Australian Newsagency Blog

A blog on issues affecting Australia's newsagents, media and small business generally.

Ovato: taxpayer funds to cover employee entitlements?

Mark Fletcher
November 30th, 2020 · 2 Comments

This, from the Chairman’s address at last weeks (Nov. 26) Ovato AGM indicates that the company is restructuring in such a way that the financial responsibility to a chunk of employees who will lose employment is shifted to the Australian taxpayers.

In my opinion, it sucks. But … I don’t have the time to lobby on this. If I did, I’d say that in my opinion the trajectory of the company was set well before Covid, that those running the company should have known for years that restructuring was inevitable and that, for these reasons, the shareholders in the company should be responsible for funding employee entitlements, and, if they can’t, the whole business should collapse.

The restructure appears to be movements specifically designed to shift the liability for employee entitlements to taxpayers, and retaining, for shareholders, a smaller and, I guess, more profitable business.

But, hey, these are just my opinions. I am no expert.

I am, however, a long-suffering customer of the Ovato business, a business with inadequate infrastructure and inadequate strategic planning. It is my experience with these that feed into my wondering why Ovato is making the moves it is making and whether the reasons put forward as to justification for the restructure stand up.

Now, to be clear, I respect the folks working at Ovato. In my experience, they are professional and committee to Ovato customers. My issue is that the company does not provide them the resources they need to deliver the level of service we (customers) need.

But, more broadly on the restructure, I am curious as to the motives and long term plans of Are Media in all this.

I think it is important that employee entitlements are protected. However, I do not think companies should be able to shift things around through various structures controlled by essentially the same body for the purpose of avoiding the obligation of fully paying employee entitlements.

To me, what is happening at Ovato, the transfer of employee entitlement responsibility from the company to the taxpayer, could be considered through the lease of social responsibility. each time I see Ovato in the news, on social media and in emails touting business, there will be the reminder of how much taxpayers invested in remnants of the business so that the remaining business itself could trade.

Down here in small business land, most of us are not structured so that we can slice and dice and manoeuvre such that we keep the good bits and have others fund the funeral of the bad bits. I appreciate that sounds dramatic. Maybe I am missing someone but it is how it reads to this non accountant.

Newsagents continue to be treated poorly by Ovato., We do not have control over our level of indebtedness to the company, we carry considerable costs for wrong decisions by the company, we make bugger all margin on their products. Yet, we do it because magazines are a core category. That we do it, and they know we will, allows them to by inefficient and maybe that is a factor in getting them to the point of needing the restructure.

Who knows.

What I do know from the Chairman’s own words is that Ovato plans to restructure such that us taxpayers pay money towards the costs that will be a consequence of the restructure.


Category: Ethics · magazine distribution · magazines · Social responsibility

2 responses so far ↓

  • 1 Peter // Nov 30, 2020 at 8:51 AM

    Shades of Clive Palmer ?


  • 2 Lance // Dec 2, 2020 at 3:20 PM

    No ‘shade’ with Palmer, he’s a bluddy eclipse……..


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