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Visions for the 20/20s
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New Zealand is the country of the future – and always will be
his sarcastic bite used to be applied in less politically correct times to what were then known as Third World countries -- plus a healthy dose of banana republics - full of heroes of both genders and dreams aplenty but little follow through. Last year was like that in God’s Own -- lofty promises and noble social plans with little to show at the end of the year. Record government revenues amid falling confidence levels in business. What’s going on? Infrastructure NZ Policy Director Hamish Glenn was polite in his essential read for anyone who wants to get a grip on what we need to do this year from an infrastructure perspective (p30-35). “There can be little doubt that 2018 failed in some important respects to deliver on New Zealand’s needs,” he says. Media Solutions Content Partner Barry Dyer says that as the dust settles on Earth’s fourth hottest year there remain many “unresolved challenges (p6-7). “Last year was memorable for the move away from globalization to protectionism (US/ China trade war), the EU response to the Brexit shambles and predictions
of another global financial crisis. “Growing unrest in NZ over social issues such as inequality, the global refugee dilemma and sustainability in the form of climate change all require solutions,” he says in a fascinating look at the promise of 2019 and the contradictions of 2018. Dampening down the property market appears to have worked and the year promises more of the same, with the prospect of tight lending regimes, low interest rates and the tantalising thought of the introduction of a capital gains tax on the horizon (p63-65). But it is not all gloom. Perpetual Guardian has pulled off a successful introduction to the four day-week (p36-37), and Regus has plans by 2030 to reduce CO2 in New Zealand by 900,000 tonnes per year, add $18 billion to the economy and create 83,000 new jobs. “Simply changing the dominant culture of commuting to a central office for work will contribute to climate change goals,” say country manager Pierre Ferrandon. Find out the secret formula on pages 38 to 45. In preparation for the change FutureWork has launched a transparent platform to link flexible
and remote workers with employers and make sure the latter get paid and both sides get a healthy dose of peer review (p4651). The board of trustees of Pure Advantage is an eclectic mix of our smartest business brains around who are united in their determination to take the mentality behind financing and funding evaluation from risk/ reward to risk/reward/impact (p52-59). Plans abound to keep our workers safe although a lot more attention is still needed to support SMEs who make up 90 percent of our businesses. WorkSafe’s new 10-year plan (p8-9) hopes to achieve that with a more targeted approach. The ACC pitches in (p16) and CHASNZ is formed (p60-62) to help get our construction sites a lot safer. The chemical industry steps up its training and safety support programmes despite long overdue guidelines from government agencies (p18-19). Toxic workplaces (p14-15) however are beyond its remit. Check out the three biggest threats to humanity (p66-67). Komatsu introduces satellites and drones to
earth moving sites with precise excavations saving contractors thousands of dollars (p26-29). The 2019 Yearbook combines Media Solutions’ overlapping speciality areas of Infrastructure, Safety, Property and Construction to provide insights into the reasons behind our most successful projects. All grist for the mill for our readership of decision makers in all four industry sectors The year ahead sets the scene for a sea change in the way we work and hopefully contributes to a rethinking of our values in the 2020s. Astoundingly, there are still powerful political and business voices who decry the doomsayers’ exhortations that we change our environmental culture or perish. Encouragingly, the critical mass of common sense is near and the so-called doomsayers are exponentially adding some of the smartest business brains and most hardened political hacks to their ranks. Want to bet your family’s life on who’s right?
Mike Bishara Publisher safetynews.co.nz
Content Partners for this issue
A brief outline of the key articles within this issue
Plenty of work to do in the year of the pig
63 What the 2019 property market will look like 8
What the new health and safety strategy means for you
14 Six symptoms of toxic work behaviour 16 ACC Support for SMEs
26 Komatsu technology leads earthmoving industry
John Ives Pages 22-24
Pierre Ferrandon Regus Pages 38-45
60 CHASNZ strategy to reform construction health and safety 30 Plenty of scope for infrastructure progress 36 Four-day week for Perpetual Guardian
38 Flexible working key disruptor in the 2020s 42 Workspace as a service: workplace for the future
18 Chemical industry leads by example
46 Workforce disruption has only just begun
Events: 10 National Safety Show 12 NZ Planning Institute 33 NZ Infrastructure Funding 77 NMEC
52 Financing the future risk/reward/impact
22 NZ industrial and trades wage report
66 Biggest threats to humanity 68 How blockchain is improving the global supply chain
Published by Media Solutions Ltd PO Box 503, Whangaparaoa Auckland 0943 09 428 7456 Original material published online and in this magazine is copyright, but may be reproduced providing permission is obtained from the editor and
acknowledgement given to Media Solutions. Opinions expressed are those of the authors and may not necessarily be those of Media Solutions Ltd.
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Plenty of work to do in the Year of The Pig As the dust settles on 2018 and Earth’s fourth hottest year, there remain many unresolved challenges says Content Partner Barry Dyer
ast year was memorable for the move away from globalization to protectionism, reflected in the US/China trade war, the European Union response to the Brexit shambles and predictions of another global financial crisis. Growing unrest over social issues such as inequality, the global refugee dilemma and Sustainability in the form of climate change require solutions. The Inter-Governmental Panel on Climate Change (ICC) prediction we have a mere 10 years to stabilize global warming or perish, was a wake-up call for governments, scientists and businesses alike. Diminishing Polar ice will trigger more extreme weather events and rising sea levels threaten coastal communities. Sustainability requires governments to look beyond reliance on fossil fuels and outmoded technologies. Science is the key to sustainable, practical and affordable alternatives, which industry can then implement to everyone’s benefit. Nothing, including nuclear energy, should be excluded from consideration. 6
Chemical industry steps up
Globally, the chemical industry’s priority is contributing to the UN Sustainability Goals, with less harmful products, practical energy alternatives to fossil fuels, the eradication of disease and helping to provide clean water and crops able to sustain growing poverty-stricken populations in hostile environments. A critical industry capacity building initiative to improve chemical safety in more than 30 countries, particularly developing economies, is overshadowed by the focus on addressing the plastic waste polluting our environment.
At home, these same basic issues confront an increasingly risk-averse population which expects sensible, inclusive discussion, leading to pragmatic policies and solutions, together with strong leadership to ensure limited resources achieve the desired results. Signing of the important Comprehensive and Progressive Agreement for Trans Pacific Partnership (CPTPP) is an overdue
achievement. There is growing concern about the environmental impact of burgeoning tourism, the need for immigrants to sustain the struggling construction, healthcare, education and horticultural sectors and now the growing assault on plastics. Our resilient economy is feeling the strain. Despite low inflation and a welcome Standard and Poor’s upgrade, business remains ambivalent, noting New Zealand will not escape the global economic turbulence. Our dependence on China’s slowing economy, together with our international political relationships are critical and require constant attention. Low productivity, rising unemployment and growing public impatience with issues as diverse as declining water quality, unaffordable housing, healthcare woes and an education system not producing the talent and skills we need. A deteriorating economy cannot afford all of the solutions we seek.
A recurring theme is the need for sound policy, fully resourced before implementation which is enforced; pan-government planning and delivery is essential, yet contradictions abound.
For example: • Extolling the virtues of safer vehicles (LTA) while removing financial incentives on top-rated models (ACC). • Massively expensive campaigns to reduce smoking and alcohol consumption (MoH) while freeing up access to recreational drugs (politicians and special interest groups). • The lack of any sound science-based justification for evicting more than 400 people and their possessions from their homes because of alleged methamphetamine contamination (Housing NZ) many at levels less than those found on $5 notes, without verification (Chief Scientist). • The cancellation of heavy vehicle Certificates of Fitness (CoF) because the issuing inspectors were not adequately policed. Of concern is not holding politicians and public servants to account for increasingly numerous, expensive commissions, enquiries and consultants’ reports, when the outcomes are largely predictable (mental health, prison populations, taxation, fuel prices) together with individuals simply not doing their jobs (Pike River, vehicle CoF, Methamphetamine evacuations). The default response is more regulation, instead of partnering with Industry to help ensure compliance with the labyrinth of existing and new complex, prescriptive requirements and often confusing compliance advice.
Yearbook 2019 Lessons for education
This year, our education system is to be “overhauled and improved”, beginning with scrapping national performance standards. Employers have long lamented that school leavers are not equipped with the skills required in a future workplace. Overcoming the shortage of the thousands of tradespeople required to sustain our economic development and quality of life, needs a balance between skilled migrants and our own technical training, including recognition accorded their university educated peers. An enlightened and responsive education system recognizes individuals have differing skills and knowledge requirements and cater for both. The ‘enterprise skills’ in vogue elsewhere focus on enabling critical thinking, collaborative and effective communication, producing team players focused on problem solving – basic skill sets desirable in every occupation and relevant throughout life. The belated resuscitation of bankrupt polytechnics is proposed. In response, Intermediate schools which introduced students to manual skills are to go, joining the Charter schools which were reportedly successful in helping many youngsters rejected by the state system.
Simply put, we require better policy-making than the precipitous ban on ‘single use’ plastic bags which captured public engagement while over-
whelming inadequate waste treatment facilities. For many, the now infamous ‘one trip’ bag was always utilized in many different ways. The irony of expensive replacements sold by delighted shopkeepers, together with the rush to purchase ‘one trip’ rubbish bags, continues to escape scrutiny. Increasing stockpiles of intractable plastic waste join old tyres and e-waste requiring pragmatic solutions. Sound policy requires questions to be asked. Is the real issue reusable plastic products or public littering? Will removing plastic food packaging result in deteriorating public health? Is it OK to offload our waste to other countries? Should the conversion of polluting, coal-fired electricity generation plants to state-of-theart rubbish incineration facilities be fast-tracked, despite outmoded policy and dissenters?
SME employers carry the buck
Passing responsibility on to employers for psycho-social issues ranging from workplace bullying and drug-taking to an employee’s domestic violence situation, again without recourse to the required support infrastructure, is doomed to fail without qualified counsellors and funding. Requiring employers to manage an employee’s lifestyle situation may be a worthy cause but is largely beyond the capability of an SME without comprehensive support. Business operators claim prospective employees are refusing drug tests. Healthcare profes-
sionals express concern about the dangers of synthetic cannabis and the social ills of Methamphetamine, all impacting workplace health and safety. Any drug, legal or illegal that dulls pain, must also affect the senses – the same senses we need to be fully functional and responsive when operating safely in a hazardous and often challenging environment involving vehicles, machinery and chemicals. There is no reliable, portable drug detection device available to quickly assess drivers, warehouse staff or chemical workers in their workplace. SME operators are already struggling to demonstrate compliance. Controversial changes proposed to employment law and taxation, including a ‘Wellbeing budget’ in May distract the media from intelligent debate on important issues impacting on the wellbeing and economic sustainability such as the effectiveness of regional development funding and upskilling workers. Shifting psycho-social responsibilities onto employers will prove to be a step too far for poorly-resourced SMEs responsible for much of our economic health. They are too often told to “Read the regulations” when
they desperately need practical, user-friendly and cost-effective support to achieve workplace health and safety obligations to staff and the local community. Without our SMEs in particular, meeting their wide-ranging social and particularly workplace health and safety obligations, our aspirations for the burgeoning economy necessary to enable meaningful improvements in our quality of life, remain largely academic.
Cannot live in isolation
New Zealand cannot escape the global economic turbulence. In this ‘Year of Delivery’ our global trading options need to be protected and, ideally, expanded. Maintaining our international relationships is vital to our continuing prosperity. We need cross-political agreement and planning for the long-term upgrading of education, social welfare and health to ensure we have the skills needed. This includes effectively harnessing all available resources to achieve goals too important to be allowed to fail. To paraphrase Abraham Lincoln, “The legitimate object of government, is to do for a community whatever they need but cannot do for themselves”
The views and opinions expressed by Media Solutions content partner Responsible Care CEO Barry Dyer may not necessarily be those of Responsible Care New Zealand. safetynews.co.nz
Yearbook 2019 Video: WorkSafe
What the new health and safety strategy means for you The government's new strategy for health and safety at work sets out clear priorities which should help ensure more Kiwi workers get home safe at the end of each day, says Site Safe Chief Executive Brett Murray
ew Zealand’s level of work-related harm is still high by international standards. Some population groups are at greater risk of harm, such as Māori, Pasifika, migrants, older workers, and youth. Some businesses and sectors face challenges in managing their health and safety risks well, including small businesses and higher risk sectors. Fatalities from work-related health risks are up to 10 times higher than fatalities from injuries. The government's new strategy intends to improve health and safety at work over the next ten years by: • setting a clear direc8
tion for New Zealand, providing a shared vision for where we want to get to, and what we need to do to get there • identifying the common capability gaps and opportunities, through a set of goals and priorities that help us focus our efforts • supporting better coordination, by providing visibility of the different roles we have and a framework to talk to each other about how we’re working towards better health and safety • improving measurement, through the work to build a better picture of New Zealand’s overall health and safety. The core of the Strategy
is the vision, goals and priorities. Together these make up the framework for action. Work must be healthy and safe for everyone in New Zealand. To achieve this, we need to make sure we are focusing our efforts in the right areas. The Strategy sets out two goals, aimed at helping everyone play their part to manage health and safety risks effectively and proportionately. > The first goal is getting everyone to focus on what will make the biggest impact to reduce harm. To achieve this goal there are three priorities: better management of work-related health risks; businesses with greater
need (including sectors with the highest harm and small business); and workers with greater need (workers at greater risk such as Māori, Pasifika, migrant and seasonal, younger and older workers) > The second goal is building everyone’s capability to do this well. We need to make sure that everyone knows what their role is, is able to and does play their part. To achieve this there are four priorities that together will lead to improved capability in the system to manage risks. These are leadership; worker engagement, representation and participation; health and safety practitioners;
Factsheets Small Businesses We can all help small businesses improve health and safety Click here to view the factsheet
Māori workers How we work together to improve health and safety outcomes for Māori workers Click here to view the factsheet
Engagement, participation and representation and data and insights. These priorities don’t work in isolation – they are all interlinked and we need to address all of them to lift our game. “We applaud the strategy’s focus of helping those who are at the most risk of harm – whether that’s those working in high-risk sectors, those working in small businesses or those workers we know are simply more vulnerable," says Murray. “In particular, we support the stronger emphasis on worker health and wellbeing. There are between 600 to 900 deaths each year from exposure to workplace health risks, and we know there is much more that can be done in this area to prevent Kiwis being
Putting workers at the heart of safety harmed at work. “We hope the action plan which will eventually flow from this strategy will identify practical ways to support businesses, especially small to medium-sized businesses, to improve their health and safety, and will empower workers to actively take part in shaping health and safety in their workplace.” “Site Safe is looking forward to working with government agencies such as WorkSafe, as well as the industry, to help make this vision, of a country where work is healthy and safe for everyone, a reality.” Click to view the strategy
Click here to view the factsheet
Work-related Work can create both immediate and longterm risks to physical and mental health. Click here to view the factsheet
Forestry Forestry has traditionally been New Zealand’s most dangerous industry.. Click here to view the factsheet safetynews.co.nz
Yearbook 2019 Sponsored Article
The National Safety Show returns June 2019 Thousands of industry professionals from across New Zealand and overseas will converge in Auckland to attend the sector’s largest (and free to attend) trade only industry event – The National Safety Show
osted at the ASB Showgrounds this June, this year’s show is set to be the must attend event for anyone in the workplace health and safety industry. “NSS is arguably the most important national sector event in this country,” says Tony Waite, Event Director of XPO Exhibitions, owners and organisers of NSS. “No matter what stage your business is at, there is something for everyone to gain”. For those looking to
protect their workers, their reputation, and their business there is no other event that offers such a wide-ranging showcase of the newest products and service solutions essential in business today. NSS is the best place to make connections, learn new techniques and understand the latest in workplace health and safety innovation. There’s so much to see and do at NSS 19. Just some of what’s on offer includes; over 80 leading exhibiting suppliers
including 3M, Layher, Quality Safety, Safety ‘n Action, Red Cross and many more; an extensive educational Seminar Program addressing the most pressing issues the industry is facing today. This free seminar and workshop series will cover topics such as; Health and Safety at your Workplace, How Technology is Reshaping the way we Work – Safely, The Importance of your Staff’s Mental Health for a Stronger Business and, in addition Interactive Workshops
are being developed on how to better prepare you and your team for the future of workplace health and safety. In addition to a busy seminar series there are a number of new and returning features including the H&S Advisory Lounge. Hosted by all the key industry associations including Worksafe, Sitesafe, New Zealand Institute of Safety Management (NZISM), Health and Safety Association NZ (HASANZ) and EMA, the advisory lounge is set
in a relaxed environment where visitors can access education, support, personal and confidential FREE advice from each of the relevant associations. This is your one chance to have any of your H&S questions answered privately and confidentially.
Plans are underway for an expanded Health Hub creating an interactive and hands on experience for business owners and managers to experience first-hand the benefits of having a healthy workforce and how the supporting of their staffs physical and mental wellbeing leads to increased productivity and a stronger business focus. The Health Hub will also provide Occupational Therapists and Ergonomic Specialists to help with queries you might have relating to staff members health and well-being. The Innovation Quarter returns in an expanded area, with both new and returning exhibitors showcasing a myriad of amazing technology that is revolutionising the industry. Waite explains, “The National Safety Show is targeted to deliver a hig-quality audience – people who know that their business is dependent on the best safety products and technology available and have come with the specific goal of
finding new suppliers and keeping up to date with the industry” With a comprehensive programme of free to attend professional development seminars, special features, networking opportunities, show-only specials, and the opportunity to win a huge array of prizes - this is the one event the industry won’t want to miss. If you’re interested in promoting your products and services to a qualified and targeted industry audience, now would be the time to come on board! No other industry event has the scale or ability to reach over 4,000 qualified industry professionals that are estimated to visit the combined NSS and BuildNZ Show 2019. In addition, NSS will again be co-located with the 30+ year strong BuildNZ, New Zealand’s largest build, design and construction industry trade show. A key feature at this year’s event will be the KiwiBuild Summit, hosted by Patrick Gower featuring Hon. Phil Twyford and over 20 of NZ’s
leading CEO’s and industry influencers. Following it’s successful launch in 2018 the KiwiBuild Summit on Monday 24th June will be the one year anniversary of the Labour Government’s KiwiBuild programme. The goal of achieving 100,000 homes in just ten years is being hotly debated and we are looking forward to hearing from the Minister on progress to date and what industry collaboration and strategy is needed to achieve this goal. Don’t miss out! The National Safety Show is to be held at the ASB Showgrounds in Auckland, 23-25 June 2019. A range of exhibiting options are available to suit all budgets so contact Exhibition Manager Deb Haimes today on 021 487 552 or firstname.lastname@example.org and ask about our special ISN offer for all new exhibitors. Visitors can register to attend for free at www.safetyshow.co.nz
hese and topics such as future food security, driverless cars, Maori involvement in freshwater planning, and Government proposals to change New Zealand’s planning systems are all up for discussion at New Zealand Planning Institute’s annual conference in April. Senior policy advisor Joel Cayford says planners are in the spotlight in highgrowth cities. “Urban planning challenges we face every day include storm water damage of waterways, providing adequate housing and infrastructure including schools, amenities and transport,” he says. “There’s also the challenge of finding ways to regenerate declining suburbs”. In the rural sector, the planning industry’s focus is on New Zealand’s inadequately regulated primary industries and subsequent agricultural pollution. Cayford notes that international experience indicates it is possible to develop and maintain a domestic productive primary sector that operates within environmental limits. “However, the problems we experience in New Zealand arise because of relatively unregulated and explosive growth of primary production for export. “Remember the widespread sheep farm development at the expense of high-country soils. Now we have dairy expansion at the expense of freshwater quality”. Planners can only be as effective as the planning system they work within according to Cayford. “Robust monitoring coupled with effective regulation and rigorous 12
Planning conference set for April Urban growth, climate change and water quality are issues facing the planning profession in 2019 are on the agenda at the Weaving the Strands conference
scientific assessment are the critical components of a planning system that will ensure farming practices operate within the environmental limits of the natural resources they rely upon,” he says Speakers at the April 2-5 event, to be held in Napier, include former US State Legislator Sue Minter who will talk about planning in an unstable world, drawing on her experience as a planner in post-apartheid South Africa, a state transportation leader, a disaster recovery chief and political candidate in the US. Environment Minister David Parker, Maori Development and Local Government Minister Nanaia Mahuta, Waikato University Demography Professor Tahu Kukutai, renowned designer and sustainability champion David Trubridge and Director General of the Pacific Regional Environment Programme Kosi Latu are other notable speakers. The 2019 conference
coincides with a period of flagship reforms and legislative change. The Government has just released its blueprint for improving freshwater quality, which will put in place new rules and regulations by 2020. The government blueprint includes the development of new tools which will also change New Zealand’s freshwater planning system. Cayford says that NZPI will draw on the experiences of its members to make submissions that ensure these tools are a workable and effective part of New Zealand’s natural resource planning toolkit. New tools include a National Policy Statement for Freshwater Management that aims to ensure all aspects of ecosystem health are managed, and a new National Environmental Standard for Freshwater Management, aimed at regulating activities that put water quality at risk, such as intensive winter grazing, hill country crop-
ping and feedlots. “Freshwater planning starts with the planning system itself. Planners will then need training to implement new systems, so that the improved freshwater planning system together with an appropriately training and empowered planning profession, will enable the primary sector to function productively and within the environmental limits of our freshwater resource,” says Cayford. “Regulatory reforms are important, but the challenge for planners is delivery, bridging the gap between policy and practice,” says Joel. He says the same thinking applies to climate change and rapid urban growth regulation. “We need to be very clear what we are planning for, and what we expect planners to do, when we engage with these big issues as a country, so we build regulatory systems that enable effective action to be delivered on the ground.”
Champions of green growth â€“ ensuring a climate positive, economically thriving and socially just New Zealand. PUREADVANTAGE.ORG
Six symptoms of toxic work behaviour Do you work with these people? They’re highly toxic and fly below your radar
id you know that 1 in 5 CEOs is actually a psychopath? But there is a close relative of psychopaths that isn’t covered enough and you probably work with one. These people are highly toxic and will wreak havoc at work. They’re one of the most difficult personalities you will encounter: the narcissist. Merriam-Webster defines narcissism as “extreme self-absorption, an exaggerated sense of self-importance, and a need for attention and admiration.” Narcissists are manip14
ulative people who wear masks and fly below your radar. You need to spot them before they destroy morale or your reputation. So how can you tell you work with a narcissist?
1. They’re only concerned about their own selfish needs
A narcissist doesn’t care about the things that matter to their colleagues or subordinates, and will probably get defensive when being confronted, so don’t expect an apology. If you see a pattern, address it soon through the proper channels to see how they respond.
If that person shows no respect for your position, consider cutting ties altogether, whatever that means for you.
2. They can’t handle pressure
A narcissist may stick around for the good times because that’s low pressure. But as soon as there’s a crisis, don’t expect them to be there for support for you or the team. This should be a clear signal of things to come as problems arise, so don’t expect the behavior to go away.
3. They will blow you off
When a colleague expresses disappointment with something they said or did, a narcissist will deflect responsibility, and try to justify their actions or put it on someone else (probably back on you!). It’s rare for narcissists to express themselves authentically, speak and be heard without judgment, or take responsibility for what they are creating. This is not a safe professional relationship.
4. They are hot and cold
Narcissists will drive you nuts by giving you mixed signals. One day they’re telling you how amazing and smart you are (a part of their manipulative charm), and the next day they’re acting uninvolved, withdrawing, and stonewalling.
5. They are master manipulators
A narcissist will charm his way into and out of working relationships to serve their needs, and convince a colleague of going along with them, which leads to conflict and brings the whole team down. The antidote to the smooth talker who says all the right things is always to observe and mentally document their actions. Do they follow through? If it’s too good to be true, it probably is.
6. They play the blame game
Narcissists will blame their colleagues or subordinates when something goes wrong, even if it’s not based on reality. Nothing is ever good enough for the narcissist. A colleague can try over and over to please a narcissist to no avail. After a while, you start censoring yourself and walking on
eggshells because you’re afraid of their reactions. In your mind, it’s easier to take the pain of another blow than dealing with another confrontation.
Tips to dealing with narcissists
Don’t take it personally and don’t blame yourself — the problem is not with you but with them. If you know what you’re getting into with a narcissistic co-worker, start emotionally detaching early so you don’t take their unreasonable demands personally.
Lastly, make sure your boss knows what’s going on, and cover your bases. In other words, document everything so that, if HR
needs to get involved, you will have amassed enough proof of what’s really going down.
Principal and Founder Leadership From The Core @MarcelSchwantes Article first published on Inc safetynews.co.nz
he creation of the new five-year incentive programme recognises the high, sometimes prohibitive, costs faced by many of the SMEs who are eager to improve health and safety in their businesses. In an industry like construction, investing in health and safety can be expensive, and many SMEs struggle to find the funds to invest in best practice controls and systems. And although we have made some real gains in health and safety in construction, injuries in our sector still account for a large number of ACC’s severe injury claims. These new subsidies support investment in areas which we believe are vital to reducing injuries in the workplace - and it’s good to see that the Minister, Iain Lees-Galloway, recognises the need to target the five key sectors with the greatest injury rates. Targeting those sectors which have a high proportion of SMEs, which includes construction, means that the funding is being used in the areas of greatest need.” We welcome the fund as great news for all the Kiwi businesses in highrisk sectors who want to do their best to keep their workers safe.
Preparing for health and safety advice
ACC support for SMEs The recent announcement of a $22 million ACC incentive programme to help small to medium-sized businesses reduce workplace injuries is welcome news, says Site Safe Chief Executive Brett Murray
Health and safety risks at work
Keeping people healthy and safe
Get your training sorted
Useful if the risks you need to manage are complex and technical
If risks can't be reasonably eliminated, the law says you must take "reasonably practicable steps" to minimise them
Health and safety (H&S) isn’t about paperwork and ticking boxes. It’s a way of thinking and behaving to keep everyone safe and healthy at work
Getting your staff up to speed is key to business growth. Weigh up the training options available for your team
Click here to learn more
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23-25 June 2019 ASB Showgrounds Auckland
WORK SMARTER. REDUCE RISK. BE SAFE.
THE NATIONAL SAFETY SHOW BOOK YOUR SPACE NOW!
and ask about our ISN special exhibitor offer
The Award Winning National Safety Show co-located with BuildNZ is New Zealand’s largest trade only event dedicated to workplace health and safety. Get face to face with 1,000’s of qualified industry decision makers to: Showcase your latest innovative products and technology solutions. Educate your customers on industry best practice. Sell to a qualified and targeted audience. Network and build strong business relationships with industry partners and influencers. Grow your existing and build a new customer base.
Contact Exhibition Sales Manager Deb Haimes, email@example.com 09 976 8367 / 021 487 552
www.safetyshow.co.nz Show Features Innovation Quarter
H&S Advisory Lounge
Health Hub ISN.CO.NZ
Chemical industry leads by example The chemical industry continues to lead by example, helping to ensure essential chemicals encountered at work and at home are safely managed - safeguarding employees, communities and our environment
lagging indicators of safety performance in favour of identifying safer work practices and workplaces, by responding to workers’ suggestions about improvements. WorkSafe NZ has warned against business operators falling victim to uninformed and always expensive ‘consultants’. Responsible Care NZ site compliance assessments are non-threatening, effectively capturing and assessing chemical safety performance in a variety of workplaces. Conscientious business operators can add value by sourcing accurate, cost-effective workplace chemical safety advice and compliance tools from their suppliers, industry partners and Responsible Care NZ.
The core problem
hile 130,000 businesses are reportedly captured by the Hazardous Substances and Major Hazard Facilities regulations, the official mantra of “600-900 persons seriously harmed each year by unwanted exposure to chemicals in their workplace” presumably applies to all of the country’s 530,000 workplaces. Downgrading the flawed but effective HSNO Certified Handler requirement has inadvertently undermined an invaluable capability. The action deprived businesses, particularly 18
SMEs, of an immediate and recognisable source of workplace chemical safety and compliance advice -- a safe chemical handling capability and emergency response knowledge – critical when a chemical incident occurs. PCBUs and SMEs must now devise their own solutions to ensure employees are competent to safely handle the chemicals with which they work.
So where to from here?
Responsible Care is a global voluntary chemical industry initiative devel-
oped autonomously by the chemical industry for the chemical industry. Chemical suppliers continue to help customers achieve workplace chemical safety aspirations through product stewardship initiatives. To help solve the inhouse chemical compliance dilemma in New Zealand, Responsible Care NZ www.responsiblecarenz. com delivers specialist and cost-effective Certified Handler standard training, complete with a certificate. Internationally, chemical industry leaders are moving away from relying on
Hundreds of business operators turned out for a free Responsible Care NZ compliance workshop, eager for accurate and practical advice, indicating an unsatisfied demand for assistance and education. Attendance highlighted the need to provide SMEs and others with the ability to access, correctly interpret and successfully implement complex regulations with clear and concise compliance advice. Inviting enquirers to “read the regulations” is falling well short of the industry educational expectations arising from WorkSafe’s Statement of Intent 2016-2020. A proven strategy is government agencies collaborating with proactive industry associations to best achieve workplace safety aspirations.
Yearbook 2019 The problem is that SMEs rarely join associations. However they all obtain their chemical requirements from suppliers and can benefit from product stewardship advice and cost-effective industry compliance initiatives. Responsible Care NZ extols less regulation in favour of enabling business operators to be increasingly self-sufficient, using cost-effective products and services such as site compliance assessments and specialist training. The focus is keeping people safe around the chemicals we encounter every day, by once again adding value to businesses. Proven, collaborative
and cost-effective initiatives to raise awareness and improve workplace chemical safety performance include: • Joint agency and industry-focused local compliance workshops at times convenient to SME operators. • WorkSafe NZ inspectors distributing free copies of user-friendly ‘compliance tools’ such as the Storage of Hazardous Substances HSNO Approved Code of Practice and posters explaining GHS pictogrammes • Supporting industry initiatives such as product stewardship • Referencing industry ‘compliance tools’ • Upskilling workplace inspectors in chemical safety.
• Encouraging ‘no blame’ reporting of incidents • Acknowledging successful, proactive industry compliance initiatives • Restoring the status of Approved Industry Codes of Practice A refreshed and energized government strategy for improving workplace chemical safety is both welcome and essential if we are to significantly improve sub-standard performance and learn
from our successes and shortfalls. Expanding mutually beneficial government- industry partnerships helping business operators ‘do the right thing’ with minimal fuss and expense should be ‘a no brainer’. Chemical suppliers are ‘Impatient optimists’. They know we can all collectively do better through continuous improvement.
Responsible Care NZ provides practical products and services to enable compliance with New Zealand’s world class chemical management regime. Talk to us today about your compliance requirements. Phone: +64 4 499 4311 Email: firstname.lastname@example.org Website: www.responsiblecarenz.com
Responsible Care NZ
If this was your chemical consignment, what would you do? Let’s discuss how our 0800 CHEMCALL® 24/7 ERS can help Call 04 499 4311 safetynews.co.nz
Safety gear must be fit for purpose WorkSafe's investigation into three serious falls reveals one thing they all have in common - unsafe equipment was the primary cause
dentifying a workplace risk but not following up to ensure it is controlled is bad health and safety business practice according to WorkSafe. The comment follows the sentencing of Agility Building Solutions Limited in the Christchurch District Court after a painter was injured in the construction companyâ€™s own workplace. WorkSafe says the
case is a clear example of workplaces not ensuring safety gear is actually safe for use. The injured painter, brought in as a contractor to complete some work at Agilityâ€™s business premises, was given incorrectly installed mobile scaffolding to work from. On the first day of the job, the painter fell two metres from the scaffolding to the concrete floor below landing head first
Yearbook 2019 and sustaining multiple fractures to his skull, face and ribs. He suffered major brain trauma as a result. While Agility had identified a fall from the platform as a risk and noted that it needed to be correctly installed, they had no systems in place to ensure that a pre-work check took place to make sure the safety gear was installed correctly and fit for purpose. WorkSafe’s Head of Specialist Interventions Simon Humphries says “Temporary work platforms, like the mobile scaffolding used in this instance, should be constructed by a competent person and should be suitable for carrying out the work required of it. “This case is also a reminder of the obligations for those employing subcontractors to complete jobs. “It is reasonable that the painter expected the safety equipment supplied by Agility Building to be safe and the law required Agility to ensure that it was.” Following the incident, Agility Building put a pre-start check list for the scaffolding in place that requires manager sign off before it can be used. It also provided remedial training to all workers on how to assemble the scaffold correctly. A fine of $150,000 was imposed, reduced from $285,000 for financial reasons and reparation of $42,180.04 was ordered. Agility Building Solutions Limited was sentenced under sections 36(1)(a), 48(1), and (2)(c) of the Health and Safety at Work Act 2015. “Being a PCBU, failed
to ensure, so far as was reasonably practicable, the health and safety of workers who worked for the PCBU, while at work in the business or undertaking, namely painting, and that failure exposed workers to a risk of death or serious injury, arising from a fall from height.” In another similar incident, an electrical engineering firm was fined $332,060 after a worker harnessed to the top of a 30-metre high temporary transmission tower was injured when it fell to the ground leaving him with multiple injuries. WorkSafe’s investigation found that the tower was not safely secured. The company was found to have failed to: • Develop and implement a safe system of work • Ensure the tower was erected in accordance with the manufacturer’s instructions • Ensure the competency of its workers on the towers. WorkSafe’s Head of Specialist Interventions
Simon Humphries said the sentencing should remind those working in the industry to ensure they understand and mitigate the risks. “The fact that tower fell in the first place is completely unacceptable. If you are expecting your workers to carry out their duties 30 metres in the air, then as an employer you need to have absolute and failsafe measures in place to keep those workers safe. This worker was lucky to escape this incident with his life but will carry the injuries and trauma sustained in the incident with him for the rest of his life.” Unsafe equipment was again the culprit when a worker fell and lost his life. In this case it was a wire rope being used as a handrail, which appeared to have parted as he leaned against it, resulting in him falling onto the ground. Initial examination of the wire rope found corrosion at the site of the parting. It is unclear at this stage whether there had
been prior damage but the wire rope was covered with a material that was not transparent. The rope in this particular case was used on a vehicle that was regularly exposed to a marine environment but the advice below applies to all such situations. Final conclusions about the cause of this particular accident have not been made but in the interim WorkSafe is urging companies to make sure that the use of handrails systems are: • based on sound risk assessments • properly designed for risks they are protecting against • constructed so they can be easily maintained and/or inspected • regularly inspected and replaced/repaired when needed. Advice should be sought from competent persons regarding the expected life of handrails and the type of inspection systems required to keep them safe.
Workers in Northland enjoy best pay with lower cost of living A survey of more than 10,000 kiwi workers across the country shows that blue collar workers in Northland and Auckland are paid the highest
hat’s my Rate. . .New Zealand Industrial and Trades Wage Report gives in-depth analysis of New Zealand’s core industrial sectors: > Manufacturing > Production & logistics > Commercial and hospitality > Trades & services > Construction and infrastructure > Engineering The OneStaff report is a comprehensive look into New Zealand’s industrial sector and aims to empower employees and employers to improve working life across the country. “With very low unemployment at 3.9 percent, many industries are experiencing staff shortages. “Understanding what’s important to employees, whether that’s pay or management style, can help businesses provide the most attractive job offers and attract the best people,” says Jonathan Ives, Group General Manager of specialist recruitment agency OneStaff, which ordered the survey. Auckland and Northland trades and industrial workers average pay is the highest at $25 an hour, while those in Palmerston North/Whanganui and the West Coast are paid the lowest at $21 an hour. Northland’s cost of living is significantly lower than more metropolitan areas like Auckland, Wellington or Christchurch. “If you’re working within New Zealand’s industrial and trades industries, a shift to Northland might be the best option for your back pocket,” says Ives. “There’s also a bit of a spike in Taranaki with the average worker getting
Construction and infrastructure At $24 per hour, the Construction & Infrastructure sector is smack bang in the middle when it comes to median remuneration. There was quite a spread across the sector with construction labourers earning a median of $20 per hour and commercial carpenters getting $27 per hour, the same as the median rate in the Engineering sector. With 95.77 percent of respondents in this sector being men, the gender pay gap was $4 per hour. This doesn’t take into account the different roles worked by men and women. It’s hard to pinpoint the exact reasons for this gap, and it’s certainly something that the sector should investigate and monitor internally.
Most respondents from this sector were located in Canterbury (27.45 percent) and Auckland (17.13 percent). It’s likely that the strong turnout from Canterbury is linked to the post-earthquake construction boom. Employees in this sector have a median of five years’ experience, which seems to be the standard across all sectors. Their happiness levels are equivalent to the other sectors and most of them are either Millennials (59.03 percent) or Generation X-ers (28.69 percent) with Baby Boomers again being a priority.
Preferred Management Traits
Those in the Construction & Infrastructure sector prefer managers who lead by example, have practical experience in the trade and are fair/even handed. A little less than a third of respondents reported working overtime. When considering a new role they valued a great team, career progression, and a higher pay rate. Nearly a third would move for $4-$5 extra per hour; a number that skews slightly higher than other sectors.
$24 an hour. “What we’re saying to wage workers is this – think twice before choosing to settle down in places where cost of living can outstrip wage gains, such as Auckland or Queenstown,” he says.
The survey also shows that women are under-represented (just under 14 percent of workers) and paid less in nearly all industries within the report. The trades, services and engineering sectors is made up with one percent
Engineering Engineering has the highest median remuneration of all ($27 per hour), which is expected given it’s a specialist industry that requires years of tertiary study. It’s also long been listed as a skills shortage by the New Zealand Government. Maintenance Engineers reported the highest median remuneration ($31 per hour) of all roles in the survey. Only a small percentage of survey respondents were working in this sector – likely because the skill requirements are higher than other sectors – with 9.01 percent of men and just 0.64 percent of women. We also see a significant gender pay gap of $5 per hour here. This highlights the gender imbalance in the Engineering sector and should provide impetus for employers to open up more pathways for women to enter and progress within the industry.
Once again, most survey respondents in this sector were located in Canterbury (21 percent) and Auckland (20.88 percent). What’s interesting is that they had the highest median experience of all (seven years), which suggests that Engineers stay in the sector for the long run, bumping up the overall experience, possibly because the roles are typically not as physically demanding as the other industries. Their happiness metrics are commensurate with the other sectors, however, despite being paid the most they were the least satisfied with pay transparency. Engineers were also the most likely to move without a pay increase, with 8 percent saying they would consider a new job at the same rate. The sector has the second highest proportion of Millennials (68.38 percent) followed by Generation X-ers (21.88 percent).
Preferred Management Traits
Employees in this sector were the only ones to prefer a manager who was knowledgeable, however, it was the third priority behind leading by example and having practical experience. Engineering staff were the most likely to do overtime by far with 58.38 percent of respondents saying they work over and above their assigned hours. Key factors they would look for in a new role were the same as in other sectors – a great team, career progression, and higher pay. Most would consider moving for an increase of between $2-$5 per hour.
of female workers. They are paid on average $5 an hour less than their male counterparts. The construction and
infrastructure sectors workforce contains four percent female who are paid $4 per hour less. It is much better in the safetynews.co.nz
Yearbook 2019 manufacturing, production and logistics sectors where 12 percent of workers are female and the pay disparity is only $1. The most progressive is the commercial and hospitality sectors where female workers make up 69 percent of workers and pay parity. “While we applaud the commercial and hospitality sectors for bridging the gender pay gap, there’s work yet to be done in all other sectors surveyed,” says Ives. “Our advice is if there are women working the same jobs as men for less money, it should be promptly addressed. “When it comes to job happiness and satisfaction, equal pay and equal opportunities are critical,” said Mr Ives.
Pay remains a critical, but it is not the only factor in creating a happy and satisfied worker. The survey showed that “leading by example” is
the preferred management trait - no matter gender or generation. Interestingly, the opportunity to work overtime also increases workplace satisfaction. “What we saw in the report was that people need a range of things to be happy at work. Good and fair pay and management are mainstays,” notes Ives. “The shift we’re seeing is that the opportunity for overtime improves a worker’s happiness with their level of pay and their workplace satisfaction –likely because it gives people the chance to earn more.” The report includes a salary index for a range of jobs, which is divided into region, providing median remuneration benchmarks that are useful for businesses, employees and jobseekers alike. It also covers areas such as workplace satisfaction, management preferences, and the impact of experience, gender and age on earning potential.
Manufacturing, Production & Logistics The Manufacturing, Production, & Logistics industry has the second lowest median remuneration ($22 an hour) of the five sectors that took part in this survey. Class 5 Truck Drivers received the highest median pay in this sector ($24 an hour) with Traffic Controllers and Warehouse Labourers getting the lowest ($19 an hour). This sector has the best gender balance (not including Commercial & Hospitality), with 12.05 percent of respondents being women, which made up 18.34 percent of all women respondents in the survey. It also has the second lowest gender-based pay gap with a median difference of just $1 an hour between men and women.
A majority of respondents from this sector are based in Canterbury (26.88 percent), followed by Auckland with 18.06 percent. The median experience of employees across the sector was five years, which is about the same as the other industries. The happiness metrics were also similar to the other sectors surveyed, but they were slightly lower across the board than al l industries aside from Commercial & Hospitality. However, the differences are so small that they are barely worth mentioning. The sector is largely made up of Millennials and Generation Z-ers (61.68 percent) and Generation X-ers (30.49 percent), however, it was also the area where Baby Boomers were most represented (7.83 percent).
Preferred Management Traits
Employees in this sector prefer managers who lead by example (61.91 percent) and are fair/ even handed (33.72 percent). A little over a third of respondents (35.04 percent) report working overtime. A significant majority of employees in this sector would consider a career change for between $1 and $5 an hour, suggesting that most employees are happy to move on for an increase, no matter how significant.
Group General Manager of specialist recruitment agency OneStaff
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Earthmoving industry led by Komatsu technology Over the past few years, Komatsu has been increasing its investment in innovative technology, including an accelerating use of telematics, to drive the future of civil construction, earthmoving and related industry segments
omatsu’s investment in telematics, allied to the development of a major ICT centre at its regional headquarters in Sydney, is allowing it to achieve breakthroughs in machine management, project management, site supervision and planning, and long-term infrastructure maintenance and support, “For example, all Komatsu’s latest product releases incorporate our KOMTRAX Step 5 remote monitoring capabilities, giving machine owners and fleet managers unprecedented access to very detailed data about every aspect of a machine’s operation, says Garth Dixon, Komatsu New Zealand’s National Sales Manager. “It is available online via computer, smartphone or tablet 24/7.” KOMTRAX gives Komatsu and its customers the ability to identify potential issues with a machine, well in advance of them causing a breakdown, so they can be rectified
and repaired in a timely manner. “Since it was introduced 10 years ago, in late 2008, KOMTRAX – which is available free on every Komatsu machine sold in New Zealand, Australia and New Caledonia – has grown to cover more than 14,500 machines,” he says. “Customers and their operators are using KOMTRAX to not only identify and fix potential issues before they become problems, but also to improve machine and site performance and productivity, and even operator skills. “And with our latest Step 5 version identifying individual operators working on a given machine, KOMTRAX now allows site or project management and operators to work together even more closely to improve and develop their skills and production levels.” Komatsu manages the data coming from KOMTRAX through its ICT-powered INSITE Fleet Management Centre at its
Telematics encompasses • Telecommunications • Machine technologies • Transportation and safety • Sensors • Instrumentation and wireless communications • Information communications technology (ICT) • Global positioning technology. regional headquarters in Sydney. “Our investment in ICT has significantly changed the way we interact with our customers throughout the region,” says Dixon. “It allows us to harness the power of our KOMTRAX systems, working in conjunction with other analytical and communications tools, to help increase machine safety, productivity, uptime and availability – and reduce customers’ costs per tonne, no matter where they operate. “That data, combined
with Komatsu’s analytical and predictive capabilities based on millions of machine hours data, allows us to work with our customers to help ensure their Komatsu equipment is always working at its optimal best.” These ICT capabilities allow Komatsu and its service technicians to be far more responsive to machine issues when carrying out repairs or service and support calls. Known as “Fix It First Time”, this concept ensures that customers’ machine issues are identified, addressed and resolved in
the shortest possible time, and on the first visit – minimising downtime and keeping repair and service costs to a minimum. “Fix it First Time focuses on getting our customers’ machine issues resolved in the least possible time, and on the first visit, so that downtime is minimised,” says Dixon. “This is another element of our holistic approach to machine monitoring, troubleshooting and servicing. “Our ICT systems are key to ensuring that the issues arising on a machine are fully understood and diagnosed, prior to a Komatsu technician attending the customer’s job site.” Dixon says that this preparation, in combination with Komatsu’s fully qualified in-house technicians, meant that a technician with the right skills, the right parts and the right tools is dispatched to get each customer’s machine back to work quickly. “By reviewing the latest machine-specific ICT information before head-
ing out to service that machine, our technicians can understand how the machine has been operating in previous days and weeks, including any abnormalities which have occurred. “This understanding allows for diagnosis and troubleshooting to begin before leaving the branch, creating the shortest-possible path to get a machine working again,” he said. “This means that we are far more likely to fix the machine on the first visit. “This is something that our competitors in the service space can’t match because they don’t have access to the same skill set of reliability engineers or our advanced ICT systems.” But remote monitoring is only one element in Komatsu’s telematics capabilities. Komatsu is a pioneer in semi-automation – as a first step towards full automation – of complex earthmoving activities, such as digging, excavating, dozing, levelling and
grading to high levels of precision. “In the past two years, we’ve introduced our integrated ‘intelligent Machine Control’ concept, which allows machines such as excavators and bulldozers to excavate, bulk out and trim – in high-precision complex 3D designs,” Dixon said. “Our intelligent Machine Control, or iMC, system is factory-integrated into select Komatsu machines and results in significant improvements in efficiency and productivity compared with conventional construction processes. “Customers who’ve used this technology are seeing massive benefits from it, and we are seeing multiple repeat orders from contractors and plant hirers throughout New Zealand and Australia.” More recently Komatsu has rolled out SMARTCONSTRUCTION, a completely new concept in construction technology with the potential to really change the face of the earthmoving industry –
and the way it goes about its business. SMARTCONSTRUCTION covers the critical steps in a project’s development, from initial site survey, design and professional consultancy, through to final completion. “It includes improving site process and productivity, machine control management, machine interconnectivity and review of project progress during the construction phase, and culminating in development of detailed as-built information for future construction and infrastructure maintenance,” he says. “Komatsu has integrated these technologies through the introduction of our drone-based survey and site management technology, and our cloud-based SMARTCONSTRUCTION Application information management offering. “And Komatsu today is unique in our ability to offer a complete suite of fully integrated, end-toend range of cutting-edge, safetynews.co.nz
Yearbook 2019 telematics-based products, services and solutions across every aspect of a project, and the life of the machines working on those projects. “It gives our customers a real edge in today’s increasingly competitive and challenging construction and resources extraction environment,” Dixon says. For more information contact: Elle Schutte Komatsu National Aftermarket Marketing Manager, NZ Phone (09) 969 6704 email@example.com www.komatsu.co.nz Australia: Wafaa Ghali Komatsu Australia National Marketing Manager Phone 1300 566 287 firstname.lastname@example.org www.komatsu.com.au Sponsored Article
Contractor gets benefit of automated Komatsu excavator New Zealand contractors have been early adopters of Komatsu’s innovative intelligent Machine Control (iMC) semi-automated excavator system and are now joined by the first Queenslander to get the message 28
he first Queensland-purchased Komatsu excavator that can intelligently perform traditional manual operator duties has been hired out on a long-term roadworks project by Sunshine Coastbased civil earthmoving and construction company, Weier Group. Owner Gareth Weier’s business specialises in wet plant hire, supplying premium earthmoving and roadworks services to leading contractors and developers throughout South East Queensland. After working for eight years as a loader operator in an underground gold mine, Weier continued his passion for machinery by starting his earthmoving
business with a single skidsteer. He has since built his fleet up significantly, using predominantly Komatsu excavators including a hybrid 335LC1, a PC300LC-8, two PC138US-8, one PC45MR-3 and one PC88MR-8. His most recent purchase has been a Komatsu PC210LCi-10 iMC excavator, in line with the company’s progressive approach to new machine technologies. “I like to be on the cutting edge of technology in terms of our equipment in order to demonstrate the progressive nature of our business,” said Weier. “That’s always been our approach: something new
Kiwi contractors are achieving real savings in time, cost, materials and job accuracy compared with conventional excavation or indicate-only systems
comes out from Komatsu and we check it out to see if it can benefit our business. “I wanted to see what the intelligent excavator could do. I had a go on it and I found it was really good. “I was especially impressed by its operational efficiencies and reduced operator fatigue. We ended up being the first business in Queensland to buy one.” Weier was particularly impressed by the Komatsu iMC excavator’s automatic control features, which offer real-time bucket edge positioning in relation to the machine and job surface. “With a normal machine the operator can see the
level he has to dig to, but has to keep stopping to use his bucket to check digging depths and ensure they’re on grade. “With the iMC excavator you take the bucket down to the line, pull one lever and it automatically traces the ground so the operator doesn’t have to think and do as much as they would, conventionally, to avoid cutting past the line. “Once the design model has been loaded into the iMC machine, the surface level is set and the operator cannot cut past the level they have to dig. “Because it can’t be over-cut, you avoid having to in-fill with more material than is necessary, which is extremely important when you’re trying to save the client money.” According to Komatsu NZ National Sales Manager Garth Dixon, the iMC excavator’s exclusive automatic control function technology can result in more than a 60 percent improvement in work efficiency when compared with conventional construction processes. “Since we introduced this technology in New Zealand some years back, Kiwi contractors have really taken advantage of it,” Dixon said. “They are achieving real savings in time, cost, materials and job accuracy compared with conventional excavation or indicate-only systems.” These advantages have also been appreciated by Gareth Weier. “It is obviously more
accurate, and I saw that it would be quicker in practice,” he says. So, is this something he has already been able to leverage with his customers? “It’s early days so we don’t jump up and down about what it can do for a customer, but it does allow them to see the performance and benefits of the new machine in action on the job. “I think they will count the outcomes and that builds a case further down the line. “I am sure customers will be looking for iMC machines over standard machines, sooner rather than later.” Weier is also mindful of the benefits of iMC excavator’s exclusive automatic control function technology for his operators. “They don’t have to concentrate on cutting to a line as much when they know that the machine can take control and come down to the level,” he said. “It requires less mental exertion over a day than they would usually expend. It’s also a quicker overall result because there are fewer required actions than in a manual exercise, so they’re less fatigued all-round.” In response to a perception that the iMC excavator’s automation might erode the value of an operator’s manual skills, Weier says: “Of course you still need someone who is fairly experienced and knows what they are doing, but, no, the oper-
ators love it – even the experienced ones and especially the screen, which is a lot bigger and better than the bolt-on GPS systems.” With Komatsu’s iMC technology integrated into the excavator, Weier says he wouldn’t consider ‘bolton’ alternatives. “The integrated Komatsu technology is not that much more expensive. It’s basically around the same cost but you’re dealing with Komatsu rather than a third party, which is our preference. “We have a machine from another manufacturer that is nightmare to deal with, in comparison. Getting anything done by them is like pulling teeth,” he says. “Komatsu, however, is always so easy to deal with. They are very reliable machines, but if anything needs attention Komatsu is right on fixing it. “That’s absolutely imperative in this industry because downtime equals losing money. We need machines that won’t let us or our customers down. From here on, Weier sees additional Komatsu iMC machines being added to his fleet. “Yes, this is our first step into that suite of the different offerings in Komatsu’s SMARTCONSTRUCTION offerings. “I’m focused on continuing to grow the business. “I know Komatsu has an iMC dozer so I will be keeping an eye on that. Hopefully a job will come up that suits it,” he says. safetynews.co.nz
rom an infrastructure perspective, it’s fair to say 2018 was not the best. The clearest way to illustrate why this was the case is to ask a simple question: what did we do? The Auckland Airport spent the best part of a million dollars a day on much needed capacity and service improvements. Marsden oil refinery completed a major productivity enhancement. Spark trialled the first 5G kit in the country and all the big telco operators announced plans to roll out the next generation of mobile infrastructure. But it’s noteworthy that these developments all took place in the private sector. What did the biggest infrastructure owners and operators – councils and the Government – do? It’s actually not easy to think of much. It was a record year for housing, some of which can be attributed to Housing New Zealand’s massive building programme and Government guarantees for developers through Kiwibuild. But this is housing, it’s not “infrastructure” in the standard sense.
The year past leaves plenty of scope for the year ahead in infrastructure It’s difficult to think of a year in the past decade which wasn’t lining up to be a “big one” for infrastructure. However, there can be little doubt that 2018 failed in some important respects to deliver on New Zealand’s needs, says Infrastructure NZ’s Hamish Glenn
Work did continue on the Roads of National Significance. This is positive, but the RoNS programme was National’s signature investment programme announced in 2008. Other, more recent road announcements were more likely to be deferred in 2018 than delivered. One notable positive was the Manawatu Gorge replacement, an option for which was confirmed. 30
However, Mill Rd, Penlink and the East West Link in Auckland saw no physical progress, even while the private sector lodged multiple unsolicited bids to undertake work. Wellington’s northern corridor was downsized and the long-awaited solution to the Basin Reserve sat on the books
while authorities discussed what to do. Major Northland road projects got cancelled. Waikato projects got cancelled. Hawke’s Bay projects got downsized. All of these regions are growing and have demand. It’s not a question of if we need the projects, just when they can get through our failing deci-
sion making and funding processes. In rail, works continued on our biggest infrastructure project, Auckland’s City Rail Link. Good news here is tempered by the slower than anticipated tendering of the major ‘C3’ contract to build the tunnels. We also found out another $500 million was going to be added to
Yearbook 2019 the cost. This takes the $1.8 billion CRL -- which became the $2.4 billion CRL which became the $2.9 billion CRL which became the $3.4 billion CRL -- to $4 billion. The 2015 Business Case estimated a not too disappointing, but not too impressive, benefit-cost ratio of 1.6-1.7 on the basis of a $2.5 billion capital cost. Inflation should be expected, but that’s inflation of almost 18 percent per annum and will be impacting the relative benefit of the project. Even the Government’s priority regional and light rail programmes failed to impress with Auckland light rail not able to produce a business case. To be fair, 2018 was always going to be a bit soon for rail, but then roading should have remained the interim response to ensure congestion could be managed and land opened for growth.
Energy investment remained quiet as technological developments continue to extend the ability of existing assets to meet more efficient demand. Paradoxically, this was in no small way due to record coal burning at Huntly which has become more critical in recent years as gas production has been stymied.
The municipal water sector is threatening to go into crisis, if it isn’t already there, yet it’s difficult to pinpoint any landmark delivery achievements in 2018. Procurement for the biggest water infrastructure project in decades – Auckland’s central interceptor – got underway in 2018, but construction is yet to begin. Irrigation remains out of favour, but, remarkably, one project managed to make it through most of our planning and consenting hoops – the Waimea Dam in Tasman. Again, however, construction is yet to begin.
Social infrastructure has done a little better. The public found out what many in the health industry either knew or strongly suspected – that our hospitals have for a number of years suffered severe underinvestment and many are now substandard. Crucial remedial work has got underway in places like Middlemore and land was purchased for a major new facility in Dunedin, but, actual delivery has proven elusive. The Labour-led Govern-
ment reluctantly decided to continue with a public-private partnership for Waikeria Prison. Not doing so would have left prisoners with nowhere to go, so the pragmatism exercised with this decision was a 2018 highlight. And education received significant investment, albeit much of it long overdue and limited to minor capacity improvements across increasingly crowded inner-city schools. It’s still not clear whether education infrastructure can meet the demands of New Zealand’s recent rapid population growth.
More positive from a planning perspective If the year 2018 was a bit of a disappointment from a delivery perspective, it was much more positive from a policy and planning perspective. In a year of pretty significant policy development, perhaps the biggest from an infrastructure perspective was the announcement that the Government will establish a dedicated independent infrastructure advisory entity, or i-body. Very pleasingly, this unit will assist the multiplicity of government, and
hopefully council, agencies with complex project procurement support. It will also perform a strategic advisory function so that New Zealand can better prepare for, and respond to, future challenges and needs. The Government has so far been pretty courageous in suggesting this new unit will have the degree of independence it requires to act and advise outside of the normal ministerial framework. Without this independence, the i-body will either become an unnecessary mouthpiece for government policy, even when that policy is flawed, or will be stifled. A key thing to look out for in 2019 is just how much independence the new entity will be granted, whether it gets both procurement and strategic advisory powers and if it is allowed to assist local, as well as central, government bodies.
Infrastructure funding and financing
The Milldale agreement with Fulton Hogan was a seminal step in resolving New Zealand’s housing and infrastructure crisis. The deal shifts develop-
Telecommunications Chorus continued its roll out of fibre and rural broadband continued to receive attention from industry and authorities. Again, this represents a continuation of policies announced a decade ago and responsive private sector investment.
Yearbook 2019 ment risk around so that the responsible council (Auckland) carries less of the costs associated with development infrastructure. It truly was a landmark in infrastructure funding and financing but will need some tweaks before it can be rolled out further. Not every developer has the land, scale, scope and capital of Fulton Hogan and further announcements are eagerly anticipated.
For this reason, it is puzzling why the Government did not remove Auckland’s metropolitan boundary in 2018, as signalled before the election. Removing the metro boundary will allow development rights to be tied to infrastructure provision rather than planning regulations. Lower cost land will be accessible at a scale which makes commercial sense for major investors and infrastructure costs can be linked to the improved value land which infrastructure generates. This will not only better align costs and benefits, it will materially lower the price of delivering homes on Auckland’s periphery – something that is desperately required in a city where even the cheapest new homes are unaffordable for over half the population.
Urban development authority
Another policy achievement in 2018 was the release of details on a new urban development authority. The HUDA (Housing and Urban Development Authority) will have powers to zone, acquire and aggregate land, finance infrastructure and
cut through red tape. It’s undeniably necessary. New Zealand’s shameful housing construction performance in recent years demonstrates that it has become simply too hard to deliver this most essential of all services. However, under the Resource Management Act 1991 (RMA), New Zealanders have become accustomed to being able to stop nearby development and infrastructure activities they don’t like. With HUDA established, they won’t necessarily be able to. Ensuring the new entity can cut through barriers without incensing the voting public to the point that the policy fails is akin to walking a tightrope. We all hope policy makers get the balance right.
Municipal water policy also saw big steps forward in the last year. Accumulating evidence is suggesting that councils will not be able to maintain their water assets under current arrangements. Councils are already struggling to meet minimum standards for drinking and fresh-
water quality and simply will not be able to meet the combination of higher standards, new growth and greater resilience. Aggregation of water services into a much smaller number of regional providers, funded by water charges and with their own independent balance sheets, is needed. Although encountering resistance from local authorities unwilling to lose a major revenue stream, this approach will allow water to remain locally owned while being managed by dedicated asset management professionals. Most importantly, it will allow efficient use of debt to fund critical improvements and a much longer-term approach to integrated water services.
Resource Management Act 1991 reform
The RMA is kaput and 2018 will probably go down as the year we finally acknowledged this. But as we saw with the flag debate a few years back, there’s a big difference between agreement to change the status quo and agreement over what to change it with. Environment Minister
David Parker’s November announcement that a major review of the RMA system would kick off in 2019 was one of the year’s policy highlights. It was encouraging because it indicated the Government is looking beyond the RMA narrowly defined and is looking at the Act’s relationship with other parts of the framework. The RMA is so intricately entwined with local government that the two cannot be separated without a high likelihood of policy disjoint and failure. Local government, meanwhile, is so entwined with transport, that any changes to councils need to look at the Act which oversees their transport obligations and resourcing. The desire to try to fix this system with incremental changes to each individual Act is the reason our environmental performance is declining, we can’t build enough homes and our infrastructure is poor.
Energy market design
The energy sector continued to experience unprecedented change in 2018, with policy makers challenged to keep
Yearbook 2019 up. Transformations in transport energy, distributed generation, storage, efficiency and even new sources are combining to disrupt the industry in an extraordinary way. The speed of change and comparatively small role of government in the sector means energy policy is heavily focused on a flexible and responsive market system Positively, it does look as though energy leaders are taking the necessary steps to keep up. Several major rounds of consultation were conducted in 2018, including for the Electricity Pricing Review.
Transport policy not keeping up
It wasn’t all progress on the policy and planning front in 2018. Transport policy continues to flounder. New Zealand’s appalling safety performance is equalled by astonishing levels of congestion for such small cities. Progress towards road
pricing took a backwards step as the furore over Auckland’s regional fuel tax pushed transport funding out of the public policy debate. Reprioritisation of critical road projects needed for new development conflicted with the Government’s housing agenda, leaving many in growth centres confused as to how to address the housing shortage. Meanwhile, progress to address transport demand with rail stumbled with the aforementioned deferral of a business case for Auckland light rail. If the decision to build light rail down Dominion Rd has been made before we’ve worked out why we’re building it, whether it’s in the right place and if the benefits exceed the costs (including opportunity cost of spending limited funds), then our once proud, independent and efficient land transport investment framework is dead. Here’s hoping a
good result is published early in 2019 and, if it can’t be, leaders have the courage to rethink the project.
Challenges for the year ahead
The big challenge for infrastructure in 2019 is clear: the Government must accelerate delivery. Shovels have to hit the dirt. Decisions have to be made. Most important will be the transport sector. It’s near impossible to see a prediction for improved transport outcomes anywhere in New Zealand. Congestion in Auckland and Wellington will get worse. More people will die on rural roads. Growth won’t be accommodated in Queenstown. This simply can’t go on. Fundamental reform of our entire transport funding, investment and decision making system is required – but in the meantime we have to build to meet growth.
Roads and rail are both required. If the fuel tax-dependent National Land Transport Fund is no longer fit for purpose, then let’s move forward with road pricing, but while that’s happening, top up funding from the Government surplus. Transport is too important to housing and employment to continue to structurally underinvest in it and watch as the country chokes. Economically beneficial projects like Auckland’s third rail line, Penlink, Mill Rd and East-West Link, all of which deliver benefits orders of magnitude greater than costs, need construction to start in 2019. The Let’s Get Wellington Moving initiative needs commitment: when will the critical and inevitable four-laning to the airport go ahead? The public must find out what the story is with light rail in Auckland and Wellington: is it a goer or not? If it is, how will it be funded and will it solve the problem and, if it isn’t, what’s the alternative? What’s the deal for Hawke’s Bay, Nelson, Tauranga and Queenstown? There is so much to do in transport that, if you spend too long thinking about it, you want to cry.
Local Government and RMA reform
The water sector will likely to flounder in 2019 as councils continue to struggle with the investment required to meet standards and provide for growth. This may be overlooked, however, if behind the scenes there is serious progress made on whether New Zealand’s
existing local government arrangements are sufficient to meet not only water but transport needs into the future. That this discussion is occurring at the same time as local government’s other major function – planning and regulation under the RMA – presents a once-in-a-generation opportunity to reform the system. Look out for progress on reform in both areas and whether it is happening as a whole or as a disjointed and incremental mess. Here’s hoping it’s the former, but don’t underestimate the opposition to changing the status quo even when it’s clear it’s not working.
Infrastructure funding and financing
Greater use of off-balance sheet debt funding as per the Milldale initiative should be enabled in the short term for critical growth projects. Auckland’s central interceptor and Mill Rd, Nelson’s Southern Link, Queenstown improvements and Let’s Get Wellington Moving all should be targeted for innovative new infrastructure funding and financing.
Adding to this discussion in a big way will be the Productivity Commission. They’ve been tasked with an inquiry into local government funding and financing and will be taking submissions before their final report is due towards the ned of the year. The Commission’s extensive analysis will complement progress in Milldale and by the end of the year we might have clarity on new options for resourcing critical infrastructure. One additional sector that has been overlooked should also be considered: irrigation. Irrigation represents one of the true economic game changers for rural communities and all available evidence indicates that rainfall will become less predictable in the future. Changes to irrigation funding which lessen the pressure to intensify farming activities could deliver essential economic and public health resilience into the future. The key is tying the wide public benefits of irrigation to project delivery, something we are not currently doing well, but which new approaches may solve.
Our cities aren’t working. The latest Demographia housing affordability statistics are chilling, with New Zealand a much more unaffordable housing market than the UK, Ireland, USA and even Australia. Tauranga, Auckland, Wellington and Queenstown all stand out as among the very most unaffordable cities of their size – and getting worse. Auckland needs a gamechanger. While it is true that consents have now, after almost a decade, finally caught up with demand, the same cannot be said for actual housing construction. The city needs to lift production another 30 per cent just to meet demand in a
tight labour market. It has to do this, furthermore, at half the cost. The only way to generate such an improvement is through a step change in productivity and this can only be achieved by building at scale and away from complex urban environments. This means Auckland needs to accelerate at least one major greenfield development of a size which enables a multi-decade programme of building to catalyse investment in off-site manufacturing and standardisation. Tens of thousands of homes are required, not hundreds. If we’re clever, we can do this around rapid transit and tied to employment so that we change the direction and length of journeys across Auckland, getting more capacity out of our transport system. This model can be extended to Queenstown, Tauranga, Wellington and other cities which cannot build homes fast enough and at the price point local workers can afford. Every year that we wait, more houses don’t get built, fewer jobs are created and quality of life suffers. We all but lost a year in 2018. Let’s make sure it doesn’t happen in 2019.
Policy Director at Infrastructure New Zealand, the peak industry body for the infrastructure sector that promotes best practice in national infrastructure development through research, advocacy and public and private sector collaboration. safetynews.co.nz
Four-day winner In the final quarter of 2018, following our landmark eightweek trial of the four-day week and analysis of the qualitative and quantitative data from it, the Perpetual Guardian board signed off on the four-day week across the business
Click to read the full story
Andrew Barnes views the trial and its successful outcomes as being much bigger than just the future of work at Perpetual Guardian. “This is about flexible working and about using technology to enable that,” he says. “The learnings and challenges uncovered as part of the trial raise a number of questions that we will work through to ensure we address areas that need improvement or further innovation in order to increase flexibility and productivity,” Barnes says. “If you can have parents spending more time with their children, how is that a bad thing? Are you likely to get better educational outputs as a consequence? “Are you likely to get fewer mental health issues when you have more time to take care of yourself and your personal interests – probably. “If you can take 20 percent of people off the roads every day, what does that mean? “If you have fewer people in the office at any one time, can we make smaller offices? If people work more efficiently or remotely, coming to the office less frequently, what does that mean for urban design? “These are interesting issues, and we should be debating them because I think it changes the composition of society. And once that changes, opportunities available for people will change. Maybe more people will be providing services for people’s leisure as opposed to traditional business-related support services. “I don’t know what the outcomes will be, but I would say to all business owners, be a little creative -- think about trying a few things.”
ndrew Barnes was pleased by the productivity, engagement, job satisfaction, work-life balance and many other positive findings that emerged from the trial, and gratified by the scale of local and global interest in the four-day week story – but we were not surprised. Going into the trial, we felt this was an idea whose time had come, and that we could collectively challenge some long-held ideas about how we work. Internally, we refer to this new work structure as our ‘productivity week policy’, with all full-time employees (most of the 240 people in our business) eligible to opt in to work a four-day week. As per the terms of the original trial, employees who opt in are eligible for a weekly ‘rest day’ provided they meet their weekly productivity objectives, and are paid at their usual salary. They continue to accrue annual leave, with entitlements remaining on the basis of their contractual hours as set out in their individual employment agreements. The opt-in process began on 1 November last year and is gradually scaling up as teams configure their long-term productivity objectives and workloads within the new framework. Approximately half of our full-time staff have opted in to date, and ultimately we expect around threequarters of staff will choose the four-day week. The trial taught us that not everyone prefers a four-day week, and other flexibility choices are appreciated. Some employees might, for example, negotiate changes to their hours of
Barnestorming the success of an idea whose time had come work across the standard five-day week, such as starting later or finishing earlier to miss rush hour or accommodate school pick-ups. We are collaborating on innovative processes to offer flexibility to existing part-time staff and teams with seasonal peaks of work during the year. We have always sought to avoid being prescriptive in our approach, and as we did before and during the trial, we continue to ask staff to tell us how they can work best. At a governance level, the challenge of implementing any broadly revolutionary change is to prove the business case. After the post-trial staff review and data analysis, we began drafting a new HR productivity week policy. We knew the current legislative framework did not specifically allow for a reinvention of the 40-hour week, so to ensure we could offer flexibility on a long-term basis while maintaining
regulatory compliance, we obtained legal opinions from Bell Gully and MinterEllisonRuddWatts, which offered independent advice based on assessment of relevant legislation and current employment agreements. The board was satisfied that the case for the four-day week was sound and the new policy could be applied within the existing legislative setting, and we were able to announce the next phase of our extraordinary work experiment to the world. To date, the news of our four-day week has reached more than four billion people through reporting by the BBC, CNN, the New York Times, the Guardian and many other prominent media outlets, and has been shared millions of times on social media. In this next phase, the academic researchers involved in the trial are again reviewing Perpetual Guardian’s progress, and we are engaging
constantly with other businesses, academics and policymakers in the global conversation about the future of work. Recently, the UK’s Trade Union Council said the four-day week, with no reduction to living standards, should be an ambition for the 21st century, and the Wellcome Trust, a biomedical research charity based in London, announced it is considering a four-day week trial for its 800 head-office staff. To continue inspiring conversation beyond the media stories, I have done a TEDx Talk, and we have compiled a white paper which will be shared on request with hundreds of interested parties around the world in the coming weeks. Later this year, we will publish a book about the four-day week that challenges ideas about the gig economy, worker productivity and wellbeing, and the changing world of work in the 21st century. safetynews.co.nz
Flexible working set to eclipse Artificial Intelligence as a key disruptor in the 2020s An increase in flexible working practices within New Zealand will reduce levels of carbon dioxide by 900,000 tonnes per year by 2030 and add between NZ$16.2 billion and $18.1 billion to the economy
hese are the findings of an independent economic study commissioned by global workplace provider Regus (one of the IWG group of companies). Achieving these targets is a lot more than a pipe dream or wishful thinking, the study found. Growth in demand for flexible workspaces in New Zealand is increasing rapidly, with nearly 40 percent of office tenants considering flexible solutions for the future. CBRE Pacific’s Corpo38
rate Co-working Survey: The Future is Flexible says that in the next two years, 39 percent of New Zealand office tenants plan to reduce their traditional leased office footprint space, while 47 percent are looking to increase co-working space use. The results of the survey highlighted a growing trend for large office tenants to move towards more flexible workspace solutions, supporting the significant environmental benefits reflected in the
Regus survey. The reduction in carbon dioxide levels in New Zealand espoused in the report is based on workers saving between 7.7 million and 8.7 million hours of commuting time per annum. Such flexibility is expected to add between 74,000 and 83,000 additional jobs in talent scarce sectors of the economy such as property services, professional services, financial services, information and communications activities, public admin-
istration and business support services. “Simply changing the dominant culture of commuting to a central office for work could contribute towards climate change goals,” says New Zealand Country Manager for Regus, Pierre Ferrandon. Regus offer more than 3500 locations worldwide from fully serviced offices, meeting rooms and business lounges to co-working spaces and virtual offices which can be rented by the day, week or year.
The workspace revolution is coming
As a starting point, greater opportunities for flexible working could become an increasingly important factor in enabling greater levels of workforce participation among groups such as women and the disabled. For all workers, but especially women, opportunities to work flexibly or remotely can help in balancing working life with other responsibilities, such as caring for children. For the disabled, opportunities for flexible or remote working can expand the types of job opportunities that can be conveniently accessed. Studies have also found that flexible and remote workers tend to report higher levels of happiness and job satisfaction than other workers. Therefore, flexible working regimes and environments can also have positive effects
The Regus study analysed the socio-economic impact of flexible working in 16 countries: Australia, Austria, Canada, China, France, Germany, Hong Kong, India, Japan, Netherlands, New Zealand, Poland, Singapore, Switzerland, United Kingdom and the United States. The study found that: on the health and well-being of employees.
Driven by the US
The nation which would see the largest annual carbon emission saving by 2030 is the United States. It is predicted to save nearly 960 million hours in commuting time, and with commuters relying heavily on cars, this time saved translates to over 100 million tonnes of CO2. There remote work has gone from mainstream to rushing river says US author Scott Mautz writing in INC. Mautz warns of getting the management structure right to make it succeed. Already some companies like Yahoo, Bank of America, and IBM have abandoned remote work, calling employees back into the office. Ferrandon says that working from home induces a reduction in productivity and contributes to isolation, in turn reducing
• Flexible working will contribute US$10.04 trillion to the economies of the 16 countries by 2030 – more than the current GDP of Japan and Germany combined. • By 2030, the US could see an economic boost of as much as US$4.5 trillion annually from flexible working – more than 20 percent of its current GDP and more than the entire current GDP of Germany. • The proportion of people working flexibly in China will remain relatively small, but it will see the greatest associated gain in economic output – as much as 193% in 2030 compared to 2017. This could equate to a huge overall boost of US$1.4 trillion. • Flexible working could save more than 3.5 billion hours of commuting time across the 16 economies by 2030. • If more people in the US work flexibly, almost 960 million hours could be saved. That is the equivalent of nearly an entire extra day of holiday for each working person in the US. • China sees the greatest potential gain in time saved, with as much as 1.4 billion commuting hours claimed back via flexible working. • Click here to read the full report safetynews.co.nz
Tips for managing a business with remote workers
Video: Inc employee engagement. “Remote working delivers the productivity increase outcome when the employee is able to bring the office closer to home, while retaining the home/work separation. “Giving access to a network of co-working spaces to that effect enables the essential interactions the employee needs, while reducing the commute at the same time,” says Ferrandon. Mautz says a study by Upwork among more than 1000 hiring decision makers shows that 63 percent of companies now have remote workers, yet 57 percent of companies have no remote work policies. The Upwork study showed 48 percent of companies in the US use freelancers (up from 43 percent a year ago), while work done by freelancers increased 168 percent. Six times more hiring managers believe agile team structures will become the norm and three times as many believe offices will become temporary anchor points versus daily travel destinations. The 2018 State of 40
Remote Work Report indicates that 90 percent of remote workers plan to keep working remotely for the rest of their career. Mautz says it's not surprising, given the top reported benefits of a flexible schedule, more time with family, a more pleasant work environment, and avoidance of office politics. The flexibility conundrum is critical to figure out for both leaders and employees as remote work continues its upward trajectory. Gallup research shows the key to successfully fostering flexibility is to bake it into the culture, says Mautz. This means attacking some of the unwritten rules of many work cultures like: • Being seen at your desk assures the manager knows you're working. • Arriving later or leaving earlier must equal a lack of commitment. • Recognition/promotions go to in-office workers. • "Hard work" equals time on the clock versus net outcomes. • Critical discussions
(even on career) happen in the hallways and are missed at home. Mauntz says employers need to take the time to get clear on goals and expectations. Gallup's research showed that 50 percent of employees don't know what's expected of them. IWG is leading the workspace revolution. Its group of companies, including Regus, helps more than 2.5 million people and their businesses to work more productively. It does so by providing a choice of professional, inspiring and collaborative
workspaces, communities and services. Ferrandon says digitalisation and new technologies are transforming the world of work. People want the personal productivity benefits of living and working how and where they want. Businesses want the financial and strategic benefits. “Our customers are start-ups, small and medium-sized enterprises and large multinationals, with unique goals and aspirations. “They want a choice of workspaces and communities to match their needs. Through our companies we provide that choice. “We create personal, financial and strategic value for businesses of every size. From some of the most exciting companies and well-known organisations on the planet, to individuals and the next generation of industry leaders. “Our ambition is to build a complete network of workspaces from Invercargill to Kerikeri to allow New Zealanders to work and enjoy anywhere they want.”
About Regus Regus (one of the IWG group of companies) has built a global network of office, co-working and meeting spaces for companies to use in every city in the world. It’s a global infrastructure built for businesses to support every opportunity. The network of workspaces enables businesses to operate anywhere, without the need for setup costs or capital investment. It provides its customers with immediate cost benefits and the opportunity to fully outsource their office portfolio. Designed to enhance productivity and connect 2.5 million like-minded professionals, it’s an instant global community. www.regus.co.nz www.facebook.com/RegusNewZealand www.linkedin.com/company/regus
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DAY 1: WEDNESDAY, 1 MAY 2019 • Laing O’Rourke’s Journey to Becoming One of Australia’s Safest Companies & Winner of National Safety Awards of Excellence • Fatigue Monitoring Case Study: How IoTs and Wearables Help to Detect “Microsleeps” in Truck Drivers and Operators of Heavy Machinery • How IoTs Are Now Used to Monitor Hazardous Environment and Locate Workers in Emergencies • Success Case Studies from DHL & Origin Energy • Preventing Fall Injuries in Construction: How Wearables Enable Fall Protection and Detect Cases of Early Falls When Working at Height • How Predictive Analytics Can Transform Root Cause Incident Analysis and Reduce Workplace Injuries • Safety Roundtable: Industry-Specific Workplace Safety and Health Case Studies
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Workspace as a Service: workplace for the future The way we do business has been disrupted; we are now connected everywhere and with everyone, says Regus Country Manager Pierre Ferrandon
Employee flexibility means that the workspace needs to adapt and become a tool of that flexibility – not fixed but mutable and responsive to demand 42
s employees we can now choose where and when we work, because work is no longer something we do or a place we go but is the overall output that an employee and employer produce. The increasing pace of connectivity gives people easier access to a wider choice of work opportunities, while employees’ choices are increasingly geared towards work-life balance and making the best use of their most valuable asset -- time. If flexible working adop-
tion continues to increase - and all indicators are that it will - then the natural question is, how does the work space need to evolve in order to adapt to this new way of working? Employee flexibility means that the workspace needs to adapt and become a tool of that flexibility – not fixed but mutable and responsive to demand. The traditional view of the workplace as a single central location to which people commute is becoming obsolete and inefficient as remote working
Yearbook 2019 grows in dominance. The first go-to for companies responding to this change is to look at home working, which works in a number of cases but has some limitations, such as reduced productivity, disengagement, isolation, network security, mental illness, and health and safety issues. The alternative is a structure whereby the central office is supplemented by a network of satellite offices for staff to work from whenever they are not in the main office.
In the traditional approach, this would pose the problem of utilisation because of the difficulty of accurately predicting how much each office would be used, leading to a capacity imbalance (whether over or under), waste and excessive real estate expenses. There is an instructive parallel with the car industry and the rise of Uber and other ride-sharing platforms. The model gives users the ability to consume transport on demand, enabling both a better user experience and a higher utilisation of the depreciating asset -the car. Extrapolating this concept to the workspace, imagine what it would mean if companies could have access at all times to a network of on-demand office space that gives all staff access to a fully functioning workspace within 10 minutes of their home. This exists, and we call it Workspace as a Service. The following example shows what Workspace as a Service looks like for the employee, the employer and the economy of Auckland. The employee benefits: from time spent to output With access to a workspace 10 minutes from home, the employee would be able to choose from a wider range of job options, therefore increasing job satisfaction and engagement. The reduced commute and lower associated costs would result in higher satisfaction and increased spending ability. Commuting time saved frees more time to spend with family and on personal interests, and more
time to do productive work. The ability to work from remote workspaces also increases networking opportunities because the employee is no longer subject to the traditional model of the same workplace and desk every day and is instead exposed to different people from different companies, fostering exchange, social engagement and new ideas.
The employer benefits: from traditional leasing to on-demand
The first benefit for the employer stems from the employee’s benefits: A happier, more engaged workforce makes the company more productive, as staff are more focused, take fewer sick days and use their time to produce agreed outputs rather than watching the clock. The second benefit, critical to the bottom line, derives from adopting a real estate strategy that gives employees the ability to adopt flexible working practices – which requires adopting a network of on-demand workspace rather than one or several traditional leased locations. Consider the industries that will benefit the most from adopting on-demand workspace: Digital services, business services and support services. Each has different real estate strategy drivers but presents a mostly standard use of the workspace. Let’s look at the impact of switching from a traditional leasing model to a Workspace as a Service model.
The on-demand model affords real estate cost management by calculating by head count, not total cost of space. We can break this down by comparing the current cost of the workspace for a company in Auckland with the cost of adopting on-demand workspace. This example company employs 100 staff and has its main office – using A grade space – in the Auckland CBD.
With normal utilisation, this company would rent between 1,000 to 1,500 square metres on a 10year lease. • Rental cost: $450,000 to $675,000 per annum • Building service charge: $150,000 to $225,000 per annum • Facility costs (maintenance, electricity, cleaning): $50,000 to $75,000 per annum • Insurance: $6,000 to $8,000 per annum • IT/T costs: $30,000 to $40,000 per annum • Fit-out depreciation: $100,000 to $150,000 per annum • Total cost: $786,000 to $1,173,000 per annum • Average cost per head: $7,860 to $11,730 per annum. To compare this cost to the cost of an on-demand workplace strategy, it is important to link this fixed cost to utilisation. Looking at the drivers behind utilisation, we need to consider the following: • Staff leave: As a minimum 20 days per annum = 13 percent of staff not present at work at any given time • Staff absenteeism/sick leave: 5 days per annum = two percent of staff not safetynews.co.nz
Yearbook 2019 present at work at any given time. â€˘ Therefore, at any given time, 15 percent of the workspace is not utilised due to leave entitlement. If we now take a look at under-utilisation driven by workforce size changes, the data available shows close to 25 percent variation in head count for companies of all sizes and industries across a period of 10 years (for reasons of scaling up/down, requirement for project space used only a portion of the time, relocations etc). By adding the period where companies move office location and have to align lease start and ends we can find another 4 percent under-utilization (half a month double rent per year across a period of 10 years). In total, 44 percent of the space under a traditional leasing model would be un-utilised by any company across a period of 10 years. Our example real estate cost to head jumps from NZ$7,860/NZ$11,730 per FTE per annum to NZ$14,035/NZ$20,946 per FTE per annum.
Under an on-demand workspace model, under-utilisation does not exist, because by definition the company only pays for the space it uses at any given time. What does it cost under an on-demand model? The typical cost of workspace in this model, traditionally called serviced office or co-working, is driven mainly by the cost of real estate (location), the type of access (fulltime, part-time, best view/ no views) and the term of commitment. Within the 19 locations of the IWG network (Regus, Bizdojo, SPACES) in New Zealand, the cost per workstation ranges from NZ$1,788 for a non-assigned desk to NZ$6,600 to NZ$12,400 for a dedicated desk in a private (self-contained) office. Under this model, companies only pay for space when the employees are actually using it (remember: 13 percent annual leave and two percent sick leave), making the total cost for this company to adopt a fully on-demand work-
space for 85 percent daily usage NZ$561,000 to NZ$1,054,000 (85 x $6,600 to 85 x $12,400). This is a real estate cost reduction of 10% to 29%.
These include IFRS 16, reduced management, forecasting and budgeting, speed to market and disaster recovery. Beyond the staff attraction and cost benefits we have already outlined above, the adoption of Workspace as a Service presents other tangible benefits for businesses. The first stems from the upcoming changes of the global accounting standard IFRS 16. Briefly, these changes require companies to report all lease-associated cost and liabilities onto their balance sheets, which affects their financial performance ratios, ability to borrow and valuation. With Workspace as a Service, companies typically commit to service agreements presenting much lower term commitment, lower security deposit and depreciation.
The second benefit comes from the outsourcing aspect of WaaS. Where traditionally a company would employ staff to manage leases, contractors, landlords and so on, with an outsourced solution the provider will take care of all these aspects, thus reducing the in-house requirement for companies. Third, the Workspace as a Service model presents much easier forecast and budgeting aspects, as it is on-demand and predictable with an all-inclusive per head count cost. Fourth, the benefit of speed to market. Traditional leasing would require 12 to 18 monthsâ€™ planning, but with WaaS, any company can set up an office within 48 hours. Finally, one of the less-heralded benefits of Workspace as a Service is the introduction of new workplace recovery solutions. Traditionally, workplace recovery solutions offer a single fixed location to multiple customers with different degrees of recovery services on offer. In the New Zealand context, this way of looking at workplace recovery has some major flaws: 1. The single-location approach is dangerous because it is impossible to predict where a disaster will hit. Relying one location for recovery seems to not be in line with the principle of business continuity. 2. The recovery location is over-subscribed on a first-come, first-served basis, so in the event of widespread disaster it is likely that not every customer will be able to operate from the recovery location at once. To ensure a proper
Workspace as a Service provides a more comprehensive and flexible approach to company real estate, with capacity to allow staff to adopt flexible working practices and reap the benefits business continuity solution, look at the dynamic recovery solutions that a network of flexible workspaces can provide. With a multitude of locations providing plug and play office options ready to go within 24 hours, the customer has the option to choose the most efficient place to operate from in the event of a disaster, with certainty that there is always a location available. These solutions provide a better and more resilient option for a fraction of the price. See the Useful Links section at the end of the article.
Comprehensive and flexible option
In summary, Workspace as a Service provides a more comprehensive and flexible approach to company real estate, with capacity to allow staff to adopt flexible working practices and reap the benefits while gearing their real estate portfolio for performance and future-proofing their strategy. It costs less, is more efficient and supports the change that 92 percent
of staff want to see in the future.
What next for New Zealand?
What are the obstacles to adoption, and how will companies in New Zealand be able to implement the change? The landscape of flexible workspace in New Zealand has evolved dramatically over the last three years, growing from circa 10 locations to over 50 nationwide, with close to 60,000 square metres of space today. The IWG network grew from six to 19 locations and 3.5 times the total capacity in the past 12 months, and now covers four cities with two brands, Regus and Bizdojo. IWGâ€™s third format, SPACES, an Amsterdam-born co-working space, opens its first location in August this year on Karangahape Road in Auckland, shortly followed by the largest opening to date in the new Precinct Properties development Commercial Bay. If we look at the fore-
cast of independent studies by JLL, Knight Frank & JP Morgan, the potential is for flexible workspace to account for up to 30 percent of total commercial office stock by 2030. Considering New Zealand business demographics, it is likely that the penetration rate of flexible workspace will be even higher than in other markets, with a higher fragmentation of the workforce and a high level of entrepreneurship. The IWG five-year plan for New Zealand is to reach a network of 100 locations spread across the top 20 cities. This will allow us to provide solutions to both corporate and local businesses to support their employees wherever they want to work in New
Zealand, while creating the largest business community that will transcend cities and connect workers across the country. In order to achieve our planned growth, we will soon be opening our business to franchisees and will start partnering with like-minded entrepreneurs who understand our ambitions and want to join in the workspace revolution.
> How coworking benefits mental health > IFRS 16 > The future of co-working > Education Payroll case study > Disaster recovery white paper > Disaster recovery intro > Franchise
Country Manager for Regus New Zealand, a member of the IWG Group Pierre.ferrandon@ regus.com safetynews.co.nz
The disruption has only just begun One of the most significant workforce shifts in history is underway. New and innovative perspectives will be required to ensure organisations remain competitive, agile and at the forefront of developing technologies
cross the world, boardrooms and executives are grappling with the challenge of how to respond to opportunities created by emerging technologies while at the same time delivering today's requirements. The challenge is exacerbated by the fast pace at which organisations need to reinvent and develop new capabilities to drive revenue growth in a competitive external environment, while simultaneously reducing bottom line costs. Seeing this first hand while in senior corporate roles Vincent Vuillard and Joanne Fair have recently founded FutureWork Studio to address these challenges. "Moving to more flexible and agile ways of working is critical to remain competitive" says Vuillard. They believe a collaborative marketplace in which organisations can access new and emerging skills as they need them will create more agility and increase competitiveness. "We believe that New Zealand is uniquely positioned to be a leader in finding solutions to address future of work challenges" says Vuillard. “The ability to access targeted skills is attractive for companies. However many will need to change the traditional view of staffing if they are to reap the benefits of more motivated staff and increased productivity," he says.
Welcome to the new freelancer
“We are seeing significant growth in a new type of worker, the freelancer – employees who work on
The 4th Industrial Revolution Much of the emergent disruption in business operational structures is driven by the changing needs of organisations and individuals in what has been coined the 4th Industrial Revolution. With the average life span in the western world now extending towards a century, individuals are looking for better balanced careers and a quality personal lifestyle for a much longer period of time. This creates pressures on organisations struggling to access scarce skills in newly emerging areas such as: • Data science • Blockchain development • Machine learning • Alternative energy It is characterised by the merging of technologies such as: • Artificial Intelligence • Robotics • Internet of things • Autonomous vehicles • Biotechnology • Material science • Quantum computing
particular assignments for different organisations, leveraging their unique skills for specific needs." “Traditionally freelancers were associated with creative roles – today freelancing is becoming a sustainable alternative to full time employment with a single employer,” Vuillard says. McKinsey Global Institute estimates that about 162 million people freelance in the US and EU-15 combined. In the US, 35 percent of the workforce is already working on a freelance basis with prediction that this will rise to more than half of the workforce in the next decade. Globally, total freelancing earnings are estimated at around $1.4 trillion,
Traditionally “soft” skills such as empathy, creativity, critical thinking and problem solving will also be increasingly prioritised as organisations seek to make sense of how humans and technology interact. At the same time, a new way of working is emerging in response to this – one that ensures much needed skills and capabilities are used where they are valued most. A transparent marketplace bringing these needs together not only makes sense, but accelerates opportunities for all parties, and in doing so, contributes to a healthy and viable economy well prepared for the impacts of change and technologies.
an increase of 30 percent from previous years. Morgan Stanley found that in the UK, France and the Netherlands, freelance growth has outpaced overall employment growth, the number of freelancers in the EU doubled between 2000 and 2014. Research in the US has shown that freelancers typically take the lead in developing new skills in order to stay market competitive. “A desirable flow-on of this skills marketplace is the creation of a learning economy in which individuals take greater ownership to stay at the leading edge of new developments," says says FutureWork Studio partner Joanne Fair.
Growing acceptance in Australia and NZ
“In New Zealand and Australia, we’re also starting to see the same shift with a number of high-profile organisations already experimenting with more agile ways of working, including emphasis on flexible work patterns," says Fair. “This includes remote work, four-day weeks, project-based assignments, Agile methodologies and collaborative physical spaces - shared co-working spaces popping up in major cities." “There are more and more innovative ways for teams to interact to deliver results using software like Trello, Zoom . . . after all, there are many alternatives to the traditional safetynews.co.nz
Yearbook 2019 This is being driven largely by the pace of business change, accelerating privacy regulations, and the digitalisation of their industries. “While Gartner recommends a focus on internal training to address this risk, the reality is that many organisations simply struggle to continuously upskill their staff to meet the changing capability requirements,” says Vuillard. “Accessing professionals who are available on demand for specific requirements and are incentivised to stay at the leading edge of their skills development, is therefore a smart solution for the majority of organisations,” he says
Future of Work recognition office work structure of 5 days a week, 8 hours a day,” says Fair.
Merging with other disruptive strategies
Likewise, the move to increased freelancing opens up different ways for organisations to manage their talent agenda. “For example,” says Fair,” a reduced hour work week might work better for an organisation while, at the same time, creating an opportunity for employees to allocate time to interests or commitments outside the organisation." “In this type of scenario, a role such as an accountant or marketing manager within a large organisation, working five days a week but seeing automation free up some of their more basic tasks, may negotiate with their employer to reduce their primary full time role to a
four-day week and use the additional day per week doing freelance work to gain new experience and build new skills in a new industry." “The employee benefits from the new skills, and the organisation benefits from reduced employment costs,” she says. The trends discussed above are well known by early adopters and digital companies and are starting to find their way into Board agendas. This is seen as a clear opportunity to tap into this new way of delivering value through a very different way of thinking about talent.
growth phase either can’t afford to maintain a fulltime workforce, or simply don’t have an employment proposition that can compete with larger organisations,” says Fair. “The ability therefore to access skilled individuals, in a flexible way, made affordable by the smaller time commitment, is very appealing." “Imagine for example a start-up accessing a retired company director for 1-2 hours a week for specific advice, or a cutting-edge software developer for targeted chunks of time,” she says.
High growth SMEs and start ups
Gartner’s latest Emerging Risks Survey showed that concerns about talent shortages are now the top emerging risk which organisations face globally.
It is not just large organisations who can benefit from this more flexible working model. “Often SMEs in high
Talent shortage a global problem
The New Zealand government has recently set up a Future of Work forum, recognizing the need for workers and businesses to be equipped to adapt to the rapidly changing nature of work. Building tomorrow's skills is also a key topic on the Business Advisory Council, a partnership between Government and New Zealand businesses. At the recent World Economic Forum, the future of work was a significant topic of discussion. “With increased automation, there are legitimate fears that traditional work will be significantly impacted,” says Vuillard. “However, there is also considerable optimism that new roles, and new ways of working, will open up more meaningful work and new opportunities.” It is anticipated that the need for more agility will increase as the expo-
Yearbook 2019 nential pace of change requires more responsiveness and upskilling of our workforce to maintain competitiveness. Already in New Zealand, organisations are talking about the talent shortage
and the New Zealand Institute of Directors named Future of Work one of the top five issues that should be top of mind for directors in 2019.
Logistical and social challenges
There are a few challenges that need to be addressed to accelerate the adoption of freelancing as a sustainable solution for both companies and
individuals. First, the amount of administration that hiring someone for a short period of time entails (on-boarding, scoping of the project, deliverables and paying the freelancer)
Some practical examples of how the system benefits organisations Types of opportunities which would be ideal for Freelancers include: • To enable quick access to specialised skills for a high growth environment • Completing a specific task such as writing a business case or conducting an opportunity review which requires experience/skills not currently available in that team or business • A one off or regular advisory role e.g. mentoring, coaching or providing targeted feedback to an executive team • Short term role coverage during periods of transition • To take pressure off a team during a peak period, such as businesses that experience seasonal impacts and want to staff flexibly • To support a team where there are specific pieces of work to be done from time to time, but
insufficient work for a fulltime employee
Lisa is the GM Innovation of a large organisation in New Zealand, she’s been asked by her Board and management team to understand what Artificial Intelligence (AI) could do for their company, what cost and benefits are to be expected, what skills and people are needed to start implementing it. These skills don't currently exist in the organisation. Therefore, Lisa needs three key elements which a marketplace will provide: First, finding an expert who understands AI and can give her a better understanding of how she can use it within her company Second, connect her with another professional who has already started the journey of integrating
AI within their organisation Third, once she knows what skills are needed finding her a match who can start as soon as needed. Depending on the need and the direction the Board will choose, Lisa will be able to staff freelancers in the area of need in a timely manner, enabling her to not only meet the scope and requirements but also beginning the journey of upskilling her organisation.
Nick is a Senior Contract Manager working on a large and complex construction project. He wants to pitch to clients and be able to engage with the public who can’t visualise 3D from a 2D plan. This is a one off piece of work that requires specialised expertise. Nick needs to find a graphic designer and a photo montage technician to bring the print to life with an artist's impression or even use augmented reality tools to show fly throughs. Freelance support would be ideal to meet his needs. After a few days working with the freelancers, the team decides to use Virtual Reality (VR) tools as technology has now made this affordable. Therefore Nick sources an additional expert freelancer to scope this opportunity. Having the leading edge knowledge of these freelancers enables the project to be well received by the public through advanced visualisation techniques used. safetynews.co.nz
Yearbook 2019 Second the complexity to find the right capabilities and availability needed and a way of working that facilitates integration within a team in a timely manner Third, freelancers often lack a support network (a community of experts and practitioners) to help them maintain their capabilities, a feedback mechanism that enables them to grow and a place to network and feel part of a community. Concerns have been raised that an increase in freelancing if not well managed could lead to a casualisation of the workforce without sufficient
regards to living standard and wages. The good news is that US trends indicate that the majority of freelancers chose to work in this way, valuing the flexibility and lifestyle that it provides. "In addition to this", Fair says, "research by the McKinsey Global Institute has estimated that up to 75 percent of people who are unemployed and able to work would be likely to work if they had flexible options. If even only a small number of these use a platform to work a few hours per week the economic impact would be huge
– McKinsey estimates globally more than $1.3 trillion by 2025.
Where FutureWork Studio fits in
The core concept is simple – a web and mobile based platform which connects organisations to the short-term talent they need to address targeted and specific skills requirements while providing transparency to freelancers on what opportunities are available. Over time FutureWork Studio will support freelancers to build meaningful careers by continuously reskilling to stay relevant.
The strategy enables organisations to be more competitive by moving to a talent management approach that is fit-for-purpose as strategy evolves. In addition the platform will also offer administrative benefits for organisations - for example single supplier payment to the platform, transparency of total freelancing spend, simplified on-boarding and other tools.
Managing your own terms
“We envisage a future where employees work on a portfolio type basis – managing their own terms and having the opportuni-
"Most organisations we spoke to are looking to open up a number of opportunities to support the establishment of the marketplace."
Yearbook 2019 ty to work for multiple organisations concurrently – or take time off between assignments to allow for travel, family or other interests,” says Vuillard. “Organisations can more effectively manage their costs, by bringing in targeted skillsets for specific activities or tasks, without the often-unproductive costs associated with underutilisation or the need for heavy investment in skills which may quickly be superseded as organisational strategy evolves. “For the public sector, this could provide access also to private sector skills and capabilities, on and ‘as needed’ basis, saving the taxpayer while also creating more private/public cross-skilling and exposure."
Fit the profile?
Types of individuals who may be interested in working in a more flexible way might include: • Millennials, who will make up the majority of the workforce by 2025. They’re the first generation of digital natives and are actively seeking flexible and meaningful work • Mid-career executives who are looking for a break from the intense pressures of corporate life, but still want to do interesting and varied work or take a ‘career break’ for a period of time and pick and choose their work • Experienced leaders who are at or nearing retirement, still have plenty of energy and a contribution to make, and want to shift to a focus on mentoring, reduced hours, or a phased transition to retirement • Stay at home professionals who want to balance childcare but keep their skills relevant through targeted assignments, or who want to transition back into fulltime work • Employees whose roles have been retrenched and want to gain experience in multiple industries or reskill while in transition to another fulltime permanent opportunity. For all these groups, knowing where to start, and how to access a portfolio career can be daunting. Companies like FutureWork Studio will create transparency on available opportunities and can also provide the networks and insights to successfully set up and stay relevant.
Co-Founder Vincent started his career as an Officer in the Armed Forces where he spent a decade leading teams in challenging situations. Being confronted with complex decision making under pressure sharpened Vincent’s ability to get the best out of people. Vincent then transitioned to work for McKinsey & Company in New Zealand and Australia where his experience was applied in a number of large scale organisational transformations, with a particular focus on capability building and business execution. Vincent holds a Master of Science (MSc) from the Ecole Navale, an MBA from Melbourne University and is a graduate of the Executive programme at Singularity University in California.
Co-Founder Jo brings more than 20 years experience in senior corporate positions across New Zealand, Australia, Europe and South East Asia. With her career predominantly in strategic human resources, she has also led significant business units in customer facing roles. This unique combination of commercial acumen and people focus gives her a deep understanding of the challenges that businesses face in preparing for the future while continuing to deliver results today. Jo holds an LLB/BA, she is a graduate of the Australian Institute of Company Directors, a member of the New Zealand Institute of Directors, and has recently completed the Executive Programme at Singularity University in California. Sign-up to receive more information about FutureWork Studio technologies and events on www.futureworkstudio.com safetynews.co.nz
Traditional opposites driven together by nature, public demand and the will to survive Finance has always fuelled development and, according to Financing for the Future needs to now become the fuel for sustainable development
mpact investment is not a new idea but it is providing a unifying language for a range of financing practices that enable new thinking about the fundamental purpose of capital, according to a project report produced by Pure Advantage. The primary challenge of our time is to balance the miraculous gains of the modern global economy with the risks and inequalities that have grown with it, the report says. Impact investment represents a “revolution within capitalism” according to Sir Ronald Cohen, a preeminent international philanthropist, venture capitalist, private equity
investor and social innovator. It is built on three core principles: > the intention to create a positive social or environmental impact > the expectation of a financial return > measurement of the impact that is achieved Public resources are already stretched so new pools of capital are required to deliver these collective aspirations. Getting more from our money across a quadruple bottom line requires investment approaches that go beyond the principle of ‘doing no harm’. They demand a fundamental reframing of the
purpose of capital, more sophisticated accounting of externalities and for finance to be a friend of sustainable development rather than a threat. In New Zealand, the market is estimated to be NZ$100 million but due to a lack of aggregated market data, the report says this figure doesn’t reflect the true extent of activity. In 2018, the global market size of impact investment was estimated to be around US$228 billion. The report says the business sector in New Zealand is aligning with impact investment through the rise of social enterprise, the growth of tribal economies, and the
increasingly progressive outlook of corporates and mainstream business. Public sector reform, particularly in the area of service commissioning, is driving new demand for impact investment, and citizen sentiment increasingly requires institutional investors to consider non-financial returns in their decision-making. There have been a number of significant developments in New Zealand in the last year that will feed into the growth of a domestic impact investment market. These include the establishment of new funds, policy initiatives, institutional strategies,
Yearbook 2019 and growing consumer awareness. While demand for impact investment is growing, it is often cut off from the supply of capital, with much more remaining latent due to constraints relating to resources, culture, and capability. The Pure Advantage report believes there should be a dual approach to its growth – focusing on specific market opportunities and the development of a “whole sector” strategy. In terms of specific market opportunities, the report focuses on areas where commercial opportunities combine with pressing need, potential for scale, and policy priorities. In the report, four areas are examined: • Social and affordable housing • Forestry and sustainable land use • Social procurement • The circular economy For a longer-term approach the report recommends: • Development of a policy agenda to align capital with priorities • Anchoring the supply of capital through the establishment of a wholesale fund and encouraging all institutional investors to allocate a percentage of their portfolios to impact • Unlocking consumer demand and activating financial citizenship • Proactively growing the pipeline of investment opportunities • Building an evidence and knowledge base • Supporting upskilling and professional development • Setting strong and clear principles of practice A critical part of growing
the market will be having an independent organising body that can bring all stakeholders into play and recommend investments into the market infrastructure without being conflicted or politicised. The best vehicle for this role is the newly established Impact Investing National Advisory Board Aotearoa New Zealand (IINABANZ), which is also the country’s formal representative on the Global Steering Group on Impact Investment. As it grows, the impact investment market in New Zealand offers an opportunity to combine the values of our unique cultural identity with the interests of business innovation, community well-being, and policy priorities, the report says. However, good outcomes will not happen by themselves, and we should be prepared to invest in the design and development of new market infrastructure. While globally, impact investment is on the rise, in New Zealand the market remains nascent – largely ad hoc, unstructured, and underdeveloped. This seems at odds with New Zealand’s progressive approach in areas of social policy and sustainable development, such as the Living Standards Framework, the upcoming 2019 ‘Wellbeing Budget’, the ‘Social Investment’ approach and pioneering legal models for the designation of public lands, illustrated by Mt Taranaki and the Whanganui river solutions. It is, however, consistent with other areas where we need to do better, the report says. This includes invest-
ment strategies across the built environment, housing in general, land use, biodiversity, water quality, transportation, waste, supply chains and support for innovation and hybrid business models. All these issues reflect, in part, the lack of an effective capital market aligned to a national identity that takes pride in kaitiakitanga, a hopeful vision for the future, and the hard realities of laying a pathway to genuine sustainability.
Risk and return . . . and impact
Because impact investing is driven by social and environmental objectives, the practice evolves the calculation of risk-reward to one of risk-reward-impact. This means investment opportunities with higher risk profiles and/or below-market financial returns may be acceptable, for some investors, when the potential return on impact is attractive enough – particularly where impact is being created in areas of market failure and/or underserved populations.
These potential concessions, in themselves, are not defining characteristics of impact investing; they are part of the toolbox with which to tackle difficult issues. Impact investments are not soft investments – they simply consider a broader range of value and adjust the risk-return ratio accordingly. Flexibility will not always be possible. Many fund managers, company directors, or trustees have specific fiduciary duties in relation to the investments and investment strategies. While these duties are not always as clear cut as having to maximise financial returns, there are material obligations that often need to be legally reviewed on a case-bycase basis when impact investments are being made from funds with conventional settings. This can create both real and perceived barriers to doing impact investment, especially in a nascent market where precedents, and the confidence to do things differently are often limited.
Click here to access the Pure Advantage website
In today’s polarized world, of growing inequality and devastation of the planet, we are in need of a paradigm shift. We need to bring impact to the centre of our consciousness and shift investment and business decision-making from considerations of 'risk and return' to 'risk, return, and impact' - Sir Ronald Cohen safetynews.co.nz
Yearbook 2019 The biggest dataset on market activity is offered by The Responsible Investment Association Australasia (RIAA) who survey their 230 plus members on an annual basis. In 2018 they reported an impact investment market in New Zealand of NZ$100 million, with no recorded change from the previous year. From the same survey, the SRI market was estimated to be NZ$86.4 billion, and negatively screened ESG investments constituted NZ$97 billion. The whole responsible investment market grew 40 percent year on year -- reflecting the profound pushback from consumers to having their KiwiSaver deployed in destructive industries. A recent Colmar Brunton survey (commissioned by the RIAA and Mindful Money) found 72 percent of Kiwis expect their investments to be managed ethically, and 62 percent would shift their funds if they were managed in ways inconsistent with their values.
The financing gap
So far we are not seeing the actions needed to reshape the capital markets and redirect investment towards our sustainable development. To grow impact investment, much of the attention now focuses on increasing the participation of the private sector and institutional investors. This is important, but significant capacity also sits in with the non-profit sector (NPS), primarily made up of organisations structured as charitable trusts and incorporated societies including religious institutions and most philanthropic organisations. The opportunity to increase NPS engagement with impact investment is underpinned by a natural alignment around mission. NPOs exist to deliver charitable and community-based outcomes, so the opportunity to deploy their capital towards social and environmental impact investments, as well as their day-to-day activities, should be an intuitive step to make.
The Tindall Foundation is a notable example of how a philanthropic organisation can deploy its whole balance sheet towards impact, as highlighted by the case study with the Housing Foundation depicted in the report. At the moment the majority of NPOs separate the management of their assets from the management of their operations, or in the case of philanthropy, their grant making. Generally, an NPOâ€™s investments are geared to maximise financial returns, to ensure the future security and/or generate profits, in order to make grants. While this is a rational approach, as more impact investment opportunities come to market we can expect to see more NPOs making the strategic and structural shift towards impact investment in their portfolios. The New Zealand Cause
Report, produced by JBWere, estimates that the total asset base of the NPS amounts to NZ$58 billion, with net assets amounting to NZ$46 billion. Out of this around NZ$20 billion is deployed in investments and endowments. This sum represents a significant block of capital in the economy. It is mission-aligned and could be set to work on delivering social and environmental outcomes. In September 2017, the Ä€kina Foundation, released in association with JBWere and EY, Growing Impact Investment in New Zealand. The report outlines the scale, breadth and momentum of impact investing globally, and how the field was developing domestically. It estimated that the New Zealand market could grow to NZ$5 billion within a decade.
What impact investment is and what it is not Impact investment is often negatively confused with other concepts such as responsible investment, ethical investment, or environmental social governance and more investments of a philanthropic nature
he Global Impact Investment Network (GIIN) defines impact investment as investments made into companies, organizations and funds with the intention to generate social and environmental impact alongside a financial return. Impact investments can be made in both emerging and developed markets and target a range of returns from below market to market rate, depending on an investors’ strategic goals. This definition is the one most commonly accepted, and the one the report uses. Within this definition, the basic practice of impact investment involves three core principles: > Intentionality – an investor’s intention to have a positive social or environmental impact through investments > Expectation of return – the investment is expected to generate a financial return on capital or, at minimum, a return of capital > Impact measurement – a commitment by the investee to measure and report on the social and environmental performance and progress of underlying investments, ensuring transparency and accountability An investment is not an impact investment unless it is originally motivated
by a goal to contribute to social and environmental solutions. Unintended social and environmental outcomes of an investment are not considered within scope - there needs to be a transaction that delivers a material financial return alongside the delivery of impact. The performance of an impact investment is evaluated using a wider accounting basis than economic return alone. Impact investment measurement seeks to capture a holistic record of value creation, potentially over a quadruple bottom
line and usually tailored to specific areas of intended impact. Externalities, both positive and negative, are incorporated into performance metrics. The financial returns targeted by an impact investment depend entirely on the motivations of the investor and can range from below market (concessionary or impact first) to a risk-adjusted market rate (finance first). It is simply a tool to finance blended social, environmental, economic value creation and generate aligned returns. One of the best resourc-
es for getting to grips with ‘impact’ is the Impact Management Project, a collaborative effort of more than 700 organisations to establish shared fundamentals for how we talk about, measure and manage impact.
Not to be confused with . . .
Impact investment is often confused with other concepts such as ‘responsible investment, ethical investment or Environmental Social Governance (ESG) investment. Equally, impact investment can also be conflated with concepts such safetynews.co.nz
Yearbook 2019 as social finance community finance and venture philanthropy. As we look to build the market in New Zealand, we need to be clear what we’re talking about and be talking about the same thing. The RIAA depicts responsible and ethical Investment along a spectrum, bookended by traditional investment at one end, where investments are agnostic to social or environmental impacts, and philanthropy at the other, where grants
(gifts with objectives) are made to fund social or environmental impacts without any expectation of a financial return. Moving along the spectrum does not necessarily mean diluting financial returns. ESG investing represents investments that avoid harm, socially responsible investing (SRI) represents investments that create general benefits for stakeholders, often indirectly and unquantified.
But not mutually exclusive
Still these practices are not mutually exclusive, with impact investment portfolios often being nested within a wider responsible investment strategy. In a report summarising insights gained from a series of engagements held in early 2018 between David Carrington, an expert in the field of impact investment, and New Zealand-based investors, Giving Architects state the following:
“The opportunity to develop a variety of suitable investment options using debt, fixed interest and equity to deliver Impact Investments from responsible investment portfolios is significant. “Aiming to utilise three to five percent of responsible investment portfolios for impact investment for the right products is a reasonable expectation, based on discussions at several meetings and forums.” However, at this early stage of market devel-
Yearbook 2019 opment, including the absence of established secondary markets, if impact investment is a portion of a portfolio,
investors may also need to be comfortable with restricted liquidity for that portion.
Market opportunities in New Zealand Investments can be made through nearly every asset class, type of organisation and sector to deliver different combinations of impact investment
Katherine Corich Trustee
Phillip Mills Founder
iven the stage of development of the market in New Zealand, the report focuses on four areas that present immediate opportunity and pressing need.
Rob Morrison Chair
Mark Solomon Trustee
Geoff Ross Trustee
Stephen Tindall Trustee
Pure Advantage advocates for economic models that generate both profitability and positive social and environmental outcomes. The not-for profit charity, led by business leaders and supported by a collective of researchers and writers, sets out to debunk the notion that wealth creation and environmental protection are contradictory goals.
Traditionally the social housing marketplace has been dominated by Housing New Zealand Corporation (HNZ). HNZ is a Crown entity with 64,000 properties nationwide and provides 90 percent of social housing and 3.5 percent of the country’s total housing stock. HNZ also maintains around 1,500 houses for community housing groups providing residential services. Beyond HNZ, local authorities provide approximately 9,000 social housing units (mostly in Christchurch and Wellington), and a number of community housing providers maintain around 5,000 units in total, typically focussed on specific populations, such as people with physical or mental challenges. New Zealand’s current housing crisis has been driven by years of population growth combined with low rates of new home building dating back to the Global Financial
Crisis in 2007-2008. The Ministry of Business Innovation and Employment (MBIE) estimates that across the country, there is a shortage of 71,000 appropriate homes. Surplus houses that do exist are often too expensive for the majority of families to afford. In parts of Auckland, house prices are more than ten times household income compared to the international benchmark for ‘affordability’ (set by the Demographia International Housing Survey), which is four times household income. Unaffordability is not consistent across ethnic groups. For Māori in particular, home ownership rates are more than 20 percent below the national average (Census 2013). Social housing and housing affordability are now areas of policy priority and political risk. However, to deliver improved outcomes, the sector requires both investment and a more considered development approach to improve access, appropriateness and affordability. Provocation one: Paul Gilberd Provocation two: Jade Kake safetynews.co.nz
Investment case study: The New Zealand Housing Foundation
Forestry & land-use
New Zealandâ€™s unique climate, geography, and history mean that forest and land-based assets dominate our nationâ€™s economy and culture. The contributions of forest services and sustainable land use will also be a major factor in determining whether we achieve our Paris Agreement targets. This creates a motivation and opportunity for change. New, or imminent,
policies that will be material to these two interrelated sectors include the Climate Act, the Provincial Growth Fund, the Green Fund, and the One Billion Trees programme. A key barrier to increasing sustainable land use remains the current economics of pastoral agriculture, and particularly dairy farming. This includes an inflationary mix of high land prices combined with high levels of private debt, and production models that mostly exclude the value of the water being drawn from increasingly
stretched catchments, and the price of the nitrogen leached into waterways. Until these negative externalities are properly priced, along with the cost of agricultural carbon, which is currently excluded from the Emissions Trading Scheme, distorted economics will present a barrier to widespread transition to sustainable land-use. In terms of forestry, The Ministry for the Environment estimates that the sector currently sequesters about 30 percent of gross emissions. In a sce-
nario presented by Vivid Economics, New Zealand will have to support extensive afforestation covering an additional 1 million hectares by 2050. Presently, however, New Zealand is in a cycle of deforestation. According to Ministry for the Environment, the rate of forest removal has averaged around 8,500 hectares per year since 2008. To reverse this trend and help meet that carbon target, the current New Zealand Government has set a goal to plant one billion trees over the next ten years. The expansion of forestry is likely to create some trade-offs with pastoral agriculture and other current forms of land use. It will also require careful diversification of species, smart thinking around what social and environmental co-benefits that can be leveraged, and the provision of new economic opportunities to enable the private sector in a meaningful and productive role. Certainly, the growing popularity of Green / Climate Bonds
could play an important role in financing new initiatives. Provocation one: Dr. David Hall Provocation two: Cerasela Stancu Investment case study: Waipā agri-impact fund
This area of opportunity is different to the previous two in that it doesn’t represent a specific sector. Instead, the opportunity is created by an evolution in procurement policies and practices that open up markets to social and indigenous enterprises, working in a range of sectors, and, as a result, generates demand for values-aligned capital in the form of impact investment. Social procurement leverages an organisation’s (private, public or not-for-profit) buying power to deliver social, cultural and environmental value, above and beyond the value of the goods or services being procured. In essence, social procurement happens when a buying organisation intentionally
uses their supply chain as a tool to foster positive impacts by purchasing from suppliers that deliver, and can demonstrate, additional social and/or environmental outcomes as a result of the basic transaction. An example of this is Vanguard Laundry in Queensland Australia, which provides commercial laundry services while also delivering supported employment opportunities to people who have experienced mental illness and otherwise struggle to get back into the workforce. Social procurement policies and practices, in both the public and private sector, are being adopted rapidly around the world, especially where there are strong and developing social enterprise sectors in concert. Indeed, social procurement will be a major focus for the New Zealand Government’s Social Enterprise Development Programme. The Ākina Foundation, which leads the implementation of this programme, launched Fwd: an online social procurement marketplace, for both buyers and sellers, in
October 2018. Provocation one: Dr Sean Barnes Provocation two: Tania Pouwhare Investment case study: Kilmarnock Enterprises
The circular economy concept is based on three key principles: > Designing waste and pollution out of manufacturing and production processes > Keeping products and materials in use over multiple life-cycles > Regenerating natural systems. Circular economy practice is based on moving away from a linear “take, make, dispose” industrial process, to ‘closed loop’ approaches to production. This sees both biological and technical materials being intelligently designed, assembled, used, and recycled in ways that minimise leakage and waste at end-use, i.e. materials ending up in landfill or incineration. A major growth driver in circular economy practices, is that achieving sustainable outcomes need
not negatively impact the quality of life of consumers, nor does it result in a loss of revenue or extra costs for manufacturers. There is no one single approach to embed circular economy concepts into a business model, and there is a proliferation of innovations, in both established business and new startups, that are using these concepts to reduce negative impacts, regenerate the environment, and offer a highly desirable cost savings and/ or propositions to consumers. This field is being championed by the both the Sustainable Business Network and Ministry for the Environment, whose Waste Minimisation Fund’s latest round is for initiatives that will accelerate New Zealand’s transition to a circular economy. Provocation one: Rachel Brown Provocation two: Bernadette Casey Investment case study: Ethique
Click here to read the full report by Pure Advantage safetynews.co.nz
HASNZ is an accredited charitable trust that has been developed to deliver a unified voice and to raise the standard of health and safety across the whole of the construction industry. The aim is to help create a stepchange in the health and safety culture and performance in the next five years so that all construction workers go home safe and well at the end of every day. CHASNZ works with industry to identify and provide guidance on best practice health and safety. Their goal is to establish consistent, easy to engage, health and safety systems that are at the heart of business culture, continuously reviewing and making improvements to the health and safety standards in the construction industry. To achieve this, 60
CHASNZ's three-part strategy to reform health and safety in construction Construction Health and Safety New Zealand (CHASNZ) is a charitable trust that was established in March last year and it is already leading the way toward a safer, more efficient construction industry CHASNZ has devised a robust strategy made up of three key themes:
1. Provide industry leadership
CHASNZ was established with sector representation across the whole NZ construction industry. A high calibre Board, who act as â€˜Brand Cham-
pionsâ€™ for each key sector of construction, provides inspirational leadership to enable better involvement and connection within the industry. CHASNZ recently welcomed Brett Murray, CEO of Site Safe New Zealand Inc, to its Board of Trustees as the representative for the Construction health and safety training
industry. Brett brings with him a wealth of experience in health and safety. Brett will be forming a training advisory group that will ensure the training needs of the Construction industry are captured and that training is aligned with industry standards.
"Our Trustees were selected because of their standing and influence in each of their sectors, along with their passion for the health and well-being of people in the Construction industry."
Roger McRae Chairman
MD, Milestone Homes Residential Construction
Nicole Rosie CEO, Worksafe Government
2. Achieve worldclass performance in health and safety for the Construction industry
The Plant scheme is available and ready. Any NZ based Construction organisation that employs excavator and roller workers has access to free useful materials. The ConstructSafe website functionality is being improved, to enable navigating the website as either a Worker, Company or Client. In November a framework review group met to discuss the content and form ConstructSafe’s Tier one, three and four tests. The objective of the group was to challenge the ConstructSafe questions, set up to date against industry needs, to ensure it represents the NZ Construction industry as a whole. The workshop was attended by key industry representatives from Fletchers, Naylor Love, Leighs Construction, Hawkins, Arrow International, Dominion and LT McGuinness, Site Safe, Downer, McConnell Dowell, Fulton Hogan, HEB, CPB, Skills, and Connexis.
Chair, NZ Specialised Trade Contractors SMEs
CEO, Auckland Transport Client (Public)
Director, Ngāi Tahu Property Client (Private)
Business Leaders' H&S Forum Independent
Darryl-Lee Wendelborn MD, Beca NZ Consultants
CEO, Naylor Love
National Secretary, E tū Unions
CEO, Site Safe NZ Health and safety training industry safetynews.co.nz
Yearbook 2019 The feedback was positive, some changes are required and the review group is working to roll out an updated version of the ConstructSafe Tier 1 test which will be available early this year. CHASNZ will be working on further Tier 2 specialist assessments this year which includes the release of Electrical safety competency. The VCLG is also playing a vital advisory role in providing CHASNZ with the priorities over other core safety assessments such as carpentry. Data and information gathered by ConstructSafe has indicated that a number of candidates are experiencing challenges around literacy and understanding English. With help from
Downer NZ, CHASNZ has received funding from Tertiary Education Commission (TEC)/Te Amorangi MÄ tauranga Matua. This funding will focus on addressing these challenges and work with industry partners on a funded solution.
3. Focus on achieving consistency and cohesion across the industry
CHASNZ is now responsible for the ConstructSafe safety competency assessment scheme. Endorsed by the CHASNZ Board and independent advisors as the Construction industry health and safety competency benchmark tool. To date, more than 70,000 Tier 1 Con-
structSafe assessments have been performed and the scheme has expanded to cover Tier 2 specialist trade activities including scaffolding, excavator and roller operation, as well as Tier 3 (Supervisors), Tier 4 (Managers) and Tier 5 (Professionals and Practitioners). CHASNZ has been tasked with developing a standard for pre-qualification schemes in the Construction sector in New Zealand. The objective of the project is to develop a framework where pre-qualification schemes can be assessed by all parts of the Construction supply chain, with the benefit of schemes being mutually recognised by clients.
This project will commence in early 2019 and has the backing of many large and significant Construction companies. CHASNZ is developing a standard measurement framework for lag metrics across the industry. The work the Vertical Construction Leaders Group (VCLG) has already been undertaken is being used to develop an overall approach to what lag metrics are important and how they should be measured. Representation from the horizontal, vertical and residential building arena were active contributors at the meeting held in November and an overall approach is now being developed for consultation across the industry.
What the 2019 property market could look like Leading property and information service provider Core Logic sets the scene for the 2019 property market and economic outlook
lot of the market interest in 2018 was focused on government policy and measures to stifle property speculation. In the event, volumes were low but stable and values generally showed consistent growth across the country expect for Auckland and Christchurch. Another fascinating year. Here’s our top 10 list, summarised:
1. LVR changes
The first milestone for 2019 is the relaxation of the LVR restrictions on 1st January 2019. We’re cautious about the effects these changes may
actually have on market activity because banks are likely to stick to tough lending criteria, so the pool of potential borrowers who can meet those requirements may not be that big.
2. Foreign Buyers
Core Logics senior Analyst Kelvin Davidson says that in Q4 2018, there were 885 purchases by people without citizenship or a residency visa, equating to 2.3 percent of the total. In the same quarter a year ago, there were 1,038 purchases, equating to 2.9 percent of the total. The most purchases in Q4 were in Waitemata, at 159, down from 189 a year ago.
Clearly, these figures have dropped year-onyear, but the foreign buyer ban hasn’t perhaps had the ‘big bang’ impact that might have been expected. However, there was always a strong possibility that the reporting from this Stats NZ data series wouldn’t be able to show much effect in Q4. First, note that this series is based on settled transfers, not sales agreements (which occur much earlier in the sale process). Second, the data covers a full three-month period, which had a three-week window at the start when the ban didn’t apply. Therefore, the ability for foreign buyers to rush
through agreements from 1 to 21 October, but just settle at a later date, may well have held up the figures for Q4 as a whole. In fact, there probably has been a greater effect from the ban. As shown by other, timelier sales figures, there was a spike in overall activity in October with a commensurate drop-off towards the end of 2018. In other words, some activity appeared to move forward to the start of October to ‘beat the ban’. So where to next? The Stats NZ data for Q1 due on 2 May will be of huge interest, as the technicality of agreement/settlement should have disappeared and we’ll have safetynews.co.nz
Yearbook 2019 ‘clean’ figures to look at. If the ban has been effective (and effectively enforced), the foreign activity in the market should fall away pretty sharply – albeit probably not to zero (because for example Australia and Singapore are exempt, while foreign buyers can still purchase and hold apartments in large-scale developments). We’ll also be looking closely at our own Buyer Classification series to see any effects, perhaps evidenced by a drop-off in the cash multiple property owner segment. Granted, this segment is much wider than just foreign buyers. But they will be a part of it, with that cash/equity generated overseas and put into New Zealand. Overall, although the Stats NZ figures on foreign buying activity across New Zealand as a whole suggest that it’s never been an overwhelming influence anyway. The removal of this group of buyers will create purchasing opportunities for locals who might otherwise have missed out. Any impact on prices, however, is always going to be harder to detect – given that in theory the foreign purchaser may have effectively paid no more to buy a property than the failed domestic buyer would have paid.”
3. Capital Gains Tax:
The Tax Working Group will be submitting its final report to the government in February 2019 with a recommendation of whether or not to impose a capital gains tax, and in what form (if the recommendation is indeed for a tax, which seems likely).
However, it’s important to note that the government would then have to accept that recommendation and also survive the next election (2020) before any tax would come into law, so it’s certainly not a short-term impact.
4. Ring-fencing of rental property losses for tax relief
Moving forward to April 2019, the intention is to ring-fence rental property losses for tax relief purposes. At the moment, if you’re a property investor and you make a loss, you can use that loss to reduce the amount you’re taxed on other income sources. The new approach is basically saying that any losses can still be applied for tax relief, but limited to the asset class of property. So, landlords can still use losses to reduce tax across their current property portfolio by applying losses from one property against profit from another property and/or from one year to
the next. What is no longer permitted is applying that loss against other forms of income. It’s targeting the speculative end of the market who are in it for the capital gain. It will be really interesting to see if this triggers some existing landlords to leave the sector. The bigger investors may restructure in advance, but on its own the ring-fence seems unlikely to cause a mass exodus.
Then there’s KiwiBuild. The programme has had its fair share of teething problems to date, but they’ll be hoping to really ramp up momentum in 2019, both in terms of construction volumes and buyer take-up of the houses actually built. Their first headline target was that 1,000 KiwiBuild modest, affordable properties would be completed by mid-2019, and according to the dashboard tracker on
their website, they look reasonably on-track to meet that. They’ve announced some developer partnerships, have sold 40 homes, completed another 33 homes, with another 77 under construction and a further 4,047 contracted to build. An interesting aspect to all this is whether the homes do actually end up with First Home Buyers. If a property goes through ballot and doesn’t sell, it can be sold to other buyer types (eg investors) but still at the capped price. That’s part of the system and not a failure – KiwiBuild’s primary aim is to raise the stock of ‘starter’ homes available, and if they end up with FHBs then that’s a good secondary result. Another related topic is the influence of KiwiBuild on the construction sector. In a year in which several major companies went bust, and development funding became a bit harder, could this mean
Yearbook 2019 firms pivot their focus – perhaps towards smaller dwellings (independent of KiwiBuild, or pre-fabrication? One to watch.
6. Building Consents
New Zealand is currently in the midst of one of the three biggest booms for building consents in the past 50-odd years, driven by Auckland and a gradual shift away from standalone houses and towards smaller dwellings (townhouses, apartments, flats). However, looking at Auckland specifically, we estimate that of the 1213,000 consents per year, only about half are resulting in a genuine chance in the stock of housing: because there’s a lot of infill development going on, i.e. knocking down a property to build a replacement(s). In short, consents and
actual construction volumes need to stay high - or perhaps even rise further to make a real dent in the current shortfall of housing. That could be problematic in 2019 for an industry already running at full tilt.
At least the easing in the net migration balance, which is very likely to continue in 2019, will help to take some of the steam out of property demand and dampen the pressure on the construction sector. However, the effect may only be small and slow – after all, net migration is still very high and will take a fair while to diminish.
8. Interest rates
The official cash rate will remain at 1.75% in
2019 (and probably most of 2020) and that should help interest rates to stay reasonably low and stable. However, the balance of risks around mortgage rates is to the upside. Flow through effects from higher offshore rates cannot be ruled out, and the signaling by the Reserve Bank that capital adequacy requirements will be raised over the next five years could also see mortgage rates rise. Any increases in 2019 will probably be small, but we’ll still be keeping a close watch.
9. Market volumes
How all of these factors above interact with each other, and other macro factors such as GDP growth and the labour market, will go a long way to determining the path
for sales volumes in 2019. Our central forecast is that volumes will stay at around 80-85,000 in 2019 (similar to 2018), with the LVR relaxation likely to mean that the actual figure is more towards the top of that range than the bottom. But whether they’re 80,000 or 85,000, sales will still be well below previous peaks of more than 100,000.
10. Property values
Now for the million dollar question that every property owner or buyer wants to know: will prices move up, down or stabilise? Generally speaking, we’d anticipate similar patterns to 2018, with average prices across the country rising by 3-5%. It would be no surprise to see Dunedin and Wellington outperforming that figure, and Christchurch and Auckland underperforming. Many regional centres that have fared well this year (eg Napier, Whanganui, Palmerston North, and Invercargill) may well do the same in 2019. There’s a lot going on. Our crystal ball prediction is another solid year without any major upheavals. The local market is more stabilised, but there’s still the unknown risk of offshore dynamics. Either way, it’ll be another busy year, with plenty to watch. Of course, if you’re thinking of buying or selling, do your research.
Head of Research nick.goodall@corelogic. co.nz
he distinguished medical journal identifies the three pandemics affecting human health as “the global syndemic”. And the three major issues are connected. So if we can fix one, the report says it can help towards fixing them all. The report highlights the three problems are caused by methods of agricultural production, transport, urban design and land use which are taking an enormous toll on human and planetary health. A syndemic is “a synergy of pandemics that co-occur”, interact and affect people in every country and region around the globe. “The current costs of obesity are estimated at about $2 trillion annually from direct health-care costs and lost economic productivity. “These costs represent 2.8 per cent of the world’s GDP,” the report said.
The three biggest threats to humanity Obesity, undernutrition, and climate change represent three of the gravest threats to human health, the environment and our planet, highlights the latest Lancet Report
Urban design, transport, and land
But focusing on the intersections between our built environment and the issues, the report also reveals how within governance processes, urban planning decisions can contribute to reducing obesity and undernutrition while simultaneously working towards mitigating climate change. “Transport systems, urban design, and land use are interconnected systems that have an enormous effect on climate change and obesity through their impact on greenhouse-gas emissions, physical activity, and diet,” reveals the commissioned report.
Urban design and its impact on health
The challenges of global environmental change make it essential that cities become more sustainable. “Many overlaps exist between health and sustainability at the urban level,” the report said. “Re-establishing the link between urban planning and public health is a high priority.” There’s been an increasing recognition of the many ways in which urban planning and design can affect human health in recent decades.
Urban design and land use reflect underlying social and economic conditions, and systems of governance, resulting in very different types of urban and rural environments throughout the world. “For example, there are some compact and dense cities that are suitable for walking and cycling, sprawling cities dominated by freeways for cars, formal housing areas with good quality housing and services, overcrowded slums with a lack of basic services, high-density
subsistence farming areas and low-density commercial farmland.” And most major cities are forced to address the twin challenges of traffic congestion and air pollution. With transport accounting for around 14-25 per cent of greenhouse-gas emissions the report calls for transport systems and community designs that support “active transportation and reduced car use”. “Switching reliance on cars and trucks to more public transportation, active transportation, and
rail freight will address the targeted issues of congestion and air quality as well as reduce greenhouse-gas emissions and increase physical activity.” Together, obesity and malnutrition are the biggest cause of premature death. The report notes around four-million deaths each year are linked to obesity, and around 815 million people are chronically undernourished. The problems have been exacerbated by the lack of action of policymakers, the influence of profit-seeking food companies over public policy and the public’s lack of demand for change, explains the report. Lancet suggests a binding international agreement, similar to the agreement reached on global warming in 2015, is needed to address and improve food production and distribution. Global meat production has increased from 71 million tonnes annually in 1961 to 318 million tonnes
in 2014. It’s projected to increase further to 455 million tonnes in 2050. The report says this level of production and consumption of red meat is a substantial driver of The Global Syndemic. To help fix climate change, the commission says we must fix the
obesity and starvation epidemics. “A food system that secures a better diet for this and the immediate next generations will save millions of lives and, at the same time, also help save the planet.” The 43 authors hope the new report will start
a dialogue for better policies and encourage companies to create affordable but health-conscious products. This article was written by Dinah Lewis Boucher, first published by The Urban Developer
he blockchain is the technology that powers cryptocurrencies like Bitcoin. A lot of people know what Bitcoin is, but still don’t know much at all about the blockchain that powers it. Blockchain technology is still relatively new to most people. If you ask the random person walking down the street what the blockchain is, they’ll likely look at you like you’re speaking a foreign language. That will change in due time because the blockchain technology has the power to change everything. One of the first things it looks to disrupt is supply chain management. Supply chain management relies on a system that has been outdated for years and has become unreliable and practically useless in today’s world. It uses a system that still relies on paper records and dozens of middlemen. Let’s take a look at the supply chain and how the blockchain technology is destined to revolutionize it.
What Is the Supply Chain?
In short, the supply chain is getting a product from creation to the customer. It’s the network of all the people, companies, resources, activities and technology involved in the creation and sale of a product. This includes the delivery of materials from the supplier to the manufacturer, all the way to its eventual delivery to the end user. This process can be extremely complex, especially when it’s on a global
How blockchain is improving the global supply chain A primer on blockchains and supply chains for those who missed the information boat first time round and are left feeling a bit like Neanderthals
scale. Major corporations have supply chains that span multiple countries and even continents, so properly managing the supply chain is key. Supply chain management (SCM) is the oversight of materials, information, and finances as they move from supplier to manufacturer to wholesaler to retailer to consumer. The three main flows of the supply chain are the product flow, the information flow, and the finances flow. SCM makes sure everything flows smoothly from the beginning to the end.
What is Blockchain?
If you’re someone with no prior knowledge of or experience with blockchain, it can seem extremely overwhelming and complicated at first glance. The blockchain got introduced to the world via Bitcoin. Bitcoin is the most popular cryptocurrency, with one Bitcoin being valued at US$3,202.70 at the time of this writing. But the blockchain technology can be used for more than cryptocurrencies. At its core, the blockchain is a public record of transactions. It’s also dis-
tributed, so instead of one person controlling everything, there are thousands of computers around the world connected to a network, and they come to an agreement on which transactions are valid. Whenever someone makes a transaction, it is broadcast to the network, and the computers run complex algorithms to determine if the transaction is valid. If it is, they add it to the record of transactions, linking it to the previous transaction. This chain of linked transactions is known as the blockchain. Since the transactions
Yearbook 2019 all reference the one before them, you can figure out which ones came first, thus ordering them. The ability to track and reference transactions of the blockchain technology has the potential to revolutionize almost any industry you can think of. It can be especially useful in supply chain management.
Blockchain has the potential to revolutionize the supply chain
When the idea of the supply chain was born around 200 years ago, it was a revolutionary idea that improved visibility and control of goods as they moved from point A to point B. But the way it was done 200 years ago no longer support today’s production and supply cycles, which have become extremely fragmented, complicated and geographically dispersed. Currently, supply chains can span over hundreds of stages and dozens of geographical locations, which makes it very hard to trace events or investigate incidents. The blockchain has the potential to transform the supply chain and disrupt the way we produce, market, purchase and consume our goods. As a distributed ledger that ensures both transparency and security, the blockchain is showing promise to fix the current problems of the supply chain. The first thing to do using the blockchain technology would be to register the transfer of goods on the ledger as transactions that would identify the parties involved, along with the price, date, location, quality, and state of
the product and any other information that would be relevant to managing the supply chain. With the blockchain, it would be possible to trace back every product to its origin. All the way back to the raw material used to create it. The decentralized structure of the ledger would make it impossible for anyone to hold ownership of the ledger and manipulate the data to their advantage. And the cryptography-based nature of the transactions would make it nearly impossible to compromise the ledger.
Advantages of using the Blockchain for the Supply Chain Let’s go over the major advantages of using blockchain technology in the supply chain one by one. 1. Transparency: The blockchain is a shared database that ensures honest transparency. All partners have the responsibility to upload their information and data about the product. A dig-
ital collection of accurate data improves accountability and trust between partners. Blockchain technology can show updates to the product in mere minutes. Everyone involved knows exactly where a product stands at all times. You can see exactly where a product is, how it’s being made, and when it will be delivered all in one place. 2. Security: The blockchain is built using extremely secure blocks. Each block is a copy of the document that is chronologically stored and linked to all of the previous blocks. Some experts already consider the blockchain “unhackable.” To hack it, a hacker would have to change hundreds of copies at the same time, which is basically impossible without the software picking up on it. 3. Streamlined: All of the logging involved with the blockchain is done digitally. This leads to less administrative work and more consistent and speedy data tracking. With the blockchain,
you cut out the middleman and sign on to the blockchain to instantly download information. Everything is in one spot, making communication and operations highly streamlined. The blockchain is global and scalable. The technology can support worldwide partnerships and communications just as fast as regional partnerships. This makes it the ideal solution for an economy of globalization. 4. Enhanced Analytics: The blockchain offers complex solutions to analyse the data being uploaded. It can help create forecasts and predictions based on previous data, and it can allow users to pinpoint lags in the supply chain. These data analytics are proving invaluable to companies who want to minimize supply chain expenditures and grow their businesses. 5. Customer Satisfaction: The blockchain technology can also be used to boost customer satisfaction. Business owners can use safetynews.co.nz
Yearbook 2019 the blockchain database to see where items are in production and shipment to build a delivery timeline for their customers. It also has a social advantage to it. A clothing brand with a dedication to fighting sweatshops may give their customers access to the blockchain, showing them a social consciousness approval form, and a labour union sheet.
Disadvantages of using the Blockchain for the Supply Chain Even though the advantages are overwhelming, there are still some disadvantages to using the blockchain. The technology is still very new, and it will take some time for it to be trusted on a mainstream level. And, companies are usually resistant to change at first, especially change of this magnitude. The three biggest concerns today are: 1. Blockchain programming is complex and challenging. Companies have to host extensive
blockchain training or outsource programming to a third party. 2. Since it’s international, it would eventually have to succumb to a variety of global laws. Moving forward, you can expect trade organizations to better standardize supply chain blockchain usage. 3. Blockchain relies on a network effect. The more people that use it, the more value it has. In order for it to truly succeed, all partners of the supply chain should use the platform consistently.
IBM and Blockchain
IBM has rolled out a service that allows customers to test blockchains in a secure cloud and track high-value items through complex supply chains. The service is already being used by Everledger, a firm that is trying to use the blockchain to push transparency into the diamond supply chain and thus help fix a market fraught with forced labour and tied to the funding of violence across Africa.
Blockchain is gaining to find out where the bad food came from would be traction in the Food stored in one centralized Supply Chain The Wall Street Journal posted an article that exclaimed, “after initial tests, 12 of the world’s biggest companies, including Walmart and Nestle, are building a blockchain to remake how the industry tracks food worldwide.” As it stands today, The Food Safety Modernization Act in the US requires companies in the food supply chain to provide “one back, one up” traceability. “One back” refers to where the food came from, and “one up” refers to who it was sold to. To do this, many participants may have to go into paper records to figure out the information that needs to be provided. When tainted food makes its way onto store shelves, the current process makes it extremely difficult and time-consuming to figure out where the food came from and when it was tainted, etc. All the information companies would need
place online. No looking into paper records or calling all of your suppliers on the phone. You would simply look up the information in the blockchain and problems that traditionally take days or weeks to solve can be solved in just minutes.
A world of potential
The blockchain is already revolutionising the financial world, and it’s only a matter of time until it takes over every other industry. A technology like this is a generational technology, something that will change the way the world works. For something like the supply chain, the blockchain technology will update a 200-yearold system and make it more reliable, secure and transparent. This article was supplied by Anna Kucirkova anna. kucirkova@iqsdirectory. tech of IQS Directory
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