Major Award for Airport Gateway

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The Watchman Road Intersection Upgrade Project (The Kuaka Gateway), has scooped the award for Infrastructure Project of the Year at the NZ Airport Association’s annual awards held in Auckland.

Sponsored by Beca Airports, the awards were presented at a black-tie event held at The Auckland Museum Events Centre on Thursday October 24th before an audience of representatives from throughout New Zealand’s aviation sector. The infrastructure category was particularly well contested this year with entries reflective of the extensive amount of development happening across the industry.

The Kuaka Gateway was acknowledged as being a special project for the way in which it saw three organisations collaborate in an aspirational and holistic approach to problem solve alongside genuine stakeholder engagement. The results saw a traffic blackspot transformed into a safe and admired environmental statement.

Hawke’s Bay Airport CEO Stuart Ainslie was on hand to accept the award and was quick to acknowledge funding partners NZ Transport Agency and Napier City Council as well as the various stakeholders who were so instrumental in enabling the project to be the success that it is.

Mr Ainslie points out that the many of the cultural elements of the Kuaka Gateway will be carried through into the redevelopment of the airport’s terminal and surrounding forecourt.

“We have engaged local artist Jacob Scott to re-design the forecourt in front of the terminal and to inject a cultural overlay into the

internal finish. Jacob was heavily involved in the Kuaka Gateway and he will be working to connect this narrative throughout the airport environment” — Stuart Ainslie, HBAL CEO

More significant development milestones are on the horizon at Hawke’s Bay Airport with Stage 2 of the terminal redevelopment set to open to the public in early November and an upgrade to the carpark and supporting technology due for completion prior to Christmas.

Launch of New Safety Brand

Safety will always be our top priority. During the second week of October we undertook a wide range of activities as part of our participation in Airport Safety Week. The program culminated with the launch of our new safety brand “SOAR”. The brand is an acronym for “Safety On and Around Airport”, it was developed by local design agency Coast & Co. and will be used to anchor future safety related communications on and around the airport. We encourage all airport users to keep an eye out for this brand going forward.

The war for talent – Hawke’s Bay’s Talent Attraction Strategy

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Hawke’s Bay is buzzing. Our local economy is one of the best performing in regional New Zealand. Consumer confidence is high, unemployment is at a 10 year low. The labour market is tight and that means that competition for workers (not only in Hawke’s Bay, but around New Zealand) is expected to remain strong.

Our businesses are doing well, but what they need to sustain that growth is more people with the right skill-sets and experience, along with work-ready employees. It’s a significant challenge to business growth and one that if not addressed, has the potential to curb our economy’s upward trajectory.

One of the ways that we can address our talent shortage is to develop the local workforce; it’s a key focus for business and iwi leaders, central and local government. The other is to attract people with the skills we need.

That puts Hawke’s Bay in direct competition with other regions of New Zealand, all who have the same aspirations for their region; to drive growth. Simply put: talent drives business and skills drive talent.

Currently only 2 percent of all skilled international migrants coming into New Zealand, find work in Hawke’s Bay. If we want to grow this skill-base opportunity, we need to do something different. We know there are widespread challenges in attracting candidates for niche, specialist, managerial, and technical roles. Employers and regional leaders need to think innovatively about talent attraction and retention. There’s a clear need for a strategy and a joined-up approach that sees Hawke’s Bay go to battle in the war for talent.

That’s where Hawke’s Bay’s Talent Attraction Strategy comes in. Think Hawke’s Bay (a collective made up of Business Hawke’s Bay, local councils, Hawke’s Bay Tourism, Napier Port and Hawke’s Bay Airport) is developing a competitive strategy to attract skilled talent. This is a new initiative for the region and a key deliverable of Matariki, Hawke’s Bay’s Regional Development Strategy for Economic and Inclusive

Growth. Specifically, the strategy addresses Pillar 5: “Promoting our place: attracting visitors, talent, businesses and investment to strengthen and diversify our economy.”

Craig Ireson, Economic Development Lead for Central Hawke’s Bay District Council says the goal is to develop a strategy to inform our skills attraction campaigns, by looking at the skills gaps and then identifying who needs to be attracted and what the key attraction drivers are for them.

Carolyn Neville continues: To be clear, the strategy is not focused on Regional Seasonal Employer skills; that’s already being done well, and the strategy also doesn’t cover every industry. Instead, the focus is on technical, leadership and transferrable skills, and industries that will deliver the greatest impact. The strategy which is close to being finalised, has identified initial sectors to focus on, based on growth and skills needs.

The type of skills profiles that we’re targeting encompasses those with higher level formal education and training, work experience and on-the-job-training, particularly covering managerial, leadership and professional roles, support workers, technicians and trade workers.

Most importantly, the strategy identifies the opportunity for Hawke’s Bay to do something different. Almost every region has mid-career candidates with families as a key focus of their attraction campaigns. This is a highly competitive segment. Other age groups and household types such as late career or couple households are largely untapped and could offer additional value to Hawke’s Bay.

Effective talent attraction requires more than a marketing campaign. Other important considerations include wrap around support to help people settle in once they’ve moved, to integrate into the community, both socially and professionally. Our strategy adopts a talent management framework that recognises talent attraction and retention requires a holistic eco-system to be truly successful.

Adopting such an approach takes time to implement comprehensively, so priorities for action in the short and medium term need to be identified. Getting these essential foundations in place means that we have a greater chance of keeping talent in our region. Very few regions provide active settlement support, with Auckland leading the way with its talent attraction activities.

In profiling Hawke’s Bay, we need to consider people’s aspirations and motivations for relocating and ensure that our campaigns strike the right note to get them here. Once they’re here, we need to reinforce our attraction messaging with onboarding and retention programmes to help them settle in well, put roots down and network, so our hard work and their faith in Hawke’s Bay is rewarded with a long term or permanent relocation.

In summary our talent attraction strategy is a mix of targeted activity to attract skilled talent alongside the staged development of key talent management tools, built around three pillars:

1. Targeting the right skilled talent – focusing on transferrable skills, management and professional skills along with sector specific technical and trade skills

2. Targeting the right people:

  • –  mid stage career with technical and trade skills, business professionals (single, couple or family)
  • –  late stage career with transferable higher skill-sets (single or couple)3. Developing the tools required – including marketing, transitional, management and reputation tools to help people/families settle in and thrive, professionally and personally

Of course, underpinning all this targeting is our existing narrative around lifestyle and ease of living; but people also need to know that Hawke’s Bay offers lifestyle plus a great range of career and business opportunities, community involvement, networks and new challenges. And the chance to stay connected to existing networks. It’s not all about the wine!

Attracting entrepreneurial, technical and professionally skilled people is critical to driving growth and making our region more innovative and sustainable. Hawke’s Bay’s Talent Attraction Strategy is the way that our region will compete more effectively both nationally and internationally, in the war for talent. Great things grow here!

Fingermark & Luke Irving – Making a mark on the global fast food scene

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Luke Irving has big aspirations to leave an indelible mark on the global technology scene from Havelock North, as well as creating a Silicon Valley styled technology scene nurturing Hawke’s Bay talent.

Luke, the founder of a global tech company Fingermark which is leading the development of applied computer vision and deep learning computer machine technology, uplifted his team of 18 staff from Auckland and moved them into a warehouse in Havelock North three years ago.

The easiest way to explain what Fingermark does is that it designs, builds and manufactures leading edge technology solutions to help businesses streamline operations and enhance customer experience.

Fingermark leads the way in artificial intelligence (AI) software with real time and predictive business analytics, through to next generation customer kiosks and digital menu boards, which is fit for purpose and with a clear vision to “revolutionise customer speed of service” in sectors such as Quick Service Restaurants (QSR) and the health sector.

Luke established Fingermark in 2005, seeing a gap in the touch screen market and how it could be adopted in the hospitality and food service industry. He had had dabbled in the technology as a bar owner in Wellington, when he installed a touch screen point of sale system which he simply turned the screen around to the customer to place their food order.

“Self-service was starting to come of age and technology was at price point that it could be adopted into most markets quite easily but there was no one building technology in that space in NZ.

“I took a bit of a punt and set Fingermark up as a digital kiosk company, where we started to build hardware and software.

Early adopters included the Briscoes Group including Rebel Sport as well as Westfield Group and Sky City.”

Luke’s big break came when he developed the first self-ordering and payment kiosk for Subway, heralding a serious foray into the QSR sector.

This opened up the global opportunity to secure a contract with Yum Brands, the parent company of Restaurant Brands, which operates Taco Bell, Pizza Hut and KFC globally.

Luke says fast food businesses were making good money during the Global Financial Crisis and they decided to invest in digital technology such as outdoor and indoor ordering kiosks and digital signage.

“There’s a well-known story of me taking 63 flights across the Tasman to win the Yum brands contract.

“They saw us as one-stop technology shop and that started our growth and global opportunities, so at the point in time I reinvested heavily back into the business in software development and we set up a software development business in Brazil.”

Four years ago, Fingermark hit a “sweet spot” and started to win additional contracts in the QSR sector for developing AI and Machine learning for suggestive selling and predictive modelling of a customer’s ordering patterns. The next generation technology is capable of identifying the customer and its buying habits so that it can offer more than ‘would you like fries with that?’.

Fingermark has gone on to smash its “big hairy audacious” client base target set for end of 2020 goal of 100,000 QSR including securing a global contact with McDonalds.

Fingermark now employs over 60 staff, many spread across two offices spaces in Havelock North, as well as team members based in Brazil, Dubai and Colarado, United States.

Luke’s ambitions are not to just develop a large technology business in Hawke’s Bay but to develop local talent that goes on to work in other local technology businesses such as Re-leased, Ask Your Team or Fingermark’s sister business Florence, which is based in Napier.

To do so, he is championing a talent laboratory campus and is scouting for a greenfields site. He has also had early discussions with EIT Hawke’s Bay to be the education partner with the aim of delivering highly skilled technology graduates with a higher earning capacity to Hawke’s Bay businesses.

“We’ve got five EIT technology graduates at Fingermark and we can see the potential to create a lab style education hub that will ensure the long term sustainability of businesses like ours in Hawke’s Bay. We don’t want to move, but we need the talent and there’s two options — you grow it locally or you import it.

Mark Matthews – Making his Mark on the animal health scene

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Mark Matthews retired as a veterinarian earlier this year after 44 years of travelling on dirt roads to the back blocks of Hawke’s Bay and other parts of the Central North Island.

Mark grew up on a farm in Poverty Bay but rather than becoming a farmer, he set his sights on being a vet – and a pretty good one, too.

Mark studied at Massey University in the early 1970s and upon graduating he moved over the hill to a vet clinic in Pahiatua, where he came under the mentorship of Bruce Farquharson. He spent five years learning off Bruce before moving up to Hastings to establish a practice for Vet Services Hawke’s Bay, an ambitious practice that started as the Central Hawke’s Bay Vet Club in 1949.

“Bruce played an important role in my career and was a fantastic mentor, especially in the area of production animal health.”

Mark, his pregnant wife Diane and two young children packed up and moved to a new exciting opportunity to establish Vet Services Hastings in 1980. Over the next 30 years, he would see the small clinic with one vet grow to a large-scale companion and working animal clinic with 14 vets, a large support team and a strong retail presence.

Mark built a strong reputation as a problem- solving vet on many farms across Hawke’s Bay, as well as earning a reputation as a leading authority on production animals that culminated in him being the latest recipient of the Alan Baldry Award this year for his contribution to sheep production.

Over the years he also became much sought after for his expertise in sheep and cattle health and productivity, presenting at many conferences in the United Kingdom and Australia. He was also involved in the early development of artificial insemination for sheep reproduction.

However, his greatest achievements are on the farm, where he’s helped minimise the outbreak of deadly animal diseases along with developing animal health plans for farmers.

“We deal with disease outbreaks all the time and I recall many years ago a farmer had all these yearling cattle dying and it looked like they had been poisoned – there was dead cattle everywhere.

“We did some autopsies and found out it was a major outbreak of worms and it was a set of circumstances that saw many of them die in a short period of time, which at first made us think they had been poisoned.”

Another interesting problem Mark and his team solved presented itself in the early days of dairying. The dairy cattle were dying and the farmer called in a nutritionist and Vet Services.

“They were all anaemic, they had no blood. The nutritionist couldn’t work it out but we gathered the information, pieced it together and worked out what was happening – it was a lack of phosphorus in the feed. We traced it back to the farmer providing supplementary feed that was coming from a food processing plant.”

The biggest farm production change Mark has seen over his career has been the introduction of international sheep genetics, which he says was a “major game changer”.

“All of a sudden you had sheep that produced two or three lambs, where New Zealand sheep at the time were only producing one and, only sometimes, two.

“Genetics has played a big role, as has on- farm practices. There’s been a lot more intensification and farmers have become much more ‘scientific’ than they used to be. They take a much more measured approach and some farmers are just amazing with what they are doing on their farms.

“When I first graduated, farmers would have been lucky to grow 8,000 kilograms of dry matter a year yet now top farmers are growing 15,000 kilograms, which can be attributed to farming techniques and genetics in the feed.”

Mark says the other key change was the end of livestock incentives when farmers were “paid to have sheep and beef”.

“That all went under Rogernomics and for the better as well, as farmers are now farming for a profit, not incentives.”

In recent years the spotlight has been placed on farmers and the environmental impact of farming. Mark says that generally farmers have been unfairly tarnished when it comes to their environmental footprint.

“Most farmers are very environmentally aware of what’s happening and are doing a lot; I don’t think the general public realise just how much they are doing.”

However, he says dairying could still be less intensive.

“It’s only my theory but farmers should only have enough cows that they can feed from what is grown on the farm and I think if you did that, you wouldn’t have any problems at all.

“But what happens is that they might have 30 percent more cows, and that means they have to bring in 30 percent more feed. Then you have all the problems of the extra nitrate coming out of the cows that adds pressure to our soils and waterways.”

Mark says he misses visiting the farms and catching up regularly with his farming clients and he has a word of advice for the modern- day vet:

“Some vets don’t get outside of the cattle yards but you need to get out and drive around the farm so that you understand the problems of the farm. You might work out a plan on how to do something but it might be physically too hard to achieve because of the terrain or lack of facilities on the farm, so it’s really important to get out on the farm and understand the full picture.”

Mark was also instrumental in the growth and success of Vet Services, which now has clinics in Masterton, Dannevirke, Waipukurau, Hastings and Napier.

He became an owner of the Hastings practice and was chairman of the board for about eight years. As he sits back in retirement, the only part of his job he doesn’t miss is being on-call.

Now in retirement, Mark and wife Cath plan to hitch up the caravan a bit more, spend time at the holiday home in Taupo as well as keep fit swimming and mountain biking.

The Value of Building your own Castle

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Anecdotally, despite rising construction and land costs, the existing high house prices have made building a house more attractive relative to buying an existing one.

This is not surprising given the amount of subdivisions that have become available such as Frimley, Northwood in Hastings, Arataki in Havelock North and Parklands, Guppy Road and Te Awa in Napier being the bigger and more popular choices. However, if you are considering building your own property there is a process which most homeowners will need to go through especially if you require finance from a lending institution.

Whether you build or renovate your property, the bank will often ask for a valuation report ‘As If Complete’, to determine if the cost to build, plus the land value aligns with the Market Value (MV) of your property. When it comes to building, planning and management are important, especially when it comes to accurately costing the build. A Registered Valuer can provide you with a valuation of the house ‘off plans’ to determine if the cost to build plus land value aligns with the market value of your property.

How can a Registered Valuer help?

When you build a house ‘off plans’, a valuation report provides information on the following:

  • The Market Value (MV) ‘As If Complete’
  • Analyses ‘Cost to Create’
  • Determines whether the project is over capitalising
  • Provides full report to your Financier to rely upon to lend Mortgage Security so you can pay your builder
  • Confirms your home is being built as per the plans and specifications.What does a Registered Valuer need?
    Full set of Stamped & Approved plans by the Local Territorial AuthorityA copy of your building contract stating build cost and any exclusions

    Specifications of

  • All building materials
  • Fittings to be installed
    Details of other site improvements, such as:

• Landscaping, fencing, gardens

• Driveway, paths, swimming pools, paving,

• Associated out buildings (e.g. shedding)

• Services to the site

What are Progress Payments and Progress Payment Certificates?
As the build advances, progress payments will be needed to pay for the work completed by the builder. Therefore, your lender requires a ‘Progress Payment Certificate’ which is undertaken by a Registered Valuer verifying that the appropriate site works have been completed, and what is still required to finish the project. On your instructions the Valuer will re-inspect the property to assess the percentage of works complete and a ‘Progress Payment Certificate’ is issued for the lender to release the funds. Any progress payment recommendation is based on the full funds to be drawn down less a calculated amount ‘Cost to Complete’ less a ‘Saleability Allowance’. The number and frequency of ‘Progress Certificates’ required will depend on your personal financial circumstances, however the following can be used as an estimate:
• Slab down, framing up and roof on
• Fully enclosed and secure all exterior cladding on and all exterior windows and doors in.
• All interior walls lined and ceiling lined as well as all electrical and plumbing in place.
• All interior and exterior decoration complete and all fittings to bathroom, kitchen as well as all electrical fittings in place.

• Fully complete dwelling with Code of Compliance Certificate issued, all landscaping and other improvements included in the valuation done.

Items included in the ‘Progress Payment Certificate’ include all items that are physically fitted in place. We cannot include items that are on site but not fitted, such as: • Stockpiles of building materials

  • Window and door joinery on site but NOT fitted
  • Fittings/appliances on site but not fitted

If Progress Payment Certificates are necessary, try to hold off as long as possible before instructing the Valuer to proceed. That way more building work will be able to be included in the calculations.

Building your own home can be hugely rewarding, however it is worth taking the time to understand the true value of your new home, not just in cost and materials.

Are you ready for your business to grow?

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The goal of most businesses is to grow. Growth is exciting. Growth implies success. More sales, more customers, more staff, more profit. But the reality can be very different.

We’ll explore some of the common issues SMEs face during a growth stage; and offer some practical advice for how to work through them. Issues like how to approach business planning, how to prepare for change and where to go for further support and advice. The goal is to help you face challenges with confidence and clarity – giving you space to focus on the next exciting stage for your business.

What does it mean to have reached this stage of growth within your business?

It means your business model is promising and you’ve achieved a degree of self- sufficiency; but you’ve likely outgrown your initial set up. It also means that it’s probably time to expand your controls and systems for managing the business – which means getting ready for new people, new skills and new approaches to come on board. To facilitate business growth, leadership must have the right attitude and mindset. Too often we see leadership teams who are happy with ‘Business as usual’ and this alone can stifle any growth potential.

The below are examples of common barriers that can often restrain growth potential. Reviewing these common growth obstacles alongside your current business plan will help to minimise the effect these barriers may have on your business growth.

• Over-dependency on founding team
• Constrained by initial systems – IT, communications, reporting

• Business is responsive and flexible; but lacking adequate analysis and planning

• Flat business structure

• Loyal staff; but skill gaps are showing

• Administration overload

• No contingency planning

• Not robust enough to survive a major change

Understanding where you’re headed

With all the pressures associated with growth, it’s important to take stock. Understanding where you’re at in the evolution of your business can be just as important as where you’re headed next.

Before you start setting growth goals, it is recommended that you undertake a review of your current business plan to ensure you are achieving your current goals. When completing these reviews, it is often helpful to bring in a third party to undertake this process alongside you. Working through a plan with a qualified adviser with knowledge of your industry can help you prepare for the known challenges that often affect businesses specifically in your sector. This insight can be invaluable when setting goals and objectives for any future business plans to ensure that your investment in growing your business results in an improved market share.

In order to facilitate successful growth a review of your business may include:

• Established controls and systems for managing the business

• New people, approaches and disciplines • A defined business strategy, with regular reviews

• The effectiveness of the management structure

• Flexibility and scalability of IT systems • Appropriate performance indicators; training and education for new staff

• Willingness for business to continue to evolve and grow

• Succession planning and clearly defined exit strategy

Getting bigger and more successful often results in a struggle to prioritise competing business tasks pulling you in different directions. The three main sources of conflict in businesses are growth, cash flow and control.

Business planning and reporting helps business leaders make strategic decisions, using the data to justify each move made. A business that doesn’t generate cash will not succeed; but sustained growth will chew through cash. There’s a similar tension between growth and control. When it comes to raising funds for growth, good sound planning can often make all the difference. Pursuing business growth can often mean you operate at a loss for some time, as you’ll be investing more to finance things like new warehousing, products or increasing stock levels. It is important that you have enough capital on hand to finance these new projects and sound reporting processes in place to keep track of this spending.

Going through a growth stage is the perfect time to review your reporting processes, taking full advantage of the new technology available. Which functions in your business need be added or expanded? Who do you need to bring in to make it happen? Where do you need to focus your key people? These are all critical questions for growth. Ensuring you have systems implemented that can handle your business growth is paramount as you don’t want to be held back by these easy fixes once your growth trajectory takes off.

Strong Wifi is critical to business success

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In business we are using more technology than ever and the internet is now an essential service for our business. With an increase demand on online applications and services having good practical secure Wifi is critical.

Business demands technology to be mobile, flexible and not hardwired when possible.

Sometimes we forget that we are still using the standard modem that was provided to us when we signed up for broadband services. This can be enough, but we are seeing a lot that isn’t.

There are several issues to consider when looking to address the WiFi need of the businesses.

  • How many devices are going to be connected?
  • What type of data will be transferred, Streaming, Skype, etc
  • SecurityConsider the number of devices connecting and take into account not only laptops and PCs but also mobile devices and other connected devices like sensors, alarms and any thing that may be IoT.If you only use the internet for online banking and general work-related activities that don’t need large amounts of bandwidth then you only need think about the location of the modem to ensure strong signal. But if you have a greater need then its time to look at upgrading to commercial grade access points modem and security.

A common question often centres on the need for a business-grade access point over the many less-expensive alternatives with similar specifications. It is worth noting that an important premise for a business- grade access point is reliability under sustained, heavy usage, which is unlikely to be the case from an access point picked from the bargain bin

The cost of the hardware has come down significantly, making the choice to replace your standard modem at the same time as installing a business grade access point very cost effective.

Not only has the cost of the access point come down but the functionality as become more user friendly. A number of Access Points can be managed via a cloud base portal.

The tools are available to enhance your existing network and can be easily installed. But what shouldn’t be forgotten is how you ensure the security of you data and importantly customer data.

As more Internet of Things (IoT) smart devices are introduced into company networks, it’s becoming increasingly difficult to assure the security of those devices and the network where the company’s most precious information is sited.

For example, a rather unusual and recent case involved a casino whose database was hacked via a smart thermometer monitoring water in an aquarium located in the casino’s lobby. Once the system had been breached, the hackers were able to pull the database back through the thermometer and into the cloud.

It’s important when storing customer data that you have the tools in place to protect it. In all cases an IT professional should be consulted when upgrading to ensure you are protecting the data and are meeting compliance requirements.

Consider the nature of the work your employees do and how much of that is dependent on the internet. If you work in a highly internet-dependent field, then having a strong, business-grade internet connection that can handle all of the traffic that is using it each day will be vital to your employees being able to remain productive throughout their workday.

A slow internet service can frustrate employees who are trying to be productive with their workday. Keeping employees happy with the tools they need to complete their job in a timely manner (such as business- grade internet) makes the investment worthwhile.

Getting the right solution for your business and needs will mean you are well place to take advantage of new technologies that will be relevant to you. Staff will be more productive, and customers will be confident you protect their data.

If you want to know more then please feel free to contact me.

Shock and Orr Reserve Bank head prepared to make big calls

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Currently, it is very difficult to speak of anything but the low interest rates affecting savers and investors. At the time of writing1, the Reserve Bank of New Zealand has taken a breather with its September 2019 announcement and left the Official CashRate(OCR)at 1.00%.After the hefty movement of 0.50% “south” on August 7, this is welcomed in most sectors.

The OCR influences the price of borrowing money in New Zealand and provides the Reserve Bank with a means of influencing the level of economic activity and inflation. An OCR is a conventional tool by international standards.2 However, for many, it is seen as a blunt instrument that has far wider consequences. This includes directly affecting deposit rates, especially at main street banks.

Banks use domestically raised capital (term deposits) to help fund their lending book. Therefore, “the spread” between their deposit rates and their lending rates is effectively the margin off which they operate. This revenue, as well as transactional fee and service fee revenue, is the primary source of their well-published profits.

We, therefore, rely on competition in order to be able to shop around for better deals, but as rates remain so low, the main banks are starting to look rather homogenised.

It was widely reported3 recently, that the Financial Markets Authority (FMA) has found a further decline in interest rates on bank term deposits is causing more savers to consider alternative investments.

The financial watchdog said a survey of 195 term-deposit holders in August suggested 43 per cent were likely to invest less in term deposits because of low interest rates. Of those who were considering changing their investment strategy, a quarter were considering shifting savings in search of better returns.

Certainly, in our organisation, we are seeing a steady increase in queries about deposits as investors search for regular income and quality yield, without being locked in. More so than ever, investors and savers are asking questions about quality, liquidity and generally, “what do you do with my money”? I find this heartening, as for me it seems the message is filtering through that yield is important, but quality, management and liquidity are all factors that need to be considered.

Even though there is a search for yield, the preservation of capital is front of mind, as it should be.

The low-interest rate environment is currently forecast to continue, with little sign of an end any time soon. Investors and savers can no longer wait “for things to get better”. Mainly because the outlook is that it won’t, any time soon.

Like an English tabloid paper’s perpetual exploration of tacky metaphors, I read4 with great amusementthat the moniker “shock and Orr” is starting to be used.

Certainly, Reserve Bank Governor Adrian Orr (above) has ingrained himself in the financial services psyche of New Zealand. In a previous profession, I remember clearly learning of “shock and awe” in military doctrine with the words “overwhelming force from the outset” still ingrained in my mind 25 years later. In Mr Orr’s case, this cap certainly fits.

In my opinion, he’s a strong and bold Governor, not only for his large cut of the OCR in September, but also for his continued statements regarding bank conduct and all things economy. I am excited by the fact that we have visible economic leadership in New Zealand. The Reserve Bank Governor should be a “front of office” role. For this, personally, I applaud him.

Therefore, moving forward, we should watch Mr Orr with a deep fascination. He must navigate the country through what is largely uncharted waters. Interest rates are historically low and are forecast to remain so. The OCR is a blunt instrument and the biggest trick in his bag of tricks. I wonder how often he dares to play it.

One thing is for sure, this Governor is probably not offended by the term “shock and Orr”. He may even like it…

New Trust Act – are you prepared?

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On 30 July 2019, the Trust Act 2019 received Royal Assent signalling a modernisation of trust legislation that, given the number of trusts in New Zealand, we should all be aware of.

The new Act will replace the Trustee Act 1956 and its purpose is to make the law more accessible to both trustees and beneficiaries of trusts.

Significantly the new Act does not come into force until 30 January 2021 – given the extent of the changes, the new Act provides for an 18-month lead in. While this is a substantial period, time will pass quickly and the new Act will be in force before we know it.

The new Act will apply to existing and new trusts, and therefore we recommend that all existing trusts are reviewed in light of the changes and in some cases varied or wound up.

Some of the key changes being introduced by the new Act are:

Trustee Duties

The new Act identifies and defines mandatory and default duties of trustees.

The five mandatory duties that cannot be avoided or excluded in the trust deed are:

  • a duty to know the terms of the trust,
  • a duty to act in accordance with thoseterms,
  • a duty to act honestly and in good faith,
  • a duty to act for the benefit of beneficiaries, and
  • a duty to exercise the trustee’s powers for proper purposes.The ten default duties are not compulsory but will apply unless they are expressly excluded in the trust deed. The default duties are:
  • Exercise reasonable skill and care in administering the trust, having regard to any special knowledge or expertise that the trustee has, or to any special business or professional knowledge or expertise if the trustee is acting in the course of a business or profession;
  • Invest prudently, with the same regard to special knowledge or experience as above;

• Not exercise their power for their own benefit, whether directly or indirectly;

• Regularly and actively consider whether they should be exercising their powers;

• Not bind or commit trustees to the future exercise or non-exercise of their powers;

• Avoid conflicts of interest;

• Act impartially between beneficiaries;

• Not profit financially from being a trustee;

• Not take any reward for being a trustee; and

• Act unanimously with the other trustees. Trust Duration

The length of a Trust’s life has been extended from a maximum of 80 years to a maximum of 125 years.

Duty to hold documents

The new Act requires trustees to retain core documents, so far as it is reasonable. Where there is more than one trustee, each trustee must hold:

The trust deed and any other document that contains terms of the trust;

Any variations made to the trust terms;

And they must be satisfied that at least 1 of the trustees holds the other required documents and that they will be made available to the other trustees on request. The other core documents are:

• Records of trust property identifying the assets, liabilities, income and expenses of the trust;

• Records of trustee decisions made during the trustee’s trusteeship;

• Written contracts entered into during that trustee’s trusteeship;

• Accounting records and financial statements prepared during that trustee’s trusteeship;

• Documents of appointment, removal, and discharge of trustees;

• Any letter or memorandum of wishes from the settlor;

• Any other documents necessary for the administration of the trust;

• Any of the above documents that were kept by a former trustee and passed on to the current trustee.

Disclosure Obligations

The new Act favours keeping beneficiaries informed and clearly outlines the basic trust information that is to be provided to every beneficiary, namely:

• that they are a beneficiary;
• the name and contact details of the

trustees;

• changes to the trustees as they occur; and

• the right of the beneficiary to request a copy of the terms of the trust or trust information.

Trustees may only refuse to provide information to beneficiaries after considering both their general obligation to provide information and a series of factors as to the nature of the information and the practicalities of restricting that information.

The implications of this are clear, particularly in circumstances where it has always been considered appropriate for a person’s interest in a trust not to be disclosed to them.

These are only some of the changes however in general terms, the new Act, increases the rights and protections for beneficiaries while also imposing more responsibility and prescriptive requirements on the trustees. The changes are likely to make trusts more transparent for beneficiaries but also more intensive to administer for trustees and could lead to changes both to trust documentation and administration.

If you are a trustee of a trust, then we recommend that you speak to the trust’s lawyer in the coming months to consider the changes as they relate to the trust in question.

Property investors predict positive investment conditions

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Commercial and industrial property investors see positive investment conditions over the next 12 months in Napier and Hastings, according to the latest Colliers International commercial property investor confidence survey.

A net positive (optimists minus pessimists) 25 percent of respondents expect investment conditions to improve over the next 12 months, which was up slightly from the previous 2Q 2019 survey.

The survey also revealed quite a significant shift up in the number of optimistic respondents.

Approximately 41 percent were optimistic in the 3Q 2019 survey, versus 30 percent in the Q2 2019 results. More respondents shifted out of the neutral category, one of the largest shifts recorded in the Colliers survey.

There are a few key features in the Hawke’s Bay sector that is driving the positive sentiment.

Interest rates at all-time lows, with an expectation of rates to fall further, is driving some of the sentiment.

Access to capital remains a key element to this, and discussions around higher margins from potential changes made by RBNZ on capital requirements for banks (announcement expected in November) will most likely benefit experienced investors who can show a positive track record. Banks remain competitive for quality opportunities.

Another driver of the sector in Hawke’s Bay market is the demand and supply balance. Opportunities to lease space have been reducing recently. Also, general market

conditions have meant owners have been able to benefit from rising rents.

In the office sector, we have seen rents climb steadily over the past year, especially for the highest quality properties. Prime rents typically average between $275 per sqm and $320 per sqm. Prime average yields range between 6.10% and 7.00%.

In the retail sector, prime retail rents have been broadly flat over the past year, but prime average yields continue to sharpen, now ranging between 5.60% and 6.50%, down around 60 basis points in 12 months.

Industrial market conditions carry a lot of favour with investors with rents edging up higher as well. Average prime yields in the industrial sector are heading sub-6% in some locations.