EMA BusinessPlus August 2013

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Issue 106 – August 2013

$6.30

P ublicatio n o f t h e E m p l o y e r s & M a n u f a c t u r e r s A s s o c i a t i o n Inc

Online sales grow 50% a month in the US

Tax Tips is back!

In this issue: • • • •

What's the use of performance reviews?

How to value your business, or the one you work for TPP more than just the trade An employee is stealing; what should I do?

Living wage proposal unworkable

We do more to

make

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Contents 3

BusinessPlus is published by :

The Employers and Manufacturers Association (Northern) Inc 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 Whangarei Louise Morrison 09 459 1501 mob 027 6870604 Waikato Denis Quigan 07 823 9311 Russell Drake 07 838 0018

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Bay of Plenty Terry Arnold 07 575 8401

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On the cover...

World Wide Access can take the credit for growing Merino Kids online sales of their baby sleeping bags and gowns in the US by 50% a month! They're not the only ones benefiting. The story is on page 20

Advocacy 04

EMA advocacy at work

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Trans Pacific Partnership more than just the money – By Kim Campbell, EMA CEO

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Wins for employers and employees under proposed law changes

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’Living wage’ proposal unworkable – By Phil O’Reilly

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New Zealand’s clean brand tops consumers thinking - Sustainability update

News 06

New app to help with tax

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How much is your business, or the one you work for, worth?

BusinessPlus

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Big issues dominate Business NZ agenda

Editor Gilbert Peterson Ph: 09 367 0916 gilbert.peterson@ema.co.nz

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Profile World Wide Access opens export markets online

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Port and customs costs outweigh free trade gains

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Export credit agencies work increases worldwide

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

Writer Mary MacKinven mary.mackinven@ema.co.nz Published by Mediaweb

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6 20

25, 27 Proud Moments!

Designer Bex Mikaere

Advice

Advertising Sales Colin Gestro (09) 444 9158 colin@affinityads.com ISSN No. 1176-4953

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An employee is stealing; what should I do?

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Employment chat: What’s the use of performance reviews? And how can I change sick leave? Plus: Breastfeeding at work

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EMA’s E&Y Tax Tips is back ...

Surviving a tax attack

27

Learning 18

Sustainability update - New Zealand’s clean brand tops consumers thinking

23 Our Vision. Your Success

4 Advocacy

EMA: advocacy at work Economic update

RMA

ASB Bank Chief Economist Nick Tuffley presented a comprehensive economic outlook for New Zealand for the EMA Policy Forum last month.

EMA has also lodged submissions on the Ministry for the Environment’s Discussion Document “Improving our Resource Management System”.

EMA has also submitted business views at the annual council hearings in Hamilton, Tauranga and Rotorua.

Our submission to Hamilton Council provoked a reaction from the Mayor on regional economic development but the exchange has led to ongoing dialogue through the Regional Mayoral Forum.

Our submissions can be read at www.ema.co.nz under ’submissions’.

Nick Tuffley

He covered quantitative easing, due to start slowing this year, which could see our currency volatility return slightly perhaps, immigration becoming positive again, predicting house prices in Auckland to rise 15% over the next year but to have flattened out by 2016.

Where unions meet employers The Secretary of the Combined Trade Unions Peter Conway addressed EMA’s Employers Forum early last month with the free and frank discussion ranging over every topic imaginable of mutual interest.

Mr Conway said he was not anti business but pro worker and had chosen to spend his life working for the employee cause.

EMA presents the business viewpoint EMA has made a full submission on Auckland Council’s Draft Auckland Unitary Plan, commenting on: • Future provision of business and residential land and their zoning • Transport congestion • Sharing land value uplift from rezoning • Significant Ecological Areas (SEAs) which remove a property right • 5-Star green buildings Council officials have until September to produce the final draft of the plan to be followed by another round of consultation.

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Messages through the media EMA’s views and researched findings are regularly reported in the media.

In particular EMA said Aucklanders prefer some form of road tolls to raise the funds needed to bridge the $12 billion funding gap on projected transport infrastructure.

This was the finding of the Consensus Building Group of which Kim Campbell, EMA’s chief executive, was a part, along with representatives from the unions, environmental, walking, cycling, public transport and other community interests.

“It took 9 months to reach a consensus, and now we need to get on with the job with urgency,” he said.

“By 2015 we need to decide how to raise the extra funding needed if Aucklanders are not to pay a lot more in other ways through traffic jams and delays in getting to work.”

The Christchurch rebuild EMA also welcomed efforts by the Christchurch Central Development Unit (CCDU) to provide more transparency on the business opportunities becoming available in the rebuild of the Christchurch CBD. “The Christchurch rebuild presents attractive investment and business supply opportunities for North Island businesses, but until now it’s been difficult to find out much about them,” said Mr Campbell.

“In the new CCDU market update we see $4.8 billion is to be spent by central

and local government for anchor projects in the city’s CBD alone.” www.collaboratecanterbury.org.nz

Protecting migrant workers Government’s new regulations to protect migrant workers from exploitation are a positive step, EMA’s manager of employment services, David David Lowe Lowe, told the media.

The changes will help protect both workers and employers, he said.

Unethical employers are being given their notice, which is as it should be for both good employers and those being exploited.

Employers who exploit migrants are putting at risk the operations of legitimate businesses, Mr Lowe says.

Earlier this year EMA wrote a policy on employing migrant workers, “Responding to Concerns of the Exploitation of Migrant Workers”, with input from members, to help Government amend employment law accordingly.

The proposals include: • exploitative employers facing lengthy prison time, hefty fines, and in some cases deportation back to their country of origin; • changes to the Immigration Act to encourage victims of exploitation to come forward; • creating as a specific offence exploiting migrants who hold temporary work visas, with a proposed penalty of imprisonment for up to seven years, a fine not exceeding $100,000 or both; and • exploitative employers with residence visas becoming liable for deportation if the offence was committed within 10 years of gaining residence.

The legislative changes are likely to be introduced by August, and are in addition to other steps being taken by the government to address migrant exploitation.

Advocacy

By Kim Campbell, Chief Executive, EMA

Trans Pacific Partnership about more than just the money (First published in the NZ Herald, 12/7/2013)

The drawn out Trans Pacific Partnership negotiations are about much more than achieving freer trade access with the United States and the other countries on its own.

There’s more at stake than just the money.

F

ree trade agreements are a function of our relationships with the other countries involved. The fact that under them our officials can sit down with their counterparts across the Pacific to talk about major trade concerns, rather than impose unilateral, ad hoc regulations without consultation, speaks volumes about the maturity and strength of our international relationships.

The TPP in particular is certainly about what the partnership means in a wider strategic context, and less what is said in the text of its documentation.

Though largely unheralded, the Wellington declaration in November 2010 fundamentally altered New Zealand’s relationship with the United States by establishing a foundation for raising discussions on all manner of issues. After it was signed by the Hon Murray McCully and Secretary of State Hilary Clinton, the US commitment to the TPP became far firmer.

New Zealand has strong, historical, traditional and cultural bonds with the US which are quite different from those with Australia or elsewhere and at least as important. Those bonds founded on heritage and history, are also just as symbolic. We can add technological ties too, since we rely too on US technical and engineering innovation.

Bilateral trade agreements often result in the forging of closer relationships between the two countries involved well beyond the trade itself, but that hasn’t been the experience with multilateral negotiations, such as those of the stalled Doha round of the WTO talks.

However closer ties other than trade between the countries involved in the TPP will result as the agreement presents a useful forum to deal with sensitive matters which have cultural factors associated, things such as security, air and sea corridors, and other difficult to discuss matters like phyto sanitary standards and practice.

New Zealand and Australia long since proved the value of the bilateral

“The fact that our officials can sit down with their counterparts across the Pacific to talk about major trade concerns, rather than impose unilateral, ad hoc regulations without consultation, speaks volumes about the strength of our international relationships.”

model with the Closer Economic Relationship, now the Single Economic Market (SEM); both countries are still enjoying gains under its provisions.

CER began with our two countries talking about such things as lowering the quota for the trans Tasman trade

in footwear; 30 years later we are talking about capital flows, shared superannuation and the free flow of tax.

The runaway success of our FTA with China - a trebling of two way trade in five years - is also as much, or more to do with its symbolic power as it is about the reduction in duties at the border required under its terms.

The perception of China’s traders upon the signing of the FTA bestowed a special and privileged preference, a licence if you like, to do business with New Zealand denied to other countries.

Now Japan’s entry to the TPP has changed its potential impact profoundly. For the first time Japan has signaled a willingness to engage on agricultural access to Japan’s food markets; hitherto that may as well have been a brick wall.

Japan’s joining the talks is most positive for New Zealand and the other partners both directly and indirectly.

Importantly it gives the US a meaty, welcome bone to chew on, and a far bigger stake in the TPP outcome as the US has long wanted freer access to Japan’s markets for its agricultural products just as we have.

The TPP also presents a means for the US to contain China’s influence in the Pacific and farther afield, though the general view of the TPP partners is that China will be invited as well into the partnership in due course.

With freer TPP trade tantalizingly near, and the larger prize of closer relations with the other eleven signatory countries in the offing, how soon is it likely to be signed off? From what I gathered in Washington in May the terms of the partnership may not realistically be completed this year, but there is every reason to expect they will be by mid 2014. The US is certainly talking when, not if.

To cement our relationship with the US which is more important than ever, and with Japan in on the deal, the advent of the TPP could turn out to be a game changer for us, and for global trade and a more secure world. kim.campbell@ema.co.nz

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6 News

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Advocacy

Wins for employers and employees under proposed law changes The changes proposed to our employment laws currently before Parliament clearly stand to benefit both employers and employees.

T

hey include real gains for instance by extending to all employees the right to request flexible working arrangements from their first day of work. The current law allows only caregivers to request flexible work hours and only after they have been employed for six months.

Another positive is the new law would help protect an employee’s rights under the Privacy Act when an organization restructures its operations. Other employees will no longer have access to information about their work colleagues.

A third change proposed would benefit both employers and employees by allowing some flexibility over when meal and rest breaks can be taken at work.

But we are often quick to bank wins like this and that’s fair enough as most employers already allow for requests for flexible work arrangements, and for rest and meal breaks.

Some changes are not so popular though they apply to a small minority, just 17%, of the working population involved in collective employment agreements.

When teachers, health workers and other public servant employees are

“Should a group of employees go on a partial strike, their employer could dock the pay of those involved based on the actual time they are out on strike, or by a flat rate of 10%.” excluded the number of people in the private sector affected by these changes drops to 12%.

Amongst them are a few who are resisting any change. When talks over wages and conditions break down, they want to keep the right for the parties to keep on talking to each other indefinitely, even if they have nothing left to say. And while the talking is going on, nothing else can change.

The law change proposed to address this suggests that if, after making strong attempts to resolve their outstanding issues over the wages and conditions in their collective agreement, the parties reach a deadlock, then they can park their talks. The two sides would no longer be obliged to conclude their negotiations.

Under the changes too, where the dialogue has gone on for an extended time without being settled, one party in

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the talks, or the other, could apply to the Employment Relations Authority to have the bargaining declared at an end. Before that could happen they must have used up all the avenues open to them.

These amendments would prevent a recurrence of the type of industrial action that held up the Ports of Auckland for months last year, and importantly, prevent more of the financial harm done to many of the ports customers.

Another matter some think contentious is that should a group of employees go on a partial strike, their employer could dock the pay of those involved based on the actual time they are out on strike, or by a flat rate of 10%.

That seems fair enough too.

Some unions are contesting another change which removes the rule requiring employers to pay non-union members at the same rates and conditions as union members for the first 30 days of their employment. Employers see this as a crude way for the union to recruit new members, but the law change proposed in any case would still oblige the employer to advise a new employee when a collective agreement can apply, and if they wanted to be covered by it that the employee would need to join the union. This change is the bare minimum required to make progress.

All in all the amendments are essentially fine tuning representing small gains for many workers and an incremental step on our labour reform journey.

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8 News

How much is your business, or the B

efore the GFC prices for businesses kept rising, but how do they fare in a declining market, and what about now?

approaches as well. And Tony says out 20 years ago. He pointed to the having access to extensive underlying evidence that investors are looking for accounting data is critical. alternatives outside of bank deposits by Three valuation mistakes arise noting household savings have trebled from: over the past few years and the NZX 1. Over optimistic forecasts – they has gone up 30% though by and large need to be sensible. earnings have been fairly flat.

Lowndes Associates 2. Comparing a business with Allan McRae partner Allan McRae another thought to be similar, Nigel Gormly is head of Direct posed the question though a premium is paid for Investment for the New Zealand Super for three presenters at the latest Business things like the robustness of Fund which invests $23 billion and has Intelligence Breakfast Workshop series on earnings and the calibre of delivered a return of over 8% over 9 July 31st. EMA partners with Lowndes management. years. The Fund is coming up to its 10th for the series.

3. Focusing on EBITDA (earnings anniversary in December. before interest, tax, depreciation He said valuations are being used in First up Tony Batterton has been and diverse ways, for financial reporting, with Direct Capital for 17 years investing amortization)! to mergers and acquisitions, through in private companies valued between $20 In response to the to business development support. and $100 million. question: Is valuing Valuations can vary too, depending on “We’re very focused on the earnings a business getting their purpose and the motivation for multiples,” Tony said, adding that more difficult, Tony doing them. discounted cash flow analysis doesn’t says they focus on “But temptation can be hard to measure up to hard realities for business the same attributes manage,” Nigel said. “Its very easy to owners. But Direct Capital applies other when they started Tony Batterton value a capital investment similar to

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News

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one you work for, worth? what everyone else is doing but its hard to come up with an independent analysis.”

He agreed valuations Nigel Gormly become easier not harder when comprehensive data is to hand.

Tony McNaught has been with KPMG here and offshore for 25 years advising on buyouts and capital raising for many New Zealand household name companies. He presented several war stories under the banner Valuation Reality.

Unlike The first speaker, Tony said he likes EBITDA multiples as they are ‘clean’ and consistent provided you apply them differently to different businesses.

EBITDA multiples averaged 7.4% between 1995 to 2002; 9% from 03 to 07;

7.3% from 08 to 011; and 8.3% to the present. But the number of transactions have been down lately.

Tony enumerated the factors contributing to a business value as its: • Competitive advantage (or IP) which can drive higher multiples • Earnings quality – how consistent and reliable are they?

• Strength of the customer base – their loyalty and are they locked in?

• Strength of governance – this is very important and reflected in its board reports, and formal structures and policies.

Navman grew 100% year on year for 10 years before its sale in 2003. How was it valued? In historical earnings terms as 12 times EBITDA, but in terms of its forecast earnings the figure was 6 times.

The point is to be careful what you hear

about multiple earnings.

Likewise an engineering company selling price included a building it owned to which a separate valuation was applied.

Other factors illustrated were the seasonal nature of a business, and the “special Tony McNaught purchaser,” one who will pay more than a usual analysis suggests they should.

“Valuation is an art, not a science,” Tony said. “Don’t just do the one valuation method.”

In summing up each presentation chairman Allan McRae said: • “Keep valuations as simple as possible” – Tony Batterton • “Stay objective and focus on the medium term” – Nigel Gormly • “Look behind and beyond the valuation formulas” – Tony McNaught

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10 News

Big issues dominate Business NZ agenda T

hree major topical issues have occupied the Business New Zealand agenda over the past month. Here’s a report on: • Reserve Bank Macro-prudential policy • Earthquake strengthening tax issues • Local Government reform

MACRO-PRUDENTIAL POLICY INSTRUMENTS After consultation with the public (EMA made a submission), the Finance Minister and Reserve Bank Governor have signed a Memorandum of Understanding on measures aimed at further protecting the economy and the financial system from boom and bust cycles.

The memorandum provides new measures for the Reserve Bank to apply if necessary requiring banks to: • Hold additional capital on their balance sheets as a buffer during an economy-wide credit boom; • Hold additional capital against loans in specific sectors if risks emerge in those sectors; • Adjust their funding ratios to use more stable sources of funding to avoid short-term funding shortages; and • Apply quantitative restrictions on the share of high loan-to-value (LVR) ratio loans in the housing sector.

EMA and BusinessNZ consider these measures as sensible, with a caveat that the restrictions on loan to value ratios could impact adversely on first home buyers.

Would-be home buyers might resort to source finance from less desirable institutions than banks since initially the tools would apply only to registered banks.

The measures are targeted at prudential supervision and financial security rather than as a substitute for monetary policy settings (i.e. interest rates) as a means of controlling inflation.

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“If a building is strengthened to meet the new code... current tax law suggests this is capital expenditure even though the life of the building is not necessarily enhanced.”

to rent it out, current tax law suggests this is capital expenditure even though the life of the building is not necessarily enhanced.

BusinessNZ is now part of a coalition group which has put together a paper discussing the issue, and appropriate Ministers are being approached to try to get the Government to agree to explore potential future options.

The issue is complex and could have wide implications, for example, the treatment of environmental legislation as it impacts on farm practices (eg requirements to put in settling ponds for cowshed effluent) or requirements under health and safety upgrades.

LOCAL GOVERNMENT REFORM

EARTHQUAKE STRENGTHENING – TAX ISSUES The Ministry of Business, Innovation and Employment earlier this year put out a paper “Building Seismic Performance” which would require all non-residential and multi-unit, multistory residential buildings not meeting an earthquake strength of 1/3 of the new building standard to be demolished or strengthened within 15 years. (Five years for assessments and 10 years to take action). BusinessNZ put in a lengthy submission on this to outline the major concerns. The submissions are still being reviewed. No decision has been made in terms of timeframes or potential compensation etc.

In parallel was a concern with respect to the tax treatment of earthquake strengthening. For example if a building is demolished because it is damaged as a result of an earthquake or other natural disaster, then it can be written off immediately. However, if a building is strengthened to meet the new code (or market conditions) in order to continue

The first tranche of the “Better Local Government” reform package is completed now with the passing of the Local Government Amendment Act late last year.

However one of local government’s concerns, given the change in focus from social, economic, environmental and cultural factors to the provision of local public services was the potential for litigation as to what local councils could, or could not get involved in. To date this has not been an issue although it is still early days.

Work is progressing on the “stage two” reform Bill due to be introduced to Parliament later this year.

The second Bill will include development contributions, and concerns with local government regulatory performance, drawing heavily from the work of the NZ Productivity Commission.

A key area of analysis is the appropriate regulatory role of local versus central government, with the local government sector expressing concern that while it is increasingly burdened by central government decision-making, local government has not had necessary input beforehand.

Examples of this include the government proposals on earthquake strengthening of buildings which could impact significantly on some communities.

Advice

By Carla Pallant-Drake LLB, EMA AdviceLine Employer Advisor

An employee is stealing; what should I do?

There are always financial costs when an employee decides to steal from their employer, whether an employee takes home products they are not entitled to, through to an employee taking money from a company bank account.

B

ut an employee’s misappropriation can take more than just a financial toll on an organisation.

When an employee steals money or property, it destroys the trust and confidence essential to an employment relationship, and leaves an employer not only with a bad taste in their mouth, but also a big mess to clean up.

An employer can take steps to reduce the likelihood of an employee stealing property or money, and it is also important for an employer to be in a position to react if allegations of misappropriation arise.

Prevention Quite often, an employer will not think that an employee would or could steal from them until it is too late. So it is important to consider the possibility of an employee stealing money or property in advance in order to develop appropriate detection and prevention techniques.

Certain roles within a business may give rise to a particular risk of misappropriation. For these, and in fact any roles where an employee might have access to property or money with little supervision, it is important to determine what systems could be put in place to act as a deterrent, and what practices could be used to provide for the early detection of any misappropriation.

Some prevention techniques might include: • Ensure there is adequate supervision of employees in ’high risk’ roles • Install CCTV cameras in ’at risk’ areas, like stock rooms, with clear signage that the area is monitored • Make frequent and complete

• • • •

stock takes and audits Make sure that transactions over a certain level are checked before they can be processed Limit access to company bank account details and accounting software Limit access to safes and petty cash Install GPS tracking systems to limit ’time wasting’

Finally, and most importantly, employers should have a clear policy which outlines the company’s position on misappropriation and what the potential outcome will be if an employee is caught stealing. A clear policy can itself act as a deterrent and will also place an employer in a position to react in a pre- established way if they become aware that an employee may be stealing.

“Employers should have a clear policy which outlines the company’s position on misappropriation and what the potential outcome will be if an employee is caught stealing. A clear policy can itself act as a deterrent”

The response An employer must conduct a full and fair investigation into an allegation of misappropriation before a disciplinary procedure can commence.

Dismissing an employee in a kneejerk reaction, without conducting a proper process in good faith would be likely to place the employee in a position to bring a personal grievance for unjustified dismissal, and unjustified disadvantage, despite the fact that the employee may have been the cause of

their own down fall.

Sometimes an employer may consider an investigation and disciplinary process too onerous and, instead of starting a disciplinary process with the employee, they contact the police.

A police investigation, with the laying of charges, and any subsequent conviction does not absolve an employer from their obligation to address the issue at hand. While the police are conducting their process, the employee remains an employee until they resign or their employment is terminated.

Consequently, they are still entitled to attend work as provided for in their employment agreement unless they are suspended, or their employment is ended.

It may be appropriate to seek police involvement at some point, however an employer still needs to deal with the employment law issues that arise when there are allegations of misappropriation.

An employer may find it possible to suspend an employee while an investigation is being conducted, but suspension will not always be appropriate or necessary. Before directing an employee to leave the workplace it is important to consider any suspension policies or requirements.

If, as a result of a full and fair investigation, and good faith process, an employer determines that the allegation of misappropriation has been substantiated, the next step is to determine how a fair and reasonable employer could react. The termination of an employee’s employment will not necessarily be the only available outcome.

Conclusion Discovering an employee has been stealing company property or money can often trigger an emotional reaction but it will pay to keep a level head. A good faith process needs to be followed to legitimise any disciplinary outcomes.

Also, there is no substitute for being prepared. Prevention techniques can often limit the risk of misappropriation, and they can result in early detection should an employee give into a temptation to steal from their employer.

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11

12 EMPLOYMENT CHAT

What’s the use of performance reviews?

Plus: Breastfeeding at work Q. I need to do performance reviews of my five staff but really I don’t think I have the skill or the time. Any suggestions…that won’t cost the earth?

- Will

“Performance management does not have to be extensive, only sufficient to ensure that management has the correct understanding of the employee’s contribution to your organisation’s success.”

Dear Will EMA has employment relations consultants available to members for the kind of help you require, at special member rates. Call us to be referred to one in your area.

Also read our A-Z of Employing Guide for Employers and Managers on ’Performance Management’, which members can download for free at ema.co.nz.

The guide describes optional appraisal systems for you to choose the one most relevant to your organisation as well as talking about remuneration and managing performance, including termination when necessary, and it provides a sample process outline.

How performance is managed and measured varies immensely, from complex and intricate systems of quantitative and/or qualitative measurements, to simple evaluations by the employee’s direct supervisor.

Performance management does not have to be extensive, only sufficient to ensure that management has the correct understanding of the employee’s

contribution to your organisation’s success.

Should an employer be dissatisfied with an employee’s performance, they must make the employee aware, and give them a reasonable opportunity to improve. The appraisal process is a good time to do this.

Ongoing poor performance may be disciplined, but via a thorough process first.

Q. I thought I would change our staff sick leave conditions from 10 days to five as we are struggling financially. How might I go about this? - Angus Dear Angus I would caution you about jumping in to reduce staff conditions to save money.

Bad for morale…

People are what keep the business alive, no matter how good your machines are (but then I’m a people person of course).

Have you considered all other aspects of the business first to see where you can cut costs?

It’s amazing how much waste there is in energy use and throwing stuff out instead of recycling. One of the ways you can save on power and fuel is through the Member Rewards offered

by TUMG, Meridian Energy and Caltex (see ema.co.nz).

The thrust of our Eco Smart Business programme is also to help you save on waste and cut costs, with the added advantage of satisfying supply chain and customer pressure for business to have environmental accreditation. (see ecosmartbusiness.co.nz) If you have to reduce sick leave entitlements, you will need discuss the proposal with your staff and get their agreement before making any changes to their employment agreements.

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

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

Erin Burke

Senior Solicitor - Waikato P +64 7 839 6449 M +64 27 459 3375

Ani Bennett

Call us toll free on

0800 300 362 Untitled-4 1

Brandon Brown

Senior Associate - Bay of Plenty Solicitor - Auckland P +64 7 577 0488 P +64 9 367 0912 M +64 27 706 4433 M +64 21 515 116

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Matthew Dearing Solicitor - Auckland P +64 9 367 0931 M +64 27 284 4042

Visit our website

www.ema.co.nz 21/06/13 3:59 PM

WHAT EMPLOYERS ARE ASKING ADVICELINE THIS MONTH

How can I change sick leave?

Q. One staff member wants to come back from maternity leave and breastfeed her baby here (with the nanny bringing him in a couple of times a day). But we just don’t have the facilities. I don’t want to lose her though. How can I accommodate this? – April Dear April The issues you need to consider are outlined in our A-Z of Employing Guide for Employers and Managers on ’Breaks’. There is also a link to the Code of Employment Practice on Infant Feeding which provides good guidance around meeting your obligations.

An employee who is breastfeeding or expressing breast milk is entitled to request appropriate facilities and breaks in the workplace. What is appropriate will depend on the particular circumstances and the workplace.

You should discuss with your employee their particular needs and consider what is required in the way of breaks and facilities to allow them to breastfeed during work time.

The breastfeeding breaks will be unpaid unless you agree otherwise and these are in addition to the rest and meal breaks to which your employee is entitled. You may of course agree for the breaks to be taken at the same time.

You could also discuss flexible work

as the A-Z of Employing – a manager’s guide on more than 100 specific employment topics, at www.ema.co.nz

“Breastfeeding breaks will be unpaid unless you agree otherwise and these are in addition to the rest and meal breaks to which your employee is entitled.”

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.

ARE YOU GETTING EXTRAORDINARY TEMPORARY BUSINESS SUPPORT?

options so that she can work from home, or alter her hours even on a temporary basis and document any agreement in writing.

Horizon, Auckland’s temp and contract specialist, has a reputation for providing:

By the EMA Advocacy team in consultation with EMA Advice, and loosely based on real calls to EMA’s AdviceLine. All names are fictional.

 Exemplary Temps  Exceptional Service  Excellent Value

The information in this article is a guide only and not to be used as business advice without further consultation.

Be it for a short or longer term, get a really useful person who fits in and gets the job done!

EMA members can start with our AdviceLine team at phone 09-367 0909 or 0800 800 362 (within New Zealand), and 1800 300 362 (from Australia), 8am-8pm weekdays.

Alternatively, email adviceline@ema. co.nz or read or print information such

Call now 09 966 7474

Visit: horizonrecruitment.co.nz

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.

AdviceLine

Member Only Resources

Don’t just get information – get advice you can rely on from industry specialists.

A library of knowledge, tested in the courts and all in one place.

A free, confidential telephone service providing employers with up to date, direct and practical advice.

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

Untitled-3 1

10/06/13 12:42 PM BusinessPlus – Exclusive news, advice, learning and networking

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14

’Living wage’ proposal unworkable The idea of a ’living wage’ has been in the news this year.

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arlier this year the Anglican Family Centre proposed a ’living wage’ of $18.40 gross per hour.

Its calculation is that $18.40 per hour is needed for an average family of two adults and two children, with one adult one working full-time and one working half-time.

Since then, the proposal has been taken up by a number of unions and other organisations that have promoted the idea to local bodies and universities.

Now Wellington and Auckland councils are considering the idea, and the Hamilton council has voted against it.

Some universities are considering it, and Auckland University has increased the rate paid to its gardeners and security staff.

The way the phrase ’living wage’ is being used here is a bit different from the

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way it is used in other parts of the world.

In London, some councils and education institutions call a living wage the extra amount they pay to offset higher city living costs.

In the US, mandatory increases of $3$7 an hour in some local councils and universities are called a living wage.

Advocacy for higher minimum wages in a number of places has been carried out under the banner of ’living wage’.

And some companies use the phrase in a marketing or promotional sense, to describe wage increases they have awarded, often related to skills or to encourage connectedness or loyalty.

But there is also a key difference between what is proposed by the Anglican Family Centre and that appearing to be advocated by some unions and other groups.

The Anglican proposal of $18.40 gross per hour includes government transfers including Working for Families, accommodation supplements,

childcare assistance and others, as well as the actual rate of pay.

But some groups appear to be advocating an actual wage rate of $18.40 gross an hour, with government transfer payments on top of that. All included, this would have the effect of the two wage earners in an ’average family’ each receiving the equivalent of over $20 gross per hour.

So there is some confusion about what sum is actually meant by a ’living wage’.

However there is another confusion at the heart of this proposal - if implemented, the system proposed by the Anglican Family Centre would bring a very strange outcome: it would mean low-wage workers being paid according to their family circumstances.

This of course is different from the way everyone else is paid – for their work.

If people were paid according to their family circumstances, how could all the different circumstances be calculated?

Everyone’s circumstances are different.

By Phil O’Reilly

If $18.40 per hour was appropriate for a family of four with 1½ pay packets, then different rates would be needed for, say, a family of six with one pay packet, or a two-person-two-income household, or a single person with two jobs. Calculating all those different ’living wages’ would be a bureaucratic nightmare.

Paying people for the size of their family is not consistent with the way the rest of the world operates, where people are paid for their work.

The proposal is also at odds with the fundamentals of our welfare state.

Businesses have understood ever since the 1930s that employers should pay market rates and the state will assist the unemployed. In recent decades the state has moved to assist employed people also, with Working for Families, accommodation supplements, childcare assistance and other assistance for those in work.

The taxes we all pay support this extended assistance to people both in and out of work. The rates of personal income tax and company tax paid by businesses reflect this overall system of welfare support.

Wages paid also reflect this overall welfare system. Employers pay market rates in this context, taking into account free education, free hospitals, Working for Families, accommodation

“Some groups appear to be advocating an actual wage rate of $18.40 gross an hour, with government transfer payments on top of that. ” supplements and so on.

But employers are not required to shape pay packets in reference to family size and circumstances. Employers are expected to focus on being competitive and paying market rates in order to be able to provide as many jobs as possible.

Instituting the ’living wage’ proposal would reduce the competitiveness of many employers and probably reduce the number of jobs.

For these reasons, the system proposed by the Anglican Family Centre and others is unworkable.

But it raises the question of the role of the minimum wage as it currently exists. What is the minimum wage for and why is set at the level it is?

Many countries have mandatory

minimum wage policies. New Zealand’s minimum wage, at 65 percent of the median wage, is higher than most. One reason it is not higher still is because a too-high entry wage would make it too hard for many – including those at the margins of the labour force and those seeking their first job - to gain employment.

It should be remembered that the minimum wage wasn’t designed as a reward for higher skills but as a wage ’floor’ and protection against exploitation of the unskilled.

For most people on the minimum wage it is a starting-out point, a stepping-stone towards more skilled, higher-paid work.

The minimum wage recognises that the labour market is dynamic - always changing but consistently paying more money for higher, more relevant skills – and that the incentives should always lead towards upskilling.

A successful workforce is one where employee skills help companies produce, innovate and successfully compete, and where employee focus on ongoing learning - towards higher and more relevant skills – brings higher value and higher pay.

The minimum wage as currently set is part of that evolving picture.

Phil O’Reilly is Chief Executive BusinessNZ www.businessnz.org.nz

Building Jobs & Growth

An update on the Government's Business Growth Agenda The Government is working across six areas that we know are essential for businesses to succeed and grow: building export markets, infrastructure, skilled and safe workplaces, innovation, natural resources and capital markets.

The Minister will update us on each of these programmes.

This is your invitation to hear the Minister, and give him feedback on how the Government can support New Zealand businesses to be more competitive in the global market.

To register email: julie.brough@ema.co.nz BusinessPlus – Exclusive news, advice, learning and networking

15

Advice

By Jo Doolan

EMA’s E&Y Tax Tips is back ...

Surviving a tax attack The Inland Revenue Department has launched a serious tax attack on 500 taxpayers in its “naughty house” for failing to distribute enough profits to themselves from their businesses and professional practices.

T

hese taxpayers also sinned by failing to avail themselves of the commissioner’s grace period for rocking up to the tax confessional.

Shivering in your boots, and wondering why the commissioner doesn’t devote the same time and energy to hounding the criminals who evade tax, is unlikely to resolve this issue.

Our advice? Crouch, pause, hold and engage.

Toughen up and prepare to present your defence. As a starting point, recall the details of the Supreme Court’s decision in Penny & Hooper. The IRD’s response was yet again to rewrite tax law by using the anti avoidance rules.

Tax legislation does not stipulate that full-time shareholder/employees must pay themselves a market salary.

Orthopaedic surgeons Penny and Hooper were extreme examples: they were paying themselves substantial salaries, then set up a company and trust structure and paid

“The major hiccup was the level of salary they paid themselves and that there was no real explanation for this, other than the associated tax savings.”

themselves substantially reduced salary while retaining access to the money.

The other major point (and the court didn’t focus on this) is that in many respects Penny and Hooper continued running their businesses as if they were still sole practitioners. So, in spite of the new company and trust structure, nothing fundamentally changed.

The court accepted the reasons for using a trust company structure were commercially based and designed to protect their assets. The major hiccup was the level of salary they paid themselves and that there was no real explanation for this, other than the associated tax savings.

The court’s decision - that there was tax avoidance - is therefore unlikely to rip the hem of one’s nightwear. But using the decision to focus on hundreds of other taxpayers is therefore, at best, disingenuous.

Adding salt to this wound, the IRD then issued an edict, saying that rather than focusing on the level of salary paid, it expected similar businesses to distribute at least 80% of their profits to the shareholder /employees. This was designed to minimise the compliance issues associated with determining a market salary.

To fight this tax attack, you need documentation to justify why it was not appropriate to distribute 80% or more of your profits to the shareholder/ employees. The reasons for this can include: • The business was in a growth phase and needed working capital • The business was losing money so it was inappropriate to distribute this level of income • The business was anticipating capital expenditure that needed to be funded • Other assets owned by the business, such as intellectual property or processes, meant the business is entitled to retain a higher level of profits to provide an adequate return on these investments.

• There is no evidence of a reduction in income received by the shareholder/employees pre-

“The IRD then issued an edict, saying that rather than focusing on the level of salary paid, it expected similar businesses to distribute at least 80% of their profits to the shareholder / employees.” and post- the company and or trust structure being put in place.

• The salary paid to the shareholder/ employees clearly represents a market rate.

This issue is all about the IRD protecting the tax base by ensuring shareholder /employees are not being paid an artificially low salary to save taxes by benefiting from the lower tax rates enjoyed by companies and trusts.

This honourable motive does not, in my view, justify the commissioner’s failure to move for changes to the tax legislation as soon as leakages are found and, instead, relying on that ever-shifting line in the sand by using the antiavoidance rules.

The time delays before the IRD moves on these issues, and the crippling penalties and use-of-money interest, are disastrous for many businesses whose trading conditions are still, at best, challenging. A protracted tax dispute will be a major distraction as well as a financial burden.

The key message: adopt an attitude of proactive engagement rather than the old head-in-the-sand approach. Even if you have an exposure, you are better to take advice and consider making a voluntary disclosure rather than waiting for the tax office to come to you.

Joanna Doolan is a tax partner with Ernst & Young. joanna.doolan@nz.ey.com

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17

18 Learning

Sustainability update

New Zealand’s clean brand tops consumers E

nvironmental protection is important to New Zealanders, but there’s been a decline in organisations engaged in sustainable business practice, according to recent consumer surveys, says Penny Nelson, executive director of Penny Nelson the New Zealand Sustainable Business Council (SBC).

Penny was speaking at a business lunch for EMA’s Eco Smart Business programme on trends in sustainability • practices adopted by businesses.

Key themes emerging are: • Consumers will switch brands.

While sustainable practice has been declining, consumer support for organisations that behave sustainably has re-emerged, according to the SBC/Fairfax - 2013 survey.

Two thirds of adult consumers

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say they would switch brands if they found their regular brand or service provider was having a bad effect on the environment, people or society, or behaving unethically.

In the past year, 23% - about 800,000 people - have switched for those reasons. Many cited the use of ingredients, like palm oil in chocolate, and production methods (such as battery caged hen eggs) as their reasons for switching.

New Zealanders are concerned about the integrity of the NZ national brand with our ’100% pure’ and ’clean and green’ positioning. We are seen as ethical and trustworthy. All our exports leverage this positioning to some degree.

87% of New Zealanders think the country’s environmentally pure image is important for competitive

Kate McIntosh of Treeline Parks is presented with an Eco Warranty Award by Annette Lusk (rt) of Sustainable Edge

advantage in overseas markets.When asked whether the country lived up to this image, 55% said no. This year for the first time since the Lincoln University Environment Perception surveys began, the mean response was negative for New Zealanders’ agreement with the statement ’NZ’s environment is clean and green’.

Learning

thinking New Zealanders think the environmental issues we most need to address to live up to our overseas marketing messages are associated with water quality in lakes and rivers, and farm run off. There are also concerns about waste disposal and the impact of mining on national parks and forests.

Public Perceptions of New Zealand’s Environment Report 2013 (by Lincoln University and partners) found farming as a major cause of damage to freshwater increased by 31.3% (from 24.7% in 2000 to 56.0% in 2013).

Recently James Griffiths from the World Business Council for Sustainable Development (WBCSD) visited New Zealand. He talked about the steps to a business’ engagement in sustainability, saying: • Opportunities are found once companies start measuring their impacts. Their approach turns from risk management to identifying opportunities.

• Increasingly value chain management is a focus (eg, PUMA – a lot of the impacts from their first profit and loss statement in the supply chain).

• Smart regulation is seen as a critical tool to move late adopter businesses.

Internationally, SBC and BusinessNZ have studied ’licence to operate’ issues for New Zealand business.

Ms Nelson says, “Global consumers have greater expectations for the role companies should play in giving back to society and addressing social and environmental issues.”

In May 2013, the Cone Communications/EcoGlobal Corporate Social Responsibility (CSR) global study surveyed 10,000 people living in 10 of the largest countries by GDP, about consumer attitudes, perception and behaviours around CSR. Nine of the 10 consumers surveyed said they wanted companies to go beyond the minimum legal standards to operate responsibly and address social and environmental issues.

The study also found that consumers were more sophisticated and more connected than ever. Social media is an everyday tool for consumers to

learn and engage around critical issues.

62% of those surveyed said they used social media to address or engage with companies around CSR. While the majority shared positive information with their networks, 26% were communicating negative news.

Inquiries from other stakeholders regarding social and environmental performance, especially investors and shareholders, are also on the rise. Mandatory integrated reporting (incorporating non-financial aspects) exists now for the Johannesburg Stock Exchange, and regulation in Denmark, Norway and Sweden mandates sustainability reporting to varying degrees.

Increased awareness among business is this is not a nice-to-have, but a matter of current and future risk and opportunity management.

SBC is a division of BusinessNZ and partners with other divisions of BusinessNZ such as the Major Companies’ Group, ExportNZ and EMA. It has 55 members. Its purpose is to enable New Zealand businesses to be leaders in sustainable business practice. SBC is the regional partner to the WBCSD established after business participation in the 1992 Rio Earth Summit.

International trends At the EMA lunch, Nick Main, a Deloitte consultant, said despite the surveys there appears to be a significant gap between value and Nick Main action: consumers don’t actually do what they say they will do...

The real push for sustainability is not coming from consumers or politicians, but business itself; from activist chief executives, the World Economic Fund and WBCSD. “Business gets things done!”

Why should New Zealand business care?

Mr Main said the picture is more complex and nuanced but increasingly business will be seen as ’on the journey’, or not.

“There is traceability in supply chains: you cannot hide.

“Business’ stated reasons are often: • Cost reduction • Risk management/strategic flexibility • Innovation • Customer intimacy • Reputation management “But there are activists out there!”

And: “We have a lot riding on the ’New Zealand Brand’. Customers expect ’their’ brands to do the right thing.”

Quoting Warren Buffett he said: “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that you’ll do things differently.”

Member organisations interested in learning more about making their operations sustainable to meet social and environmental expectations and in becoming accredited for their efforts, should contact Peter.Atkinson@ema.co.nz

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19

IN OUR REGULAR SNAPSHOT OF AN EMA MEMBER COMPANY, WE DESCRIBE 20 THE BUSINESS OF WORLD WIDE ACCESS IN AUCKLAND.

World Wide Access opens export New Zealand is oceans away from export markets, but that need not be an insurmountable barrier.

N

ew Zealand company World Wide Access has developed an option for businesses to get their products to customers overseas Paul Grey using smart software.

Headquartered in Auckland and founded by Paul Grey in 2008, World Wide Access exports and sells consumer products in America, China, Japan, the UK and Europe on behalf of its customers.

They manage distribution, including small consignments of less than a container load, prepare export documentation, and undertake marketing and payments on behalf of clients. They rely heavily on the internet.

WorldWide Access customer, mumi&bubi illustrate how the service works. mumi&bubi manufactures purpose-designed freezer trays for baby food purée; mumi&bubi.

Less than a year after entering the USA market with the help of World Wide Access, the company grew to

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Solids Starter Kit

be one of the top three in its product category.

Each of the two freezer trays in the ’Solids Starter Kit’ has 21 spoon-shaped hollows that each hold 30ml servings of food. This allows mothers to prepare food as infrequently as once a fortnight and simply slip out the portions from the tray as needed.

Auckland mother and mumi&bubi director Christina Piet says, “We sold our 1000th unit after less than six months in the market. Since then, we’ve increased this figure many times over.

“When you work with World Wide Access, they get your product on Amazon and dozens of other shopping web sites in North America – all at the same price.

“So when people hunt around to compare prices they see it’s consistent and that inspires confidence.”

She says World Wide Access also simplifies the distribution.

“If I sell through another retailer in the USA, I have to ship the product to the USA and keep it in my own warehouse before I can ship it on to the retailer. With World Wide Access, all I have to do is send an email to my factory in Onehunga to produce the product and they send it over to the World Wide Access export consolidation warehouse, also in Auckland.”

From that point on, World Wide Access takes care of the cost and all arrangements for export shipping, customs clearance, distribution, sales and order fulfilment.

Christina says, “World Wide Access sells direct to the consumer and provides full customer service and support, while allowing me the freedom to develop a wholesale business separately. So I have that control.

“After only one year with World Wide Access, USA sales exceed our domestic sales already and we haven’t even begun to understand the market.”

World Wide Access suppliers [customers] are paid once a month, shortly after the previous month’s sales close.

“World Wide Access pays US dollars directly into my New Zealand account, so it wasn’t necessary to have a bank account in the US,” Christina said.

Mumi&bubi passed their first shipment to World Wide Access in December 2010. Seven weeks later, the product was listed and selling through Amazon and other shopping sites.

21

markets online

Part of the Merino Kids winter collection

“The World Wide Access marketing team found the right bloggers and online forums to bring the product to the attention of customers in the target market very cost-effectively.

“We’re up against the big players.

These are really big companies with huge marketing budgets and an army of sales reps...and here’s little old mumi&bubi right up there with them!

“World Wide Access is doing a great job for us in the US, so I thought why not try other countries as well?”

Mumi&bubi is about to enter Canada using World Wide Access, with more markets in the pipeline.

They’re not the only successes World Wide Access is chalking up. Two others are Real Nappies, and Merino Kids.

made of corn fibre, rank second or third in the US market. Sales keep going up, Liz says, and they’re starting to export to the UK, and Japan.

Real Nappies use no pins and require no soaking; they use velcro tabs and by displacing disposables in effect displace a tonne of paper waste per baby over the time a baby is in nappies. And its an easy thing to do, Liz says.

Merino Kids For Hawkes Bay based Merino Kids, makers of merino wool sleeping bags for babies and toddlers,World Wide Access is overseeing 50% growth per month in the US.

They sell also in the UK, China, and Japan after starting the online business six years ago, focused initially on New Zealand and Australia. Now 30% of sales are also going through wholesalers.

Co-owner of Merino Kids, James Nilsson says they’re very happy working with World Wide Access.

Because they’re a merchant of Amazon, through them we can retain full control online of our pricing, branding and distribution, he says.

“World Wide Access has done an excellent job of making us look and feel local in the US market.”

www.worldwideaccess.com

Real Nappies Real Nappies Ltd started life 10 years ago to replace disposable nappies with real cloth. The company is still small wife and husband and two part timers - but “its pretty exciting for us,” says owner Liz Mole.

She says World Wide Access who they’ve been with since 2008, ships their product to the US three or four times a year, and promotes them on Amazon, Shopzilla and other shopping sites.

World Wide Access represents an opportunity for Real Nappies in the US Liz says they couldn’t have otherwise explored.

Now some of their lines, such as their fully biodegradable flushable nappy liners BusinessPlus – Exclusive news, advice, learning and networking

22

Port and customs costs outweigh free trade gains Progressive Economy reports that the World Bank early this year used computer modelling to forecast gains in global growth and exports through easier paperwork, more transparent and simpler Customs operations, and better trade infrastructure.

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t concluded: “An ambitious (but still incomplete) improvement in supply chain barriers - border administration, and transport and communications infrastructure - with all countries raising their performance halfway to global best practice (defined as “global best practice” of logistical cost and efficiency in Singapore), would

lead to an increase of approximately $2.6 trillion (4.7%) in global GDP and $1.6 trillion (14.6%) in global exports.”

The predicted result for the United States is an increase of 2.8% in GDP, and an 11.3% jump in American exports. In practical terms this would amount to extra year’s typical GDP growth or $420 billion in extra output, and a $200 billion addition to last year’s $2 trillion in US exports.

By comparison, the report forecasts increases of this magnitude would be about six times greater than the level of growth achieved by removing all of the world’s tariffs.

The outcome is achieved by improving American port procedures, using information technology more effectively, and reducing port costs abroad, by completing the “Single Window” allowing exporters to get

forms and file paperwork at a single website rather than in hard copy to the 46 separate agencies which regulate exports, and concluding the WTO’s Trade Facilitation negotiations by late this year.

An example is that by using figures from World Bank, WTO, and Customs Bureau reports, it finds New York port costs nearly twice as high as the European Union tariff, which means New York’s extra port costs add as much to the price of a box of American manufactured goods as the entire EU tariff system, and bringing these costs in line with those of Europe and wealthy Asia would do as much for exporters as eliminating the EU tariff system.

The paper, Trade Facilitation as Growth Tool, is at http://progressiveeconomy.org/2013/07/16/tradefacilitation-as-growth-tool/

Making it Lean $39.90

By Barry Nolan

“It’s a good and relevant read. I would recommend it to anyone intent on maximising returns for their business” – Peter Townsend, CEO, Canterbury Employers’ Chamber of Commerce

It shows you how Lean is the way to go to achieve greater productivity and reduce costs.

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incl P&P and GST

“I have been in the IT ERP space for over 30 years and this is the best book that I have seen on Lean. After reading the book I have a better understanding of Lean that I had developed over all the past years. The book presents the concepts and application of Lean very concisely and clearly.” – Michael Ligudzinski, Minneapolis, Minnesota USA

TO ORDER EMAIL:

Gilbert.Peterson@ema.co.nz

23

Export credit agencies work increases worldwide A

ccording to a recent Progressive Economy report (July 10) Germany’s Minister of Economics and Technology says: “Export finance is gaining ever more importance as a competitive factor [and] is often the precondition for the realization of an export deal. ... State export credit insurance must today be seen in its international context.. ...

“The growing competition from nonOECD states (eg China, India, & Brazil) remains a crucial challenge. It is therefore a central concern to formulate global standards - both in respect of financing conditions and the consideration of sustainability aspects.”

The report goes on to note 53 national export credit agencies operate worldwide providing $300 billion worth of loans, credit guarantees, and other forms of support each year, equivalent to 2.5% of $11.5 trillion in manufacturing traded exports.

Chinese export-credit programs though poorly documented seem to be the world’s largest; the $45 billion Japanese programme is second. ExIm’s in the US ranks fourth with $31.3 billion, just below Germany’s 29 billion euros. Canada, France, the Netherlands, and Korea also run big export-finance programs.

Export-credit agencies are most active in large, long-term manufacturing sales and infrastructure projects, in which buyers are willing, returns to commercial banking low, and values well above $10 million.

Recent American Ex-Im projects include sales of cable-TV satellites to Vietnam, locomotives to the Mexican rail system, drinking water pipes to Sri Lanka, and planes and parts to Ethiopian Airlines.

Brazil’s BNDES (“Banco Nacional de Desinvolvimento Economico y Social”) last year committed funding guarantees to back Embraer aircraft sales, urban infrastructure and power projects in Angola, and buses for Bogota’s mass transit system.

Germany’s covered 169 countries with especially large commitments in Russia, China, and Turkey and

Southern Spars rigging sails benefited

supporting projects ranging from a hydro-power plant in Iceland through wind-turbine sales to South Africa, a brewery in Brazil, and a steel mill in Korea.

The New Zealand scene In New Zealand exporters should review the range of guarantee products offered

by New Zealand’s Export Credit Office (www.nzeco.govt.nz).

NZECO is starting to build an impressive record assisting exporters. A recent example was to guarantee a bond helping yacht rigging specialist Southern Spars with a $30million plus contract.

Christchurch machinery company G Tech Group was recently guaranteed a bank loan for $US2.5 million to meet short term working capital to meet forecast customer demand.

Technopak case In a third case Auckland business Technopak secured two contracts with

G Tech decanter centrifuge

“53 national export credit agencies operate worldwide providing $300 billion worth of loans, credit guarantees, and other forms of support each year”

a Chinese company for the supply of their milk powder packing bulk-bag filling machinery. Technopak, a proven exporter, and had negotiated advance payments on the performance of certain milestones.

In response, the Chinese buyer required Technopak’s bank to provide guarantees matching the value of the milestone payments. These bonds totaled 70% of the contract value and were to protect the buyer from losses in the event Technopak failed to satisfactorily deliver. NZECO underwrote 50% of the bonds value which allowed the company’s bank to extend the balance which also assisted the company’s cash flow.

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Membership Rewards Savings Your Business Can Actually Use! Being a member of New Zealand’s pre-eminent business association not only delivers vital support and advice to your business but also entitles you to an exclusive range of incentivised products and services.

Our Rewards scheme is exclusively for you, our members, so take advantage of these great offers and start impacting your profitability today!

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The Buy NZ Made trademark is a great marketing tool for businesses. Providing a unique selling point and value to your brand. As a member you receive a 20% discount on your annual membership to the Buy NZ Made Campaign.

Southern Cross Healthy people. Healthy business. When you offer subsidised health insurance for your employees, your business benefits all the way to the bottom line.

Telecom NZ Providing a full range of Internet, data, voice, mobile and fixed line calling services for customers in Australia and New Zealand.

Caltex We have teamed up with Caltex to help minimising your fuel expenses and offering members 5.2 c/l off the pump price of Petrol and 10.5 c/l discount at dedicated Caltex Diesel stations nation wide.

OfficeMax Members have told us that office supplies are an area where they would like to make significant savings, so we thought we would deliver just that. OfficeMax have come on board with EMA to bring members the very best deals available on the market.

Vero Members receive up-to 30% off your Quotable Value (QV) valuations and preferential valuation rates year after year on general insurance.

Custom Fleet No matter what size of fleet you operate EMA have negotiated exclusive discounts for members across a vast array of models to suit all Kiwi business types.

Horizon Recruitment As a ‘thank you’ for your loyalty Horizon Recruitment are offering a $300 gift voucher or charitable donation of your choice.

Total Utilities Cut your utilities bills on a ‘no savings, no fee’ basis by joining Total Utilities and leverage buying muscle by collaborating with fellow members and participating in bulk buying tenders for electricity, LPG and waste services.

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

EMA MEMBER PROUD MOMENTS NOTICEBOARD

25

Iconic Parnells off to fresh start Itching to get the iconic venue Parnells on The Rose Garden off to a fresh start, new owner Michael Edwards is recruiting a team to add a modern twist to the historic and iconic functions centre.

It’s the first business for Michael, who is leasing the 1890s building from Auckland Council.

“This is an exciting opportunity; it has my operating juices flowing!” says the former director of convention and food and beverage services at the Hotel Pullman (formerly Hyatt Regency) in Auckland.

His 25 years in the industry include roles at the Bruce Mason Centre, SkyCity, Eden Park and North Harbour stadia and London hotels including as general manager.

He says Parnells will be open every day for any size function

providing a beautiful venue in the heart of the city: rooms with natural daylight, and the ability for conference and function delegates to go outside, stretch and enjoy fresh air during their breaks.

Not to mention partaking of the perfume and floral display in the adjacent rose gardens in season!

He feels a key to success in the functions business is the staff ’s personal touch: greeting guests, remaining attentive, and being present full time to handle inquiries and their needs.

Right now the challenge is restoring Parnells to its former glory and making New owner/manager Michael Edwards it a place full of special in front of the historic Parnells on The Rose Garden memories for those who grace its doors. catering for up to 120 seated It's a new and exciting adventure downstairs and 80 upstairs – each and Michael is looking forward to area with its own facilities. providing its clients with a premier The attractions for him are service.

Natural skincare company recruiting madly China is a new, big and growing market for Hamilton-based New Zealand Skincare Company but one of just many successes that the company expects to announce.

Owner Penny Vergeest says her company, which makes organic and natural skincare products, has just moved to a bigger, purpose-built factory in Te Rapa. It is also recruiting with plans to increase staff numbers from 10 to 30 within the year, across a range of roles.

This month the NZ Skincare Company also launches its ’Happy Little Poppets’ range of baby soaps, oils, washes, lotion and bottom balm.

Neither the adult range nor the baby range have any synthetic chemicals or

Penny Vergeest

preservatives - some of the latter (eg, parabens and phenoxyethanol) are unnecessary, Penny says, and are ingredients that have been linked to cancers.

Her certified organic ’geoskincare’ range is made from natural minerals found only in New Zealand’s geothermal regions, along with essential oils and pure extracts. The range consists of 22 products, including six for men.

“We are committed to clean and healthy products for homes and families,” Penny said.

NZ Skincare is growing fast. “We are so busy. And we are looking at markets in Europe and the USA.” Originally trained as a beauty therapist, Penny founded the company in 1998 because she says there were no New Zealandmade, natural or affordable skincare products on the market.

BusinessPlus – Exclusive news, advice, learning and networking

EMA MEMBER PROUD MOMENTS NOTICEBOARD

27

All that glows is polished wood The completion of the iconic Rotorua Museum made a huge positive impact on Wood Masters Ltd. The long term EMA member company makes a variety of wooden products, from carved souvenirs, trophies and 21st keys to custom made furniture, timber mouldings, turnery, handrails and routered signs.

Wood Masters also supplies custom processing services such as laser cutting and engraving, wood turning, CNC machining, machine and hand carving to other local and national businesses.

Owner and manager Peter Bjarnesen says the company has had to diversify its product line in recent hard times.

But the museum project enabled them to employ rarely used traditional skills in the production of the ornamental woodwork required.

“There is a great sense of pride and satisfaction in being able to extend the life of our built heritage so that it is fit to pass on to the next generation,” Peter said.

“Its like the line in the song ’Big Yellow Taxi’, you don’t know what you’ve got til it’s gone. Just ask

Christchurch. It would be good to be able to help resuscitate some of their fallen heroes.

“We take pride in being masters at crafting ideas from native wood,” he says.

Wood Masters sells souvenirs and keys through stockists nationwide, and supplies several shops in Australia that specialise in New Zealand handcarved items – mainly 21st keys for ex-pat Kiwis. The rest of production is supplied ex-factory on contract.

“The souvenir industry has taken a hammering over the last few years, due to cheap Asian imports, the global economic recession affecting tourism, and the targeting of Asian tourists causing a decline in our traditional European and North American markets,” Peter says.

Mr Bjarnesen employs eight people, seven full time.

His father started the business in 1960; Peter took over management around 1993 and bought the business after his father’s death.

The company combines Whakairo (the art of Maori design and carving)

Peter Bjarnesen with his new, replacement EMA Certificate of Membership: Wood Masters’ 40-year-old Certificate had become faded.

with European craftsmanship. Locally trained carvers, using traditional techniques, work alongside other expert woodworkers with different technical skills. New technology is employed to complement the ancient hand skills of the carver.

Mr Bjarnesen’s advice to someone in their first year of business would be: “Treat your business like a baby that will never leave home.”

Future sounds bright for Asona acoustic panels Acoustic panel manufacturer Asona celebrated its 10th birthday this year with growing its future firmly in focus.

Company founder and coowner with his wife Anne, Neil Ridgway, says he’s passionate about manufacturing and adding value in New Zealand.

It’s paying off. Penrose based Asona is hiring a new manufacturing manager and extra factory staff, up from the present 18. A neighbouring premise has been leased to increase manufacturing capacity from 1200 to 2000 sq m.

Exports are a small part of the business but include the recent installation of acoustic ceiling panels in a Sydney call centre, something of a feat because the building was a protected historic place and Asona was able to

Pacific Islands and the US, where Mr Ridgway sees future options.

The niche business designs, makes and installs acoustic ceiling and wall panels, as well as high performance fabric finishes for walls and ceilings – such as in chef Peter Gordon’s new restaurant at Auckland’s Sky City, and corporate interiors.

Auckland-based Asona mostly uses New Zealand made glass Anne and Neil Ridgway fibre board in its production that has 80% recycled content. Asona install its new ’Baffle Beams’ with their offers clients a take-back and renew functional and aesthetic qualities while programme to minimize waste too. retaining the building’s character.

Yes the environment matters: to These latest panels minimize this end Asona is also en route to reverberation in offices and educational Environmental Choice certification, as facilities to improve speech acoustic well as gaining ISO 9001 accreditation intelligibility and people’s overall comfort. and other processes to support growth.

Other export destinations were the www.asona.co.nz BusinessPlus – Exclusive news, advice, learning and networking

Out & About Introducing Our Learning Managers

From Left to Right | Bill Butler, Kelly Walden, Caryn Leitgeb, David Foley, Zoe Timbrell, Craig Garner, Kevin Chambers & Deborah Carruthers

Meet the new-look team..

David Foley | EMA Learning Manager

P. 09 367 0954 | M. 027 228 6790 | E. david.foley@ema.co.nz

Bill Butler | Operations Manager

P. 09 367 0971 | M. 027 264 6656 | E. bill.butler@ema.co.nz • Enrolments • Room Hire • General Enquiries

Deborah Carruthers | Portfolio Manager

P. 09 367 0947 | M. 021 636 799 | E. deborah.carruthers@ema.co.nz • Manager - Tailored Solutions • Customer Service and Sales • Employee and Personal Development

Kevin Chambers | Portfolio Manager

P. 09 367 0958 | M. 021 543 043 | E. kevin.chambers@ema.co.nz • Tertiary Courses -EMA Certificates (Massey Papers) -National Certificates • Human Resources and Employment Law • Training and Development

Caryn Leitgeb | Portfolio Manager

P. 07 839 2710 | M. 021 842 577 | E. caryn.leitgeb@ema.co.nz • Export • Business Development • Waikato/BOP Representative

Craig Garner | Portfolio Manager

P. 09 367 0907 | M. 027 495 4393 | E. craig.garner@ema.co.nz • Occupational Health and Safety • Supervision, Management and Leadership

Zoe Timbrell | Conference & Events Manager P. 09 367 0919 | M. 027 497 1234 | E. zoe.timbrell@ema.co.nz • SmartWorkplace • GoGlobal • SmartMoney • Thrive • Fresh Series • Schmooze

Kelly Walden | Assistant Portfolio Manager

P. 09 367 0957 | E. kelly.walden@ema.co.nz • Customer Service

Our Portfolio Managers know a whole lot about our courses and are happy to assist where they can.

They will discuss course content with you, advise which training is best for your needs and assist in the registration process.

AUGUST

EMA Alert

Great Customer Service Over the Phone

20

Time 21 Management Personal Effectiveness

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.

Learn to use the time you have more productively and experience more personal effectiveness and less anxiety.

Nationwide | Deborah

Hamilton | Deborah

The Ultimate Sales Professional

22

Coaching, Mentoring & Delegation

26-27

Take your sales career to the next level and discover how you can excel within your organisation. This programme is run as ten 1-day blocks, 1 block a month.

Learn effective coaching, mentoring and delegation skills to improve workplace motivation.

Auckland | Deborah

Auckland | Craig

1st Annual Asset Management Conference

21

This new conference explores sustainable technologies for your business, compliance issues, plant and equipment, insurance, power, fleet management, new trends in building usage plus much more.

Its aim is to give your business the latest in asset management as well as ensuring you are up to standard and complying with all current legislation for your physical assets.

Auckland | Karen

Health 28-29 & Safety Representative Training (Stage 2)

2nd Annual 29 Supply Chain & Logistics Conference This is a complex and evolving industry and it is important to keep up to date with technology, law and system changes. Hear from industry leaders about what they see as the issues we face now and what is coming.

Review and build on the skills, knowledge and competencies developed in Stage 1 Health & Safety Representative Training.

Auckland | Karen

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

Lean Thinking Continually Improving Your Business

10

Gain the ability to ‘think lean’ by minimising the time wasted on non-value adding activities and learning how to map the business process.

SEPTEMBER

Whakatane | Craig

Human 2-3 Resource Management An Introduction

From hiring to firing – gain an overview of the responsibilities of the human resources role as it applies to each aspect of your organisation.

Auckland | Kevin

Engaging 13 Contractors From an OSH Perspective Understand your Occupational Health and Safety responsibilities when engaging contractors and sub-contractors in your organisation.

Auckland | Craig

Communicating 4 With Your Customers Develop a communication style that will help you form enduring customer relationships and pave the way for career success.

Auckland | Deborah

Health 5-6 & Safety Representative Training (Stage 1) Learn to better manage health and safety issues in your organisation by improving workplace communication and gaining understanding of relevant employment statutes.

Tauranga | Craig

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

Auckland | Craig

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

Tailored solutions for EMA members With 29 Telecom Business Hubs throughout New Zealand, we make it our business to understand your business needs.

That means we work with each EMA member individually and find the right telecommunications package to help you succeed.

Our services include: •

One-to-one meetings at your premises, at a time that suits you.

•

Recommending the right broadband, landline, mobile and IT solutions for your business.

•

Regular business health checks to make sure you’re always on the right plan.

Find out more

TEL0192_07/13

0800 BUS HUB (0800 287 482) www.telecom.co.nz/localhub