The councils face bills from $3 million to $6.94 million this financial year. Most council workers who started before 1993 are in a defined benefits superannuation scheme, guaranteeing that their fund will increase despite the vagaries of financial markets.

In a non-performing market, the fund manager, Vision Super, makes calls on councils to make up the shortfall to the level guaran-teed by the defined scheme, including the15 per cent tax payable by all super schemes.

This year Vision Super estimates the short-fall will increase from $71 million to $320 million, a liability paid by Victorian ratepayers.

The Defined Benefits scheme closed to new members in 1993.• FRANKSTON ratepayers face a $6.5 million

Super shortfall hits councilsbill in 2012-13 to fund the guaranteed super of its council employees. Last year coun-cil’s contribution to top up the fund was $1.22 million. The latest $6.5 million li-ability facing council will be funded from loan borrowings in 2012/13 to be paid over a three-year period. • GREATER DANDENONG has budgeted $3 million for unfunded super. The payment is due on 1 July, 2013. Council said that when its budget was framed, the unfunded gap in the defined benefits scheme was unknown. However, Vision Super flagged “a high prob-ability that council would again be asked to help fund the shortfall”.• MORNINGTON PENINSULA Shire Coun-cil’s exposure to unfunded super is $6.94 million in two loans from the NAB and Com-monwealth Bank. The shire has budgeted to pay off $1.5 million this financial year, leaving it with a super debt of $5.4 million at 30 June, 2013.

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With offices in every state MeGT can streamline and simplify requirements of employ-ers with multiple locations.

MeGT says it has simpli-fied management of Australian Apprentices making it easier to engage apprentices and deal with skills shortages.

MeGT Australian Apprentice-ships Centre can tell businesses whether they are eligible for government incentives and then help them sign up their apprentices and trainees.Call 13 MeGT (13 6348) www.megt.com.au

WHILE Australia reels from statistics showing house prices dropping about five per cent in the past year, realtors in the United States see similar figures in a more positive light.

The Black Rock Institute reckons “housing prices may have hit bottom … with minimal declines of up to five per cent over the next year or so”.

“Home prices in the United States have fallen to 36 per cent from their peaks, and we believe the decline is slowing – and perhaps on the cusp of reversing itself,” Black Rock’s chief investment strategist Ewan Cameron Watt said.

The optimism was fed by a survey showing 20 per cent of respondents to a survey believed house prices would have a “modest decline” of five per cent.

A year earlier the same survey showed “a major-ity expected declines between five to 10 per cent and fewer than 5 per cent believed in price gains”.

“On the one hand, many indicators are point-ing upward. These include slowing price declines, increasing affordability, an uptick in loan demand and a reduction in supply,” Mr Cameron Watt said.

However, he cautioned that his optimism was “counterbalanced” by the effect of retiring baby boomers, the weak financial health of the US con-sumer, the difficulty of obtaining a mortgage and regulatory uncertainty scaring off investors.

“A tidal wave of baby boomers is expected to retire and downsize in the next decade, adding to an already greying population.

“People are also marrying later and college graduates are burdened by student debt and unemployment, depriving the market of its traditional source of demand from first-time buyers.”

Mr Cameron Watt said Americans were gun shy about buying a house. He sees the property “recov-ery” taking the form “of a long, flat U rather than a V. It may even flat line for a while.”

This may be slightly comforting news for those

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who recall the role of sub prime mortgages in the global financial crisis.• AUSTRALIAN property watcher Sean Summerville sees the “swelling repossession rate” as “a massive opportunity for buyers and investors”.

“For buyers who have cash, are ready to go and want to settle quickly, they can snap up properties at massively reduced and unprecedented prices,” Mr Summerville said.

To help investors snap up property from those less fortunate, he has developed a website that “for a small fee” lists the latest foreclosed properties across Australia.

He will also “guide you step by step through what you need to do to snap up foreclosed properties at a heavily discounted rate”.

“At the end of the day it’s in the best interest of the banks to keep this information to themselves,” Mr Summerville says.

“Banks make money on home loans and interest payments so the more people who think the property market is strong, the more loans they are able to generate. If people can’t make their repayments the banks also win because if they foreclose on the property the banks still get their money.”

Mr Summerville also offers help on avoiding foreclosure with “a couple simple solutions”.

See www.fortunesinforeclosures.com.au

BusinessTimes | 7August 2012 | Frankston / Mornington Peninsula / Dandenong |

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VICTORIAN Small Business Commissioner Geoff Brown has told lawyers that he would like to see more business disputes resolved under the Small Business Commission Act than in the courts.

Speaking at a Law Institute of Victoria breakfast on 20 June, Mr Brown encouraged lawyers handling general business disputes to make the commission their first port of call. He said he wanted to see a higher proportion of disputes get to mediation.

“The benefits of a mediated outcome need to be sold to the respondent, who too easily can ignore the invitation, only to [end up facing] VCAT or the courts.”

Mr Brown said lawyers, whether acting for an applicant or a respondent party, (should) be prepared to attend mediation through his office.

Muslim marketingResins supplier to the plastics and packaging industries Cardia Bioplastics of Mulgrave has been given halal certification for its range of Biohybrid resins.

Halal is a term designating any object or an action which is permissible to use or engage in, according to islamic law.

The term is most frequently associated with food preparation, but can also include cosmetics, personal care products and perfumes and fragrances.

Cardia makes a range of biodegradable plastic bags and other types of plastic packaging.

Cardia’s managing director Dr Frank Glatz said the Biohybrid resins were “derived from renewable sources”, complying with islamic laws “regarding safety and quality, allowing them to be used in and by Muslim cultures worldwide”.

“Meeting the strict halal criteria imposed by islamic law is universal recognition that our Biohybrid resins are safe to use in food packaging applications; are manufactured hygienically using high quality techniques and resources; and that consumers can place trust in our products.”

The halal certification was issued to Cardia by the Chinese islamic Association which is an appointed Halal Certification Body by Halal Malaysia, Department of islamic Development Malaysia (JAKiM).

“The dispute resolution services my office provides under all four Acts is quick, low cost and effective, and can benefit your clients and you.”

Looking to the future, Mr Brown said he believed retail lease disputes “will continue as our bread and butter, although it would be good to make some inroads in reducing some of the consistent causes of disputes”.

He said that in tougher economic circumstances there might be stronger growth in these disputes over the next year or two.

“Times can be tough for both tenant and landlord, and being willing to negotiate terms to keep a tenant in retail premises may be the best outcome for both parties.”

By Dr. Ivan Misner,Founder, chairman Business Networking InternationalOUR surveying told us that most people who credit networking for some of their success also maintain a system for measuring the dollar value of their networking activity.

Conversely, most respondents who said networking did not contribute to their success had no system for tracking any money generated by their participation in networking groups.

More respondents said they did not have a system than said they did have one.

Having systems to follow up and stay in touch allows for more productive activities and results from networking activities.

There is no way to create success if your success is out in “airy-fairy” land. Hard facts and data tell you what you are doing well and what you are not doing at all.

Tracking is a key factor in success: • What organisations you belong to and what results

you are getting from them?• How much time you spend networking and work-ing your network• How much money have you made as a result of your activities?• Who is sending you referrals, and how much of your income are they responsible for?

You must have systems around all the tracking as well as systems for:• Following up with those people you meet• Staying in touch with your network members• Rewarding your referral sources•How you are going to help your referral sources

Here is the key point: If you learn to use good systems, it will allow you to get better results in much less time. This will free up more of your time for family and personal life. The work and time is upfront developing and implementing the system. On the backside, you will spend much less time going out networking and more time working in your network.

Networking systems make a difference


NetworKING

1. Bartercard sponsored an expo of Bartercard traders at Keysborough Golf Club on 29 June. Pictured are Troy Dimento and John Kercheval, of Bartercard.

2. Media personality Ita Buttrose was the guest speaker at Casey-Cardinia’s July Breakfast for 350 guests at Cardinia Cultural Centre, Pakenham, on 4 July. Pictured with Ms Buttrose (left) is BusinessTimes sales director Marg Harrison.

3. Rachel Black and Siobhan McEntee who were guests of the Bank of Melbourne at the Casey Cardinia breakfast.

4. Also at the breakfast were Merril Phillips, of the Bank of Melbourne, and Pernille Hogg, director of Catago.

1 2

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Just like the first time you wanted to build a puzzle, someone sat with you, worked as a team, showed you a process, and so you started to build. Together, you finish the puzzle quicker and less stressed. This is what Personnel Relocations does with a new international arrival. Together, build their new life in Australia, one step at a time.

There are few relocation companies that can relate to an international move the way Personnel Relocations can. The founder, Robyn Vogels has lived and worked in nine cities around the world, moved with children to three different continents, and now, settled in Melbourne, she shares her knowledge and experience with new arrivals. Being able to relate to a relocation is so important. Robyn has a deeper understanding of the families’ emotions and can anticipate their needs. Never overwhelming them with irrelevant information – but information when they need it.

Melbourne has a rental shortage; this is particularly noticeable in the surrounding suburbs that feed workers into the city. With relocation support, the family can have a local confident to help with the process of narrowing down where to live, which school to send their children too and, how the transport works, just about anything to help them get settled, and make a positive start to their new life.

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List your networking events free in BusinessTimes. Contact Marg Harrison on [email protected], listing the event, a brief description, date, time, venue and a contact number.

BusinessTimes | 9

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August 2012 | Frankston / Mornington Peninsula / Dandenong

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5. Brent Musgrove, of NAB Mornington Business Banking Centre, and Luke Sheales, of RAMS Home Loan Centre Mornington, at the Peninsula Business Networking’s breakfast at Barmah Park on 3 July. BusinessTimes’ Marg Harrison was guest speaker.

6. Peter Spokes (left), senior account manager, of 3AW693 and Magic1278, and Donald Betts, recruitment consultant, of Adecco Dandenong, at Frankston Business Chamber (FBC)expo at Chisholm Frankston on 18 July.

7 Two Bays Office products team at FBC expo (from left) Olivia Blecic, Stacey Jenner, owner Don Taylor and Terri Carroll, ceo of Peninsula Access Support & Training.

8 Mornington BNI breakfast at The Rocks Restaurant on 19 July. From left Steve Hofer, of William K. Hofer Architect, Rachael Stent, Gateman Automatic Gates, and Ray Strongman, of ActionCoach.


aPPoINtMeNtS

VANESSA Savian has taken up a senior accountant role with Flinders Partners Group Accountants and Advisors, based in Frankston. Her professional, articulate manner is already well regarded by local business and Vanessa is welcomed as a key member of the expanding team, said principal Alan Williams. Call Vanessa for a no obligation inquiry on 9781 3155.

FUSION Workforce welcomes Jane Betts to its team. Jane brings with her a wealth of experience gained proactively in the recruitment industry where for the past five years she has chosen to focus exclusively on the industrial sector – recruiting, consulting and account managing clients in manufacturing, warehousing and logistics, pharmaceutical and food.

NIKITA Benetti started at RACV Cape Schanck Resort as full-time wedding and events coordinator on 1 July. Nikita has eight years industry experience with a strong focus on weddings; including sales, planning, marketing and event delivery. Offering wedding ceremonies on site and two function rooms, call Nikita on 5950 8006 to arrange a site inspection at the resort.

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Yellow Pages fading? Where to market now?The Yellow Pages book has been a mainstay of small business marketing for many years, but today less and less people appear to be using it. The 2010 book had 432 pages, 2011 had 408 and the current version contains 304 pages. With a main arm of advertising apparently no longer as effective, what kind of marketing is working for small businesses? The chang-ing times require a different ap-proach to getting new customers.Web: Many customers still do not have a website. Websites are the equivalent of the Yellow Pages site. People will go to Google and be looking for a specific product or service that they need and if you don’t have a website, or your website doesn’t have great search engine optimisation, you simply won’t be found. The customer will buy from your competitor.Email: Email can be the cheap-est way to stay in touch with customers, to engage with new customers and to gain more sales. However, we find that very few businesses have an effective strat-egy. Some businesses are still sending out mass emails through Outlook or Gmail. It is very important to use a proper email program like www.mailchimp.com or www.interspire.com. These programs will handle the unsubscribes for you, but also tell you who opened the email and who clicked through to your website. Re-member to stay compliant with the relevant legislation. A good place to start is http://www.acma.gov.au/WEB/STANDARD/pc=PC 310294Facebook: Social media is word of mouth on steroids. The spread of customers’ comments is far wider and last a lot longer than they used to, so, like word of mouth of old, it can be a double-edged sword. The effectiveness for businesses also depends a lot on the degree to which people are willing to engage with your business on a social level. Lawyers tend not to use Face-

book, but restaurants do, business-to-business indus-try tends to use Twitter more than Facebook, whereas business-to-consumer customers tend to use Facebook more. The beauty of Facebook is if someone likes your page, posts a comment or shares a story or photo, that is seen by their friends and if your story or photo is interesting or humorous, they may share it as well. This is the viral effect where more and more people share a single link. Well executed social media campaigns can have very large returns on investment, because they are often cheap to run. Extreme Networks offers support for all these kinds of marketing and more. We have built websites that receive more than 100,000 visits a month, so if your online marketing campaign needs a boost, give us a call. We build small business websites with packages starting from $495 setup and $39.95 a month and have customers all over Australia and New Zealand.

THE latest local Yellow Pages has fewer pages than past years.


Recruitment agency Fusion Workforce was the brainchild of Courtney Rowe, its owner and managing director.

Sitting in her first floor office in Walker St, Dandenong, Rowe reflects on that day and the list of names. The contrast could not be greater than the environment of that tributary leading to the mighty Murray River.

“I was there during Christmas holidays. The workforce part of the name was obvious and then Fusion just seemed to jump off the page at me.”

A check of its dictionary meaning confirmed the choice: the merging of different things, materials or ideas to form a solid, unified whole. That was six years ago. Rowe worked for several recruitment agencies from the early 1990s and after 17 years decided to branch out on her own.

“I wasn’t necessarily unhappy, but if I’d been ecstatic, obviously I wouldn’t have left,” she says.

She identified a need for occupational health and safety checks as one outstanding element of the recruitment industry that would provide a point of difference.

“There was a fundamental conflict of interest when salespeople signing up employers were also the ones ticking the boxes on safety issues.”

Fusion concentrates on providing casual workers for the manufac-turing and horticulture industries, both areas that can have health and safety issues. The company handles full-time placements, too.

Once an employer is signed, qualified Fusion staff carry out a safety audit before attempting to find the labour being sought.

“I had never seen anything traumatic happen in a workplace, except muscular injuries. There was no light bulb moment,” Rowe says. “But it was more the complacency of recruitment agencies.”

Rowe started her business with the help of some financial backers who, she says, have all been repaid with the agreed interest.

“I only needed $40,000 to $50,000 and bought them out over the

first three years, although they probably thought they would be in it for a longer term.

“I was a single mum with my back to the wall, but I only went through three months of not making money. It was probably the best investment they ever made.”

As with all her business dealings, Rowe made sure entitlements and expectations were all thrashed out at the beginning.

“Having a strict contract makes things more amicable.”She says it is the same with the agreements between Fusion and its

clients (businesses) and candidates (labour). The workers supplied to industry are paid by Fusion, which, like any other employer, is responsible for their superannuation, WorkCover, safety and payroll tax.

Rowe recalls wanting to keep and frame the first cheque ($150) received by her fledgling company. The “payroll lady” said no, not unless you do not want to eat in the next week.

That first “candidate” had been a forklift driver and these days Fusion interviews about 60 prospective workers a week.

While only one person can fill each vacancy, many interviewees are added to the pool on the books.

“We have about 200 people on active day-to-day availability,” Rowe says.

Candidates climbing the stairs from Walker St are offered tea or coffee while filling out their application form.

“Other recruitment companies don’t see them as gold, like we do.”Each year Fusion holds a Christmas party for candidates, clients

and their families, with up to 350 attending last year’s event at Sandown racecourse.

WORDS & PICTURES BY KEITh PlaTT

AS a go-to place for inspiration, a rock on the river’s edge sounds ideal. The result of that time spent studying a list of possible company names was ‘Fusion’, a company which today has a staff of 15 and finds jobs for hundreds of people.

A vision that is all about jobs

courtney rowe talkS about developing fuSion workforce


“It is a big budget item, but we do it because we understand we are dealing with families and people.”

Rowe says the people hired out by Fusion have “no less security with us” than if they were employed directly by a company.

“Many don’t want permanent positions, they like the variety, although most want stability of some sort.

“Getting regular work through us can be quicker than going back onto the job market.

“We can help people with their careers. We can create a world for them and see what occupations are available.”

Rowe is not idle when it comes to her own career.“I’m a prolific student, always studying.”Rowe, who holds qualifications in occupational health and safety

and recruitment, is now part way through an Australian Institute of Company Directors course.

“I’m always looking for better ways of doing things,” she says. “I’ll study anything and everything I can get my hands on, otherwise you can get very stale and find yourself behind your staff [in knowledge].”

Men make up just three of Fusion’s 15 staff, mainly because women do not mind “processes and procedures”. Men are “more into dealing with recruitment and sales”.

Although Rowe interviews all staff for the Fusion business, this is not done until they first meet the leadership group.

“I wouldn’t hire anyone without them being involved. We will go out to lunch with someone being considered for a position here. It creates a bonding and we see how it goes.”

Although working on her next five-plan plan, Rowe is doing it in

FeatUre

consultation with a mentor, a company chief executive.“People in senior positions are very willing to help each other. It’s

lonely at the top and there’s a lot of networking.”The plan will create “a brand new Fusion with a new vision”.The plan will cater to changes in industry and create opportunities

for Fusion staff “so they can have flourishing careers and lifestyles”.In five years Rowe wants to have two or three branches, but

making sure none of the offices “suffers from the poor cousin syndrome” of having lesser or fewer facilities than the other.

“It’s OK for me, I could just sit here and make money, but I’m almost certain most of my staff would say they want more.

“I have to do it right, I’m a perfectionist,” she says.A single mother with a son at secondary college, Rowe admits to

having “always been a career mother, working 7am to 6pm daily”.She says her son Rory understands her chosen situation and has

accepted before and after school care.“I like my boy sports,” she says, sitting in her office adorned with

a framed signed Essendon footy jumper, pictures of motorcycle ace Casey Stoner and three times Melbourne Cup winner Makybe Diva.

“The time I spend with Rory is real quality. We go out on ‘dinner dates’ and take overseas trips. He’s had a very good, privileged life. He’s happy and I know I’ve done the right thing.”

There is also sign a in her office outlining the “downer side” of someone born under the star sign Aries.

“You’ve got to laugh and recognise things in yourself,” Rowe says. “Don’t take yourself too seriously, although I do set a high

standard for myself and want people to be proud of the Fusion brand.”

“I like my boy sports”, says Fusion Workforce boss Courtney Rowe, obviously a Bomber supporter.

14 | BusinessTimes

NetworKING


Networking opportunities

Monash Peninsula Business Breakfast Seminar Series • Tuesday, 18 sepTeMBer The sports Injury Clinic success story Speaker: Pippa Hanson - Managing Director, Sports Injury Clinic , Frankston. Pippa was overall winner of the Frankston City and Mornington Peninsula Shire regions Excellence in Business Award 2011. Judged on business acumen and outstanding service delivery, Pippa runs her successful business within a strong framework of good corporate citizenship. Hear Pippa outline some of the innovative aspects of her success from which you will be able to draw inspiration. Mornington Golf Club Mel Ref 104 J9• Tuesday, 30 OCTOBer social Media: The new rule book for business. Speaker: Peter Wagstaff, lecturer, Department of Marketing, Faculty of Business and

Economics, Monash University. The vast majority of Australians are now active participants on social networking sites, yet only a small number of businesses have adopted these platforms as part of their marketing approach. Be part of Peter’s interactive session where he will explore the different ways that social media can be used to connect with customers. Peter can show you how to ensure your company’s brand remains relevant in this new and challenging online world.Mornington Golf Club Mel Ref 104 J9 Contact Narelle Krueger , 9904 4074 Mt Eliza Networking Group

• Tuesday, 28 augusTBruce Billson, MP,Federal Member for Dunkley. Shadow Minister for Small Business, Competition Policy and Consumer Affairs.(Brooklands) Mornington• Wednesday, 12 sepTeMBer

Cosmic Sounds: Faye Chaumon, Chrisine DavisNorwood House ReceptionsMount Eliza Business Networking Group [email protected] 0419876821

Frankston Business Chamber

• Wednesday 22 augusT: Networking night, SkillsPlus, Wells St, Frankston• Wednesday 19 sepTeMBer: Networking night, Westpac, Wells St, Frankston• FrIday 19 OCTOBer: Golf day, Settlers Run, Cranbourne•Tuesday 13 nOveMBer: Networking night, Replas, Titan Drive, Carrum Downs• Wednesday 5 deCeMBer:Networking/ trivia night, Frankston RSLDetails: Karin Hann, 9781 [email protected]

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After 7 months of negotiations, ROCG Blackford Davey Stevens have acquired the Geoff Shaw & Partners Accounting and Financial Planning Practices in Frankston. It is anticipated that the service received by clients of the Frankston Practice will continue to be provided as previously, as all of Geoff Shaw’s team have been retained by ROCG.

The Principals of ROCG, after exhaustive due diligence, are confident the amalgamation of the Frankston Practice will compliment the services offered to both its existing and acquired Frankston client bases.

In addition, ROCG with its international affiliations, is geared to offer all clients access to all facets of accounting and financial planning particularly with any “cross border” advice and assistance.

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SOUTH East Water will relocate its head office to Frankston in 2015, housing all of its 700 staff under one roof.

The new offices will built at the southern end of Playne St, near Kananook Creek and adjacent to the Landmark building (pictured).

The water retailer expects the move will save up to $20 million over 20 years.

South East Water provides water and sewerage services to 1.5 million customers across Melbourne’s south east region.

Managing director Kevin Hutchings said Frankston was chosen because of its central location, allowing the company to reduce operating costs.

“With leases due to expire on our current offices in Heatherton, Dandenong South and Lynbrook in 2015, moving all of our staff to a purpose-built office on land we own will save us and our

South East Water heads bayside

customers at least $20 million over the next 20 years.

Frankston Council has yet to approve plans. It will meet community groups concerned about the height and location of the new building.

Mr Hutchings said South East Water’s next moves will be to appoint an architect

and “work with the community and council” on the design of the building, which will have at least a five-star energy efficiency rating. South East Water hopes to start construction early next year.

“We’re happy to be a part of the planned rejuvenation of Frankston,” Mr Hutchings said.

The proposed site of South East Water’s new Frankston headquarters on Kananook Creek.


LoCaL GOVERNMENT

RATES in the municipalities of Frankston City, Greater Dandenong and Mornington Peninsula will rise between four and five per cent this financial year.

The councils say they will absorb the indirect costs of the new federal carbon tax introduced on 1 July. (see Pages 4 and 5).

Mornington Peninsula Shire has flagged the lowest rate increase of 3.9 per cent, followed by Frankston (4.66 per cent) and Dandenong (4.98 per cent).

The councils pointed out that a revaluation of properties in the past year did not increase the amount of rate revenue they raised – it simply redistribut-ed the rate burden among ratepayers: those in areas where property values increased were likely to pay more.

And, in a revaluation year, rate increases would not be experienced uniformly across all properties, the councils added.• FRANKSTON COUNCIL will increase rates by 4.66 per cent in 2012-13 to help fund $88.2 million budgeted for works and services.

However, average households face only a 1.49 per cent increase courtesy of the revaluation and differential rating which distributes the rate burden over the range of property classes.

The rate increase includes the impact of the carbon tax on council’s costs other than rubbish collection and disposal.

Council estimates that one per cent of the 1.49 per cent increase is due to the carbon tax.

And it said that significant increases in the separately-costed waste management services were substantially due to the

impact of the carbon tax as well as increases in state government landfill levies and the higher cost of collecting hard waste.

It estimates that the cost of collection and disposal of waste have increased by 22 per cent over last financial year.

Council will collect $64.4 million in general rates and $23.7 million from its annual service charges.

Waste collection charges will range from $113 to $369 depending on the service and bin size.

Loan borrowings of $19.57 million will fund both the capital works program and the cost of a Defined Benefits Superannua-tion Scheme call-up (Page 5).

Council has budgeted $9.2 million to continue developing the $47 million Frankston Regional Aquatic Centre. This project will be funded in 2012/13 from

INCREASING property values, the carbon tax, higher waste collection and disposal charges and a 25 per cent hike in the differ-ential rate for some commercial properties and all industrial properties will add to the cost of running businesses in Frankston over the next 12 months.

Commercial properties in the Central Business District already pay the 25 per cent premium, a surcharge above the average rate paid by residential property owners.

Councils adopt differential rating to more equitably share the rate burden.

Greater Dandenong Council will not alter its differential rates this year – 75 per cent for commercial properties and 150 per cent for industrial properties. Dandenong collects 50 per cent of its rate revenue from the commercial and industrial sectors.

Mornington Peninsula council will not strike an additional differential rate for commercial and industrial property this year, citing rising unemployment across the peninsula in 2011 as an influence on its decision.

Frankston Council said increased

charges against commercial and industrial properties paid for its “promotion of economic development initiatives” and “recognises tax deductibility of commercial (and industrial) properties not available to the residential sector…”

“The commercial businesses of Frankston are expected to be beneficiaries of … ongoing significant investment by council,” according to the city’s draft budget papers.

Frankston has 2245 commercial properties (900 in the CBD) making up 3.8 per cent of the total assessments and contributing nine per cent of the total rates raised. Also, the city has 2223 industrial developed properties that previously

have been rated the same as residential properties.

They constitute 3.8 per cent of the total assessments and contribute 4.9 per cent of the total rates raised.

Dandenong has budgeted $1.17 million for its economic development unit and $469,000 for South East Business Network.Gaming machine venues pay extra

Frankston council will charge poker machine venues a differential rate of 100 per cent above the residential rate, raising an extra $163,539 to fund initiatives to combat the impact of problem gambling.

Mornington Peninsula will not impose a differential rate on gambling venues but will revisit the decision when it reviews its Responsible Gaming Strategy.

Mornington Peninsula has 17 properties that would be eligible for the differential rate. Two Returned Serviceman’s League properties with electronic gaming machines are exempt from all rating provisions under the Local Government Act.

Based on 2011/12 values and rating, the 17 properties would pay an additional $27,000 on a 120 per cent differential.

Values, tax and differential rates impact on business

Three municipalitiesCouncils say a revaluation of properties

does not increase the amount of rate revenue they raise – it redistributes the

rate burden among ratepayers.


both grant funds and loan borrowings.• GREATER DANDENONG: The 2012-13 budget requires an increase in rate revenue of 4.98 per cent. Council’s total capital expenditure is estimated at $84.6 million with $25.3 million being funded from rate revenue. Borrowing in 2012-13 will be $33.1 million for works associated with the new municipal building project in central Dandenong.

Council will repay $3.1 million in loans while committing $6 million to road asset renewal.

Total rates and charges on an average residential property will rise nearly $50 to $987.

Council plans to maintain the existing differential rate structure with residential rates increasing by 4.15 per cent (inclusive of the 4.98 per cent council rate increase)

New management for market

and industrial rates will increase by 5.07 per cent.

In addition to the increase in rates, the 2012-13 budget proposes a $20 increase in the annual garbage charge which is linked directly to the cost of providing the waste services. The state government landfill levy further increases from $44 a tonne of waste to $48.40 a tonne in 2012-13, requiring the recovery from residents to increase from $31 to $31.20 for each assessment. The increased cost to an average residential property is $49.09 or $0.94 cents a week.• MORNINGTON PENINSULA shire rates will rise 3.9 per cent this year.

Mayor Cr Frank Martin said the shire was maintaining its position as having rate levels among the lowest in Victoria.

The shire’s total budget of $169.35 million includes $119.77 million from

rates. The balance will come from grants and subsidies, user charges, grants commission payments and interest on cash deposits.

The municipal charge will increase by $10 to $160.

Shire borrowing will increase by $1 million this year but overall debt will be reduced by $4.3 million by June 30, 2013.

Staff numbers will drop by 14 mainly due to closure of Annie Sage Child Care Centre in Somerville and the commercial leasing of Pelican Pantry cafe, Hastings.

“Every year for the past decade the shire has made a surplus, enhanced facilities and services and made budget, while remaining one of the lowest rating municipalities in the state,” Cr Martin said.

Council CEO Dr Michael Kennedy said management costs as a percentage of the shire’s budget have dropped 14 per cent over the past decade. He added that Mornington Peninsula was one of a handful of Victorian councils to have closed the infrastructure renewal gap.

announce rate rises

GREATER Dandenong Council has moved to change the management structure of iconic Dandenong Market.

The council favours an independent corporate structure based on a limited liability company, wholly owned by council and run by a board of directors, similar to the management of Queen Victoria and Prahran markets.

The new management structure would

effectively separate council from day-to-day operations of the market but allow it to remain involved in reviewing and approving the strategic plan, annual plans and annual budgets.

The market is presently managed by Savills Pty Ltd with direct contract oversight by council officers.

Council admitted that this management model has regularly led to confusion

and tension over the past two years, “particularly in relation to the role played by councillors in intervening in dispute resolution”.

The council has spent $26 million redeveloping the market which has an annual income income of more than $4.7 million and outgoings of $2.7 million.

Council has authorised CEO John Bennie to make an application to the Minister for Local Government for an exemption from the requirements of the Local Government Act 1989 in order to allow it to enter into a management agreement with Dandenong Market Pty Ltd (DMPL) without going through a procurement process;

A panel will be established to deal with any submissions about the management change.

In the absence of objections, Mr Bennie will advertise for directors of the DMPL and conduct interviews with the help of council’s director of corporate services and Cr John Kelly.

Recommendations of the interview panel will be referred back to the full council for approval.

Consultants estimated $250,00 additional annual costs of governing the market through a corporatised entity. Set up costs would be about $50,000.


Mornington BMW

SalesFinanceServiceParts

INCLUDING M GENES. THE NEW BMW X5 M50d.

EXPERIENCE THE ULTIMATE AT MORNINGTON BMW.

The new BMW X5 M50d is the culmination of all the knowledge of the engineers at BMW M. The intelligent all-wheel drive system grants precise handling and perfect traction, while the new BMW M Performance TwinPower Turbo engine with 280 kW and a powerful 740 Nm of torque propels you forward. To experience this impressive fusion of dynamism and comfort, contact Mornington BMW.

Mornington BMW 181 Mornington Tyabb Rd, Mornington. (03) 5970 5970. morningtonbmw.com.au LMCT 7674

BMW2845_280x205_Mornington_FA.indd 1 25/07/12 5:48 PM

Although you can use an X5 as an off-road explorer if the conditions aren’t overly rough, most owners never take them off sealed surfaces.

The BMW X5 first reached Australia in November 2000 and gained a good reputation from the start.

It appealed to those looking for a prestigious station wagon to cart kids. And many buyers had dreams of one day carting those kids into some interesting out-of-the-way areas in the Australian bush or desert. Or perhaps even to the beach.

The second generation X5 came here in early 2007 and has been given regular upgrades, the most recent in January 2012. The third generation BMW X5 is due to be launched in 2013.

With most X5 buyers now choosing diesel engines, BMW has made the xDrive30d its entry level model, replacing the previous petrol-powered xDrive30i. Although there was no change in the price of the 2012 xDrive30d there was a substantial jump in value with the previous ‘innovations package’, valued by BMW at $16,000 and priced as a $9000 option, now included in the manufacturers list price of $92,100.

The new ‘free’ equipment includes satellite navigation, reversing camera with new ‘top view’, a head-up display that projects speed and satellite navigation onto the windscreen in front of the driver, powered front seats, high beam assist and power tailgate.

Standard equipment includes active cruise control, lane departure warning, hill descent control, dual-zone climate control air conditioning, bi-xenon headlights, anti-glare side mirrors anf high beam assist.

The X5 also comes with BMW’s ‘efficient dynamics’ package that combines the seemingly contradictory benefits of improved performance and lower fuel usage.

The latest addition to the BMW X5 range is the xDrive 30d Perfomance Edition a package that includes 21-inch alloy wheels, front and rear aerodynamic trim, high-gloss black kidney grille, side

More power, less fuel

sills and wheel arch extensions.There are five engines, three diesel and

two petrol, all with some level of turbo assistance.

The xDrive30d generates 180kW of power at 4000rpm and torque 540Nm between 1750 and 3000rpm. Despite its size it can accelerate from zero to 100km/h in 7.6 seconds and uses 7.4 litres a 100 kilometres on the Australian combined cycle test. Not surprisingly it dominates X5 sales.

The second diesel engine, powering the xDrive40d, is of the same (3.0-litre) capacity but comes with two turbochargers and so provides significantly more power (225kW) and torque (600Nm). Fuel consumption is fractionally higher than that from the xDrive30d, at 7.5 L/100km, an amazing figure for a vehicle with a kerb weight of 2100kg.

The xDrive35i has a 3.0-litre turbocharger petrol engine that uses BMW’s ‘twinpower’ technology combined with variable valve control to enhance performance to 225kW and 400Nm.

Top of the diesel range is the just-released X5 xDrive M50d, from BMW’s high-performance division. Under the bonnet of the M50d is a new 280kW six-cylinder which, according to BMW, is the most powerful volume-produced six-cylinder diesel engine in the world.

Using triple turbocharging technology it generates a 740Nm of torque between 2000 to 3000 revs, with the 280kW peak power coming between 4000 and 4400rpm, equal to the sports car performance of 93.6kW

a litre and 5.4 seconds for the standing 100km/h dash.

Despite this the x50 M50d can use as little as 7.5 litres a 100 km although we don’t anticipate many owners will be driving this off-road hot rod too conservatively.

The xDrive50i comes with a 4.4-litre V8 300kW / 600Nm twin-turbo petrol engine with all the smoothness and refinement that you’d expect for long-distance cruising.

All X5 variants now come with BMW’s eight-speed automatic transmission, previously only available with the flagship 760Li model.

We were able to test all four X5 models on a variety of roads and conditions, ranging from inner city Melbourne to winding country roads in central Victoria, and incorporating a 50 kilometre dirt road segment. In its natural habitat, long motorway running, it was the consummate cruiser that we’ve come to expect. Even in the often slippery off-road sections it coped well, although the 20-inch wheels on the xDrive50i weren’t suited to such conditions and provided us with a few harsh bumps.

The extra value proposition comes as the X5 - market leader in the luxury SUV category for far longer than its competitors would care to remember - is being challenged by the latest Mercedes-Benz M-Class – and such competition that can only be good for buyers.

Prices (excluding government and dealer charges) are:• Drive 30d 3.0-litre diesel: $92,100• Drive 30d Performance Edition 3.0-litre diesel: $99,990• Drive 30d Exclusive Edition 3.0-litre diesel: $100,600• Drive 35i 3.0-litre petrol: $103,900• Drive 35i Exclusive Edition 3.0-litre petrol: $108,400• Drive 40d Sport 3.0-litre diesel: $113,300• Drive 50i Sport 4.4-litre petrol: $134,000• Drive M 4.4-litre petrol: $178,000

BMW’s X5 is a huge success in Australia, primarily because it’s more of a sporty people mover than an SUV. Indeed, BMW prefers to call it an SAV (Sports Activity Vehicle) rather than an SUV (Sports Utility Vehicle).

NewSwheeLS: bMW x5

The upgraded BMW X5 combines improved performance with lower fuel consumption.

Alistair KennedyMotoring Journalist


Mornington BMW

SalesFinanceServiceParts

INCLUDING M GENES. THE NEW BMW X5 M50d.

EXPERIENCE THE ULTIMATE AT MORNINGTON BMW.

The new BMW X5 M50d is the culmination of all the knowledge of the engineers at BMW M. The intelligent all-wheel drive system grants precise handling and perfect traction, while the new BMW M Performance TwinPower Turbo engine with 280 kW and a powerful 740 Nm of torque propels you forward. To experience this impressive fusion of dynamism and comfort, contact Mornington BMW.

Mornington BMW 181 Mornington Tyabb Rd, Mornington. (03) 5970 5970. morningtonbmw.com.au LMCT 7674

BMW2845_280x205_Mornington_FA.indd 1 25/07/12 5:48 PM

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MarKetS

Richard Campbell*Stock analyst

This is in sharp contrast to the east coast and particularly Melbourne’s outer fringe where building stimulus and weak demand has created a glut. Sydney’s market is heading that way too with lack of affordability, redundancies and the rise of part-time work depressing demand. Turnover of stock is crawling at half the level of just three years ago.

With apartments it’s a different story. Approvals have risen firmly in both of the eastern capitals over the last three to four years as apartment living became less repugnant and, to some, preferable. Apartment numbers are rising, not merely in the fringe CBD areas like South Bank and Pyrmont, but in the middle ring – in areas like Melbourne’s Camberwell or Sydney’s Chatswood.

Perth’s newfound appetite for apartments is easily explained. It is now a sprawling metropolis of 1.7 million people many of whom have long boring commutes to the CBD. But unlike the increasingly crowded Sydney and

Building with a view

Melbourne inner zone, central Perth remains physically attractive with open spaces and frequent river views captured by changed height limits. The driver underneath, however, is not just the traditional gold, grains and wool, but the great gas and iron projects of the Northwest Shelf and the Pilbara. The workers are paid big cheques but the corporate planning, accounting and legal work is back in Perth, the epicentre of 40 per cent of Australia’s exports.

It is not surprising that those surfing this resource wave are doing very nicely. The Perth apartment specialist Finbar Group has just posted a 17 per cent rise while Cedar Woods is guiding to a 21per cent net profit rise. At a time when investors are hungry for yield, both have yields over eight per cent and both look far better propositions than the former

east coast property heavy weights like Stockland.

Finbar was listed in 1995 and while still a minnow in comparison it is now building 40-45 per cent of the new apartments in Perth and 95 per cent in booming Karratha where rents are crazy. The average is $1700 a week – four times average rent in Melbourne.

For seasoned property investors, Finbar is reminiscent of quality developers like Mirvac in its glory days or the reliable Peter Kurts before the Gold Coast was overbuilt. Its model of joint venturing with the land owner with a 50/50 profit split is conservative and seems to produce better land lots.

Sydney may not export much these days – in fact very little – but it has any number of bankers, lawyers and developers who can afford

unrepeatable views.

IF there is one bright spot among Australia’s uneasy property markets it’s Perth. Apartments are selling briskly and after a period of over-supply a long downturn in residential house prices has bottomed now that available housing stock has fallen by 30 per cent in a year with rents up $40 a week in the last quarter.

Cedar Woods is better known in Melbourne as it has diversified to post-industrial Victoria after establishing a profile for developing marinas north of Perth. Its focus is still largely low rise housing with an urban planning approach. Developments usually well integrated with shops, schools and transport. It still has a Perth pipeline of developments but it may rue the day it went east just as lay-offs and industrial problems rise, particularly in the northern and western suburbs.

But the big daddy of apartments is the giant Lend Lease. It is highly diversified these days as both developer/builder and civil engineer, but is returning to its Sydney roots having just secured funding for the first section of a $6 billion project which will change the Sydney landscape. Barangaroo’s three towers will rise on the west side of Dawe’s Point almost under the harbour bridge on the site that saw Australia’s first exports depart the new colony. As well as housing Westpac it will house a casino and 700 to 800 apartments. Sydney may not export much these days – in fact very little – but it has any number of bankers, lawyers and developers who can afford the views.

*Richard Campbell is Executive Director of Peninsula Capital Management, Tel. 9642 0545


Culture can be defined as the collection of habits, practices, attitudes, and beliefs that shape a social unit. While the concept of culture has been applied most frequently at the macro level for a country, or region, it can be applied in a business context to any size of social unit including just two people. Within the small business context, culture is an important concept that is often overlooked.

In this context, the person with the greatest ability to create or change the culture is the business owner or leader. They can shape the culture through their efforts by establishing the framework within which all of their people will work. This can take the form of written values, policies, procedures or standard work instructions, etc. that can be written down and deployed to their people. This can take a lot of work, but is often not done well for a small business, particu-larly during the start up phase. Once an organisation grows to having several employees, a process to clarify their business architecture and shape their culture becomes much more critical. While this is an important first step to building a supportive culture, the key thing is not what is written down, but how the business leader behaves in the real world.

Every leader casts a shadow over their entire organisation and people in the organisation will be evaluating leadership behaviour continuously to determine if the actual observed behaviour complies with the written expectations. If it does comply, then this reinforcement will be a positive driving force, but where the behaviour does not fit, then the organisa-tion can quickly become dysfunctional. For example, I had some recent experience with a business that had been taken over by a new owner. The small supervisory team took some time to write down a new set of organisational values and communicate them to all of their people. This was a positive step as the values that they chose were sound and appropriate.

Creating business culture WE have all experienced a feeling of strangeness when we observe a group of people who are different to us. They may look different, talk differently and have different customs and lifestyles. It is usually hard to understand and accept these differences between two cultures.

Problems started to develop fairly quickly when the new manager started to behave differently to the expectations created by these values and it only took a few months before some of the more talented people started to vote with their feet and leave the organisation. This demon-strated very clearly that it takes real commitment from a business leader to both talk and walk the stated values of their culture. While communication is the corner stone of culture, it is important to realise that communication is much more than the spoken or written word. We communicate in many ways; with our body language, our tone of voice and other subtle gestures. All of these will be observed by people in your organisation and will contribute to the formation of your culture.

In the establishment of your business culture, there are many facets to consider. It is logical to start with the legal environment by assessing which laws apply to your business so that their intent can be integrated into your culture. In particular, the employment laws including equal opportunity and discrimination need to be considered. It is your choice whether you merely comply with the letter of the law or whether you embrace the concepts behind the law and turn it into a business strength. For example, if your target customer base includes substantial ethnic diversity, then it would be smart for you to reflect this diversity in the selection of your people. This way, your business strategy can be reinforced and strength-

ened by the culture that you create. There are many facets of business to

consider when you are creating your culture. Issues such as ethics, environ-mental impacts, safety of people and products. The most important aspect to consider is how your culture will evolve over time. Culture is not static, it is constantly evolving and adapting to the many forces of change. It is your response to these forces that will determine the rate of change of your culture. For example, if you respond positively and excitedly to new ideas and encourage and support your people to innovate, then your culture will respond by becoming even more innovative.

You can reinforce this by giving more accountability and support to the best innovators in your team. On the other hand, if you are hesitant to take up new ideas, want excessive analysis and minimum risk, then your culture will avoid new ideas and stay relatively unchanged. It is your choice as a leader to embrace change or to avoid it.

If the leader communicates clearly about the business strategy and goals, if they smile, laugh and have fun at work, then it is most likely that their people will do the same. If the leader is dour, avoids risks and changes the business goalposts frequently, then it is likely that their people will behave in a similar way. Such is the power of the shadow of the leader to shape the culture of their organisation. Actions Planning Questions: • Have you reviewed the architecture of your values, policies, procedures that shape your culture to ensure that they are complete, clear and current? • Do you understand how well your behaviour complies with your stated standards like values, policies and procedures? • Have you sought feedback from your people on how you “walk the talk”?• Have you invested some time to understand your current culture and its strengths and weaknesses?

*Hamish Petrie had a 37-year corporate career including 25 with Alcoa Inc. His latest position was VP People and Communications for the Global Alcoa Corporation based in New York. He can be contacted at [email protected] or on 0404345103.© Hamish Petrie 2012

While communication is the cornerstone of (business) culture,

it is important to realise that communication is much more

than the spoken or written word.

MaNaGeMeNt

Stock Analyst

Hamish Petrie*Business Consultant

22 | BusinessTimes

heaLth


You know what I mean – you’ve heard them all. When it comes to your health, just about everyone’s got advice and pretty well no-one knows what they are talking about. It’s such a quagmire.

Don’t get me wrong, in the West we are great at emergency medicine, and skilled at surgery, and our frontline medicos – GPs – have admirable diagnostic skills and do superbly well with the system they’ve got.

But I’m talking about what we understand about health and its causes.

I could cite any number of examples of misguided Western thinking on this topic, but really I need only one fact to make the case: This current generation of children is shaping to be the first in history to have a shorter life expectancy than their parents.

From the dawn of human time, a few glitches excepted, human longevity has increased generation upon generation. Until now.

Right now in the West it’s all going bell shaped. The graph has peaked and it’s trending downwards.

Actually the continual upgrades in life expectancy in recent decades have been deceptive anyway. They are more to do with the great reduction in infant mortality inflating the averages than elderly people being one iota healthier now than in previous generations.

How could this possibly be? We’ve mapped the genome. Technology allows us to peer inside the body, to scan it, to see our cells in extraordinary detail. Our surgeons have supreme skills. Our finest young minds get VCE scores of 99.95 and study medicine.

Bloody hell, our kids should be living forever.

But at this rate, they’re not even going to live as long as us.

Surely that is compelling evidence that we’ve got things wrong.

Yes, we know a bit about the biochemis-try of disease but not much about health.

Take, for one thing, the assumptions we make about exercise.

I was reminded of this when I read a report in The Age (10 July) of a University of Sydney study that found people who sat for eight to 11 hours a day were 40 per cent more likely to die within three years compared with people who sat for less than four hours a day. Exercising for an hour as compensation for the sedentary period failed to improve the percentage.

Seeking explanations, the research team then went delving off into muscle contraction, blood sugar levels and glucose metabolism.

It is so typically Western to be surprised by such a finding then to seek an explanation in some biochemical marker or other.

From Chinese medicine’s viewpoint, this is another case of missing the forest for the trees.

I’ve written before that in the West we mistake physical fitness for health. They are not the same thing.

In our sports-centric culture we see exercise as a panacea, but Chinese medicine understands that health is not about aerobic fitness, or muscle strength or endurance; it is mostly about circulation.

(It’s also a lot about balance, and 11 hours daily in a chair is hardly that.)

A maxim of Chinese medicine is that when circulation is free and unencumbered – when one’s “qi” is moving – then disease cannot exist.

That’s why exercise is so beneficial to health – because it gets your qi circulating.

To move your qi, you don’t have to exercise hard, because that flows from the false corollary “exercise is good for you, so more exercise must be even better”.

After doing even gentle exercise, most people feel good. Their mood lifts and they get a buzz – a kind of natural “high”. (The entire gym industry relies on this.)

That buzz is the sensation of your qi moving. It’s the feeling of health.

But you don’t necessarily need exercise to achieve it. Other things can move your qi too.

Singing, for example. Turn up the radio and sing along and see how it changes your mood.

Music moves your qi. And singing strongly moves the qi of the chest (an area where it easily stagnates, leading to ailments like depression).

Singing along to stirring sentiments (such as may occur in churches), or to rousing music (such as hymns), or with other people (such as in choirs) can provide that same feel-good “buzz”.

I actually have a theory that this accounts entirely for the religious experience, but that’s for another more controversial column.

What else moves your qi? Dancing does. Even doing good deeds can achieve it (see previous point). Also meditating, if you practise enough.

And if your 11 hours of sitting is work, then being creative – achieving something, feeling rewarded – will move your qi. As opposed to feeling bored, frustrated or unappreciated, which will do the reverse.

Bottom line is, health requires circulation. It should come as no surprise that sitting on your bum all day turns out to be bad for you.

* Michael Ellis is a registered Chinese herbalist in Mt Eliza. Visit www.mtelizaherbal.com.

Advice to move youPIck an ailment – any ailment. Then mention it to someone you know. I bet they will have an opinion on the cause and a remedy to offer – a supplement they heard about that worked for a friend, or advice from a snake oil segment they saw on Today Tonight, or some goofball theory about diet, or childhood trauma, or which shoulder you carried your schoolbag on.

Michael Ellis*Chinese Herbalist

The Yin (structure, matter, space…) and the Yang (immaterial, rhythm, time…) are the bi-polarity of Qi : the energy animating the Man and the Universe.


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Business Times August 2012