NZ Herald - The Business 22nd February 2019 by NZME.

A CUTTING-EDGE SOLUTION TO KEEP YOUR BUSINESS

CONNECTED Turn over to ﬁnd out how Spark’s Cloud Phone solution helped STHIL Shop Masterton ﬁnd their edge.

Nic Burgess Branch Manager STIHL Shop Masterton

LITTLE CAN BE HUGE

“CLOUD PHONE HELPS KEEP OUR BUSINESS Courtney Allen Business Hub Owner Spark Business Hub Wairarapa

CONNECTED”

In today’s business environment it’s more important than ever to be connected. For STIHL Shop Masterton’s operation, it’s crucial.

Nic began by talking to his local Spark Business Hub and it soon became apparent that they were due for a system upgrade.

Kiwis are passionate about the land, and the distinctive orange ﬂashes of STIHL branded chainsaws and other machinery can be found in sheds and workshops all around the country. Renowned for quality and reliability, the German-made tools are loved by professionals and weekend warriors alike. In Masterton, the STIHL store franchise is overseen by Branch Manager Nic Burgess.

The Spark Business Hub Wairarapa provided Nic with a solution that made sense from a logistical and ﬁnancial point of view. It consisted of upgrading the two Masterton stores to Fibre and installing a 4G Wireless Broadband modem in Greytown, where Fibre was not yet available. The faster connection speeds across the two stores also made it possible to connect them all through Cloud Phone, a cloud-based collaboration system.

“Our phones are ringing every five minutes with people booking and hiring gear, trying to get machines fixed, all while our staff are busy on the floor”. Nic and his team are constantly busy, not just through selling and servicing STIHL products, but through the two other businesses that they run out of the same building in Masterton – The Hire Shop and The Heat Shop, as well as their Greytown-based Hire Shop. With two locations and a client base of more than 14,000 customers, it’s imperative that ordering, stock levels and deliveries run smoothly. Adding to the complexity is distance. With three businesses based in Wairarapa’s main hub of Masterton and another located 25kms away in Greytown, the geographical separation of the stores means staying connected is vital. But intermittent connection problems were beginning to impact their business. So Nic set out to find a solution. Nic is proud of the businesses’ customer service and sees it as one of their points of difference. Having their competitive advantage impeded by technology was frustrating, especially because the problem was fixable.

One of the call management features of Cloud Phone is Hunt Group. It’s designed so calls aren’t missed, by automatically transferring them in a predefined sequence, until the call is answered. This provides a seamless experience for customers. For Nic it means “If people ring Greytown and they can’t get through, they’re automatically bounced up here to Masterton and we can still sort them out.” Cloud Phone also has a User Portal that provides call transparency and easy reporting. It means that Nic can monitor calls coming in and out of the office and see how much the phones are being used. This allowed Nic to adjust their business comms to suit the businesses’ changing needs. “Last year with the User Portal I was able to identify a phone that wasn’t being used as much as others. We took action quickly and removed it, ultimately cutting costs while still accommodating our communication needs”. Nic recommends Spark and Cloud Phone to other businesses that face similar challenges. “The new phone system helps give us an edge. As all calls are getting answered now which keeps our customers happy. If the customers are happy, we’re happy”. To find out more about how Cloud Phone helped give STIHL an edge, go to spark.co.nz/cloudphone or contact your Customer Lead or Business Hub today.

0800 BUSINESS

February 22, 2019

Dr Cullen’s prescription TAX SHAKEUP Liam Dann

Property — the real target? C4

Tamsyn Parker

KiwiSaver impact C5

Chris Keall

Entrepreneur fires a warning C6

Matthew Hooton

Capital gains tax: Dead on arrival C7

Brian Fallow

No way to help business C8 Photo / Mark Mitchell

Where to plug them in? The big problem with electric cars FEATURE C12-13

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The New Zealand Herald | Friday, February 22, 2019

News Inside

Skyline Queenstown attracts international as well as domestic tourists.

Tax shakeup: ● Liam Dann: What’s the real plan? C4 ● A bob each way on KiwiSaver C5 ● Rocket Lab man’s warning C6 ● Matthew Hooton: This plan is dead on arrival C7 ● Brian Fallow: Why discourage business investment? C8 As electric cars gain ground, there’s a problem: Where to plug them in? Feature, C12-13

Regulars Stock Takes P10 Business Traveller P11 Markets P20-22 The Insider P23

The Business NEWS SECTION Editor: Duncan Bridgeman News Editor: Karen Shepherd Email: duncan.bridgeman@nzme.co.nz Phone: (09) 379-5050 Write: The Editor, Business Herald, Private Bag 92189, Victoria St West, Auckland 1142

FEATURE SECTION Editor: Mark Fryer Email: mark.fryer@nzme.co.nz Phone: (09) 379-5050 Write: Private Bag 92189, Victoria St West, Auckland 1142

Photo / Mark Mitchell

Skyline Queenstown is finalising detail on a project to upgrade the tourism mecca’s iconic gondola service in a scheme that chairman Mark Quickfall says will require “north of $100 million” of new investment. The project reached a significant milestone on Wednesday with an Environment Court decision to grant a resource consent for the project, which will install a new “state-of-theart” gondola system, expand the complex at the top of the gondola,

NEWSTALKZB.CO.NZ

and add a new lower building and a 449-space carpark near the base terminal. It sits on the outskirts of one of New Zealand’s busiest tourist precincts. Trading on the Unlisted platform, Skyline Queenstown will fund the project from a mixture of cash on its own balance sheet and bank debt. “This is a fantastic result for the Queenstown community and the New Zealand tourism industry as a whole,” general manager Wayne Rose said in a statement.

“This project is vital to ensure we cater to the demand of our visitors, as well as providing a premium facility that Queenstown locals can use and enjoy. It will enable us to step into the future not only as one of NZ’s most popular leisure facilities, but as one of the world’s top leisure tourism attractions.” The redevelopment of Skyline Queenstown, which includes the gondola, a luge facility, viewing deck and mountain biking tracks, will increase the capacity for gondola

passengers at the base terminal and “improve the overall guest experience” with additional services and amenities, the company’s statement said. New 10-seat Doppelmayr cabins will be installed for the gondola, there will be a 650-seat restaurant with a flexible configuration for multiple dining options. Conference facilities will accommodate more than 700 guests, and there will be a new cafe and additional retail space. — BusinessDesk

Critic’s anger at ICT sector report

Aimee Shaw

report published by Government has come under fire for not giving enough credit to the importance of New Zealand’s ICT sector and “almost exclusively” references Google’s own report. Joint research project Growing the digital economy in Australia and New Zealand, by the New Zealand Productivity Commission and Australian Productivity Commission, did nothing to highlight the opportunities in the local ICT and digital sectors, and heavily references a report commissioned by Google, a critic says. Catalyst founder and director Don Christie was disappointed at the report, which he said wrote off New Zealand’s digital sector as too small

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Gondola revamp gets green light

to bother with. He says the 168-page report suggested innovation only happens at scale — and scale only happens in San Francisco and China. “It’s sickening. It is extremely offensive to those of us who spend our lives building and promoting Kiwi products and services,” he says. The report suggests regulations that would protect society from digital dominance were unnecessary, he says. “There really is nothing here about opportunities for our sector or how we might achieve some core government goals. It’s very outdated thinking and very disappointing.” A big believer in New Zealand’s ICT sector, Christie says Government had bold ambitions to double the size of the digital sector to make it the second-largest contributor to GDP. But Christie feels the report “almost

exclusively” references Google’s Alpha Beta report highlighting its economic and social impact in New Zealand. “My concern is that report very much reflects the view that Google would give you of the world’s digital economy and effectively has no ambition for anything that happens in New Zealand or might be exported. “They quote uncritically from the ‘Alpha Beta’ report, which was commissioned by Google. They seem to have failed to reference that obvious self serving connection. Google and Uber get far more mentions than our own local digital sectors.” However, Productivity Commission chair Murray Sherwin has defended the report, saying it made no comment about the quality of the local technology sector but was

simply observing current trends. “We made the observation (which is widely held in academic literature) that there are strong economic forces that are concentrating the production of digital goods and services in a relatively small number of locations such as Silicon Valley, Seattle, Beijing and Shenzen,” he said in a statement. “These forces include ‘spillovers’ and ‘agglomeration’. That is, the benefits that one firm or individual gets from being physically close to other producers in the same sector, such as the sharing of ideas, access to specialised staff and advice, and proximity to customers. We concluded that these economic forces are very difficult to overcome.” Sherwin acknowledged the commission cited “a couple of reports prepared for Google”.

nzherald.co.nz # C3

The New Zealand Herald | Friday, February 22, 2019

News

Windfarm plan sparks community storm

Andrea Fox

elling a windfarm plan to a local community is always tough but Hauraki people are giving promoters of a major project on the Kaimai Ranges a gruelling run for their money. After being howled down at a Business-after-5 function in Paeroa late last year, the windfarm proposal’s community liaison advisor Clare Bayly was steeling herself for placards and more shouting at a Te Aroha Continuing Educationorganised public meeting this week. Though lively, the decibel-level stayed manageable among the 80 or so people who turned out. But there’s no doubt Auckland entrepreneur Glenn Starr faces a serious public challenge to his plan to build 24 turbines, most up to 207 metres high, over 1304 hectares on the north western top of the Kaimai Ranges, south of Paeroa. Hauraki deputy mayor and Paeroa businessman Toby Adams was at the business function which turned ugly. “It was well-advertised to the public. The people were business owners, but not the usual, and they had concerns. It was heated and loud. I was there as deputy mayor and I did apologise that it had got like that. But I did explain she is the front person, so she knew (it could get heated). I’ve had worse.” Adams said while “no one deserves that no matter what” the issue, people always feared change. “They believe it’s going to affect their outlook, their living quality, their house prices.” Submissions have now closed on the project. Hauraki District Council received 220. A total of 157 against it and 57 in support. Waikato Regional Council had 143 submissions, 96 against, 42 in support. Independent commissions appointed by both councils are expected to hear the case by midyear but Starr’s company may apply for direct referral to the Environment Court.

Entrepreneur Glenn Starr plans to build 24 turbines, most up to 207 metres high in the Kaimai Ranges. Photo / 123RF

Getting the proposal across the regulatory line will cost around $180 million, then Starr will seek equity partners to build, says Bayly, who, while unsettled by the verbal attack in Paeroa, isn’t without sympathy for the opponents. “I understand how they feel — when people feel powerless they get frustrated. My job is to provide them with objective information. “These are big turbines. They will be highly visible — you’re going to see them right out in the Hauraki Plains.” For context, turbines at Meridian Energy’s windfarm at Te Uku near Raglan, are 130m high, currently the tallest in New Zealand. They are visible from Hamilton, 35km away

and will be dwarfed by the Kaimai “sound like waves on a beach” and closer up, allows for normal converones. But the site also has the best wind sation level, Bayly says. energy generation potential Residents of Rotokohu Road, in a valley that would that’s close to Auckland, be wrapped in turbines, Hamilton and Tauranga. are understandably senThe promoter argues sitive about the prothe Government is posal, she says. targeting 100 per cent Judging by the Te renewable electricity Aroha meeting, people generation by 2035 and are also worried about the windfarm would the effect on property generate enough to prices, birds, and who’s power Napier. going to “clean up the The visual impact is Hauraki deputy mayor mess” if Starr’s comapparently number Toby Adams. pany goes broke in the one concern for local communities. Second is noise which, next 20 or 30 years and neighbours for houses 500m to 1km away, will are left with “a whole lot of rusting

turbines“. Also, it’s possible, noted one attendee, that new technology will render the windfarm redundant in 20 years. There were calls for a ring-fenced fund to be established to “clear up” the windfarm remains if the worst happened, and one attendee called for rates relief for households which “have to look at this eyesore”. The windfarm would get more support if the public owned it, said another. Bayly assured that a community group would be developed to work with the company if the windfarm gets approval. The windfarm would be monitored 24/7 from the United States, a revelation that provoked questions as to why New Zealand wasn’t getting the job. Bayly said the windfarm would have a manned substation but the US organisation was top of its field. She said the public consultation journey had been an education, particularly while working with four iwi with connections to the site, one of which had raised the issue of the impact on mist on the Kaimai hilltops. “They said the mist represents their ancestors. And there are burial sites up there. Of course they want to know none will be desecrated.” Two turbines had been cut from the plan after talks with local hanggliding and gliding groups and lights would come on the turbines when they sensed an aircraft at night. Noting that the Te Uku windfarm had become a tourist drawcard, Bayly suggested a similar boost for Hauraki tourism and the growing popularity of its cycling rail trail. Kaimai Windfarm Ltd is 51 per cent owned by Ventus Energy, a company 100 per cent owned by Starr, and 49 per cent owned by Starr, according to the Companies Office register. If the windfarm gets the green light from regulators, the first turbines would be delivered to the site late next year and the first power generated in 2021. The project could be completed by 2023.

F&P Healthcare shares rally after deal with US arch-rival Jamie Gray

Shares in Fisher and Paykel Healthcare rallied by 6.3 per cent on the back of news it had agreed to agreed to bury the legal hatchet with American arch-rival, ResMed, over patent issues. After a few minutes of trade, the stock was up 84c at $14.22, and closed yesterday at $14.28. The company earlier announced

its settlement of the global patent infringement litigation with ResMed would not have a material impact on its net profit after tax guidance for the financial year. However, Mark Lister, head of private wealth research at Craigs Investment Partners, said analysts had factored in ongoing future legal costs into their valuations of the company. “The litigation has, by no means, been a show stopper for them, but it

has been a negative issue that’s been hanging around for quite a while now,” Lister said. F&P Healthcare said last November it expected full-year operating revenue for the 2019 financial year to be about $1.07 billion and net profit after tax to be in the range of approximately $205m to $210m. F&P Healthcare and ResMed had agreed to settle all outstanding patent infringement disputes with no pay-

ment or admission of liability by either side after racking up millions of dollars in legal fees. In a joint statement, the companies said all ongoing infringement proceedings against named products will be dismissed and each party will bear its own attorney fees and costs incurred in global proceedings. All other terms remain confidential, they said. As a result of the settlement, there will be no further infringement

BEETHOVEN’S TRIPLE

proceedings against ResMed or F&P Healthcare products. F&P Healthcare has been locked in patent disputes spanning the US, UK, Europe, New Zealand and Australia with ResMed since 2016. The Kiwi company spent $15.6m on litigation in the year ended March 31, down from $20.7m a year earlier. Litigation cost it about $7.7m in the six months to September last year. — Additional reporting BusinessDesk

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The New Zealand Herald | Friday, February 22, 2019

Tax shakeup

Chorus of boos from business groups B Liam Dann

usiness organisations have pushed back against a capital gains tax with a chorus of concerns ranging from the impact on productivity, the destruction of shareholder value, and flowon to an already slumping property market. Matt Goodson, managing director of Salt Funds Management, said CGT would have a negative impact on company valuations. “It will increase companies’ cost of capital, which should decrease valuations, and that will be particularly skewed to those companies who retain most of their earnings,” Goodson said. “If you retain most of your earnings, you would expect your share price to go up over time, so you would be taxed on that where you were not taxed previously.” Shane Solly of Harbour Asset Management said the extension of the bright line test and restrictions on income spreading were already taking the heat out of some of the more speculative elements of residential property investment. “They have certainly put owner occupiers on a more equal footing to

residential property investors,” he said. The introduction of a CGT while leaving the above measures in place would be “draconian”. EY Tax leader David Snell said he thought the prospect of implementation by 2021 looked “hasty”. “The fact the group vote was split three (against) to eight (for) indicates that implementation of a full CGT is going to be incredibly difficult with associated revenue and efficiency gains uncertain.” Greg Haddon, tax partner at Deloitte, said the report raised the possibility whether the Government should look at a staged introduction and consider what assets might be perhaps be simpler to start with. “One of the things we are going to have to work through over time is the complexity,” he said. “For example it says it will be taxed on a realised basis. A lot of overseas jurisdictions have massive rules around what is in fact a realisation so that can be very complex.” Mark Peterson, CEO of stock market operator NZX, said it would discourage investment in New Zealand businesses and stunt the growth of the country’s capital markets.

The recommendations outlined are not fair on New Zealand businesses. Mark Peterson (above)

The suggested capital gains tax would cover assets such as land, shares, investment properties, business assets and intellectual property.

Peterson said New Zealanders were already taxed on income used to acquire shares — and that being taxed twice would be unfair. “NZX is also concerned about the fairness of the Tax Working Group’s recommendations, and the different tax treatment proposed for direct investment compared to managed funds and KiwiSaver, which if implemented, would narrow participation in the New Zealand market,” Peterson said. He said the NZX did not want to see tax settings which would create preferences for offshore investment, adding that a strongly performing and efficient capital market requires the broadest possible participation from a wide range of investors. “Our capital market is a significant part of New Zealand’s economy, which needs to keep growing,” he said. “The recommendations outlined are not fair on New Zealand businesses and may pose risk to economic growth.” Meanwhile, lobby groups wasted no time laying into the report. Federated Farmers described the capital gains tax proposal as a “mangy

dog”, that would add unacceptably high costs and complexity to the rural sector. The Employers and Manufacturers Association (EMA) warned that any gains from such a broad-based capital gains tax would be eaten up by administration and other costs, leaving little revenue. “It’s difficult to see any benefits for the business community from implementing the proposed capital gains tax rules, as taxing both shares and business assets appears to be double taxation,” EMA chief executive Brett O’Riley. Peter Newbold, general manager of PGG Wrightson Real Estate, said a capital gains tax would have a minimal impact at the moment because the rural property market was largely static. He said in general rural property values for most sectors are holding steady, although there was some downward pressure in dairy in some regions. “If that remains the case, a capital gains tax would have minimal impact on the market,” he said. — Additional reporting Bridgeman, Jamie Gray

Duncan

Has the Government just pulled a political masterstroke? Liam Dann

comment

Is this Government going to bet it all on a comprehensive, once-in-ageneration, tax revolution — one that affects nearly every New Zealander via KiwiSaver, small business, and the family bach. Or has it, in a political masterstroke, reset the dial on capital gains tax to the extent that introducing a tougher regime targeting property investors now looks mild-mannered and relatively uncontroversial. I’m inclined to think the latter. Consider how hard it was for previous Labour leaders to get any traction at all on proposals to tax property investors. Now, rather than being responsible for devising a harsh new system, the Government’s job is to soften and exempt. The Tax Working Group has covered a once blank canvas in thick paint which the Government will now scratch away at. We won’t get an official response until April. And even then, I’d be surprised if it was delivered as fully formed election policy. We’ll see some of the least politically workable aspects ruled out and others left open for more assessment. None of this is simple. There are coalition ramifications to work through and no doubt a bit of ideological soul searching to be done. But political pragmatism has to win. Finance Minister Grant Robertson was reluctant to give much away but has already made the point that it’s unlikely — given the sheer volume of recommendations — we’ll see them all implemented. His joint press release with Revenue Minister Stuart Nash was at pains to reassure. It pointed out that the recommendations are non-binding, that the Government didn’t see the need for a “major overhaul” of the tax system. “In the words of the Prime Minister we will not throw the baby out with the bath water,” Nash said. But even the dissenting minority

Finance Minister Grant Robertson (right) and Revenue Minister Stuart Nash talk to the media about the Tax Working Group report.

within the working group had rental property owners in its sites. “In our view, the case for taxing more gains from residential rental property is clearest,” they wrote. It seems unlikely that property investors will be spared by the Government. Those dissenting members expressed concern about what additional tax on businesses and equity investments will do to the productive end of the economy. Lifting productivity is one of Robertson’s core missions and these

The Tax Working Group has covered a once blank canvas in thick paint which the Government will now scratch away at. concerns will have to weigh on his thinking. Meanwhile, NZ First leader Winston Peters seems set on an exemption for farms. Then there is the issue of the tax itself which — at the marginal tax rate (28 or 33 per cent) and without

allowances for inflation adjustment — would be one of the toughest CGT regimes in the world. Why has the working group delivered something so hard-nosed? Sir Michael Cullen has described the group’s task as one of weighing up the costs and benefits of any

Photo / Mark Mitchell

changes. In the theoretical world of tax policy, a more comprehensive system, with fewer exemptions, is simpler, cheaper to administer and gathers more revenue. It was simply not the working group’s job to weigh political risks. But given the make-up of the group, and the brief it was given, it’s hard to believe the Government wasn’t well aware of what would be delivered. On that basis, then you’d assume that they have a grand strategy at play.

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The New Zealand Herald | Friday, February 22, 2019

Tax shakeup

Cullen’s bob each way on KiwiSaver

Tamsyn Parker

ir Michael Cullen’s Tax Working Group has called for KiwiSaver to be tweaked to increase the incentives for low income earners to save, reduce tax and provide a boost to those on paid parental leave. But a retirement savings expert has warned that the proposed changes will fail to help some of those who need it most and the true benefit is hard to gauge as people will also have to pay tax on gains on their investments. Cullen, who helped set up KiwiSaver in 2006, has recommended the tax on the employer contributions be refunded for those who earn under $48,000 with a graduated refund for those who earn between $48,000 and $70,000. Those who earn more than $70,000 would get no benefit. He also wants the Government to increase the annual member tax credit from 50c for every dollar a member puts into KiwiSaver up to a maximum of $1042 to 75c in the dollar. That would mean members could get up to $781.5 a year from the Government and Cullen wants it to be paid to all those who go on parental leave regardless of whether they put money in themselves. The group has also recommended the lower tax rates for KiwiSaver funds be reduced by five percentage points each for the lower rates which are currently 10.5 per cent and 17.5 per cent. Some of the group’s recommendations reverse reductions of KiwiSaver incentives brought in under the

Sir Michael Cullen was the architect of KiwiSaver back in 2006 and now his Tax Working Group is recommending changes to the scheme. Photo / Ross Setford

National Government which cut the member tax credit in half and introduced the tax on the employer contribution. David Boyle, head of sales and marketing at Mint Asset Management, who previously worked at the Commission for Financial Capability, said the recommendations had a touch of “back to the future” about them. He warned that a lot of New Zealanders who now worked on a contract or casual basis would miss out on the benefit of reducing the tax on the employer contribution and it

added another layer of complexity to KiwiSaver. “A lot of New Zealanders won’t benefit from this.” He said many of those in the manufacturing and construction industries were contractors. Boyle said while the increase to member tax credit was welcome, it was hard to know what the net benefit would be and people would also be paying tax on their investment gains through KiwiSaver. “What will the real net outcome be? I think there needs to be more work done there.”

Boyle said he was in favour of the lower tax rates on KiwiSaver funds which are structured as portfolio investment entities or PIEs but said PIEs that were not KiwiSaver schemes would miss out, creating a skew in the market. Some have previously questioned whether many savers are on the right tax rate for KiwiSaver, as providers put people on the highest rate of 28 per cent until they get told by the member to change it. Dropping the lower rates may make little difference if people aren’t using them anyway.

Boyle said paying the member tax credit to those on parental leave would help with the gender gap which has already emerged in KiwiSaver. Richard Wagstaff, president of the Council of Trade Unions, also welcomed the recommendation to keep paying the Government KiwiSaver contribution while workers were on parental leave. “We have long advocated this and would like to see the proposal taken up and expanded. It helps working parents to continue saving while they are caring for children,” he said.

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The New Zealand Herald | Friday, February 22, 2019

Tax shakeup

Entrepreneur fires rocket at CGT plans

Chris Keall

ocket Lab founder Peter Beck lashed out at the Tax Working Group’s proposal for a capital gains tax (CGT) while others took a wait and see approach. “Taxing IP [intellectual property] and stock will decimate the already fragile NZ startup industry,” Beck tweeted following the release of the report. “NZ already has big problems around creating large valuable technology companies and this will not help.” In October, Beck was made one of the founding members of Prime Minister Jacinda Ardern’s Business Advisory Council. His startup employs around 350 people — most of them in Auckland — and is valued at more than $1 billion. The head of a group of investors who support early-stage companies said things hung in the balance. “The CGT could be very damaging to early-stage investment if implemented poorly,” Angel Investment Association chairman Marcel van den Assum told the Herald. He compared early details of the CGT proposal to the first cut of the new R&D tax credit, which failed to address loss-making companies. “But on the other hand, it could be very beneficial if funds are shifted from unproductive assets such as property, to productive assets such as innovative startups, effectively shifting from artificial to real-value creation,” he said. “Opening up more funding, provided modest capital gains are offset by material capital loss consideration, is something I’m looking forward to.”

Rocket Lab founder Peter Beck fears a capital gains tax would decimate New Zealand’s startup industry.

Punakaiki Fund manager Lance Wiggs said. “The details will matter. My initial thoughts are that the CGT approach seems reasonable, but it would be a lot more palatable if the rates were lower.” He added: “I have a general concern that new investment into companies (as we do at Punakaiki Fund) should be recognised as more valu-

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RESPONSES ARE DUE BY 14TH MARCH 2019

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able than buying and selling existing listed shares. Other countries reward this sort of investment with various incentives.” Van den Assum’s hope that the CGT would shift investment from property to startups was a common theme. Movac founder and rich-lister Phil McCaw said: “I want to reserve judge-

ment to see what ultimately comes out in the wash. In terms of what’s proposed, I don’t see how going from one of the lowest CGT regimes in the world to the highest could be positive for investment in the early stage ecosystem nor how it helps one of the smallest nations in the world be globally competitive.” Christchurch tech, outdoor cloth-

ing and commercial property investor Ben Kepes said: “There has long been the concern that, instead of being invested in businesses or other productive assets, a huge proportion of Kiwi wealth is locked up in speculative property investment. As such, a CGT levels the playing field and should result in a significant shift of capital from speculative to productive assets.” Kepes added: “At an ethical level, and putting aside the not insignificant self-interest aspects that seem to creep into conversations around CGT, the proposal will hopefully see a move towards a more equitable distribution of wealth and, potentially as a flow-on effect, more interest in the social and economic bottom lines of commercial entities.” Wellington investor Dave Moskovitz, whose most recent payday was the multimillion-dollar sale of academic publishing startup Publons to Thomson-Reuters spin-off Clarivate, was also bullish. “The devil is in the details, but looks great overall,” the US ex-pat said. One of those details, he’s hoping will be clarified: “It’s important that CGT is not payable until a gain is realised. Other jurisdictions have a nonsense where you have to pay tax on nominal increases in book value that have a high chance of evaporating later,” he said. “It shouldn’t affect professional investors. We already pay tax on investment gains as income. It looks fair — if you earn a dollar, you pay tax on it — unless you can call it art. What’s with that? I’m pleased to see losses can offset gains. That’s important for startup investors.”

Overcrowding and rent hikes, warns expert Tamsyn Parker

Property investment advocates say the proposed capital gains tax will see investors sell up, reducing the supply and ultimately leading to overcrowding. But the trade unions have welcomed it as a chance to stop speculators and help people on to the property ladder. The Tax Working Group yesterday released its recommendation for a CGT to be applied on assets such as land, shares, investment properties, business assets and intellectual property. Any gains on the sale of these assets would be added to the seller’s overall yearly income and be taxed normally at realisation — meaning a CGT would only take effect when it becomes law. Other assets — such as the family home, cars, boats and art — would be exempt from a CGT. Andrew King, chief executive of the New Zealand Property Investors Federation, said the recommendations weren’t a surprise. “They were set up to bring in a capital gains tax that wouldn’t affect the family home.” But he said the proposals would penalise those who saved and invested and encourage people to either spend their money or put it into the family home. “Basically it’s a disincentive to those who want to save money and invest money — they get punished.” King expected the proposed changes, which still require government sign-off, could push up family house prices as people upgraded their home rather than investing in property and drive more people to sell their investment properties resulting in fewer available, pushing up rents.

Concern has been raised that a capital gains tax could mean fewer rentals available, pushing up prices. Photo /

Getty Images

“I can only see that rent is going to go up and that is bad news for tenants.” He said that drove people to move in together resulting in crowding. “Rents are going to be more expensive. Overcrowding is going to increase.” King said property investors were already selling up because it was getting harder to be a landlord and because of concerns about government plans to ringfence losses. “There are lots of things causing people to leave.” He said there probably wouldn’t be a drop in the number of rental properties but new supply was not coming into the market to meet growing demand. “It won’t be there. There will be a shortage of rental property, higher rents and overcrowding. But Richard Wagstaff, president of the Council of Trade Unions, said taxing the income from capital gains was an important piece in the puzzle making New Zealand a fairer place.

“Those who complain about taxing this income like all other income, are those who are currently able to play the property market as if it were a game of monopoly.”

Basically it’s a disincentive to those who want to save money and invest money — they get punished. Andrew King

Wagstaff said so many working Kiwis were struggling to buy a single home because of the way that the wealthy few could use this subsidy to speculate. “With wages receiving a falling share of the nation’s income it is increasingly important that taxation of income from capital is made fairer. “Working Kiwis deserve a better deal and now the Government

needs to show what they are made of and show that they truly do care about making ours a fairer system.” OneRoof editor Owen Vaughan said if the Government decided to adopt the proposals, New Zealand could see some investors quickly withdraw from the market. “In the short term this could put pressure on the rental market, which the group acknowledges in its report. “The group concludes that market pressures will constrain attempts to push rents above what landlords are already able to set, and that tenants will find homeownership more affordable than renting as a result of a lowering of house prices. “That’s the experience in other countries with similar forms of capital gains tax, but recent polls suggest that the Government will have job convincing Kiwis that the changes are nothing to fear, especially in the shadow of falling house prices in Australia, even though the triggers of the chaos there are nothing to do with capital gains tax.”

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The New Zealand Herald | Friday, February 22, 2019

Opinion

Tax shakeup

Cullen’s plan — don’t say CGT, say DoA

If Jacinda Ardern presses on with CGT, she’ll be giving Winston Peters the issue which will differentiate NZ First from Labour.

Political reality means proposed capital gains tax is dead on arrival

he probability of Michael Cullen’s capital gains tax (CGT) ever being implemented is close to

zero. Labour’s plan was that Cullen’s Tax Working Group (TWG) would unanimously recommend a modest new tax, Parliament would legislate for it to come into force in 2021 along with compensating tax cuts, and the 2020 election would be a referendum on a done deal, proposed not by politicians but by so-called experts. If it opposed the CGT, National could be smeared for allegedly standing with the rich against the combined wisdom of the nation’s taxation establishment. It hasn’t worked out this way. Cullen has recommended the world’s most severe CGT, with a rate of 33 per cent for those earning over $70,000 a year in their ordinary job. Not unrelatedly, a quarter of the TWG rejected the proposal. The dissenters were perhaps New Zealand’s most respected tax-policy guru Robin Oliver, well-regarded tax lawyer Joanne Hodge and Business NZ head Kirk Hope. The upshot is that when Jacinda Ardern and Grant Robertson make decisions in April, they cannot claim to be reflecting the unanimous advice of so-called experts. They will have to choose one side over the other. This may be academic, because Ardern and Robertson will not get Cullen’s CGT through Parliament this side of the election, or ever. With his party well below MMP’s 5 per cent threshold, Winston Peters has no intention of seeing his quarter-

century project fail, let alone by backing a tax he has always opposed. NZ First will not vote for the proposal. Ardern and Robertson cannot then go into 2020 saying the CGT is the combined view of all three governing parties, but only that it is Labour’s policy. Such vagueness invites National and NZ First to fill in any gaps but they need do little more than state the most obvious flaws in Cullen’s plan. The long-standing argument for a CGT is to rebalance investment away from unproductive residential property towards productive businesses and the capital markets. Cullen’s proposal does the opposite. The one major asset class to be exempt from the new tax will be the two-thirds of residential properties that are owner-occupied. As the TWG itself noted, this risks a “mansion effect”, with homeowners investing in their CGT-free homes, rather than in their businesses or the capital markets, to escape the new tax. Other exempt assets are private art collections, jewellery and family boats, none of which seem especially productive compared with shares, investment properties, business assets, intellectual property, farms and other productive land, all of which would be included. KiwiSaver is also caught, although the TWG has recommended complex measures to try to counter such an obvious new disincentive to save. Cullen’s plan also fails to meet the Prime Minister’s fairness test, especially intergenerationally. Baby boomers have enjoyed 40 years of tax-free asset-price inflation and are often cashed up, but can now look forward to the income-tax cuts on their superannuation payments that Cullen recommends. The economic effect is that Gen X, Millennials and Gen Z will be paying new taxes on gains they make on their businesses, retirement savings and other investments in order to pay

Ardern and Robertson will not get Cullen’s CGT through Parliament this side of the election, or ever.

Photo / NZME file

for their Boomer parents to receive higher superannuation payments. The point of the income-tax cuts is to deliver the Government’s promise that the CGT will be revenue neutral, but no such assurance is credible. Cullen claims his tax will bring in $8 billion in its first five years but eventually over $3b annually. To be much more than numbers plucked out of the air, such forecasts require Treasury officials to have insight into how the value of non-owneroccupied residential property, privately-owned businesses, the NZX, and KiwiSaver and other managed funds will track in the decade ahead. Not even Warren Buffett has such insight and it is fantasy to think it could be found in Wellington. As Cullen well knows, fiscal forecasting is notoriously difficult and it stretches all

conceivability that revenue neutrality is possible even in year one. The Opposition can choose to attack the proposal as either a tax grab or as risking a fiscal hole, with either more plausible than revenue neutrality. Coalition realities and the CGT’s political unsaleability give Ardern and Robertson an easy way out. If they proceed, Peters has his issue on which to differentiate or even split from Labour. Off the back of the CGT, he can get above 5 per cent, again secure the balance of power, then put a stop to the CGT in coalition with either Labour or National. Either way, Cullen’s scheme is best judged dead on arrival. Matthew Hooton is managing director of PR and corporate affairs firm Exceltium.

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The New Zealand Herald | Friday, February 22, 2019

Economy

Tax shakeup

Brian Fallow

brian.fallow@nzherald.co.nz

NZ businesses could perform better against the global competition, if they had access to more capital. Photo / NZME file

Ease the problem, don’t make it worse Capital gains tax on business investment is no way to help Kiwi companies become more productive

eard the one about the tourist on the backroads of Ireland, who stopped to ask a local how to get to Ballymacpeake? “Ah, if I was going to Ballymacpeake, I wouldn’t leave from here.” Yes, the old ones are the best ones. However defensible a broader capital gains tax may be as a destination for tax reform — both in theory (real capital gains are income) and on equity grounds — policymakers cannot ignore where we are starting from. And that starting point is an economy with a business sector that is capital-shallow and which (at least partly) as a consequence suffers from chronically low productivity and therefore incomes. Output per hour worked in New Zealand puts us on a par with Slovakia, Slovenia, Israel and Turkey in the OECD league table. Labour productivity is one-third higher across the Tasman, not because Australians are smarter or harderworking but because they have a lot more capital invested per worker. It is a problem that tax reform should try to reduce, not exacerbate. The starting point is also a tax system which already taxes capital income harder, and labour income less, than people tend to think. As economist Andrew Coleman, who divides his time between Otago University and the Treasury, argues in a trenchant critique of our eccentric tax system, New Zealand is unusual in not having social security

taxes (unless you count ACC), which are normally imposed to fund the state pension. On the OECD’s latest numbers for the “tax wedge” on wages, when both income tax and social security contributions are included, a New Zealander on the average wage is the second lowest-taxed among the 34 countries listed (Chile is lower). By contrast, New Zealand ranks in the top quartile of the OECD for both the statutory corporate tax rate and the effective average corporate rate, when they adjust for various tax breaks. The tax working group says that this ignores an atypical feature of the tax system, dividend imputation, which means that distributed company profits come with a credit for the shareholder’s share of company tax paid. On that basis, it says, the tax rate for domestic shareholders is the sixth lowest in the OECD. But Coleman argues this is misleading. The comparison is only with people in other OECD countries who are on the top marginal rate (usually higher than ours) and who pay income tax on dividend income in the same year it is earned. In other words, high income earners who don’t hold their assets in a retirement savings scheme. New Zealand is extremely unusual in taxing the income earned by people’s retirement savings as it accrues, rather than waiting until they are in a position to spend it. The taxed-taxed-exempt (TTE) regime introduced by Sir Roger

Taxing domestic investors on the gains from their shares would increase the cost of equity capital for [small to medium-sized] companies and could reduce investment. Tax Working Group

Douglas 30 years ago discourages saving and encourages borrowing to buy housing, and has contributed to exceptionally strong house price inflation and declining rates of home ownership. The Tax Working Group’s recommendations leave this onerous and highly distortionary system intact. Meanwhile, it has been forbidden by its terms of reference to go near the most tax-advantaged, and therefore most popular, form of wealth accumulation: owneroccupied housing, or at least the family home.

“It is difficult to see how a tax system that provides incentives to over-invest in residential property will not reduce the overall efficiency of the economy,” Coleman says. “It is also difficult to see how a tax system that engineers a transfer from young generations to the landowning members of older generations by placing upward pressure on property prices will not be regressive.” So our starting point is a household sector with a chronically negative saving rate and a business sector that is capital-shallow. Imposing a capital gains tax on the returns to capital invested in productive enterprises is hardly going to help those enterprises get more productive. Coleman points out that the Nordic countries, generally considered progressive, have responded to the detrimental effects of high corporate taxes by deliberately reducing taxes on capital incomes so they are lower than taxes on labour incomes. “Most other countries have lower taxes on capital incomes than labour income by imposing social security taxes on labour incomes. Either way, New Zealand’s attempts to tax labour, business, and other capital incomes (except incomes from owneroccupied housing) at similar rates has little theoretical justification,” he says, “and the high taxes that businesses pay as a result may be reducing productivity levels and economic growth rates.” The working group’s final report at least nods in the direction of the

potential cost of taxing the returns to business investment even harder than they already are, especially for firms whose shareholders are Kiwis: “Most small to medium enterprises, however, cannot readily access international capital markets. Instead they depend on funding from domestic investors to make additional investments. Taxing domestic investors on the gains from their shares would increase the cost of equity capital for these types of companies and could reduce investment,” the working group says. It may be possible to mitigate these costs, it says, by using the extra revenue garnered to fund some productivity-enhancing reforms elsewhere in the tax system. It mentions the loss continuity rules (to support the growth of innovative start-ups), “black hole” expenditure and maybe, fiscal conditions permitting, building depreciation. It smacks of sugar-coating the pill. When the working group chairman Sir Michael Cullen was asked what the case is for taxing the returns to business investment harder than they already are, when the business sector is capital-shallow and labour productivity is low, he said that internationally there was no relationship between capital gains tax levels and productivity. That hardly settles the issue. But pointing to the long political and legislative process still ahead, he acknowledged that a government might decide to exclude “that active business class”. Land-based capital gains were the main problem.

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The New Zealand Herald | Friday, February 22, 2019

Stock Takes

Vodafone a value stock, insists telco boss

Chris Keall

odafone NZ might be poised to fill a Xero-size whole in the NZX, but it will be a very different type of stock, despite the pair both being in the technology business. Asked if his company will be positioned as a growth or value stock when it lists, chief executive Jason Paris says: “I’d like to think both, right? It’s good to have your cake and eat it, too. “But the reality is we’re in a very competitive industry where low single-digit revenue and margin growth is the norm. So a yield and dividend stock is where we’ll be positioned initially.” Spark alumnus Paris says he was brought in to whip Vodafone NZ’s financials into shape ahead of its IPO, which he says is still on track for early 2020. There has been talk from insiders that a restructure currently underway could see up to 400 of the telco’s 2800 staff culled. Paris says nothing is confirmed at this point and won’t be until the end of March. But he says a “bold” plan to cut costs is underway to free up funds to investment in new technologies. And, of course, soon there will be dividends to pay. Vodafone NZ has been to slow to adopt innovations produced by its parent company, such as Vodafone TV, Paris says. He hopes that post-restructure, the local operation will be more agile, and more capable of investing in “digital adjacencies” that could ultimately turn it into a growth stock. For 2017 (its most recently reported financial year), Vodafone NZ made a profit of $57.5 million, turning around a loss of $18.3m. Revenue increased 2.8 per cent to $2.05 billion. The telco first raised the prospect of floating its New Zealand business late last year, with a global roadshow for potential investors. That effort was a sounding-out process, and did not include a mooted IPO value (documentation released during the failed Sky merger valued Vodafone NZ at $3.44b). It got the cold

Vodafone chief executive Jason Paris (inset) says he was brought in to whip Vodafone NZ’s financials into shape ahead of its IPO. Photos / Bloomberg, Leon Menzies

shoulder. Paris’s mission is to make the telco a more attractive proposition — by taking an axe to costs, then seeking new digital opportunities. Among other opportunities, he hopes a new alliance with ASX-listed Vocus, aimed at unbundling Chorus fibre, will give his company more flexibility over the services it offers, and at what price. The Vodafone NZ boss says that as a proud Kiwi, he would like to see his company list on the NZX (also the stated preference of his predecessor, Russell Stanners). But he adds that the decision could well be made higher up Vodafone’s global foodchain, and that an NZX/ASX dual listing or an ASX-only listing is possible. Law change boost ASX-listed Xero is poised to make

XERO

Close=A$47.74

50.00 45.00 40.00 35.00

Aug 23, 2018

Feb 21

Source: Bloomberg / Herald graphic

hay from a law change across the Tasman, according to Craigs Investment Partners deputy head of institutional research Stephen Ridgewell. Australia’s Parliament has just passed a law that will require some 700,000 small businesses to adopt a single-touch payroll solution (or STP) by the start of the country’s new tax year on July 1. It’s being billed as the biggest accounting shakeup since Australia

introduced GST two decades ago. Currently, only companies with 20 or more staff have to use a singletouch software solution rather than pen or paper. While small businesses have become more and more tech-savvy in recent years, there is still a large pool using either pen or paper, Excel, or non-compliant payroll software, Ridgewell says, and so he he sees the law change as a catalyst for an acceleration of subscription growth in Australia going into Xero’s 2020 financial year. Xero is touting an Australian Tax Office survey that found one in five small businesses still use pen and paper. The cloud accounting software company positioned itself for the law change by announcing its first standalone payroll product earlier this month. The snappily-named Xero Payroll for Single Touch Payroll will be launched by July 1 and cost about

A$10 a month for a small business, Xero Australia managing director Trent Innes says. The legislative change is a “huge opportunity” for Xero and its partners, Innes says, especially with around 90,000 “micro-businesses” that will need to be walked through the new requirements. Arch-rival MYOB should also benefit from the law change, but is the subject of a buyout offer from KKR that will likely see it delist from the ASX before July 1. Ridgewell says the new payroll requirement will boost Xero’s growth in Australia in 2020, allowing it to hit its targets even if growth slows in one of its other key markets, the UK, amid a possible Brexit-induced recession. The analyst has a “hold” rating on Xero and a 12-month target price of $A45.70 (shares closed at A$47.74 yesterday). He says the company is performing well and fast approaching “ground zero” or breakeven, but already full-valued.

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The New Zealand Herald | Friday, February 22, 2019

Business traveller

Grant Bradley

grant.bradley@nzherald.co.nz

Qantas sure it can shrug off fuel costs Australian airline upbeat about full-year result, despite first-half earnings taking a hit from higher oil prices

antas is confident it can overcome the impact of fuel costs which dented first-half profits. In an upbeat assessment of prospects for the full year, group chief executive Alan Joyce yesterday said there were strong forward bookings, competitor capacity growth had slowed and oil prices had fallen from peaks seen late last year. “These factors point to a strong second half and we expect to completely recover our increased fuel costs by the end of this financial year,” he said. Almost two-thirds of the increased fuel bill would be felt in the first half. The Qantas announcement was more optimistic than a warning from Air New Zealand three weeks ago, in which it said softer than expected demand would mean its full-year underlying profit could be far lower than forecast last year. Qantas yesterday reported its halfyear profit had fallen A$179 million ($NZ187m) as fuel costs rose by 27 per cent. Its underlying profit before tax was A$780m, down 19 per cent on last year’s six-month result to December 31, a record for the airline. Fuel costs were up $416m for the latest six months. Total fuel cost for the full year would be $3.9b. Statutory profit before tax was $735m and $498m after tax, a fall from $595m in last year’s first-half result. Joyce said he was pleased with how the business responded to the challenges and opportunities in the half-year. “Our dual-brand strategy with Qantas and Jetstar in the domestic market meant these segments delivered another set of record earnings. Across our network, capacity is broadly meeting demand, including shifts to capitalise on the continued strength of the resources sector,” he said. Higher oil prices were a significant headwind and the airline moved quickly to recover as much of the cost as it could. “That’s easier to achieve in the domestic market than on longer in-

ternational routes, where fuel is a much bigger factor, and that’s reflected in the segment results we’re reporting today.” The airline faced an increase in selling costs, due simply to the commissions associated with the 6 per cent rise in revenue, as well as costs from a weaker Australian dollar. Qantas was making good progress against its longer-term strategy, Joyce said. More Boeing 787s arrived to replace less fuel-efficient 747s. He said the airline was mindful of potential weakness in the broader economy and was adjusting capacity to meet demand in individual markets.

Capacity to the Northern Territory had been reduced while growth in the resources sector had led to a 10 per cent increase in Western Australia. The airline was closely watching the Chinese market, which was showing signs of slowing down. “Overall revenue and yield indicators remain positive.” In response to questions, Joyce said there was no sign of demand flagging in the high-yield premium cabins. On its Perth-London service, premium cabins were 95 per cent full. Its domestic operation achieved another record profit, up 1 per cent to $659m, made up of record earnings from both Qantas and Jetstar. It does

Qantas is taking delivery of more fuel-efficient 787 Dreamliners. Photo / supplied

not break out the performance of its New Zealand operation. Qantas International’s revenue increased by almost 7 per cent to $3.7b but Ebit declined by 60 per cent to $90m, due largely to a rapid rise in fuel costs (up by $219m for the half) that couldn’t be fully recovered. Joyce took a swipe at airports, particularly their parking charges. He said some airfares from Hobart to Melbourne were far less than weekend parking charges in the Tasmanian capital. Air New Zealand, which reports its half-year result next week, has warned its profit could be sharply down on what it forecast last year. In a late January announcement, chief executive Christopher Luxon trimmed pre-tax earnings guidance to a range of $340m-$400m for the June year due to slower-than-expected revenue growth. The previously announced guidance was for underlying earnings before tax of $425m-$525m, which excluded an estimated $30m to $40m impact of schedule changes prompted by the global Rolls-Royce engine issues. Luxon said the revised guidance reflected updated revenue forecasts based on recent forward booking trends, and that “difficult decisions” lay ahead. While the revenue growth forecast was still positive, the rate of growth was likely to be slower than previously thought. Markets showing signs of slower growth include domestic leisure travel and softening inbound tourism traffic. Air NZ announced before Christmas that it is looking for cost savings of $30m and is reviewing all its routes. Capacity growth for the full year was previously expected to be up to 6 per cent but this has been revised down to 4 per cent, the lower end of guidance. Air New Zealand’s former partner, Virgin Australia, last week reported a sharp rise in underlying profit before tax. It was up 142 per cent to A$102.5m, the airline’s highest in 10 years, on a 6 per cent lift in revenue to $2.8b.

Buoyant NZ market defies Australian downturn for Flight Centre A slowdown in holiday bookings in Australia has led to a fall in half-year profits for Flight Centre, but its New Zealand arm says its profit is up almost 65 per cent. Flight Centre Group’s net profit after tax dropped by nearly 17 per cent to A$85 million ($89m) for the six months to December 31. The company said it was likely its underlying profit before tax for the full year would be at the bottom of its previous guidance range of $390m-$420m. It says it is closely monitoring Australian leisure results amid ongoing earnings and market volatility. In spite of the profit dip, the company will return $211m to shareholders in a special dividend. While there had been “disappointing” Australian leisure results, corporate business across the Tasman and in other countries was driving growth. There were accelerated sales and profits throughout the business outside Australia. Flight Centre does not break out

figures for its New Zealand business, but combined with Australia it has turnover of $A6 billion. The firm says that in this country its turnover for the six months was a record. While the group’s outlook is at the lower end of guidance, the outlook for full-year results in this country looked positive, tracking towards a third successive year of record profit. David Coombes, Flight Centre NZ managing director, said in an increasingly increasingly competitive market, this was evidence of “our powerful network and strong, customer focused travel offering”. “I couldn’t be prouder of these results, and attribute them first and foremost to our people; it’s thanks to their continued passion and specialised travel expertise that we consistently deliver results above market average.” While store closures in Australia had affected the result, the number of Flight Centre outlets in this country had remained steady at 125 and the company also had 10 Travel Associates stores.

Coombes said the business had looked closely at the needs of customers in smaller regional communities. It had made changes to create “a more sustainable model that allowed us to maintain our physical stores in regional NZ”. “This new model has proven extremely successful, with all of the stores involved in the programme now within our top 10 most improved stores nationwide,” he said. More flexible work hours were providing benefits. “I am particularly proud of how we have overcome preconceived notions about rigid working hours in our retail bricks and mortar space. We’re proving that being open to different team structures and hours can work, and in turn have outstanding results.” Last year the firm’s Cruiseabout stores were brought into the Flight Centre brand.

Flight Centre has kept stores in regional NZ, says David Coombes. Photo / Greg Bowker

”The cruise industry is growing at a phenomenal rate and this move meant we were able to provide our customers a more tailored and specialised offering,” said Coombes. “This strategy has proven extremely successful with total cruise sales increasing year on year.” In this country, margin and productivity gains for corporate travel in the first half of this financial year had driven profit growth of 45 per cent. Competitor Helloworld last week reported a lift in profit of 5.4 per cent to $A21.9m, while privately owned House of Travel says turnover is hitting records and is over $2b. Flight Centre said in its group results that it will consider mergers and acquisition opportunities. It said it would build a stronger network by closing or relocating poorly performing or poorly located shops and opening new ones in prime locations.

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Around the world, electric vehicles face a problem: Where to plug them in? By Brian Eckhouse, David Stringer and Jeremy Hodges

ven in the biggest electric vehicle markets, a driver venturing too far from home can have a hard time finding a place to recharge. Try your luck on California’s Pacific Coast Highway. The roughly 1000km route between San Diego and San Francisco has dramatic sea cliffs, offthe-grid retreats, lush vineyards — and, in some long stretches, few places to recharge for anyone who isn’t behind the wheel of a Tesla car. California is home to about half the battery-powered passenger cars in the US and does more than almost anywhere else to encourage electric vehicles (EVs), but that doesn’t mean it’s always easy to plug in. Drivers face similar frustrations outside of China’s major urban hubs and on road trips through Europe. Executives in the budding charging industry know that limited infrastructure has become a chokepoint. “It’s a pretty rubbish experience charging a car today,” said Roy Williamson, vice president of oil giant BP’s advanced mobility unit, which is investing in charging operators and technology companies. He was addressing a Bloomberg New Energy Finance (BNEF) conference in San Francisco this month. The first thing needed is more places to plug in. The global electric-vehicle fleet reached 5 million last year, according to BNEF, supported by a little more than 600,000 public charging points around the world. Under a scenario where EVs hit 30 per cent market share by 2030, the International Energy Agency projects a need for between 14 million and 30 million public chargers deployed globally to serve passenger vehicles. Today’s limited infrastructure isn’t created equally. About half of existing public chargers are concentrated in China, by far the top EV market, and more than two-thirds globally are slower units that may add only 16km of power for every 30 minutes at the plug. The best-performing EVs are capable of driving more than 320km on a full charge, which means anyone who finds an out-of-date charger risks an hours-long wait before their batteries are filled. That means drivers can have wildly different experiences depending on where they recharge. A standard household wall socket can take about 12 hours to replenish a battery run down to 20 per cent, although if this takes place overnight it will hardly be a problem. Hooking up to a charger capable of medium speeds — available at the homes of some EV owners, alongside highways or in parking areas — will add between 16km and 100km of driving range per hour. The most common fast chargers can add at least 120km in 30 minutes, at a premium cost, although most still fall short of the dream of matching the 10-minute time it takes to refill at a petrol station. There’s also nothing near standardisation of the charging infrastructure itself. Some charging points, such as those owned by Tesla, are designed with plugs that won’t work with rival electric car models; others might require clunky adapters. The price of charging outside the home can vary wildly and sometimes require a cumbersome array of subscriptions or mobile apps. The US has three charging standards, compared to one in China. “Using an electric car to run long distance is a fake proposition at the moment,” says Beijing-based Chen Zhen, who owns two EVs including a Tesla Model S, but uses a petrol-

The New Zealand Herald | Friday, February 22, 2019

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The New Zealand Herald | Friday, February 22, 2019

LOOKING FOR A CHARGE

VW revs up plans for more e-cars

It’s a pretty rubbish experience charging a car today.

Volkswagen plans to widen its electric-car offering in coming years with additional models for China and a budget car costing around €20,000 ($32,000). With the additional vehicles, the manufacturer now expects to produce 15 million cars in the first wave of its electric-car rollout, raising the goal by 50 per cent, VW’s electriccar chief Christian Senger said at an event last week in Dresden, Germany. The VW brand alone will invest about €9 billion to roll out 20 electric models by 2025. Since admitting in 2015 to rigging 11 million diesel vehicles to cheat on emissions tests, Volkswagen has pushed aggressively to develop battery models, and plans to have eight production sites for batterypowered cars by 2022. That’s putting pressure on VW to make the spending pay off. “The electric car is sustainable technology,” and demand is ahead of expectations, Senger said, but noted that kerbside charging remains an issue. “Driving in cities must be possible, but it’s impossible for carmakers to create the necessary infrastructure.” To address concerns, Volkswagen is broadening beyond offering electric cars to venture into electricity supply, offering customers green power contracts and wallboxes to recharge their vehicles at home and offices. Volkswagen is also part of the Ionity consortium that will install fastcharging stations at 400 locations on European highways. The company is extending its new green approach to production, and plans to save 1 million tonnes of carbon dioxide emissions a year by making production of its first electric model carbon-neutral. Volkswagen will use green power to assemble the I.D. model at its plant in Zwickau and for the car’s battery cells. Where renewable energy is unavailable, it will invest in climate projects. That commitment is welcome news for Germany’s sputtering efforts to cut greenhouse gas emissions amid a reliance on coalfired power and the steady growth in the number of combustionpowered vehicles. While energy sector emissions have declined since 1990, transport emissions have risen. Chancellor Angela Merkel aims to broker plans this year with car and truck makers to cut CO2 by about 40 per cent by 2030. “Climate change is the greatest challenge of our times,” Thomas Ulbrich, who oversees electric vehicles for the VW brand, said in a statement. “Truly sustainable mobility is feasible if we all want it and we all work on it.” — Bloomberg

Using an electric car to run long distance is a fake proposition at the moment.

Roy Williamson, BP advanced mobility unit

EV owner Chen Zhen

14-30 million

Number of public charging points needed worldwide, if electric cars hit 30 per cent market share by 2030, says International Energy Agency

powered car for trips outside the city. Charging at public facilities costs Zhen more than double the price he pays for electricity at home, while units are often out of service or incompatible with his cars. For many drivers, he says, “if they don’t have charging facilities at home, buying an EV would only cause them trouble.”

While for now about 80 per cent of EV charging is done at home or the workplace, the rollout of millions of additional public charging points is seen as crucial to give motorists enough confidence to ditch combustion-engine vehicles. That balance of charging inside or outside the home is also seen shifting

as EV prices fall and the vehicles are increasingly purchased by drivers who don’t have space to park within plug’s reach of their home. Already, it’s not uncommon to see power cords trailing from upper-floor windows of Chinese apartment blocks to charge vehicles parked at street level, according to a report published this month by Columbia University. Some markets are also proving to be a conundrum. In Norway, low volumes of public chargers haven’t impeded the rise of EVs, which now account for about half of new vehicle sales. Germany, on the other hand, has more chargers than any country besides the US and China — and EVs make up only about 2 per cent of sales. In Britain, where EVs are relatively scarce, planners aren’t sure how to proceed. “Do we build out now and hope the demand kicks in? Or do we wait and then build the infrastructure, leaving consumers waiting?” says

Graeme Cooper, project director of electric vehicles at National Grid, the UK power and gas network operator. But markets with healthy demand find infrastructure a similar puzzle: “Getting even to 7 million electric vehicles in California by 2030, and the charging that is needed for that, is going to be a huge lift,” says Drew Murphy, Southern California Edison’s senior vice president of strategy and corporate development. In the short term, the EV industry faces a chicken-or-egg scenario: a lack of sufficient charging points is seen as a factor holding back adoption, yet low rates of EV penetration mean the economics of building new charging stations are challenging. Fast-charging stations need at least eight customers each day to break even, according to BNEF, but today the average public charger in some markets sees fewer than five customers. “Consistent profits are elusive

today,” Brett Hauser, chief executive of Greenlots, a Los Angeles-based provider of hardware and software to manage charging stations, said at the BNEF summit in San Francisco. EV charging is “one of the biggest pain points, given how hard it is to finance and operate a standalone unit,” says BNEF analyst Salim Morsy. “You’ll need to see regulatory support.” New Jersey has just five public chargers for every 100,000 residents, says Ralph Izzo, chief executive of Public Service Enterprise Group, which owns the state’s biggest utility. So it’s proposing about US$364 million ($530m) of electric vehicle-related infrastructure, mostly for single- and multi-family home charging. Carmakers who are eager to lure customers for their rapidly expanding electric lineups have started taking action. Tesla built charging stations and networks on four continents to help

spur car sales and fill huge gaps in infrastructure. The electric carmaker is one of the only operators to have charging stations in both the US and China. An alliance of Volkswagen, Daimler, Ford and BMW, meanwhile, plans to build a total of 400 charging stations across Europe by next year, seeking to add charge points about every 120km along the continent’s highways. Volkswagen’s Electrify America unit plans to spend US$2 billion to support zero-emission vehicles in the US, including US$800m in California. This week the company announced it had 105 electric-vehicle charging sites in the US and plans to have 484 built by July 1. It’s a quick ramp-up: at this point last year, Electrify America had zero ultra-fast charging sites. The company, seeded with money from VW’s diesel-gate settlement after falsifying emissions tests, is building an open network available to most EVs,

including some Tesla models. “The flood of cars is coming,” says Brendan Jones, Electrify America’s chief operating officer. The world’s EV sales jumped 82 per cent last year, and electric models are expected to account for a third of the car fleet by 2040, according to BNEF. The coming boom is spurring utilities, oil and gas companies and other new entrants to join carmakers in investing in a charging industry that has so far been dominated by little-known companies. For oil firms that dominated the petrol market, it may also be about protecting turf. “We’ve always looked at this as a land grab,” says Michael Farkas, chief executive of US incumbent Blink Charging. Royal Dutch Shell will be the first oil major to own a US-based charging service outright after closing its acquisition of Greenlots, according to BNEF. Rival oil giants Total and BP, along with

companies producing fuel pumps and petrol station equipment, are also making investment and acquisitions. What’s clear is that charging options aren’t likely to replicate the combustion engine-era’s networks of highway petrol stations. Motorists will want their car to recharge wherever it’s parked, while they shop for groceries or spend a day at work, rather than make a specific stop for charging, Ford’s Rebecca Shelby, manager of electrification policy and standards, said at the BNEF summit. Future innovations may also include socket-free wireless charging. And XCharge, a Beijing-based supplier of charging technology to stations in more than 50 cities in China, is working to use robotic arms to help charge driverless cars. For now, there are marked differences in how charging infrastructure is developing in different markets. Carmakers are playing a larger role in

the US, while in China — where charging infrastructure was dominated by stateowned utility companies until about 2015 — the majority of points are being installed by hardware manufacturers or other private operators, according to Colin McKerracher, a London-based analyst at BNEF. Charging network operators need to prepare for new consumers in the next decade who will be less tolerant than early adopters. Current EV drivers are “pretty smug” and willing to trade “quite a lot of pain” in exchange for the kudos of going electric first, says BP’s Williamson. He includes himself in that category. For EVs to go from “crazy boutique small to mainstream”, the industry needs cheaper vehicles that can drive further on a single charge, says EVgo’s Cathy Zoi. And, she adds, “there has to be charging infrastructure everywhere.” — Bloomberg

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Around the world, electric vehicles face a problem: Where to plug them in? By Brian Eckhouse, David Stringer and Jeremy Hodges

The New Zealand Herald | Friday, February 22, 2019

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The New Zealand Herald | Friday, February 22, 2019

LOOKING FOR A CHARGE

VW revs up plans for more e-cars

It’s a pretty rubbish experience charging a car today.

Using an electric car to run long distance is a fake proposition at the moment.

Roy Williamson, BP advanced mobility unit

EV owner Chen Zhen

14-30 million

Number of public charging points needed worldwide, if electric cars hit 30 per cent market share by 2030, says International Energy Agency

How NZ retailers can thrive “Bricks & mortar” retailers will always be here - but need to up their game, says expert.

ew Zealand “bricks and mortar” shops will always be part of the country’s retail mix, according to a leading expert — but many retailers need to evolve to survive the challenge of online shopping, digital disruption and changing consumer trends. Tristan Will, head of the retail sector for accounting and business advisory firm BDO, says physical retailers have a great opportunity to prosper but only if they do the research, put in the thinking and come up with new ways to improve the customer experience. “Online versus bricks and mortar isn’t a situation where one wins and one loses,” he says. “There will always be both — but retailers need to differentiate themselves, whether online or in store, to satisfy changing consumer demands.” Customers increasingly want more of an “experience” when shopping; Will cites the growing influence of millennials — a generation for whom work is often a means to an end that has more to do with leisure than career. They often enjoy shopping as a pastime and are heavily influenced by the internet. It’s not just millennials. Most consumers are increasingly demanding a more immersive experience and Will says many physical retailers are creating “destinations” where events and experiences increase customer “dwell time”,

BDO’s Head of Retail, Tristan Will

encouraging spend on services and experiences if they are less likely to spend on products. A theoretical example, says Will, is a retailer selling gym gear — but branching out into fitness classes and wellbeing services, as well as involving a shoe retailer so that complementary services and products are more interesting and pleasing to the customer. Stores which manage to combine the digital retail world with the physical comfort and experience of being in a desirable location often stand out, like some Nike stores — where people can easily buy shoes online. But in-store advances like their inter-active table increase the experience. Customers place a shoe on the table — and can immediately access digital examples of different colours of that shoe, price and size availability, plus information on the athletes who wear it.

In New Zealand, Will says Pak’n Save’s “Shop’n Go” technology is one example of a local retailer enhancing the experience — with technology allowing a customer to scan goods as they go, arriving at the checkout only to pay, thus reducing queues and waiting time. Amazon Go, currently being trialled in the US, is planning 3000 convenience stores but are operating only eight at present. The key offering is that there is no checkout, no waiting time; customers activate an app on their smartphone while the store uses cameras and sensors to track everything the customer does. They can then choose a product and leave — with the money deducted from an account via the app…no till, no queue. Some estimates forecast revenue of USA$4.5 billion if all 3000 stores come to pass, with returns 50 per cent more than traditional convenience stores because of the speed and convenience. Will says most New Zealand retailers do not need to be so “futuristic” in their thinking, though he knows of one similar project here seeking to use cameras and sales data to forecast customer peak times, in-demand goods and other patterns which help the store involved to (a) sell more, (b) make the shopping experience more efficient and enjoyable and (c) allow them to staff the premises according to the most likely flow of customers.

“Many New Zealand retailers can improve by just adjusting their interaction with their customers,” says Will. “Virtually all the retailers I know in New Zealand got into the business because they loved interacting with other people — but that can get buried in the hurly-burly of everyday business. “Retailers mustn’t stand still — they have to be pro-active, do the research, understand what is happening overseas, understand what is going to impact their business, positively or negatively, and plan how they are going to combat or embrace it.”

“Many New Zealand retailers can improve by just adjusting their interaction with their customers” Tristan Will

One example, he says, of a company that forgot its interaction with customers was Dick Smith: “In the 90s and early 2000s, Dick Smith really interacted with people; they were renowned for staff who would really help you as to whether you needed that one or that one… “But when they re-invented themselves as an online company, that helpful and enjoyable experience changed. All you got then was a Dick Smith employee looking

something up on the internet — which you could have done before you got to the store.” New Zealand’s retail industry generated $92bn last year and is forecast to reach $120 billion annually by 2030. Online spending is now estimated at $4.5bn annually (up 10 per cent in 2018 over 2017) with 43 per cent of that heading to overseas retailers (a drop of 1 per cent) and 57 per cent to New Zealand retailers. The trend in recent months has been for local online spend growing faster than spend with overseas retailers. So, Will says, there is an opportunity for New Zealand retailers to grow and improve their lot: “But they have to have a strategy built on the back of analysis tools; they have to know what state their business is in; if they are going to develop digital channels, they have to do it right — a bad experience for customers can have a big impact on brand awareness and loyalty. “Retail technology is exciting — but it can be a threat if you are unaware and don’t have a plan. To thrive, brick and mortar retailers may need a strategy taking in omni-channels, creating a destination that has complementary goods, services or experiences.” BDO has just compiled a Thrive Guide for retail businesses. For more information: www.bdo.nz/retail

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The New Zealand Herald | Friday, February 22, 2019

World

Honda exit a blow to UK manufacturing Revival of carmaking industry is now going into reverse

onda’s decision to end carmaking in Britain casts a pall over the future of the UK auto industry after it recovered from near extinction just a few decades ago to become one of Europe’s top producers. The planned closure of Honda’s Swindon plant in 2021 — blamed on “unprecedented” global changes — will end a manufacturing history that began in 1989 and lead to the loss of 3500 jobs. That will be the biggest drop in output and employment since Rover Group folded in 2005, eliminating more than 6000 positions. The ramifications of the latest shutdown may be greater still. While Rover’s demise marked the death of home-grown volume car production after years of contraction, Honda’s plan to quit Britain removes a major component of the Japanese manufacturing influx that filled the void, making the country Europe’s third-biggest carmaker as recently as 2016. Nissan had already dealt a blow with the announcement this month that it no longer plans to build the X-Trail sport-utility vehicle at a plant in Sunderland, northern England, that accounts for almost one-third of total UK car production and employs more than 7000 people. Meanwhile, Jaguar Land Rover (JLR), Britain’s biggest carmaker, is

New cars leave the Honda plant in Swindon, western England.

scrapping 4500 posts worldwide, many of them in the UK, in response to the uncertainty surrounding Brexit and slowing sales in China. Ford has said its two British engine plants may be at risk. And the future of PSA’s

Photo / Bloomberg

3500

Jobs to go at Honda’s Swindon plant

Vauxhall site in Ellesmere Port is also in doubt as the French group mulls plans for the next Astra. Throw in the Honda decision and what initially looked like a restructuring — as manufacturers adjusted to Brexit, lower diesel demand and a dip in sales in some European markets — is growing into a full-on crisis, according to David Bailey, professor of industrial strategy at Aston Business School. “We’re not yet back to the situation we faced before the Japanese came in, but there is a risk that that may be the case,” Bailey says. Among other plants facing a potentially bleak future are JLR’s Castle Bromwich site, the Ellesmere Port plant, and Ford’s factories in Bridgend, Wales, and Dagenham, near London, he says. Honda probably made its decision because it doesn’t view Britain as an optimum location for developing a coming generation of electric cars, Bailey says. The company plans to exit European carmaking entirely as it centralises output in Japan, with a factory in Turkey also earmarked for closure, Honda said. The UK industry has already been battling a Brexit-related sales slowdown, potential tariffs and supply bottlenecks ahead of the split from the European Union on March 29, with politicians yet to reach an agreement that would avert a no-deal departure. Britain’s car output slipped behind France in 2017. If all the sites regarded as at-risk actually close, the extended slump would see volume fall below the likes of the Czech Republic and Slovakia.

For the UK, that would mean a future as a niche manufacturer relying on the JLR lineup, BMW’s Mini, McLaren and Aston Martin supercars and ultra-luxury models from RollsRoyce and Bentley. The decline of mass manufacturing in the UK stemmed largely from a loss of market share to Japanese carmakers from the 1960s onwards, with heavily unionised British firms unable to match their Asian rivals in productivity, price and reliability. Struggling brands were brought together as British Leyland, which was nationalised in 1968 and renamed Rover before being sold to BMW and gradually broken up. Rover’s former Longbridge factory limped on as a manufacturer of MGbrand sports cars under Chinese ownership before ceasing production in 2016. The UK has been a hub for Japanese car production in Europe since the Sunderland plant opened in the mid-1980s, with Nissan, Honda and Toyota owning three of the country’s six largest carmaking factories. As the political impasse over Brexit drags on, automotive-industry investments in Britain have slumped. They almost halved last year to £589 million ($1.1 billion), the lowest since the global financial crisis, according to the Society of Motor Vehicle Manufacturers and Traders (SMMT). The impact on UK employment goes far beyond plant closures, with Honda’s Swindon site alone sustaining about 10,000 jobs in the local supply chain, the SMMT estimates, and many more roles in the wider economy. — Bloomberg

22nd CEO Survey Key ﬁndings for New Zealand

Storm clouds and silver linings: what’s the outlook for New Zealand CEOs? See what’s on the minds of 1,378 New Zealand and global business leaders.

pwc.co.nz/ceosurvey

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The New Zealand Herald | Friday, February 22, 2019

World

In trade war, US farmers are the losers Bankruptcies rise amid competition from Russia and tariff battle with China, writes David Millward

or more than 30 years, Joe Peiffer has worked as a lawyer looking after farmers in Iowa, in the heart of the US corn belt. He was raised on a farm and during the 1980s was a law clerk in a bankruptcy court during the last major US agriculture crisis. Now he is watching history repeat itself with a wave of bankruptcies across the farm belt. The number of Chapter 12 bankruptcies — a mechanism that allows family farms to restructure their debts — surged last year as the country paid the price for overproduction at a time when a rejuvenated Russia supplanted the US as the world’s leading wheat exporter. Russia has muscled in on markets such as North Africa and the Middle East, which were once the preserve of the US. Thanks to its ability to undercut the US, Moscow is cementing its economic as well as diplomatic presence in the region. The days of the collective farm and antiquated rusting equipment are long gone. Instead, the country’s farmers are boosting production with the aid of an iconic American company, John Deere, which opened a manufacturing plant in Domodedovo, near Moscow, in 2010. Not only are American grain farmers battling against Russia’s lower production costs, but they are also falling victim to Donald Trump’s trade war with China, which saw Beijing impose 25 per cent tariffs on US goods including corn and soybeans. While arable farming has taken the biggest hit, there is growing concern among meat producers about the rising demand for plantbased substitutes, whose sales increased 22 per cent to US$1.5 billion ($2.2b) last year. A report last year by the Congressional Research Service — which provides information for

members of the Senate and House of Representatives — is pretty depressing reading. It predicted that net farm income across the country as a whole would be substantially below the 10-year average and 31 per cent less than the record high of 2013 when it reached US$135.6b. Farm expenses were forecast to increase by 4.2 per cent compared with 2017 and farm debt was predicted to hit a new high. In Iowa the picture is grim. In 2013 only four farms in the state sought Chapter 12 protection. By 2017, the latest year for which figures are available, the number had reached 18. “It is like, here we go again,” Peiffer says. “In some respects, it is tougher than it was in the eighties when the price of real estate dropped and farmers could come out of bankruptcy and repay the entire value of their farm through a bankruptcy. “Today land prices and rents have not dropped and there is really not enough profit raising corn and soybeans, which are the main crops here in Iowa. “I am seeing a lot of financial stress, with many farmers unable to procure crop input financing, which they need for the 2019 crop to pay for seed, fertiliser, rent, fuel and labour. “We are finding many banks have decided they are not going to make loans to their existing farm borrowers for 2019 inputs. “Many cannot get financing and those who can have to go to secondary sources, which are far more expensive. Distressed farmers are paying 12 per cent interest rather than around 6 per cent and also having to pay additional fees on top. “Stressed farmers are having to pay a lot more and that impacts on their ability to make money.” Elsewhere, the figures are equally stark. An analysis by the Wall Street Journal showed that the Seventh Circuit Court of Appeals, which includes Illinois, Indiana and Wisconsin, recorded twice as many bankruptcies

We are finding many banks have decided they are not going to make loans to their existing farm borrowers for 2019 inputs. Iowa lawyer Joe Peiffer

last year than in 2008. A separate analysis by the Federal Reserve Bank of Minnesota reported 84 farms filing for Chapter 12 bankruptcy. “Bankruptcies have been spiking and the reason is because prices are low, and have been low, going on four years,” says Ron Wirtz, the bank’s regional outreach director, who has investigated trends in Wisconsin, Minnesota, Montana, South Dakota and North Dakota. “When prices are low, farm finances will be under stress, and the longer prices are low, the more farms will be affected.” The halcyon days of only a few years ago are becoming a distant memory. “In 2013 prices were high for corn, wheat, soybeans and dairy, which led to overproduction as smaller operators chased yesterday’s market,” says Dec Mullarkey, managing director of investment strategy at Sun Life Investment Management. “Bankruptcies in Indiana, Illinois and Wisconsin have doubled since

2008. As we come into spring and farmers need access to funds ahead of the planting season, that is when failures could bubble up as banks become cautious. “Now Brazil and Russia have come online and they are forcing prices down. They also have the advantage of lower production costs.” The pain is being felt by smaller businesses rather than the big conglomerates. In any case, the family farm is a dying species, the number falling from six million just after World War II to two million today. “The human cost is very significant,” says Roger Johnson, president of the National Farmers Union in Washington. “There are increasing stress levels that have built up over time. There are a lot of reports suggesting mental health helplines are receiving a level of calls that are at least reaching, if not exceeding, that of the last farming crisis in the eighties. “Farms are dispersed and you have increasing isolation out there. Small manufacturing businesses have gone, which means there aren’t off-farm jobs for farmers or their spouses.” Johnson believes Donald Trump’s administration should shoulder much of the blame for the problems farmers face. “The administration has picked trade fights all over the world and it is agriculture that has borne the brunt of those battles.” It is a view shared by Ray Goldberg, professor of agriculture at Harvard Business School. “It has occurred suddenly because of the policies that have taken place when our President decided to get tough on trade. In the process of doing it, he obliterated long-term relationships in the food sector. “Once you lose these relationships, they are very hard to get back. “The people who are affected are farmers because we are an exporting nation in agriculture.” With the 2020 presidential elec-

tion looming, Republican strategists are already showing signs of nervousness at the political damage a farming slump could do to Donald Trump’s re-election prospects. In 2016 an estimated 75 per cent of farmers voted for Donald Trump and it was their backing in swing states like Wisconsin that helped propel him into the White House. A Farm Futures poll last August showed that his support had dropped to 60 per cent, with 24 per cent saying they would not support his re-election. They were particularly alarmed about trade, with only 8 per cent agreeing with the President’s assertion that trade wars were “easy to win”, while 40 per cent said the trade war had done permanent damage to agriculture. Brandon Barford, a partner at Beacon Policy Advisers in Washington DC, has noticed Trump is sensitive to the threat posed by a slump in farmers’ support. “While we have traditionally thought of Trump’s behaviour as being bound by the movement in the Dow Jones Industrial Average, he has also been known to alter behaviour and policy based on farmer and farm-state members of Congress voicing their displeasure to him directly. “Farmers are suffering even more now, so Trump is likely to use auto and auto parts tariffs to try to force the EU to include agriculture in the talks, to once again help to show his farming base that though it is bad now, he is fighting for them.” To use current political parlance, the optics of a farming crisis hitting some of his most loyal supporters are potentially disastrous. “Politically this could be significant,” adds Mullarkey. “Agriculture is a significant lobby. There will be a rising number of hard-working people losing their livelihoods and that is a story that will grab the headlines.” — Telegraph Group Ltd

Bags of corn and soybeans are stored at a farm in Illinois, waiting for the market to improve. Photo / Bloomberg

Want to have a runner in the $1,000,000 Karaka Million Race run at Ellerslie in January 2020? Come and join the highly successful Fortuna Syndications Team. Fortuna is the Syndicator of NZ’s highest rated racehorse, MELODY BELLE, the winner of the 2017 Karaka Million as well as seven other Elite Races – on top of that, our Trainer, Jamie Richards, has trained the last three Karaka Million winners in a row!!! Fortuna Director, John Gavin, has been active at the recent Karaka Yearling Sale and, assisted by NZ’s premier thoroughbred Selector, David Ellis, has acquired two outstanding Thoroughbred Yearlings which are Karaka Million “types” and these are now offered as part of Fortuna’s 2019 Syndication opportunities we pride ourselves on ﬁnding “Value” opportunities for our clients. Fortuna Syndicated horses have won 22 of their last 63 starts in NZ – an amazing Strike Rate Yearling Colt Sired by Australian speed sensation DEEP FIELD and from a Female family replete with Two Year Old success – this Colt, nicknamed “Cassius” – presents as a Genuine 2020 Karaka Million Opportunity Selector’s view (David Ellis) “John, you have done well here – I was doubtful that you could get this Colt for your budget, I gave him a high rating and thought he would make a lot more – to my eye, he looks ideal for the 2020 Karaka Million 2yo race.” Trainer’s view (Jamie Richards) “John, you told us you wanted to buy a Colt that had the attributes on an early 2yo type that could be aimed at the Karaka Million. This boy ticks a lot of boxes, he is strong, very well put together, has a great walk and I can see that he is just the type of Colt that could be broken in early, trial at Te Teko in August, then spell, get him back to another trial in October and then commence his racing career on a path toward the Karaka Million.” Shares available right down to 1% 10% share $15,600– 5% share $7,800 2.5% share $3,900 – 1% share $1,560 Yearling Filly by the Internationally successful Stallion, Iffraaj and out of the winning racemare, Champagne Katie. Nicknamed “Candy” this Filly also has a strong Two Year Old winning family and presents as another “get up and go” Two Year Old type Selector’s view (David Ellis) “I really rated this Filly, I gave her a B+ and I don’t give out many A’s. She is physically correct, has a great walk, lovely head and eye, a strong pedigree and is exceptional value at this price.” Trainer’s view (Jamie Richards) “John, you have bought another lovely Filly here, she is a medium sized, very attractive physically Filly, whom I could not fault. She is from a high class family and I believe she will be an early runner as a Two year Old – deﬁnitely one that I would be targeting toward the Karaka Million.” Shares available right down to 1% 10% share $12,000– 5% share $6,000 2.5% share $3,000 – 1% share $1,200 Syndicator’s view (John Galvin) “We know all about winning the Karaka Million, having enjoyed success in that race in 2017 with MELODY BELLE – it is one of the greatest thrills in racing for us and our Syndicate Members. Winning the Karaka Million is all about selecting the right type of horse – they must be early maturing types who will just get up and run as Two Year Olds and both Cassius and Candy certainly meet that criteria. As well as that, our Trainer, Jamie Richards, knows just what it takes to win the Karaka Million, having enjoyed unblemished success in that race these past three years” Both Yearlings are eligible for the Karaka $1,000,000 Two Year Old Race run in January 2020 and the Karaka $1,000,000 Three Year Old Classic run in January 2021 Share price for both Yearlings includes all Initial Costs – i.e. the Purchase price, GST, Promoters Fees, Insurance through to 31st January 2020, Karaka Million Fees and Working Capital of $8,000 approx Monthly Ongoing costs for each yearling commence 1st April 2019 – 10% share $360 per month – 5% share $180 per month – 2.5% share $90 per month – 1% share $36 per month Interest Free Purchase Terms are available – Conditions apply

Applications can only be made after Investors have perused and signed the NZ Thoroughbred Racing approved Disclosure Statement. This can be obtained from the Syndicate Promoter, Fortuna Ltd (Director John Galvin), by emailing john@fortuna-nz.com or calling John 021 921 460.

Fortuna Ltd is an Authorised Syndicator in accordance with the Code of Practice administered by New Zealand Thoroughbred Racing (Inc) established under The Financial Markets Conduct (Equine Bloodstock) Exemption Notice 2016. Details of this Offer are contained in the Disclosure Statement relating to the Offer

Contact Fortuna Director John Galvin NOW on 021 921 460 or email john@fortuna-nz.com to make a no obligation enquiry Visit https://www.fortuna-nz.com/buy-shares/ to view these opportunities

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The New Zealand Herald | Friday, February 22, 2019

World

Carbon tax wins economists’ approval

Plan to charge polluters and pay a public dividend is seen as the most effective way to cut emissions

nited States economists led by former US Federal Reserve chair Janet Yellen are uniting in record numbers to back the idea of a carbon tax as the most effective and immediate way of tackling climate change. At a time when Democrats including New York congresswoman Alexandria Ocasio-Cortez are pushing a sweeping “Green New Deal” programme to reduce greenhouse emissions, climate change is shaping up to be a major 2020 election issue. The US is the world’s second-biggest emitter of carbon dioxide, behind China. But Yellen told the Financial Times the Green New Deal was costly, whereas the carbon tax, which would plough proceeds back to the public in dividend payments, would be the “most efficient way” to reduce emissions. “Global climate change is a very serious problem and it calls for immediate national action,” she said. “If you were to start around $40 a ton and then raise this over time, by more than the rate of inflation, this would be a very effective way of reducing carbon emissions and would more than meet the Paris commitment.”

The carbon tax proposal, organised by the Climate Leadership Council, is a bipartisan effort that has united senior economists from both parties, and now garnered 3300 signatures from professional economists and academics across the US. That surpasses previous petitions across the US analysts’ community, such as the 1997 Economists’ Statement on Climate Change, which received 2600 signatures, and the 1930 Economists Against SmootHawley [tariffs]. Yellen said a carbon tax and dividend would be more “feasible” and “sensible” than the Green New Deal in its current form. “This is a plan that harnesses markets, it is much more efficient and less costly than methods proposed by the proponents of the Green New Deal,” she said. Under the terms outlined in the statement, which was first published a month ago, the revenue from a carbon tax would be redistributed to Americans on a per capita basis, which would disproportionately benefit the poorest households more. The proposal also envisages a carbon border tax that would impose a levy on carbon-intensive goods that enter the US from countries without a carbon price. Marty Feldstein, a prominent

Republican economist and former chief economic adviser to Ronald Reagan, said that economists agreed that carbon emissions were a serious problem. “Our current method of trying to control carbon emissions by complex regulations is a bad idea, we think it is better to use a price mechanism to do it,” said Feldstein, also one of the signatories. The chances of passing a carbon tax and dividend under the current

Our current method of trying to control carbon emissions by complex regulations is a bad idea.

Economist Marty Feldstein

administration are viewed as extremely slim because of US President Donald Trump’s sceptical views on climate change, but the signatories say they hope the policy will gain momentum in future. “I’m not expecting progress on this during this administration,” said Yellen. “My hope is that under a future administration, whether Democrat or Republican, that there will be a call and a greater focus on doing something about climate change,” she added. Yellen is an adviser at the Climate Leadership Council, which organised the proposal. The group is backed by large companies including ExxonMobil, BP, Shell, General Motors and Unilever, as well as environmental groups such as the Nature Conservancy and World Wildlife Fund. She said the plan was both environmentally ambitious and likely to attract business support. “Businesses I think, are able to get behind this because it is preferable for most businesses to have a predictable environment in which there are a set of prices rather than have government regulations dictating what technologies must be used,” Yellen said. The 3300 signatories include former Treasury secretary Larry Summers, former Fed chair Ben Bernanke,

former Clinton economic adviser Alan Blinder, and Christina Paxton, the president of Brown University. The carbon tax has been criticised by environmentalists because it does not set a cap on total carbon emissions. But the idea has gained consensus as scattered carbon trading schemes around the world have struggled to dent emissions. Ted Halstead, founder of the Climate Leadership Council, said that returning the proceeds of a future carbon tax directly to households was important to help make the plan “small government” friendly and revenue neutral. “The most significant part of the statement, is that for the first time in history, there is consensus on what to do with the money,” he said. Next he hopes to get carbon tax legislation introduced by both Republicans and Democrats in the Senate, even though it may be unlikely to become law under the current administration. “I think it is fair to say that America has two choices, one is the route of the Green New Deal, one is the route recommended by the entire economic establishment, which is the carbon dividend plan,” he added. — The Financial Times

The US is the world’s secondbiggest emitter of carbon dioxide, behind China. Photo / Bloomberg

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C20

# nzherald.co.nz

The New Zealand Herald | Friday, February 22, 2019

Markets

0800 102 100

Personalised Investment Advice

Rises

Falls

5000

Share name

Feb 19

8900

Top 10 TURNOVER

Nov 18

6250

Aug 18

9025

May 18

7500

A disclosure statement is available on request and free of charge

Issues traded

Volume traded

Value traded ($)

188

44.81m

189.11m

s Ofﬁcial market statistics provided by the NZ Exchange. Closing data compiled at 5.30pm yesterday.

Top 10 VALUE Spark NZ a2 Milk Fishr&Paykl Health Fletcher Building AuckAirport Z Energy Ryman Health Vista Group Meridian Energy Air NZ

Share name

Percentage

AMP Fishr&Paykl Health Plexure Group PushpayHld a2 Milk TeamTalk Serko Ltd ANZ TIL Logist Metro Perf Glass

9,361,959 3,216,988 2,014,491 1,843,126 1,513,494 1,449,257 1,443,496 1,414,914 1,332,581 1,203,007

Share name

21/02

Biggest 10 RISES

Spark NZ Fletcher Building a2 Milk AuckAirport Vista Group Fishr&Paykl Health Heartland Grp Holding Air NZ Meridian Energy Z Energy Feb 18

9150

Feb 21

8750

Feb 15

▲

9275

Feb 8

+51.37

10000

Feb 1

9300.81

Last TWELVE months

9400

Jan 25

NZX50

Last FOUR weeks

www.spicers.co.nz

6.92 6.80 6.66 4.25 4.21 3.79 3.39 2.29 2.11 2.08

Biggest 10 FALLS

Dollars

Share name

Percentage

ikeGPS Grp Wellington Drive Paciﬁc Edge Spark NZ Moa Ord Shrs Sky Network Contact Energy Mercury NZ Ryman Health OceaniaHlth

35,548,985.36 29,470,134.54 20,652,617.12 15,902,891.42 13,503,710.70 7,295,036.28 5,934,498.52 5,933,480.59 4,874,756.36 3,720,453.82

6.25 6.25 4.83 3.72 3.29 2.38 2.17 2.15 1.94 1.81

NZ shares rise as a2 Milk hits new record

ew Zealand shares rose for a second day as a2 Milk reached a record following its strong earnings on Wednesday and Fisher & Paykel Healthcare jumped on the end of a costly, long-running patent dispute. The S&P/NZX50 index climbed 51.37 points, or 0.6 per cent, to 9300.81. Within the index, 22 stocks rose, 22 fell, and six were unchanged. Turnover was $177.5 million. F&P Health led the market higher, rising 6.8 per cent to $14.29 on volume of 1.4 million shares, more than twice its average. The breathing-mask maker settled a long-running dispute with rival ResMed across the US, UK, Europe, Australia and New Zealand, having racked up millions of dollars in legal fees in the process. Both parties have decided to settle with no payment or admission of liability. “Just the lawyers won with that particular battle — now sanity has prevailed, which is good,” said Grant Davies, an investment adviser at Hamilton Hindin Greene. A2 rose as high as $14.85, a new record, and ended the session up 4.2 per cent at $14.82. Volume was bigger than usual at 2 million shares. The milk marketing firm beat earnings expectations on Wednesday and has resumed its place as the biggest listed company on the NZX, with a market capitalisation of almost $10.9 billion. Meridian Energy, the secondbiggest listed company, rose 1.4 per cent to $3.63 on an average volume of 1.3 million shares. The electricity generator reported record earnings on Wednesday, although some investors were unnerved by weakness at Meridian’s Australian arm. Auckland International Airport, the third-biggest listed company,

>> The Dollar Trade Weighted Index

21 FEBRUARY: 73.97

Auckland International Airport increased 0.1 per cent to $7.35, with 1.8 million shares changing hands. The airport operator reports earnings today.

increased 0.1 per cent to $7.35, with 1.8 million shares changing hands, almost twice its average volume. The airport operator reports earnings today and is expected to respond to the Commerce Commission’s concerns that it plans to overcharge customers for its major upgrade. Pushpay climbed 4.3 per cent to $3.43 on a smaller volume than usual of 161,000 shares. Vista Group International increased 0.5 per cent to $3.94, with 1.5 million shares traded, more than seven times its 90-day average of 210,000. Spark New Zealand was the most traded stock with 9.4 million shares changing hands, compared with its

>> Interest rates

76 74 72

The NZ dollar (Trade Weighted Index): Yesterday 73.97 -0.30 Primary Exchange Rates on the NZD: Currency Close Move US Dollar 0.685 -0.002 AUS Dollar 0.956 -0.002 Euro 0.603 -0.002 Japan Yen 75.84 -0.29 UK Pound 0.525 -0.001 Buy/Sell Rates on the NZD Yesterday: Currency Buy Sell Australian Dollar 0.9409 0.9759 US Dollar 0.6739 0.7009 Pound Sterling 0.5166 0.5363 Euro 0.5928 0.6194 Japanese 74.42 77.67 Canadian Dollar 0.8879 0.9216 Swiss Franc 0.6734 0.7000 Danish Krone 4.4189 4.6021 Fiji Dollar 1.4111 1.5010 Hong Kong Dollar 5.2831 5.4824 Indian Rupee 47.3300 49.6457 Sri Lanka Rupee 119.4694 125.9652

3.9 million 90-day average. The stock fell 3.7 per cent to $3.75, extending Wednesday’s decline. Sky Network Television fell 2.4 per cent to $1.64, a new record-low, on a volume of 591,000. The pay-TV operator posted yet another slump in first-half earnings on Wednesday. Fletcher Building fell 1.6 per cent to $4.90, Heartland Group rose 1.5 per cent to $1.37, Air New Zealand fell 1.5 per cent to $2.61, Z Energy increased 1.8 per cent to $6.09, and Precinct Properties New Zealand decreased 0.3 per cent to $1.48. Outside the benchmark index, TeamTalk rose 3.8 per cent to 82c after affirming annual earnings will be

3 MONTHS

>> Metals & Oils

Close 0.716 1.135 0.87 110.75

2.1

1400

1.95

1300

1.8

Norwegian Krone 5.7716 PNG Kina 2.1760 Philippine Peso 34.8119 Soloman Islands Dollar5.0994 Swedish Krona 6.2568 Singapore Dollar 0.9082 Thai Baht 20.9661 Tonga Pa’anga 1.4475 Vanuatu Vatu 73.62 Samoa Tala 1.7031 CFP Franc 70.11 South African Rand 9.4030 Source: ANZ

Move -0.001 +0.001 +0.001 -0.05

6.0078 36.6540 5.8643 6.5086 0.9442 21.5699 1.6213 81.54 1.8280 73.97 9.7977

3 MONTHS

NZ rates at close yesterday: Yield % 90 Day Bank Bill 1.92 180 Day Benchmark 1.93 2 Year Benchmark 1.74 5 Year Benchmark 1.74 10 Year Benchmark 2.22

World bank bill rates yesterday: Yield %

3.75 2.443 2.645 2.992 2.087 1.632 0.1 0

6900

10250

Change 0.00 -0.013 +0.002 +0.011 -0.014 +0.004 -0.006 0.00

Yesterday 5pm ($US) Price Gold (ounce) 1,338.41 Silver (ounce) 16.03 Palladium (ounce) 1,488.5 Platinum (ounce) 822.5 Aluminium (tonne) 1,849 Aluminium Alloy (tonne) 1,472.5 Copper (tonne) 6,428 Lead (tonne) 2,027 Nickel (tonne) 12,700 Tin (tonne) 21,299 Zinc (tonne) 2,724.5

8500

3 MONTHS

Metals Change -2.67 +0.05 +9.00 +5.00 +20.00 +10.50 +84.00 +23.25 +270.00 +98.00 +44.00

DAX

20 FEBRUARY: 11,401.97 12000

6500

20 FEBRUARY: 1,338.41 Change -0.01 0.00 +0.015 -0.025 -0.025

>> Frankfurt

7300

Gold ($US)

21 FEBRUARY: 1.92

FTSE-100

20 FEBRUARY: 7,228.62

1200

90-Day Bank Bills (%)

US Prime Bank US 90 Day US 10yr Bond US 30yr Bond Aus 10yr Bond UK 20yr Gilt Ger 10yr Bond Japan 10yr Bond

>> London

)

3 MONTHS

Cross Rates: Currency AUD/USD EUR/USD EUR/GBP JPY/USD Source: Reuters

in line with the $4.4m reported a year earlier. Dividends will also be back on the table at the end of the June financial year. NZME was unchanged at 48.5c. Rival Stuff posted a 23 per cent slide in first-half earnings, outpacing a decline in revenue, with owner Nine Entertainment Co looking to sell the New Zealand news group. Of firms reporting today, New Zealand Refining was unchanged at $2.26, Summerset fell 1 per cent to $6.28, Cavalier was unchanged at 51c, Delegat Group rose 0.4 per cent to $9.55, and Michael Hill International was unchanged at 56c. — BusinessDesk

3 MONTHS

>> Paris

CAC 40

20 FEBRUARY: 5,195.95

>> New York

20 FEBRUARY: 25,954.44

5200

26000

4600

23500

4000

DOW JONES

21000

3 MONTHS

>> Hong Kong

3 MONTHS

Hang Seng

21 FEBRUARY: 28,663.33

>> Tokyo

21 FEBRUARY: 21,523.35

Oil ($US a barrel)

Price

Change

29000

WTI Cushing WTI Sour Light Louisiana Brent Crude

56.85 57.85 65.78 67.15

+0.78 +0.85 +0.41 +0.70

24500

19500

20000

16000

3 MONTHS

Nikkei

23000

3 MONTHS

nzherald.co.nz # C21

The New Zealand Herald | Friday, February 22, 2019

New Zealand 0800 102 100

Personalised Investment Advice Share Code

NZX Market Shares

Closing quotes Buy Sell

Last Sale

Move

1000s Sold

a2 Milk Abano AFTPharm Air NZ AlliedFarmrs AMP ANZ Aorere Argosy Arvida ASB No.2 Pref ASB Pref AsiaPacFund Asset Plus Ltd AuckAirport Augusta Cap Aus Fin Fund Aus Found Aus Mid Cap Fund Aus Res Fund AusTop 20 Fund AusDivFund AusPropFund AWFMadison Bankers Inv Barramundi Blackwell BLISTech Briscoe Grp Carbon Fund Cavalier Corp CBLCorporation CDLInv Chorus City of Lond Inv Colonial Motor Comvita Contact Energy

1479 595 205 261 8.2 230 2899 122.5 131 99.2 99.3 195.1 58.5 731.5 108 710.8 628 661.8 493.9 359.5 159.4 148.6 162 1650 59 .7 1.7 340 100 50 82.5 520.5 765 785 520 631

1483 1482 600 600 207 207 261.5 261 8.9 8.2 250 247 2900 2899 .1 .1 124 124 132 132 100 99.2 99.5 99.3 195.6 195.7 59 57.5 735.5 735 109 109 712.6 708.4 635 635 664.4 660.8 495.3 491 360 358.3 160 157.1 148.9 148 170 161 1650 60 59 .8 .7 1.8 1.7 342 340 107 100 53 51 317 85 85 525 520.5 775 769 810 810 539 539 641 631

+60 -5 +2 -4 -.1 +16 +65 +2 +1 -.1 +1.5 +1 +2 +8 +3.9 -2.9 +4.4 +.6 +2 +1 +4 -3 -14

2014.491 22.4 4 1414.914 2.513 42.036 30.67 148.714 86.709 206.831 144.25 16.589 1843.126 130 2.578 9.101 9.838 13.149 6.168 2.343 8.6 25.708 101.909 435.777 15.052 2.599 2.886 556.443

1485 948 260 343 10.5 586 3346 .2 124.5 136 99.3 99.3 217.9 63 772 112.5 804.8 710 759.9 499.8 392.6 172.4 153.3 227 1793 65 1.6 2.3 371 109 68 96 532 860 900 847 649

867 600 205 259 6.5 224 2410 .1 99.5 115 81.5 83 177.8 56.5 610.5 103.5 652.7 611 594.4 408 322.2 136.4 129.3 156 1460 57 .6 1.3 320 98 48 79 367 696 748 436 515

47.12 30.56 .28 26.45 193.13 7.61 6.46 3.04 3.31 2.47 4.5 30.21 8.16 37.53 34.41 17.58 16.71 15.6 7.79 5.48 22.5 38.45 5.55 27.08 4.86 30.56 35.59 69.44 8.33 44.44

DGL EBO EMF ERD EUF EVO FIN FPH FBU FWL FCG FSF FCT FRE FMS

Delegat Group EBOS Group Emerg Markts Fund EROAD Ltd Europe Fund EvolveEduc Finzsoft Solutions Fishr&Paykl Health Fletcher Building FoleyWines Fonterra Fonterra Shrhlds Unts Foreign & Colonial Freightways Future Mobility

952 2150 121.4 225 155.7 21.5 15 1428 489 151 458 452 1313 783 7.5

955 2165 121.9 230 156.2 22 160 1430 490 154 463 460 1320 788 9

955 2164 122 225 156.3 21.5 160 1429 490 155 458 457 1313 783 10.5

+4 -1 +1.1 +2 +91 -8 -5 -5 -1 -2 -

6.303 53.603 21.008 7.234 15.253 25 1449.257 3216.988 9.5 138.189 480.81 14.004 98.286 23.325

1100 2300 136 393 176.5 66 254 1644 719 161 613 613 1439 840 15

751 1730 111 225 142.4 21 160 1185 454 131 450 450 1158 670 10

GEN GNE GTK GEO GBF GMT GXH HLG HGH HFL IKE IFT IPL JPG

General Capital Ltd GenesisEgy Gentrack Grp GEO Glob Bnd Fnd Unt Goodman PropTst Green Cross Health Hallenstein Glasson Heartland Grp Holding Hendrsn Far East ikeGPS Grp Infratil Investore JPMorg GlobGrth

273 505 15 317.1 164 105 424 137 676 58 398 158 597

6 274 511 16 317.3 165.5 108 425 138 60 400.5 159 -

9 274 511 15 317.3 164 105 424 137 675 60 400 158 590

-3 +.5 +.9 -1.5 -1 +2 -4 -2 -1 -

114.642 53.639 40 43.07 292.884 5.5 44.144 1443.496 49.25 366.868 82.434 -

9 280 739.1 26.1 317.3 166.5 176 635 159 740 76 405 159 672

KMD KFL KPG MFT MLN MMH MWE MGL MCY MEL MVN MET MPG MHJ MCK MOA

Kathmandu Kingﬁsh Kiwi Prop Mainfreight Marlin Global Marsden Mari MarWineEst Mercer Group Mercury NZ Meridian Energy Methven Metlifecare Metro Perf Glass Michael Hill Millennm&Copthrn Moa Ord Shrs

238 137 141 3301 88 520 18 362 361 160 522 49.5 56 290 42

250 138 142 3304 89 525 23 22 374 366 161 525 50 57 300 44

238 138 141 3301 89 525 23 22 363 363 160 525 49 56 295 44

-2 +1 -1 -6 +1 -8 +5 +4 +1 -1.5

56.432 283.557 981.069 38.21 22.101 5 230.984 1332.581 170.2 93.168 10.75 78.35 16.548

346 145 146 3335 97 560 24.5 39 379 379 161 651 95 124 338 54

A-C

ATM ABA AFT AIR ALF AMP ANZ AOR ARG ARV ASBPB ASBPA APA APL AIA AUG ASF AFI MZY ASR OZY ASD ASP AWF BIT BRM BGI BLT BGP CO2 CAV CBL CDI CNU TCL CMO CVT CEN

D-F

G-J

K-M

N-P NTL NZB NZC DIV NZK MDZ NZO NPF NZR TNZ FNZ NWF NZM NZX OCA OHE PEB PYS PGW PLX

NewTalisman NZ Bond Fund NZ Cash Fund NZ Div Index Fund NZ King Salmn NZ Mid Cap Fund NZ Oil & Gas NZ Prop Fund NZ Reﬁning Co NZTop 10 Fund NZTop 50 Fund NZWindfarms NZME Ltd NZXLimited OceaniaHlth Orion Health Paciﬁc Edge PaySauce PGGWrightson Plexure Group

1.3 305.2 298.7 115.9 220 510.8 48.5 121.8 225 160.6 263.1 13.6 46 101 107 121 29.5 1.3 52 32

1.4 1.4 305.4 305.4 298.9 298.8 116.2 116.3 221 221 512.6 512.9 49.5 48.5 122.1 122.1 226 226 162.5 162.4 263.9 263.1 14 13.6 48 48.5 102 101 108 108 122 121 31 29.5 1.4 1.4 53 52 33 32

+.1 +.1 -.2 +1 -1.7 +.5 +.1 +2.4 +.4 -.4 -2 -1.5 +2

136 5.575 21.5 9.157 13.089 16 19.544 105.703 83.15 49.908 18.334 106.692 561.953 5.388 21.5 169.593 1063.284

52-week High Low

2 306.2 302.1 119.5 299 522.2 70 124.2 263 168.5 270.4 16.7 91 115 123 124 45 2.2 72 37.5

Yld%

P/E Ratio

1.35 1.58 4.75 .04 1.39 2.75 3.38 15.05 .67 2.50 .75 .24 .98 9.03 9.25 3.63 .83 2.75 .70 .31 2.35 1.44 3.46 .92 1.46 3.01 1.53

7.85 11.71 3.39 10.71 6.66 6.13 4.89 3.07 3.34 1.26 7.82 4.11 7.49 5.30 5.42 2.66 3.40 4.35 4.96 3.70 13.98 2.33 9.41 7.97 5.72 5.87 4.63 8.57 1.55 7.04

43.4 12.33 7.51 8.63 244.65 12.1 7.24 7.36 7.31 23.96 13.54 24.72 110.4 18.79 5.78 4.41 8.8 33.86 11.38 14.26 137.52 4.54 12.09 8.58 7.02 25.83 11.1 29.83 12.9

20.83 75.16 1.66 3.75 2.78 30.9 4.17 10 10 21.23 41.32 -

3.09 1.39 1.11 3.57 1.62 1.15 6.40 1.35 -

2.18 3.47 1.36 2.40 12.92 2.16 2.69 2.18 2.19 1.62 5.28 -

20.62 22.68 91.85 357.86 16.21 39.58 23.12 44.84 9.66 19.53 -

5.4 221 466 11.6 311.5 131.5 105 398 131 620 35.5 303 137 521

22.16 18.91 5.43 8.01 9.72 61.11 42.03 22.68 9.53 23.53

.12 1.16 .68 2.50 1.38 1.04 .25 .35 2.28 2.01

8.09 3.70 1.71 4.88 9.26 14.41 6.23 5.67 6.03 3.99

138.61 32.36 118.86 9.88 10.84 9.24 63.39 66.47 9.29 12.49

206 128 130 2350 81 500 23 14 308 276 100 505 37 56 280 40

19.28 13.08 8.8 66.67 8.17 21.88 20.97 24.03 8.21 10 5.28 5.42 8.33 -

2.22 2.15 1.23 2.51 2.52 1.57 1.13 .50 1.13 5.87 1.87 .24 7.80 -

8.10 9.48 6.24 2.02 9.18 4.17 5.78 6.62 5.13 1.90 10.77 9.68 2.82 -

7.15 5.44 16.64 27.39 4.41 21.28 21.35 38.13 17.71 8.94 6.88 43.25 6.3 -

1.3 301.3 297.6 105.7 184 461.3 47 106.6 215 146.7 240 12 48 97 95 57 19.5 .3 46 12.5

Dividend CPS t/c

11.99 8.53 6.79 6.94 23.11 5.66 20.83 4.98 10.81 11.11 10.56 4.7 4.17 -

1.21 .92 1.42 2.33 4.10 3.01 .86 7.34 5.59 .75 .57 1.98 .79 -

3.92 2.85 5.83 3.14 4.51 4.63 9.22 3.07 4.11 22.91 10.45 4.35 8.01 -

29.07 51.6 16.73 18.97 7.4 102.9 8.64 17.44 6.17 5.84 8.1 23.43 11.6 21.85 -

www.spicers.co.nz

Share Code

NZX Market Shares

POT PCT PIL PFI PPH

Port ofTauranga Precinct Prop Promisia Prop For Ind PushpayHld

QEX RAK RBD RBC RYM SAN SCL SCT SEA SEK SKO SKL SKT SKC SPY SCY SRF SPN SPK STU SNC SPG SUM SML

TGG TTK TLS TEM TLL TLT TWF THL TWR TME TRS TPW TRA USF USG USV USM USS VCT VIL VGL VHP WHS WDT WBC ZEL

Q-S

T-Z

Closing quotes Buy Sell

A disclosure statement is available on request and free of charge

Last Sale

Move

1000s Sold

52-week High Low

Dividend CPS t/c

Yld%

P/E Ratio

535 148 .1 187 325

538 149 .2 188 343

535 148 .2 188 343

+6 -.5 +14

71.863 1117.487 100.059 161.418

545 155 .5 193 448

474 125 .1 162.5 285

24.58 6.54 8.94 -

.80 3.71 2.90 -

4.60 4.42 4.76 -

37.86 6.82 8.52 -

QEX Rakon RestaurantBrands Rubicon Ryman Health Sanford Scales Corp ScottTech SeaDragon Seeka Kiwifruit Serko Ltd Skellerup Sky Network SKYCITYEnt Smartpay Smiths City SnrTrst RetVill South Port NZ Spark NZ Steel &Tube Sthn Charter Stride Summrst Grp HldLtd Synlait Milk Ltd (NS)

101 33.5 860 21 1108 660 460 260 .2 455 335 213 164 391 20 30 95 700 375 126 .1 193 628 1000

103 34.5 866 22.5 1145 667 465 265 .3 475 339 215 165 394 21 33 97 715 385 128 194 632 1005

103 33 863 22 1108 667 465 265 .2 455 335 214 164 394 20 31 96 700 375 126 .1 194 628 1000

-1 +3 -22 +1 +5 +8 +11 +3 -4 +6 +.7 -14.5 -1 -6 +1

6 106.053 526.327 8.228 63.309 27.936 12.413 16.246 220.038 591.279 293.459 10 3.89 9361.959 193.685 358.487 160.522 148.695

155 36 884 30 1409 805 500 355 .6 637.3 347 222 285 436 25.5 60 100 750 435 197.1 .5 199 800 1353

61 18.5 705 20 1032 635 420 250 .2 420 190 177 163 341 15.9 26 95 610 328 114 .1 168 580 675

25 21.7 31.94 25.69 13.89 30.3 14.05 20.83 27.78 1.39 6.75 36.11 32.29 9 11.76 13.1 -

1.65 3.27 1.96 1.42 1.43 1.22 1.36 1.17 1.05 1.36 .80 2.83 7.34 -

2.90 1.96 4.79 5.53 5.24 6.66 6.57 12.70 7.05 4.48 7.03 5.16 8.61 7.14 6.06 2.09 -

41.45 4.13 28.99 11.84 15.6 14.76 17.75 18.56 17.15 153.19 14.26 16.86 18.86 18.82 19.73 18.81 6.93 6.53 24.04

T&G Global TeamTalk Telstra Templeton TILLogist Tilt Renew TotalWorld Fund Tourism Holdings Tower Trade Me Group Ltd TRS Investments TrustPower TurnersAuto US 500 Fund US Large Growth US LargeValue US Mid Cap Fund US Small Cap Fund Vector Veritas Inv Ltd Vista Group Vital Healthcare Warehouse Group Wellington Drive Westpac Z Energy

281 80 332 1442 140 236 212.6 456 70.5 637 .3 640 230 749.2 437.3 316.6 463.4 450.9 345 11 392 210.5 207 22.5 2750 605

290 281 82 82 339 332 1460 1442 145 145 235 236 213.1 213.1 458 456 71 71 640 640 .4 .5 650 640 231 230 749.8 749.6 437.8 437.6 317.1 314.4 463.8 462.1 451.4 449.5 350 350 14.5 13.3 399 394 211 211 208 207 23 22.5 2810 2797 610 609

+3 -15 +3 +1.6 +4 -1 -1 -10 -2 +4.7 +2.4 +2.9 +1 +2 -1.5 +47 +11

217.307 7.3 2.14 3 7.349 54.449 59.553 444.446 39.614 28.825 9.202 10.877 1.037 83.863 1513.494 159.205 18.231 96.369 21.472 1203.007

327 91.1 379 1520 208 241 234.9 689 86 641 .6 662 321 829.8 488.8 344.6 505.8 503.3 354 24 435 216 218 25 3376 775

277 69 283 1235 140 178 190.6 446 67 425 .2 511 230 656.9 380 278.6 396.4 376.7 315 3 248 199 198 13 2450 518

16.67 23.83 37.87 3.19 3.67 1.54 34.97 57.78 72.22 24.31 2.35 3.13 22.57 4.63 8.98 22.22 218.02 47.78

.62 1.15 3.39 .78 30.36 1.90 .58 .60 1.77 104.74 28.46 .91 2.01 2.67 .41 1.27 2.34

5.93 7.18 2.63 2.20 1.56 .72 7.67 9.03 11.28 10.57 .31 1.00 6.45 1.18 4.26 10.74 7.79 7.85

37.67 6.06 12.17 11.25 81.93 6.32 8.87 26.32 18.02 7.43 4.23 3.93 4.9 4.91 4.16 23.62 1.28 58.73 9.16 31.38 10.82 7.57

Move

1000s Sold

Yld%

P/E Ratio

1.25 6.36 8.49 2.80 6.39 -

274.81 2.21 7.41 14.7 10.78 17.47 -

Yld%

P/E Ratio

NZAX MARKET Share Code

AFC BFW CRP CGF CSM ENS GFL JWI LIC SDL TRU

NZX Market Shares

Aust Food BurgerFuelW’wide Chatham Rock Cooks Glob Fds CSM Group Enprise Group GFNZ Grp Ltd Ord JustWater Livestck Imprvmnt Solution Dynam TruScreen

Closing quotes Buy Sell

.1 52 18 2.5 .1 55 36 83 153 16

.2 55 19 7 79 59 46 163 17.9

Last Sale

.1 55 19.2 7.8 .5 80 55 36 85 163 16

-3 -

Last Sale

Move

52-week High Low

500 3.176 3.774 -

.2 90 35 8.5 1.1 110 70 50 100 215 28

Dividend CPS t/c

.1 54 17 3.5 .5 80 50 30 56.3 150 13

1 3.5 3.06 2.38 10.42 -

2.12 1.11 4.60 1.24 -

NXT MARKET Share Code

NZX Market Shares

MWE MarWineEst SNK SnakkMedia

Closing quotes Buy Sell

23 -

23 5.5

1000s Sold

52-week High Low

Dividend CPS t/c

24.5 23 10 3.5

21/02

NZDX MARKET Share

NZX Market Bonds

Coupon rate %

Maturity date

CEN020 ZEL030

Contact Energy Z Energy Bonds

5.80 6.50

2019-05-15 2019-11-15

Closing quotes Buy Sell -

Last sale

1000s sold

Price/$100 face value

2.58 3.28

Disclaimer: All parties have endeavoured to ensure the accuracy of the information contained herein is correct. Neither this newspaper nor AAP, related companies nor any of their respective employees or agents make any representation as to its accuracy or reliability nor will they, to the extent permitted by law, be liable for any loss arising in any way from, or in connection with, errors or omissions in any information provided (including responsibility to any person by reason of negligence). Please note: All products and services subject to change without notice.

C22

# nzherald.co.nz

The New Zealand Herald | Friday, February 22, 2019

Australia 0800 102 100

Personalised Investment Advice

Rises

Falls

634

556

6000

5450

5900

4975

5800

4500

Share name

Feb 19

Nov 18

Aug 18

5925

May 18

6100

Talon Petrol Telstra Corp Emerge Gaming 4DS Memory South 32 Nine Entertainment AMP Ltd Fortescue Met Alumina Ltd Andromeda Met Feb 18

6400

Feb 21

6200

Feb 15

▲

Top 10 TURNOVER

Feb 8

+42.70

Last TWELVE months

Feb 1

6139.2

A disclosure statement is available on request and free of charge

Last FOUR weeks

Jan 25

ASX200

www.spicers.co.nz

Issues traded

Volume traded

Value traded (A$)

1,559

1.91b

$7.70b

s Ofﬁcial market statistics provided by ASX. Closing data compiled at 5.30pm yesterday (AEST).

29,100,000 28,531,911 27,833,936 27,122,403 26,555,478 24,528,748 22,987,826 22,813,976 22,650,425 22,350,095

Top 10 VALUE

Share name

BHP Group CBA CSL Limited Wesfarmers Ltd Westpac Bank ANZ Banking Woolworths Nat Aust Bank Rio Tinto Ltd Fortescue Met

352,516,060 329,714,598 295,221,217 225,433,223 197,804,487 191,966,878 187,320,306 179,889,865 176,014,796 148,383,005

Biggest 10 RISES Share name

Webjet Ltd Fisher&PaykelH Nine Entertainment Platinum AMgmt Wesfarmers Ltd Orocobre Ltd Syrah Resource Star Entertain Galaxy Res Nanosonics Ltd

Biggest 10 FALLS

Share name

St Barbara Saracen Min Wisetech Global Mineral Res Credit Corp JB Hi-Fi Ltd GWA Group Ltd Worleyparsons Fortescue Met Spark NZ

INDUSTRIAL (A¢) Share Code A2M AAC ABP ARI ABC APT AGL AIZ ALQ ALU AMC AMP ANN ANZ APA APX ARG ARA ALL AHY ASX ALX AIA AZJ AFI AST ASB API BOQ BEN BYI BSL BLD BXB BRG BKW BWP CTX CAA CAR CBA CBAPD CLT CGF CHC CML CNU CIM CWY CCL COH COL CLH CPU CTD CYG CMW CWN CSL CSR CYB DVN DXS DJW

Last Sale

A2 Milk AAC Ltd Abacus ACN Ltd AdelBrtn Afterpay AGLEgy Air NZ ALS Ltd Altium Amcor AMP Ansell ANZ Bank APAGroup Appen Argo Ariadne Aristocrt Asaleo ASXLtd AtlasArt AuckAirpt Aurizon AusFound AusNet Srvcs Austal AustPharm BankQld BenAdeBnk BeyondInt Bluescope Boral Brambles Breville Brickwork BWPTrust Caltex Capral Carsales CBA CBAopt Cellnet Challenger CharterHG ChaseMin ChorusLtd Cimic Cleanaway Coca-Cola Cochlear ColesGrp CollHouse Compshare CorpTrav Coventry Cromwell Crown Ltd CSLLtd CSRLtd CYBG Plc Devine Dexus DjerriInv

Percentage

14.85 13.73 1.57 5.13 34.97 3.40 1.325 4.65 2.08 3.61

30.61 7.27 7.17 6.88 6.88 6.25 6.00 5.68 5.32 5.25

Percentage

4.82 2.84 19.90 16.84 20.51 22.33 3.03 14.78 6.41 3.59

8.02 6.89 5.37 5.18 4.69 4.49 4.42 4.40 4.19 4.01

Thursday, Feb 21, 2019 Move

100s Sold

1410 +46 91 354 -3 2.2 484 +10 1701 -43 2138 +7 253 -2 804 +15 3394 +75 1500 +15 236 +9 2482 -2 2777 +50 969 +31 1808 +2 766 -4 63 2559 +95 92.5 -1 6951 +82 715 +11 700 466 605 +2 174.5 +1 237 +2 138.5 +1.5 885 979 +1 95 +9 1218 +2 478 -2 1160 +27 1521 -6 1820 +13 373 +1 2767 -13 12.5 +.5 1236 -5 7310 +144 9804 +9 28 -9 798 +28 876 1.9 +.1 499 -2 4936 +71 209 -1 827 -9 17030 -315 1134 -3 143 -3 1798 -3 2927 +46 79 +1.5 107 +.5 1140 -15 18550 +15 324 -6 355 +16 22 1209 +3 320 +1

92320 32800 9091 20935 36596 29451 902 38769 18177 42177 229878 12243 69518 31475 10774 1334 32940 7776 4185 13991 600 52574 2211 118203 25963 10640 34808 21551 65 21601 95640 72225 6847 5296 14651 10359 6149 6649 45396 144 746 45873 20314 719 3891 4190 73581 26079 4085 82482 725 54529 8900 270 43843 40847 15887 50455 48772 37861 580

Last Move Sale

100s Sold

52-week High Low 1378 144.5 397.5 2.4 702.5 2300 2330 325 940 3364 1537 547 2964 3039 1029 1900 834 77.5 3306 153 6955 726 731 471 631 177.2 236 194.5 1300 1187 110.5 1900 796 1175 1574 1841 382.5 3702 17.4 1645 7766 9945 52 1345 884 6.5 510 5167 222 1050 22144 1337 169.5 2080 3387 125.2 115.3 1459 23269 590.5 636 42 1224 359

814 90.5 312 2.2 417 526 1744 240 640 1484.5 1266.5 212 2107 2298 759 807 747 59 2066 62 5518 527 571 390 574.7 150.5 155 122.7 882 974 61 1056 449 858 1013 1402 289 2450 11 1056 6523 9521 35 717 558 1.6 341 3957.5 136 798 15522 1126 120 1625 1920 73 93.9 1140 15268 262 310 21 909 311

Dividend CPS Yld% 9.25 3 13 55 10.0 11 16 29.78 4 29.2 80 21.5 4 16 1 27 6 114.4 12 10.0 11.4 18 4.86 3 4 38 35 2 8 14 14.5 18.5 36 8.93 57 .5 20.5 200 83.19 1.25 17.5 16.5 11.9 86 1.65 21 155 3.9 21 18 2.5 1.8 30 120.3 13 5.5 27.2 10

5.11 4.43 5.54 7.95 2.53 .90 4.20 6.17 2.55 5.87 4.85 .39 4.16 3.17 1.87 6.42 3.25 3.41 2.88 5.26 3.98 5.46 2.13 5.47 8.59 7.16 1.15 5.52 2.56 2.29 2.99 4.83 4.24 10.42 3.56 6.01 3.42 3.38 4.61 3.73 4.06 3.21 1.45 5.62 1.82 5.34 2.33 1.35 7.31 5.19 1.34 8.03 1.64 4.25 6.27

P/E Ratio

Share Code

55.0 8.1 15.6 11.1 8.0 26.6 66.6 18.3 227 21.1 12.3 36.7 92.8 20.5 8.2 28.9 28.8 101.1 14.0 18.7 18.7 23.2 20.8 13.9 10.3 11.2 4.3 12.7 20.2 30.1 15.3 15.0 9.8 4.7 22.1 13.9 4.8 35.1 16.3 27.3 20.2 35.5 13.2 37.9 20.5 7.6 17.6 36.2 5.1 9.7 16.0 32.4 17.1 8.4 16.2

DMP DOW DLX EBO ENE EVT FRM FPH FBU FLT GNE GMA GLB GMG GNC GOZ GUD HVN HSO HIL HTA IAG IEL IDT IPL IFM IFT IFL IRE IVV JHG JBH JHX LGD LLC LNK MAH MQG MFG MRL MCP MPL MCY MEZ MTS MIG MLT MGR MPR MYO NAB NVT NWL NWS NWSLV NXT NHF NEC NUF OEC ORI ORG ORA PDL

Share Code

Last Move Sale

100s Sold

Dominos 4441 -9 10597 DownerEDI 722 -8 40541 Dulux Grp 716 -2 10033 Ebos Group 2120 +70 107 Enevis 26 -2 200 EventHos 1246 -74 1452 FarmPride 75.5 Fis&PayHc 1373 +93 4573 FletchBld 469 -8 10363 FlightCtr 4430 +124 11369 GenesisEn 262 -3 47 Genworth 256 +8 50502 GlobeInt 229 GoodGrp 1274 -5 52908 Graincorp 955 +1 5062 GrowthPro 404 -1 5744 GUD Hldgs 1202 +7 2291 Harvey 352 +1 34992 Healthscope 248 +1 99071 Hills Ltd 19.5 +.5 1150 Hutchison 13.5 +2 1584 IAG 731 +3 100803 IDP Education 1437 -3 17913 IDTAust 16 1000 IncitecPV 331 +3 127133 Infomedia 141 +2.5 3362 Infratril 380 IOOF 648 +28 34036 Iress Ltd 1284 +44 7431 iSharSP500 39281 +313 169 Jan-Hend 3452 +46 6153 JB Hi-Fi 2233 -105 7507 JHardie 1782 +3 28187 LegendCor 31.5 LendLease 1389 +10 19298 LinkAdm 722 +22 19083 Macmahon 26 17402 MacqGroup 12797 +197 9906 MagellanF 3248 -41 13471 MayurRes 54.5 -.5 173 McPherson 128.5 -1 1307 Medibank 281 -1 113190 MercuryNZ 355 -4 33 MeridianEn 345 759 MetcashL 251 -6 70790 Migme Ltd 4.4 Milton 443 +2 2531 MirvacGrp 256 -4 189198 MPower 3.5 -.3 1198 MYOB Grp 338 -3 14397 NAB 2471 +17 73085 Navitas 563 -1 15957 Netwealth 830 +25 3511 NewsCorp 1828 +10 1266 NewsCorp 1808 +21 .35 Nextdc 706 -7 11298 NIBHoldin 560 +3 11276 NineEntrtnmnt 157 +10.5 245287 Nufarm 515 -4 29262 Orbital 41 +3 199 Orica Ltd 1778 -27 11154 OriginEgy 766 +7 55348 Orora Ltd 316 +8 39136 PendalGp 855 +11 8780

52-week High Low 5780 798 820 2150 31 1545 98 1507 662 7053 267 290 275 1302 980 406 1555 454.2 259 27 22 858.4 1509 18.5 428 144 385 1104 1420 41528 4605 2778 2419 38.5 2173 905 28 12987 3344 104 181 330 369 364 373 5.5 483 261 10.2 369 3064 567.5 992.7 2262 2228 819 720 266.5 944.5 60.5 2036 1027 372 1097

3810 595.5 631 1585 16.5 1254 75 1118 425.5 4119 208 205 112 811 717 310.3 1045 299 177 16.5 4.2 653 687 6.5 317.5 77 278 419.5 917 33716 2696 2030 1438 20.5 1103 650 20 10060 2180 52 120 229 285 253.9 225 4.2 424 207 3.8 272 2252 387 584.3 1598 1570 561 464 130.5 517 32.5 1602 603 292 737

Dividend CPS Yld% 62.7 14 14 29.4 31 9.2 6.5 107 7.6 9 6 15 8 11.4 25 18 3.5 2.1 12 12 6.2 1.7 5.5 25.5 16 211.5 50.5 91 11.0 .75 35 8 215 73.8 6 5.7 8.2 7.3 6.5 9 5.3 5.75 99 8 5.5 9.8 9.8 10 5 6 31.5 10 6.5 30

2.53 3.84 3.90 2.84 3.94 1.62 1.37 3.88 5.75 6.85 4.80 2.29 1.68 5.58 4.44 8.55 2.83 4.38 1.28 3.26 1.23 4.06 8.47 3.55 1.65 5.78 5.86 2.39 4.60 5.00 3.07 4.25 4.98 5.02 4.57 3.86 3.67 5.25 4.35 4.35 3.37 8.07 3.09 1.09 1.11 3.77 6.83 2.12 2.85 4.22 6.16

P/E Ratio 32.8 20.2 18.2 22.6 18.8 82.9 37.8 16.5 145.6 11.7 11.2 15.5 30.9 7.5 10.0 10.4 17.3 126.6 19.1 58.6 26.2 33.2 26.7 12.2 33.8 9.5 5.3 11.1 31.1 11.2 10.0 13.8 15.9 16.2 17.3 26.0 19.0 23 48.2 21.7 7.5 35.3 12.1 83.7 316.8 18.6 6.1 13.1 61.2 16.7 12.3

Share Code PTM PMC PPK PMV PRT QAN QBE QUB RHC REA RCL REH RWC RMD RIC SCG SMX SEK SVW SCP SIG SLX SGM SKC SHL SOL SKI SPK STW SPT SPO SGR GAS SDF SUN SDG SUL SYD TAH TNE TLS TGG TWR TPM TME TCL TWE URW VAS VCX VRL VEA VOC WEB WES WBC WTC WOW WOR XRO ZEL

Last Sale

Plat Mgmt PlatCaptl PPKGroup Premier Prime MG QantasAir QBE Qube Hold Ramsay Rea Group ReadCld ReeceAus RelianceW Resmed Ridley Scentre SecurityM SeekComm SevenGrp ShopCenAu SigmaH SilexSyst SimsMetal Skycity Ent SonicHlth Soul Pat Spark I.Grp Spark NZ SPDR200 SplititPay Spotless StarEnter StateGas SteadfstGrp Suncorp Sunland SupaCheap SydAirprt Tabcorp TechOne TelstraCp Templeton Tower TPGTeleco TradeMe Transurban TreasryWine Uni-Rod VangrdASI VicinityCtr VillageRd Viva Energy VocusComm Webjet Wesfarmrs WestpacB Wisetech Woolwrths WorleyPars Xero Ltd Z Energy

Move

513 +33 175 +2 71.5 +1 1585 +30 26 577 +11 1144 +14 286 +5 5956 +3 7775 +32 28.5 +2.5 1031 +6 492 -3 1400 +6 137 -3 384 -3 28 1704 -11 1883 -19 242 -1 57.5 -.5 26.5 +2 1145 -21 378 +3 2458 +28 2964 +35 232 +2 359 -15 5735 +38 77 -.5 167 465 +25 90.5 -3 306 +11 1302 +17 150 768 +3 707 +12 456 +7 755 +11 322 +2 129 +.5 68.5 -.5 674 -9 612 1240 +14 1482 +10 1140 +11 7796 +55 244 -2 323 -3 232 +4 356 -1 1485 +348 3497 +225 2677 +35 1990 -113 2835 -34 1478 -68 4782 -47 585 +11

100s Sold

52-week High Low

14150 786 444 1513 216 166 256 96 21 2133 2016 1327 1743 33 19.5 191524 692 518 35848 1180 928 40909 289 215 3321 6937 5189 2705 9412 6923 145 62 22.5 754 1295 940 19270 638 393.7 26992 1657 1166 536 157 124.5 122996 453.5 376 859 76 20 17597 2294 1627 20749 2387.5 1317 58293 274 216 31286 98.5 40.5 3797 43.5 15 35375 1794 891 4189 397 321 20576 2700 2126 6079 3187 1670 70525 253 212.5 11766 414 307.6 1357 6012 5075 68329 99 30.5 181.5 104.5 98894 566 425 319 105 15 39427 314 233 33916 1587.8 1212 192 187.5 127.5 24363 1044 635 65573 762 624 59901 499 409 7297 756 409.7 285319 346.6 257.1 678 150.5 123 369 79 61 13782 965 503 6197 616 381.6 58497 1250 1062 72532 2020 1338 9830 1517 1065 463 8161 6890 156015 283.5 236 2099 350.7 173 21859 251 166 34969 369.5 211 32529 1773.5 963.4 65026 3769.4 2878.6 74369 3140 2330 16637 2500 918 65917 3148 2616 16998 2002.8 1072 5943 5257 3060 112 716 479

Dividend P/E CPS Yld% Ratio 16 6 1 33 1.7 10 22 4.8 86.5 55 14.25 3 3.6 2.75 11.08 22 21 7.25 1.5 23 9.5 33 33 8 11.5 54.4 1.35 13 3.2 26 4 21.5 19 11 8.16 8 8 6.8 2 29.7 29 18 71.0 7.95 14 6 12 120 94 1.5 45 12.5 11.7

6.67 14.8 5.20 9.8 1.42 3.99 29.3 3.00 10.1 2.30 1.96 22.4 2.42 31.8 1.51 83.0 1.98 22.7 1.31 40.2 1.01 31.5 3.04 24.5 5.73 8.9 2.68 112.8 2.21 19.6 5.91 12.7 6.90 13.8 4.55 11.5 4.97 16.8 3.37 22.0 1.91 26.2 6.79 39.5 5.28 19.4 4.19 8.7 24.2 4.66 25.1 2.68 29.8 5.14 19.3 6.67 7.2 6.41 11.8 5.40 43.8 4.68 53.4 1.21 46.1 3.91 12.2 3.50 80.3 .59 15.9 2.95 27.4 4.65 103.9 2.38 26.9 23.6 4.55 225.0 6.57 13.5 2328.5 36.3 1.76 31.5 6.82 30.9 7.12 11.1 .15 151.2 3.31 21.6 1.78 33.1 5.54 7.5

MINING (A¢) Share Code AWC AGG ARQ AMI ARM ASL AUT BPT BHP BDG BOC CAA COE CRN CUE EMP ERA EVN FMG

Alumina Anglogold ARQ Grp Aurelia Met AuroraMin Ausdrill AutecoMin BeachEngy BHP Group BlDragon Bougainvl Capral Cooper Coronado CueEnergy Emperor EnergyRes Evolution Fortescue

266 430 170 90 1.5 166 .7 200 3785 11 14 12.5 51 355 6.4 .3 31 365 641

-6 +14 -3 +3 -.2 +1.5 -.1 +.5 -9 +.5 -1 -10 -.1 +1 -15 -28

226504 439 615 36023 45 137179 15596 124277 93176 80 1.5 6149 18732 32506 3723 58 322 136739 228139

52-week High Low

Dividend CPS Yld%

P/E Ratio

320 421 372 91 3.8 287.2 .8 226 3794 24 23 17.4 52.5 384 8 .4 72.5 408 683

11.7 3.5 3.5 1 77.3 .5 3.5 30

12.1 53.4 62.9 6 9.4 11.7 40.2 4.7 5.8 27.7 16.9

212 198 163 34 1.6 104.2 .2 119 2697.1 7.5 14 11 29.2 275 5.2 .2 22 260.5 351.5

8.69 .29 4.05 3.04 1.00 4.37 10.42 1.97 4.63

GXY GOR HLX HIG ILU IGO KCN LEG LYC MIN MGX NHC NCM NST OGC OSH OMH ORE OZL

Galaxy Gold Road HelixRes Highlands Iluka Res Ind Group Kingsgate LegendMin LynasCorp MineralRe Mt Gibson New Hope Newcrest NthStar OceanaGol OilSearch OmHold Orocobre OzMineral

Last Move Sale

100s Sold

52-week High Low

Dividend CPS Yld%

208 +10.5 86 +1.5 2.1 -.2 10.25 944 -14 485 17 +.5 3 +.3 172 -2.5 1684 -92 70.5 +1 423 +12 2525 -19 958 -32 473 836 +18 137 +1 340 +20 1069 +16

42596 62257 3685 1125 25300 21879 5096 11277 26220 48335 23337 22110 41853 40658 3254 45535 278 22829 23986

366 85 4.7 15 1220 573.5 43.5 6.6 296 2070 73.5 428.5 2553 997 528 926.5 170 699 1070

10 2 5 40 3 8 10.5 6 2.0 11.8 3 8

189.5 59 1.9 7.2 702 356 13.5 2.1 148 1239 36 193.5 1857.5 598 316 670 95 291 808

3.65 .82 3.66 4.32 1.95 1.00 1.11 .63 1.79 2.21 2.09

P/E Ratio 32.2 1.1 112.7 56.4 19.7 12.2 11.9 22.8 40.4 30.9 11.3 25.7 5.0 285.7 11.3

Share Code PLS RRL RSG RIO SFR STO SAR SGM S32 SBM TAP WHC WPL YAL

Last Move Sale

Pilbara Regis Resolute RioTinto Sandﬁre Santos Saracen SimsMetal South 32 StBarbara TapOil WhiteHave Woodside Yancoal

69 553 112.5 9469 769 697 284 1145 387 482 9 458 3706 322

+1.5 -23 -2.5 -25 -23 +3 -21 -21 -4 -42 +10 -24 -1

100s Sold 95785 42885 64796 18599 14722 75534 82469 35375 265554 53866 520 81128 34474 27

52-week High Low 112.5 581.5 144 9494 1004 748 347 1794 428 532 9.9 579.9 3938 595

57 365 91 6941 607 480 150 891 300 327 5.1 396.7 2838 260

Dividend P/E CPS Yld% Ratio 8 2 170.84 7 4.7 23 9.5 4 20 127.5 .2

2.78 1.74 4.21 3.28 .69 4.55 4.04 2.29 6.47 5.37 3.20

17.4 12.9 13.0 11.1 42.5 34.3 11.5 9.9 13.3 7.7 17.7 2.5

nzherald.co.nz # C23

The New Zealand Herald | Friday, February 22, 2019

The Insider

Customs wants to fight smugglers before they reach NZ.

Smuggler busters wanted

The GCSB, SIS and Police have all been helping Customs as it beefs up its intelligence work, with the aim of “disrupting” smugglers and the like before they reach NZ. It may sound very James Bond-ish, but it is much more mundane. Mostly, it’s about analysing data, and Customs has been finding it difficult to get people with the right expertise. It has been hiring from overseas, but that has its own problems. People from overseas can’t get the necessary SIS clearances, so they can only work with anonymised or non-sensitive data until they have lived in New Zealand long enough to obtain security clearance.

Straight talk

The Wellington visit from the EU Commissioner for Agriculture and Rural Development, Phil Hogan, left no one in any doubt that trade talks with the EU aren’t going to be easy. Hogan and others are saying how keen they are to get the talks over the line before the end of the year, but the “bruiser” of European politics was blunt about what the EU would require. When talking to farming groups he was clear on bottom lines such as environmental standards, the branding of goods and quota access. One official said he pitied the NZ negotiating team as it faced Hogan’s and the EU’s immovable walls.

electric vehicles. Almost a year after this goal was made clear, there has been little change in departments’ purchasing patterns. Now ministers have written to them again, this time specifically saying that “when purchasing or replacing vehicles, agencies will target those with emission profiles 20 per cent below their current fleet average”. In an attempt to get some action, officials are working on ways to measure departments’ progress, to name and shame the laggards.

Power play

The options paper released this week by the Electricity Price Review’s advisory panel takes a very middle of the road approach. This has not pleased those who were keen to get rid of the Electricity Authority, in favour of the Commerce

Photo / NZME file

Cabinet Minister James Shaw plugs in — but are departments following suit?

Commission. The battle is not over yet, and lobbyists are now working on ministers. They know that after all the consultation and reviews are done and dusted, final decisions will be made around the Cabinet table.

Scamming the spies

You have to admire the gall — or maybe it’s stupidity — of some scammers. Government Communications Security Bureau Director-General Andrew Hampton told MPs no one was immune from people trying to defraud them via cyberspace. Even with all its firewalls, Hampton said the GCSB finance team got an email that seemed to come from him, asking them to transfer money. He didn’t say if the GCSB had used its powers to hunt down the scammers — or whether his finance team fell for it.

Opening the vault

The Reserve Bank has long resisted other agencies getting oversight of how it operates, despite Treasury chipping away at the walls. Now the Auditor-General is getting in the act, saying the office supports the removal of the provisions in the Public Audit Act which exclude the bank from the Auditor-General’s mandate. The bank is the only public entity excluded in this way and fought for the exemption decades ago, arguing that such scrutiny would erode its operational independence. The Auditor-General says it

Dilbert

Photo / NZME file

is time the Reserve Bank faced the same scrutiny as everyone else.

Ageing badly

Nick Smith may now be the Father of the House, but he shows no sign of mellowing with age. Smith (below) managed to achieve what few have done: getting himself kicked out of the House twice in one day.

Counting costs

Some people in the telco sector are amazed at how little attention is paid to power price rises, compared to media publicity when broadband costs go up. They reckon the electricity sector has got away with stealth price rises for years, because people’s power bills fluctuate anyway. They also wonder if many in the media care more about the price of Netflix and internet access, than they do the cost of their power.

Grand ambition

Treasury and other officials are a bit gobsmacked by KiwiRail’s ambition, as it pushes business cases for various projects, notably in Northland. KiwiRail has active supporters in Cabinet now, and has been telling them the rail system has been held back by years of underfunding. This is a bit of a shock to Treasury, and indeed previous Finance Ministers, who have poured money into the state-owned enterprise.

Plug in — now

New ministers are finding how tough it is to combat departmental inertia. A case in point is the Government’s fond desire for agencies to buy more

To spend less and save more, stay off social media Could social media be one of the reasons why people don’t save as much as they once did? A team of American and Canadian economists have made the connection. They say we tend to notice other people’s spending more than their non-spending, and new media have made that spending more visible than ever. That, in turn, is making us tend to spend even more, and save less. “A boat parked in a driveway draws the attention of neighbours more than the absence of a boat,” explain the economists from the University of Toronto and the University

of California. “Similarly, it is more noticeable when a friend or acquaintance is encountered eating out or reports taking an expensive trip than when not, or buys an enjoyable product as compared with not doing so.” These signals from other people are particularly powerful, in part because many of us have considerable uncertainty about how much we should be spending. “There is a great deal of evidence suggesting that people are indeed often ‘grasping at straws’ in their savings decisions, which suggests that they may look to social cues for help,” the authors write.

David Hirshleifer, one of the authors, says “saving is the flip side of consuming, and it's tempting to think that you're saving enough because you are not throwing lavish parties or taking expensive cruises the way some people you know are.” But, “such self-congratulation is treacherous, because those cruises and parties may not really be typical of your acquaintances — they just stand out in memory.” Fifty years ago, our frames of reference for our spending habits were relatively small. We had our neighbours and friends, and people we interacted with at work.

Then came TV, which brought us things like Lifestyles of the Rich and Famous, and eventually reality TV shows where contestants are jetted off to tropical islands to enjoy expensive meals. Now we have social media. We can log on to watch kids unbox expensive new toys on YouTube. Facebook lets us stay in touch with our rich friends who always seem to be on holiday. We can see what our co-workers are eating on Instagram. On social media, as the authors tell it, “a posting about a consumption event triggers a notification to friends; a non-posting about not engaging in

a consumption event does not.” The net effect of this saturation of consumptive media is that we're bombarded every day with signals to consume, consume, consume. “People infer that low saving is a good idea,” as the authors put it. To counter this, they have a suggestion: “To decide if you're overconsuming, make a special effort to notice when your friends do something that is frugal, such as having a staycation or holding on to their 15-year-old car,” Hirshleifer says. “If you're going to compare yourself to others, try to make it realistic.” — The Washington Post

Worried about a capital gains tax?

There were ﬁve rules for a fair capital gains tax. The Tax Working Group’s proposal fails four of them.

Ind Indexation for Inﬂation

Revenue Neutrality

Any capital gains tax regime must discount for inﬂation, so taxpayers are taxed only on their real capital gains, rather than nominal gains.

Given the Government’s surpluses, any revenue from a capital gains tax must be used to fund tax cuts in other areas.

No Valuation Day Any capital gains tax regime should exclude a valuation day approach in favour of grandfathering assets into the system upon sale, as in Australia.

Discounted Rate Any capital gains tax should apply at a discounted rate, not the full personal tax rate, to avoid having one of the highest capital gains tax rates in the world.

Roll-Over Relief Tax should be paid only on sale – not death. Further, there should be roll-over relief when capital from a sale is immediately invested in the same asset class.

The Government must reject this extreme and bureaucratic tax.

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