May June Tabloid
Change At The HelmNEW PRESIDENT FOR THE CHAMBER
Christa George, Director of Support Services at Waiariki Institute of Technology, was elected President of the Chamber at the Annual General Meeting held at the Grand Tiara Hotel on Wednesday 28 June 2006. Christa joined the Executive of the Chamber in July 2001 and has played an active role in the many functions of the Chamber, particularly contributing in the areas of project management, quality improvement and human resource management. Christa moved to Rotorua in 1980 and has worked for the last sixteen years in business lecturing and management roles. She has considerable experience in the health and education sectors, both in New Zealand and overseas. In 2005 Christa moved to her current role at Waiariki Institute of Technology.. For the past two years Christa has been Vice-President of the Rotorua Chamber of Commerce and has worked closely with Margriet Theron, Immediate Past President, in raising the profile of the Chamber. She has been a judge of the Rotorua Business Awards for three years and in 2005 became Convenor of the Awards Judging panel. Christa has also been a volunteer mentor for Business in the Community. Other interests include swimming, reading and playing in the Bay of Plenty Masters Badminton Team. Christa is looking forward to working with the new Executive, many of whom have committed to further active involvement with the Chamber. This will provide the organisation with valuable continuity in its current programme of activities and provide opportunities for further development of services to members. Christa is also looking forward to 2008 when the Chamber will reach its Centenary; celebrating 100 years of support and services to the Rotorua Business Community. Dr Margriet Theron steps down as President of the Chamber after a term of two years. Margriet started her association with the Chamber six years ago when, as Marketing Manager for Waiariki Institute of Technology, she was instrumental in forging a close relationship with the Chamber with the introduction of the Scholarship Programme and free courses for members. At the AGM in July 2003, Margriet was elected as Vice-President and when the then CEO Mark Watson left to pursue other interests, she stepped into the breach with Mike McVicker as joint Acting CEOs. During 2004 Margriet took on the role of Acting President until her full election as President at the AGM in July of that year. During that period she placed emphasis on developing a strong strategic focus for the activities of the Chamber. With the appointment of Roger Gordon as CEO in October 2004, a partnership began that, with the support and assistance of a committed and capable Executive, has seen the Chamber develop into a strong and effective voice of business for Rotorua. Utilising the strength of her Executive, Margriet introduced a working committee structure that enabled much of the governance of the Chamber to occur in a less formal, more effective environment. Known for her professional and forthright chairmanship, the Executive meetings have been efficient and productive and on most occasions have been kept within Margriet's two hour deadline! The commitment of time and energy that Margriet gave to the Chamber was considerable. To many, it must have appeared as if it where her full-time occupation, such was her dedication. In 2003 and 2004, Margriet was Convenor of Judges for the Rotorua Business Awards and continued as a member of the Awards Organising Committee for the two subsequent years. As the longest serving member of this committee she has contributed greatly to the growth and quality of the Awards which is now known as the business social event of the year. During last year, Margriet was appointed as a member of the Bright Economy Advisory Board to contribute to the future economic direction and growth of Rotorua and reflecting her considerable knowledge and skills. As her personal theme during her time as President, Margriet has given support to the Mt Ngongotaha Bush Restoration Trust, rekindling an association of the Chamber with this mountain that first began in the early 1900s. Margriet is not lost to the Chamber. During Christa George's time as President, Margriet will continue as Immediate Past President and will continue to have a strong voice on Chamber matters. Each President leaves behind them a legacy of contribution to the Chamber. The Chamber thanks Margriet for her unlimited dedication, her focused leadership, her strategic direction and the strong foundation she has laid for the Chamber for the years ahead. Thank you most sincerely Margriet. CHAMBER COMMENCES 2006 RETAIL MAP
The Chamber has commenced approaching retailers and organisations in the CBD to be involved in the official CBD retailing map. This map has been produced by the Chamber of Commerce for the past five years. The publication has a print run of 100,000 copies and is available throughout the year at most of the major hotels and motels, information centres and many retail outlets. It is a free guide and is distributed without cost to the outlets. It is a unique publication in that it provides an accurate location index for each advertiser. As an example, the map breaks Hinemoa Street into 20 different sub-blocks, so it is easy for the shopper to pin-point the exact location of the shop. Each shopping category is translated in four languages: English, Japanese, Mandarin and Korean. There is an opportunity to participate in the map with a line entry or to increase the exposure to either a duo-tone or full colour advert. A basic line entry is less than $4 per week and that includes GST. Sharee will be approaching each retailer and organisation in the CBD during July and it is anticipated that the publication will be available before September 2006. Rotorua Airport Trans Tasman Passenger Services
I have already publicly declared my support in principle to the Rotorua Airport Company bid for Trans-Tasman passenger flights. I do not support Trans-Tasman freight movement from Australia to Rotorua. My decision is based on bio security concerns of potential irreversible damage to our forests and kiwifruit industries from a pest incursion such as the painted apple moth that could occur with freight carriage. The Rotorua Airport Company is convinced that the business case for potential passenger flows between Australia and Rotorua stacks up. Domestic growth at Rotorua Airport is currently 25 percent compared to average growth of 42 percent across all regional markets since 2002. There are many factors behind this lower growth and they are not indicative of a weak international market. Air New Zealand is our national carrier and it is vital that Air NZ remains a viable airline if we want economic growth in the regions. We are concerned at the ever increasing costs of fuel on the carrier in the long-term. For Rotorua to consider Trans-Tasman capability it is critical to have regional support and I am confident this agreement has been reached. Any new flights between Australia and NZ will be a challenge for the Hamilton Airport. In government we need to drive a nationwide perspective, while ensuring Air New Zealand remains viable at the same time. The Air NZ and Qantas “Code Share” arrangement announced in April will be an opportunity for our Rotorua issues to be widely canvassed by both parties. I urge the Airport Company and the Regional Mayors to continue to work pro-actively with Air NZ to find our place in the sun.
Business Advisers/Coaches/Consultants Providing Advice in the SME Market Place
Members needed Throughout New Zealand! The Australasian Institute of Enterprise Facilitators [AIEF] has appointed David Evans to promote awareness and increase membership of this important Institute throughout New Zealand. As you may know, the Institute originates from an APEC initiative and is not profit making. It is dedicated to evaluating and providing accreditation/registration to business advisers/facilitators/ mentors/coaches operating in the SME sector. Evaluation costs $100 plus GST, whilst professional member costs are $200 plus GST per annum. Professional members, successfully accredited, will be able to write ASMEA behind their name. Business owners will be able to freely contact the AIEF and seek referrals to evaluated advisers in both general and specialist areas of expertise. The aim is to give added confidence and reassurance to the business owner of the competencies of the evaluated consultant. David himself initially trained in the UK as an Accountant before coming to New Zealand in 1994 where he set up his own Takapuna recruitment/employment agency business. A firm believer in this concept of supporting New Zealand SMEs, via the provision of competent advisers, David looks forward to making your acquaintance on his nationwide travels. Individuals interested in possible membership throughout the Rotorua/Bay of Plenty Bay region should check out the web site www.aief.org.nz or telephone 0800 999933. Residential Property: Investment For Your Superannuation, OR A Mug’s Game?
Residential property investment in Rotorua has undergone surprising changes over the past 12 to 24 months. Colleagues and acquaintances who invested in the lower end of the market (against our advice) are set to reap the capital gains reward. Houses that were purchased 18 months ago for $55,000 and rented for $145 per week, giving a gross return of 14% (lets not dwell too much on down time because all the walls were kicked in) are now selling for $100,000 plus and achieving rents of $180 per week. Are they taking the money and running? You bet. As we all know, the days of 10% plus return are long gone and wise buyers will build their portfolio on the tried and true three bedroom family homes with room for improvement. There are still bargains to be had: the tired rental, and the granny and granddad family home that has had no work done on it since the 1970s. A $170k investment will bring a good steady rent of $210 with 6% gross. Add a fire at $2,000, fencing at $75 per metre and a garage at $7,000 and see the rent creep to $235. Sit tight and in 5 years gloat over your capital growth, market conditions accepted. Central blocks of two units are also a good investment, often with the opportunity to add garaging and renting at $175 - $185 per unit. Market rents are racing away as demand outstrips supply and good properties in fair to middling areas have become as scarce as hen’s teeth. Average rents of good properties in areas such as Westbrook, Kawaha Point, Springfield and Poets Corner are $270 plus. Move to Lynmore, Tihi-o-Tonga and the Sophia Street end of Fenton Street and your are talking $400 plus. Some serious money is being paid in rent in Rotorua these days and it is not all at the top end of the market. Areas of Western Heights over towards Selwyn Heights are achieving $220 plus. Tenants who have been in a property for 12 months or more know they are going to have to pay $20 or $30 and in some cases $40 more to get exactly what they already have so they are staying put. This has had the effect of stabilising the rental market with the average time tenants stay in a property lengthening. New families to the city and existing tenants with growing families are finding it hard to get suitable properties. Current property investors should not fall into the trap of assuming all is well if they don't hear from their tenants and the rent appears in their account as regular as clockwork. Keep up your inspection schedule and, plan ongoing maintenance. Your tenant's idea of adequate maintenance may not be yours. Failure to carry out inspections may negate the validity of any claim to your insurance company. Check your policy. There are a number of property management companies throughout the city who offer both a managed and a casual letting service. Managed service brings stringent tenant selection followed by ongoing inspections and tenant management. These days ingoing costs to tenants are roughly five times the weekly rent covering bond, rent and let fee. Property companies also carry out a casual letting service with the same tenant selection process and then handing the property back to the landlord. Property management costs across the city are around 8% of the rent plus gst. Always get a rent appraisal and a professional opinion from a property manager before you buy your investment property. They have a wealth of knowledge in their area of expertise and it's free. Beware of tenants that target private landlords; it's because they have difficulty get a property through an agency, usually for a very good reason. Don't be sucked in with “me and my four kids and the pit bull have been boarding for the last five years so don't have references.” Ring around the agencies to check the name. Honestly - Don't be afraid to dip your toe into the residential property investment puddle. It can be profitable and fun.
A new member of the team at the Chamber.
Sharee Lowndes has been a member of the Chamber for several years. She comes from a background of self employment for 10 years building up a small independent business in the lighting industry. Sharee was then invited to become a Lighting Plus Franchisee. She sold the business in May 2006. To be successful in your business Sharee believes that you have to “Be innovative and think success”. People do business with people they know and trust, so being a member of the Chamber of Commerce allows you to tap into a big networking base. Her business experience in Rotorua has convinced her of the very real advantage to organisations of being a member of the Chamber. She is looking forward to working with the team in what is a very busy office, and to getting to know you and your business. Sharee is contactable at the Chamber on 349 8356 or through her email at membership@rotchamber.co.nz Data Technology Helps Catch Criminals In The Act
An Auckland-based security firm is using high-speed data technology more typically seen in corporate boardrooms to help patrol client premises and has achieved instant results. On the first night that First Security used an adaptation of One Office to monitor car parks remotely at the Manakau Supercentre a would-be burglar was caught on-camera attempting to break into the centre and apprehended within two minutes. First Security General Manager, Mike Rutherford, says that the unique application of the technology, which has been operating for about three months from their Head Office in Auckland's CBD, is giving them an unparalleled view of the premises they monitor.
The system also registers an alert if there is any suspicious activity occurring outside of normal hours, which the previous system could not manage. “We used to only be able to see one image every two seconds. The new system transfers visual images at the rate of five frames per second. At that speed, it's virtually a live transmission, and the quality of the images is extraordinary.” In the situation at the Manakau Super centre the Head Office immediately contacted one of the company's mobile patrol units and they were on the scene almost immediately. “Previously, it may have taken anywhere up to 30 minutes for a patrol to make a random sweep of the area,” says Rutherford. “And then they may have arrived only after the crime occurred.” “Basically, if it wasn't for this combination of technology, we wouldn't have caught the guy.” The system is supported by a 17 terabyte hard drive which can record several weeks of footage of activity around the centre's exterior and car parks. The capability to replay sections of footage has also been successful in alerting security personnel to a number of car break-ins. First Security also uses One Office to connect with its Wellington office and monitors several high-security locations around the capital. “In some cases the cameras can capture faces with remarkable clarity, and can even read number plates at a distance of up to 800 metres,” says Rutherford. Telecom Marketing Manager for IP Networking Julio Coelho says it is rewarding to see solutions such as One Office allowing innovation and efficiency. “One Office is all about productivity improvement and this is a great example of the technology well applied.” Mr Rutherford sees First Security's use of the technology expanding in multiple ways in the future. “We will always need personnel, but this system can help make up for human error. We can see this technology increasing the potential for 'virtual concierges' and automatic monitoring of all kinds of secure locations.” Don't Ignore Stress In The Workplace
There is considerable legislative responsibility placed on employers to keep their workers safe. As a result, a number of factors such as stress and fatigue are recognised as occupational hazards and require a level of management. Stress is one of those words that can evoke a strong reaction in many people, but when it is referred to, employers need to listen and do some work around identifying what it is that is the contributing stressor. It could be: • The workload is too high
• Are the objectives achievable? Is the workload too much for one person? There are some really simple things that all employees can do to help them better manage their levels of stress. These include: Stress will always be present at some level in our workplaces. A certain level of stress is healthy but it's what we do to manage stress that is important. Some of the suggestions below might be part of a way to reduce stress in workplaces: • Sometimes we have to change our behaviours to reduce stress i.e. it's not usually a quick fix Managing work and home life stressors successfully can be quite a positive experience. Ignoring stress, or failing to analyse what is part of the reason for it, will cause harm in the long run. Encourage people to talk about their issues and concerns. Work together for a healthier, happier workplace. Energy Management and Electricity Savings
Saving electricity in the commercial environment is a lot easier and more significant than you think. Better still, you can save electricity and money without denying yourself the useful services that electricity provides. As energy management consultants, Rotorua's Power Solutions Ltd have prov-en cost savings averaging 20% can be made when an energy management programme is prepared and introduced to a commercial environment. Moreover, simple low-cost or no-cost “housekeeping” measures undertaken by staff can account for about one third of these savings. In other words: you can help to conserve electricity at work.
• Turn them off when they are not needed, when the area is not occupied, or when there is enough natural light. Turn them off if they are not going to be used for the next 10 minutes. Switching fluorescent lights off and on neither significantly shortens their life nor uses excessive power. Power Solutions Ltd are electrical and energy consultants regularly conducting energy audits and compiling energy management plans for commercial and industrial businesses all over the North Island. They are available locally to help you through the Rotorua Chamber of Commerce. In the next Tabloid we look at other ways and means to conserve energy and reduce operating costs. For more information contact RAY WELLS PSL's Accredited Energy Auditor, Ph 07 349 8349. The Playing Field Doesn’t Stay Flat For Long
We are all encouraged to embrace change positively and with the advent of electronic communications, changes seem to happen with ever increasing speed. So much so that social and tax changes that are signalled in the Government’s Annual Budget each year are generally implemented at some time in the future and their effects can easily be overlooked until suddenly they are here and in force. When there is a general election, Parliament drops all Bills. Therefore, changes that were announced in May 2005 did not come into law until March 2006 with a start date of 1 April 2006 and in some instances were retrospective to April 2005. The new laws provided for some significant changes to the New Zealand tax system including the following:- DEPRECIATION CHANGES • With effect from 1 April 2005 and the 2005–2006 income year, the tax depreciation rates applying to most plant and equipment have been increased. For example, the tax depreciation rate for new computers has increased form 48% Depreciating Value (DV) to 60%DV. There are issues for taxpayers to consider depending on when their Balance Dates fall Taxpayers with a 31st March or Earlier Balance Date If you have a 31 March or earlier balance date, the new tax depreciation rates apply from 1 April 2005 for most depreciable assets acquired (other than buildings) on or after that date. However, you have the option of using the “old” rates for assets acquired between 1st April 2005 and the end of your 2005-2006 income year. This is for those taxpayers who may already have entered the “old” tax depreciation rates into their asset registers for assets acquired on or after 1 April 2005 and before the end of their 2005-2006 income year. This concession means those taxpayers are not required to amend those depreciation rates if they elect to use the “old” rates in their 2005-2006 tax return. For example, a taxpayer with a 31 March balance date acquires a new motor vehicle on 5th May 2005. The taxpayer can use the new tax depreciation rate OF 36%DV, (rather than the “old” rate of 31.2%DV) in the year ending 31 March 2006 or can opt to use the “old” rate of 31.2%. Taxpayers with Balance Dates Later than 31st March If you have a balance date later than 31st March (e.g. 30th June), you cannot use the new depreciation rates for any assets acquired between 1st April 2005 and the end of your 2004-2005 income year i.e. you are required to use the ”old” rates. However, for the 2005-2006 income year, you have the following options for most depreciable assets (other than buildings) acquired during that year. 1 Use the “old” rates 2 Change to the new tax depreciation rates If you choose the latter option, you will need to go through your tax asset register in relation to assets already added during the 2005-2006 income year and replace the old rates with the new rates for those assets acquired during that year. The new rates must be applied to any assets acquired from the 2006-2007 income year on wards. FBT AND MOTOR VEHICLES – A FAIRER DEAL? People have been complaining for many years about having to pay FBT on the original cost of a car, which may have been written down to nothing. Therefore, the following changes will help to remedy this: • With effect from 1st April 2006, the FBT valuation rate applying to the cost of a vehicle will be reduced from 24% to 20%. Other changes: • A new FBT exemption has been created for “business tools” such as mobile phones and laptops. To qualify, all of the following criteria must be met: o The item must be provided mainly for business use.
This new exemption removes concerns that incidental private use of employer-provided laptops and mobile phones may give rise to FBT liabilities. • From 1 April 2006 the rate used to calculate Fringe Benefit Tax on low interest, employment related loans has risen from 9.01% to 9.55%. The previous rate applied from 1 July 2005. INCREASE IN CHILD REBATE You can be more generous to your children. From 1 April 2006 the child rebate has increased from $156 to $351. If you are paying wages to school children, they can now earn $45 a week ($2,340 a year) before you need to deduct PAYE or withholding tax from payments made to them. Previously they could earn $20 a week before deductions needed to be made. In looking at whether the total for the year will be $2,340 or less, it is necessary to look at what the child earns (or is expected to earn) from all employers. STUDENT LOAN INTEREST WRITE-OFF FROM 1 APRIL 2006 From 1 April 2006 borrowers who live in New Zealand will no longer be charged interest on their student loans. Those who travel overseas will still have to pay interest. The legislation requires that borrowers will need to be present in New Zealand for at least 183 consecutive days before they qualify for the write-off. The write-off will then start from the first day of that period. Once a person has qualified they will continue to be eligible until they have been overseas for 184 consecutive days. The 183 day presence is still considered to be met if 31 days or less are spent overseas during that period, and likewise the 184 day absence will be treated as continuous even if 31 days or less are spent in New Zealand during this time. If a person meets the 183 day requirement, or is granted one of the exemptions below, they will have an interest write-off credited to their student loan account after the end of each tax year. Exemptions • Studies full-time overseas at postgraduate level. Transitional provisions can also apply. RETURNING RESIDENTS AND NEW MIGRANTS – TEMPORARY TAX EXEMPTION Returning residents (who have not been tax residents for the previous 10 years) and new migrants qualify for a temporary tax exemption from 1 April 2006. These individuals are referred to as “transitional residents”. The exemption applies to most types of the individual’s overseas income and lasts for four years. The objective is to reduce tax barriers to the recruitment of highly skilled people to New Zealand. Examples of the type of income that will be exempt are: • Dividends The following types of income will not be exempt: • Income from overseas employment performed while receiving the exemption The exemption is automatically granted – it is not necessary to apply for it. However, when the exemption period expires the people affected will have to start to include their foreign income in their New Zealand tax return. A person will be deemed to be a transitional resident when they acquire a permanent place of abode in New Zealand. Accordingly, the period of exemption begins when the person actually moves permanently to New Zealand. Under the provisions in the original bill the first date of residence could be backdated to a previous visit before 1 April. This could have had an adverse affect for someone, say from the UK, who came to New Zealand for a visit in order to decide whether to move here permanently. This article was submitted for the interest of members by Stuart King of Nairn Fisher Limited, Chartered Accountants. It should be used as a guide only and it is recommended that you consult with your tax advisor or Nairn Fisher Limited before acting on any of the information contained in the article. Businesses Facing Slower Demand And Rising Costs
According to the NZIER Quarterly Survey of Business Opinion the NZ economy began 2006 like it ended 2005 with no growth. The surveys measure of domestic trading activity declined in the March 2006 quarter, which is consistent with our expectation of 0% GDP growth in the quarter. More importantly, the survey paints a clear picture of firms facing soft demand and rising costs. Profitability is under extreme pressure and firms are responding by shedding staff and putting expansion plans on hold. In short, businesses remain decidedly gloomy. The fact that businesses are facing soft demand comes as little surprise. The writing has been on the wall for the consumer for some time. Slowing net migration, lagged interest rate effects, weaker house price growth and high levels of debt have all meant that the pace of consumer spending growth seen over the past couple of years could not be sustained indefinitely. Indeed, the most recent retail sales figures released by Statistics New Zealand suggest that consumer spending has already slowed considerably. Annual growth in total real sales eased to 3.0% in the first quarter of 2006, well below the 4.6% average through 2005. A similar story exists when we look at core sales i.e. sales excluding vehicles sales and services, which provides a better indication of the underlying trend in consumer spending patterns. Annual growth in core sales volumes was 4.8% in the March 2006 quarter, again well below the 5.8% average through 2005. What is so disconcerting about the current slowdown in consumer spending growth is that it has occurred without a substantial cooling of the housing market. When this happens and the equity consumers have been withdrawing from their homes to finance spending is shut off, the risk is that consumers go into hibernation for an extended period. This is especially worrisome when outside of government spending it is difficult to find a sector that will be able to fill the spending gap left by consumers. Just how far and how long will the slowdown in consumer spending endure? The questions are critical to the economic outlook, but the answers are not that simple given the number of competing factors involved effectively creating a tug of war between high wage growth and higher costs thanks to factors such as increased interest rates, petrol prices and utilities charging and the likelihood of a lower currency. Doing some quick sums suggests that the negative factors, in combination with deteriorating housing market sentiment, will dominate and keep the consumer in cautious mode for at least the next year. But perhaps the scarier prospect is that the ability of RBNZ to use interest rates to kick start the downtrodden consumer will be greatly reduced given the prevalence of fixed rate loans (around 80% of all mortgages in NZ are fixed). The Reserve Bank of New Zealand, when they finally decide to try to release the economy from its strangle-hold by cutting interest rates, may find they are pushing on a string. In any event, 2006 is shaping up to be a difficult year. Chamber Calendar, 20065 July Writing a Business Plan for Small Businesses Pinnacle Business Solutions 6 July Lunch with John Key Opposition Spokesperson on Finance 8 July Business Awards Entries close 11 July BA5 Rainbow Cars 12 July Personal Communication Skills for Successful Business Toschi International 13 July Cash Flow Management for Small Businesses Nairn Fisher, Chartered Accountants 17 July Chamber Executive Meeting 19 July Developing your own web-site Waiarike Institute of Technology Royston Bartholomew 25 July BA5 - PF Olsen 2005 Rotorua Business of the Year 31 July Credit Union Lakeland Employee of the Year and Waiariki Institute of Technology Apprentice of the Year entries close 2 August Quality Systems for Small Businesses McCulloch Business Education 8 August BA5 Rainbow Springs 9 August Achieving a work life balance to increase your own productivity Marketing Techniques 11 August Answering your questions New Zealand Immigration Service 14 August Chamber Executive Board Meeting 16 August Performance Appraisals Waiariki Institute of Technology 22 August BA5 Lakes District Health Board 23 August Working on Employment Issues Your questions answered DavysTabloid Contents Burton 29 August Increase the productivity of your computer Waiariki Institute of Technology June Tabloid |
Contents CHAMBER COMMENCES 2006 RETAIL MAP Rotorua Airport Trans Tasman Passenger Services Business Advisers/Coaches/Consultants Providing Advice in the SME Market Place Residential Property: Investment For Your Superannuation, OR A Mug’s Game? A new member of the team at the Chamber. Don't Ignore Stress In The Workplace Data Technology Helps Catch Criminals In The Act Energy Management and Electricity Savings The Playing Field Doesn’t Stay Flat For Long |
Picture of David Evans
“Running over One Office, the system records the view from 20 different cameras, and can give us a clear picture of the premises at any one time instantaneously,” says Mr. Rutherford. 
Picture Stress 1 and Stress 2
What's needed is to talk with the employee facing the stress, and work with that person to look at their strengths and weaknesses. It could be that one or several of the following might need to happen, to reduce the level of stress:
Lighting accounts for over half of the electricity used in commercial buildings. The following measures can make substantial savings;
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