Newsagency management

I was disappointed to see media coverage in the last few days from union representatives and others calling for more government support for auto manufacturers so that Australian can keep General Motors, Toyota and Ford producing cars here.

While I understand the interest in supporting the manufacturing sector and thereby keeping jobs, government assistance provides false economy, it protects the businesses and those who work in them from reality. This, in my view, makes them less competitive.

I don’t see the long term value in government assistance packages, especially when governments do it for one sector but not another.

Imagine the boost to the economy if every dollar of government assistance was spent on building needed infrastructure or providing for needed and underfunded government resources such as health and education.  Surely this more practical investment would be more valuable than protecting uncompetitive industries.

Newsagency businesses live or die by the decisions of those who own and work in the businesses. There is no safety net, no parachute, not since 1999 when the federal government deregulated the distribution of newspapers and magazines.  Many newsagents are still digesting the ramifications of the deregulation. This has been made more challenging by the lack of government support.

The auto makers say that they can’t compete with China and India.  Hmm, our print products are challenged competing with digital yet there is no support or assistance package.

My point is that governments or all colours support some industries and not others.  I think this is wrong.

We all need to be accountable for our situation. Tough as it is, dealing with what we face relying only on ourselves will make those who do make it stronger, more competitive and more valuable to the Australian economy.

Talking with independent and small business retailers and attending conference sessions at the 101^st National Retail Federation Convention and Expo here in New York has reinforced to me that the core challenges of small and independent retailers are universal.

Today I have been focused on sessions for independent retailers and here are points they make which resonate with me and what I often hear from small business owners including newsagents back in Australia.

• Customers think that small businesses are more expensive than big businesses … but we are not.
• Customers more often go to small businesses when they want service … because big businesses fail in this area.
• Small business owners often complain about employees … but rarely act on this.
• Small business owners too often think that they cannot compete with big business.

There have been many other excellent points. These are they keys I want to share for the moment.

The challenge we face is to believe in ourselves enough to live to our fullest potential. This is tough, really tough … to live this every day through long hours and often in situations where we feel downtrodden and irrelevant.

I think that a key for newsagents is for us to break free of suppliers.  I don’t mean that to be critical of suppliers, no there are newsagency suppliers I respect, appreciate and willingly support.  There are other suppliers who leech off us, use us and abuse us.  There are suppliers who dominate our businesses beyond the return they help us achieve from doing business with them.

We need to unchain our businesses from these paternalistic relationships and partner with suppliers who have a mutual commitment with us to genuine shared success.

This is our biggest challenge as a channel. It will come. Either suppliers will ditch us or we will ditch them. Folks this will certainly happen. It is a matter of time. I am certain because of changes in technology and changes in how consumers interact with core products in our channel.

Our challenge and our opportunity is to control our businesses and how they engage with, embrace and seek out the changes which will come from a business model which is free from regulation.

Let’s look at one small area of magazine supply and return data. The paternalistic nature of the treatment of newsagents feeds lack of compliance and engagement. I have no doubt about that.  I have seen models here in the US which put the customer, us in this instance, in control and this drives compliance in a way which is valued by suppliers.

While it is a bit of a challenge in today’s newsagency world, imagine a newsagency channel without any supplier rules, a channel where we choose what we sell. A channel where our businesses are genuinely our businesses and under our complete control.  I think that is where we are headed. It is a world where smart business people will thrive.

Let me get back to the topic, small business challenges are universal. We need to seize every opportunity to show that our prices are competitive, our customer service is better and our employees are better than big business.

Happy New Year newsagents.  New national OH&S regulations come into effect from today. They impose on newsagents, and indeed all businesses, tough requirements which will be time consuming and present to us considerable risks for lack of compliance.

Thanks to the assistance of the ANF, here is what you need to know.  This is a summary of information provided by the ANF to newsagents already:

Newsagents need to be aware that new model Work Health & Safety (WHS) laws commence on the 1st of January 2012 in most States and Territories. (Victoria, South Australia and Western Australia are still to confirm exact dates) Under these new model laws all newsagents have a positive obligation to undertake due diligence to ensure that their organisations are compliant.

The introduction of a new concept of “Person Conducting the Business or Undertaking” (PCBU), and the expansion of the definition of “worker”, has together greatly increased traditional employer obligations.

Employers (now PCBU’s) must ensure that, so far as is “reasonably practicable”, their workers are not exposed to health & safety risks.

The concept of “reasonably practicable” requires each employer to effectively implement a formalised risk management program, through which it identifies workplace hazards, assesses them and takes action to either eliminate or control them. Newsagents are required to have a goodworking knowledge of WHS matters and how they apply in practice to their organisation.

Newsagents are also required to ensure that their organisations have appropriate resources and processes in place to manage WHS and, critically, to verify that these processes actually work in practice. This requires a system that provides both transparency and visibility.

It only takes one worker (it could even be a work experience student), to request that a Health & Safety Representative (HSR) be appointed and an organisation must comply with this request.

HSR’s have expanded powers and can issue directions to cease work, which must be complied with.

The new laws come with significant fines and penalties of up to $3 million per breach for a corporation, and$600,000 perbreach for Newsagents.

Newsagents (and potentially, workers) face prison terms of up to 5 years.

If Newsagents fail to discharge their duty, they can be prosecuted, even if the PCBU is not prosecuted, or the PCBU is found not guilty.In some jurisdictions (including New South Wales and Queensland) criminal proceedings arising from WHS events are being moved from the Industrial Courts to the mainstream court system, where prison terms are handed down on a daily basis. This means that prison sentences for Newsagents are more likely to be applied.

The simple message is that newsagents should act NOW to ensure compliance and avoid fines and penalties.

The following is a summary of the key changes due to commence on the 1st of January 2012.

Move Away From Employer Definition:
From 1 January 2012, the primary duty of care for workplace safetywill sit, not with the employer but rather, with the “Person Conducting the Business or Undertaking” (PCBU). A PCBU may be a corporation, partnership, unincorporated association, a self-employed person, or a sole trader.

Expansion of Duty of Care:
The PCBU concept is much broader than the employer definition it replaces. In simple terms, the introduction of the PCBU definition is designed to break down barriers of responsibility so that there can be more than oneparty primarily responsible for the health and safety of workers.

Expanded Definition of Worker:
The definition of “worker” has also been expanded to include contractors, subcontractors (or their employees), employees of a labour hire company, volunteers and work experience students, to name but a few. This expanded definition is designed to better reflect the nature of the modern workplace and the types of relationships that now exist within it.

Expanded Obligation to Consult:
The obligation to consult has been significantly expanded to include a requirement for each PCBU to consult downstream, upstream and cross-stream, depending on the nature of the workplace and the other PCBUs it interacts with.

Additional Powers for Representatives:
The role of the Health and Safety Representative (HSR) has been expanded to include the power to stop work or demand remedial action. From 1 January 2012, it will only take one worker to request the appointment of an HSR and an employer must do so.

Officers Required to Exercise Due Diligence:
Officers (adopting the broad Corporations Act definition of an “Officer”), are required to exercise ongoing ‘due diligence’ to ensure that a PCBU meets its WHS obligations. The definition of due diligence requires each and every officer to take positive steps to inform themselves of their organisation’s workplace safety obligations and to ensure that they have adequate systems and procedures in place to comply with these obligations.

New Model Codes of Practice:
In conjunction with the introduction of the Model Law, new Model Codes of Practice have been developed. These provide guidance as to how to comply with certain aspects of the new legislation. Courts can reference the Codes to identify what is “reasonably practicable”.

Increased Penalties:
Maximum penalties have increased significantly.

• Up to $3 million per breach for a corporation.
• Up to $600,000 per breach, or 5 years’ imprisonment, or both, for a director or officer
• Up to $300,000 or 5 years’ imprisonment for a worker.

Change in Criminal Jurisdiction:
Whilst in the past directors often referred to the possibility of “going to jail” for workplace safety breaches, the reality was that in the Industrial Court system, offenders were rarely sentenced to a prison term. This may be about to change, with some States now passing jurisdiction for serious offences arising from WHS breaches to the criminal courts. Here, judges are used to imposing prison sentences on a daily basis.

The ANF along with all State Newsagent Associations have recently been communicating with newsagents about this issue and have launched a newsagent specific Smart WH&S online workplace safety system to proactively assist newsagents manage this significant risk in their businesses. With changing obligations under WH&S harmonisation newsagents should not ignore this risk.

The ANF will be providing further communication about this issue to members to help them understand its significance. New additional costs associated with compliance hurt and the ANF has made representations about this issue during consultation. However, faced with requiring a solution for newsagents that is easy for them to use and that will proactively prompt them to remain compliant where a simple manual is unlikely to achieve this, an online solution has been deployed. It is a very comprehensive online system that is easy to use and that has been customised for newsagents.

The ANF would love this to be free to members, but this is unfortunately not possible. We have negotiated a dramatic discount for members of all Newsagent Associations with Smart OH&S who have developed the system. If you would like more information please contact your ANF or State Newsagent Association or you can download a flyer HERE.

The final report from the Productivity Commission into retail in Australia was released last week.  The report, Economic Structure and Performance of the Australian Retail Industry, makes for interesting reading.  Newsagents get plenty of mentions thanks to the submission from the ANF.

I agree overall with the findings and recommendations of the report.  However, if we are to see less regulation around trading hours, we need to see less regulation around a key cost of trading, labour.  We also need to see greater fairness in tenancy costs.

The terms of reference for the inquiry did not go far enough in serving newsagents.  I’d like to see inquiries which look at:

1. The treatment of small independent retailers in shopping centres compared to other tenants. I think that such as inquiry would uncover practices which are unfair and disadvantage small and independent retailers and which significantly benefit big retailers beyond the benefits one might expect from their size.
2. The trading terms and financial benefits achieved by retailers all magazines. I think this this inquiry would uncover a disparity in trading terms and benefits accessible to some supermarkets, convenience store groups and other retailers compared to newsagents.
3. The role of Australia Post government owned Post Offices and their impact on privately owned retail businesses. I think that this inquiry would find that Australia Post is operating outside what is permitted under the act and what was envisaged when the act was drafted.
4. The magazine distribution system in Australia – in the context of the impact of the deregulation of 1999 and how it has served consumers and newsagents who had their monopoly taken from them.  I think that this inquiry would find that deregulation was not as fair and thorough as it should have been and that the changes made did not provide newsagents with an appropriate competitive framework.

Of course these points cover more than you would see in a single inquiry.

Maybe this report, its recommendations and suggestions which will flow from associated debate could add to the agenda of the new Minister for Small Business.

I don’t expect any of my proposed inquiries soon so it’s best to focus attention on what we can deal with rather than what we cannot.