Moving to the Cloud isn’t enough

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Over the second half of the last decade we have seen the progression and growth of the tech sector all but explode and stamp its claim on the world’s business landscape. These developments have revolutionised the way that businesses operate and streamlined many of their day to day processes.

Accountants may appear to be on the endangered species list in this era of rapidly-increasing automation, but we’re finding that as Business Advisors we are adapting to the changing landscape, working diligently to stay ahead of the curve and thinking differently to stay relevant in order to assure demand for our services in the future….

The business landscape has gone through such significant changes over the last decade, particularly regarding the utilisation of technology in even the most basic of businesses that it wouldn’t be surprising to envisage a period of stability or cooling-off as business operators come to grips with the raft of tools now available to them – however this seems very unlikely. It is within the next decade that we are likely to see which businesses can thrive in this new landscape and those which may fall by the wayside through their own inactivity or inability to embrace change.

The really exciting element from our perspective is how Hawke’s Bay has managed to position itself at the forefront of this change. Hawke’s Bay is now seen as a booming business economy that has the required elements to expedite the achievement of business goals. This teamed with the Bay’s reputation for true work/life balance has ensured that the New Zealand business community stands up and takes notice of our little slice of paradise. This as well as our own local success stories such as the Napier Port, Ahuriri Tech Hub and the Airport expansion project has enticed a range of business investors and opportunities to our region.

Dynamism is a fundamental component of many successful businesses and the required strategy can dictate short timeframes for growth, sale & purchase and market penetration

opportunities. This means we really need compliance and reporting to run like clockwork, with the data available at our fingertips. Neither we as advisors nor you as business owners can afford to waste time on historical results.

One change by product is how we work to align the current business environment, technology and new generations entering the workforce together. This is a fundamentally important investment for every organisation, and our clients value good advice around what works and what to do when it doesn’t.

Futurists talk of the threat that Artificial Intelligence poses to so many businesses by manipulating the way in which we conduct our business. We see this advancement and evolution

signalling a somewhat inevitable move towards robotics and automation taking over the logical, predicable and monotonous tasks within society. And while the further development and future influence of AI is uncertain, it is another element of the change cycle that businesses will need to take heed of and build into their strategic planning in order to stay relevant.

To address these changes Businesses must embrace cloud- based accounting software in all its glory. Harnessing the cloud for efficient accounting compliance is not enough. The real benefit is in utilising apps and add-ons to provide privately- owned businesses with a broader, more integrated solution that is the envy of larger corporates. It is likely that within the first half of the next decade we will see who can succeed in taking their Business to the next level and those that have been weighed, measured and found wanting.

Which one is your business??

New themes emerge in RMA changes

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An emerging theme in our sector is that there are more matters to be considered – and more to be considered earlier. An inevitable outcome is that things may take longer – meaning its even more important to be aware of the necessary inputs and to set realistic timeframes.

Some of the main changes we’re observing relate to archaeological matters, cultural values and hazards. None of these are necessarily a bad thing, however – it’s just an element of change.

Section 6(h) of the Resource Management Act requires all persons exercising functions and powers under it to recognise and provide for the protection of historic heritage from inappropriate subdivision, use, and development. This has generally been given effect to by District Plans and property information identifying the presence of archaeological sites, for which the Heritage New Zealand Pouhere Taonga Act 2014 sets out a framework for allowing and managing works that may affect such sites.

There has always been an overlap between the two Acts, and while authorities in relation to archaeological sites are sometimes obtained prior to or as part of resource consent applications for larger projects, it is becoming more common for this to be focused on for smaller projects as well – requiring greater inputs up front of a process.

This has pro’s and con’s. On one hand, greater certainty is obtained for all parties, but on the other, gone are the days of stepping through the process one regulatory step at a time and managing cost as you obtain more certainty. Whether the RMA actually envisages the Heritage New Zealand Pouhere Taonga Act 2014 being implemented concurrently seems to be a mute question, as the emerging theme is that if it needs to be done at some point, it needs to be done now.

It’s a slightly different situation with cultural impact assessments, but there is again an emerging theme that these are beginning to be required on what would have been considered less complicated applications. Again, I’m not suggesting this is a bad outcome, as in most cases they reveal some pretty interesting findings and matters that are worthy
of consideration and management.The message is that inputs previously associated with only larger scale projects are becoming common day requirements.

As we’re becoming more aware of different natural hazards, this is another topic which is requiring a lot more consideration earlier. Again, not a bad thing considering the idea is to avoid making decisions that could put people, property and infrastructure in harm’s way. However, while the technical inputs are based on very hard science, there is subjectivity around the parameters used to generate models and predictions, and a lot of time can be spent between designers and auditors in agreeing on the inputs and being comfortable with the solutions.

So, the message is there are actually a lot more things to consider earlier now. This shouldn’t justify just wanting to know things for the sake of knowing them, but where reasonable, it’s a transition we all need to make, meaning projects need to be well scoped and momentum maintained.

As a company we have increased our capacity and are continuously reflecting on and responding to changes in the industry and have developed processes to identify necessary inputs early so that key areas can be refined and focused on and certainty obtained so that costs and timeframes can be managed as best as possible.

2020 shapes up as a stellar year

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This year is shaping up to be another stellar 12 months for commercial and industrial property in the Hawke’s Bay. Investor confidence remains high and market activity is strong on the back of an outstanding 2019.

Yields are likely to compress further on the back of record lows in 2019. The sale of the 19-unit Harvest Lodge Motel in Havelock North for 4.54 per cent last year was the sharpest yield in history for a Hawke’s Bay commercial property. While not all properties will attain such returns, we see yields in the 5 to 7 per cent range as representing the new norm, given the continuing low interest rate environment and strong investor appetite.

The Hawke’s Bay industrial sector is expected to continue its strong run in 2020, buoyed by the thriving horticulture sector. This trend is exemplified by the sale in 2019 of a 6.3ha industrial property at 22 Irongate Road, Hastings, which will be transformed into a $30 million new pipfruit facility. This was the largest industrial land transaction in the Hawke’s Bay last year.

Havelock North will continue to be a focus for growth, particularly in the office sector. Numerous investment advisory and management firms have established offices in Havelock North in recent years, putting the town in a position to become a regional financial hub in the future. The location is attractive due to its relatively affluent residential population and its proximity to key markets in Hastings and Napier. Strong horticulture and tourism sectors are also adding to growth.

The future of retail continues to be augmented by the tech sector, rather than disrupted. Tenants benefit from a wide range of apps to assist them with business, focusing on customers, staff and productivity benefits. Owners benefit from better understanding about property management and facilities management requirements. Investors get a better understanding and assessment of risk and potential future benchmarks.

Key to all of this is access to data and information. The advent of 5G in New Zealand will help transmit significant amounts of raw and visualised information at an immense pace. Connectivity will be a major game changer over the next few years.

To assist our clients in this space, Colliers International has been running Colliers Proptech Accelerator to create solutions, shape technologies and find opportunities.

Commercial property transaction volumes in Hawke’s Bay across all asset classes are likely to remain buoyant in 2020. Colliers had very strong years
in 2018 and 2019, resulting in our Hawke’s Bay office being named Small Commercial and Industrial Agency of the Year at the 2019 REINZ Awards. Commercial property investor confidence was 23 per cent net positive in Colliers International’s latest survey, which is line with national averages over the past two years.

The cost of compliance

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It is hard to believe that The Profit is celebrating its 10th birthday and that Williams’ Harvey, has been writing a column for a decade now. I went back over all the articles written and it appears that in a nutshell compliance has been the single biggest change in our sector. Whether in response to economic upheavals such as the Global Financial Crisis (GFC) or natural catastrophes especially the Canterbury earthquakes, the level of compliance we need to adhere to in our reporting to satisfy stakeholders stands out.

We set up our business in 2006, little knowing the world was about to be plunged into one of the biggest periods of financial stress since the 1930 Great Depression with the
GFC.

Worldwide housing prices plummeted approximately 31% – more than the price plunge of 1930. As a result, and in response to the GFC by 2010 regulators worldwide were responding to the financial crisis experience with a large and ongoing program of reforms to “strengthen requirements on banks’ capital and liquidity structures and bolster domestic and international financial supervision”.

Regarding valuing property in New Zealand a panel ordering system was established. In February 2011, I wrote an article titled ‘Changes Afoot’ which signaled that lending institutions would adopt the ‘panel ordering’ system if you required a residential property valuation for mortgage security purposes.

Essentially, lending institutions felt this brought about “greater independence and rigour and through its risk management policies, highly incentivise bankers to correctly assess the risk of a loan, and with an independent assessment of value of the collateral for security, which is a critical aspect of the policy.” ANZ was the first adopter and as predicted all banks have now adopted one of the two panels (Corelogic and Valocity) available followed by second tier lenders and mortgage brokers.

Subsequently reporting has considerably increased the amount of compliance placed on as Registered Valuers in order to mitigate the stakeholder’s aversion to risk. Not entirely popular at first and reports made pretty ‘negative’ reading, however, I predict they are here to stay and are now an accepted part of the lending process for all.

No sooner had these changes been implemented when the 2011 Christchurch earthquake hit. The impact on valuing and property values was profound. As a result, earthquake risk was prioritised and adherence to the Building Act of 2004 regarding a building withstanding a moderate earthquake was enforced rather than being a best practice option. Words such as ‘liquefaction’, ‘seismic strengthening’ and ‘earthquake prone buildings’ (EPB) became part of the reporting landscape, driving the Building (EPB) Amendment Act 2016. As Valuers we have to comment on all of the above and in some cases where buildings were found to be earthquake prone, values plummeted.

Commercial property owners found themselves in the insidious position of having to remediate buildings (with regulatory timeframes now set) as well as manage tenants and/or their businesses, if owner occupied. From a valuation perspective lending institutions and insurers became more concerned with a building’s ‘New Building Standard’ (NBS) percentage. As these factors impacted property’s value lending institutions had the ability to structure funding to mitigate perceived risk. Ultimately, the more relevant information we can analyse means a more accurate assessment of value can be determined.

Residentially there were impacts too. Pre the Canterbury earthquakes residential property was insured on a replacement basis for a floor area size, with no regard to cost. Post the earthquakes insurers and reinsurers found themselves to be considerably underinsured. Consequently, there was a change to an agreed sum insured which needed to include
the house, all other site improvements, services, demolition and inflationary provisions. A substantial change and costly exercise for homeowners who wanted to set an accurate sum insured.

The aim is to satisfy the auditing process for both banks and insurer’s risk management systems. This together with the Reserve Banks move to increase the loan to value ratio (LVR) has meant more equity is required by buyers when purchasing a home. Therefore, whether by mother earth or man-made the impacts of the last decade on the property sector have resulted in compliance, taking more time to produce a considered and accurate report.

Looking ahead – what will change

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What are your predictions?

I can hardly claim this is a prediction, because it is well documented. But certainly, in the immediate term, we will continue to live in a low interest rate environment. For borrowers, this is good news. However, for savers and investors in income assets, it’s not so great.

One aspect of this is not fully understood. Post KiwiSaver, main street banks do not have to compete for the term deposit billboard rate as much as they used to. This is because within their own KiwiSaver products, they can assign the income end of the portfolios to their own instruments.
This effectively helps fund their domestic loan book by stealth, while charging a management fee to do so. When the organisation then sells you this as an investment solution, this is called “vertical integration”.

So better deposit rates at the bank billboard are a long way off. Time to think differently!

What’s likely to change in your sector?

More regulation and more compliance. On the lending front, the Credit Contracts and Consumer Finance Act (CCCFA) Amendment Bill is going to have some immediate implications come June 2020.

Here at Midlands, with both investing and lending, we are mature in our adoption of anti-money laundering (AML) considerations, as well as continuous disclosure, transparency, and our focus on good customer outcomes.

These changes mean that financial services providers like Midlands must get “closer” to clients. That requires investment into relationships and the delivering of soft skills if not actually giving financial advice per se. But we have to ask a lot of questions of our clients.

For this reason, I struggle with organisations moving away from genuine local relationship models and with “robo advice” or online lending models. To me, it’s an exploration in protecting margins and revenue without investing into customers and communities. Because we have had a very good run in investment returns, I do feel there are some fair-weather models being rolled out to investors that may be challenged in a market correction.

I also struggle with some passive management models for this same reason. Automated electronic trading based on macro asset allocation, with no micro company research really bothers me. Especially when you consider Environmental Social and Governance (ESG) factors.

But personally, I hope the powers that be do look further into “vertical integration” and if it is delivering better client outcomes. Certainly, the findings of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry in Australia indicate it may not.

What opportunities do you see?

For us at Midlands, it’s pretty easy. Invest in our relationships and educate our investors and borrowers. We have a vanilla offering that suits our conservative investors.

We continue to significantly outperform bank deposit rates, while remaining fully liquid (no lock in of funds). We do this by close management of a quality first ranking security loans book across New Zealand.

While banks have reduced their lending and offer low interest rates to retail investors, we can continue growing as we are. We are proud to be non-bank.

What technology advancements will have an impact on how do business?

During our lending process, while we personally inspect every property we lend against, a lot of the initial discovery due diligence process can be done on-line now. This is important to ensure the quality of our lending book. This is only going to get better.

Regarding investments, the speed to market of online services used to be hamstrung by AML requirements. This gap has closed very quickly, and we are aware of this. Certainly, something we are looking into.

More compliance for Trusts

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In my last article, I summarised some of the key changes to Trust Law arising from the Trusts Act 2019, which comes into force on 30 January 2021. One of the key changes.

The Act aims to make trusts more accessible and to strengthen the ability of beneficiaries to hold trustees to account. In doing this, the Act increases compliance requirements for trustees, which will likely increase the costs to operate and maintain a trust, and increases risks associated with being a trustee of a trust.

Requirement to keep core trust documents

As mentioned in my previous article, Trustees are required to keep core trust documents necessary for the administration of the trust.

Keeping the core trust documents together is clearly prudent and sensible, however at present the documents may not all be held together (e.g. some with trustees and some with advisers, lawyers and accountants). It is permissible for one trustee to hold most of the documents but each trustee must hold the trust deed and any variation of those terms. Where one trustee is to hold most of the documents, they will need to be held in a manner to allow the other trustees to access them easily.

Disclosure of information to beneficiaries

The Act creates a presumption that a trustee must make ‘basic trust information’ available to every beneficiary and ‘trust information’ available to beneficiaries who request it.

Before any information is provided the trustees must consider a range of factors and may choose to withhold the information if the trustees “reasonably consider” that the information should not be disclosed.

In either scenario (disclosure of information or non- disclosure) there will be ongoing requirements to update information previously provided and to review a decision to withhold disclosure of the information.

Review of Trustee decisions

A beneficiary will be able to apply to the court to review “the act, omission or decision” of a trustee “on the ground that the act, omission, or decision was not or is not reasonably open to the trustee in the circumstances.”

We will have to wait to see how this will work in practice, however we may see beneficiaries challenging trustee decisions more frequently particularly in circumstances that could be considered “contentious”.

What I suspect may occur is that trustees will seek professional advice more frequently for decisions for which they would not have previously done so. By way of an example, a trustee may now seek advice from a financial adviser on how to invest funds from the sale of property rather than placing the funds with the trust’s bank as they have done previously – where a court is considering whether a trustee is liable for a breach of the duty “to invest prudently to the applicable standard” the court can consider if the “trust investments have been diversified, so far as is appropriate to the circumstances of the trust” and whether “the investment was made in accordance with any investment strategy”.

Exemption and Liability Clauses

Following on from the increased compliance, is the inability for a trust deed (both new and existing) under the new Act to limit a trustee’s liability for breach of trust arising from dishonesty, willful misconduct or gross negligence (rather than ‘ordinary’ negligence), and does not allow a trustee to be indemnified out of trust property for such breaches. This means that trustees can no longer rely on broad indemnity clauses that purport to protect them against gross negligence.

You may consider that this is fair and reasonable, however when determining if a trustee has been grossly negligent, the Courts will consider:

The circumstances, nature and seriousness of the breach;

The trustee’s knowledge and intention relating to the breach;

The trustee’s knowledge and skills and whether the trustee has been paid;

The purpose for which the trustee was appointed;

The type of trust, including the degree to which the trust is part of a commercial arrangement, the assets held by the trust, how the assets are used, and how the trust operates.

While the threshold for gross negligence has been set very high, these changes may result in a trustee’s exposure to liability increasing which some trustees may not wish to carry.

Where professional persons, such as lawyers and accountants, are still happy to act as trustees, we will expect that they will become more involved in the day-to-day affairs of the trust.

We hope that the above gives an idea of how working with trusts may change and importantly how it could mean that the increase in the time and cost of administering some trusts, will result in some trusts no longer being cost-effective.

Key Tech trends set to emerge

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Whether you have a decent grasp on technology or not, you’ll probably be aware that emerging technologies are changing the way we work and interact with others. In fact, with things like machine learning and touch commerce becoming increasingly popular across every industry from banking to healthcare, technology is transforming the way we do business, making hi-tech investment inevitable for most organisations.

Here are four key technology trends you should know about as we head into 2020:

1. Internet of Things (IOT)

One of the biggest tech trends to emerge in recent years is the Internet of Things. In layman terms, Internet Of Things (IOT) consists of web-enabled smart devices that use embedded processors, sensors and communication hardware to collect, send and act on data they acquire from their environments. Sometimes, these devices communicate with other related devices and act on the information they get from one another. How could this impact you? It depends on your industry.
For example, for those who work in marketing, advertising, media or business management, IOT could provide a wealth of information on how consumers engage with products by tracking their interactions with digital devices. In turn, this data could be used to optimise marketing campaigns and user experiences.

How will it affect your business?: The exciting thing about IOT is that it can change the way we do business and the business models we use to do it. IOT technologies will drive process automation, home automation, smart cars, decision analytics, and smart farming.

2. Machine learning

Another exciting emerging technology is machine learning, which is essentially a computer’s ability to learn on its own by analysing data and tracking repeating patterns. For example, Google is using machine learning and satellite data to prevent illegal fishing. On any given day, 22 million data points are created that show where ships are in the world’s waterways. Google engineers found that when they applied machine learning to the data, they could identify why a vessel was at sea. They ultimately created Global Fishing Watch that shows where fishing was happening and could then identify when fishing was happening illegally.

How it’s affecting industries: Machine learning is also changing the way companies do business with customers. Companies like Google are using machine learning on mobile devices which can continue learning even when offline. The result? Machine learning will redefine the way businesses interact with their customers by helping them anticipate and meet their customer needs.

3. Virtual reality (VR)

Remember watching movies about virtual reality and wondering what if it was actually like that in real life? Well, it’s about to be! VR has been around since the mid 20th Century, but
until recently the technology wasn’t able to deliver the fully immersive digital experience users have been expecting. That’s about to change with recent improvements to both hardware and programming, and the effects are going to be felt across almost every industry from retail to education.

How it’s affecting industries: Virtual reality has been a popular component of video games for several years and this trend is continuing to expand. In addition to video games, VR is likely to affect companies across the board as they adopt the technology to help them engage customers more effectively and optimize their sales and marketing efforts. It’s also a potentially useful tool for health and safety training and job learning, and is increasingly being adopted by educational organisations.

4. Cognitive Technology

Cognitive technology is a field of computer science that mimics functions of the human brain through various means, including natural language processing, data mining and pattern recognition. For example, the cognitive technology umbrella includes things like natural language processing (NLP), and speech recognition (e.g. Siri, Alexa and Google Home). Combined, these different technologies are able to automate and optimise many tasks that were previously done by people, including certain aspects of accounting and analytics and predictive decisions.

How it can impact our world: Cognitive technology could be a great ally in protecting our planet. Physics-based prediction models already exist for forecasting things like weather, pollution, and drought. But with machine learning, we can systematically understand which model performs better when, where and under what circumstance. Through machine learning and video analytics, cognitive technology can help us understand what the norms are and discover anomalies or problem areas. This will help us minimise deforestation, track urbanisation, mitigate diseases and to better understand and control ecosystems.

With emerging technologies changing professional industries including banking, eCommerce, agriculture, healthcare and education, staying up to date on the latest trends will give you a better understanding of your industry. This will be a catalyst in opening up new opportunities and hopefully making your business more sustainable, relevant and competitive.

Time to take stock of employment law compliance

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Welcome to 2020

In the rush of business, it is easy to take our eye off the ball when it comes to employment law compliance. The beginning of the New Year is a good time for many businesses to take stock and review changes to employment law and how they may impact on your business. Here is a brief overview of the key changes that have taken place over recent years:

  1. Tougher penalties and sanctions for breaches of employment standards. You are required to keep records in sufficient detail to demonstrate that you have complied with minimum entitlement provisions.
  2. If you do not provide a written employment agreement to an employee, a Labour Inspector may issue you with $1,000 infringement fee.
  3. Addressing zero-hour contracts. All employment agreements must include any agreed hours of work and, if you ‘require’ an employee to be available for additional hours, you must include an availability provision in the employment agreement and ensure the employee receives reasonable compensation for the ‘required’ availability. Also, the introduction of “shift cancellation” provisions requires you to provide reasonable notice or compensation to cancel a shift.
  4. Secondary Employment. You cannot restrict secondary employment for employees unless you have a genuine reason based on reasonable grounds to do so, and record these grounds in the employment agreement.
  5. Before any deductions are made in accordance with a general deductions clause, you must first consult with the employee.
  6. Reinstatement is back as the “primary remedy” if requested by an employee when a proceeding is before the ERA or employment court.
  7. Meal Breaks and Rest Periods are specified as having to be at least one 30 minute unpaid break and two paid 10 minute breaks in a typical eight hour day. Unless there is agreement about when these breaks are taken, the law requires the breaks to be taken at times as specified in the Act, so long as it’s ‘reasonable and practicable’ to do so.
  8. 90-day trial periods have been restricted to businesses with fewer than 20 employees.
  9. After 6 months service, employees are entitled to up to 10 days paid per annum to deal with the impact of family violence. This could relate to dealing with the impact of historical violence that occurred prior to them being employed by you.
  10. Parental Leave. Changes to these provisions include extending payments and entitlements to a wider group, the introduction of ‘keeping in touch’ hours during the paid leave period, and allowing employees to resign and continue to receive payments from IRD.
  11. Collective Bargaining provisions have been strengthened. This has included restoring the duty to conclude collective bargaining as a part of Good Faith, the provision of reasonable paid time for delegates to undertake union activities, and the requirement to provide new employees with information about the Union (provided by the Union). The 30 day rule has also been restored, which means that for the first 30 days, new employees must be employed under terms consistent with the applicable collective agreement.

Coming Up in 2020

12. “Triangular Employment” relationships. This refers to the situation where you have the employees of other contractors on your site, but you effectively control their day to day work. From 27 June 2020, if such an individual is dismissed unfairly, they will have the ability to ‘join’ your company in any Personal Grievance proceedings.

13. The Ministry of Business, Innovation and Employment (MBIE) is currently reviewing the concept of ‘vulnerable / dependent contractors’. We are also waiting to see the draft legislation in relation to a new Holidays Act and Fair Pay Agreements.

These changes, along with whatever is promised by the political parties, will ensure that the employment law space remains dynamic and subject to change in 2020.

Iconic Hastings hotel takes on new offering

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Hastings’ iconic Angus Inn, once the top business hotel in the city, is now part of a win-win solution to fixing Hawke’s Bay’s housing crisis and the seasonal labour shortage.

In its hey day, the Angus Inn was the place to stay — from hosting All Blacks players to politicians, as well as it being booked out on Saturday nights for weddings and 21st celebrations.

Today the Angus is playing a new role in growing Hastings’ economy along with transitioning locals into full-time employment.

It’s a great example of how Hawke’s Bay’s booming horticultural industry is dealing with the region’s housing crisis, while accommodating the desperately needed seasonal RSE (recognised seasonal employment) labour to get the record crop picked.

Bibby brothers Drew and Nick, together with their father Richard, recently purchased the Angus Inn for $4.8 million and have undertaken a $600,000 refurbishment to provide 312 beds.

The development is part of the apple industry’s $30 million investment in building 1500 new beds to gain the Government’s
confidence that Hawke’s Bay can accommodate the 1000 more RSE workers needed to get the crops harvested.

At the same time, these new beds are becoming part of the solution to the region’s housing crisis, offering transitional accommodation to vulnerable people in desperate need while also freeing up rented houses.

Their positive working relationship with WINZ means every suitable New Zealander looking for employment is being offered the chance of full-time work through a range of seasonal jobs required during the year.

The Bibby’s business, Thornhill Horticultural Contracting, provides a 450-strong permanent and seasonal workforce to a range of leading Hawke’s Bay employers, including Brownrigg Agriculture, Rockit Apples and Delegates.

As part of Thornhill’s pastoral care package, for $130 a week, RSEs staying at the Angus get full lodgings, fresh linen, weekly laundry and cleaning service, this is extra. They will also get three full meals a day for $13.50, including a packed lunch.

Thornhill have started an initiative with the Ministry of Social Development (MSD) and Department of Corrections giving New Zealanders the same opportunities as RSE workers; that is, offering jobs, subsidised accommodation and meals to those in need. Named the Accommodate to Work Scheme, applicants are employed with Thornhill, or other employment if they already have full-time work.

The entire premises is now an alcohol-free zone, with full security, a 24-hour on-site manager, and a strong health and well-being focus.

Their focus is on developing a supportive and friendly culture for all different nationalities including people visiting
from Samoa, Vanuatu, Tonga, Thailand and Fiji.

The Bibby family is making a positive difference.

“It’s incredibly rewarding being able to help those who have no place to live,” says Drew.

A fully separated area with its own secure access of 14 units is providing transitional housing in partnership with MSD.

Some of the transitional housing tenants are also becoming permanent Thornhill employees working within the Angus accommodation complex and elsewhere as part of the contracting team.

“MSD clients are often homeless when referred so it’s great to be able to accommodate them and help them into full employment.

Nick says“One of the greatest benefits is it’s giving people the time and opportunity they need to find work and a place to settle, without the fear of where their next bed and meal will come from.

“This is how we can make a real difference towards helping people improve their lives.”

The Angus offered everything the Bibby’s needed: it had great bones, a full commercial kitchen and dining hall, and an open lounge and common area.

“The complex is ideal. Its large hotel rooms mean we can meet all the new size and building, bed and bathroom requirements set by the council for RSEs, as well as providing a great place for people to enjoy their work/life balance.”

It now has an entertainment area with pool tables, 86-inch televisions, computers and free Wi-Fi throughout. Outside there’s a range of different activities available including volleyball, pentaque and a swimming pool during summer.

The Bibby’s are also developing 60+ more beds in the ‘bird cage bar’ area within the hotel site. As well as accommodating their own RSE and New Zealand staff, the Bibby’s are now providing evening meals to other employee staff.

From fruitbowl to foodbowl

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Hastings was once branded as the Fruitbowl of New Zealand but a proposed $18 million Food Innovation Hub is set to position Hastings and Hawke’s Bay as the nation’s food capital.

Hastings District Council has been the champion of an idea first put forward by local businessman Trevor Taylor in 2013 to develop a one-stop shop that will be used by food and beverage start-ups to create new products; an education facility to upskill people for roles within the food processing sector as well as be the home for government support services to the food industry and a hub for associated support businesses.

Lee Neville, the chair of the Hawke’s Bay Innovation Hub Governance Group and economic development lead at Hastings District Council says the hub will be a “think tank” to share ideas, create new and exciting food products as well as developing and show casing innovative food processing equipment.

The Government’s Provincial Growth Fund invested $200,000 to develop a business case which was followed up in September with an investment announcement of $12 million.

Lee and project support Tony Gray are now busy filling the $6 million shortfall from private food related businesses as well as preparing funding requests to the region’s five councils as part of the 2020 Annual Plans.

When Trevor Taylor first put forward the idea, the proposed home was on land his business interests owned in the Tomoana area but the net is being cast a little wider but Tomoana and Whakatu still remain the preferred base, as part of the HDC Eastside Plan that is focussed on creating a new commercial/industrial zone.

The preferred site size is 2 hectares, of which 1.3ha would be developed in Stage 1 with the remainder developed as new tenants sign up. Lee is in discussions with two businesses that are interested to move their marketing teams away from the factory operation to the hub.

“Some of the advantages that they see is that when they are bringing international clients here to look they can take them to their production facility as well as visit the centre of excellence and innovation which in turn gives the client greater confidence of their capacity and capability as a successful food processer,” he says.

Lee says the hub will unlock Hawke’s Bay’s potential in the food, beverage and agri-tech sectors as well as industry training and development.

The business case undertaken by Sapere identified that the hub has the potential to create 500 new jobs in the region and boost the Gross Domestic Product value by $100m.

Hastings is already the home of well- established food processing businesses such as Heinz and newcomers like the Apple Press and Lee says there’s many more that could scale up quicker via an innovation hub.

As part of designing a sustainable food innovation hub that doesn’t rely on funding top ups from central or local government, Lee and Tony are looking to mimic the success of the Waikato Innovation Park, which has returned a profit.

“As part of the PGF process they helped us identify a multi-national in Hawke’s Bay that wants to upskill not only their workforce but those that work in food processing in the region.”

The business is now working with the PGF, EIT Hawke’s Bay and Hastings District Council to put together a feasibility study to offer courses and train people in food processing.

“It not just about the business that wants to establish the training but it will be offered to all food processing businesses in the sector. Labour is a major issue and they all require staff with food related and processing skills.

“For example if you trained as an engineer, you can take a course at the food hub which will give you the food safety skills to understand what’s required when you start working as an engineer within a food processing business.”

Lee is also proposing that the hub will showcase food processing equipment such as palletising and de-palletising equipment and process engineering from many of the region’s innovative engineering firms.

Lee says as part of the feasibility a number of important trends and opportunities arose such as environmentally sustainable production and packaging (including low impact on atmospheric emissions and water availability and quality, and less plastic); plant- based production and a shift from high meat to more plant-based diets; functional food and beverages that can enhance lifestyles and provide health benefits and Waste stream utilisation as food waste is a global problem that undermines industry profitability and contributes to climate change.

“Any innovation initiative needs to respond to these opportunities, while building on Hawke’s Bay’s very clear competitive advantage in growing.”

Over the next few months Lee and Tony will look to secure tenancy commitments that will release the $12m PGF funding by June 2019, put in place a governance and operational model including a project manager and chief executive and commence construction in the middle of 2020.

It is hoped that the hub would open at the end of 2021.