EMA BusinessPlus September 2013

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BusinessPlus news

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advice

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learning

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networking Issue 107 – September 2013

$6.30

Public a tio n o f th e E mp l o y e rs & M a n u f a c t u re rs A s s o c i a ti o n In c

Get ready for a tax attack Vote early, vote often! THE LOCAL COUNCIL BUSINESS ISSUES

Environment pioneer makes the mainstream

Your complete guide to all the OH&S changes In this issue: • • • •

Alarm over work drug problem Manufacturing's IT future Opotiki's new marina prospect People's Choice Awards launched




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*This offer is only available to EMA Northern region members (“EMA Members”), who sign up to, or are currently signed up to, a fixed term PowerFreeze agreement with Genesis Energy for the supply of electricity. This offer excludes residential and time of use (TOU) customers, customers on standard electricity pricing plans, and customers of natural gas and LPG products. The Offer is a 12% prompt payment discount (PPD) provided their account is paid in full by the due date. EMA members must contact Genesis Energy on 0800 600 900 and quote their membership number to receive this offer. Once the EMA membership is confirmed the 12% PPD will apply from the EMA member’s next electricity bill. Should the EMA member cancel their membership, the PPD will revert to Genesis Energy’s standard PPD. Genesis Energy reserves the right to change or revoke this offer at its discretion at any time. Genesis Energy PowerFreeze terms and conditions apply.


Contents 3

BusinessPlus is published by :

On the cover...

The Employers and Manufacturers Association (Northern) Inc

Earthwise sales director Jamie Peters and brothers Kayol and Jeremy Robinson are part of a family business that’s been going since the 1960’s. Only now its become mainstream. The story is on page 27

159 Khyber Pass Rd, Grafton, Private Bag 92066, Victoria Street West, Auckland 1142 Ph: 09 367 0909 or 0800 800 362 Email: ema@ema.co.nz Website: www.ema.co.nz Chief Executive: Kim Campbell Advocacy Manager: Bruce Goldsworthy Manager, Employment: David Lowe Manager EMA Learning: David Foley Manager EMA Membership & Marketing: Mauro Barsi Waikato Denis Quigan 07 823 9311 Russell Drake 07 838 0018 Bay of Plenty Terry Arnold 07 575 8401

mob 027 203 0694 mob 021 686 621

Advocacy 04

EMA advocacy at work

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Australia’s misfortune a mixed blessing – By Kim Campbell, EMA CEO

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Business mood in the city – By Phil O’Reilly

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Get your voting papers in on time! Local Council Election 2013

News 06

Congrats to 'Services' Entrepreneur of the Year

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EMA signs with Genesis for power

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Alarm over extent of workplace drug problem

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New training scheme rushed past employers

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People's Choice Awards launched

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Employment advisers on time and in tune EMA’s AdviceLine survey results are in

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Proud Moments!

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Bay of Plenty funding will boost marine activity, education, research

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Profile Environmental products pioneer keeps on innovating

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mob 021 662 656

Rotorua / Taupo / South Waikato / Whakatane Clive Thomson 07 348 0334 mob 0274 372 808

BusinessPlus Editor Gilbert Peterson Ph: 09 367 0916 gilbert.peterson@ema.co.nz Writer Mary MacKinven mary.mackinven@ema.co.nz Published by Mediaweb

Advice

Designer Bex Mikaere

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Mixed use assets are in for a tax attack EMA's E&Y Tax Tips with Joanna Doolan

Advertising Sales Colin Gestro (09) 444 9158 colin@affinityads.com

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Employment chat: How do I keep our business out of the news?! And, help, my key staff is being head hunted.

ISSN No. 1176-4953

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The changes coming to workplace health and safety

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Technology

28 29

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IT will drive manufacturing in the future

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Tip for sme entrepreneurs: Get Ultra-Fast Broadband at home!

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Building in security for manufacturing

25 Our Vision. Your Success


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Advocacy

EMA: advocacy at work EMA hosts ambassadors from ASEAN’s 10 nations

EMA was privileged to host a meeting of the 10 ambassadors to ASEAN last month. EMA chief executive Kim Campbell welcomed the visitors, recalling our decades-long relationships with the ASEAN nations. New Zealand Ambassador to ASEAN and Indonesia, HE David Taylor, said the visit was timely as New Zealand had just launched its ASEAN Strategy to increase engagement, and with planning underway for a 2015 ASEAN leaders’ summit. ASEAN’s formal free trade agreement takes full effect from 2015. An ASEAN spokesperson said the first requirements in engaging with other countries were peace and stability, which New Zealand had long demonstrated. He was impressed by New Zealand government ministers committing to the region and looking forward to understanding more about New Zealand’s trade and economic challenges. He said, “2015 will not be the end (for the ASEAn community), but the beginning of a long journey [of benefits].” A businessman with long and deep ties in the ASEAN region stressed the value of patience and building personal relationships.

City councilors talk shop Several Auckland City councilors met with EMA staff to discuss the upcoming October elections and the future of the Unitary Plan Christine Fletcher, Dick Quax, Cameron Brewer Christine Fletcher and George Wood. They agreed the draft Unitary Plan is BusinessPlus – Exclusive news, advice, learning and networking

misleading on the availability of business land, and the number of dwellings planned was not achievable in the Housing Accord over the next three years, (9,000 additional residential houses consented in year one, 13,000 in year two and 17,000 in year three.) However accelerating the notification of parts of the Unitary Plan (expected this month) should help free up land for housing. They also discussed the report of the Alternative Transport Funding Consensus Building Group EMA took part in, and recommended the tolling of motorways across Auckland as one of several mechanisms to raise funds for transport projects.

Strike one National MP Jami-Lee Ross and Government whip addressed last month’s EMA Policy Forum on his Member’s Bill, the Employment Relations (Continuity of Labour) Amendment Bill.This was drawn from the Parliamentary ballot and awaits its first reading. The Bill repeals Section 97 of the Employment Relations Act 2000, which prevents the use of volunteers, contractors or other temporary employees during strikes and lockouts. Mr Ross said the Bill supports the National Party’s overriding philosophy of individual freedom and choice, limited government intervention, recognition of competitive enterprise, and rewards for achievement. Since the introduction of section 97 in 2000, he said the number of stoppages has tripled, and the risk is they will rise further when the economy improves. Mr Ross emphasised his bill does not prevent people striking; it only affects the 8-9% of New Zealanders in the private sector who are union members, and would reduce the likelihood of a drawn out strike.

Employment discussed EMA’s Employers Forum heard from the general manager of labour environment at the Ministry of Business, Innovation and Employment (MBIE), Kirstie Hewlett. She is head of policy advice to Government on the labour environment including on employment law, ACC, health and safety.

Lunch with Minister Steven Joyce

EMA’s latest business lunch featured Minister of Economic Development Steven Joyce (pictured) talking on Building, Jobs and Growth. He said New Zealand’s growth last calendar year was high among OECD countries, but wasn’t good enough. “Doing reasonably well is not what we aspire to”. A lot of effort is going into attracting foreign investment, to reforming the Resource Management Act, increase skills training (eg, engineers, IT graduates and trades apprentices), and ultra-fast broadband. He said the timing and location of transport investment was critical for growth, noting that investing too early was just as large an impost on business as delivery too late. He also doubted any tolling of the motorway network would happen. Mr Joyce updated the Government's Business Growth Agenda across the six areas: Building export markets; infrastructure; skilled and safe workplaces; innovation; natural resources; and capital markets.

Focus on building EMA’s Infrastructure and Local Government Committee heard from civil engineers AECOM, with Transport Sector Director Mike O’Halloran presenting their bi-annual survey of confidence of professionals across the construction sector, Sentiment. The report notes confidence is increasing for the recovery to shift up a gear with more promising prospects in the residential, commercial and social infrastructure sectors. Alongside this enthusiasm, uncertainty remains around project funding and resourcing, particularly to handle the peak of the Christchurch rebuild envisaged for 2016 or beyond.


Advocacy

By Kim Campbell, Chief Executive, EMA

Australia’s misfortune a mixed blessing (First published in NBR, 16/8/2013)

The 30th anniversary of our most important trade agreement, ANZCERTA, came and went in March this year attracting scarcely a mention from either trans Tasman partner, a mark perhaps how much it is part of our everyday life.

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ince the signing of CER the New Zealand and Australia economies have steadily morphed into a single economic market which is the name of it more often referred to these days. Over the past 30 years the respective fortunes of our two nations have also risen and fallen back typically over somewhat similar business cycles, but that could be about to change. For the first time our two economies may be about to fall out of sync, and the change would have profound implications. Three factors are to the fore: 1. Australia has traditionally delivered higher labour productivity than New Zealand. But lately it appears to be lagging New Zealand with declines in this measure over the last four years. 2. On the back of demand for our food products, and notwithstanding the most recent Fonterra debacle, our terms of trade have been steadily rising. Though not declining, Australia’s terms of trade have stalled. 3. The regulatory and tax regime in Australia has become steadily more cumbersome and inefficient as the pace of reform there slowed. In contrast in New Zealand, and contrary to what is generally thought here, New Zealand is becoming the envy of the world for our market orientation and business facing government. These things in combination, plus

the massive infrastructure build in Christchurch and Auckland, anticipate an economic window with a view ahead on an outlook of some 10 years of reasonable growth. No such luck for Australia. Amongst other obstacles to growth they are looking for ways to achieve much needed labour reforms (labour costs in some Australian industries are almost double New Zealand’s), tackle the imbalances of the state versus federal system, and unravel the cumbersome gst of their tax regime. The urgency to deal with these issues is considerable as Australian government debt threatens to spiral out of control, and large parts of their economy are found to be uncompetitive.

“A less competitive Australia makes it easier for New Zealand to compete... but it also means Australian markets are not as buoyant. The opportunity and disadvantage net off against each other.”

Australia’s ability to reverse their tumbling fortunes is also an admirable Australian trait. Already we see signs of Australians galvanizing themselves for the rebuild. First up are the reports measuring their productivity growth record. One by PWC last month noted average real GDP per hour worked in the 2000s was just 1.4%, down from the 2.1% achieved in the 12 years from 1988 to 2001. Then there’s the Opposition’s promise to drop the company tax rate by 1.5%. Last week we read

the Business Council of Australia lambasting red tape and infrastructure cost blow outs. The pipeline of big new investment projects has fallen 30%, the BCA says. A member, Peter Coleman, chief executive of Woodside Petroleum, said: “Those who had the GFC have shed their fat. Australia didn’t make the structural changes others were forced to make.” The BCA says the costs of building a kilometre of freeway has gone from $4.6 million to $11.1 million and from 27 to 36 months to complete. They say labour productivity on resource projects in Australia can be 35% higher than on the US Gulf Coast, with export gas projects up to 50% more expensive to build. Australia’s Productivity Commission has chimed in calling for Government processes to be streamlined, and to establish a single project assessment and decision process across federal and state lines to remove duplication and clarify competing compliance demands. The reading from all this is Australia’s deficiencies will no doubt be temporary. In any case they are at best a mixed blessing for New Zealand. A less competitive Australia makes it easier for New Zealand to compete in third country markets where we compete with them, but it also means Australian markets are not as buoyant. The opportunity and disadvantage net off against each other. Opportunities certainly abound in Australia, but each of them requires careful study, and access to capital, and the human resource factor to capture them cannot be taken for granted. The take homes are that in New Zealand we must not slacken the rate of our reforms, become complacent, or timid about our investment in new infrastructure. We must also continue to diversify our export marketing efforts by building on our trade agreements with ASEAN, the Gulf states, Thailand and Malaysia and keep on consolidating the gains to be won under the Trans Pacific Partnership. kim.campbell@ema.co.nz

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News

Congrats to 'Services' Entrepreneur of the Year E

MA congratulates the founder of partner company Tax Management New Zealand, Ian Kuperus, for winning the ‘service provider’ category in the Ernst & Young Entrepreneur of the Year awards 2013. Ian Kuperus established the world’s first tax pooling venture whereby overpayments and underpayments can be traded. During the 10 years since it was

launched, his company has saved more than 21,000 clients more than $100 million collectively. He has also instigated changes to New Zealand tax law to operate the business. Mr Kuperus has been tax oriented for most of his professional career, first working with Inland Revenue then in the tax division of the National Bank and New Zealand Dairy Board (later Fonterra).

EMA signs with Genesis for power Genesis CEO Albert Brantley (left) visited EMA last month to meet EMA CEO Kim Campbell and officially sign a new agreement offering EMA members electricity at preferential rates, and other services designed to optimize your power usage.

Ian Kuperus, inventor of unique tax pooling the system operated by Tax Management NZ

When the then Labour Government introduced the Use of Money (UOM) concept in 1988 Mr Kuperus spotted how businesses could trade their tax positions and take advantage of interest rate differentials. Given this was a legitimate way to avoid paying the ‘hated’ UOM to IR, the concept and the company flourished. The five category winners compete for Entrepreneur of the Year, with the overall winner announced on October 17 at an event in Auckland. The winner attends the Ernst and Young World Entrepreneur Of The Year Awards in Monte Carlo.

Tax pooling tames the beast. Provisional tax doesn’t have to be a beast. With tax pooling from Tax Management NZ you can get it under control by: - reducing exposure to IRD interest - increasing flexibility on when and how you make provisional tax payments Talk to us about how you can tame your tax.

Talk to your accountant, call the tax masters on 0800 829 888 or visit www.tmnz.co.nz/corporates/ EMA/PB/D/HP 2013

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News

By Carla Pallant-Drake LLB, EMA AdviceLine Employer Advisor

Alarm over extent of workplace drug problem The extent and cost of drugs affecting the workplace and work output has raised the alarm.

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ver half of the workplaces responding to a recent EMA survey said they have had to take disciplinary action with an employee over a drugs issue. The negative effect of drugs in the workplace is a serious concern for most employers in most industries. 79% of employers report that an employee’s drug use has negatively impacted their business in some way – whether it was in terms of safety, productivity or some other impact. EMA recently invited members to participate in a survey surrounding the issue of drug testing in the workplace. The participants were asked a number of questions surrounding whether drug testing was conducted in their business, what negative effects were an employee’s drug use having on a business, and how employer’s viewed the current legislative framework. The data collected showed the prevalence of drugs in New Zealand workplaces and the impact of an employee’s drug use on more than just workplace safety.

Risk to safety The impact of an employee’s drug use on

Do your employees work within safety sensitive areas? Entire Workforce works in safety sensitive areas

11%

25% 64%

Some of my employees work is safety sensitive areas, others do not None of my employees work in safety sensitive areas

Have you ever conducted drug testing in your workplace?

Yes No

If yes, under what circumstances? Participants were able to tick as many options as applied 30% - Pre-employment testing 22% - Reasonalbe cause testing 20% - Post incident/accident/incident testing 17% - Random testing 6% - Internal transfer testing 3% - Annual testing as a part of medical examinations 2% - Prior to working on contractor's site Other (Less than 1%) • Employee acknowledged that he had a problem • After a random search • Outcome of drug dog detection

Please rate your perception of the impact of drug use by employees to your workplace safety 1(no impact) 2

3

4

5 (Severe Impact)

15%

19%

22%

14%

29%

Do you believe that an employee's drug use outside the workplace can have a negative impact on your business (e.g. performance, safety, financial)? Yes – 86%

No – 14%

workplace safety, however, could not be understated. The impact of drug use on the wider business and other people were of significant concern for employers. 63% of employers reported that an employee’s drug use had resulted in a risk to the employee’s or another employee’s safety. The participant reported that an employee having an accident or near miss were the most common examples of an employee’s drug use having a negative impact on workplace safety.

concern. Also, it was not just drug use that occurred within the workplace that was an issue for employers. Drug use outside the workplace was reported by participants as having a negative effect on an employee’s performance, safety and attendance at work. 86% of participants reported that an employee’s drug use outside the workplace could have a negative impact on their businesses.

Impact on performance

The law surrounding drug testing in the workplace is woefully inadequate. The present need to rely on the Health and Safety legislation to justify drug and alcohol testing leaves an employer at a loss when attempting to address non-safety related effects of drug use. 45% of employers in the survey were not complying with the current legal requirements because the law was unworkable or employers are unaware of what the legal requirements are. For example randomly testing all areas of the workplace to ensure it is drug free is generally unlawful but it appears some do. What the survey shows is that a clear law is required which supports employers who want to take a stand against illegal drugs.

The survey participants strongly indicated that their concerns around drug use were more extensive than direct safety issues. 72% of employers reported that an employee’s drug use had resulted in a loss of productivity for their businesses. The most common examples of the negative impact on productivity were an employee performing poorly or exhibited high levels of absenteeism.

Other consequences When asked for other examples of the negative effects of an employee’s drug use had on a workplace, survey participants reported that the financial cost of damage to property and loss in productivity were cause for particular

Current law inadequate

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News

New training scheme rushed past employers A

$10 million pilot scheme to test a new apprenticeship and other youth training system is being rushed into place. Under it employers with large numbers of trainees - perhaps 40 - could become eligible for Government funding to train their own staff themselves rather than engage for it with Industry Training Organisations (ITOs). The scheme to start from January 1st 2014 could equally apply to other organisations such as group training schemes and co-ordinators of Modern Apprenticeships. Organisations taking up the option would be subject to similar requirements as ITOs are. Also from the same start date Modern Apprenticeships and other apprentice type training will be managed under a new name - New Zealand Apprenticeships. The Tertiary Education Commission (TEC), which reports to the Ministry of Tertiary Education, administers the new Industry Training Fund for education providers as well as the direct funding to employers for their apprentices and other trainees. ‘Registration of interest’ documents were available on the website of the Government Electronic Tenders Service, www.gets.govt.nz, to those with approved registration. The TEC said in emails if interested parties could not attend their briefings due to the short three days’ notice it may run additional meetings.

“Barriers to entry in the pilot will be high, and employers will have to navigate the TEC funding criteria in a very short timeframe.”

Funding employers The new Industry Training Direct Funding scheme means employers can apply to the Direct Funding scheme and use the funds to pay for training of young people at other education providers, or do it themselves. The rates per trainee will be $2,880 to complete a general approved programme and $4,680 for a New Zealand Apprentice. The self-help option requirements include meeting quality standards, registering trainees’ credits with the New Zealand Qualifications Authority (NZQA) and other compliance. The briefings for the direct funding scheme were to select a limited number of companies to identify issues before the scheme was expanded. The TEC is looking to invest in a mix of organisations which aims to: • align industry training with employers’ needs

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create efficiencies for employers with many trainees • encourage competition in industry training. A shortlist of those registering their interest in the pilot by August 30 was to be selected by the end of September. Shortlisting will be based on meeting the policy aims, aligning with the Tertiary Education Strategy, and meeting other Tertiary Education Commission requirements (eg, Auckland or Christchurch needs). Shortlisted organisations will need to complete a more detailed application. EMA believes the barriers to entry in the pilot will be high, and employers will have to navigate the TEC funding criteria in a very short timeframe.

New ITO sets up A new infrastructure industry training organisation is being created with the merging of existing ITOs InfraTrain NZ and ESITO (Electricity Supply Training Organisation). The ITOs have been working on their merger for the past 12 months and will officially join on 1 October. ESITO chairman John McEnteer said we want to capture the best from both ITOs for an even better organisation in the future.

www.acepay.co.nz


News

Celebrating New Zealand Product Excellence

People’s Choice Awards launched Vote for your favourites!

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ew Zealand product excellence is to be celebrated this year with the Buy NZ Made Campaign’s first ever “People’s Choice Awards”. The campaign, featuring the iconic kiwi logo is celebrating its 25th anniversary this year. “We’ve got a great range of products already nominated, from businesses of all sizes. All five award categories look set to be well represented” said Buy NZ Made Manager Trina Snow. Nominations closed on September 6th - now its your turn to vote for your favourites. Everyone can have their say

with three finalists to be chosen n in each category. The five product categories are: • Most Iconic NZ Made Product/ Brand • Most Innovative NZ Made Product • Best NZ Made Product on the World Stage (Export) • Best New Product (Launched in 2012 or 2013) • Most loved New Zealand Made Product Send a note to all your staff! Attach this link: www.peopleschoice.org.nz

Voting will be open from September 16th October 18th. The public will pick their top three products in each of the five categories and go in a draw to win a NZ Made prize pack valued at over $500.00 + two tickets to the awards. The People’s Choice Awards will culminate with a classic Kiwiana themed function at SkyCity on Thursday October 31.

Employment advisers on time and in tune EMA’s AdviceLine survey results are in We are pleased to assure members you are in safe and reliable hands when you call EMA’s AdviceLine to discuss your employment concerns. Every year we survey our members - owners and operators of all types of enterprises - who have used the free Adviceline service, and every year they rate it above 90% on measures of satisfaction. 2013 has been no exception. Our advisers aim to answer phone calls promptly, with a professional and friendly manner, and provide quality advice. Virtually everyone found the response to their calls prompt: 99% rated the speed their call was answered as excellent, very good or good; 85% said it was either excellent or very good. Callers said our law trained advisor on the phone exhibits professionalism, friendliness and empathy to an ‘excellent’, ‘very good’ or ‘good’ degree, according to 98% of participants. 84% said advisers were either excellent or very good. The quality of the advice or service members received was considered excellent, very good or good for 96% of respondents; and excellent or very good for 80%. The area of least satisfaction was for online written advice which pleased 97% of respondents but only 65% thought it

excellent or very good. This might reflect the preference to talk issues through rather than read about them. Overall, 97% rated the AdviceLine service as excellent, very good or good; with 85% answering either excellent or very good. Here’s a selection of comments: • This is a fantastic service and probably the biggest advantage to being an EMA member. • The Adviceline and resources on the website are magic! A great service, thank you. • I have always found the service helpful and professional. • I love dealing with the team, they are always friendly and helpful willing to answer questions and help out with reasoning things out. • This is a fantastic service which I use regularly. As the sole HR person in my organisation it is very helpful to be able to get a second opinion on any difficult/ unclear HR matters. • I find the service extremely professional and helpful. It is great to know that help and

advice is only a phone call away. The AdviceLine survey was emailed last month members who had recently contacted AdviceLine, and achieved 183 responses. EMA members who want a free and confidential discussion about employment issues or other business compliance or about EMA in general, can contact our EMA AdviceLine team 8am-8pm weekdays at: • phone 09-367 0909 or 0800 300 362 (within New Zealand), • phone 1800 300 362 (from Australia), • email advice@ema.co.nz Or read information such as the A-Z of Employing – a manager’s guide on more than 100 specific employment topics at www.ema.co.nz using your membership password.

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Advice EMA's E & Y Tax Tips

Mixed use assets are in for a tax a “Everyone would like to own a holiday home, but it should not be subsidised by the taxpayer” - former Revenue Minister Peter Dunne

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hese assets are like an apartment, holiday home, helicopter, boat or similar where they are used for both private and business use. The rules are complex and the cost benefit may be seriously questioned. Moaning about unnecessary complexity will not help, the legislation is now enacted and the changes are driven from perceptions of fairness as well as collected more taxes. At the time the first issues papers was issued in August 2011 the extra taxes were estimated at around $50 million per annum. By the 2012 budget this was revised to $109 million over four years. For real estate the new rules apply from

the beginning of the 2013/14 income year for boats and aircraft they apply from the beginning of the 2014/15 income year. Because the rules for real estate assets come in sooner we leave the boats and aircraft rules until a later date and focus on how you apply the other rules.

Get mixed used assets out of your business If you are one of those “Keep it Simple” people and want to focus on your business rather than tax rules the shortened advice is take any mixed use assets out of your business. If you use these assets for business then work out the arms length rate and invoice the business for this use. For those who are more into a little or a lot of pain you need to understand the rules. The starting point is previously many were not claiming expenses that related to private use but were claiming

all the expenses when the asset was not in use along with the business use. The new rules change this so the days that the expenses relating to the time the asset is not used are apportioned on the basis of the number of days of income earning divided by the number of days of total use. Trusts partnership and anyone associated with you will also fall into the rules – this means you cannot get your relatives to rent your city apartment or holiday home and claim the rules do not apply as they are count as private use. Even if you get your friends to stay with you or your relatives and charge them a market rental this still falls into private use. The only good news on this is the income received is not taxable. If your active brain is still trying to find creative solutions to this issue and you are going to rent out your property for cheap rates to people who

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Advice

attack are not associated to you – think again. If the person who rents your property pays less than 80% of the market value that is appropriate for the season, then you will also be within the rules and these days count as private use.

An example If my city apartment was rented out to external parties at a market rate for 25 days and I used it for 40 days I divide 25 by 65 and will then be able to deduct 38.5% of the expenditure relating to this property. Under the old rules by adding in the days the property was not being used to the business use I would have been claiming deductions for 325 days of the year or 89% of the expenses relating to the property. There are special rules to allow you to opt out so you are not taxed on any

By Joanna Doolan

income and do not deduct any expenses if the gross income earned is less than $4,000 or where you have losses that are ring fenced. Where the income earned is 2% or less than the value of the asset and you are generating losses these losses cannot be offset against other income.

Reach for a stiff drink I appreciate you are now reaching for a stiff drink however there is more you need to know. If you are holding these assets in a company then any you have to apportion your interest deductions claimed in the company. You firstly have to determine the most recent value of the land (either its rating value or acquisition price if this was from an non related party). You then determine the average total interest bearing debt owed by the company at the beginning and end of the financial year and if the asset

His work profoundly influenced Apple co-founder STEVE JOBS, business magnate MICHAEL BLOOMBERG and Intel CEO ANDY GROVE - some of the greatest business leaders of our time Harvard Business Professor Clayton Christensen is the world’s foremost authority on innovation strategy and growth. His development of Disruptive Innovation Theory has defined 21st century business

value is equal to or more than the debt value the interest is apportioned if the asset value is less than the debt value the apportionment is restricted to part of the interest using the formula of Interest x the asset value divided by the debt value. The IRD has on its website a 24 paged document that explains all the rules in more details, it is well written and has lots of practical examples. Yes of course beanies like me love further complications to our tax systems and as always you need to take advice, if you have mixed use assets the strong recommendation is do not ignore this one otherwise you will be not only contributing to the extra tax take you will find yourself being stung by use of money interest and penalties. Joanna Doolan is a Tax Partner with Ernst & Young. joanna.doolan@nz.ey.com

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4 November 2013 | 9.00am - 2.00pm | Sky City Convention Centre, Auckland Early bird price (to Sept 30) $795 + gst | Corporate Table of 8 $5995 + gst To register email julie.brough@ema.co.nz or phone 09 367 0913 BusinessPlus – Exclusive news, advice, learning and networking

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EMPLOYMENT CHAT

How do I keep our business out of the news?! A Q. I plan to send an email to my customers explaining that it was a former employee and not us who was contacting them as ‘previous customers of ours’, looking for work. We don’t go round drumming up work like that. In fact he stole our database before he resigned. Any problem in sending that email identifying him and inviting responses? - Carl

“Ensure your employment agreements include a ‘restraint of trade’ clause, if they don’t already.”

Dear Carl There is nothing wrong with sending such an email, provided you are 100% sure that everything you say is accurate. Otherwise you could face defamation charges from the person who has already harmed you. The question is whether it is good public relations, or not, to tell customers and ask them to get in touch. That is over to you, but it might be wise to take advice from one of our employment lawyers and a public relations expert. It’s possible the less you say the less attention you draw to a negative event around your business. Many customers he contacted might not have minded, or been aware of the illegality of his calls. In the meantime you can privately pursue legal action. And ensure your employment agreements include a ‘restraint of trade’ clause, if they don’t already.

Q. We have had to dismiss a senior manager and it’s likely to end up in the news. How can I prevent that? It would destroy him and his family and not be too good for us! Am I obliged to comment when a reporter calls? – Anon Dear Anon Obviously staff and shareholders need to know he is leaving, but the reasons and terms can be agreed to remain confidential. Any confidentially agreement must be honoured by both you and the departing manager. When you communicate to the parties, ensure you provide only the basic information needed and direct them to keep it confidential. If your employment agreements don’t already

say so, you might like to get staff to sign a policy that says no one speaks to the media about company matters except you, and they are to direct any inquiries to you, 24/7. There’s been enough about information leaks in the news lately! We recommend you consult a media law specialist lawyer for the fullest protection, but simply speaking, you can indeed refuse to comment to the media. It can often be best to say nothing at all, as in “There will be no comment from our firm on this matter/person” to avoid saying things you wish you hadn’t. Consider damage control strategies, as the public relations people call it. Get their advice as well as your lawyer’s. They could help formulate messages to key people, and even a press release that will give out the correct information. Once a reporter gets wind of the exit, even if you don’t release a media statement, he/she will probably want to know more and possibly even broadcast the fact without your knowledge, if she has a reliable source of information. When a management change at your company is deemed [ultimately by a court] to be in the public interest, and if the publicity is true, this could be considered ‘legal’ and ‘reasonable’ exposure. If anyone publicizes lies about

Advice and Support when you need it! We’ve got a team of advisors, lawyers and consultants who’ll do more than take the case - they’ll help you build a workplace for the future.

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Our member only resources allow you to download templates for all the difficult jobs that face employers - like Employment Agreements and OH&S.

Free call AdviceLine, NZ 0800 300 362, AU 1800 300 362 or visit our website, www.ema.co.nz

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WHAT EMPLOYERS ARE ASKING ADVICELINE THIS MONTH

! And, help, my key staff is being head hunted. an individual or an entity, eg, your company, you can charge them with defamation. Although this is a stressful and expensive road to go down, the threat of it could be helpful in deterring interest in your situation….or alternately, could infl ame it!

such as the A-Z of Employing – a manager’s guide on more than 100 specific employment topics, at www.ema.co.nz To inquire about becoming a member to gain access to this free AdviceLine service, please contact EMA Membership at the numbers above or through EMA.co.nz.

“Consider incentives other than pay, and their job description and promotion options. Are they feeling valued?”

Q. A staff member says they have been head-hunted and would leave if we didn’t match the pay offer. We really don’t want to lose that person but feel a bit blackmailed, as we are doing the best we can for them. Any ideas? - Nick Dear Nick If you want to know what a realistic pay level for their position is, you can purchase the relevant position data from our National Wage and Salary Survey to make sure your remuneration is competitive.Visit www.nzsalarysurvey.co.nz Consider incentives other than pay, and their job description and promotion options. Are they feeling valued? Consider when you might be able to raise pay, or what an employee may need to achieve to get a pay increase but if you discuss this, be prepared to follow up with the increase. At the end of the day, staff will leave when they are ready, for a variety of

reason, and there is only so much you can do to retain them. Act in good faith and record any offers or decisions. By the EMA Advocacy team in consultation with EMA Advice, and loosely based on real calls to EMA’s AdviceLine. All names are fictional. The information in this article is a guide only and not to be used as business advice without further consultation. EMA members can start with our AdviceLine team at phone 09-367 0909 or 0800 300 362 (within New Zealand), and 1800 300 362 (from Australia), 8am-8pm weekdays. Alternatively, email advice@ema. co.nz or read or print information

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Specialist Employment Lawyers Our legal team spend 100% of their time working solely with employers, to help build and shape New Zealand businesses. Come in, sit down and talk to us about what’s next for your business – if you’re ready to take the next step, we’re ready to make it happen.

Jo Douglas

Erin Burke

Ani Bennett

Managing Solicitor - Auckland P +64 9 367 0917 M +64 27 683 7919

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14

Business mood in the city What’s keeping business owners awake at night? How does the average firm feel about the environment for business in New Zealand?

A

recent survey turned up a rich mine of information about the realities of doing business today. The Mood of the Boardroom survey of medium and large companies, conducted by EMA, BusinessNZ and the NZ Herald, told us a great deal about revenue trends, business priorities, hiring intentions, current political issues, local government performance and more. The part of the survey that covered medium-sized businesses – average payroll 160 full-time and 40 part-time staff - contained many businesses in the Auckland region. Their concerns are wide-ranging, but top priorities revolve around money and staff. Getting more customers, revenue and cashflow are top of mind for the biggest number of respondents. Next most pressing are concerns around staff – getting the right skills, improving productivity and service levels, and retaining good staff and reducing others.

Revenue growth Encouragingly, most (64%) are expecting revenue growth in the next 12 months, and most (85%) expect to increase or maintain staff numbers. Most (92%) are reasonably optimistic about New Zealand’s progress in the next decade. As in previous surveys, skill shortages show up as a major concern, with employers unable to get key skills such as IT, engineering and other applied skills. Skills shortages may indicate greater hiring intentions by employers in the Auckland market. But skills shortages are also a brake on growth and indicate a pressing need for more work on national skills policy.

More tertiary funding wanted The respondents gave their own opinions BusinessPlus – Exclusive news, advice, learning and networking

“Skill shortages show up as a major concern, with employers unable to get key skills such as IT, engineering and other applied skills.”

of consents is negative for business. Most (77%) are unhappy at councils using ratepayer money to establish enterprises in competition with the private sector. And most (60%) want the Auckland Council to sell assets to help fund new transport infrastructure. These responses indicate that the environment for business in Auckland could be significantly improved through better decision-making at local government level. BusinessNZ is seeking better local government performance through its work with the Local Government Forum and in submissions on local government reform. We agree that consenting decisions are often unnecessarily restrictive and other areas under the control of local government can impact negatively on business. Further work is needed to restrict council activity within core services to help restrain rates rises, and to curb the tendency of councils to use ratepayer money to start up enterprises in competition with local private sector businesses.

Electricy policy

on preferred policies for improvement – they want more tertiary funding and more student loan funding for needed subject areas. Shortages of needed skills is an area where EMA and BusinessNZ advocate strongly on employers’ behalf, with organisations such as the Ministry of Education, NZQA, Careers NZ and the Tertiary Education Commission. Our goal is to achieve investment in education that results in skills in greatest demand in the economy, better connections between education institutions and business, and increased links between research and science in universities and innovation in business and industry.

Local government Another key concern of Auckland firms is the performance of local government and its impact on business. Most of the respondents to the survey (59%) feel that councils’ administration

In other policy issues covered by the survey, the issue of electricity and economic growth received a clear response, with most respondents (77%) disagreeing with the Labour-Greens proposal to impose price controls on electricity generators. Respondents don’t believe the policy would be successful in promoting economic growth. The policy has also been strongly rejected by EMA and BusinessNZ, on the grounds that price controls would deter investment in the electricity and wider sectors. Perhaps the most interesting answers in the survey were in response to questions about business owners’ achievements and regrets in the previous year.

Policy regrets Unsurprisingly, maintaining or growing revenue – “surviving” - was the biggest achievement cited by a small majority (35%) of respondents. But when asked about their biggest regret over the previous year, business


By Phil O’Reilly Reilly

responses were revealing. Responses split into three main areas. 19% regretted their actions – or lack of actions – in relation to staff. Not hiring or training well enough, getting people into the wrong roles, losing valued staff or failing to reduce non-performing staff, not communicating enough, not celebrating enough – many different regrets around people issues were expressed. 25% regretted lack of achievement not achieving sales or profitability targets, not growing new business or losing contracts. The biggest category of regret could be summed up as “not seeing”. 27% regretted not seeing soon enough or reacting quickly enough to changed circumstances - a rapid decline in profitability, a new environmental problem, a new competitor, declining IT performance or new regulations - respondents either hadn’t seen

“25% regretted not achieving sales or profitability targets, not growing new business or losing contracts.”

the change coming, or were too slow to take action on it. Responses to this question highlight a key factor about today’s business

environment - that change happens fast and may not be easy to quickly discern or quickly react to. Overall, the picture that emerges from this survey of many medium-sized Auckland businesses is reasonably positive, though with challenges: • There’s reasonable confidence around business growth • There’s optimism around New Zealand’s future progress • Skill shortages are a worry • Local government is causing a few concerns • The pace of change is a challenge As for businesses themselves, the responses show a large number of ambitious, pragmatic, resilient firms successfully doing business in the north of the country today. Phil O’Reilly is Chief Executive BusinessNZ www.businessnz.org.nz

REGISTER NOW Survey Available 1 May to 30 August 2013 www.bestworkplaces.co.nz (09) 378 2003

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Proudly supported by:

In association with: © 2013 Kenexa Corporation

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16

Advice

The changes coming to workplace h In November 2010, 29 miners lost their lives at Pike River, an event which will go down in history, as well become known as the circuit breaker for health and safety change in New Zealand.

I

t was already known our safety record was poor, but this single event was the tipping point for change. Immediately following the explosion a Royal Commission of Inquiry was set up. Their report was a wakeup call for the mining industry as well as safety in general

in New Zealand. They made 16 recommendations - the government accepted all of them with an action plan developed to implement them. This work has been completed. Of the 16 recommendations 12 were for the mining sector, the remaining four were to apply more generally. These four included setting up a new independent OH&S agency, which is underway, and making directors more accountable and responsible for OH&S in the workplaces where they held responsibility. The Directors Guideline document was launched on April 30th with a good degree of exposure and its gaining traction. Subsequent to the Royal Commission

Under the Hase Act 1992

the Government set up the Workplace Health and Safety Taskforce.This was charged with looking at all OH&S issues in New Zealand and overseas. It consulted widely and sat for 10 months. Their report was released on April 30th and they made 15 recommendations. Now Labour Minister Simon Bridges has just released his long awaited blueprint “Working Safer” in response to the recommendations of the Workplace Health and Safety Taskforce. These 15 recommendations were listed under three main headings: accountability, incentives, and knowledge. The new blueprint has effectively

Proposed

Duty holders Currently employers, employees, principal, owner, lessee, sub lessee, or occupier are considered the main duty holders.

Under the proposed scheme “persons conducting a business or undertaking “will be seen as duty holders. This term comes from the Australian model law. This expression will extend the scope of those who will have a duty under the law. It considers those people upstream from the business e.g. designers and manufacturers etc. In essence a PCBU is anyone who engages employees or anyone else who is affected by that work being carried out.

The HASE is underpinned by a test of “all practical steps’. This test is used to determine many of the employer’s duties. The phrase was never really tested in the courts so has been left up to individuals to determine.

A new test is to be introduced. It is “reasonably practicable”. The wording may sound very similar but from an interpretation perspective they are different. This term also comes from the Australian model law. Where this test differs significantly from other terms and tests in that there is a presumption that the step undertaken was safe. It will require steps to be undertaken that are reasonable and practicable given the circumstances at the time, taking into account all other matters including risk.

Director’s duties. The new Guideline document recently published “Good Governance Practice Guideline for Managing Health and Safety Risks” by MBIE and the Institute of Directors expanded the roles and obligations on directors. In essence directors are required to have an active hand in the management of the business. Under our current regime Sect 56 the offence was where they participated or contributed to an offence.

Under the Australian model law directors, chief executives, CFO’s etc. will been seen as those who have a duty. This obligation is for individual officers and what they did or didn’t do. It is a positive affirmative action to actually do something, e.g. understanding the hazards of the PCBU and identifying and assessing the control that have been put in place.

Penalties The HASE Act allows for two main penalty groups. 1. Sect 49. A fine of up to $500,000 and or up to two years in jail 2. Sect 50. A fine of up to $250,000 per offence. 3. On top of this are reparations

The new proposal if for a 3 tier system. Category one. Reckless conduct. Here the person who has a duty exposes another person to a risk of death or serious injury. 1. Fine up to $600,000 , 2. Jail up to 5 years, or both 3. For corporate $3million Category Two. Where a person fails in their duty exposing a person to death or serious injury. Fine $300,000 or for a body corporate $1.5 mill Category Three. Where a person fails in their general duty and exposes a person to risk of death or injury. $100,000 or $500,000 for a body corporate. There is no comment re taking out Reparations so until told otherwise they will remain. There I still debate over whether Corporate Manslaughter will be introduced. The Min of Justice is considering this. The Courts may also be able to issue adverse publicity orders and require compliance and or restoration orders.

Publications. Currently there are many Codes of Practice and Guideline documents. Many of these are out of date and in need of a re write.

There will be a concerted effort to update and or re write many of these documents. New regulations will also be needed to support the new Act. It is more than likely that new regulations will come from or be mirrors of the Australian Regulations. ( Some 700 pages)

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By Paul Jarvie e

e health and safety adopted all of these recommendations either in full or in part. The blueprint is divided into three main sections:Working Smarter,Targeting Risk and Working Together. Within each section are more details including scope, and timeframes. At a glance the changes are: 1. The creation of a new crown agency by December 2013 called Worksafe New Zealand.The legislation for this is already being debated. It effectively moves the existing OSH unit from MBIE and places it into a new agency along with creating new mining regulations. Presently there is

an establishment board charged with developing this new agency. 2. MBIE will still be responsible for policy while l Worksafe will deliver the outcomes. 3. The will be a new Act called Health and Safety at Work Act (HSW). This will be introduced into Parliament by late 2013 with the intention of it being enacted by December 2014. 4. The new law is based largely on the Australian Model Law.This law has recently be totally revised and scrutinised and made more effective. Our legislators will use some or all parts of this for the new Act here. We are also likely to see the Australian

Regulations (with NZ customisation) being used here as well. 5. In the interim the old inspectorate will be working existing law plus a programme called Lifting our Game.This programme anticipates new working relationships and standards for the inspectorate. 6. There will be changes in education in and around OH&S for H&S reps, managers and consultants. The combined vision of the Minister and the Taskforce is for a 25% reduction in workplace fatalities and serious harm by 2020 and for the NZ workplace to be best in the world in ten years’ time.This is attainable but only if all stakeholders do their bit and do it well.

Under the Hase Act 1992

Proposed

Employee engagement. Currently under the HASE Amendment Act employers along with employees and where present a union are to agree an employee participation system. In essence the design, functions, and scope of the participation system are all defined by agreement. Where agreement cannot be reached there is a default set of duties and functions.

What is being proposed is that all businesses no matter what size will need a worker participation system whether requested or not. Employers will continue to fund training for H&S representatives. New legislation will specify powers and functions for Reps and committees including the ability to issue a PIN, Provisional Improvement Notice (Aust model Law) A Code of Practice for employee engagement is also likely.

Hazardous Substances. Currently Hazardous substances are regulated by two different and overlapping Acts, The HASE Act and HSNO Act.

Proposed changes. Regulations controlling use of hazardous substances will be transferred to the new agency. HSNO will continue with applications and manufacture of hazardous substances. Changes will be made to the HSNO regulations simplifying them and making them more user friendly. EPA will still approve substances and setting base line controls. They will now also enforce HSNO controls being introduced into the market.

The agencies involved are,’ MfE – admin of the HSNO Act and default controls EPA- considers applications sets controls and produces guidelines MBIE- responsible for compliance under both HASE and HSNO Injury prevention Currently ACC has the prime function for injury prevention under the ACC Act. MBIE also has a role under the HASE Act by enforcing legislation aimed at preventing injuries at work. Other agencies e.g. Maritime, CAA and Road Transport also have injury prevention functions.

The new Agency will partner with ACC and prepare an injury prevention strategy thus enabling both partners to work collaboratively and within the same scope and direction.

Occupational health. Currently little is done in this space. MBIE do have a voluntary NODS programme ( a system to report occupational diseases) .

The proposal sees a focus on occupational harm, businesses will need more information about occupational diseases and harm, and how to effectively manage the exposures to occupational ill health vectors.

Incentives. Under the ACC Act employers are experience rated. Small employers under $10K in levy can receive a 10% discount if they have no injuries requiring more than 7 days off. Larger employers above $10K can receive a varying discount ( up to 50%) based on their industry and relative size within that sector. The key criteria here are cost of claims and days off. On top of this employers can choose to enter either the ACC WSMP programme (further discounts of 10, 15 or 20%) or the ACC Partnership Programme where they completely self-insure for significant discount of up to around 95%.

There are discussions around changing the incentive amounts plus introducing a Star Rating system. This is still being developed and is only at concept stage. It is envisaged that both the ACC programme will remain.

Hazard management. Currently our legislation requires employers to identify hazards, assess them for significance and then develop and implement controls of eliminating, isolating and minimising. The test is a binary test, yes or no. The only concept of risk is found in the second test of all practicable steps.

We may well see an evolutionary move towards risk management along the Australian Model law protocols.

Serious harm . The HASE Act describes Serious Harm. This test is used to determine significance of hazards, reporting harm to the regulator

There may be another set of criteria used to report harm as recommended by the Taskforce. Acute harm, sudden onset and may of short duration. Chronic Harm, the condition appears over a longer period of time. Catastrophic Harm, low frequency but high potential.

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18

Advocacy

Get your voting paper in on time! V

oting for local body politicians closes on October 12. Vote early and, if you pay rates on other properties, you can vote often. That is, in addition to your individual vote, a company, corporation or society paying rates on a property may nominate one of its members or officers as a ratepayer elector, providing the nominated person resides outside of the area and is also a registered Parliamentary elector. In the northern region 25 territorial local authorities create and oversee the rules for their localities. Auckland Council as a unitary authority acts as both a regional and traditional city council.Voters in Auckland elect a mayor, ward councilors, and Local Board members for their local board area. They also elect a member for the district health board and in some locations, for a licensing trust. In the Waikato there are 12 local authorities (city, district and regional councils) and eight in the Bay of Plenty, and four in Northland. You can read about them at www. localcouncils.govt.nz. In summary the following is a summary of the issues commonly regulated by local councils that affect all types of enterprises. So this is checklist if you like of the issues you can ask your council candidates to address, and use these business view to evaluate them. More details on these issues are at www.ema.co.nz/2013elections These business issues as EMA sees them are:

1. Business rating differentials In some areas the local council has decided to make businesses pay a multiple of the general rate, sometimes several times more than home owners pay, just because the council believes businesses can afford to. Yet the council does not deliver any more service to these businesses than to ordinary residential or rural ratepayers.These higher rates are called a ‘business differential’. EMA has campaigned constantly (for over a decade) to have this unfair and unjustified practice removed or phased out. We have had some success, for example in Tauranga and Rotorua, but the message has yet to fully sink in in Auckland, yet, though there are promises to reduce it over time. BusinessPlus – Exclusive news, advice, learning and networking

2. Aspects of rating Capital Value: EMA supports the use of Capital Value as the basis for rating. It is fairer, as there is a closer relationship between capital value and council services received. EMA does not support the use of land value rating. Uniform Annual General Charge EMA holds that the Uniform Annual General Charge should be set at the highest level allowed by the rating act (which is 30% of total rates). A higher Uniform Annual General Charge is fairer because it reflects the fact that each rating unit incurs a fixed cost on council regardless of the property’s value. The UAGC covers these fixed costs. Level of increases EMA considers that rates increases should be kept at or below the rate of inflation (2.7% per annum over the past five years). Any increase in excess of this needs to be justified.

3. Water, rubbish charges EMA says councils should operate a user pays policy for water use and wastewater costs, as well as for rubbish collection. We also believe in user pays fees, rather than using rates, to fund library services, leisure facilities and other council services where a user and a benefit can be clearly identified. Councils should evaluate all the services provided to ratepayers and other residents and allocate the costs of them where they fall.Those services that are of equal value to all ratepayers and residents should be funded as part of the general rate or the Uniform Annual General Charge.The other costs should be the subject of user charges.

4. Roads In Auckland, EMA campaigned long and hard for the fast completion of the Western Ring Route (SH 20 from Manukau through Waterview and ultimately to rejoin SH1 in Albany). We have also worked hard on the development of the Auckland Manukau Eastern Transport Initiative (AMETI) and East/West link, and for building the second harbour crossing. EMA backs the findings of the Auckland Consensus Building Group that earlier this year decided some form of road pricing is needed to raise the funds required to bridge the $12 billion funding gap which is the projected amount required to build

Auckland’s transport infrastructure over the next 30 years. Kim Campbell, EMA’s chief executive, was part of the Consensus Building Group along with representatives from the unions, environmental groups, walking, cycling, public transport and other community interests.

5. Public transport EMA supports the early completion of the city rail loop in Auckland. Recent announcements about partial Government funding support for this project are very welcome.

6. Land use EMA says not enough land is being allocated for the future development of business in the Auckland region. Options to ease the looming pressure for commercial land include such as the redevelopment of ‘old’ commercial and industrial areas.

7. Business services’ provision, e.g., building and resource consents EMA has plenty of anecdotal evidence of delays in the council consenting processes for business activity, whether under the Resource Management Act or Building Code. These processes need to be sped up for the sake of employment and general economic growth as well as to protect the environment.

8. Council assets, eg ports, airports, parking buildings EMA says local government should only provide public goods and services such as those for water and waste treatment, and over time exit activities that are more efficiently carried out by the private sector. Some examples of businesses that councils should get out of are fitness centres, parking buildings, housing, land and commercial property, hotels, etc. In general business assets held by council should over time be sold to fund essential infrastructure. Shareholdings in certain strategic assets may be reasonable (eg, Auckland Airport and the Ports of Auckland), but only when there is a compelling strategic reason why the council should retain control of the underlying property asset. Greater use should be made of user charges where the services or goods


Advocacy

Local Council Election 2013 provided are in the nature of private goods.

9. Council revenue and spending options (including debt management) EMA believes councils must practice more spending restraint. They should not duplicate the role of central Government. It is not a council’s role to get involved in income redistribution activities such as: • Rating differentials based on ability to pay rather than value of services received; • Subsidized council housing; or • Reduced rates for special interest groups. Income redistribution for social reasons is the legitimate role of central government and should be carried out by them.

10.Transparency in reporting to the public More transparency is needed in rates invoices and financial accounts. These documents are often difficult

to understand and leave out much explanatory detail.

11. Engaging with business EMA asks councils to engage with us as representing business and/or directly with local firms when planning changes that affect services and charges to business.We are happy to advise, and provide case studies to help them get it right. Some council services could be more profitably operated by experienced business people; councils should wherever possible support local businesses to increase local employment and growth. As for your own life (where it differs from your business life!) the main services and facilities that councils provide are: • Libraries • Parks • Subsidized public transport • Rubbish collection • Street lighting • Event venues • Swimming pools

• Museums • Civil Defence operations • The quality of water, air and land in the region (Regional Council) • Zoning for types of buildings and activities (e.g., heights of homes, rural vs commercial vs domestic activity) • Building permits • Dog control • Noise control • Licensing premises to sell liquor • Restaurant grading • Car parks • Regulating prostitution Voting papers are posted to all enrolled voters about a month before Election Day. Ensure you post your completed voting papers on or before October 9 - votes received after Saturday, October 12 (unless pre-registered as ‘special votes’) will not be counted. Even if you think your candidate selection is uninspiring, remember your vote might tip the balance in favour of someone you would prefer, and keep someone hopeless out of office.

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Technology

Tip for sme entrepreneurs:

Get Ultra-Fast Broadband at home! A

new Digital Enablement Training programme is being devised to assist SMEs apply the productivity benefits that Ultra Fast Broadband (UFB) has to offer. When Andy Hamilton saw UFB being laid in the street outside his Auckland home, he knew he wanted it. Andy combines being a father of two young daughters with running The Icehouse. He wanted to be able to get home at 5.30pm to be with his kids then work seamlessly through his connection to the office network from home after dinner. “The kids and I like music, games, we download movies on iTunes and music via Jango. I use WeChat with work contacts in China, and Skype, and all of us talk to family and friends in New York with Viber and WhatsApp. I knew we would benefit.” Andy says the main thing since getting UFB at home is the speed and consistency of the connection to his office network. Work files are instantly available. He also uses the video on Skype calls because the picture quality is clear, and it doesn’t

slow the rest of the household down, so the connection to the office can be left on all the time with everything from his home computers backed up automatically to the cloud. He’s achieving the work-life balance he was hoping for. “If I was a SME I’d have fibre at home Icehouse CEO, Andy Hamilton enjoys being able to work from home with UFB. and in the office. As He estimates about a 30% saving in an SME you want maintenance and other costs since getting to choose to work wherever you are. fibre and moving away from servers.There’s Entrepreneurs want to see their kids, so also been far less IT-related downtime. they should look at replicating their work The connection to the cloud has provided environment at home.” security in case of a disaster. Already he’s found that by not “I think it’s a great opportunity that all maintaining so much hardware, costs are of us need to take advantage of.” lower in the cloud, and he has saved time. For more go to: www.crownfibre. “With the cloud, you pay every month, govt.nz/users-of-ufb/about-business but don’t have to pay for infrastructure.”

Building in security for manufacturing Manufacturing is New Zealand’s most targeted sector by cybercriminals, according to Symantec’s latest Internet Security Threat Report. It’s also the second most spammed industry, marginally behind the transport sector. Digital design processes are easier than ever for employees to share information with one another and outside experts, but every endpoint connected to the internet presents a risk of a cybercriminal stealing intellectual property or other sensitive information. Information is the new currency among thieves, and the right individuals pay top dollar for a competitive advantage, whether through outright theft or by disabling critical systems. Malicious emails are waiting for employees to click on, and malware also finds its way onto machines via USB devices and even through visiting reputable, but infected websites. Smaller manufacturers sometimes assume they are immune from attacks

because of their proprietary nature. But recent incidents such as Stuxnet have revealed there is no limit to the lengths cybercriminals will go. Malware like Stuxnet also shows even physical machinery is no longer safe.

The human element Most employees know spam contains malicious elements, but many are unfamiliar with phishing techniques that involve personalised messages. It’s important to give workers regular reminders on online safety. It’s also important to establish policies concerning where sensitive information can be stored, and monitoring employees to ensure compliance.

Security technology Today’s security tools go beyond traditional definition-based malware recognition, which is critical given the emergence of new threats. Smaller manufacturers should guard against these through reputation-based security, which

leverages data gathered from millions of other machines. When looking to upgrade or consolidate endpoint security, consider whether onsite security software will meet the need, or whether a cloud-based solution would be a better. The advantage of a managed service is protection is always up to date, and security status information is typically available from any internet connection. When security is utilised as a managed service, it reduces the time needed to maintain protection and automatically handles issues that come up. Manufacturing is undergoing a revolution as systems are replaced with technologies that efficiently coordinate activities. At the same time threats are evolving just as fast. Endpoints are the front line of the cyber security battle, and as information is stored and accessed in more places, manufacturers need to deploy strong endpoint protection as part of an overall security plan.

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Technology

IT will drive manufacturing in the f The future of manufacturing is not just about robots, though Asian businesses already deploy about 70,000 robotic units which is far more than in the Americas or Europe, with most in China, and increasing.

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napshots of the future of managing manufacturing assets were presented at EMA’s Asset Management Conference in Auckland recently by Dr Chris Holmes. According to Dr Holmes, who is head of international at IDC Manufacturing Insights market research and analytical company, based in Singapore, the future includes the following: • Information intensive factories which are IT intensive and people

Manufacturing Operations

China Manufacturing Costs/Productivity

BusinessPlus – Exclusive news, advice, learning and networking

intensive – with more people who are high skilled, working in areas such as planning, product design, research and programming for automation; and fewer people on the shop floor, in assembly. Shop floors will become selfconfiguring as they seek out other devices and connect to them. Plant metrics will include the entire value chain to deliver a clear view of the state of the business in real time. The notion of ‘guided/facilitated decision-making’ reliant on a few points presented by a new breed of analysts. Data will be presented in a more visual style, using graphics more than words. The number of middle managers will reduce; workers will have all the information they need on

screen and at their fingertips. The technology department will report to the chief executive, not a finance manager. It will be seen as an asset, not a cost…(‘as it should be now!’) • Email will be superseded by webbased internal communication. • Business functions will be spread across locations, even across continents, to minimize risk (such as from natural disasters and local regulation and costs) to ensure customer demand is met. • Operational ERP (enterprise resource planning) that manages customers, the supply chain and manufacturing operations will need an operational platform based on social business and predictive analytics. Imagine, Dr Holmes said, a future where the military take a 3D printer to a •

Application Investment Areas

Overall Equipment Effectiveness (OEE)


Technology

e future war zone instead of a boat load of spare parts…where a machine in melt-down runs off its own 3D-prints to repair itself…where an aircraft maintenance worker has a small computer built into his clothes so his hands are free to explore the wing of the plane. Dr Holmes outlined four pillars of manufacturing as: • cloud computing for communication and storing data – public, private and hybrid; • big data analytics – using new technology, harnessing larger quantities of information to analyse and make decisions; • mobile devices and workers; and • social business – analyzing using social software (eg, Facebook type technology with orders linked to a page of information around that order avoiding the need to troll through emails) and collaboration

follower. But it is important to develop a road map now; get a few university students in, and to commission a research project to map out options for the future.

Dr Chris Holmes

tools to manage global teams. However, it’s not all about technology, he said. Processes are important too: getting the right information to the right people. And issues arise around plant security in the face of virus attacks and insurance, for example. He said there is no need to be a leader; it’s ok to watch competitors and be a fast

“Manufacturers can double their size (revenue) without adding any new management headcount”

New Zealand IT Spending in Manufacturing Software

Business Initiatives

The 4 Pillars and Manufacturing

Manufacturing Operations – and the four pillars

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EMA MEMBER PROUD MOMENTS NOTICEBOARD

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Growing IT firm proposes ‘mini Silicon Valley’ Auckland-based IT company Optimizer has moved its premises to the central city to accommodate a rapid increase in staff numbers as well as seek the benefits of being closer to like-minded companies. Optimizer has seen employee numbers rise from eight to 40 in the past 12 months with the number expected to grow to more than 200 globally in the coming years, says chief executive Manas Kumar. The technology firm provides payment, security and cloud technology solutions for businesses;

it has also recently announced plans to explore the prospect of listing on the New Zealand Stock Exchange (NZX). Mr Kumar is calling for technology companies to form a central hub to secure better infrastructure and boost collaboration to support the industry’s continued export growth. Ideally he would like to see a ‘mini Silicon Valley’ established in Auckland’s CBD where growing IT companies would be supported by those more established businesses around them. Optimizer is showing the way.

Zebra prints Pacific licences

Optimizer CEO Manas Kumar

Backing Job Creators.

Pacific nations Vanuatu, Tonga and the Solomon Islands recently introduced Zebra card printers to deliver on demand, hologrammed, credit-card style driver’s licenses and windscreen display discs. The governments of the three Pacific nations used to use manual card-based systems for driver licences and vehicle registrations but they offered little identification security and were open to forgery or falsification.

Receive a 20% discount on transaction fees on business banking accounts.

An offer for EMA Members.

Get a 3% discount off the Business MasterCard®.

Business Banking.

Kiwibank Business Banking and the EMA are both passionate about New Zealand business and supporting our own. As an EMA member you will receive discounted rates and transaction fees on your business banking accounts and business credit card when you bank with Kiwibank. Find out more about Kiwibank Business Banking today.

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The Zebra P430i printer is capable of producing 102 dual-sided PVC cards per hour in full colour. The time taken to get a driver’s licence is greatly reduced, while back office administration and revenue collection is improved. Additionally, their security features now makes them suitable for use as identification in banks and other situations.

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News

Bay of Plenty funding will boost marine activity, education, research F

our big projects that have won the backing of the Bay of Plenty Regional Council are just the sort of developments wanted for New Zealand’s regions - the Council is to be warmly congratulated for backing the four projects, said Kim Campbell, EMA’s chief executive. “The four projects all present exciting opportunities for jobs and business growth. “Its these sort of ventures that will reverse the decline in rural New Zealand and provide valuable jobs and skills training in high quality, export facing industries,” Mr Campbell said.

The projects are: 1.

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Entry to the Opotiki Harbour, to be developed to improve boat access

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the growth of a viable aquaculture industry. This is to create an entrance at Opotiki Harbour able to be navigated in most conditions. The project, in conjunction with the Eastern Sea Farms marine farm and processing plant, is expected to create around 236 jobs and add $33.5 million in GDP to the region. Funding up to $2.5 million for a new innovation centre at Rotorua’s Scion Innovation Park, to act as a hub for research and development firms in the forestry and wood sectors.

Developing Opotiki Harbour is precisely the sort of investment needed for the eastern Bay of Plenty, Mr

Campbell said. “The Council’s backing the harbour development will be a transformational boost for Opotiki. “The harbour development will reverse the decline and provide jobs in just the sort of high quality, export oriented venture needed for rural New Zealand. “But the project will not only provide jobs in aquaculture and food processing; it will also boost the number of tourists visiting the region. “For instance, we can see a marina in Opotiki becoming a ‘Tutukaka’ type tourist destination for launches and yachties from the north. “Its exciting to see this sort of development getting the backing it richly deserves.”

Credit photos: Scion

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Up to $15 million for the development of (Waikato) university and polytechnic campus in Tauranga’s city centre. The campus costing $67.3 million in total is projected to generate $133 million in regional revenue and provide over 600 new jobs. Up to $5 million for haul out infrastructure to catalyse the development of Harbour Central Marine Precinct at Sulphur Point in Tauranga. An economic impact study commissioned by Tauranga City Council has forecast nearly 200 new jobs and nearly $50 million in revenue would result. Funding of up to $18 million for developing Opotiki Harbour to allow access for vessels to enable

Farmed mussel growth being checked in Opotiki Photo: Rob Donald of Bay of Plenty Regional Council

BusinessPlus – Exclusive news, advice, learning and networking

Scion campus and Te Papa Pipu Innovation Park in the foreground


IN OUR REGULAR SNAPSHOTS OF EMA MEMBERS, WE PROFILE THE BUSINESS OF EARTHWISE BY MARY MACKINVEN

Environmental products pioneer keeps on innovating Ahead of his time, Tom Robinson began making plantbased and nontoxic household products back in the 60s. His Earthwise brand amassed a loyal following through specialty health and organics stores and mail order.

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ow the Earthwise range of about 50 products for laundry, kitchen, bathroom, body and hair is mainstream; sold in supermarkets throughout the country. The strategy was always to make effective environmental options accessible and affordable to everyday New Zealanders rather than as a premium offer which is common for environmentally friendly products, says Earthwise sales director Jamie Peters. Tom passed away two years ago. “He was a pioneer …and a hippy,” says Jamie affectionately. “And his two sons are still here.” Kayol Robinson is the formulation engineer inventing new products and brother Jeremy is the blender. Jeremy says, “From the start, Dad was adamant any product that carried the Earthwise name was going to work, would be as natural as possible, and was going to be safe.” Kayol adds: “It’s fantastic that Dad was able to see his people-friendly, planetfriendly ideals move into the mainstream.”

The work continues to roll on. The new Earthwise baby range was launched last month: shampoo, detangler spray, body wash, bubble bath, soap and sleep spray, which is a new concept combining chamomile and lavender for spraying into the air to relax baby at sleep time. Four laundry products are sold in Woolworths in Australia – a major target country for Earthwise. And Earthwise laundry products are sold in the Singaporean supermarket chain Cold Storage, with other Asia Pacific markets in sight. “There’s a lot of interest from China and we would like to export there but haven’t found the right distributor yet.” The company’s local origins are a central part of the Earthwise story. They have been awarded Environmental Choice certification for their laundry products and are looking to certify other products. Plus Earthwise has been awarded Sensitive Choice accreditation from the asthma foundations

Earthwise sales director Jamie Peters and Tom and Kayol Robinson, sons of the founder.

of New Zealand and Australia for a number of its laundry products, and looking at certifying other ranges. In all Earthwise employs 33 full time staff plus several part-timers and interns in marketing and communications including digital media. The current premises in Auckland are bulging at the seams. Warehousing for finished goods and packaging has had to be moved along the road, but a new site is being sought to bring it back together with fill production, marketing and all other tasks.

BusinessPlus – Exclusive news, advice, learning and networking

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Out & About 17th Annual Managers and Team Leaders Conference, Auckland

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| 1 Sheonagh Nielson [ADHB] and Sue Erby [Equip] | 2 Billy Piutau and Richard Hayward [Bidvest NZ] | 3 Damien Sauni [Electrical Engineering Solutions] and Russell Cuddihy [Sanford, Tauranga] | 4 Kobus Louw [Schindler Lifts] | 5 Louis Deverell and Adam Bosustow [Schindler Lifts] | 6 Julie Kidman [Proformance] | 7 Kaye Taylor [Med Imaging] and Denise Corlett [Northern Regional Alliance] | 8 Tammy Clark and Rob Barr [Schindler Lifts] | 9 Diane Gillard [Affinity Services] | 10 Jenny Goldsmith and Stephenie Quinn [Shorecare Med Services] and Julie Valencia [Paymark] | 11 Laurence Prasad [Argenta]

Business Lunch with Minister Steven Joyce, Auckland

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| 1 Greg Shore and Bruce Hart [Mitre 10] | 2 John Morgenrood and Roger Marshall [Seventh Day Adventist Schools Association] | 3 Gustav Gerber and Paul Johnston [LHF] | 4 Brian Grove [Mitre 10] | 5 George Backhus [Quinovic] | 6 Marina Nola, Ana White and Barry O’Brien [Enterprise Recruitment] | 7 Steve Martin, Karen Osler and Michael Sweet [Enterprise Recruitment] | 8 Patrick Britton [Mitre 10] | 9 Robert Grove [Mitre 10] | 10 Stu Stanners and Chris Whyte [Century Yuasa] | 11 David and Mary Vinsen [Quinovic Parnell]


SEPTEMBER

EMA Alert

Great Customer Service Over the Phone

Conflict Resolution

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17-18

Learn the basic skills required to effectively manage interpersonal conflicts in both your business and personal life.

This 90-min, interactive webinar covers the essentials of handling inbound and outbound calls in a way that creates a good and lasting impression for your customers.

24-26

Simplifying Export Series

NEW EXPORT COURSES To help exporters make sense of some of the challenges associated with export growth and sustainability, EMA Learning is pleased to host GoGroup Ltd who will deliver their popular Simplifying Export Series.

Auckland | Deborah

This series is run as 6 half-day courses over 3 days. You can register for all 6, or pick which ones you would like to attend.

Nationwide | Deborah

Rotorua | Caryn

Managing Leave

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It’s time for a refresher on annual leave, sick leave, discretionary and parental leave! Are you sure you are applying statutory holiday rules correctly? When should a medical certificate be required? Are you up with recent ACC processing changes? Be up-to-date, be confident!

OCTOBER

Auckland | Karen

Project Management Tools & Processes

Writing & Agreeing Key Performance Indicators

Learn the tools and techniques to effectively lead and manage projects for the best outcome within budget and time-frame.

Learn to use the Strength Deployment Inventory to increase your personal strengths, reduce team conflict and improve workplace communication and morale.

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Understand the importance of KPIs in your organisation and learn to link them to your business strategy and evaluate success. Auckland | Kevin

Auckland | Craig

Building A 2 Better Team Identifying Your Personal Strengths

Auckland | Deborah

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Supply Chain 3 Management Achieving Cost Reductions Understand the criteria behind effectively managing your suppliers, distribution channels and inventory.

offers you a holistic look at your business and the training needs you have. Whether it be standard training or specialized, we can meet with you, discover your needs, and structure a training plan specifically for you Contact Deborah Carruthers

deborah.carruthers@ema.co.nz Ph 09 367 0947 | Mob 021 636 799

Payroll Legislation Essentials

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Understand the ins and outs of the payroll system from accurate pay deductions to wage related law. Auckland | Kevin

Hamilton | Caryn

Business 9 Forecasting & Budgeting The Fundamentals Gain knowledge of the complete budgeting process – from accurate planning and forecasting, to internal controls. Auckland | Caryn

Emotional Intelligence

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Developing your emotional intelligence skills will allow you to better understand and motivate your staff. Auckland | Deborah

Conference Contacts Karen Joe | 09 367 0959 | conferences@ema.co.nz Training Contacts Kevin Chambers | 09 367 0958 | kevin.chambers@ema.co.nz Craig Garner | 09 367 0907 | craig.garner@ema.co.nz Deborah Carruthers | 09 367 0947 deborah.carruthers@ema.co.nz Caryn Leitgeb | 07 839 2710 | caryn.leitgeb.@ema.co.nz

www.ema.co.nz | learn@ema.co.nz


Membership Rewards Exclusive, Substantial & Relevant Membership rewards can help your business with every day savings on things you actually use, like power, petrol and paper. It’s like a normal rewards scheme - only this one has actual cost saving benefits! Kiwibank*

OfficeMax

Kiwibank Business Banking we are passionate about New Zealand business and supporting our own.

We have partnered with OfficeMax to bring the best available pricing on everyday office supplies and packaging, if your new to OfficeMax, simply show your current pricing for stationery, furniture and cleaning supplies and they guarantee to match or better the price.

Together with KiwiBank, members receive a 20% discount on transactional banking and 3% on business MasterCard interest rates, this is on top of KiwiBanks exciting range of business products and servcies.

Horizon Recruitment Genesis Energy Genesis Energy wants to help members get the best deal on their energy usage. With a great understanding of energy needs, they are committed to giving better, simpler and smarter ways to manage your energy needs. Members can receive a 12% prompt payment discount on a fixed term Power Freeze electricity account. Telecom NZ As members, Telecom can work with your individual business in one-to-one meetings and recommend the right communications solutions for you. Telecom provide a full range of Internet, data, voice, mobile and fixed line calling services for customers in Australia and New Zealand Caltex - StarCard Last year members saved over $600,000 in fuel costs. Take advantage of your EMA membership and minimize your fuel expenses with a StarCard account from Caltex. Save 5.2 cents per litre on regular and premium petrol at Caltex service stations Save 10.5 cents per litre on diesel at unmanned Caltex diesel stops. Buy NZ Made Get an exclusive 20% discount on membership to the Buy NZ Made programme. Buy NZ Made is a great marketing tool for businesses, providing a unique selling point and value add for your brand. If your product carries the iconic Kiwi symbol, your customers can be certain they’re buying local.

As an EMA member you can receive upto $300 as a reward when referring a temporary contract or permanent staff vacancy. Also ask about Horizon Recruitment’s new super low ‘Temp to Perm’ rates. Vero Receive upto 30% off your Quotable Value (QV) valuations with Vero. Vero, are not above showing preferential treatment – particularly to our members. Because Vero is our preferred supplier of general insurance, members enjoy preferential valuation rates year after year. Total Utilities Collaborate with fellow members in bulk buying tenders for electricity, natural gas/LPG and waste services. Receive an additional 20% discount on all service fees by just being a member. Members have saved over $3 million dollars from their power, gas and waste bills since 2010. Southern Cross Investing in the health and wellbeing of your employees can have a positive effect on productivity and profitability. With over 50 years of experience looking after the health insurance needs of New Zealanders, Southern Cross Health Society can help tailor the right solution for your business. Custom Fleet Together we have negotiated exclusive discounts for members across a vast array of models. No matter the size, Custom Fleet have a solution for your business.

For more information on these great offers and to ensure you don’t miss out on the latest exclusive member only discounts, simply search ‘rewards’ on our website: www.ema.co.nz All information is correct at time of printing and subject to change. Individual partner terms and conditions and/or service fees may apply.

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