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Rotorua Chamber of Commerce Tabloid - July 2005
BrightEconomy Bright Future
Rotorua Economic Forum Hailed As Success
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Mayor Kevin Winters delivers the Rotorua Economic Forum's opening address
The 120 Rotorua Economic Forum Attendees
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Rotorua's first ever economic forum has been hailed as a huge success with 120 of the region's key business leaders, politicians and entrepreneurs taking part, and TV One covering the event for its ASB Business programme.
The forum, held on Friday 27 May in Rotorua, was the launching pad for the Rotorua 'Bright Economy' Strategy. It kicked off with a passionate opening address from Rotorua Mayor Kevin Winters, who said he had waited a long time to see forestry/wood processing, farming, tourism and manufacturing sectors all in the same room together, and more importantly celebrating the launch of a united strategy for future growth.
Hon David Cunliffe, Minister for Communications and Information Technology and Associate Minister of Finance, along with Rotorua MP Steve Chadwick, supported Kevin Winters' sentiments and talked about partnerships and working together in formation. Deryck Shaw of industry reference group Vision Rotorua endorsed the forum's objectives, with Rick Vallance also of Vision Rotorua laying down some key challenges about implementation to the Rotorua business community, the council and central government.
Several interactive workshops saw productive discussion around prioritisation
of actions from the strategy. The workshops identified a number of priorities seen as critical to stimulating Rotorua's growth into the future. These included:
- Continued encouragement, promotion and interaction of tourism and retail sectors.
- Development of value-added forestry and wood processing in the region - both stimulating a manufacturing environment, and utilising opportunities currently presented by Rotorua's significant comparative advantages - such as the raw resource, education, manufacturing, and research and development.
- Redevelopment and enhancement of the city's central business district.
- Physical and economic linkages with surrounding areas, especially Tauranga, with opportunities that result from being located next to one of the country's fastest growing regions in terms of investment, markets and business.
- Opportunities created by multiple owned Maori land.
- Further development of destination marketing, including the attraction of visitors, as well as skilled workers, residents and businesses.
- Enhancing the role and voice of youth in the community's development, and in education of practical business, work and life skills.
- Development of a 'one stop shop' regional and business development location.
- Unanimous support for the establishment of the BrightEconomy Advisory Board to drive implementation of the strategy.
Rotorua District Council Chief Executive Peter Guerin concluded the event with an outline of the 'BrightEconomy' Advisory Board's responsibilities and called for expressions of interest from people who could fit the bill.
He said it was to be a competency-based Board with an advisory function, and that the establishment process was to be very public and transparent.
“The Board will be determined by a representative based appointment and review panel, which aims to have the process completed by July 30 .”
“We are looking for people who have a commitment to being part of the economic growth of Rotorua, sound business networks, an understanding of the Rotorua economy, experience in the commercial sector and excellent communication skills.”
Destination Rotorua Economic Development's general manager, Mark Rawson, said the forum provided a positive base from which the Rotorua 'BrightEconomy' project can now grow. “It is up to all of our key stakeholders to play their role in turning the strategies into action.”
He said expressions of interest for the 'BrightEconomy' Advisory Board close on Friday July 1 and a copy of the expressions of interest package is available from www.rotorua-business.com or by calling him at Rotorua District Council on
07 348 4199.
Can I Export My Brand As Well As My Product?
No matter what stage you have reached in exporting your product overseas, you should address branding issues sooner rather than later. The alternative is to run the serious risk of having to withdraw your product from overseas markets and hand over all your profits to another trader whose registered trade mark you have inadvertently infringed. You may also have to pay the other trader's costs for suing you. The fact that you did not intend to encroach on another trader's brand is normally of no consequence.
Conducting Brand Availability Searches
It is possible that someone else may be using, and has registered, the same or similar brand for products in one or more of your export markets. It is strongly recommend that brand availability searches be conducted in each market so that you can assess the prospect of using your brand in each country. Such searches should include the trade mark register in each country and can also include market place searches.
Brand availability searches can be relatively inexpensive, carried out very quickly and provide a level of certainty as well as peace of mind. These searches should be carried out by experienced trade mark lawyers. Ideally they should be carried out before launching your product in each market. However, if you have already launched, you should have the searches done as soon as possible so that you can limit the consequences if a conflicting brand is found.
Applying to Register your Brand Overseas
Assuming your brand is available to use overseas, you should then apply for a trade mark registration. This is particularly important in most civil law countries (Continental Europe, the Middle East, Latin America and much of Asia) where rights are acquired only through registering your brand. It would be a shame to launch your brand overseas only to find that another trader subsequently registers the brand and sues you for trademark infringement. There are many other good reasons to register your brand. One of the most important, from a costs perspective, is that other traders can easily locate your brand when conducting their own availability searches. They are then effectively deterred from using your brand, which saves you the expense of enforcing your rights. Relying on a trade mark registration to stop another trader using your brand is usually far less expensive than relying on the uncertainty of any rights you may have based on the mere use of your brand.
If you have not yet done so, your first step should be to file a trademark application for your brand in New Zealand. In most countries, you will then have six months from the date of filing your New Zealand application to file corresponding applications in your export markets, which will receive a priority date based on the filing date of your New Zealand application.
Finally, it is possible to file a Community TradeMark application and thereby obtain a trademark registration covering all the countries of the European Union. In particular, Community TradeMarks filed before 1 May 2004 will automatically extend to the additional 10 member states which will be added on that date. This means you can have your brand registered in 25 European states all under the one registration. Switzerland and Norway are not European Union members and therefore separate registrations need to be obtained in these countries if you are exporting there.
Conclusion
Go for the certainty of conducting availability searches and then, if your brand is available, registering your valuable export brand in each market. This will avoid downstream disappointments, which could jeopardise the promotion of your branded product or service and ultimately your business.
by Marcus Woodhouse - Barrister and Solicitor specialising in trademarks and branding
A J Park, Intellectual Property Lawyers, Consultants and Patent Attorneys New Zealand and Australia with worldwide connections.
New Team to Lead Chamber
The Annual General Meeting of the Chamber held at the Grand Tiara Hotel on 8 June, featured an election for the governing Executive Board for the first time in recent years. Eleven members had been nominated for the maximum of eight executive positions than can be elected at the Annual General Meeting.
The successful members to guide the organisation for the next twelve months are:
Paul Dunlea
Sealed Air Cryovac
Christa George
Waiariki Institute of Technology
Mike Johnson
Nicara Lakeside Lodge
Rebecca Johnson
RadioWorks
Jeremy Mihaka-Dyer
Boost Young Executives and Rotorua General Practice Group
Steve Pinder
Westpac Banking Corporation
Mark Rawson
Destination Rotorua Economic Development
Jonathan Temm
Davys Burton
Margriet Theron who was re-elected as President, and Chief Executive Officer, Roger Gordon, make up the full executive.
The new constitution that was also adopted at the meeting allows for an additional two members to be co-opted as need is determined. The first meeting of the new Executive was held within a couple of weeks of the AGM and the following working committees were established.
Membership:
Rebecca Johnson (Chair), Steve Pinder, Jeremy Mihaka-Dyer, Mike Johnson.
Chris Innes also joins this committee.
Advocacy:
Margriet Theron (Chair), Jonathan Temm, Mike Johnson, Mark Rawson
Networking:
Mark Rawson (Chair), Christa George, Rebecca Johnson
Finance:
Steve Pinder (Chair), Margriet Theron
Business Training:
Paul Dunlea (Chair), Jeremy Mihaka Dyer, Gary Dender of Waiariki Institute of Technology also joins this committee.
Management and Governance:
Margriet Theron (Chair), Christa George, Jonathan Temm, Mike Johnson.
Business Awards:
Roger Gordon (Chair), Margriet Theron, Steve Pinder, Jeremy Mihaka Dyer.
Jacqui Smith and Jeff Alexander (Event Impressions), Joelene Elliot (Event Venues), and Mary Eriksen (Grand Tiara Hotel) also join this committee.
Sustainable Rotorua Committee:
Ann Nicholas (Chair), Mark Dyer, Margriet Theron, Roger Gordon.
Margriet Theron and Roger Gordon are ex-officio members of all committees. The contact details of all Executive members will be posted on the web-site.
The Property (Relationships) Act 1976 and claims against Estates “Death after Business”
Every business person has to be mindful of how their estate might be involved in proceedings under the Property (Relationships) Act 1976 (“the Act”). You take steps during your lifetime to develop your business; therefore consideration should be given to how it can be protected on your death.
Under the Act if a spouse (which may include a de facto partner of either sex) has been provided for in a Will, they have a choice:
- They can either accept what they have been given under the Will, or
- seek a greater part of your estate by bringing a claim under the Act.
A surviving spouse or partner should receive independent legal advice after your death as to whether what they are getting under the Will is more or less than their entitlement under the Act. If they get less under the Will, they will be advised they can go to the court and claim their full entitlement.
It is often thought that transferring an asset to a trust before death will reduce the potential for litigation over the Will. It can potentially achieve this if there is little left in the deceased's estate for family to claim against. It is, however, important to remember that there are new provisions in the Act make it possible for, say, a widow to claim compensation if, on the death of her husband, her half share of what he owned when he died is less than it would have been because relationship property was earlier put into a trust.
Sometimes a couple think they can dictate what will happen to a particular asset by deciding how they will own it while they are both still alive.
If a house or business property is owned jointly by both parties, then on the death of one of them, the surviving partner carries on owning the property on their own. Sometimes a couple may have worried that the children of one of them from an earlier relationship might want to claim a half share of the asset. They may have relied on their joint ownership of the property to try and ensure that on the death of, say, the husband, the property will be owned solely by the wife. They hoped that the asset will thus never become part of the husband's estate which his children might claim against.
Joint ownership does not, however, provide that sort of protection for a second husband or wife. The children of the husband have the right to claim against the father's estate under the Family Protection Act 1955 if they think they have not been properly provided for. They can also insist that the Trustees of their father's estate make a claim against the second wife under the Act so that his half share of the asset comes back into his estate for them to claim against. The Act makes it clear that the estate's entitlement in respect of the asset will be established on the basis of how it was owned immediately before his death rather than afterwards.
Through superannuation schemes a partner or wife might also be entitled to a substantial capital payment from the scheme when a member dies. It is worth remembering, however, that what a partner or spouse receives by way of a death payout from a superannuation scheme, is relationship property under the Act. The trustees of an estate could be asked to get half that payment back to the estate, again so that children of the deceased might try to benefit from some of the superannuation payment.
The potential for claims to be made under the Act will, however, reduce considerably if each spouse or de facto partner understands what the other is doing, each knows what the other owns, knows it is being dealt with in Wills, and agrees with what each is trying to achieve.
There is also a way of ensuring that a surviving partner does not bring a claim under the Act, or that family members cannot pressure the trustees of an estate to bring a claim against a surviving partner for their benefit. A husband and wife or de facto partners can enter into an agreement under the Act by which they agree on how their property is to be shared between them, either when they are alive or when one of them dies. If such an agreement is to withstand subsequent claims, each party will have to take independent legal advice as to its effect on their legal rights. A solicitor or other approved witness will also have to certify that they explained its nature and the effect to the party they acted for.
Relationship property entitlements continue after the death of a spouse or de facto partner. If, while you are alive, you are transferring property to another party such as a Trust, and when you are making a Will, you and your lawyer need to know what your partner/spouse's relationship property entitlements might be. You need to know whether what you are doing will leave your partner with less than his or her entitlement. If these issues are not dealt with carefully at the time things are done, the risks of litigation increase later on.
A prudent business person should protect their business, not just during their business life, but should do everything possible to ensure that, on their death, the results of their efforts go to those whom they consider are entitled to the benefits.
BUYING AND MANAGEMENT TIPS FOR ELECTRICITY AND GAS
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In Association with Energy Managers
| In an increasingly specialised world, no matter how good we are at buying, we can't cover all bases. All businesses, whether large or small, publicly or privately owned, use utilities. The common denominator with electricity and natural gas is that they have both been characterised in recent years by sharply rising prices and greatly reduced consumer purchasing power. It is not all 'doom and gloom' though, as there are practical steps that you can take to give you a buying edge.
The supply of electricity is dominated by five national energy generators/retailers and regional suppliers, Bay of Plenty Energy and King Country Energy. To control your electricity costs, you need to negotiate the best possible energy prices, given current market realities, ensure that you are optimising your use of energy. When negotiating a new two or three-year time of use Energy Supply Agreement, it is tactically better to have a contract expiring in summer rather than in the middle of winter. Also, given that over a third of the typical electricity bill relates to line charges, it is important that, where you are specifically charged for your connected capacity, you check that this capacity is appropriate given your maximum demand in practice. You also need to verify that you are not being charged a reactive load charge i.e. indicative of an inefficient use of energy.
We had a recent case where a new client was paying a $4500 a year reactive load charge (equivalent to approximately 4.5% of its total electricity expenditure) and had not realised it. These charges can be avoided if you invest in power factor correction equipment with a typical financial payback of +/- three years.
When it comes to your energy usage and its management, you need to understand how much it is costing you and how it is being used.
There are significant cost savings to be made through a structured energy management plan.
There are two basic management tools.
The first management tool is to use an accredited energy auditor like Rotorua-based Power Solutions Ltd to assist you compile an energy management plan. The first step is to carry out either a level one (walk through) or level two (detailed) energy audit. Here it should be noted that the Energy Efficiency & Conservation Authority (EECA) provides subsidies covering up to 50% of accredited auditor costs (up to an existing $10000 limit) for approved clients.
Secondly, you can invest in a computerised energy management system. These are expensive, but the related computer software gives you the ability to regulate such things as room temperatures and to switch power off in specific rooms and buildings or plant, whether by movement detectors or time switches. These are best provided once the above audit has been completed and the plan is in place.
One final point with energy supply. Traditionally time-of-use clients have been charged on a fixed price variable volume basis i.e. with no volume or price risk to the customer. Some energy retailers are now promoting customers having a degree of exposure to spot market pricing. Over a two or three-year period this approach can be cost effective, provided the retailer's mark-up on spot prices is competitive. But you need to be fully aware that spot rates can increase very sharply with little or no advance warning. At times like this, your short-term energy costs can escalate drastically and it can prove difficult to revert to contracted energy rates.
The supply of electricity and natural gas are inextricably linked. Approximately 25% of electricity generation is natural gas based and three of the six main gas retailers also retail electricity. The key thing to remember with gas supply is that roughly 70% of it comes from one field, Maui, that is due to run dry by 2010.
Replacement fields are coming on lines but they are much smaller and more expensive to operate. They also have less flexibility in production. The implications of this are that gas prices will continue to increase for the foreseeable future. When negotiating Gas Supply Agreements, commercial sites need to ensure that different supply proposals are compared on a like-for-like basis in terms of the overall natural gas price and the price breakdown of the individual gas, metering, local network and transmission cost components. You also need to check the price adjustment mechanism per cost component and the length of guaranteed supply term offered by the competing suppliers.
Power Solutions Ltd is the regions only accredited Energy Managers and is ideally suited to assist you save money on your energy bills at purchase and on an ongoing basis.
Total Utilities Management Group Ltd specialises in the procurement of electricity, natural gas, telecommunication services and trade waste services.
Our local agents in Rotorua,
Power Solutions Ltd (David McNiven)
can be contacted at:
POWER SOLUTIONS LTD
PO Box 691
ROTORUA
Tel: 07 347 8385
Fax: 07 347 8321
Email:
Finding the Right Staff with the Right Stuff
Improving your staff selection and development
practices can significantly contribute to the bottom line.
Selecting the right people for the right position is fundamental to the long-term success and viability of any organisation, industry and indeed economy. Among other things, unsuitable employees take longer to train, tend to resign early, find work stressful, quickly become 'performance issues', are less productive and generally don't fit into the team.
How can we then ensure that we make better selection of employees? Improving recruitment and selection processes, along with on-going career development will go a long way towards ensuring that employers make better and hence more cost effective employment decisions.
Effective selection utilises personality tests, ability and aptitude tests, in conjunction with structured interviewing. The usefulness of personality tests has long been debated, but continual research indicates that certain personality traits are strong predictors of job performance. For example, 'conscientious' (as defined by dependability and achievement striving), appears to be a very robust, valid predictor of job performance and trainability - regardless of the job role.
There is also an overwhelming amount of research to suggest that 'neuroticism' (ie anxiety, depression or personal insecurity) is also highly correlated with the level of one's job success with those people who are prone to anxiousness and insecurity less likely to perform at an optimum level. New legislation related to stress in the workplace makes such testing even more significant.
How can you pre-determine if a candidate is, for example, either conscientious or overly anxious? Referees can tell you from their perspective, but this is a very subjective means of gathering this information. Standardised testing gives you the objectivity and validity needed to make sound judgements on candidates.
Ability and aptitude tests can measure a wide range of areas, including general problem-solving ability (measures of verbal, numerical and abstract reasoning), spatial and mechanical reasoning, as well as specific clerical skills. Some test sales ability, indicating the type of selling 'style' a candidate might prefer, while other tests can give a picture of industrial proficiency or even cultural knowledge. Such tests can form the basis for further upskilling resulting in more relevant, targeted and cost effective training.
Recently I worked with a client who had been interviewed for a clerical position with a local employer. The employer spent two days interviewing candidates for the position, failing to ask the pertinent questions, and having no knowledge of their personality or skills other than what appeared in their CV. In this worst practice case study the employer gained little knowledge about the candidates and had to rely on 'gut' feeling about their suitability for the position. It came as no surprise that the person selected for the position left after just a few weeks. Such practices at any level are a recipe for failure with implications for workplace stress, non-performance and resultant personal grievances and employment related legal issues.
For employers there are some clear messages to be drawn from this. Firstly, don't disregard personality assessment unless you want to undermine your ability to predict future job performance. Secondly, if you want to make your selection decisions with confidence, then it is in your best interests to utilise tests that can provide an insight into the candidate's personality, as well as their abilities and attributes.
Career development is fast replacing non-specific on-job training and PD (professional development) courses among enlightened employers who realise that employees are looking for more than just monetary rewards from their work. Personal growth and self development are work values consistently highly rated by employees, and, unless employers are prepared to assist workers develop their careers, they will leave to pursue it elsewhere.
Career Development, or sometimes called Career Coaching, can provide organi-zations with a means of motivating people and maximising their output, while gaining a greater insight and understanding of the people they have working for them. This helps ensure best fit in the job, leading to greater job satisfaction and productivity.
There is a common myth that such services are expensive, but failure to utilise best practice can result in other costs, such as repeated recruitment, claims for stress, personal grievances, and the complexities of firing staff, not to mention their poor performance and productivity in the first place. A new field of HR Metrics is now being used to illustrate the cost benefits of utilising better selection and training processes. A complex calculation involving the number of staff recruited, the length of tenure, the selection processes used and the costs of those services can show the return on investment (ROI) achievable from using such services. Even small improvements in the use of selection tools can result in almost immediate cost recovery.
When the labour market is tight and employers may feel they have little option but to sign on staff to fill vacancies, use of good personality and ability tests combined with career development can contribute significantly to the overall job performance of the workforce. Greater insight into staff personalities can determine, for example, the types of team roles people might fulfil or who they might best work with, what tasks to give them or what style of leadership they respond to best.
The Career Planning Centre in Marguerita Street has been providing Career Development Services to private clients for eight years now. More recently, they have been conducting psychometric assessments for selection purposes, and career development programmes for corporate clients. This move is consistent with the convergence of the careers industry (that has traditionalyl represented the individual client) with the HR industry (that has traditionally represented the employer) to the benefit of all concerned.
Gary McAuliffe
Career Planning Centre, Rotorua
Westpac
Over the last couple of months the NZ news seems to be full of economic indicators pointing towards our much lauded “softening”. The big question for business is, “Has the much-anticipated slowdown actually started and what does this mean for us?”
In May, the NBNZ business confidence survey registered a fifth successive fall. General business sentiment plunged to a 17-year low of net -56.7% from -48% in April. Firms' “own activity” expectations, the most important indicator in the survey, also fell further to net 8.9% from 14.8%. That is the lowest “own activity” reading since April 2003, when the SARS crisis hit and brought fears that the tourism industry would take a serious blow. It is clear that business thinks things will get worse.
In April housing/apartment consents dropped 33.9% relative to March in seasonally adjusted terms. This is considerably weaker than expected, even though March changes to building regulations and increased building levies meant that April consents would have been lower anyway.
Apartment consents dropped back by over 700 to 154, accounting for the lowest proportion of consents for 18 months. Moreover, ex-apartment consent issuance fell 11.6% in seasonally adjusted terms, suggesting there is more to the slump than timing (combined, March and April consents were very low). House prices also reversed some of their recent strengths, according to the REINZ, although prices are still quite robust.
These developments join a drop in hours worked, weak wholesale trade, declining equity prices, and a higher unemployment rate in signalling that the economy is losing some momentum.
But, to address the balance of mixed messages, there have still been some economic positives. Credit growth remains strong, and the Government Budget will bring further stimulus in coming years. Q1 retail sales rose 1.3% (2.0% excluding automotive components) and building work rose 6.2%, the latter indicating that construction has rebounded from a recent soft patch. However, in both cases a degree of pick-up was widely anticipated after Q4's weak growth.
Interest rates remain stable for now, with the RBNZ keeping the OCR unchanged at 6.75% on June 9. However, the decision was described as "not easy" and "a close call", so there is still some risk of a rate increase in late July.
As anticipated, the recent decision was accompanied by tough talk: "Further tightening in monetary policy would likely be required if there are upside surprises to the inflation outlook". However, we find some of the reasoning behind that assessment to be wanting. The RBNZ
has interpreted recent data as
being marginally stronger than expected in terms of medium term inflation
pressures, even though it admits that it overestimated the strength of the
economy in 2004.
The RBNZ's 'hawkish stance' may continue to underpin the NZ dollar in the short term, a boon for importers, but still leaving exporters under pressure. However, any further indications that growth will slow sharply beyond Q1 would be interpreted as undermining the RBNZ's position, and undermine the NZD as well.
The bottom line is that messages are mixed, but the slowdown has certainly started. We need more than a crystal ball to predict exactly what the mid-term implications will be and to consider positively that a slowdown in growth can still mean we are growing at a slower rate. For business, the message is to stick to the business and financial plans and apply some rigour and discipline in times of uncertainty until the picture becomes clearer. In times of growth, it is easy to forget about the stricter disciplines, but right now we suggest going back to the books.
Election Business Breakfasts
Over the past couple of months the Chamber has offered a series of successful Election Business Breakfasts. The concept was simple - a key note guest speaker from each of the major political parties to speak on their policy for business. We have requested that each speaker provide an article capturing the key points of their presentation.
We have included all programmed speakers including those where the breakfast did not proceed.
Hon Pete Hodgson MP
Minister of Commerce
Labor Party
Making Life Easier For Small Business
It was a pleasure to meet with many of you in Rotorua in May and I'm privileged to have this opportunity to outline some of the steps this government is taking to increase business opportunities and reduce compliance costs.
Taxes, compliance costs and pressures in the labour market, particularly for skilled workers, often feature high in the concerns of business people.
While others see changes to headline tax rates as the panacea for all ills, many in business know that the amount of bang you get for your buck depends on where you spend it.
The targeted package of business tax changes announced in Budget 2005 amounts to $1.42 billion over four years and is the equivalent of around a two per cent cut in the headline business tax rate.
So what are businesses going to get for their money?
The major changes are to depreciation and fringe benefit tax (FBT).
Depreciation rates are being more closely aligned with the useful life of assets. A double declining balance method has been announced, allowing an asset with a ten year economic life to be written off at a rate of 20 per cent diminishing value.
For equipment such as laptops, the change will result in a 25 per cent increase in the allowable depreciation deduction rate to 60 per cent per year.
The threshold for low value assets has also been increased from $200 to $500.
With FBT changes, many SMEs will no longer have to file FBT returns or pay FBT now that the minimum value thresholds applying to unclassified fringe benefits have been raised. The employee
minimum value threshold will go up from $75 to $200 per quarter, and the employer threshold will rise from $450 a quarter to $15,000 a year.
In addition, the private use of employer owned business tools will be exempted from FBT where they are provided primarily for business purposes and where they cost less than $5,000 each. This will remove the need for employers to monitor and value the private use of these items.
A host of other changes will also make life easier for businesses:
- Payroll agents are to be paid a subsidy for meeting the PAYE-related compliance costs faced by small employers.
- GST and Provisional tax payment dates are to be aligned.
- Giving businesses the option of basing their provisional tax payments on their GST turnover.
- Improving access to tax deductions for R&D expenditure.
In addition to these changes, the government will continue to invest a further $45 million in industry training to address the skills shortage. This will expand Modern Apprenticeships and Industry Training to boost workforce productivity, child care subsidies will be extended to give more choice to people who want to work, and more money is directed at getting more people off a benefit and into work.
The Working for Families package, and in particular the in-work payment, also does a great deal to make work pay for more people and encourage them into work.
All of these moves are designed to help business grow and, in many cases, lower their compliance costs.
New Zealand has experienced near unprecedented levels of economic, business and employment growth under the prudent fiscal management of this Labour-led government.
Rodney Hyde MP
Leader ACT Party
It remains beautiful and we continue to prosper despite our politicians best efforts at making it next to impossible. Doing business in New Zealand has never been tougher. Our employment law is too tough and too uncertain.
Interest rates are up, strikes are up, forecast growth is down and business confidence has slumped.
National's economic policy is better than Labour's, but not much. To save squabbling, they've agreed with Labour's policies. Hence their flip-flops on holidays, kiwibank, the Cullen fund, and taxes.
We need vision and leadership to match our potential.
We need government off our backs and out of our pockets.
Law and order
Under Labour, violent crime has increased 14 percent. Police are too stretched with violent crime to attend 'lesser' crimes.
New Zealanders suffer one of the highest crime rates in the developed world.
ACT's plan is:
- Zero tolerance policing, with police acting on all crimes no matter how small.
- Abolish parole. If the judge sentences someone to two years jail. They will serve two years jail.
- More police. We are about 20% below Australia's policing levels. New Zealand could do with another 2,000 police.
Fixing the tax system
Tax is a major cost to businesses, to people, and to our economic fortunes as a nation.
Under Labour, the tax take has grown by 36%. The average household is no better off in real terms than they were in 1999.
Company tax rates have fallen internationally, leaving New Zealand 4% above the average OECD company tax rate and off the radar for foreign investment.
ACT is the party that best understands tax. ACT's tax plan is:
- A simple two-tier tax scale.
- A low 15% rate all the way up to $38,000. Then a top rate of 25% for people earning over that, and for company tax too. For the average worker, that's an extra $2000 a year in take-home pay.
The Treasury says it'll mean an extra 1% growth. That's what we need if we are ever going to make our way back into the top half of the OECD.
Tax cuts are good for business, good for workers and good for the country.
Small businesses are under attack from red tape. We need to deal with the problem fast. ACT's plan is:
- A Regulatory Responsibility Act, demanding government first answer a few basic questions such as does the proposed regulation pinch property rights, is compensation being paid, is it necessary?
- Gutting laws that impose the greatest compliance costs on business - the Resource Management Act, Employ-ment Relations Act, Health and Safety in Employment Act, and Holidays Act; re-writing to protect private property rights and freedom to contract.
Lower taxes and lower compliance costs mean higher growth rates. Higher growth and greater prosperity means we can look after our elderly better, our young, have better housing, better health care, better education.
Voters have two votes this election. The ACT party is just asking for one of them. The party vote. That's a vote for less tax, less government and a freer more prosperous future.
Peter Dunne MP
Leader United Future
United Future and business policy
United Future is committed to improving the welfare of the New Zealand family.
In our view, one of the best ways of achieving this is to guarantee the best possible income for families and preferably to do it through the family's own efforts rather than through handouts from the State.
Since small businesses make up the vast majority of the New Zealand commercial environment, and since small businesses provide most employment in New Zealand, it follows that a favourable environment for small business will result in long-term, sustainable benefits for the New Zealand family.
In line with that thinking, United Future wants to remove all possible barriers to the operations of small (and not-so-small) business.
The practical measures we are proposing include:
- United Future would review the Resource Management Act every two years to make sure it's serving the country well.
- It will be audited to make sure that it's providing certainty, shortening time-lines and reducing user costs - and who knows we might even get the odd V8 race back into this country!
- United Future is committed
to improving transport infra-structure, giving priority to areas where roading constraints are holding back economic growth and development.
- A good transport system is the lifeblood of a vibrant business sector - and right now that lifeblood isn't circulating freely.
- United Future will also undertake an immediate review of all legislation and regulations that impose coercive powers and administrative burdens on businesses to ensure that the impact on business is minimised, consistent with the overall public interest.
- Retain the Ministry of Economic Development, but refocus it away from 'picking winners' and towards removing impediments to business.
- Reduce company tax to 30 cents in the dollar over the next three years.
- Enshrine property rights in the New Zealand Bill of Rights Act.
- Review general grievance and dismissal procedures in the Employment Relations Act.
- Allow employers to take on new employees for a trial period of up to six months.
We believe these are practical commonsense measures that will free employers to take on more staff, providing greater opportunities for kiwi families and the community.
Rod Donald MP
Co-leader Green Party
“Greens Mean Business”
The Green Party recognises that successful businesses are crucial to a thriving economy.
We believe the government's contribution to its partnership with the business community should include:
- facilitating a stable macro-economic environment;
- providing essential infrastructure;
- ensuring we have a healthy, well educated workforce; and
- establishing the right regulatory framework
- so that businesses can get on with their business.
Getting the NZ dollar down to where it belongs will be our top business priority after the election. Exporters, domestic manufacturers and tourism operators are all hurting because our dollar is overvalued. This transition will need to be managed carefully to ensure that inflation remains under control.
Our second business priority is a modest cut in the company tax rate, but only if it is accompanied by a suite of eco-taxes. We would also make the first $5000 of income, tax-free. That means an extra $15 a week in everyone's pocket.
Green tax policy is designed to shift the burden of taxation off work and enterprise and onto waste and pollution. In practice that means a carbon tax, a levy on hazardous substances, waste taxes, and resource levies on extractive industries.
Our third business priority is to end the government's fixation with free trade and foreign ownership and replace them with a strong “Buy NZ Made” campaign and tighter foreign investment rules.
New Zealand's lopsided international trading and investment relationship is not only the root cause of our record $4.3 billion trade deficit, our $9.3 billion current a/c deficit and our $123 billion net foreign debt, but is also the reason why our lean, mean manufacturing businesses are struggling to survive.
We want Kiwi businesses to pay their workers at least $12 an hour, as well as meet OSH standards and comply with the RMA, but they shouldn't then be forced to compete against sweat-shop imports where third world workers, including children and forced labour, have been paid less than $1 an hour and made to work in inhumane conditions.
Neither should Kiwi businesses be expected to look after the environment if we don't ensure that imports meet the same environmental standards. We would protect them from unfair competition and steer our economy towards sustainability and self reliance through a combination of tariffs, import controls and international rules and standards.
But it's not enough to get the economy out of the red and back in the black. We need to green it as well.
NZ has a small window of opportunity to transform our economy from one that depletes and wastes resources and pollutes the environment into one that is genuinely clean and green. A green economy is not about doing without, it's about being more productive and less wasteful - creating better, more durable products that last longer and consume less resources.
A green economy offers tremendous opportunities for good businesses to flourish. And a green government would make it possible for that to happen.
John Key MP
Finance Spokesman
National Party
‘Decent Tax Cuts For All’
In essence, Budget 2005 was uninspiring, selfish and does very little for anyone. Economists have described it as “predictable but disappointing." They said it "offers nothing for middle (and upper) income New Zealand," and would “simply restore lost purchasing power”.
It's little wonder that about 600 Kiwis will board a plane bound for a new life in Australia this week. The classic Labour tax and spend Budget will do nothing to slow the exodus. In fact, with its competitive changes to tax, Australia has launched a charm offensive on our best and brightest.
This Budget is an opportunity lost, not just for Labour, but for all New Zealanders. It confirms that Labour has blown all the gains from a relatively buoyant economy, and it is further evidence that Labour has no ability to set sensible spending priorities.
The laughable tax changes mean that by the time the tax tinkering takes effect, hard-working Kiwis will have already paid for it three times over.
Take someone on $40,000 a year: Michael Cullen's tax fiddle will reduce their total tax by a mere $275 per year or $5.30 a week. But, because the changes have been delayed for three years, the Government will have taken another $825 off them by the time it is implemented.
Throw in the carbon tax, which will cost every power consumer a minimum of $200 a year. National thinks it could rise as high as $400 a year, and Labour's tax tinkering looks even more pathetic.
It's highway robbery. Middle New Zealanders are increasingly
frustrated that Michael Cullen has opted to waste vast sums of money on poorly targeted spending programmes, rather than return some of it to taxpayers.
Even Labour's first-home buyer scheme is a con and an insult to the most vulnerable members of society. By 2010 or 2012 we'll be lucky if a $5,000 subsidy on a home deposit is enough to put a down payment on a pup tent.
And the so-called KiwiSaver programme is all smoke and mirrors as well. While people will probably take up the $1,000 Government contribution, it is unlikely a
one-off contribution by taxpayers
will change the spending habits of
a life-time.
Of course savings should be encouraged, but the fastest way to increase savings is to raise the wages of the low-income earners.
Budget '05 was not the game breaker it should have been. It is telling taxpayers that they can earn it but they won't get to spend or save it.
Budget '05 confirmed there is no commitment from this Government to reduce the tax burden on working New Zealanders.
The next National Government will focus on reducing the size of the bureaucracy, with the savings redirected to the frontline services of core government activities.
We will provide decent tax cuts for all New Zealanders, build more roads and spend petrol tax on those roads.
National will overhaul the RMA and devote education dollars to where they will make a difference to things like apprenticeships, rather than sing-along courses. We will demand more police and safer communities.
New Zealand needs a tax and benefit system that delivers improved incentives to work, and delivers better rewards from work - and they will get it under National.
David Jesze MP
Finance Spokesman
Destiny NZ Party
Economics and Traditional Family Values
Despite all recent attempts from the Beehive to tell us otherwise, Economics cannot be viewed as a mere rational science, but is based on the ideology of the decision maker.
Once we have covered the basics of food, housing, clothing, we spend money on what is important to us and try to save on what we consider less important. This is true for us as individual consumers and can equally be applied to fiscal expenditure.
Apart from increasing dozens of levies and taxes, many recent ideology-driven "achievements" of the current government have substantiated this claim:
- Increased taxes and wealth redistribution (In the last 5 years the personal income tax collected has risen 40% and business by 57%)
- Increased State Sector Wage Bill by $750 million to $1 billion dollars per year
- Legalised prostitution leading to an explosion in street and child prostitution
- Introduced fastest ever same-sex marriage laws (against overwhelming public opposition - over 90% of submissions)
- Increased teenage pregnancies and overall abortions to a record 18,500 abortions in 2003!
- Funded sex-change operations paid for by your taxes
While the above list is by no means complete, it is fairly easy to see the link between the social engineering and the effect it is having on our society, despite the attempt to politically correct the outcomes.
Destiny NZ believes that all democratically elected parties should be transparent about their value and belief system and outline clearly what worldview respective policies are based on.
Founded on traditional Christian values, Destiny New Zealand was launched to protect, empower and prosper New Zealand families. All policies focus on the next generation, i.e. how this will benefit or disadvantage our children. As we are only stewards of land, life, resources and assets, we have a responsibility to pass on a healthy legacy to our children, instead of a deficit.
Regarding the business sector, Destiny NZ considers business owners to be wealth creators and therefore should be encouraged in every possible way instead of being punished through anti-business legislation. A policy priority in this area includes the lowering of tax rates. (Please view our website below for details). Interestingly enough, the German Labour party recently launched an "anti-business campaign" in order to go "back to the roots" of true Labour values.
Every family is a small domestic economic unit of its own. Healthy and prosperous families underpin a healthy and prosperous nation. With this in mind, Destiny NZ has identified a number of initiatives that would strengthen the family unit. In addition to the pursuit of lower taxes, thereby keeping more money in the home, the party would also pursue one, or a number of the additional marriage/family-friendly policies outlined below:
- Tax credits in the form of 'marriage milestones' for fixed terms of unbroken marriage i.e. years 5, 10, 15 & 20, etc.
- Funding assistance for married first-home buyers.
- Greater financial support for full-time mothers.
- Income splitting for marriage-centred families to alleviate the tax burden for single income families.
No other party carries traditional family values like Destiny New Zealand, and if our families are healthy, our society will reflect this. For the Election 2005, traditional
family values will at least be equally important to economic performance.
For further information please view www.destinynz.org.nz David Jesze can be contacted on
'I'm a really fast bussmussmun!’
Third Generation for Rotorua
Third generation mobile phone services have long been touted as the 'Holy Grail' of the global telecommunications industry. Telecom is expanding its coverage of Mobile Broadband and Rotorua, Tauranga, Whakatane and Tokoroa are some of the many cities that will get the service by the end of the year.
Telecom's Next Generation Mobile Services first brought 3G communications to New Zealand in November 2004 with the launch of the high-speed mobile broadband network. This extra speed is also enabling a raft of information and entertainment services. Since last year, Telecom has, on average, rolled-out a new service every month, with among others the introduction of Push 2 Talk™, streaming Video Clips, Video Messaging and Song ID, all of which Rotorua users already have access to on the 027 network.
The extra speed that third generation offers older mobile technologies enhances the ability of business people to continue working when away from the office, and enables richer entertainment and communications services to be delivered to mobile phone users wherever they may be. It has been a catalyst for New Zealanders to consider new possibilities for business and leisure, by changing the way they view their mobile phone. The T3G phone is not just a communications tool, but can also be a business and entertainment 'centre'.
While there may be negligible difference between Mobile Broadband and other data networks in transmitting a single page document, Mobile Broadband's extra speed makes all the difference in downloading a PowerPoint presentation, schematic diagrams or graphic files or photos, or answering a backlog of emails while waiting for a flight. With Mobile Broadband, mobile devices are as functional as a desktop PC.
T3G has given New Zealanders a new way of thinking about their mobile phone, transforming it from a simple communication device into a valuable business, entertainment and information tool.
Work more efficiently with Push 2 Talk
Push 2 Talk (P2T) allows you to use your mobile like a walkie talkie, connecting you with up to five other P2T users at the same time, and provides a whole new business advantage.
Phone tag is a thing of the past with P2T because you can contact a group simultaneously. Co-ordinating work and passing on information can be done more efficiently. That means you spend less time speaking on the phone and more time getting on with the work.
P2T is not just a convenient way to have lots of short conversations with team members; it's more cost effective than making separate mobile calls. With Telecom, P2T uses the 027 network, so you can keep in touch from almost anywhere in New Zealand, giving more range than traditional walkie talkies.
Businesses are also using the walkie talkie capability of P2T to hold impromptu audio conferences and to quickly consult other team members.
For example, staff working front-of-office with the public can rapidly communicate with others behind the scenes without the need for noisy intercoms. They can make quick, discreet calls to ask for any additional information they need to close a deal or check if alternative items are in stock.
P2T is particularly useful for field services' staff because they can more easily communicate with each other to arrange meetings, get extra advice to resolve a problem, or quickly locate the parts and equipment they need.
Because staff can communicate with up to five people at once, there's less time phoning around and less room for error. That's because everyone is receiving the information they need at once.
Chubb is just one of a number of customers that has been trialling Telecom's P2T in recent months and it says the results have been impressive.
“Instead of carrying an RT and a mobile phone, the team has an all-in-one device. This means that they can use the Telecom Push 2 Talk phone like an RT to make quick reports to each other and base, and also take traditional phone calls from customers,” says Chubb's David Forster.
“For staff without RTs, Push 2 Talk enables us to manage our team with a couple of pushes of a button. This means we get things done in one go, which saves time.”
Win Telecom Home Business of the Year
Rotorua, like most cities, has a growing number of people working from home. To support New Zealand's 200,000 home businesses Telecom runs a home business programme offering special benefits to home business owners. Telecom also runs the Telecom Home Business of the Year awards.
The search has just started for this year's outstanding home businesses. There are three award categories: Inspirational Achievement, Best Use of Communications Services and Business Excellence. Each category winner will receive a technology prize package worth $5000 and the overall Supreme Winner will win an Air New Zealand Luxury Mystery Break weekend for two including two nights accommodation, in addition to the technology makeover.
If you believe your home business has what it takes to stand out in one of the three categories - Inspirational Achievement, Best Use of Communications Services or Business Excellence - tell Telecom in no more than 1000 words what business you're in, why and how you got started, how you measure your business goals, how these have evolved, and what makes your business special.
To win the Inspirational Achievement category, you'll also need to tell the judges about the challenges you've faced and how you beat them.
If you're entering the Best Use of Communications Services category you'll need to explain how they help you to achieve your business and lifestyle goals.
And the Business Excellence category is just that convince the judges you have a winning formula when it comes to identifying your business goals, who and where your target market is, and how you've met your financial targets. They will also want to hear about your future business plans.
To enter the Telecom Home Business of the Year online go to www.telecom.co.nz/ homebusiness/competition or post your written entry to: Telecom Home Business Competition, Private Bag 92028, Auckland. A separate entry is required for each category. Please indicate on your entry the category or categories you wish to enter and remember to include your name, address, contact phone number and Telecom account number. Entries close at 5pm on 19 August 2005. Visit www.telecom.co.nz/homebusiness/ competition for full competition terms and conditions
Australia vs New Zealand
To many Kiwis, the grass is greener on the other side of the fence. The number of Kiwis in Queensland is heading towards one in four. Friends of mine from Whakatane met several couples they had not seen in thirty years when they visited the Gold Coast!
The “brain drain” issue is back in the media with a vengeance, as is the discussion around an increasing rift between net pay percentage in New Zealand and Australia.
The figures certainly seem to tell the story, with wage growth in Australia easily surpassing that in New Zealand. In the five years to last November, Australians' average weekly earnings rose 27.5%, from $A801.60 to $A1021.90. In New Zealand, average weekly incomes for the five years to last June went up 22.3%, from $619 to $757. But the cost of living in Australia is also higher and this too seems to be on the increase. Mercer's Cost of Living Survey for 2004 ranked Sydney as the 20th most expensive city in the world, with Brisbane and Melbourne coming in at 67th and 87th. Auckland, in comparison, came in at 80th.
In terms of kiwis jumping the ditch, Statistics New Zealand figures show that 31,043 people emigrated to Australia in the year to the end of March - a 21% increase on the previous year. Put into context, New Zealand has the greatest number of skilled workers living abroad of any developed nation, and most of them are in Australia. Local employers are starting to feel the pinch. Rotorua Florists recently featured in an article in the New Zealand Herald over their struggle to recruit a florist from within New Zealand. A German florist eventually filled the post. Scion (formerly known as Forest Research), as the third largest employer in Rotorua, reports that they too are experiencing a noted decrease in applications across all advertised positions.
In terms of salary groups, starting salaries for primary and secondary teachers are around the same between the two countries $30,000 $36,000. Similarly, Science graduates across all disciplines appear to be on an equal footing. Of course, if you are prepared to work in the outback, or in a hazardous role such as welding on one of the large pipelines, or working on an offshore oil platform, there are fabulous money-making opportunities, even if that type of work isn't sustainable for the rest of your working life, and the pay will be more than many similar jobs available in New Zealand.
In reality, however, if you earn $40,000 per annum in New Zealand you should aim for earning at least A$40,000 pa in Australia, as houses, cars, health insurance, for example, are likely to bite a bit more where it hurts. And - when you get that all desired pay rise, you'll need it - the top tax rate in Australia is 47% compared to New Zealand's 39%. Goods and Services Tax (GST), on the other hand, is at a rate of 10% across the Tasman compared to New Zealand's 12.5%.
For many industries, such as banking, New Zealand has ended up as a kind of branch economy of Australia. Many of the functions of Australian banks, such as emerging markets, futures, and options and other items essential for the running of an international bank, are run from offices in Sydney and Melbourne rather than from New Zealand.
In the light of the pay disparity between Australia and New Zealand and the acute skill shortage we are facing, the challenge for the New Zealand employer is to:
- Pay market rates.
- Focus on retention strategies and succession planning.
- Promote the work-life balance.
More and more candidates are making career and job choices around lifestyle factors. For Rotorua-based businesses, hammering this home during the recruitment process is a key part of attracting candidates. Scion reports that several key positions have recently attracted young professionals wanting to escape Auckland house prices and travelling times. “Our new staff have been pleasantly surprised by the affordable lifestyle opportunities and beautiful environment we have here in Rotorua”, reports Louise Alexandra, HR Advisor. “It's important to be as flexible as you can around the working environment”, says Louise. “We are flexible with our working arrangements, which can stretch from working from home if the kids are sick to bringing your dog to work, but today it’s also about being a bit smarter with recruitment. The days are gone when you could draft an advertisement and watch the candidates rock in. You need to get out there and talk to recruiting managers and think: Is there someone out there I met at a conference who could do this job?”
Ironically, the average wage of New Zealanders who work in Australia is actually above the average wage of Australians in Australia! Try telling that to the average Australian who hammers on about the idea of the dole-collecting Kiwi living in Australia! Overall New Zealand is not such a bad place to live!
Boost is the young managers' network for
Rotorua. Its membership is drawn from the diverse range of industries doing business in the Rotorua District. Boost writes a regular article for the Chamber Tabloid and meets once a month. If you want to find out more about Boost, contact
Jeremy Mihaka-Dyer on 029 349 3563 or
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