Bay of Plenty Business News March/April 2018

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4 BAY OF PLENTY BUSINESS NEWS March/April 2018 CONTACT INFORMATION PUBLISHER Alan Neben Ph: (07) 838 1333 Mob: 021 733 536 Email: alan@nmmedia.co.nz SALES DIRECTOR Deidre Morris Ph: (07) 838 1333 Mob: 027 228 8442 Email: deidre@nmmedia.co.nz EDITOR David Porter Mob: 021 884 858 Email: david@nmmedia.co.nz STUDIO MANAGER Tania Hogg Ph: (07) 838 1333 Email: production@nmmedia.co.nz GRAPHIC DESIGNER Kelly Milne Ph: (07) 838 1333 Email: kelly@nmmedia.co.nz ADVERTISING INQUIRIES Please contact: ACCOUNT DIRECTOR Vanessa Lee Mob: 021 715 225 Email: vanessa@nmmedia.co.nz BUSINESS DIRECTOR Pete Wales Mob: 022 495 9248 Email: pete@nmmedia.co.nz ELECTRONIC FORWARDING EDITORIAL: News releases/Photos/Letters: david@nmmedia.co.nz PRODUCTION: Copy/Proofs: production@nmmedia.co.nz SUBSCRIPTIONS: info@nmmedia.co.nz Neben Morris Media specialises in business publishing, advertising, design and print media services. Bay of Plenty Business News has a circulation of 8000, distributed throughout Bay of Plenty between Waihi and Opotiki including Rotorua and Taupo, and to a subscription base. Bay of Plenty Business News Suite 4, 117 Willow Street Tauranga, 3110 Bay of Plenty www.bopbusinessnews.co.nz 12 Mill Street, Hamilton PO Box 1425, Hamilton, 3240 Ph: (07) 838 1333 Fax: (07) 838 2807 www.nmmedia.co.nz From the editor In this month’s cover story we examine Tourism Bay of Plenty’s bid for increased council funding to shift the focus of its marketing efforts. The good news for the Coastal Bay of Plenty is that tourists spent a record $1 billion last year. Tourism Bay of Plenty is seeking increased annual council funding of around $620,000 to help support a new and better targeted approach. Tourism BOP says the increase would make its funding more aligned with other similar-sized Regional Tourism Organisations (RTOs). And it would underpin its efforts to drill down and gain a better understanding of exactly who comes to the region and why, and to transition from largely promotional activities to what the industry describes as destination management. Consistent promotion efforts by the New Zealand avocado sector, helped by tariff changes under the Free Trade Agreement (FTA), are paying off with a season of record returns in Korea. Currently the fresh domestic and Australian market account for the lion’s share of the avocado crop. Japan, Singapore, Thailand and Korea re the other major markets. However, the industry faces a major challenge in meeting the growing demand in Asian and other export markets while it grapples with achieving more consistent production. Major changes to Zespri’s share structure have been wel- comed by the sector’s grower body as the export marketer moves to more closely align its ownership with those responsible for producing the fruit. The changes resolve the longstanding problem of so-called “dry” shareholders - those who have shares in Zespri, but are no longer actively growing kiwifruit. The changes are Zespri’s attempt to deal with what it describes as a concerning mis-alignment of ownership between growers and non-growers. A special general meeting held in mid-March drew the required 75 percent-plus grower support for the changes. After almost five years and a major industry strategy review, kiwifruit growers have agreed to the proposed changes to Zespri’s constitution. There are now caps on the ability of non-producing shareholders to continue owning shares, as well as a focus on getting new growers to own shares representing the volume of crop they contribute. We also look at the success of Tauranga-based software company SwipedOn, which has been awarded a growth David Porter grant by Callaghan Innovation for its iPad-based visitor management system. The grant is for an initial three year term, refunding 20 percent of all eligible spend, up to a total of $15 million. The grant reflects the rapid progress the company has made since it was founded in 2013. The software-as-a-service company replaces paper visitor books with an innovative iPad application. Its founders grew the business with no financial backing or sales team into a product used in over 2,000 cities worldwide, largely in the UK and US. David Porter Editor BEST SMALL BUSINESS BANK WE’RE PROUD TO BE RECOGNISED AS THE BANK OF THE YEAR – SMALL BUSINESS 2017 anz.co.nz/business ANZ Bank New Zealand Limited 11/17 19790
BAY OF PLENTY BUSINESS NEWS February/March 2018 5 Time for businesses to speak out about rates hike How do you justify a rates increase of 60% in a single year? By STAN GREGEC CEO of the Tauranga Chamber of Commerce That’s a question some business owners will be asking when they find out how much Tauranga City Council is proposing to bill them for this year’s rates. And that’s just the start. Further increases are on the cards for Tauranga business ratepayers in Years 2 and 3 of the Council’s new ten-year plan – out for consultation until April 16th. As part of a major reform of the current rating system, the Council proposes to introduce a business rate differential – which means that businesses will pay 20% more than residential ratepayers this year relative to a property’s value, rising to 40% more next year and 60% more in 2020. There are other changes on top of this, including a new targeted rate applying to all properties in the CBD. Underpinning it all is a core belief – not backed by much evidence - that the commercial sector profits dispro- portionately from Council services and city improvements: this justifies it being asked to pay more. When pressed for specifics, the Council’s CEO Garry Poole has mentioned things like ‘improved speed of delivery, transport and logistics’ and amenities that add extra value to businesses and attract high quality staff to Tauranga. Not surprisingly, the Tauranga Chamber of Commerce - representing 850 business members - is opposed to the rates proposal in its current form. It objects to the notion that businesses can be treated as a cash cow to spare the impact of the Council’s spending plans on residential ratepayers. Let’s get one thing straight. The business community is not opposed to paying its fair share of Council rates; and there may even be a case for making a higher contribution than it currently pays. However, there are serious problems with the Council’s plan as it currently stands. Missed Opportunity Stan Gregec In the Chamber’s view, it is not acceptable that the Council has sprung the rates plan on an unprepared business community, giving only a short window for ‘consultation’; at the very least it should have signaled a year ago that the current rating system was no longer fit for purpose; and it could have initiated a community-wide conversation about the Council’s ongoing financial sustainability. Unfair impacts The Council is proposing to move from the current system of parity between commercial and residential ratepayers to one where businesses will pay a 60% bigger share within three years. That’s a huge jump to make in a very short period, considering the other changes being made at the same time – such as bringing in the new targeted city centre rate. With some businesses already facing a 60% rates increase in just the first year, it’s not difficult to imagine what the full impact will be over three years. For some the hit will be big enough to make business owners, especially in the CBD, think seriously about whether to stay put or to pick up sticks. Backwards Step Tauranga used to have a business rate differential but that was abandoned in the early 2000s when the Council of the day concluded that it was an unfair and unjustified way of putting an extra burden on the business community. At that time the Council understood that businesses needed the very opposite – support and encouragement - if they were to continue to grow and contribute to the economic prosperity of the region. Now, a decade or more later, we seem to be heading backwards. As study after study has shown, ‘differential rates tend to be set arbitrarily without explicit justification in terms of the benefits provided.’ Not only are they a blunt instrument for Councils to wield, but they can be seen as something of a lazy option – given that there are far better ways for Councils to fund services and costs that benefit specific groups or interests. Targeted rates make way more sense. What can you do? The draft 2018/28 Long Term Plan is open for consultation from 16th March to 16th April 2018. The consultation document is available on the council website as well as details of public consultation meetings. The Chamber will be making a submission on behalf of its members, and encourages business owners to do the same. If you need help to make your submission, contact the Chamber and we can give you a steer. Tauranga businesses stand together… ...by joining the Chamber. Join Tauranga Chamber members like Steve Wagstaff from Pureprint, Tauranga Join the Tauranga Chamber of Commerce and become part of a connected and committed business community that supports our region to grow and prosper. For more details visit www.tauranga.org.nz
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Bay of Plenty Business News March/April 2018

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