Business News - WA
At Close of Business podcast September 25 2024
(upbeat music) All the latest business news from WA, deliver daily. At close of business, news briefing. Good afternoon and welcome to the Outclose of Business podcast. I'm Sam Jones and I'll be reading the Wednesday headlines. The nation's inflation rate is eased to 2.7% in August. It's lowest reading in two and a half years, according to fresh figures from the ABS. The monthly consumer price index rose 2.7% in the past 12 months, which is the lowest rate since August 2021 and down from 3.5% in July. Increases in housing, food and non-alcoholic beverages all weighed on the movement, which were partly offset by the drop in transport. Chepy fuel and government rebates for electricity bills drove down the inflation result with prices decreasing annually by 7.6% and a record 17.6% respectively. In WA, households have received a portion of both federal and state government rebates, which will total $700 off their electricity bill. According to the ABS, if government rebates were excluded, electricity prices would have risen by 0.1% in August and 0.9% in July. Now, in resources, 4 SKU splash more than $4 billion developing and buying 475 electric mining machines from the label in a move expected to make the Pilbara home to one of the world's largest zero emission fleets. The 2.8 billion US dollar deal signed in Las Vegas on Tuesday includes provisions of 360 autonomous battery electric trucks, 55 excavators and 60 doses or about 2/3 of 4 SKU's Pilbara fleet. And under the terms of the deal, 4 SKU zero and label will make carbon free mining equipment develop together available to the rest of the industry. 4 SKU chairman Andrew Forrest said the deal would remove barriers for other miners to follow his company's real zero emission ambition. The new deal is three times larger than 4 SKU's initial 120 truck order in 2022. Machinery developed under the partnership will be fitted with 4 SKU zero battery power system and the jointly developed autonomous haulage solution which has been designed so it can be retrofitted onto existing levered haul trucks. And finally, McQuarrie Bank has received a record $4.9 million fine from the market disciplinary panel after an ASIC investigation found the institution failed to prevent suspicious orders on the electricity futures market. The investigation found the bank between January and September 2022 breached market integrity rules by permitting three clients to place suspicious orders. In a statement, ASIC said each order displayed characteristics of an intention to mark the close which means each order was placed in the last minute of market close impacting daily settlement price in a direction favorable to the client's interests. The panel found McQuarrie should have suspected each of the 50 orders were submitted with the intention of creating a false or misleading appearance to market. ASIC chair Joe Long said McQuarrie was put on notice regarding suspicious orders placed by its clients on numerous occasions, but repeatedly failed to take timely action. That's it for today's headlines. You can read more at businessnews.com.au. Coming up on the podcast, lived clerk and collateral to discuss the not-for-profit sector and the way charities are adapting to challenges. (upbeat music) Our ears, they're everywhere and getting in them is a pretty good way to promote your business. At Creative Fix, we won't just get your business into the ears of customers. We make it stick in their minds. Podcasting, music streaming, radio. We create personalized audio advertising. With over 94% of Australians tuning into audio each week, it's time to get your brand heard. Creative Fix, we give brands a sound. Search Creative Fix online. (upbeat music) - Welcome back to At Clothes of Business. I'm Claire Tyrrell. I'm here with journalist, lived clerk. How are you live? - I'm well, thank you, how are you? - Good, I'm good, thank you. Just got back from a holiday, so I'm happy. - Yay. - In the latest edition of Business News, you've written about some solutions to the current challenges being faced by the non-for-profit sector. One of these solutions was company mergers, which Active Foundation has recently undergone. Active has had a tumultuous time over the past few years. Could you run us through its journey up to its decision to merge with another organization? - Of course, so Active Foundation was Western Australia's biggest charity for more than a decade, but it dropped down to the third biggest in 2022. And then in 2023, its troubles were further exposed when it announced the decision to shut seven of its work sites, leaving more than 700 people with disability at risk of losing employment. Thankfully, that was avoided when WA-based disability employment provider work power stepped in and took over those large-scale sites in June last year. But this consequently left Active with no choice, but to shift its focus to small-scale employment sites and capacity building for supported workers as well. A Victorian organization called Gen U recognized Active's established position within the WA community and identified that a merger between the two organizations would be a perfect opportunity to better support Australians living with disability. And Active accepted the offer, obviously, the two entities merged in July and collectively, they now employ more than 5,500 people, which supposedly places the newly formed organization among the top five disability services providers in the country. Gen U actually already had several WA operations in disability employment services under its match works business and a registered training organization called Gen U Training. But the merger has strengthened its presence here in the state, understandably. Having looked at the figures, Active's revenue stood at about $105.9 million in the 12 months ending June, 2023, while Gen U had a revenue of $400 million in the same financial year. Overall, the merger has created stability and reassurance for Active and has expanded the service delivery capacity in WA for Gen U. So it's quite a win-win sort of situation in that merger. - Well, yeah, I remember the active issue being in the news and it was very topical and quite crucial for them to get that funding. You also spoke to Chief Executive of Gen U, who is now also the Chief Executive of Active. What did she have to say about the branding and the name of the now singular organization? - So Claire Amis said the 12 months post merger will involve strategic and operational planning for the newly formed entity. And that involves exploring what becoming one organization kind of looks like and also how to maintain the great qualities of both Active and Gen U. Essentially, at this point in time, Active and Gen U will continue to operate under their individual names, while parts of the business will come under the Gen U banner moving forward. In conversation, Claire actually said to me, Active is such a well-known brand. It would be crazy for us to want to go, Active doesn't exist and we're Gen U now. She also said it was important to avoid Gen U being seen as some national organization that's not connected because obviously it's Chief purpose is to deliver services to people living locally in communities. So if the name is too disconnected from that, then the whole purpose is lost in a way. The overarching message from Claire was that the company's priority was to assist people with disability to have access to meaningful and sustainable employment and to be valued at the workplace and contribute to something greater. So the names didn't really matter as much per se. - Oh, wow, that important lesson in branding the other solutions. Many charities are adopting to ensure sustainability, innovation and investing in partnerships. What did MSWA's Chief Executive have to say about this? - When I spoke with Melanie Killey, she said those two avenues were key ways for charities to gain financial security. MSWA is highly focused on exploring different and new strategies with not only its fundraising lottery, but also with working collaboratively with other businesses. Melanie said that strategic partnerships are a win-win relationship and can help community at the same time. So MSWA are working on several partnerships at the moment to invest in this cause. Financial stability is obviously critical for survival as charities do operate as businesses, but it's also dire because these not-for-profit organizations have an obligation to be as efficient as possible to maximize outcomes for the people they serve. Melanie said MSWA was always trying to make sensible and wise decisions around trade-offs, and it was a very different process to that of a corporate business. Melanie's actually served on several boards for a variety of listed and for-profit boards, and she said that they don't have the complexity that charities have. I asked her to expand on this a little bit more, and she essentially said, you have to be willing to question your entire model, how you do things, and you have to do it with the clients and community in the not-for-profit world. She said there was an element of humility that needs to come into it to actually listen to what the community says they want or need, and then bringing those things to fruition. On that earlier note where Melanie said not-for-profits had an obligation to be as efficient as possible, Claire Amies actually mentioned something similar, saying to me that the sector was generally viewed as an efficient and productive industry, but the reality was that organizations were keenly focused on making the money last. She said government funding never covers everything, so it means organizations have to be innovative, and that's an important part of ensuring long-term financial stability. - Yeah, well, sounds like a very candid and insightful interview. Investing in infrastructure is expensive at the moment with rising build costs, but it's still a way to deliver support to the community. How can it be better designed to save money in the long-term? - Claire mentioned the benefits of developing the housing market to fit out existing homes with accessibility features when we spoke. She said this would lower costs in the long run because committing to accessible houses was about making sure people can live their lives in the same place, which obviously reduces the cost of moving house for both the person, but also the community and the government in any way that it might support. This also seeps into accessibility in workplaces, as Claire said, employees play a huge role in having diversity and inclusion approaches to employing people with disability, and also making sure the workplace is set up to be able to support all of their employees no matter what their needs are. She said the overall business industry needed to recognise the value of doing things upfront and the costs that are often saved in the long-term and can instead be invested in supporting those services, helping people in need. MSWA actually started construction on a residential facility in Shenzhen Park, called Montario Quarter, which will provide supported accommodation for people with neurological conditions and spinal cord injuries, and that facility is being delivered in partnership with state government and is expected to welcome residents in late 2025. And as expected, Melanie said, the extravagant building costs did cause major pressure on the viability of the development and caused a few delays in an overall longer process, but she said MSWA team were really delighted it was finally off the ground. So that's just one example of how infrastructure is being invested in by a not-for-profit. - Yeah, great. And it's a development WA precinct, Montario Quarter. There's a lot of nice developments happening there, one that's been particularly delayed. A poor reputation has developed around the NDIS due to its complexity. What did Rocky Bay's chief executives say about this government funding scheme and the impact on the not-for-profit sector? - To be blunt, Michael Tate said the way the NDIS was designed has been problematic for disability service providers. Rocky Bay accesses federal funding through the NDIS, and Michael said the main and recurring challenge for the sector is the NDIS itself. When we spoke he told me it started with really good intentions, but the truth was that it was not providing the best outcomes for people with disability. And Michael even went so far to say it's actually damaging the sector. He also mentioned that many organisations like Rocky Bay have been servicing the WA community for decades, well before the NDIS was envisaged, but it is a difficult time to operate in the current environment. He also referenced active struggles despite being the biggest charity in the state. And so if they were being heavily impacted by the challenges, you can just imagine how many small operators are shutting down, pulling out of services and ceasing to exist. Michael said that if the NDIS remains on its current path, it could be devastating. And organisations that do manage to survive in the current climate didn't have the capacity to absorb the overflow of demand anyway. I also spoke to Melanie about this who said the NDIS had complicated procedures associated with it and it places an added burden on providers. To directly quote Melanie, she said the challenges that affects everyone across the whole not-for-profit sector is the cost of living crisis and the NDIS has done this to us. They don't increase funding as much as the cost of providing the services increases. End quote. She said this was an ever-increasing gap between costs and funding and organisations are swiftly scrambling to find solutions which have obviously just ran through a few before. Wow, it sounds like a very insightful article into an important sector. You can read Livestory on page 38 of the September 16 magazine or online today. Thanks for listening. - The latest business news, deliver daily. Subscribe and rate the show, wherever you listen to your podcasts. For all the latest business news, visit businessnews.com.au. (upbeat music) [BLANK_AUDIO]