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No 38 WINTER 2016

TAX FREEDOM DAY Stuck in a moment you can't get out of


RECRUITMENT Getting it right

It's not all positive


DID YOU MISS SOMETHING? The Employment Standards Legislation Bill

An Accountant's view

FINANCIAL STATEMENTS Making sense of it all


David Searle


Rosanna Baird (07) 834 6800


Chris Downey (07) 578 2989


Stuart Signal

(06) 878 7004


Chris Lynch

(06) 757 3155


Robert Elms

(04) 472 7919


(03) 343 0599

No 38 WINTER 2016

(09) 373 1128

DISCLAIMER No liability is assumed by Staples Rodway for any losses suffered by any person relying directly or indirectly upon any article within this document. It is recommended that you consult your advisor before acting on this information.


IN THIS ISSUE 2 Tax Freedom Day Stuck in a moment you can't get out of

4 Doing business in the Cloud An Accountant's view

6 Recruitment Getting it right

10 The power of compounding interest The positive and negative effects

13 Building Business Introducing SR Books from Staples Rodway Taranaki

14 The Employment Standards Legislation Bill Did you miss something

16 Crikey! Big tax changes over the Tasman

18 Ask an Expert Tax and motor vehicles

20 Setting a retirement spending policy When it's time to break open the piggy bank

22 James Crisp Ltd Food importer clocks up a century of change and growth

24 The challenge of making acquisitions pay Why do so many acquisitions fail to deliver value?

26 Financial Statements Make sense of financial reporting

29 A momentous milestone Wellington office turns 75

29 Budget 2016 No taxing surprises

30 Accountant by day, Ironman by night Jed Eden to compete in the Ironman World Championships

32 Auckland Art Fair 33 Staples Rodway Challenge

TAX FREEDOM DAY STUCK IN A MOMENT YOU CAN’T GET OUT OF Tax Freedom Day marks the day that New Zealanders (taken as an average) stop working to pay the nation’s tax bill and start working for themselves.



N 2016 TAX FREEDOM DAY fell on 6 May. Because 2016 is a Leap Year, this means the date is effectively two days later than Tax Freedom Day last year. Reasons for the later date this year include increases in local body rates both in Auckland and in some regional centres, as well as “bracket creep”. In 2015, Tax Freedom Day fell on 5 May instead of the date that we estimated a year ago, which was 7 May. Our estimates of when Tax Freedom Day will fall are made before the final data is available, hence the difference. The 2015 date ended up being earlier due to better than expected economic growth, while tax revenue remained in line with expectations. The fact that there is little movement year to year reflects the lack of change in tax law, apart from small changes around the edges. “Bracket creep”, whereby the average wage increases, but the individual tax rate bands do not, means that many workers will be subject to a higher average amount of tax than a year ago. Over time, this means that Tax Freedom Day will fall later each year.

to provide public services and infrastructure, we also rely on the state for providing a “safety-net” for those who cannot look after themselves, as well as the provision of universal National Superannuation for those over 65. Our Australian cousins appear to enjoy a similar level (and in some instances, a superior level) of public services and infrastructure to what New Zealanders enjoy and yet have a lower tax burden, as shown by their Tax Freedom Day being three weeks earlier than New Zealand's. Talk to many Australian tax experts and they are envious of New Zealand’s “broad base/ low rate” tax approach. In Australia there is a smaller base that is more highly taxed. The use of average figures can therefore overly simplify things. As with many matters involving statistics, there is ongoing debate over how to measure Tax Freedom Day. Our measurement is based on the Tax Foundation calculation and uses revenue obtained by government through taxes, levies and rates. It excludes revenue obtained by government through the running of state owned enterprises, or government



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GROSS DOMESTIC PRODUCT In comparison, Australia had a Tax Freedom Day of 12 April, the United States had a Tax Freedom Day of 24 April, while most of the European Union will only have their Tax Freedom Day in June or July. Tax Freedom Day presents us, as a country, with an opportunity to consider the right mix of government and private sector activity, as well as, whether government is getting bang for its buck. It is tempting to argue for tax cuts and that the government should aim to return surpluses to the tax paying population. But is that wise when there is still significant public debt that should be reduced? While society generally relies on the state

expenditure funded by debt. This is to ensure our measures follow a consistent base of comparison both from year to year and internationally. On current projections, Tax Freedom Day will fall later in coming years and this is to be expected, as both central and local government emphasise infrastructure spending, debt reduction and targeted expenditure. In saying that, it is encouraging to see central government considering tax relief, most likely in the form of bracket shifts, provided the fiscal situation improves. That, and a stronger economy, means we are likely to see Tax Freedom Day stuck in its current place in the first week of May.


12 April

24 April

6 May

June or July

DOING BUSINESS IN THE CLOUD AN ACCOUNTANT'S VIEW When it comes to cost-effectiveness, ‘the Cloud’ clearly rocks. The evidence is everywhere. You may remember a time when the word ‘cloud’ was only associated with the weather – those fluffy white, sometimes angry grey, things floating in the sky. But in 2016, thanks to a legacy started by a group of tech execs at Compaq Computer in Houston, Texas, 20 years ago, ‘cloud’ is a popular cliché that stands for the ‘online hosted’ model of delivering software services to businesses.

Article by Glenn Baker. Article first appeared in NZBusiness, June 2016. Republished with permission.



HERE’S NO DOUBTING THE FACT that the accounting industry and business owners have wholeheartedly embraced cloud software. Mark Kingsford, Business Advisory Director at Staples Rodway, has seen a massive uptake of cloud-accounting tools amongst their clients in recent years. From minimal cloud clients just five years ago, Staples Rodway now has more than 1,600 clients using a cloud-accounting system, he reports – many with cloud add-ons such as Payroll, Inventory and Point-of-Sale. “New businesses are driving the trend, with most setting up in the cloud. It’s the more established businesses that tend to be slow adopters,” he says. Staples Rodway has embraced the changing accounting landscape by launching a cloud-based service offering called RealTime. “RealTime blends the latest cloud technology with Staples Rodway’s tried-and-true service to provide unique solutions for progressive clients,” explains Kingsford. “We also contribute to the development of many cloud solutions – rural accounting platform Figured, for example.” Cloud-accounting solutions deliver a big efficiency booster for accountants by providing ready access to online data. “Traditional means of gathering information seem antiquated and just plain slow,” says Kingsford. “Benefits for clients include access anywhere, anytime, and the automation of many tasks.” However, he says the accuracy and integrity of data must continue to be managed. “A cloud-based system doesn’t overrule the ‘rubbish in, rubbish out’ rule. We work regularly with clients to make their process fit for purpose and to ensure that the monthly financials are accurate, reliable and allow business owners to make good decisions.” Cloud accounting also means reporting is becoming more powerful. Cloud tools enable automatic feeds of data up into graphical dashboards, assessing business performance against KPIs. “Big data, benchmarking and other analysis are going to be big in the next few years as businesses make more use of, and commercialise, the aggregated data now residing in the cloud,” explains Kingsford. When clients switch to the cloud, the biggest advantage to accountants arises from the ability to work directly with the financial data, adds Kingsford. “It means we can give proactive, real-time advice at a fraction of the traditional cost.” Another advantage is utilising the ‘single ledger’ concept, he says, whereby client data is used directly to generate the statutory financial statements, instead of having to use accountant proprietary systems. Then there’s the ability to integrate or ‘bolt’ other systems or apps onto a core cloud-accounting platform to deliver operational objectives. “It gives small and medium companies the same functional efficiencies that have traditionally been the domain of the larger corporates,” says Kingsford. “This technology competitiveness, combined with conventional agility, results in small businesses starting to disrupt

business dynamics.” As for making the transition from desktop to cloud, Kingsford says planning is paramount. “Depending on size and existing infrastructure, businesses may want to stagger their shift to tie into the end-of-life of fixed hardware. Staples Rodway specialises in transitioning accounting systems to the cloud and has learnt the best, most effective way to do this.” Here is his list of things to consider: ƒƒ Do you want to take across balances or transactional data – what use will you have for the data? ƒƒ Do you need weekly, monthly or yearly comparatives? ƒƒ Open items (debtors, creditors, etc.) need to be brought across accurately. ƒƒ It is an opportune time to clean up the chart of accounts and, for multi-entity groups, put in place aggregation/consolidation tools to make reporting easier. ƒƒ Cut over on a good date – ideally, but not necessarily, the end of the financial year. Avoid mid-month cut over. ƒƒ Remember that a system doesn’t work in isolation and that focus should be given to the business processes around the system.

Mark Kingsford, Business Advisory Director at Staples Rodway Auckland

Kingsford can see an exciting future ahead for cloud deployment. “At present, most cloud applications are geared towards the client. In time we expect to see more apps that manage the deployment and maintenance of a suite of apps. This will make it easier for accountants to manage large client lists on a universal level. “Going forward we will be releasing industry-focused solutions that manage all financial aspects for certain industry groups such as RealTime Farms, RealTime Motor Vehicle Dealer and RealTime Architect. These provide the financial tools these groups need to run their business efficiently. “We will also look at tools that can help clients manage costs and identify possible savings, better handle their debtors and manage FX transactions more effectively.”

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When selecting senior and professional staff, in our experience it seems that most employers are sticking with the tried and true – traditional advertising for a role, relying on the CV to shortlist, carrying out interviews and proceeding to the final decision. Other tools to assist in broadening the marketing of a role and information gathering on candidates remain underutilised.


EING ABLE TO MANAGE RECRUITMENT well and land outstanding senior staff is vital to the continued success of any business. Research shows that great people are five times as valuable as good people (this figure is even higher for specialised roles such as engineers).

BEGIN WITH THE END IN MIND As with any project, recruiting well requires good planning. If this is not your forte, then pull in someone who can manage the project for you. Define the role and what success ‘looks’ like before you begin. Do this at three levels: 1. Role/job ‘fit’ 2. Team ‘fit’ 3. Organisational ‘fit’ Understand what you can compromise on and what you can’t, what is essential and what is merely preferred. This isn’t just about identifying the task or qualifications, but being able to specify the key competencies in relation to the specific knowledge, skills and abilities required for successful performance e.g. a Sales role requires utilising relationships and being achievement/results oriented. Be careful that these don’t conflict! For example, highly innovative and conceptual thinkers are not naturally process driven people – very few people can be both.

ATTRACTING CANDIDATES Job boards such as Seek and Trade Me Jobs are the standard, but potential candidates surfing job boards are usually looking for a reason and are not always the best people. The more appealing candidate is the engaged and capable person, currently employed and potentially not actively looking. We call these passive candidates. Research shows that these candidates are 9% more likely to perform to a higher standard and are 25% more likely to stay. To attract this high quality candidate, you may need to think more laterally. LinkedIn, Facebook and other social

media platforms can be a good way to reach out to candidates that may not necessarily be looking. Further, utilise the social media networks of your existing staff. Use of social media for recruitment has grown 54% in the past 5 years. One study indicates that 73% of 18-34 year-olds found their last job through a social network.

SELECTION STAGE Decision makers seem to take it for granted that, for higher level roles, candidates will have a high level of cognitive ability and will know how to interact with others, simply because that's how they got where they are. It is common knowledge that because someone is technically good at their work, it doesn’t make for a great manager or leader and yet time and again people are promoted on the grounds of technical competence. A robust recruitment process should have processes to validate potential candidates, including internal candidates. It is essential that the interview stage is robust, that interview questions are aligned specifically to the competencies for the role and that questions are specific to behaviour on the job. Behavioural interviewing involves using open ended questions which require the candidate to think about the process in answering and go beyond what they think the interviewer wants to hear. By asking about specific situations they have been in and what they did it is easier to distinguish what a candidate 'has done’ instead of what they ‘might do’ at work, such as “Give me an example of when...”, “Tell me about a time....”. Finally, document! Your memory will not be as good as you think it is after 6 or so interviews and you’ll end up relying on overall impressions. Also, be aware of the Halo Effect – a psychological phenomenon that causes people to be biased in their judgments by transferring their feelings about one attribute of something to other unrelated attributes e.g. attractiveness. If you like one aspect of something, you'll have a positive predisposition toward everything about it. The Halo Effect works in both positive and negative directions. NUMBERS Winter 2016 • 7

OBJECTIVE SUPPORT Reasoning ability and cognitive complexity in particular are predictive of top leadership fit. However, these don’t measure resilience, self-awareness, or motivation to lead, and nor do they address behaviours that can emerge when working under stress. Hence, we recommend testing to identify a mix of cognitive ability (i.e. critical thinking ability, strategic reasoning) together with personality, behaviour and motivations. The reference check remains an important, but often overlooked measurement tool. These validate the information provided by the candidate, but also obtain independent and detailed information about the candidate’s previous on-thejob performance and can uncover background information that may not have been identified by other selection procedures. A structured interview approach is best to probe for more detailed information. Our preference is to use referee checks after we have profiled candidates because we can probe specific areas or warning bells that have been identified. For many of our clients, we will prepare specific questions to probe from the profiling results.

DECISION MAKING Your decision on a candidate should follow a full integration of all your measurement factors – interviews, assessments and reference checks. Be careful to avoid the “best of the bunch” scenarios and don’t be afraid to go back to the drawing board. Beyond recruitment, also think about how you will on-board/ induct the candidate. Great follow through into the role will mean a smoother transition and lead to a more productive, motivated and high-performing employee.

SUMMARY Conducting a great recruitment process will have flow on effects in your business in terms of productivity and performance, and hopefully less issues later on. If you feel you are not giving your recruitment and selection process its due attention or don’t have the time to put in to getting a great person, then get some assistance. Here at Staples Rodway we have experienced recruitment professionals who make finding the right people simple. We work closely with our clients to plan and manage the search and selection and can support clients through the complete recruitment process or just undertake parts of the process - it is up to you. If you would like to talk to one of our seasoned HR professionals on this front please feel free to contact Andrea Stevenson, Staples Rodway Hawkes Bay,; Julie Rowlands, Staples Rodway Taranaki, julierowlands@; Norma Blackett, Staples Rodway Tauranga, 8 • NUMBERS Winter 2016

Big answers to your burning business questions

Auckland • Wellington • Christchurch For more info and to register visit

NUMBERS Winter 2016 • 9




The quote “Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t, pays it” is attributed to Albert Einstein, but is probably apocryphal given that Einstein died in 1955 and the attribution emerged in the 1970s. Nevertheless, compound interest is an elemental force in financial markets, with both positive and negative effects.


ENERALLY COMPOUND INTEREST IS THOUGHT of in terms of a powerful positive influence on investment portfolios. However, compound interest also works in reverse for debtors and, like nuclear fission, can have devastating effects if debt rises and interest costs become unserviceable. It is the compounding effect of interest payments that some European states are now grappling with as interest payments become unsustainable, let alone the repayment of principal, even at very low nominal interest rates. Compound interest is effectively the cycle of earning interest on interest, which can cause wealth to quickly “snowball”. 10 • NUMBERS Winter 2016

The following example demonstrates this (see infographic on page 12 - 'Total Value of Investment at Age 60'). A 21 year old invests $10,000 today at 5% per annum (net of tax), in one year they receive $10,500 ($10,000 x 1.05). Instead of withdrawing the interest they earned on the principal of $500, they re-invest the amount, and by the end of the second year their total investment will be $11,025 ($10,500 x 1.05). Re-investing the $500 led to an extra $25 made in their second year. As they re-invest, their interest earned continues to grow so that at 60 years old their total investment will be worth $67,048. In comparison, if the investor had chosen to withdraw























interest each year, only leaving the principal of $10,000, at 60 years old they would be left with that original $10,000 and accumulated $19,500 over the life of the investment. The total of this is less than half the money they would have made than

if they had continued to re-invest their earnings. The compound interest effect consists of several variables. How these variables are implemented significantly alters the investment outcome. The most important are the

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starting point and the length of time over which compounding can take effect.






All investors are aware of the erosive effect of inflation on the real purchasing power of their investment portfolios. Like investment returns, inflation also compounds, and it is critical that the real return exceeds the inflation rate over time if an investor’s wealth is to grow in real terms, as well as nominal terms. To illustrate use the example of Person A’s portfolio returning 5% per annum with the annual inflation at a constant 6% per annum. In that case, at the end of the period, although the nominal value of the portfolio is the same as the first scenario above, the purchasing power of the portfolio would have declined by the difference between the rate of return and the inflation rate compounded. In the current environment inflation is negligible, but for many international bond investors, interest rates are negative. The compound effect of negative interest rates will very quickly diminish investment capital and on an accelerating basis.



INVESTED AT AGE 21 Compounding accelerates the longer the period of investment and, as a result, the majority of the gain is in the final periods over which compounding occurs. The other factors are the size of the initial investment, the rate of interest at which compounding occurs, the extent to which returns are re-invested and whether any draw-downs occur over the compounding period. Consider two different people who decide to invest at different times (see infographic on previous page). Person A starts at the age of 21 at a rate of 10% and contributes $5,000 to their investment every year for 10 years, after which they cease contributing and only re-invest interest earned until they turn 60 years old. Person B on the other hand only begins their investment at 31 years old and invests the same amount, at the same rate, adding $5,000 to their investment every year until they turn 60, a total of 30 years. At 60 years, Person A’s investment will be worth $1,390,493 compared to Person B’s investment of $822,470, despite Person B making $150,000 in contributions to their investment compared to Person A’s $50,000. In order for Person B to achieve the same outcome as Person A, Person B would need to achieve an annual rate of return of 12.7% through the lifetime of their portfolio. In reality the rate of return is not constant but will vary over time. While we can take a view on the likely average rate of return over the life time of a portfolio, sequencing of returns can have a dramatic impact on the outcome and emphasises the benefits of an early start and solid returns in the early period of a portfolio’s development. This can be demonstrated with two portfolios of the same 30 year duration. Portfolio A returns 10 percent in the first 10 years, Portfolio B returns 8 percent over the same initial period. The initial investment for both portfolios is $5,000, with no extra contributions. Over the second 10 year period the portfolios achieve the same rate of return of 10%. For the remaining 10 years Portfolio B needs to return 12.3% compared to Portfolio A to derive the same final investment outcome, or Portfolio A can reduce its rate of return to 7.8%. 12 • NUMBERS Winter 2016









Compounding of returns is an elemental force in investment strategy and is employed by all investors with differing degrees of sophistication. Essentially, banks are founded on leveraging compound returns to grow their return on equity. It may seem like a form of financial alchemy, where it magically transforms a penny into a million but, in truth, it employs a foundation of investment finance which all investors need to recognise and exploit to optimise their portfolios. It doesn’t take a fairy tale however to achieve financial security, but if you start investing early and are consistent, you can benefit from the “wonder” that is compound interest. Staples Rodway Asset Management Limited is a boutique investment advisory service that specialises in providing personalised and impartial investment solutions for individuals and trusts. For a no obligation discussion with one of the Authorised Financial Advisers from Staples Rodway Asset Management (SRAM) please phone 09 309 0491 or email More information is available at


Article by Daimon Stewart STAPLES RODWAY TARANAKI

With the construction industry, like many others, seeing a huge shift in the way they use technology to maximise profit and improve efficiencies, one Staples Rodway Taranaki client has jumped on board and is seeing great results from implementing a construction based accounting software program, along with the services of a skilled Bookkeeper.


IFESTYLE BUILDING AND CONSTRUCTION Managing Director, Scott Siffleet, made some crucial decisions in 2015 that would streamline his business in order to offer the best possible service to his Taranaki clients. After taking 100% ownership of his award winning construction business, Scott needed to find a better accounting system that would reduce his workload, together with recruiting a new member of staff to look after the books. He approached his Staples Rodway Business Advisor, Daimon Stewart, with the view to using their HR division to recruit. Scott explained, “I went to Daimon with the plan to recruit another permanent member of staff to look after the books 20 hours per week, which had been the set up previously. However, he suggested that I consider the idea of an accredited Bookkeeper through their SR Books service. I must admit I was a little sceptical as the price was $50 per hour as opposed to the hourly cost of recruiting a permanent member of staff, but Daimon reassured me that having a contractor who was experienced in the new accounting software, would reduce my costs and help to improve the accuracy of my books.”

SR Books provides Staples Rodway accredited Bookkeepers and Accountants, contracted to work directly with clients. All of the Bookkeepers are extensively trained in accounting software and skilled at handling commercial transactions across a range of industries so they can seamlessly integrate into any business and work efficiently to keep their books up to date. Scott continued, “We found that the Bookkeeper was so experienced and skilled that the 20 hours per week previously needed to do the accounts now only took 5 hours. We didn’t need to spend time training staff on the new accounting software and have saved a heap of money having one less permanent member of staff. I now spend a lot less time in the office organising payroll and no longer take my laptop home with me; allowing me to spend time with my family and setting up other business ventures.” If you’d like to learn more about SR Books or would like a free, no obligation quote, contact your usual advisor.





If you blinked twice you may have missed it. While all the interest and publicity focused on the new Health and Safety at Work Act, the Employment Standards Legislation slipped through largely unnoticed. The Bill came into effect from 1 April 2016 and made amendments to five key employment-related Acts. Many of the changes are technical in nature, but employers need to understand them and, in some cases, take action.


OMPLIANCE WITH THE NEW STANDARDS is mandatory from 1 April 2016 for any new employment agreements, while a transition period of 12 months applies for employment agreements in place at an earlier date. 14 • NUMBERS Winter 2016

SO WHY AN EMPLOYMENT STANDARDS BILL? The Bill came about amidst growing concerns that our minimum employment requirements were not being met. The Government believed there was an “unacceptable level of non-

compliance with employment standards, such as employees being paid less than the minimum wage, not receiving annual holiday entitlements and not having employment agreements.” The Ministry of Business Innovation and Employment’s annual National Survey of Employers 2013/14 indicated that 10 per cent of employers did not have written employment agreements for all of their employees. A few high-profile cases in the hospitality industry also increased public interest in the issue of employment standards.

WHY THE LACK OF COMPLIANCE? The reasons for a lack of compliance are due to a number of factors including; a lack of understanding by employers and employees of their rights and responsibilities; sanctions not being adequate to stop serious and systematic non compliance; the ability for Directors and individuals to avoid accountability (e.g. winding up a company to avoid paying arrears); confusing requirements about keeping records; and other regulatory shortcomings.

A QUICK RUN THROUGH THE CHANGES – WHAT DO I NEED TO KNOW? With so many technical changes we have not attempted to provide a full list, but instead set out an overview of the important things employers need to be familiar with. Parental Leave and Employment Protection Act 1987 This legislation has had a major upgrade with improvements for employers and employees. The key changes are: ƒƒ Increasing paid parental leave from 16 to 18 weeks. ƒƒ Extending who is eligible to receive the paid parental leave to “primary carers” - those who take primary responsibility for the care, development and upbringing of a child. ƒƒ Allowing workers to resign and still receive paid parental leave. ƒƒ Providing “Keeping in Touch Days”. Employees can now work up to 40 hours during the 18 weeks of paid leave. The baby must be four weeks old before these days can be used. ƒƒ Providing additional parental leave payments for parents of babies born pre-term (before 37 weeks). There is now more flexibility in how unpaid leave can be taken. In the past it had to be taken full time and in one block – now this leave can be taken flexibly and in one or more blocks, provided there is mutual agreement between the employer and the employee. Employment Relations Act 2000 The changes in this Act mainly focus on maintaining good records and hours of work. The key changes are: ƒƒ  An employment agreement does not have to include agreed hours of work, but where hours of work have been agreed, they must be included in the agreement. ƒƒ Employers must make sure an employment agreement does not include a provision which prohibits or restricts an employee from performing work for another person (e.g. secondary employment) unless the employer has genuine reasons and those reasons are stated in the employment agreement.

ƒƒ E mployees who work shifts have increased protection against shifts being cancelled at short notice. ƒƒ Employers must keep good records with sufficient detail to show they have complied with the minimum entitlements and payments under the Holidays Act, Minimum Wage Act and Wages Protection Act. Perhaps the most important change relates to the “Availability Provision”. This is a provision in an employment agreement where the employee’s performance of work is conditional on the employer making work available to the employee; and the employee is required to be available to accept any work that the employer makes available. These provisions were touted as removing "zero hours" contracts, but the changes catch a far wider range of situations, including many agreements which provide for overtime to be worked at the employer's request. The fine print in this area is important as many employment agreements have pseudo availability provisions built into them and employers could inadvertently fall foul of the Act. Minimum Wage Act 1983 From 1 April 2016 the adult minimum wage moved to $15.25 an hour. The Act also now permits an employee or inspector to recover wages from a person who is not the employer (e.g. a Director) if the employee is entitled to the wages, the wages were unpaid due to non compliance, and the person was involved in the non compliance. Holidays Act 2003 The Holidays Act changes relate to record keeping and enforcement. Holiday and leave records must be kept for up to six years. From 1 April 2016 there can be infringement fees ($1,000 per instance, up to $20,000 maximum in three months) for failure to keep employment agreements as well as holiday, leave, wage and time records. Wages Protection Act 1983 Employers may not make “unreasonable” deductions irrespective of whether the employee has given consent to the deduction. While many employers have general deduction clauses in their employment agreements, under the amendment, employers must now consult with an employee before making any specific deductions.

NEXT STEPS With all the above changes we recommend reviewing your employment agreements and policies to ensure they comply, particularly if any of your employees work shifts, rosters, or overtime. So if you did blink and miss the changes, it is important you take appropriate steps now. If you would like some help reviewing your employment agreements, you can talk to one of our HR professionals: Alison Maelzer, Hesketh Henry, alison.maelzer@heskethhenry., Chris Wright, Staples Rodway Auckland, chris.wright@; Andrea Stevenson, Staples Rodway Hawkes Bay,; Julie Rowlands, Staples Rodway Taranaki,; or Norma Blackett, Staples Rodway Tauranga, norma.blackett@ NUMBERS Winter 2016 • 15


BIG TAX CHANGES OVER THE TASSIE, COBBER Kiwi’s doing business in the land of Oz are in for a bit of a mixed bag after seeing the proposals set out in latest budget that was released a couple of weeks ago. Article by Roger Shackelford and Matthew Bonner STAPLES RODWAY WELLINGTON


HILST WE DON’T THINK IT’S terribly exciting to ever be an Australian, with reduced corporate and individual tax rates proposed, most of us should be laughin’ like a gum tree full of kookaburras.















NEW RATE from 1 July 2016 (for most standard balance date companies) progressive over the next 10 years

For New Zealanders operating in Australia and earning business profits there via a company structure, whilst there still remains no recognition in NZ of franking credits (company tax paid in Australia) at the ultimate NZ shareholder level, it will nonetheless go some way to reducing the effect of the double tax we can currently experience (unless appropriate steps are taken). What is making some of us a bit crook however is the proposed ‘Diverted Profits Tax’ (DPT), which rears its ugly head on 1 July 2017. Any multinational who thinks they can come the raw prawn with the ATO by shifting their taxable profits offshore needs to think again. The proposals are similar to the ones the UK have had in place for a year or so, but in simple

terms it’s only going to apply to the big boys who have a global income of a billion or more. The plan is to impose a 40% penalty on transactions that divert taxable profits from Australia. This means for those large entities, the charging by overseas parents of, say, head office costs, royalties, and interest are going to have to be more scrupulously calculated and justified. Under the proposals the transactions will have to have ‘economic substance’ and where the ATO ‘reasonably concludes’ that tax has been reduced by a transaction with an associate, wham-o, 40%. Added to this is a further concession which will allow for small business entities to claim a deduction for depreciable assets that cost less than $20,000, up to 30 June 2017. Strewth! The thinking here is that rather than capitalising and depreciating those assets, taxpayers will be able to get an upfront tax deduction for them, which should encourage small businesses to ‘up’ their capital expenditure. And one further goodie will see small businesses being able to avoid the cost of a stocktake if their stock levels haven’t changed by less than $5,000. But we guess you might have to count your stock anyway to know that it hasn't changed by $5,000 or more, so that proposal might not be of much use. We’ve never really understood the attraction of heading to Australia to pay tax at 45% as an individual. Sure, you used to earn a bit more in Australia, especially during the mining boom, but these days there’s some false economy in thinking you might be better off in Australia (see infographic below). Taking a professional earning $120,000 a year and ignoring exchange rates, the tax in NZ is $30,520, whereas the tax in Australia is $32,032. Not a big difference, but it is certainly not what most people expect. The expectation that you are going to be better off in Australia than NZ is definitely a thing of the past. Remember also that the tax payable in the Australian amount ignores the Medicare levy which is payable by Australian residents at 2%. Bear in mind too there can be some big fishhooks for both individuals and companies who want to leap across the Tassie, so its worth a chat with your Staples Rodway advisor before you take any steps. Overall, there are some minor benefits over here in the wopwops when we are trans-Tasman trading, but the changes are like kissing ya sister – there’s nothing in it.















45% $180,000

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ASK AN EXPERT In our new regular feature we answer readers' questions on any area in the world of finance, accounting, audit, tax, and other business-related areas. This issue’s question is in relation to tax and motor vehicles. Take advantage of our expertise and send your question to and one of our specialists may answer it in a forthcoming issue of NUMBERS.

I run a small business with 5 employees, 4 of whom need to use motor vehicles to do their jobs. What is the best way, from a tax point of view, to provide a motor vehicle to my employees? Answer from Mike Rudd, Tax Director at Staples Rodway Auckland



HE ANSWER DEPENDS, FIRSTLY, ON the type of vehicles employees need and, secondly, how much the vehicles are used for business purposes, compared to how much they are used privately.

top personal tax rate, the rate of FBT is 49.25% of the value of the fringe benefit (being 20% of the motor vehicle cost). So, for a vehicle costing $30,000, FBT of $2,955 is payable over a year. Fortunately, FBT is a deductible expense.



Firstly, if the nature of the job means a “work-related vehicle” is appropriate, this will usually be the best option. A work-related vehicle basically means a ute (including a double cab ute) or station wagon with welded-down rear seats, that is signwritten, and can only be used by an employee for “incidental” private purposes. e.g. stopping to buy milk on the way home. In that case, the vehicle will generally be exempt from Fringe Benefit Tax (FBT) if your company owns it. All the costs of providing the vehicle will be tax deductible (and the cost of purchasing the vehicle deductible by way of depreciation) and GST claimable on expenses. If a work-related vehicle is used for non-incidental private use then it will be subject to FBT.

The FBT regime is unfair, though, because if an employee uses a vehicle 95% of the time for business purposes, they are treated the same as an employee who uses their vehicle 1% of the time for business purposes. It makes no difference, it is the mere fact that the car is available for private use that means it is subject to FBT all of the time. Therefore, it can be better, if an employee uses their vehicle more than 50% of the time for business purposes, for the company not to own the car, but for the employee to be paid a mileage reimbursement allowance. This can be at the IRD rate of 72 cents per kilometre, the Automobile Association rates or actual expenses. Paying the allowance relating to business use is deductible to the employer and non-taxable to the employee. If an additional vehicle allowance is paid to the employee, this will also be deductible to the employer, but taxable to the employee under the PAYE rules. Overall, this is the “fairest” approach because only the payment for actual private use is taxed, unlike availability for private use, which the FBT rules tax. Identifying business use needs to be supported by a logbook which should be maintained for a representative period of 3 months.

FBT ON COMPANY-OWNED VEHICLES If a vehicle is an ordinary passenger car the situation is more complicated. My rule of thumb is that if a vehicle is used less than 50% of the time for business purposes, it is better for the company to own the car. Note that business purposes in most cases will not include driving from home to the workplace and vice versa. If a company owns a vehicle, it can claim GST on the purchase and all running costs, as well as claiming a tax deduction for running costs and tax depreciation on the purchase price. No FBT will be payable if the car is stored at work and cannot be used privately by any employee. However, if an employee is able to take the vehicle home and/or use it privately, then it will be subject to FBT, which is payable by the company. The cost of FBT can be significant - with an employee who is on the

Staples Rodway, in conjunction with CCH, have co-written A Guide to Fringe Benefit Tax, which will be published shortly. Note: The above is general advice only and should not be relied upon as specific circumstances can vary. Please contact your Staples Rodway advisor for specific advice.

NUMBERS Winter 2016 • 19



A large amount of press attention has been given to the need to save for retirement, but for an increasing number of baby-boomers, the time for saving has ended and serious thought needs to be given to a spending policy.


LARGE NUMBER OF NEW ZEALAND (and a few Australian) Investment Advisers attended the annual Portfolio Construction Forum Symposium, held in Auckland on the 17th and 18th of May. An extensive range of topics was covered during the two days of the symposium, ranging from geopolitics and their influence on investment decisions, to the post GFC world in a historical perspective, and to the topic of this article, “Setting a Retirement Spending Policy”. This was a paper presented by Tim Farrelly of farrelly’s Investment Strategy. The conclusion reached by Tim is, “Working out how much investors can spend is one of the key areas where the rubber hits the road in retirement. It is complicated, but not difficult – develop a formal, documented spending policy for every retired client.” So let’s drill down into this conclusion and see why it is complicated. The first decision to make is what are the objectives of the retiree, do they want to maximise expenditure, minimise expenditure and leave a sizable capital sum, or somewhere in between? Immediately a number of questions arise: 1. How long will the capital need to last (longevity risk)? 2. What rate of return can be expected over the medium to long term? 3. What rate of inflation can be expected over the medium to long term? 4.  What level of safety margin should be included in the calculation? 5. What is the likelihood of a significant negative event which will cause a capital reduction in the early years of retirement (sequencing risk)? 6. Is it okay just to use a “rule of thumb” for the withdrawal rate? When we look at longevity risk there are two factors that come into play, an investor living longer than the original life expectancy used in the initial planning and, poor returns, particularly in the early years of retirement. A plan that is conservative from an investment perspective will assist with the longevity risk but it can also result in a less than desirable lifestyle for the investor. Future rates of return are the big unknown, but what we do know is that rate of return does move over time. It is important to focus on the real rate of return, which is gross return less

inflation. The spending policy needs to be flexible enough to handle changes in inflation to preserve the purchasing power of the income being drawn down. A typical method of adding a safety margin is to plan for drawings to continue for a few years beyond life expectancy. However, this only takes one factor into account and there is still the sequencing risk to be accounted for when looking to build safety margins. Simply adding a few years beyond life expectancy isn’t going to result in the level of confidence that most investors would be looking to achieve. So why not use the 4% withdrawal rate? “There is substantial literature on the subject of safe withdrawal rates. One of the most influential contributions was a paper by Brian Bengen in the Journal of Financial Planning in 2004. The paper concluded that, based on historical US data from 1923 to 2003, an inflation-indexed income stream of 4% per annum was a “safe” withdrawal rate for a 65 year old with a 50% growth portfolio. Unfortunately, as is often the case, results such as these can be taken out of context. The 4% withdrawal rate applied to a narrow set of circumstances. Bengen pointed out that a safe withdrawal rate would vary based on age, life expectancy, investment strategy and taxation rates. In a New Zealand context, he would have thrown in National Superannuation considerations, too. There’s quite a lot that could move us away from 4% as the optimal withdrawal rate. Bengen also should have mentioned capital market conditions. Are real interest rates high or low? Are equities cheap or expensive? In reality, capital market conditions at the start of retirement make a substantial difference to safe withdrawal rates. With all of this in mind, any retirement spending plan needs to be regularly reviewed and the current numbers used to forecast expected returns and inflation. Set and forget isn’t a viable option when it comes any form of financial planning, especially retirement spending planning. Staples Rodway Asset Management is a boutique investment advisory service that specialises in providing personalised and impartial investment solutions for individuals and trusts. The four advisers, who are all Authorised Financial Advisers (AFA), have 93 years combined experience in assisting investors with reaching their financial goals. Please contact one of our advisers on 0508 220 022 or NUMBERS Winter 2016 • 21

FOOD IMPORTER CLOCKS UP A CENTURY OF CHANGE AND GROWTH Adapting to change, succession planning and spotting consumer trends has helped Auckland food importing business James Crisp Limited reach a 100 year milestone.




OUNDED BY JAMES CRISP IN 1916, the family run company continues to operate as an agent, importer and manager of hundreds of products from major brands such as Tasti, SunRice, Borges, Brunswick, Best Foods, High Mark, Ocean Spray, Freedom Foods, Colmans and Cinderella. In 1957, John Hall, an Auckland food broker and nephew of James Crisp, joined the company as an equal partner, and took over the company as the majority shareholder after Crisp died in 1968. Now 92, Hall is well and truly retired after passing the reins to his sons Richard and Henry Hall who have been directors of James Crisp since the early 1990s. Staples Rodway helped with this transition in their role as consultants and with the complete package of audit, accounting and tax services. A big part of the succession planning, Staples Rodway New Zealand’s Chairman Peter Guise helped structure the transfer of ownership and provided mentoring and strategic guidance to the brothers. This left Henry and Richard free to concentrate on the most important part of their business – meeting customer demands. Henry Hall says part of the company’s success came down to identifying consumer food trends. Richard Hall noted that shoppers these days are increasingly checking product labelling for nutritional information. “It’s pretty obvious they’re looking at the fine print on the back”, Richard Hall said. “They’re wanting confirmation the food suits their diet.” Shoppers are more educated on what’s healthy and what’s not, Henry Hall comments. “They want to know where their product comes from, who makes it and what its nutritional value is.” Part of the company’s business involved distributing dried fruits and nuts to food manufacturers. Two decades ago, when these ingredients were relatively cheap, the company promoted their health benefits to drive demand. These days

customers are prepared to pay a premium for cashew nuts, almonds and walnuts. A current trend is demand for ancient grains such as quinoa, amaranth and teff. The grains are perceived to be high in nutritional value and grown in sustainable conditions. “Right now they’re very expensive on a per kilo basis,” Richard Hall said. “They’re fashionable foods for people in higher socioeconomic areas.” Rice was another category rapidly growing in popularity, largely thanks to New Zealand’s growing Asian population and wider interest in international food. Henry Hall said there were big opportunities in healthy snacking products. “With people having very busy lifestyles they’re looking for a quick snack and its hard to find something that’s not either high in sugar or overly processed.” James Crisp staff are constantly researching overseas markets to pick up on trends New Zealanders were likely to adopt. “We’ve always had a good ability to adapt to change.” That change has been possible due to a stable business backbone. “With Peter’s advice, we have always had the fundamentals taken care of, leaving us to concentrate on growing the business.” When the brothers took over the business its turnover was $25 million. By 1998 turnover had doubled and it has since doubled again. James Crisp employs more than 100 staff, some having been with the company for more than 30 years. “We feel very privileged to be turning 100. Not many companies are as fortunate to share such heritage in this country.” If you need help with succession planning, please contact your usual Staples Rodway advisor to discuss your business’ future.

Richard and Henry Hall, Directors of James Crisp Ltd

NUMBERS Winter 2016 • 23

THE CHALLENGE OF MAKING ACQUISITIONS PAY The question of why so many acquisitions fail to deliver value is perplexing, and an issue for Boards of Directors to keep top of mind when considering an acquisition opportunity.

Article by Colin Theyers STAPLES RODWAY AUCKLAND


ANY OVERSEAS STUDIES FROM NOTED Universities have correlated pre acquisition expectations with post acquisition outcomes and have concluded that less than 20% of acquisition transactions actually delivered any gains to shareholders. Some acquisition outcomes have been so appallingly below expectations that they placed the purchaser at risk. While most of these University studies related to significant transactions in major markets, the same unanticipated outcomes regularly happen in New Zealand. Over the years I have completed more than 150 acquisition and divestment projects and observed Boards and management teams in action as they grapple with new opportunities and the many unknowns posed by a potential acquisition. More recently, as a Director I have been part of the decision making team that has made the call on whether to proceed or abandon an acquisition project. At a practical level why do some Boards and management teams get it right so that the acquisition succeeds and delivers long term shareholder value? While each acquisition is unique and the economic cycle may be different, Boards and management teams need to adopt a robust and clear-eyed process of evaluation, and thorough due diligence. Having clear and articulated reasons about why the business is considering this opportunity is the fundamental question that should be satisfied right at the start. Questions that should be asked include: ƒƒ What strategic gains are potentially available? Are they financial, market position, creation of greater scale, or something else? ƒƒ Could we achieve a similar outcome and strategic gains by other means that are less expensive and less disruptive? ƒƒ What are the likely market considerations? For example, are we going to compete with our existing customers and lose existing business? ƒƒ What is the likely cost and, if funded by debt, how does that impact on our existing business, balance sheet, working capital requirements, and banking restrictions? ƒƒ What cost and market efficiencies can be delivered from a combined business? ƒƒ Have we considered the risks and, if the transaction was to be unsuccessful what the impact would be? ƒƒ Have we simulated various possible outcomes, not just the one we hope will happen?

ƒƒ H  as our due diligence uncovered any legacy matters that will impact on us in the future? ƒƒ Does the proposed sale & purchase agreement have safeguards in the event that there are any significant matters that impact the business post acquisition? ƒƒ What are the culture differences between the organisations that will impact on integration? ƒƒ Who is going to manage the process and do we have the in house skills needed to successfully integrate the target? ƒƒ Do the projected financial gains sufficiently exceed our cost of capital, inclusive of an appropriate risk premium? ƒƒ Have we factored a realistic time line of integration, cost removal, and other items? These always seem to take a lot longer than anticipated. Note too that there are many subsets of evaluation criteria to be considered, not just the overall transaction. Experience shows that the right answer, that will hopefully be vindicated over time, comes from a structured evaluation based on a staged and disciplined process. Identify and make sure the initial strategic intent is satisified, followed by working through the process in sequential steps. As you gain a greater understanding of the target you must remain objective and compare likely outcomes against the original reasons for considering the opportunity. I have regularly seen Boards or individuals hanging on to an acquisition concept even after major negative elements are found. If the proposal fails to meet the required hurdle requirements, the Board must have the resolve and self-discipline to walk away and proceed to the next opportunity. Before an acquisition is signed off, the Board must be very certain that the executives who will lead the acquisition and post-acquisition integration process have the necessary skills, particularly the people integration abilities, to make the project work. Acquisitions create uncertainty and the potential for change and restructuring, with staff on all sides of the deal naturally being nervous about the future. Communication and treating people with respect becomes a critical success factor. Many a great opportunity fails to deliver as expected because of the lack of an experienced and dedicated resource to deliver the anticipated benefits. For further information about how Staples Rodway can help you with acquisitions, please contact your usual Staples Rodway advisor. NUMBERS Winter 2016 • 25

MAKING SENSE OF FINANCIAL STATEMENTS There are few strangers to the change in financial reporting that has occurred in recent years. The changes, for some, are huge, but the fundamentals are the same – present financial statements that give a true and fair view of the organisation. Easier said than done. Article by Aniela Tkacz NATIONAL TECHNICAL MANAGER


EPENDING ON THE ENTITY'S SETUP, this may have meant moving from the External Reporting Board’s (XRB) transitional financial reporting, to IFRS or public benefit entity frameworks. The objective of the frameworks is to assist in decision making. The XRB released a research paper in March, entitled ‘are financial reports meeting user needs?’ The findings, although specific to capital markets, largely resonate across all entities. 76% of respondents found all financial statement information useful.


SO YOU HAVE SOME SKIN IN THE GAME… As a potential preparer, member of a Board or other fiduciary role what things should you look out for and what is key to providing high quality financial reports? ƒƒ Where possible, providing five-year summaries, key performance indicators (KPI) and forecasts in management commentary; ƒƒ Consistency in the format/presentation of financial statements; ƒƒ Simplifying and standardising financial reporting and the language used; ƒƒ Improving disclosures on contingencies, guarantees, obligations and related party transactions; ƒƒ Providing more non-financial and sustainability information.

More information on the entity, its strategy & risks Prospects & forecasts Broader focus Non-financial information & commentary Simplified language

These are consistent with the findings from the Financial Reporting Council’s (FRC) work on ‘Cutting the Clutter’ in annual reports.

BEFORE YOU INVEST YOUR HARD EARNED MONEY There are many indicators of financial health. The key financial statement line items to consider are listed in the table. DESCRIPTION



Inflows received from services performed or the sale of goods in the ordinary course of business. This includes work performed that is yet to be paid in the financial year.

Comparing year-on-year trends in revenue can be a good indicator of the performance of a company as well as its ability to grow. Be mindful of the outflows (expenses)!

Net profit after tax (NPAT)

The famous ‘bottom-line’.

Companies aim to generate a profit in the short and/or long term to pay dividends or provide capital appreciation.

EBITDA (earnings before interest and tax deductions)

This is a ‘stripped down’ version of NPAT. Essentially what the company earned before paying tax, incurring interest and eliminating certain accounting charges such as depreciation.

This metric makes companies that are structured and financed differently more comparable. You can essentially compare company earnings without the impact of asset and debt movement.

Net cash flows from operating activities

Net cash flow from the company’s core business activities. This does not include inflows from financing or investing, such as buying additional equipment.

The old adage – cash is king. Companies need cash to pay down debt, acquire new assets, expand operations, pay dividends etc. Alternatively, a company may need to borrow money or issue new shares to fund their operations.


Distributions to shareholders, paid out of profit.

This is your return on investment until you sell your shares.


Can be tangible or intangible (i.e. goodwill, brands).

The company aims to make a return on its asset base. Common investor ratios include ROCE – return on capital employed. This may be a KPI included in your PDS.


Includes debt and other financial obligations.

Companies may enter into debt to help them grow, too much debt can also be difficult to keep up with interest payments. A company with significant debt needs strong and consistent cash flows. Also consider why the entity is listing – is the money being used to pay down existing debt?

NUMBERS Winter 2016 • 27

Generally, if regulations require a disclosure, it goes in the report – regardless of the materiality or importance to the business.’" Louder Than Words, FINANCIAL REPORTING COUNCIL

FOR THE FIRST TIME INVESTOR If you’re considering investing in a company/ownership scheme that is about to list on a New Zealand stock exchange, you’ll receive a Product Disclosure Statement (PDS). A PDS provides you with key information to help you decide whether to invest in a financial product. It uses clear language to explain the product and replaces older forms of financial product disclosure information, such as prospectuses, that were required under the Securities Act 1978.

KEY INFORMATION SUMMARY (KIS) Taking pride of place at the front of the document, the content in the KIS is mandated in law to strengthen comparability. The KIS includes: 1. What the financial product is 2. Information about the Offeror 3. The key terms of the investment 4. The key risks of the investment 5. Other investment-specific information i.e. for a fund, what your money will be invested in. Additional information such as the financial statements, constitutional documents, Statement of Investment Performance and Objectives may be found on the Companies Office website Look for the Offeror name of Offer number in the PDS.

PROSPECTIVE FINANCIAL STATEMENTS A PDS may contain both historic and prospective financial information. The historic information is usually audited. Without a crystal ball, predicting the future can be difficult, it’s therefore important to be mindful of the inherent assumptions and risks in the prospective information. It may be that the prospective information will differ significantly from actual results.

certain transactions and/or balances are included or excluded. It is important to understand these adjustments, as there may be a significant difference to the actual financial statements.

FINANCIAL MARKETS CONDUCT ACT 2013 – THE ESSENTIALS The FMC Act simplifies the financial products that are regulated under the Act. The Securities Regulation Act 1978 detailed six categories of ‘securities’. Under the new Act, these are simplified to core categories: debt and equity securities, managed investment products and derivatives. The objective of the FMC Act is to: (a) p  romote the confident and informed participation of businesses, investors, and consumers in the financial markets; and (b)  promote and facilitate the development of fair, efficient, and transparent financial markets. In addition, the Act: ƒƒ provides for timely, accurate and understandable information to be provided to potential investors; ƒƒ  aims to ensure that appropriate governance arrangements apply to financial products and services; ƒƒ aims to avoid unnecessary compliance costs, and ƒƒ promotes innovation and flexibility in the financial markets. An added bonus is, you can expect product disclosure statements to be shorter. The desire for briefer offer documents has led to hard page limits being adopted. This is expected to discourage ‘kitchen sink’ disclosure practices, where businesses include additional commentary, inadvertently obscuring key information.

PRO FORMA INFORMATION This may be historic and/or prospective information that has been adjusted for significant or ‘one-off’ transactions. Companies will prepare pro-forma financial statements to show comparative year-on-year trends that are not affected by these one-off transactions. A company will detail the reasons why 28 • NUMBERS Winter 2016

Are you interested in cutting the clutter in your financial statements? Or are you a first time investor looking for further information? Contact your Staples Rodway advisor or Aniela Tkacz, National Technical Manager.


HE 1ST OF APRIL SAW Staples Rodway Wellington celebrate 75 years in business. To commemorate this milestone, an event was held at the Wellington Art Gallery. Hosted by current Partners Robert Elms, David Hulston and Roger Shackelford over 150 clients, the entire team, retired partners and friends all recounted their personal stories of their time with Staples Rodway Wellington. A reel of the firm’s history, partners, and staff made for some interesting conversation, finger pointing, and chuckles at how young we all looked in those days. The firm has had a number of names, but was probably best known as Martin Jarvie Underwood and Hall before joining Staples Rodway in 2013. Reminding us all of the importance of longevity, and maintaining close business and family relationships, Robert thanked the partners who had gone before, making the firm what it is today, before reinforcing that the best was yet to come. Some great food, catered by our client, Simply Food, surrounded by the best of Wellington’s art, made it an unforgettable night.



Roger Elms, Staples Rodway Wellington Partner

Hayley Bowater, Verity Dunlop & Steve Yee from Staples Rodway



HE 2016 BUDGET SAW LITTLE in the way of tax changes. Indeed, the only material changes that may directly affect your business are to Provisional Tax and Withholding Tax. The IRD will also be upgrading their systems to better integrate with cloud-based accounting systems, which makes things easier in terms of some returns automatically populating from your accounting package. Note: this makes the "rubbish in, rubbish out" rule even more important. Further details of these changes are outlined in our budget update (see more at Following the changes, Andrew Dickeson, one of our Tax Directors, attended the Post Budget event in his capacity as New Zealand President of CPA (Australia). The event was hosted by the Trans–Tasman Business Circle and saw the Prime Minister speak candidly in his Post Budget Address.

Andrew Dickeson, Auckland Tax Director, with Prime Minister John Key

NUMBERS Winter 2016 • 29

ACCOUNTANT BY DAY, IRONMAN BY NIGHT Staples Rodway Taranaki's very own Jed Eden pulls a Clark Kent when he leaves the office, ditching the suit for lycra, and prepares to compete with elite athletes on the world's stage.


HE WORDS ATHLETE AND ACCOUNTANT don’t usually “You can bike 200km with no traffic lights and no need to stop. come up within the same sentence but in Jed Eden’s The many trails with soft underfoot that Taranaki provides gives case, this has been part of his life for 10 years, and finally he some great options of landscapes and scenery to train in. The can say he’s made it! province allows for a better work/life balance and while still Successfully managing a team of accountants at Staples working 40-50 hours a week, Staples Rodway Taranaki really Rodway Taranaki whilst qualifying for the Ironman World encourages their employees to have that kind of lifestyle.” Championships wasn’t easy, but with sheer determination, the When asked what personal qualities are required to be support of his family, friends and co-workers and the trainsuccessful at both work and athletics, Jed said: ing program of a pro athlete, Jed is on his way to compete in “The two require very different personality traits. Staples Kona, Hawaii at the Ironman World Championships in October Rodway requires teamwork in order to achieve goals, whereas this year. Ironman is all about me and breaking my Despite growing up around his own barriers. I train with others for motiparents competing in Ironman triathvation and support, but once you’re at lons, it wasn’t until later in his life that he the Ironman, you’re racing against each decided to give it a go, following a car other. At that point, you’re in the mind-set accident in 2006 that forced him to stop that everyone is out for themselves. If you all physical activity for 6 months. Jed came into the workplace with that same soon put on the kilos and decided that attitude, the company would fall over.” at 105kg he needed to do something Jed hasn’t decided on his goal for about it. With some encouragement the World Championship yet, but once from friends he signed up to his first trihe does, it will be displayed on his desk athlon. What started out as a bit of fun in order to motivate him to get out and to help him lose weight soon became a prepare for what he describes as “9 Jed crosses the finish line 3rd in lifestyle choice, then before long he was hours of intense pain”. He concluded: his age group at the 2016 Ironman challenging himself, including beating “Racing in Kona will be a whole new ball New Zealand to qualify for Kona. his father’s personal best. park. The heat will be approximately 40 The next phase of his life was sure degrees, 99% humidity and with strong to put an end to his triathlon lifestyle – winds. Some triathletes competing will having kids. However, this led to another set of coincidental go to Kona a month before the race just to acclimatise. I don’t changes that amplified his hobby even further. His daughters have that luxury.” were diagnosed with gluten and dairy allergies, which forced Jed hasn’t endured any injuries or major health issues that the family to change their diet. have affected his training, but the main struggle for him has Jed said: “I was surprised at how much more energy I had been the lack of sleep. With only 6 hours of sleep in his trainto train with a gluten and diary free diet. Before that I thought ing schedule and his two year old daughter currently teething, that the more exercise I did, the more I could eat. With a simple Jed faces many sleepless nights. With the support of his family change in meals I repeatedly beat my personal best and lost and a positive mental attitude he hopes that this won’t affect another 9kg. This is when I realised I could start to train and his performance and goes by the quote: “When you wake up compete seriously.” every day, you have two choices. You can either be positive or When asked how he manages to keep a balanced lifestyle negative; an optimist or a pessimist. I choose to be an optimist. between training, work and family, Jed simply said “just being It's all a matter of perspective.” organised”. Jed will be up by 5am on a weekday when he will get his first training session in for the day; he will then be at Jed has his own Give a Little page - work by 7am; have his second training during his lunch break; jededenkona - to help him raise funds to get to the Ironman and then be home by 5pm, where he will have his time with his World Championships this year, along with other fundraising wife and two daughters. Jed emphasised the perks of living events to help him to get to Kona. and training in Taranaki, where sporting events are popular:

NUMBERS Winter 2016 • 31


HE ART FAIR RETURNED TO Auckland after a three year absence, and Staples Rodway Auckland were once again one of one of the key sponsors of the event, which ran from Wednesday, May 25 to Sunday, May 29. Under new organisers North Point there was a greater focus towards creating a buzz over the entire period of the Art Fair, with internationally acclaimed chef and art collector Peter Gordon creating menus for four pop-up bars and eateries at the waterfront venue, The Cloud. Staples Rodway clients and contacts were able to enjoy specially-created canapes and delicious drinks at an exclusive event held on the Thursday night where they could mix and mingle and then have a private viewing of the art on display. A number of interesting and adventurous purchases were made by some of the 250 guests attending. 3

1 The Art Fair is held every two years, but this year the gap was three years to ensure there was no clash with the Sydney Art Fair. Both events compete for galleries from around the Pacific and, in 2016, there was a wider range than ever. Auckland galleries dominated, but there were many others from around New Zealand, as well as from Sydney, Melbourne and as far afield as Santiago, Chile.




32 • NUMBERS Winter 2016

1. Stephanie Post from Auckland Art Fair, Nona Pellieter from Radio New Zealand, David Searle from Staples Rodway 2. Arch & Jane from MacDonnell Inhouse Design, Catriona Knapp from Staples Rodway 3. Fleur Board, Bob Boniface 4. Mark Kingsford from Staples Rodway, Jane Walsh from New Zealand Carbon Farming, Jo Kedzlie 5. Rodney Scott from Intergroup, Viv Vesty from ANZ, Tracy Hickman from Staples Rodway


HE STAPLES RODWAY CHALLENGE IS now regarded as one of the most popular sporting events in the Hawke’s Bay region. It takes in some of the Bay’s most stunning landscapes on a course that is mainly on private land and includes windswept beaches, native forest, waterfalls, river gorges and stunning coastal farmland. The area includes the world renowned five-star Lodge "The Farm", Cape Kidnappers Wildlife Reserve and passes through the largest gannet colony in the world. The course is 32km, with three legs forming a triangle along the two sides of Cape Kidnappers and back across the headland, starting and finishing at Clifton Bay Café. Staples Rodway Hawke’s Bay has been instrumental in establishing the Staples Rodway Challenge, a walk or run event, now in its eighth year. The event has raised significant funds for local charities since its inception in 2009. Charities such as Cystic Fibrosis, ‘4 Friends After school’ programme

(run through Sport Hawke’s Bay), U Turn Trust, Hayseed Trust, Surf Lifesaving Hawke’s Bay, Child Cancer, Cranford Hospice and the Hawke’s Bay Helicopter Rescue Trust have all benefited from this great community minded event which has raised in excess of $100,000 to date. The event encompasses Staples Rodway's commitment to the local community, the promotion of the Hawke’s Bay, health and wellbeing, fun through participation and helping others through charitable endeavours. The event has been supported over the years by teams and individuals from Staples Rodway offices in Taranaki, Tauranga, Auckland and Wellington. For further information on the event, please contact Sue McIvor at or visit the website at

Andrea Stevenson, from our Hawkes Bay office, competes in the 2015 event

NUMBERS Winter 2016 • 33

AUCKLAND Level 9, 45 Queen St PO Box 3899 Auckland 1140 Phone 64 9 309 0463 Fax 64 9 309 4544

WAIKATO 4th Floor, BNZ Building 354 Victoria Street PO Box 9159 Hamilton 3240 Phone 64 7 834 6800 Fax 64 7 838 2881

TAURANGA Level 1, 247 Cameron Road PO Box 743 Tauranga 3140 Phone 64 7 578 2989 Fax 64 7 577 6030

HAWKES BAY Cnr. Hastings and Eastbourne Streets PO Box 46 Hastings 4156 Phone 64 6 878 7004 Fax 64 6 876 0078

NEW PLYMOUTH 109-113 Powderham Street PO Box 146 New Plymouth 4340 Phone 64 6 757 3155 Fax 64 6 757 5081

STRATFORD 78 Miranda Street PO Box 82 Stratford 4352 Phone 64 6 765 6949 Fax 64 6 765 8342

WELLINGTON Level 6, 95 Customhouse Quay PO Box 1208 Wellington 6140 Phone 64 4 472 7919 Fax 64 4 473 4720

CHRISTCHURCH Level 2, Tavendale Centre 329 Durham Street North PO Box 8039 Christchurch 8440 Phone 64 3 343 0599 Fax 64 3 348 0186

Staples Rodway NUMBERS Winter 2016  

Tax Freedom Day | The Power of Compounding Interest | Doing Business in the Cloud | Recruitment - Getting it Right | The Employment Standard...

Staples Rodway NUMBERS Winter 2016  

Tax Freedom Day | The Power of Compounding Interest | Doing Business in the Cloud | Recruitment - Getting it Right | The Employment Standard...