Waikato Business News April/May 2019

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6 WAIKATO BUSINESS NEWS April/May 2019 Tax Working Group – Where to from here? In reality, we did not expect a broad-based capital gains tax (CGT) to be implemented. Instead, we expected the coalition to negotiate a politically acceptable ‘package’. But we did not expect the announcement on April 17, that there would be no CGT at all. It would have been interesting to have been a fly on that wall. A decade of campaigning, election commitments and an 18-month review of the New Zealand tax system, yet it failed at the final hurdle due to a lack of consensus. Jacinda Ardern was unable to implement a CGT, even though she believed it to be a fairer and more equitable method of taxation. Such is the power (or lack thereof) of a mixed member Parliament. No CGT this electoral term, or the next, or under the leadership of Ardern. This from a prime minister who has cracked the 50 percent threshold as preferred prime minister. Once we move past the fact there will be no CGT, where does this leave us? The TWG made 99 recommendations, only two of which related to CGT. So how have the Government responded to the remaining 97 recommendations? Of the 97, 13 recommendations were for no changes to be made. For example, the TWG recommended that the GST rate should not change, no new GST exemptions should be introduced, the corporate tax rate should stay the same and no progressive company tax rate should be introduced. In all cases, the Government agreed with the TWG’s recommendations to make no changes. Including the two CGT recommendations, a total of 17 TWG recommendations will not be acted on. The TWG made many recommendations around personal income tax, including changes to the marginal tax rates’ thresholds. However, with no CGT, there is no additional revenue for the Government to recycle and therefore changes to the personal income tax regime are no longer feasible. The Government has indicated that work is already underway in relation to 30 of the TWG’s recommendations. Most of the recommendations around environmental and ecological outcomes, such as solid waste, greenhouse gases etc, are being addressed through changes to the Climate Change Response Act Amendment Bill, along with other work being done by the Ministry for the Environment. Action has also started on recommendations relating to international income tax. Consistent with the government stance on introducing a digital services tax, work is underway in relation to options for taxing the digital economy, with a draft discussion document due to go to Cabinet in May 2019. The government will also continue to work alongside other members of the OECD on the taxation of multinational corporations. With varying degrees of priority, 61 recommendations have been referred to IRD for potential inclusion on its tax policy work programme, including some for which the Welcome to the April/May issue of Waikato Business News. Welcome also to my one-time hometown Cambridge, which features on these pages. I attended secondary school there when it was a much smaller town than it is now, and for this issue had the pleasure of interviewing my former school friend Antanas Procuta. These days he is an architect, living in the town, and has thought long and hard about its development. His desire to see the town centre grow vertically, enhancing walkability, is all the more pertinent given its phenomenal rate of growth. When I return to Cam- recommendation has been rejected, but an alternative approach is to be considered. Recommendations for assessment by IRD include the taxation of retirement savings, subsidiaries of Māori authorities, changes to compliance requirements of small businesses and issues around tax secrecy and tax transparency. IRD will also explore options for taxing vacant land, otherwise known as ‘land banking’. The TWG recommended adding vacant land taxes to the local government levy system. Recommendations relating to the integrity of the tax system have been flagged as a high priority, with the government continuing to invest resources to enable IRD to enforce the existing tax regime, and take action in relation to the hidden economy. Taxation of businesses and the recommendations made by the TWG around provisional tax, compliance costs, fringe benefit tax, depreciation rates have From the editor TAXATION AND THE LAW > BY HAYDEN FARROW Hayden Farrow is a PwC Executive Director based in the Waikato office. Email: hayden.d.farrow@pwc.com been flagged for consideration, but no priority level has been assigned. The Government’s response to the TWG report hints at changes in the distant future; however, these are unlikely to be revolutionary. Sometimes evaluating your circumstances doesn’t change them, but it bridge, I can still see the old town I knew, and the challenge is to preserve the best of that while intensifying and enhancing a sense of community. Having said that, Cambridge is a far more interesting and vibrant place to visit now; it was good to have the excuse to spend time there, strolling the main street with its variety of stores and eateries, and lingering in the town square. Elsewhere in this issue, I attended Avon chief executive Jan Zijderveld’s keynote speech at the Future of Work conference organised by Waikato University’s Management School. He was a big-picture person who spoke at a million miles an hour, and made for a thoroughly entertaining speaker as he threw out challenges for our time, including those around climate change and technological transformation. The Management School also has involvement in a leadership programme with a provides a new perspective, and listening to the public and its coalition partners has likely provided the government with a new one. The comments in this article of a general nature and should not be relied on for specific cases. Taxpayers should seek specific advice. difference. The Community Enterprise Leadership Foundation, which graduated its latest Elevate cohort in April, fuses profit and not-for-profit in an imaginative and enduring way, and you can read its story in this edition. I also talk to the co-founder and chief executive of Quantec, which is what I think of as a classic under-the-radar Waikato company that is extremely successful. In its case that includes making great strides in the China market, in a story that may be instructive for others. If you have a story to tell or a tip to share, get in touch with me at richard@nmmedia. co.nz Ngā mihi nui Richard Walker Editor Business owner – thinking of selling? Engineering Business $800,000 Making Over $200k $630,000 Waikato • Established brand of 25 years • Great forward work $800k • Working owners returned $250k+ • Supportive vendors • Long standing customer relationships Waipa • Great town lifestyle with this business • Owner works an average of 20 hours per week • $200k to the part-time working owner • Great, hard-working staff SOLD linkbusiness.co.nz/BPW00738 Rick Johnson 021 991 485 rick.johnson@linkbusiness.co.nz SOLD linkbusiness.co.nz/BPW00788 Alanah Eagle 021 606 345 alanah.eagle@linkbusiness.co.nz Liquorstore in Waikato $630,000 Pizza Franchise $449,000 Freehold Country Pub $495,000 Waikato • Great location • Very profitable business- great weekly sales • New lease for purchaser with great parking and fit out Hamilton • Rent is about 3.5% - 3.7% of the sales • Weekly turnovers over $15,000 (gst incl) • Excellent franchise training and on-going support • Leading pizza brands in NZ Waikato • Heart of the community • Cafe restaurant / truck stop with simple and excellent food • Independent and award winning • Off License SOLD linkbusiness.co.nz/BPW00814 Rick Johnson & Therese Bailey 021 991 485 rick.johnson@linkbusiness.co.nz SOLD linkbusiness.co.nz/BPW00456 Paul Lu 021 047 4988 paul.lu@linkbusiness.co.nz SOLD linkbusiness.co.nz/BPW00766 Andrew Whyte 022 097 0065 andrew.whyte@linkbusiness.co.nz Fun Entertainment Business $850,000 SOLD Hamilton • Well-established entertainment business - 20 year history • Currently the only indoor karting experience in Hamilton • Average sales p/m over- $80,000 + GST linkbusiness.co.nz/BPW00527 Therese Bailey 021 707 641 therese.bailey@linkbusiness.co.nz Don’t dream of better, let’s make it happen in 2019 Contact us for a confidential chat about buying or selling your business this year Bay Business Brokers Ltd - Licensed (REAA08) NZ’s most awarded business brokerage 8 OFFICES NATIONWIDE. 22 NAYLOR STREET, HAMILTON Connecting business buyers & sellers since 1996 0800 225 999 LINKBUSINESS.CO.NZ
WAIKATO BUSINESS NEWS April/May 2019 7 EXPLANATION: Company-X software architect and developer Rachel Primrose (right) discusses a concept with developer Arno van Niekerk during a team meeting. A talented architect with deep technical knowledge “I really like working with Rachel Primrose,” says fellow Company-X software architect Luke McGregor. “She’s obviously a talented developer with a strong focus on quality. She’s also not afraid to push her technical limits and learn new things, which is hugely important for any developer. From an architectural point of view she also thinks really differently to me, which I find really valuable.” SOLVE YOUR PROBLEM WITH SOFTWARE! The Company-X men and women are real-life, award winning, software specialist superheroes. 500 Technology Fast 500 2018 APAC 0800 552 551 hello@companyx.nz www.companyx.nz Level 2, Wintec House, Cnr Anglesea & Nisbet Street, Hamilton Company-X has entered software architect and senior developer Rachel Primrose into the Reseller News Women in ICT Awards. “Rachel immediately sprang to mind when we began discussing the Women in ICT Awards,” says Company-X director and co-founder Jeremy Hughes. “Rachel’s made the world of difference to a variety of projects since she joined Company-X in February 2018.” “There’s not enough women, or men for that matter, in the IT industry with the depth of knowledge and breadth of skill that Rachel brings daily to Company-X clients,” says fellow director and co-founder David Hallett. Rachel joined Company-X from trans-Tasman telco Vocus Communications where she had worked for nearly six years as a senior analyst, software developer and software architect. Rachel’s interest in technology began as a child, when she helped out at family business Arche Technologies NZ in Auckland. She started in the back office while still at primary school, but as her knowledge of the business and passion for technology grew Rachel worked on Arche Technologies’ personal computer assembly line. While studying at Rangitoto College in Auckland, Rachel researched using recycled aluminium cans to soundproof buildings and earned herself a prestigious Silver CREativity in Science and Technology (CREST) award. Rachel achieved a 1A grade, the highest possible grade in Sixth Form Certificate. “She achieved excellent results in her theoretical and practical work and also consistently approached her studies with outstanding diligence,” says Rachel’s physics teacher Chris Smaill. Rachel describes Chris as an inspirational teacher, who made an extra effort to ensure the girls in his physics class were treated the same as the boys. “Chris absolutely encouraged me,” Rachel says. “I had some other teachers that were not excited about having girls in their class.” Rachel left college in 2000, partway through seventh form, to get an early start at the University of Auckland where she earned a Bachelor of Science with a double major in physics and computer science. “While at university I worked in internet service provider ihug’s call centre parttime for a year or so,” Rachel recalls. “I would call them at 3pm and see if anyone had called in sick for the night shift and ended up working about three days a week.” Rachel took a summer job at Toll NZ on the IT support desk, also a 24-hour train operations line. “The general manager of IT asked, while I was still studying at university, what I wanted to do,” Rachel says. “I became a junior programmer working mostly in programming languages Java and PHP and was also seconded to the database team where I worked in Oracle and IBM database DB2.” There’s not enough women, or men for that matter, in the IT industry with the depth of knowledge and breadth of skill that Rachel brings daily to Company-X clients. Rachel worked as a contractor for tourism company Jucy in 2005 and 2006 in the Active Server Page (ASP) development framework providing data loads to and from the company’s forecasting system and website. Rachel joined Christian internet service provider Maxnet in 2006 as a programmer working with founding director Kim Thibault. “Kim was a most inspiring leader, not to mention a woman,” Rachel says. “Kim's never been afraid to jump into technology in terms of getting an idea to market. She’s always forward thinking about technology, and then gets others to do the implementing. She encouraged me to develop both my technical skills and my soft skills.” After more than a year working as a Maxnet developer, Rachel spent nearly two years in development management, before a three-year stint as lead software architect. Kim says she really enjoyed working with Rachel at Maxnet. “I quickly saw in her someone who is extremely intelligent, able to pick up new languages and tools really easily, and has excellent business acumen,” Kim says. “She could understand what is important to the business and deliver to that. As the only female engineer in our male-dominated environment, Rachel quickly gained the respect of all with her speed, problem solving skills and attention to detail. “She is passionate, committed, and communicates clearly (even if it is not what you want to hear, but is what you need to hear). With her skills and personality she can do and accomplish whatever she sets her heart on.” Vocus Communications bought the Maxnet business in 2012. After taking maternity leave, Rachel returned to Vocus and worked on architecture and communication skills with chief administrative officer Simon Robson. Rachel’s learnings there are evident in her work at Company-X. “The most exciting thing I did was the architecture for mergers and acquisitions worth about $1 billion. Vocus Communications founder James Spenceley had a really forward approach to culture and technology which made for a great environment.” Mentoring is important to Rachel. “From a Company-X perspective I am getting mentoring from directors David Hallett and Jeremy Hughes, professional services manager Michael Hamid, business analyst Bryan Miles, software architect Luke McGregor and designer Pete Stewart,” Rachel says. Michael Hamid says Rachel combines superb and deep technical understanding with a very pleasant manner. “She has the rare ability to translate technical details into descriptions that non-technical people can understand. She relates well to customers and is very good at building trust. Her deep technical knowledge has also gained her a lot of respect among her colleagues.”
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