Since 1876 September 2014 September

Publisher:MG Publications PO Box 20034, Christchurch $4.50 incl GST ECONOMY THE KEY IS Sparking a brand change abrand Sparking BUSINESS | CURRENT AFFAIRS | LEISURE 0 0 : 2 1 + 1 1 : 8 2 : 1 1 T 6 2 - 8 0 - 4 1 0 2 1 - e r P c i r e n e G T S P A - 7 5 4 0 PST0457_A track it, fly it, freight it, truck it, sort it, scan it, dispatch it, deliver it... courier it, Together, New Zealand Post and CourierPost offer end-to-end management of your eCommerce eCommerce your of management end-to-end offer CourierPost and Post Zealand New Together, IF YOUR BUSINESS IT ONLINE, SELLS WE’LL TAKE IT FROM THERE. customer targeting and direct marketing can help connect your products to more people in more more in people more to products your connect help can marketing direct and targeting customer places. places. It’s you needeverything to keep your customers happy, so you can focus on selling it. See how we can help you. Visit nzpostecommerce.com or call 0800 501 503. 0800 call or nzpostecommerce.com Visit you. help can we how See logistics and delivery process. Our domestic and global reach combined with smart online tools, tools, online smart with combined reach global and domestic Our process. delivery and logistics Sell it

pack it, label it, love it love 0457-APSTGeneri cPre - 1 2014-08-26T11:28:11+12:00

CONTENTS

E ditor Warren Head Sell it pack it, label it, Tel (03) 357-0442 Fax (03) 357 0426 Mob: 021 340-650 [email protected]

Design Gail Williams David Streeten

Christchurch sort it, scan it, dispatch it, Head Office Tel (03) 358 3219 Fax (03) 357 0426 8 Sheffield Crescent P O Box 20034 Bishopdale Christchurch 8543

ADVERTISING Auckland Office fly it, freight it, truck it, Heather Driver - Advertising Manager Ira Rawiri Tel (09) 360-1026 Fax (09) 360-1028 [email protected] 14 [email protected] 1/1 Curran Street, Herne Bay, P.O. Box 90953 Victoria Street West courier it, Auckland 1142.

MG Publications MG magazine is published 11 times a year by MG Publications

Publisher Warren Head Cover: Prime Minister John Key faces the media mid-campaign. Photo: SNPA Managing Director track it, Derek Freear 2 Intray 16 Pro perty Redevelopment Promise at Pakuranga Plaza Subscriptions 3 In vestment Free Phone 0800 649 696 Trimmed Spark expects profit growth 18 i nfotech Tel (03) 358-3219 Bridging a Funding Gap [email protected] 4 Pols itic

Prtg in in Finances to be Kept in the Black 21 retail Wickliffe NZ Ltd TV Shopping Making Progress love it 5 Lg e islation 22 M G Legal Match-fixing to be addressed ahead of How does the Privacy Act apply to mobile tournaments deliver it... apps? 6 COR VE STORY 26 m g otorin It’s the Economy that counts - Kia Sportage - Celebrating 21 Years Intellectual Property (c) MG Publications 2014. All it always is 28 We in rights reserved. No part of this Ascension – Still on the Rise publication may be reproduced, 10 THE ECONOMY IF YOUR BUSINESS SELLS IT ONLINE, WE’LL TAKE IT FROM THERE. stored in a retrieval system or Productivity boosts port returns transmitted in any form or by 30 ManagEMENT any means without the prior Pitfalls of Partnerships Together, New Zealand Post and CourierPost offer end-to-end management of your eCommerce permission of the copyright 12 B rands Spark of Youthful Enthusiasm logistics and delivery process. Our domestic and global reach combined with smart online tools, owner. Opinions expressed by 31 MI Lestones customer targeting and direct marketing can help connect your products to more people in more contributing articles are those places. It’s everything you need to keep your customers happy, so you can focus on selling it. of the writers and not MG 14 e vents Publications. ISSN: 2253-248X Ten Glittering Years for SKYCITY 32 Heartland See how we can help you. Visit nzpostecommerce.com or call 0800 501 503. Auckland Convention Centre MG | SEPTEMBER 2014 1

PST0457_A IN TRAY Fewer Jobs Advertised Job advertising fell 2.7 per cent in July (seasonally adjusted), unwinding much of June’s lift, said ANZ Bank senior economist Sharon Zollner. “Momentum has cooled in recent months,” she said. “Nationwide internet job advertising fell 1.9 per cent in July (sa), continuing the recent pattern of oscillations around zero. This contrasts unfavourably with the four months of solid rises that kicked off 2014. Newspaper job advertising fell 8.0 per cent in July, giving up most of its 8.8 per cent June rise. Total job advertising fell in all three main centres in July. Canterbury remains clearly the nation’s strongest labour market. The level of job advertising is consistent with continuing but more modest employment growth. We expect the unemployment rate to edge under 5.5 per cent by year’s end.” Margin Shift at Turners

Turners Group has reported Fleet revenue exceeding Auctions revenue for the second six months in a row. This is a reflection of their strategic shift from auction sales to higher margin retail sales. The Fleet division, where vehicles are acquired and on-sold by Turners, benefitted from the growing popularity of Turners’ BuyNow and CashNow services, where customers can sell and buy cars for cash, rather than through auction. Auctions showed recovery from the loss of a major contract in 2013. “Market conditions are moving in favour of customers purchasing used vehicles with a strong New Zealand dollar, heavy discounting on new cars and an influx of imports from Japan leading to a surge in Immigration on a Roll supply,” said Turners. The increase in retail vs. wholesale With the flash of an air ticket and the hint “We don’t expect Australian job prospects customers and personalised retail sales of a hard-hat, arrivals of Australians are at to improve decisively before early next so this channels were the primary drivers behind multi-decade highs. Annual met immigration migration dynamic could continue for a while — the 41 per cent increase in revenues from has now crossed the 40,000 threshold, with we now expect net immigration to peak around the Finance division, with the loan book monthly net immigration accelerating in July 50,000 early next year. growing to $30.5 million as at 30 June to a new decade high of 4,450 (prior peak Along with recent falls in fixed mortgage rates 2014. 2003). Contrary to some politicking the major and a revival in low-equity lending, Westpac influx is not Asian. “The major factor driving expect this surge to support a temporary revival this migration cycle has been movements by in the housing market over the next year or both New Zealanders and Australians across the so — by next year they expect improving job Tasman,” says Westpac. prospects in Australia to reverse net migration. PwC Appointed Polarcold Joining Wiri Hub Liquidators Following a meeting held as part of the Polarcold Stores operation has secured Fonterra as a customer for a new cold store Voluntary Administration requirements for to be built in South Auckland. The Scales Corporation subsidiary has secured a long Retva Ltd (Administrators Appointed) (formerly term lease at Ports of Auckland’s intermodal freight hub in Wiri. The hub hosts an Postie Plus Group Ltd), the creditors voted to inland port and empty container depot and has rail links to the Auckland Port and appoint PwC Partners David Bridgman and the Central and Lower North Island, plus easy access to SH1 & SH20. Subject to final Colin McCloy as liquidators of the company. project assumptions meeting expectations, construction is set to begin in Q4 2014 This follows on from the completion of the with the new facility set to be operational in Q3 2015. sale of the company’s business to Roan Ltd Scales Corporation managing director Andy Borland says there is consistent and (since renamed Postie Plus Group Ltd) on 18 ongoing demand for domestic temperature controlled storage. “New Zealand’s July 2014. perishable food exports have increased by almost 65 per cent in volume terms since The liquidators will provide further reports to 1990 and our forecasts show this continuing into the future. creditors,

2 SEPTEMBER 2014 | MG

Neill Birss on Investment Trimmed Spark expects profit growth

park New Zealand, formerly Telecom, has a chance to cent to $3.638 billion and net earnings fell 7.7 per cent to $323 grow in the surging market of smart phone and tablet million. users. Spark has trimmed staff, refocused and obtained the In the latest results available (for 2013) Vodafone NZ reported biggest block of wireless spectrum freed up by the closing revenue of $1.767 billion and after-tax profit of $55.9 million. Two S Degrees reported $263 million revenue and a $35.89 million loss. of pre-digital (anologue) television. Mobile spending averages near $30 per household and is rising Vodafone doesn’t break out its mobile revenue. Spark lists 2014 while revenue from fixed-line phones fall. Young people walking the mobile revenue as $976 million. streets, head down, tapping smart phones indicate the trend will Spark at June 30 had 669,000 broadband customers, up 3.1 per intensify. cent in the year, and 47 per cent of market connections. It has In the June 30 year, Spark’s dividend rose a cent to 17 cents, more than 10,000 fibre customers and more than 30,000 VDSL partly tax-imputed. Its share price as I write (on profit release date), customers. closed 5 cents down at $2.86. This gives a gross yield, tax credits and cash, of about 7.5 per cent. The managing director, Simon Moutter, hopes the company will pay 18 cents, fully imputed, in the present 2015 financial year. The share price has risen 28 per cent in 12 months. The company believes that from now profit can rise. However, cost cutting will be tougher. It will increasingly be through new technology rather than by staff reduction. “We’re getting into the higher hanging fruit,” Moutter said. He described Spark as being mid-stream in a “multi-year turnaround”. Competition is sharp from international giant Vodafone and small local Two Degrees. New Zealand subscribers roughly number: 2.3 million for Vodafone NZ, two million for Spark, and a million for Two Degrees. Spark puts its mobile revenue share close to 40 per cent. 4G services had already begun on other spectrum, but 700MHz band signals require fewer cell towers and are more robust. This is the spectrum formerly used by pre-digital TV. Auctioned slabs for 18-year use of 700MHz spectrum went to: Spark 40MHz (paid $158.1 million), Vodafone 30MHz ($68 million), and Two Degrees 10MHz ($44 million). The first round offered each operator three lots at $22 million per lot. Two Degrees took only two and Telecom and Vodafone competed for the extra lot. Telecom won, paying $83 million. Spark Digital (formerly Gen-i) revenue grew 10.1 per cent in the This may not end 4G spectrum allocation. Rights had already second half and margin rose more. been allocated for other bands that might be suitable for 4G use, Lightbox, Spark’s internet TV venture, will cost $15 for 30 days said Len Starling, manager of radio spectrum policy and planning of access. It launched on August 28. Spark wants at least 70,000 for the Ministry of Business, Innovation and Employment. Not all subscribers by next June. are being used, and some used for 2G or 3G mobile could be now Moutter said of Lightbox: “We are investing today to build a used for 4G if network operators chose. This includes spectrum at businesss that will be worth, we hope, a significant amount in 850MHz-900MHz, 2.1GHz, 2.5GHz-2.6GHz and 3.5GHz. many years time. That takes some resourcing, it takes a bit of risk The ministry and overseas administrators are working to appetite, and a willingness to back a strategy that’s pretty bold and determine other frequencies that could be made available for relies on disruptive trends in the market.” cellular mobile. Lightbox will be available regardless of a consumer’s ISP. “This is likely to take 8-12 years,” Starling said. Experienced investors remember the State’s effective grab Spark expects to have 700MHz band mobile operating in the current of Telecom shareholders’ wealth eight years ago — without financial year. At least one 4G smart phone is already being advertised compensation. The Labour government’s then communications as able to use the 700MHz band — the $888 Samsung Galaxy S5. minister, David Cunliffe, unbundled Telecom’s copper network. This In the June year, Spark completed selling its Australian subsidiary, wiped $3.8 billion off its share value. Those hit included 40,000 AAPT, for $506 million. Telecom paid A$2.3 billion for AAPT in the mum and dad shareholders. dot-com boom 14 years ago. The AAPT sale complicates the June Investors in Spark may seek a margin to offset the risk of any 30 full-year result. On continuing operations, revenue fell 2.6 per similar diktat.

MG | SEPTEMBER 2014 3

Neale McMillan on Politics

Labour finance spokesman David Parker (above) found his proposed capital gains tax in the firing line for National. Photo: snpa Finances to be kept in the black hough miles apart in policies, Labour Labour had underestimated the cost of some jobs and higher incomes. and National are both pledging a policies — saying this was inevitable for a Clearly mindful of Green Party aspirations, responsible approach to Budget party in Opposition. Cunliffe is emphatic that, under a Labour- finances when either John Key or Labour was also counting on revenue flows led administration, Labour would definitely T retain the finance portfolio, allocating it to David Cunliffe forms a government after the coming more strongly and more quickly than election. would occur, particularly from its capital gains deputy leader David Parker, who he describes How this pans out is a matter for ongoing tax. as a “son of Dunedin and a Presbyterian debate since both are committed to running It was also mistakenly assuming no change skinflint”. fiscal surpluses. in human behaviour by imposing higher tax While Cunliffe expects the Greens to be The Government’s forecast Budget surplus rates on top earners. a core part in an incoming government, he for 2014-2015 is a modest $297 million, “But we know from past moves in that also sees a likely accommodation with New according to the Treasury’s pre-election direction that people will diversify their Zealand First. update, with the prospect of surpluses in income in such a way as to minimise their Responding to expectations by Green co- subsequent years being “not large”. exposure and liability,” Dunne said. leaders Russel Norman and Metiria Turei that To Finance Minister Bill English, it is no time English sees Treasury’s pre-election update they would expect senior Cabinet posts, he for parties to be making expensive promises as evidence that Beehive policies are on track; said: “I certainly have an open mind to there and commitments. backed by good growth, more jobs and higher being Green ministers around the Cabinet Unfazed by this warning — and unmoved incomes. table, just as I potentially would with New by the Greens’ big-spending promises — “The economy is making good progress and Zealand First. Labour is confidently promising fiscal surpluses public agencies are delivering better services “That would be the nature of a coalition “every year for the foreseeable future unless in areas that really matter to communities government; but we’re not going to be there is a major international downturn”, — such as lower crime, higher educational dishing out portfolios before the election.” leader David Cunliffe told MG. achievement and more New Zealanders Norman and Turei have further floated To stay within Budget, Labour would, moving from welfare into work,” he the concept of a shared deputy prime if necessary, reschedule or compress explained. ministership — suggesting this should be on programmes in future years. Should National have the “privilege” of the negotiating table. As a former revenue minister, United Future being re-elected, English foreshadows a busy “Well, people can dream and people can leader Peter Dunne is sceptical, arguing programme of policy reform promoting more ask; but that doesn’t necessarily mean [that

4 SEPTEMBER 2014 | MG n Retiring Maori Party Cabinet ministers Pita Sharples and Tariana Turia have ’fessed up to Parliament about a loving Neale McMillan on Legislation relationship with Finance Minister Bill English. Delivering his valedictory statement in Parliament, Sharples said: “We love both Match-fixing to be him and his cupboards full of money. “Minister English made an unreasonable assumption about us. He addressed ahead of said we came to our meetings armed with psychological tactics to relieve him of some of his putea, his money. “He said Tariana attacks first, leads the tournaments charge, and bombards him with statistics and surveys about Maori communities’ easures to discourage match- this year, Sport New Zealand said match- needs. She goes on and on until he feels fixing in next year’s Cricket fixing involved improperly manipulating guilty or afraid and, after some time, out World Cup and the FIFA results or events for betting returns rather comes the cheque book. Just take a note Munder-20 football World than for sporting tactical reasons. of that formula. Cup will be among the first legislation This was commonly associated with “Then, he says, I follow on with my considered by the new Parliament following bets placed on pre-arranged outcomes magnetic charm, making him feel relaxed the September 20 election. for guaranteed financial return — with and comfortable and asking how his wife The Crimes (Match-fixing) ‘fixers’ paying players to lose games or and children are. Amendment Bill is due for report-back influence aspects of a game in an agreed “His sore back — is it getting better? I from the law and order select committee way. compliment his aroha ki te iwi Maori and by January 31. Sport New Zealand cites an Australian — boom — out comes the cheque book While not designed to capture every incident where the scores of a football with a signature . . .” form of match-fixing activity, it will team were manipulated in the semi- Sharples said this was English’s story, address the most serious issue where professional Victorian Premier League, and things didn’t go quite like that. But influencing a betting outcome is intended estimated to have reaped more than $2 he was much gratified for the finance by manipulating a sporting match or race. million in betting winnings. minister’s help for all the projects they’d It proposes a new provision in the Sports New Zealand’s manager of policy put forward. Crimes Act 1961 making it clear that Michael Woodside says he is unaware certain match-fixing activity is a form of of any instances to date of significant, deception. substantiated match-fixing in New This involves manipulation with intent Zealand relating to betting activity, but will be] the outcome of the negotiations,” to influence a betting outcome of a the opportunity and financial incentives Cunliffe said. sporting competition, game, match, race, would increase as sport became more He is already beginning to define the or rally involving human participants (or a globalised and commercial. priorities in the event he leads the next dog race) in terms of the overall result or “Global criminal activity concerning government — “jobs, homes, families and any incidental event. corrupt sport betting is increasing, putting people first”. An explanatory note states that other particularly with growth in online betting. “The first rise in the minimum wage will types of match-fixing activity are better “New options such as online live betting occur within our first 100 days, and there will addressed by the governing bodies of during matches also increases the risk be two rises in the first year that will take it up sports by means of code-of-conduct or of, and creates greater opportunity for, by $2 an hour. disciplinary procedures or by other areas match-fixing.” “We’ll be rolling back some of the unfair of the general law. Woodside said Interpol estimated that labour laws that the current Government has The Bill’s raison d’etre is the perceived fraudulent sports betting generated brought in. We’ll be taking steps that will and increasing risk of individuals and US$140 million turnover in 2010. make life better for New Zealanders and their crime syndicates targeting Australasia for In a February 2013 report, Organised families.” sports match-fixing; there having been Crime and Drugs in Sport, the Australian several high-profile cases in Australia. Crime Commission warned of increased Another concern is the damage that risks between Australian sport and n Winston Peters has marked a line in the could accrue to the integrity, value and organised crime. sand for journalists who keep speculating growth of New Zealand sport, calculated Interpol and other investigative experts on New Zealand First having pre-election to have contributed $5 billion to the also fear crime syndicates will expand discussions with other political parties. economy in 2008-2009. into Asia, the Indian sub-continent and “I want to tell the media one thing,” he said In a regulatory impact statement earlier Europe. in Parliament’s recent adjournment debate. “If any reports are out there that New Zealand First is in discussions with any other political party, any such report will be, to use WINE DRAW Geoffrey Palmer’s famous words, spreading rumours with malice, it will be false. The winner of the MG Publications wine draw “It will be an intentional lie on the part for renewed subscriptions for the month is... of the journalist. It will have no basis A J Norris of Wanganui. whatsoever.”

MG | SEPTEMBER 2014 5

COVER STORY It’s the Economy that counts - it always is One of the chocolate boxes that pop up each Election year is the Government’s Pre-election Economic and Fiscal Update, a legacy of former Finance Minister Ruth Richardson. Warren Head.

n the years of the Global Financial Crisis that followed from 2008 the contents have been slim pickings. That’s Inot surprising. The Americans now describe the five years 2008-13 as the Great Recession. Every OECD country has either been on the equivalent of an economic drip with historically low interest rates or squillions of dollars of increased money supply top prevent global economic collapse. There seems little doubt that New Zealand was helped off the ropes by a combination of soft interest rates, a clampdown on new state spending and the Chinese-driven dairy export boom. Our interest rates never reached the near- zero rates of European and US central banks and a high currency acted as a barrier to imported inflation. But while housing costs remained low globally we got a heart- stopping housing market. This year the return to a slender Budget surplus, positive GDP print and a continuation of a multi-year equity boom saw the headline ‘rock star economy’. In actuality the economy may be more evocative of Steve McQueen than the Rolling progress, whilst hitting some risk buttons, housing costs, mortgage rates and rents and Stones. We’ve had a great escape from the neither of which was widely reported. where it is all going. Housing Minister Nick austerity programmes imposed in some The economy and issues around housing Smith said during National’s housing strategy other nations. The English patient became and incomes were missing from the excitable launch that only 5 per cent of new homes the patient English. It took five years but Internet chatter about author Nick Hagar’s are now affordable vs. 35 per cent of homes the books balance and there’s room for up book ‘Dirty Politics’. The book release has in the 1970’s because developers target to $500 million a year for new stimulus. not been a big event for those outside the higher-end buyers. The first block was wrapped into the new so-called ‘beltway’ (Washington DC slang for KiwiSaver HomeStart grant. media-government–university insiders) but a KEY DRIVERS Would Labour have done much the same as mix of unverifiable hearsay and sledging will The Treasury Secretary Gabriel Makhlouf National over the last five years? Maybe, and always have viral appeal. Hagar’s latest leak- confirms that the New Zealand economy is you’d hope so. They once famously gutted buster (there have been three, each released expanding at a robust pace, although growth government departments in the 1980’s, close to a forthcoming General Election) is momentum has eased from earlier in the and still have a penchant for restructuring. based on files nicked by a mystery hacker year. Looking forward, real production gross Energy companies are nervously awaiting the from the hacked private computer of the domestic product (GDP) is forecast to grow Election result with Labour’s threat of equity controversially intemperate bloggist Cameron by 2.8 per cent on average over the four buybacks and a new power pricing plan a Slater. years to March 2018. loose ‘live wire.’ The lofty moral ground adopted by the “The near-term outlook remains for Is Finance Minister Bill English’s work author may yet be threatened by legal growth faster than potential driven by done? Firstly, among his peers in the OECD liquefaction. residential investment, positive migration nations, he clearly achieves an enviable report Meanwhile almost all political parties apart inflows and still-high terms of trade.” card. The Pre-election Economic and Fiscal from Internet Mana found their policies “Real GDP growth for the year ending Update (PREFU) reports substantial economic stranded by a distracted media. March 2014 was faster than expected in the The core issue for middle NZ is how Budget Update - 3.3% compared with 3.0% Prime Minister John Key campaigning in economic conditions affect them – rising forecast - while growth for the year ending Hobsonville. Photo: snpa.

SEPTEMBER 2014 7 MG | The near-term outlook remains for growth faster” than potential driven by residential investment, positive migration inflows and still-high terms of trade.

Gabriel Makhlouf

March 2015 is forecast to be lower at 3.8% (down from 4.0% in the Budget Update),” says Treasury. Growth is expected to slow later in the forecast period as the factors currently supporting growth decline and monetary conditions tighten. Rising construction activity is expected to be a key driver of growth, with earthquake rebuilding supplemented by a rebound in residential construction in Auckland in response to pent-up demand. Business investment is also forecast to pick up as productive capacity is more heavily utilised. “Net migration inflows continue to rise, adding to both demand and the productive capacity of the economy. The net inflow is expected to reach 42,500 this year and overall to add an additional 3,500 to the population Household disposable incomes are forecast to increase 4.0 per cent on average per year, after an estimated 7.1 per cent increase in the year to March 2014. Employment and wage growth is expected to be the main driver of this growth, with labour income growing by 4.6 per cent on average over the next four years. The terms of trade are forecast to stabilise during 2015, recovering some of the decline currently being seen. ‘The global backdrop to these forecasts is steady, but uneven, economic growth. Trading partner growth is likely to be similar to that recorded in the mid-2000s with mean the Treasury is now expecting smaller government (though it will incorporate any moderate inflation. Risks overall remain surpluses in 2014/15 and beyond, giving any Cabinet decisions made since the Budget skewed to the downside, with heightened future Governments less wriggle room for Update). geopolitical tensions adding to economic new spending plans,” says Anne Boniface, “Consequently, the focus is on how uncertainties.” senior economist at Westpac. Treasury’s forecasts have evolved since He added that the Crown’s financial “While we agree with the broad thrust of the May Budget and any implications of position is susceptible to market movements Treasury’s economic forecasts, we anticipate these changes on revenue and expenditure in variables such as interest rates, exchange an economic cycle of greater amplitude. projections. rates and equity prices. The final fiscal cost “Its timing, coming ahead of the “As widely expected, the Treasury of the Christchurch earthquakes is also still September 20 election, means it doesn’t downgraded its revenue forecasts on the uncertain. traditionally include major new policy back of a weaker nominal GDP forecasts, “Slight downgrades to revenue projections announcements by the incumbent which in turn were driven by a faster than

8 SEPTEMBER 2014 | MG COVER STORY expected fall in the terms of trade, lower inflation and a higher NZ dollar. “And with no significant changes to spending plans, Treasury is now expecting smaller surpluses in 2014/15 and beyond. The much vaunted promise of a return to surplus in 2014/15 remains intact, though the Government continues to skate on thin ice (with the ice getting even thinner in the latest set of forecasts). “The 2014/15 surplus is now expected to be just $297 million (compared to $372m in the Budget). Beyond this, the surplus is expected to continue to expand, but not quite as quickly as previously envisioned.” Finance Minister Bill English At the ANZ Bank economists led by chief campaigning in Rangiora economist Cameron Bagrie say the PREFU with Matt Doocey (right) forecasts mirror the broad trends of gradual National’s candidate for the Waimakariri electorate where improvement in the 2014 Budget. Labour lost in 2011. “Incremental improvements in the OBEGAL balance remain in prospect, with surpluses “Mainstream political parties appear improvement in the projected fiscal position projected to rise from 0.1 per cent to 1.1 per committed to the working assumption of a beyond 2014/15 is very small and the cent of GDP over the projection period. Net $1.5 billion new initiative cap for subsequent projected buffer relatively trivial.” Core Crown debt peaks below 27 per cent Budgets. That’s still tight historically, but Westpac’s Anne Boniface thinks the Treasury of GDP, a reasonably low level vis-à-vis global critical if projections are to be met. “ may have undercooked their forecasts in peers. Bagrie says, “Future surpluses remain a couple of areas. Although net migration reasonably small, providing only a minor projections have been revised up, the new TREND GROWTH buffer to absorb any adverse shocks but peak of around 42,500 continues to look on “The economic and fiscal projections look also providing little scope for spending to be light in comparison to our own forecast which realistic, with GDP growth averaging 2.8 ramped up if longer-term fiscal targets are to tops out closer to 50,000 new migrants per per cent over the projection period. That’s a be met. Any incoming Government will need annum. smidgen below Budget forecasts but largely in to run a fairly tight ship.” “However, this doesn’t translate to a similar line with our view of trend growth. While the “Forecasts of small(er) surpluses in the out- discrepancy in our outlook for the housing receding terms of trade and high NZD highlight years (rising to 1.1 per cent of GDP in 2018), market, where we remain more convinced near-term risks, it is the trend rate of growth and a net residual cash deficit across the than Treasury on the role of rising interest that matters for the fiscal projections.“ projection period, highlight that there is little rates. Annual average GDP growth in 2014/15 was room for a pre or post-election spend-up if “We are more downbeat than Treasury revised down to 3.8 per cent (from 4.0 per fiscal targets are to be met. about the outlook for the house prices from cent) as forecasts of a decline in NZ’s terms “Surpluses of that magnitude represent only 2016 and beyond.” of trade were brought forward and with a small buffer against adverse developments. The ANZ economic team remains more household consumption growth flatter than We’d expect a higher surplus track if the optimistic than Treasury about prospects expected. Government was serious about New Zealand’s for a recovery in the terms of trade over “Notably, the Treasury views recent weakness savings imbalance and taking pressure off the medium term where they think strong in dairy prices to be partly seasonal and expects the NZD (despite the fiscal stance remaining demand from China and other fast growing the terms of trade to stabilise at historically restrictive to the tune of 2.4 per cent of GDP developing economies will continue to high levels over the projection period. over the next four years).” underpin prices for New Zealand’s key “Similarly, nominal GDP growth was revised The projections largely replicated the May commodity exports. slightly lower, leading to minor reductions Budget forecasts and financial markets were “If we’re right on the outlook for the terms to the Government’s forecast tax take. The muted in their reaction. of trade, the government might find a little Treasury viewed softer household demand and “Of more significance is that the projections more money than they expected in the kitty weaker export prices as key downside risks, give little scope for fiscal largesse as pork for a couple of years. But over a longer while stronger US growth momentum provided barrelling season ramps up immediately prior horizon (beyond 2017), we suspect the risks an upside risk to the economic outlook. to the election,” says Bagrie. “The incremental lie in the opposite direction.”

Prime Minister John Key talking to Radio NZ: “The first thing is to grow the surpluses that we are... predicting to take place. The second thing is to pay off a little bit of debt. The third thing is to ensure ACC levy reductions take place. That does leave some cash a little bit further out potentially for a tax package. That will be aimed at lower to middle income New Zealanders.”

SEPTEMBER 2014 9 MG | economy Thirsty for craft beer he thirst for New Zealand craft beer is expected to triple over the next decade but there are concerns that brewers Tmight not be ready to capitalise on the demand. “New Zealand is well positioned to be a superpower of small brewers,” said John Bennett, ANZ General Manager Central Region for Commercial & Agri. “Craft beer is where wine was 20 years ago. People with money to spend are becoming more sophisticated in Ports of Auckland (middle ground) is handling record volumes of freight. their tastes, and they are looking beyond the big beer brands. “Asia’s fast-growing middle classes are just starting to develop a taste for craft beer. Productivity boosts port returns The potential for exporters is enormous, up to 300 per cent in the next decade, but New he company’s major import point straddles and crane, a longer container wharf Zealand brewers and hop growers will need Ports of Auckland has attributed a and a new truck grid. to significantly expand production if they’re to much improved result for the year Work on a 50m extension of the container take advantage of the opportunity.” Tto 30 June 2014 to increases in both wharf will begin in September, with Craft beer is the fastest growing segment of labour productivity and volumes across all port completion due in late 2015. It will allow the New Zealand’s brewing industry, currently at operations. handling of two next generation container about 25 per cent a year. In the US — one of The pre-tax trading profit before income tax ships at the same time. A new container crane New Zealand’s biggest beer export markets — was $73.5 million, up 65.5 per cent on last will be ordered for the longer wharf. demand for craft beer has grown 10 per cent year’s result of $44.1 million and net profit A new truck grid is under construction and annually while overall demand is shrinking 0.3 after tax of $74m is 90 per cent up (2013: due for completion in late 2014. It is larger per cent annually. $38.9 million). than the old grid and will allow more trucks to Demand is also on the rise in Europe, but “We had an outstanding year,” said be processed faster. Asian markets, such as China, hold the most chief executive Tony Gibson. “Container A new tug (the Hauraki) was delivered this exciting prospects for New Zealand brewers, volumes recovered and the volume of non- month and will enter service in September. Bennett said. containerised freight increased to record More powerful, it will assist with the handling levels.” of larger ships. One impetus was breakbulk (non- “We are building supply chain partnerships containerised) volume rising 26 per cent to which will deliver greater efficiency and cost 5.679m tonnes Container volumes increased savings for importers and exporters,” said by 18.3 per cent to 968,741 from 818,819 Gibson, referring to the recently announced TEU. joint venture with Napier Port and Icepak in Car numbers increased to 207,591 from an inland port at Palmerston North as one 170,835, an increase of 22 per cent. Ship calls example. “This site is perfectly placed to increased from 1,463 to 1,541, an increase of take advantage of the natural flow of the 5.3 per cent. supply chain and a growing export base in The growth in container volumes was, the Manawatu-Whanganui region. We are however, a one off as POA recovered from a developing our inland port at Wiri and will low base and we will also lose volume after announce more supply chain partnerships in Milestone Year Maersk moved a major service away from due course.” Auckland. “The future is reasonably positive for South Port New Zealand Ltd marked its 20th “Productivity has been increasing since Auckland’s port. Auckland is growing and year since listing on NZX with a record net restructuring started in 2011 and has hit new so is its freight demand. At the same time, profit after tax of $6.68 million. This result highs this year. Productivity has been the key competition in the port sector is growing and is driven by stronger bulk cargo activity with to our success right across the port, enabling pressure from shipping companies on pricing is total cargo throughput for the business us to smoothly handle record numbers of becoming more intense as that industry itself reaching a new record level of 2.72 million cars, containers and other freight.” This has undergoes significant change.” tonnes. The chairman, Rex Chapman, been a big change for Ports of Auckland The 2014 result will see the port’s owners said “it is 25 years since the assets of the and Gibson was praiseworthy of hard receive a dividend payout of $66.6 million, former Southland Harbour Board passed working and innovative staff for their help up 126 per cent on the 2012-13 dividend of to the then new corporate South Port New in this achievement. POA is making capital $29.5 million. Ports of Auckland is 100 per cent Zealand Ltd.“ investments to help lift productivity and owned by Auckland Council Investments Ltd, South Port was listed in July 1994. capacity further. These include a new tug, for the benefit of Auckland ratepayers.

10 SEPTEMBER 2014 | MG

ECONOMY S tockpiles and Sanctions the New Woes

here has been a lot to digest in the dairy industry in recent weeks GlobalDairyTrade Price Index and ANZ Bank’s chief economist 2% TCameron Bagrie and agri-economist Con Williams don’t hold back in discussing 0% how they think the drop in the global dairy price is going to pan out. Though they add -2% the economy still has considerable pep. On the markets side there was another -4% decent fall in the GlobalDairyTrade TWI index of 6 per cent at the beginning of the -6% month, with declines across all products.

Overall the TWI prices are now down 44 PRICE INDEX CHANGE IN GDT -8% per cent since its peak in February, but milk powders are back by even more (-47 per -10% cent). “While last week it was probably too 1 Jul 14 4 Mar 14 1 Apr 14 3 Jun 14 15 Jul 14 5 Aug 14 early for Fonterra to revise down their end 6 May 14 18 Mar 14 15 Apr 14 20 May 14 17 Jun 14 19 Aug 14 of July milk price forecast of $6/kg MS, the gap between this and current spot prices continues to grow,” say the ANZ dry up. At present we have a milk price rapidly evolving risk profile needs to be economists. forecast of $6.50/kg MS, which would recognised. The outlook for the economy “We have cut our 2014/15 milk price avoid such a situation. But we’re on is more balanced.” forecast again to $5.25/kg MS. Dairy price notice. action remains weak, with forward curve n “Amidst forestry and dairy price declines, The Outlook pricing into the peak of the NZ production other soft commodity prices have held up. Current prices are having a material impact season soft. Question-marks surround But more of these now look to have done on the outlook for the farm-gate milk China’s inventory situation, and European their dash. The NZD has started to adjust, prices in 2014/15, they add. “This is due to production needs to find a home elsewhere but by an insignificant margin. present auctions having a higher weighting given Russian sanctions. It’s a poor n “The risk profile surrounding the economy as we move into the peak of seasonal combination. is far more symmetrical than what it was supply. With Fonterra’s currency hedging 3 months ago. The outlook is now akin largely locked in around the early NZD/USD Key Points: to the March 2013 MPS when there were 0.80s this means there is nearly full flow n “If our revised forecast materialises, it clearly both “upside and downside risks through from international prices to the represents an approximate $5.1 billion (or to this outlook”. It’s not just the likes of a farm-gate.” 2.2 per cent of GDP) hit to dairy revenue low dairy payout; the NZD is lagging, the The last auction prices technically compared to last season. The hit to cash- global scene is far more wobbly and some translate, they say, into a milk price around flow isn’t as bad as the headline numbers, geopolitical aspects (Russian sanctions) the mid $4 kg MS mark, highlighting a but it’s a hit nonetheless. have had clear implications for soft $1.50kg MS gap at present. “Luckily year- n “The long-term picture for dairying hasn’t commodities. to-date prices achieved are higher than changed, but current developments bear n “The economy still has considerable pep. this thanks to better results (higher level) witness to the old adage that “what goes Our central scenario has GDP growth of earlier on, but this highlights the potential up must come down”. 3 per cent in 2015. However, there are downside risk at present if prices do not n “Mechanically putting a milk price of more risks to manage. recover. $5.50/kg MS (incl dividend) into our n “The RBNZ should move to a more The GDT auction confirmed earlier average farm model yields a breakeven neutral policy stance at next week’s suspicions, they add, that Oceania prices are result, though there is huge industry Monetary Policy Statement albeit with yet to stabilise and “the auction before was divergence around that figure. While a soft tightening bias behind the scenes bargain hunting as opposed to a stronger farmers are still backing an improvement and in the technical projections. bid tone returning”. in prices later in the season and cash- n “Inflation is projected to be closer to the “In market there is a lot going on that is flow looks better than the headline bottom of the policy band in H2 2014 making it difficult to forecast what might result it’s unlikely to be slash and burn. than the 2 per cent target point and we happen from here. But the cheque-book will be put away have greater uncertainty heading into “However, at present it is difficult to see and a reduction in advance rates come 2015. The RBNZ has an inflation target a catalyst for higher prices despite them Fonterra’s next update would now shift not a growth one and inflation has being below the cost curve for all the major this reaction into more extreme territory. consistently been in the bottom half of exporters. The market is sending confusing n “The key for whether financial stress the band since 2009 (ex the 2011 GST signals with high prices in the likes of the might start to emerge will be the outlook related spike). It’s time for an extended US due to a strong domestic demand, but for 2015/16. If there is another skinny cup-of-tea. If the situation changes the plunging prices for Oceania and European year this is where cash-flow starts to RBNZ can shift as appropriate. But a product.”

MG | SEPTEMBER 2014 11

BRANDS Spark of Youthful Enthusiasm The freshly minted Spark Ltd has been heavily promoting itself since switching identity from the long- running Telecom in August. They have been explaining the underlying logic, which may help those who recall being as mystified when England turned up to play rugby in jerseys emblazoned O2.

Spark New Zealand CEO Simon Moutter driving a new strategy.

he company’s marketing has more share in the markets that most matter and emphasis on mobile technology and being business-savvy enough to invest in broadband. This is where Spark New the areas that customers most value, now TZealand will be ramping up exposure and in the future. for a range of new ‘surprise and delight’ products in the “now and the future’ of the n “Winning by building big new businesses business. in digital services such as internet TV, Commenting recently on the change of years ago to reflect the very different world in Cloud computing services and big data. company and core brand names to Spark, which they now operate.” chairman Mark Verbiest and chief executive What makes Spark different from Telecom n “Winning by our Turnaround programme Simon Moutter said “The transformation is apparently internal culture. “Spark is a enabling us to lower our prices and keep we are undergoing was also driven by the catalyst to an internal culture of winning,” investing in the technologies that New fundamental realisation that our customers they said. That comes down to some Zealanders demand.” wanted us to change. . . the timing is right, objectives on how and where to win: we have momentum in the market and There was more but you get the message. we are following in the proven footsteps n “Winning by being #1 in mobility, data, This is, of course, current work in progress. of telecommunications companies around effortless service and cost. Another spark of optimism comes via the the world such as Orange, O2, Verizon and company’s annual report in a section called Sprint, who each changed their name several n “Winning by ensuring we are growing our ‘Inspired by our Customers’:

12 SEPTEMBER 2014 | MG business totals in excess of 250 data centre racks since the beginning of 2014. The investment in data centres has continued. In Wellington, a new Revera centre opened in September 2013 that is now 100 per cent allocated, with a third centre due to open in October. In Christchurch a new green fields centre opened in August 2013 and is already over 30 per cent full. In Auckland a new high resiliency data centre in Takanini is due to open in October 2014, with 38 per cent of capacity already allocated.

Spark Toolbox of “Our customers’ worlds are getting faster invest in selected growth areas. These Brands and more demanding. Their lives are more include the launch of an internet TV service diverse, more global and more exciting. 27 called Lightbox, greater investment in Cloud The transition from Telecom New Zealand years ago when the Telecom brand was first computing through the acquisition of Appserv, to Spark New Zealand is “a massive created, mobile phones, the Internet, Google, further data centre development in the main undertaking with a vast number of Amazon and Facebook didn’t even exist. There centres around New Zealand and a number underlying technology changes required have been huge technology shifts in the last of new businesses emerging from the Spark as well as the more visible changes to three decades and we expect rapid change Ventures incubator. branding and signage,” says Spark NZ to continue. It’s up to us to keep up with the Spark Digital (formerly Gen-i) has rapidly chief executive Simon Moutter. The core blistering pace of change, helping customers repositioned towards Cloud infrastructure, business units and brands are: navigate the changes yet to come. mobility, managed ICT and platform-as-a- “Customers rely on us for so much now. To service and Moutter says the financial results n Spark Home, Mobile and Business be an individual, to fit in, to share cool stuff, to reflect this repositioning, with IT services is the new name for Telecom Retail be in touch, to run their business, to do good, margin growth exceeding revenue growth and comes under the Sp[ark and Spark to be a family, to be the best they can be. and with a significant sales pipeline of new Business brands. “We know that the most inspired and business. customer-focused businesses in the world are n Spark Digital (formerly Gen-i) covers also among the best performing. enterprises and government customers. “So we want to truly understand our customers; understand their feelings, their Customers n Spark Connect (formerly Telecom frustrations, their aspirations and what drives Connect) delivers technology processes them to succeed. We want to understand why rely on us for so and products via the Spark network. they stay with us, why they are with others much now. To and what it would take to change their mind.” be an individual, to fit in, n Spark Wholesale (Telecom Wholesale) The enthusiasm is clearly slewed towards a related to telecommunications retailers. youthful market. ” to share cool stuff, to be in Spark New Zealand’s FY14 financial results touch, to run their business, n Spark Venture (Telecom Digital Ventures) (reported profit was $323 million, a gain of to do good, to be a family, to focuses on WiFi, Internet TV and Smart 19.6 per cent) reflect the significant changes Data analytics. made in the business, says Moutter. be the best they can be. “Mobile revenues grew 6.0% with over 2.0 Simon Moutter n Unchanged brands are Revera million customers choosing to be with Spark (business cloud), Skinny (mobile), New Zealand, a growth of 10.5% from FY13. “The acquisition of Appserv in July 2014 Bigpipe (broadband), Qrious (data “IT services revenue grew by 5.8% in adds to the significant investment across Spark analytics), Lightbox (Internet TV) and line with the growing trend towards Cloud New Zealand in Cloud services and provides Telecom NZ International. TCNZ computing and supported by our investment a major new piece in the Cloud jigsaw,” says Finance is now Spark Finance. in data centres in the main centres of New Moutter. “We see this as a strategic business Zealand. move giving us a very strong New Zealand n Telecom Corporations of New Zealand The strong performance in mobile and IT Cloud services portfolio. The combined is now Spark New Zealand and on NZX services helped mitigate the decline in fixed capabilities of Spark Digital, Appserv and and ASX the ticker code is now SPK. revenue driven by the long-term industry trend Revera mean we can now offer leading Cloud away from fixed legacy products. computing expertise to all New Zealand Spark’s share of mobile market revenue businesses including small and medium improved ~39.4 per cent, while the number of enterprises (SMEs). mobile connections grew a net 191,000. Share In the IT services area, Revera has secured Read the Spark of the intensely competitive broadband market some significant new IT as-a-service contracts, presentation on was stable at around 47 per cent. including Ministry of Social Development and www.headliner.co.nz Improved cash flow has helped Spark Transpower. New or imminent data centre

SEPTEMBER 2014 13 MG | events Ten Glittering Years for SKYCITY Auckland Convention Centre lexibility and expertise are among the The centre can look after groups big and help keep the wheels of commerce turning whilst attributes that have made SKYCITY small, said Mortensen. The convention centre a conference is under way. Vitally, there is free Auckland Convention Centre one of offers large scale conference facilities along with Wi-Fi across the centre. the most successful event venues in the plenty of smaller meeting and breakout rooms Those planning a conference, exhibition F or entertainment event can access event country. SKYCITY Auckland general manager spaced across two floors of its Federal Street John Mortensen also identifies innovation as a property. management services from SKYCITY. To gain key driver for the business in its first decade of There are 21 meeting rooms, measuring up at that wow factor for a business banquet there is operations. 5,000m² of rentable space. Into this space the intelligent lighting systems on site and an on-site The convention centre is celebrating ten years convention centre can host up to 1,750 guests. technical production company. in the industry. It has surpassed Businesses expect Retractable walls can open up space. The biggest SKYCITY is able to provide assistance and the New Zealand dollar to head back below 80 space is the New Zealand Room or 1,300m² resources from design to final implementation cents by September 2015, according to the latest capable of seating 1,040 for a dinner event, in many areas including production, theming, ASB Kiwi Dollar Barometer. 1,500 at a cocktail function and seating 1,750 lighting and special effects. The audio visual Some 6.500 events have been hosted since theatre style with a stage. components of an event are considered critical to the centre’s opening. Some of the biggest have Helping the logistics of catering for such large the smooth running of a production. been held. ACOG in 2009, the World Dairy numbers of delegates or guests, are purpose built The convention theatre is within the SKYCITY Federation Summit, the World Dairy Federation commercial kitchens on both levels. precinct which includes the landmark SKY Tower, Summit in 2010, The World Small Animal Boutique catering can also be supplied from SKYCITY Auckland Casino, more than 20 top- Veterinary Conference was held there in 2013 SKYCITY Auckland for many other of Auckland’s class restaurants, bars and cafes and the 5-star and Microsoft’s annuals Hi-Tech Ed conference as premier venues. “Last summer we catered for the SKYCITY Grand Hotel with over 300 rooms and well as several other global conventions. Heineken Open at ASB Stadium, Big Day Out and the 4.5 star SKYCITY Hotel together providing He says the convention centre has had “people Auckland Cup Week.” over 3210 rooms in total. There are more than who’ve been with us since day one” (a decade Over the decade there has been a strong 2,000 parks at the Grand Hotel. ago) and they’ve evolved with new presentations, community focus, the centre hosting such The publicly listed SKYCITY Entertainment concept packages, and out-catering options. The charitable events as the Kidz First Christmas Party, Group has been central to development on the SKYCITY precinct also has an increased number the Million Dollar Charity for the Christchurch western ridge of the Auckland CBD and the of exceptional restaurants and that has inspired Earthquake and the Cancer Foundation’s ‘Dining rejuvenation of old Federal Street. It plans further the menus offered for events held in the banquet for a Difference’ event. substantial investment in its 2014 agreement and conference rooms. There are separate business centre facilities to with the Government.

The SKYCITY Auckland Convention Centre offers theatre-style conference facilities with seating for up 1,750.

14 SEPTEMBER 2014 | MG

10 years, 6,500 events, 1,000,000 guests

“The secret to our success lies in our team of professionals who share a commonality of passion and dedication, thrive on challenges, and are not afraid of the unknown. We are so proud to have been a part of New Zealand’s most memorable moments for the last 10 years. We cannot wait for what’s next to come...” Gillian Officer Director of Sales Conventions & Out catering [email protected] / 09 363 6358 / 021 893567

TEN YEARS STRONG

SKYA5237 Convention Centre MG Magazine ad (205x270mm) 1.0ƒ.indd 1 11/09/14 3:12 PM TEN ten YEARS years TEN STRONG strong YEARS STRONG

TEN TEN YEARS YEARS STRONG STRONG Chris Hutching on Property

Redevelopment Promise at Pakuranga Plaza edevelopment potential is the promise covered mall and the Pakuranga Galleria. The been undertaken on the exterior and interior in the sale of Pakuranga Plaza shops along Pepler St remained under separate of the buildings, much of it at night time (pictured above). ownership. when the Plaza is closed to the public. This has R The vendor would prefer to sell the It competes with shopping destinations at included repainting and retiling work, a new property in its entirety but separate tenders Botany and Sylvia Park. entrance and frontage, with new branding for one or more of the three component Pakuranga Plaza offers income from nearly and profiling, replacing many of the retail parts would also be considered, according to 100 tenants as well as the development facades as well as refurbishing office space in marketers at Bayleys. potential from a future zoning change. the Plaza Tower. There is “huge opportunity” to unlock It is located on the corner of Pakuranga Meanwhile, Goldfields Shopping Centre further value from the property through more Road and Ti Rakau Drive in East Auckland and in Thames has been sold to Andrew Budge intensive development under a mixed use has a gross lettable area of 29,541sq m. for $7 million after two years on the market. Town Centre zoning proposed under the new The property “has the potential” to generate He also owns Bush Inn Shopping Centre in Auckland unitary plan. net passing income of approximately $8.35 Christchurch and The Mall in Upper Hutt. The zoning encourages higher density million per annum, according to Bayleys agents. Goldfields is anchored by a Pak N Save residential living with buildings of up to 12 Ladstone says it has spent the past 18 supermarket, the only supermarket in the storeys. months or so rejuvenating, repositioning and town. The Warehouse is a tenant and the only Ladstone has commissioned concept plans rebranding the centre as Pakuranga Plaza. department store in Thames. . which show possible staged developments “Our decision to sell is in line with our Paul Keane of retail RCG consultants says to include five 10 to 12-storey apartment previous commercial investments over the past Pakuranga Plaza has potential but requires buildings on top of the existing retail buildings 25 years where we upgrade our properties, energetic management. and on the north eastern corner of the site, add value and then move on to invest in He says the sales of shopping centres are which could potentially provide up to 1000 our next project,” Ladstone Holding’s chief relatively rare in New Zealand. apartments. executive Kim Bennett says. Several transactions in recent years have The shopping centre is for sale just 18 The property consists of the main been the result of Westfield selling down its months after Ladstone Holdings acquired it 18 enclosed shopping mall which has a Farmers portfolio, including Shore City to an overseas months ago. department store and a Countdown investor, and the Pakuranga and Auckland Ladstone shareholders include members of supermarket at either end and a mix of other Downtown centres. the Auckland-based Pendergrast family, and national, international and local retailers in Market rumours suggest Glenfield, Auckland Bruce Patterson. between plus the four-level Plaza Tower which and Chartwell in Hamilton were also on the They acquired it in December 2012 for $81.7 accommodates office tenants; Warehouse non-core list but they remain with Westfield million. It has a rateable value currently of Plaza, which is anchored by The Warehouse for now. $78.5 million. and also incorporates speciality strip retailers; Mr Keane says while shopping centres can Ladstone says it has spent the past 18 the standalone Plaza Business Centre which is be difficult for the uninitiated they show months undertaking rebranding, repositioning anchored by ANZ Bank and also contains some excellent returns long term. and rejuvenating the centre. office tenancies. But centres that are syndicated to several The Pakuranga centre had a convoluted Ladstone says it has attempted to provide a investors are a potential risk, because the end development history pulled together from more local flavour. result is a range of singular owners all of who separate parts including The Warehouse, the Refurbishment and upgrading work has want to protect their own small patch, he says.

16 SEPTEMBER 2014 | MG

Apartments selling “off the plans” for Auckland office conversion

awera Group in Auckland owned by the Mahoney family is planning to convert an office building into a luxury apartment 8 Hereford St building block by stages beginning with levels seven to 18. T The company owned by Auckland’s Mahoney family has conditionally acquired 8 Hereford St and adjacent The Plaza building in Karangahape Rd, Freemans Bay. Bayleys is marketing 119 freehold dwellings ranging in price from $390,000 up to more than $5 million for the penthouse suite, “off the plans”. The $390,000 units will be one bedroom apartments of 54sq m each, and two bedroom units will be $690,000, and three bedroom ones for $1.5 million. The four-bedroom penthouse suite with home theatre room and four bathrooms will also have 75sq m of decking. The plan includes a library, theatre, gymnasium, heated pool and concierge service. The 8 Hereford St building is on the corner of Hopetoun St overlooking Auckland Girls Grammar School. Tawera Group has been active in residential development since 1991 and recently won a merit award for its 2012 Vincent St project in central Auckland. The company has been selling down the Hopetoun apartments development under construction over the road. It is also an office-to- apartment conversion in the former Baycorp headquarters which is Directors Jonathon Ogg, Brent McGregor and Warren Hutt being transformed into 91 apartments. A handful remain to be sold on conditionally sold the properties for a total of $47 million. The 8 completion. Hereford St building comprises most of the value with a rateable value The planned apartments in the Hereford Residences are being sold by at $40 million. It was the former headquarters of Telecom but part of Bayleys Auckland agent Trent Quinton. the building is vacant and remaining tenants are on short leases. One Amenities include car parking, storage lockers, sound proofing, and of them was Auckland Council which has moved from levels to 11 to earthquake compliance. new offices in Victoria St. A concierge service will organise tenant activities from restaurant The Hereford St 15-level building has lettable area of 15,521sq m, bookings and show tickets to dry cleaning and car valet services. and The Plaza has lettable area of 4700sq m. An on-site property manager will look after the heated swimming The properties are being sold by Australian based Brookfield Funds pool and gardens. Management which is quitting ownership of several properties When the deal is settled — presumably when sufficient apartments (Auckland’s Chorus office tower was sold for $84 million recently by have been sold — CBRE agents will enjoy the brokerage fee from the the Brookfield Multiplex New Zealand Property Fund in a deal brokered sale. by CBRE). More vineyards on market post-vintage ore vineyards have come onto The award winning vineyard consists of 19ha a receivership sale. the market following harvest with 14ha of vines, and a winery processing 90 The company was placed in receivership a and processing of the 2014 tonnes a year, and selling 4000 cases a year. couple of months ago and the receivers are Mvintage. Neighbouring 8ha Edwards Vineyard is now disposing of assets. Last month we reported on two Australian- also on the market, potentially providing an Receivers John Fisk and Richard Longman, owned neighbouring vineyard properties in immediate expansion opportunity for the buyer of PricewaterhouseCoopers, have appointed the Waihopai Valley expected to fetch around of Julicher Estate. Bayleys to carry out the sale. $10 million representing $150,000/ha, Pinot Noir grapes from Edwards Vineyard Earlier this year the owners Michael and according to Bayleys. have been supplied to Mission Estate in recent Robyn Tiller sought investors to either take a Now, Julicher Estate in Martinborough in years for its Mission Martinborough Pinot Noir. stake or buy the business completely. the lower North Island in Te Muna Rd is for River Edge in Dry River Rd, Martinborough is They set up Isabel Estate in 1982 but more sale. being marketed by Leaders Real Estate. It was recently it was caught up in grape supply It has been owned by Wim Julicher and planted in 1999 and is mainly in pinot noir agreements it could not afford. Sue Darling over the past 18 years but they vines. Isabel Estate comprises vineyards over 62ha have decided to retire. It is being marketed by Marlborough family-owned vineyard, in the Wairau Valley. It is continuing to trade Colliers International. Isabel Estate Vineyard, is being advertised as as the receivers seek offers.

MG | SEPTEMBER 2014 17

infotech Bridging a Funding Gap

horus is a heavyweight in the 2019 is $1.7–$1.9 billion. apply from 2020 once the UFB rollout is information technology sector, You could say a lot of the UFB spend completed. earning a $148 million net profit has been going down a hole. Some $679 What then is their answer? Cthis June 2014 year off operating million of network assets and software were “Chorus has a credible but demanding revenue of $1,058 million. capitalized this year against the network plan through to 2020 to manage this Yet a solid financial position is assets categories of fibre cables (40 per shortfall, and has implemented a number of overshadowed by the need to reshape cent) and ducts and manholes (53 per cent). operational initiatives with more in train,” Chorus operationally and financially “to The average depreciation rate for UFB Ratcliffe commented. “A top to bottom address the challenges posed by the communal infrastructure spend is currently review of the company was completed in ongoing uncertainty with the regulatory 35 years, reflecting the very high proportion February and we are now five months into a framework and revised copper pricing,” said Mark Ratcliffe, chief executive of Chorus. The ’ongoing uncertainty’ is shared by the equities industry which worries about . . . we are the extent of a looming financial shortfall. The bottom line was 14 per cent down now five and EBIDA (‘earnings before interest, tax, depreciation and amortization’) of $649 months into million was flat and forecast to fall by at least $44 million in 2015. a wide range of The Commerce Commission’s November 2013 initial pricing principle decision activities to help” resulted in “a very material funding gap put Chorus back in Chorus’ business plan through to 2020 necessitating a fundamental review of the on a sustainable viability of Chorus’ business model and a huge effort to reshape Chorus’ business to footing. secure a sustainable operating framework.” In addition to the ‘very material trade- Mark Ratcliffe, offs’ Chorus says it has had to confront, Chief exective, Chorus ongoing uncertainty continues to be a major distraction “potentially slowing the migration to fibre.” of long life assets being constructed (with wide range of activities to help put Chorus Chorus is now 31 per cent complete on ducts and manholes having a depreciation back on a sustainable footing. its rollout of Ultra-fast Broadband (UFB) rate of 50 years). “We have worked closely with Crown meaning 353,000 end users are now within The average cost per premises passed Fibre Holdings to negotiate amendments reach of Chorus UFB. of $2,948 is within guidance range. The to our contract to roll out fibre that give Chorus is standing up to its critics, standard cost to connect premises averaged Chorus additional flexibility, as well as a insisting UFB and RBI rollouts are ahead of $1,680 and Chorus says it wants to reduce funding backstop. schedule. With 425,000 end-users within these costs. “We have presented our banks with a reach of better broadband New Zealand “The process to connect premises in multi- credible plan and they have supported is 15th in the OECD for fixed broadband dwelling units currently averages $6,500 us with some important changes to our penetration, ahead of the United States and per building in addition to the standard funding arrangements. We have also Japan. connection costs,” adds Ratcliffe. Chorus stopped the payment of a dividend until a UFB communal network rollout is at full wants to remove blockages in the current dividend policy is financially sustainable and pace, comments Ratcliffe. Build work had processes that drive cost and complexity. there is sufficient certainty around Chorus’ been completed for about 261,000 premises Opposition politicians have been taking outlook. at mid-year, representing the addition of potshots at the Rural Broadband Initiative “We have developed an innovative range 108,000 premises passed during the year, or but Chorus claims the build is also ahead of commercial broadband products to 2,000 premises ahead of target. of schedule. About 3,100 km fibre is laid; enhance end-user choice and lift copper The present broadband position is that 951 schools completed and 72,100 lines are broadband beyond a best efforts service Chorus made 51,000 more connections, within reach of better broadband. There has ahead of demand. We await regulatory reaching 1,163,000 during 2013-14. Fibre been an 80 per cent uptake. guidance on their implementation. broadband connections have more than Chorus claims it is hard to justify “And at the same time we have reviewed doubled to 42,000. Total lines remained discretionary network investment in the our entire cost structure and this has largely static, reducing by 3,000 to absence of a fit for purpose regulatory required us to focus our limited available 1,781,000. framework that provides for a fair rate of cash in areas that deliver short term cash Chorus estimates the total cost to build return, and there is no certainty, they insist, rather than the best long term outcomes.” the UFB communal network by the end of as to the regulatory framework that will Chorus has successfully delivered several

18 SEPTEMBER 2014 | MG

infotech large IT projects as the system separation from Spark continues. Even so the funding gap remains “very challenging and more Top rank again for SLI will need to be done to return Chorus to stability,” he said. SLI Systems has been ranked as the #1 cloud- them, has been a big improvement.” Chorus has just lost an appeal in the based site search provider on the 2014 Internet SLI’s patented Learning Search technology Court of Appeal against the cuts in copper Retailer Magazine Top 1000 list of the United continually “learns” from past site search activity line pricing proposed by the Commerce States’ largest online retailers. It is the third by tracking visitors’ aggregate search queries Commission. The Commission’s Final Pricing consecutive year SLI has achieved the #1 rank. and click-throughs, so shoppers can quickly Principles review will take until April 2015. SLI’s customer base of more than 800 find what they are seeking. The company’s full This will finalise the price Chorus can charge e-commerce sites worldwide now includes 84 of set of features, including Rich Auto Complete for its copper lines and copper broadband the IR Top 1000 retailers. This number is up from and search suggestions, increase the number of service. 72 the year before. Companies such as FTD, products visitors see and improve the chances of “The outcome of those processes will Harry & David, US-Mattress.com and Lakeshore making a sale. Other features let customers dive ultimately determine if a fair rate of return Learning use SLI to improve conversion rates, deep into product selection and pull out the will be achieved for network investment in increase sales and reduce site abandonment. details they need to make a decision. the short to medium term,” Ratcliffe says. “With SLI, the changes we made to search “SLI is well poised for ongoing growth as we “The new regulatory environment that and navigation have increased time on our are in a market sweet spot. In fact, according comes into effect from 2020 will be critical site 21 per cent and conversion rates 8.5 per to eMarketer, worldwide e-commerce sales for the sustainability of the industry.” cent,” said Sam Sarullo, VP of e-commerce are expected to increase a record 20 per cent This is why Chorus is looking for channels for Lakeshore Learning, in an IR Top 500 this year to reach $1.5 trillion,” said Shaun into the non-regulated area — it wants a interview with Internet Retailer. “People are Ryan, CEO of SLI Systems. “SLI powers world spot in video streaming of high definition more engaged and are exploring more of renowned e-commerce retailers with advanced video on the Boost copper broadband the products we offer. Personalising the site, site search to ensure shoppers can readily find scheme launching on 1 December. to draw people into areas most helpful for the products they’d like to buy.

MG | SEPTEMBER 2014 19

infotech NEW APPS ASB’s New Point-of-Sale Experience

SB is redefining customer service for transactions via swipe, chip or contactless. It will New Zealand businesses at the point- give merchants the ability to email customers their of-sale with a new way of accepting receipts instantly. There is also a print capable Apayments. ASB Accept mPOS will terminal for those merchants who need it. transform 3G or Wi-Fi connected iPhones, iPod ASB’s Pi platform provides a flexible payment Touches or iPads into a wireless payment terminal interface and, on launch, will feature functionality that accepts EFTPOS and credit card payments on to set up multiple users, split bills and accept the spot. multiple payments methods across one bill. “The first in a planned series of payments This means businesses and customers can have innovations, ASB Accept mPOS works with an complete flexibility over where and how to accept iPhone, iPod Touch or iPad through the ASB payments. Payment Interface (Pi) app to provide an entirely “Splitting bills is a regular part of dining out new way to get paid instantly and securely from with friends. Using the Payment Interface (Pi) app any location,” says Russell Jones, ASB’s executive that has been designed specifically for use on this general manager of Technology and Innovation. device, Businesses with ASB Accept mPOS will be “New Zealand businesses will now be able able to offer a streamlined dining experience by to accept payments while out and about letting customers easily split the bill and pay by visiting customers with the added assurance different methods right from the restaurant table.” of card-present technology that is fully chip Jones notes that the planned roadmap of and pin compliant for improved security and development for ASB Accept mPOS will allow Extra features unprecedented convenience.” native development of applications that can be n Seven-day settlement of funds to “This means, for example, that tradespeople installed on the device moving forward. your ASB Account visiting customers at home will be able to accept “The first set of applications we have developed n Issue immediate refunds a payment securely as soon as the work has been includes bill-splitting and tipping, which are great n Add tips to the billed amount completed. Customers will also be able to pay examples of everyday merchant problems that n End of day settlements with either EFTPOS or credit card, a choice that we are addressing. We are looking forward to n Print and email receipts not all other mobile payment terminals in New working with businesses and app developers in n A wide range of management Zealand currently offer.” the future to develop a comprehensive range of reporting functionality. ASB Accept mPOS will accept all types of card useful and practical new applications.” MO Y B growing Breaking the late payment cycle

ESPOO, Finland — Over half (57 per cent) of international businesses cloud business surveyed by Basware and MasterCard admit to having actively delayed MYOB has been building rapid growth in cloud-based business, paying their suppliers in the past 12 months. The findings underscore a late the Australian accounting software company said in posting a payment culture, which three out of four businesses now consider normal record June half-year result with revenue of A$140 million up practice,that is hampering in particular small and medium-sized enterprises 21 per cent and EBITDA up 29 per cent to A$70 million. MYOB (SMEs). maintained its cash conversion rate at more than 87 per cent, In order to break this cycle, Basware and MasterCard introduce Basware with strong operating cash flows and continued improvement Pay, a solution that connects buyer and supplier payment processes. It allows in its debt position buyers to better manage their cash flow and allows suppliers to get paid “MYOB is the leader in cloud accounting for SMEs in sooner. Australia,” said CEO Tim Reed. “There is rapid adoption from “When three quarters of businesses have more than 50 suppliers and new and existing clients, with 63 per cent of new clients in about two thirds send and receive more than 100 invoices a month, a culture June choosing cloud products and more than 86,000 paying of late payments impacts individual organisations as well as the economy subscribers using these solutions. “Usage of MYOB accounting as a whole,” said Esa Tihilä, CEO at Basware. “While a certain level of cash software is more than four times our nearest competitor.” hoarding may be understandable given the financial climate, it also reflects MYOB has made a $40 million investment in R&D to expand inefficient processes and poor practices. Businesses have a responsibility to cloud offerings to small and medium businesses and added 100 themselves and their supply chain to unlock value and keep money moving.” new jobs over the past six months to meet rising client demand Suppliers’ invoices are sent via the Basware Commerce Network, approved for an expanding product suite. by the buyer and once approved become available for payment through a “The recently announced acquisition of PayGlobal has virtual MasterCard account number. The supplier receives an early payment doubled our presence in the mid-to-large sized business market while the buyer typically has extended payment terms. Both parties benefit in Australia and New Zealand. It is a complementary offering from richer settlement data and full process and payment visibility — to MYOB EXO, and in early 2015, we expect to introduce a leading to less chasing or being chased for payment. new cloud-based business management system for larger enterprises.“

20 SEPTEMBER 2014 | MG

retail

N Z Post powering ecommerce he New Zealand Post Group is deploying its resources to help businesses access export markets Tand grow online. The company is also supporting the New Zealand ecommerce marketplace with a foundation sponsorship agreement forged with the newly formed industry body Ecommerce New Zealand. New Zealand Post’s executive general manager Ecommerce and Customer Solutions Sohail Choudhry said the adoption of ecommerce by companies in this country was low by international standards but that was now starting to change — particularly in Richard Kavanagh previews the Yogi Hairstyler. e-tailing. New Zealand Post featured two businesses in a recent campaign — Need A Part and Fitwear — “but we TV Shopping Making Progress we believe we’ve just scratched the surface.” New Zealand consumer demand for TV shopping is on the rise with The Nielsen Online Retail Report one shopping channel reporting increases of more than 1000 new for 2014 shows that New Zealanders customers per month. – By Fleur Revell shopping online on mobile devices increased significantly last year. Nielsen VSN which screens on channel 24 on of online shopping along with the ability to reported there are now 655,000 people Sky TV (channel 20 on Freeview) says demonstrate and discuss products on live shopping on their smart phones — its first 12 months of operation in television” he says. growth of 127 per cent year on year, Tthe local market have been extremely Audience entertainment is another feature and 414,000 on their tablet (a 73 per encouraging. of TVSN’s marketing model. “Our shows cent increase). CEO Chris Eade says, however, the New feature in-depth product demonstrations, Dr Choudhry said the New Zealand Zealand market has yet to reach full maturity brand stories, international guests, Post Group, including CourierPost, has as a mainstream distribution channel. testimonials and even the odd blooper — altered the way it packages its services “International trends and our own experience our goal has been to make the content as and global networks to customers to in the more developed Australian market entertaining as it is informative,” he says. support this growth. This includes indicate there is significant room for growth in Eade says closing the gaps in the service free online tools, such as addressing or the local market. model has reduced the perceived risk of tracking notifications tools, managed “After 19 years in Australia we have over purchasing products outside of a traditional warehousing, sea and airfreight; 600,000 customers and are growing at a rate bricks and mortar shopping environment. specialist Customs clearance and in- of 1.5 per cent to 2 per cent per month. In To achieve this, the company introduced market distribution. contrast, the newer New Zealand market has a 24 hour call centre, 30 day money back “We provide full supply chain services a customer growth rate of 6 per cent month guarantee and a local returns centre. — including demand generation, supply on month.” New Zealand born, celebrity stylist Richard chain management and after sales and Eade says the rapid adoption of the model is Kavanagh was in Auckland during August loyalty support.” due to a combination of multi-channel service to launch his new hair styling product New Zealand Post is a sponsor of the advantages. which recently appeared on TVSN. “Our new Ecommerce New Zealand (www. “Despite the global growth of online first experience with this retailing channel enz.org.nz) which aims to make it easier shopping it has a number of limitations for produced some remarkable results — the for companies not already online to get retailers, in particular it lacks the ability to event was a complete sellout” Kavanagh says. started and to help them see what’s sell the product’s benefits to a prospective Eade says revenue growth is particularly important to win and retain online buyer.” strong in the health and beauty categories with customers. “TVSN is an integration of the convenience sales more than doubling since last year.

MG | SEPTEMBER 2014 21

LEGAL How does the Privacy Act apply to mobile apps?

recent survey of commonly used and this information may be shared with mobile apps has revealed that only other traders, as well as cloud and other half of all New Zealand mobile apps service providers. A comply with the Privacy Act 19931. Customer information collected through This has prompted the Privacy Commissioner apps may also be used to personalise a user’s to release a guidance note entitled “Need experience and for real-time location based to know or nice to have: Making mobile app marketing. privacy your competitive advantage” which The Guide emphasises that, under the is aimed at helping businesses and mobile Privacy Act, an agency may only collect app developers understand their privacy information “for a lawful purpose connected obligations. with a function or activity of the agency,” The release of this Guide is consistent where the collection of personal information with the Privacy Commissioner’s focus is “necessary” for that purpose. on technology, which will underpin the The Privacy Commissioner questions upcoming reform of the Privacy Act. whether some specific examples of Your mobile app may be one of the 50 per information collected using mobile apps cent identified that does not comply with the surveyed is “necessary” as required under the Privacy Act. If so, this is a timely opportunity Privacy Act: “What about the photography to review whether your collection, use, and app that says it needs your location? What disclosure of information utilising your app about the banking app that wants access to meet the requirements of the Privacy Act. your address book?” Mobile apps present unique challenges for Ultimately the answers to these questions compliance with the Privacy Act, as they are will be fact-specific but the Guide highlights capable of collecting a significant amount the distinction between information which of personal information and using that you “need to know” (which can be lawfully By (from top to bottom) information in continually evolving ways. collected in accordance with the Privacy Act) For example, geotracking data and user and information which is “nice to have” Tim Clarke, Partner, Laura analytics may be passively provided by users, (which should not be collected). Littlewood, Senior Associate and Anna Holland, Solicitor

The Guide sets out the following key privacy considerations for at Bell Gully. businesses and mobile app developers:

1 Integrating privacy starts on day one. Make a plan and spot the risks. 2 Be open and transparent about your privacy practices. When a user makes decisions — to download your app, update it, or share personal information — be there with the right information. 3 Collect and keep only what your app needs to function, and secure it. “Nice to know” doesn’t mean “need to know”. 4 Obtain meaningful consent despite the small screen challenge. Spend time working out how to make privacy understandable and relatable with the tools you have. 5 Timing of user notice and consent is critical. Providing information in real time is as important as being up front in advance.

© Copyright 2014 MG Publications, unless directly held by providers. All material appearing in MG Legal cannot be reproduced without prior permission of MG Publications and the originator of the material. The opinions and material in MG Legal are not necessarily those of MG Publications. All the information published in MG Legal is true and accurate to the best of MG Publications and author’s knowledge but it is not a substitute for legal advice. No liability is assumed by the authors or publisher for losses incurred by any person or organisation relying directly or indirectly on this report. Editorial contributions, releases and commentaries are welcome and enquiries may be sent to [email protected]

22 SEPTEMBER 2014 | MG

New residency requirements for directors ome companies will need to change the obtain information on the beneficial ownership By Barbara composition of their board and provide and control of companies in order to comply Lloyd, additional information to the Companies with New Zealand’s obligations under the SOffice to comply with the 2014 Financial Action Task Force on Money Laundering professional amendments to the Companies Act 1993. (FATF) recommendations. Compliance is support The new requirements will apply from 1 May required when the information is requested by lawyer 2015. Existing companies have until 28 October the Registrar for law enforcement purposes. 2015 to comply. Chapman Tripp has identified This information may be given by the Registrar and Roger the action points. to other government agencies, both in New Wallis, Zealand and internationally. partner, at RESIDE Ncy REQUIREMENTS An updated prescribed form of consent to act Under the changes, every New Zealand as a director will apply from 1 September 2014. Chapman incorporated company will need to have: The Companies Office Registry Integrity Team Tripp. • a director who lives in New Zealand (no has been requesting further identity information requirement to be a citizen), or and proof of place of residency when • a director who is also a director of a company applications are made to register a company’s incorporated in, and who also lives in, a offshore shareholders and directors. We expect country with which New Zealand has reciprocal this trend to intensify. enforcement arrangements for low-level fines. Another amendment which may have practical Only Australia will qualify, at least initially. effect for some companies is the enhanced This information will be collected at powers given to the Registrar of Companies This makes a structured compliance programme registration and updated when any subsequent to remove a company from the register, or for (e.g. completing annual returns, making director is appointed. Having an alternate the Court to order that a company be put into necessary filings, such as financial statements, on director (a person appointed to exercise some liquidation. time) even more important. or all of a director’s powers), resident in New New grounds for deregistration are: Zealand will satisfy the requirement. • where one or more of the directors or N EXT STEPS Non-compliance will be grounds for removal shareholders fail in a persistent or serious way Most of the changes will come into force on from the register. to comply with duties under the Companies Act 1 May 2015. However, as noted above, there These requirements do not apply to a company 1993 (or the Financial Reporting Act 1993, while will be a 180 day lead time (ending on 28 that is incorporated overseas, but registered in it still applies), and October 2015) to enable existing companies New Zealand. • failure to respond to a request for disclosure of to comply with the new directors’ residency controlling interests. requirements. ADDITIN O AL INFORMATION REQUIREMENTS From 1 May 2015, in addition to the current requirement to provide his or her residential F MA files civil proceedings against trustee address, every director will need to, at the time he Financial Markets Authority has filed civil proceedings against Prince and Partners of appointment, provide his or her date and Trustee Company Ltd using the powers of section 34 of the Financial Markets Authority place of birth at the time of registration, or on Act. Prince was the trustee for finance company Viaduct Capital Ltd. a change of directors. This will be held by the T Viaduct collapsed in 2009. FMA alleges that Prince breached the obligations it owed to Registrar of Companies, but will not be publicly Viaduct investors and to the Treasury (the Crown) under the Retail Deposit Crown Guarantee. available. Existing companies will need to provide Section 34 of the Financial Markets Authority Act enables the FMA to stand in the shoes of this additional information on any change to another, and exercise that person’s right to take action against an individual or company who directors after 1 May 2015. This will also apply to is or has been in the financial markets industry. any appointment of an alternate director. Exercising the right of action of Viaduct investors and the Treasury (who holds the rights On registration and within 20 working days of investors paid out under the Crown Guarantee), FMA alleges that Prince failed to fulfil of any change, every company must disclose its obligations to protect the interests of investors in Viaduct. The claim further alleges that the name of any ultimate holding company, this conduct resulted in loss to individual investors and to the Treasury under the Crown the country of its registration, the registration Guarantee, to which Viaduct was a party. number or code (if any) and its registered office. The FMA has serious concerns about the conduct of Prince as trustee in the case of Viaduct. These details will be publicly available. Existing The FMA has determined that it is appropriate for the Court to consider the conduct in this companies will need to provide this information case, and where appropriate to award compensation to investors who suffered loss as a result in the next annual return filed after 1 May 2015. of Prince’s failure to fulfil its obligations as Trustee. This is the first claim filed by FMA against Failure to comply will attract penalty provisions. a trustee. The Registrar has been given new powers to

MG | SEPTEMBER 2014 23

LEGAL Draft Guidelines About Unfair Contract Terms

By Laura Littlewood, Senior Associate, Tania Goatley, Senior Associate, Kristin Wilson, Senior Solicitor and Katie Green, Solicitor, at Bell Gully.

he recent amendments to the Fair Trading Act 1986 included the introduction of a prohibition on including, enforcing or relying on any “unfair contract term” in standard form consumer contracts. This prohibition will apply to contracts that are entered into after T Cinema software company Vista makes a growth leap. 17 March 2015 or which are varied or renewed after that date. The Commerce Commission has released draft guidelines on the new provisions of the Fair Trading Act dealing with unfair contract terms. The draft Unfair Contract Terms Guidelines can be viewed on the Commission’s website Firm’s Run of The specified purpose of the guidelines is to: • explain the Unfair Contract Terms provisions; • explain how the Commerce Commission will assess whether a term is unfair, and the principles to be applied by the courts; IPO Work • outline the kinds of terms that may be unfair, and those that may not be dding to its tally of Initial Public Offer clients unfair; and Chapman Tripp recently advised Vista Group • describe the Commerce Commission’s approach to enforcing breaches of AInternational and EROAD which have listed on the the Unfair Contract Terms provisions. NZX Main Board. Chapman Tripp has now acted for the The Commission welcomes feedback on the draft guidelines and expects issuer on six of the nine IPOs that have listed on the NZX this to release the final guidelines by the end of November 2014. year. “We are holding this consultation well in advance of March 2015, as we want to make sure businesses have plenty of time to run a ruler over their V ista Group International current consumer contracts and get ahead of any issues” said Commerce Partner John Strowger and solicitor Ben Land-Maycock acted Commission chairman Dr Mark Berry. for Vista Group International on its IPO and NZX and ASX The draft Unfair Contract Terms Guidelines highlight that the Commission listings. The IPO raised $92 million through the sale of new has considered a wide range of businesses that may use standard form and existing shares and at the current market price values contracts, including finance companies, retirement villages, gyms, Vista at around $210 million. The cinema software company telecommunications companies, residential construction, motor vehicle currently comprises six businesses which provide support for sales, travel (such as airfares and rental cars), day care centres, online apps cinema operations around the world. and software, pay TV, hire purchase, residential tenancy and real estate and utilities like electricity and gas. ERD OA Some of these businesses are likely to use standard form consumer Partner Roger Wallis, senior associate Rachel Dunne and contracts that will be subject to the prohibition against using or relying on solicitor Philip Ascroft acted for EROAD on its $46 million unfair terms. IPO and NZX Main Board listing. The IPO offer price values While not legally binding, the guidelines shed light on the Commerce EROAD at $180 million. EROAD is a leading New Zealand Commission’s intended approach to enforcing the new provisions and transport and technology services company. assessing whether a contract term is “unfair”. This is particularly important The EROAD offer documents took another step in the due to the fact that only the Commerce Commission can apply to the court recent drive towards the ‘clear concise and effective’ offer for a declaration that a standard form consumer contract term is “unfair”. documents that will be required when the Financial Markets The Commerce Commission has indicated that it will make the decision Conduct Act 2013 (FMCA) comes into full force from 1 as to whether to apply to have a term declared unfair based on its current December 2014. enforcement guidelines. This means that factors such as the extent of The EROAD investment statement comprised around detriment caused, the seriousness of the relevant trader’s conduct and the 20,600 words, less than the 36,000 word limit that will be extent of public interest in a particular issue will be relevant factors when the required under the FMCA regulations. Following repeal of Commerce Commission is deciding whether to make an application to the s 36A of the Financial Reporting Act 1993, the investment Court. statement had a more concise summary of prospective The Commission invites submissions on the draft Unfair Contract Terms financial information than other recent offers, as will be Guidelines. Submissions should be sent to [email protected] by required by the FMCA. 5pm on 30 September 2014.

24 SEPTEMBER 2014 | MG

LEGAL CASE REVIEW Legitimate Business Practice or Unlawful Conduct? Wagner v Gill and others [2014] NZCA 336

Review by Richard Fletcher The High Court judge said Wagner’s claim of sharp practice, his and others conduct bristled with legal and factual difficulties. was neither directed enough nor sufficiently hristchurch Central MP Nicky The legal difficulties largely resulted from unlawful to establish liability. Wagner’s unsuccessful attempt to two English House of Lords cases about Considering the appeal questions the get redress for what she saw as “unlawful means” and “unlawful means Court of Appeal said the tort of conspiracy Cdodgy dealings regarding website conspiracy”. was one of the “economic torts”. These companies highlights the complex technical The judge said liability for conspiracy aimed to prevent conduct that damaged or issues that can sometimes surround this type depended on: interfered with another’s business interests. of case. Also relevant is where the line is • whether Gill and the two companies The court said there had been no drawn between legitimate business practice could have conspired at all; challenge to the High Court judge ruling and unlawful conduct that might lead to • if they had, did they act in a way that had that Gill breached his fiduciary duty to the liability. a dominant purpose of injuring Wagner’s two companies when the netball contract To start let us look at Wagner’s position. interests? was transferred to a third company, Two companies Mr Gill controlled, Digital • if they had, did they act through use of BAMC. However, that duty was owed to Partners (DP) and BA Partners (BAP), owed “unlawful means” with the intention of the company transferring the asset, not her money. The two companies went into injuring Wagner? and Wagner. liquidation and, as the Court of Appeal put • if so, did that cause Wagner’s loss? The court said case law tended to define it, there was no realistic prospect of her The judge accepted that a company “unlawful means” widely. However, the being able to recover the debt from either could conspire with its directors and/or unlawful means here was directed at company. Wagner said Gill and various shareholders and there were conspiracies someone other than Wagner. This meant associate entities deliberately stripped the here that might lead to the tort claim. her appeal failed. assets from the debtor companies to defeat However, the most that could be said was Even though it had already ruled on her claim. that Gill structured business and financial the appeal, the court discussed the other She said that conduct comprised the affairs in a manner that protected the key questions asked. It said the law was tort (civil wrong) of “unlawful means asset from creditors. The judge said she confusing on what intention was required conspiracy”. could not infer from what Gill did that his and whether the action had to be directed The key asset was a contract one of the aim was to defeat Wagner. at a plaintiff. However, it said Wagner was companies had with Netball New Zealand. The judge said Gill was ultimately DP’s largest unsecured creditor, Gill knew Wagner took her case to the High Court motivated by his own best interests. He this, and transferring the netball contract claiming damages from the two companies wanted to continue to work for Netball was for his own benefit and to keep the and Gill personally. The High Court judge New Zealand under the contract and contract away from creditors. In a “very said she had not established the elements to receive his salary for performing the real sense” Gill’s conduct was directed at of unlawful means conspiracy. In any contract. This was in jeopardy if the Wagner. event, the judge said, the conduct had not contract remained with an entity that was Among other things, Wagner claimed caused Wagner’s loss because the debtor in a parlous financial state. On balance, she she had lost a chance. The ‘chance’ was companies were already insolvent. The said, steps Gill took were in breach of his at various times during 2010 to injunct or judge dismissed the claim. duty to act in the entity’s best interests. wind up the companies involved. The High Wagner appealed to the Court of Appeal She then said Gill had breached a duty Court judge had said because Wagner’s raising the following key issues: owed to the entity, not a creditor. This claim failed on the merits there was no • Did a breach of fiduciary duty qualify as was not unlawful means that could lead need to consider the loss of chance claim. unlawful means for the tort of unlawful to Wagner claiming unlawful means However, the judge said it was difficult to means conspiracy? conspiracy. Because there was no other see how the chance might be valued and • What was the nature of intention the potential unlawfulness the judge did not no basis on which she could analyse the tort required? Particularly, did the unlawful have to consider other elements of the issue. conduct have to be directed at the plaintiff? tort. The Court of Appeal agreed that the • Was Wagner entitled to damages based The judge said despite the problems case did not lend itself to loss of chance on loss of a chance? with the conspiracy claim, the entity was analysis. It was also concerned that in Even a cursory look at the three effectively insolvent by late 2009 and would her statement of claim Wagner had not propositions suggested quite a few not have been able to pay Wagner. That sufficiently specified the nature, particulars potential minefields. The Court of Appeal meant there was no causal link between and amount of her claim. The High Court took little time to indicate there were many Gill’s conduct and Wagner’s loss. Rules required this, creating another barrier others, some relating to claims that were The judge said Gill was a shrewd to the loss of chance claim. not pursued further in the High Court. businessman. Though there was an element The court dismissed the appeal.

MG | SEPTEMBER 2014 25

motoring

The new 2014 Kia Sportage has been enhanced with a new GDi engine and more refinements.

Kia Sportage - Celebrating 21 Years

ia is celebrating the 21st “Sportage has been one of the best ‘Nu’ engine is engineered for improved anniversary of its fast-selling selling models for Kia and the arrival of the drivability, with torque rising to 205Nm (but Sportage with the introduction of upgraded 2014 line-up has provided an peaking at 4,000rpm, instead of 4,600rpm), Kthe updated 2014 model built in opportunity to fine-tune the range to ensure whilst power is unchanged at 122kW. Europe, featuring an all-new direct-injection that it continues to be a leader in this “There is a marked improvement in petrol engine among the changes that growing segment of the market,” says Todd performance in Sportage models equipped deliver a more refined and improved SUV McDonald, general manager of Kia Motors with the new 2-litre petrol engine — it is a package. New Zealand. very impressive and pleasing vehicle,” adds From its first appearance in 1993, “It is clear that increasing numbers of McDonald. The equally engaging 2-litre Sportage has become an iconic vehicle buyers who are drawn to the styling and R-series diesel engine, which delivers 135kW for Kia Motors, launching the brand versatility of an SUV, have no requirement and 392Nm, is carried over to the 2014 internationally and establishing the template for all-wheel-drive because they are model. for the compact SUV segment. predominantly used in urban areas, which Driving the enhanced Sportage will be an Sportage buyers now have the choice of has been demonstrated by the popularity even more rewarding experience, thanks to two power plants; a new high-compression of our 4x2 LX and EX Sportage models. a number of changes designed to minimise 2-litre GDi (Gasoline Direct Injection) petrol So I have no doubt the new 4x2 Limited noise, vibration and harshness (NVH). A new engine or the impressive 2.2-litre R-series will enjoy similar support among Sportage soundproof windscreen, with an interlayer turbo-diesel engine, both matched to a buyers.” film between the glass laminations, reduces super-smooth 6-speed automatic with While the popularity of two-wheel-drive wind noise. sequential shift. SUVs continues to grow, all-wheel-drive Key engineering improvements have been The local Kia Motors arm is adding models remain an important part of the introduced to counter vibration. Among another 4x2 model to broaden the appeal Sportage range — there are two petrol (EX them, the front subframe is now bush- of Sportage. and Limited) and three diesel 4x4, with an mounted (rather than bolted directly to the Kia was among the first to introduce 4x2 LX model joining the EX and Limited in the bodyshell), an intermediate shaft is added SUV models to this market with the second line-up. to the drivetrain, resulting in symmetrical generation Sportage Urban. It led the way McDonald says reports from Europe, (equal length) front drive shafts and a new again when the third generation Sportage where Kia builds the Sportage in a start- mounting bracket for the transmission has was introduced, expanding the 4x2 range of-the-art factory in Slovakia, indicate greater rigidity and reduced resonance. with a mid-luxury EX model to complement superior performance from the 2-litre, GDi For greater security when towing, the latest the LX Urban. Now a third 2WD Sportage engine from the ‘Nu’ range, which replaces Sportage has an improved ESC (Electronic has gone on sale in New Zealand in the form the 2-litre MPi (multi-point injection) unit. Stability Control), now incorporating a trailer of the luxuriously-equipped 4x2 Limited. Boasting a high compression of 11:5, the stability control system.

26 SEPTEMBER 2014 | MG

The cabin is enhanced by greater use of soft-touch materials on the dashboard and door sills, while the seats feature new cloth/leather upholstery combinations.

As before, the 2014 Sportage rides on an all-independent suspension that is further Acceleration by Colonial Motors refined through the” ANZAC programme to take account of the roads and driving olonial Motors has had a bumper Colonial Motors has acquired Jeff Gray conditions in this part of the world. year with record profits and BMW. The business consists of four BMW Additionally, the 2014 Kia Sportage expansion of the business. dealerships in Christchurch, Wellington, has received exterior styling tweaks and CTrading profit after tax at $18.221 Palmerston North, and Hastings. The revisions to the interior, including higher- million is up 31 per cent on last year, BMW dealerships will be a stand-alone quality cabin materials. It is distinguished which in turn was up 17 per cent on the cluster, separate from the other CMC from its predecessor by a new mesh front previous year. dealerships. grille, revised LED rear cluster lights, newly The new vehicle industry continued At South Auckland, a new dealership designed 17 and 18-inch alloy wheels (LX to grow in the reporting period. In the is to be established, Southern Autos now rides on 17-inch wheels, instead of 16- first six months of 2014, new passenger — Manukau Ltd, with franchises for inch) and a shark fin roof antenna. registrations grew by 11 per cent over the Citroen and Peugeot cars and Isuzu The cabin is enhanced by greater use of same period in 2013; light commercials light commercials. A company owned soft-touch materials on the dashboard and grew by 21 per cent and heavy site alongside South Auckland Motors door sills, while the seats feature new cloth/ commercials by 20 per cent. is to be developed for Southern Autos leather upholstery combinations. The company attributed the lift to — Manukau, and concurrent with this, Safety continues to be a high priority, “desirable products in growing segments the adjacent Mazda facilities are being with all new Sportage models having LED within this growing industry. Additionally upgraded. day-time running lights, rain-sensing wipers operating efficiencies have improved”. The company has purchased a property and all except the LX Urban now have front “A feature of this year has been the near the Auckland airport to be developed and rear parking sensors, along with a concurrent strong operating performance into a service centre for South Auckland reversing camera (LX Urban has rear sensors from all of the trading companies; car Motors Ford and Mazda. At Gore, a only). dealerships, heavy trucks, and tractors. property has been purchased to facilitate Sportage boasts a long list of standard However, there are increasing signs that the expansion of the New Holland tractor features, with the Limited models featuring the favourable conditions are easing.” business for Agricentre South. heated/electric front and rear-outboard seats, leather upholstery, cooling glovebox, dual zone climate control, proximity sensing key, Infinity sound system and Satellite Navigation among its lavish specification. Prices for the 2014 Kia Sportage start from $34,240+ORC, including a 5-year/100,000km factory warranty programme.

MG | SEPTEMBER 2014 27

Peter Saunders on Wine Ascension – Still on the Rise riving from Warkworth in Northland, and build on the bold foundations. There it arrives on the horizon quite literally was a second kitchen installed, a second like a comet in the sky. It is sudden, ‘function’ hall for everything from weddings Dand striking. An Italian structured to comedy shows with Gary McCormack and building of beauty, quite different to the Sam Hunt eager participants and a host of local architecture and almost surrounded by celebrities enjoying the facility along with the vineyards. separate fine dining restaurant and kitchen As one gets closer, the Ascension Wine where thriving new chefs were making their Estate, restaurant, winery and vineyard becomes name clearer, up to the visual expectation one has New owners are two sets of brothers Alex and from a distance. Mirko (Mick) Sipka and their families (involved Built in 1996, it was designed to be striking. in telecommunications and other interests), Lunches can be indoor or outside in the The first owners had thrown themselves into and Kiro and Gino Gurshin, also from Italy who courtyard nearly surrounded by vineyards. The making a name for wine with some near- own nine Portofino restaurants throughout planting of some Italian grape varieties add — Auckland entertainment and fine-dining, along New Zealand and another style restaurant in to the knowing eye — a continuation of the with the risks of a vineyard in what was then Tauranga. They claim 30 years in the New theme. Such varieties will appear on Ascension the largely unproven Matakana wine territory. Zealand hospitality industry. labels in a couple of years. The effect was enormous. Locals, All four are delighted to be working in the The vineyard is a sloping and north-facing as Aucklanders and international tourists were, vineyard (their first vintage 2014) winery and suits the southern hemisphere to optimise the and still are, delighted to drive over the hill restaurant, getting their fingers dirty in the sun. Much of the wine product is sold on-site, just out of Warkworth and ‘discover’ this vineyard, pruning the vines and heaving around through the restaurant, the functions and the haven. Barely an hour north of Auckland city, boxes full of grapes at harvest time. wine shop. There is also the cellar door tasting Ascension became a popular spot much as the Such ethnic influence has einforcedr the area where restaurant guests frequently pause Barossa Valley is to Adelaide and Waipara Valley Italian theme. The Ascension Osteria is the new for a bottle or two to take home. is to Christchurch. Expansion had to happen name for the restaurant which features more Many guests leave their name or email to quickly — and it did, yet still holding on to the Italian dishes on the menu. It is now open for join a mailing list as well, advising them of Tuscan charm which began the vision in the dinner as well as lunches. A refurbishment of Ascension wine bargains, new releases and up- design. the buildings and landscaping renewal of the, coming functions. Now on its second tier of ownership (2013), the site and the entrance-way also underlines The functions centre allows a romantic Ascension Wine Estate continues to thrive the Tuscan visual link. wedding breakfast (including the wedding

28 SEPTEMBER 2014 | MG

Peter Saunders’ recommendations

Ascension Matakana Ascension The Rogue Bella Rosa 2013 Matakana Flora 2013 A ‘beautiful rose’ Initially called by another in Italian for ‘bella grape name, Flora was rosa’ and indeed it DNA tested and its origin is. Flourishes very exposed! Although given beautifully, calm in style, the name as a result, far gentle yet positive in its from being a ‘rogue’ this fruit statement. Near is a delightful drop of dry, a little Pinotage with subtle, almost feminine some Malbec as a base style of white, just off variety. Tasty, balanced, dry with a lingering fruit a wonderful summer character that sits well afternoon (or luncheon on a lazy afternoon as sipper. Ready through well as with subtle food 2015. flavours, pasta included.

Ascension The 12 Ascension The Vestal amongst the vines or inside) and on concert Apostles Matakana Virgin Matakana nights a hearty laugh over dinner. The Malbec – Merlot 2013 Viognier 2013 entertainment varies to suit all moments. Ascension continues on its way up, the new Warm, cuddly style, Near dry, small owners underlining the Italian atmosphere and nicely textured to give quantity, rare perhaps menu. There is more on the planning board too a smooth mouth-feel yet delightfully elegant in the café department on the site — inspired with the fruit. Youthful drop of wine, worth from Italian memories once again. yet the life is part of the seeking out or having The two sets of brothers are enthusiastic wine, a delicious dinner lunch in the winery and enjoying the life as winemakers and or lunchtime red anytime to share a bottle. This restaurateurs. Some of them remember of year, especially with variety needs care to working in the family vineyards back home in subtle food flavours produce its supple Italy. Ascension wines and Ascension Osteria which can fit perfectly flavours and Ascension look to be a great place to follow. into a partnership with have done this really Consultant winemaker for 2014 was Ben the vino. A delight; nice well. Not too strong Dugdale who made no substantial changes to now but still with two- food courses to enjoy style, but for adapting to vintage conditions. three years of fine dining the delicacy and The 2014 wines will be bottled and on sale in ahead. finesse. No hurry into the next few months. 2017.

MG | SEPTEMBER 2014 29

J F Power on ManagEMENT Pitfalls of Partnerships here are a couple of interesting things happening in the Christchurch rebuild. One is the recurrent theme of rebuild contractors going Tinto liquidation and the second is the seemingly sudden rise in expensive utes buzzing about the rutted post-quake roads. It does make you wonder if there is a relationship between the two. According to Christchurch’s The Press (May 3, 2014) “twice as many debts to pay, has your partner got any assets that could be sold to pay businesses (18) connected to the rebuild failed in the first three months his share of the debts, or will it all come down to you? of this year, compared to the same period 12 months ago. Between Accountants always say that sales and revenue generation is the them they owe millions to creditors who are unlikely to recover their focus of any partnership. Therefore the partner who contributes the money.” most should get the greater share of the profits, not necessarily the Almost every week further failed companies, partnerships and sole partner that does most of the work. traders add to these grim statistics. If profit distribution is written into the agreement the business will The Press went on to say “although directors of these companies function without dissention. Thought should also be given to letting tend to claim various reasons for their business failure, liquidators, one partner have a 51 per cent share — that way there is always a receivers and industry experts said most companies failed because casting vote available if a stalemate cannot be settled. those in charge were inexperienced and did not have the nous to run a Your professional advisers will also suggest writing a partnership rapidly expanding business”. agreement on the basis that the business will break up one day and, Clearly, for unsuspecting subbies and tradies, there be dragons and crazy as it may seem, that you should imagine your currently friendly sharks in the rebuild, even more so if they have gone into a partnership partner turning out to be your worst enemy. with a friend to take on contract work. This is such good advice because it happened to me and I still seethe Partnerships are dangerous entities, especially if there is no with resentment that my business partner turned out to be a thieving partnership agreement worked out and signed by all parties before the rat. You think you know somebody, but when money is involved any new utes are saddled up and rolled out. friend can become an enemy in a New York minute. The two most important things to consider before entering a Okay, say everything has panned out well, you have a well- partnership are: researched partnership agreement, you’re making heaps with your • they are easier to get into than out of; and contracts and life is rosy. • what you are doing before you join up with another person. What do you do? “Partnerships often start like romances or marriages, with high hopes • take out all the money coming in and fill your pockets, buy expensive and good intentions on the part of all people involved. But just like a $60,000 utes, take on more staff, live the high life; or marriage, they can end with bitterness, anger, bankruptcy, lawsuits and • get your accountant (unless you have the skills yourselves) to do cash ruined relationships,” according to entrepreneur.com. flow projections for your business? A partnership agreement lets all partners — and there can be more Cash flow projections predict how much cash will be coming in than two — know exactly where they stand and is absolutely vital from debtors, and when, and what will be going out to staff, debtors, should the business need to be wound up for whatever reason. partners’ drawings and other expenses. It is possible that many partners go into business together without Have a guess which option those 18 businesses that went under in realising the ramifications for themselves in the case of a failure. Christchurch in early 2014 chose. My money would be on the ‘splash As well, it is widely thought that because partners are jointly liable the money about’ option. for business debts, any actual debt is split two ways (or more if there It is amazing how many people going into business for themselves are more partners). In fact, a creditor can pursue any one partner for or with partners have apparently never heard of the words working the whole of the debt. capital. They have not realised that as you expand you must put more Often, when one partner is thought by creditors not to be worth and more of your profits back into the business to fund that expansion. chasing because he has no personal assets, creditors will go for the Would you become a dental surgeon without knowing how teeth partner who has assets. Creditors aren’t bothered by the unfairness or function? Would you become a high-rise window cleaner without immorality of such an action; they just want to be paid back. knowing about safety harnesses? Doesn’t it make sense then to check out your potential partner first No? Then why would you go into business without knowing the before taking the next step? Your accountant can do a credit check for basics of working capital? you to see if there are a string of debts or even other business failures Working capital is the difference between current assets and current you should know about. liabilities. If a company’s current assets do not exceed its current Never mind if you have known your potential partner since you liabilities, then it may run into trouble paying back creditors in the went to school together. He may have been up to all sorts of financial short term. chicanery unbeknown to you. What is the inevitable result? The partnership is down the gurgler In addition, if a problem arises in the partnership and there are big and another business hits the dust.

30 SEPTEMBER 2014 | MG

MILESTONES

Anniversary of WW1

A 100-gun salute in Wellington by the New Zealand Army and an iteration on the steps of Parliament of the 1914 proclamation of war by Britain, as read then by Lord Liverpool, marked the 100th anniversary of the start of World War 1. Lord Liverpool informed King George V that New Zealand stood ready to “make any sacrifice to maintain her heritage and her birthright.” Speaker of the House David Carter said at the ceremony in August 2014, “We were a dominion of Great Britain, Great Britain was at war and therefore so were we. Over 100,000 brave New Zealanders stormed overseas.” In the five years war that followed 18,500 New Zealanders were killed.

Pictured: Infantry from the 2nd Battalion, Auckland Regiment, New Zealand Division in the Switch Line near Flers, taken some time in September 1916, after the Battle of Flers-Courcelette.

DIED: Robin Williams 1951-2014 Mighty River CEO retires American actor Robin Williams died of apparent suicide in California in August. He was an acclaimed comedian whose career included such triumphs as his role Mork in Doug Heffernan who left Mighty River Power at the the TV series Mork & Mindy (1978–82). His film career included such brilliant work end of August over 16 years after becoming its chief as Popeye (1980), The World According to Garp (1982), Good Morning, Vietnam executive, is regarded as a pioneer of the energy (1987), Dead Poets Society (1989), Awakenings (1990), The Fisher King (1991), and reforms of the 1990’s. He was asked to build one of Good Will Hunting (1997). Although famous for his huge ability to bring a laugh, he trhe new companies created from the b reak-up of also endured the dark times of depression. the Electricuty Corporation. The Southlander kept a steady hand on the helm as Mighty River grew from its base network of hydro power stations in central DIED: Air Marshal Sir Richard Bruce Bolt North Island into one of the great geothermal power generators in the world. The company listed on NZX KBE CB DFC AFC 1923-2014 in 2013 as a forerunner of the Government’s asset Retired Air Marshal Sir Richard Bolt, 91, was regarded as the father of the Royal New selldown strategy. Heffernan’s renewables-focused Zealand Air Force. Bolt was educated at Nelson College Son of the pioneering New strategy saw the giant Ngatamariki geothermal station Zealand aviator George Bolt, Sir Richard was educated at Nelson College. recently commissioned. Bolt served in World War II on Pathfinders flying the Lancaster bomber. Post-war he was Commanding Officer of No. 40 Squadron RNZAF and No. 24 (Commonwealth) Squadron RAF. He took command of the RNZAF as Chief of Air Staff in 1974, and Hamilton at 150 became Chief of Defence Staff in 1976 before retiring in 1980. There was a touch of self-depredation by residents of ‘the Tron’ as the Waikato’s ‘big smoke’ reached the dignified age of 150. The former rural town has seen DIED: Lauren Bacall 1924-2014 a lot of water flow under its famous bridges on the Movie actress Lauren Bacall, an icon of Waikato River. The British built a garrison there in 1864 Hollywood’s silver screen era often as co-star after General Cameron’s troops crossed a stream in 1863 of Humphrey Bogart, died in August aged signaling the start of the Waikato War. The European 89. Bacall reportedly died after suffering a settlement began when Captain William Steele brought massive stroke at her home in New York. a gunboat up-river and formed a redoubt. Bacall was born Betty Joan Perske “a nice Jewish girl from the Bronx.” She took the movie industry by the throat with her good Rendezvous in space looks and husky voice her 1944 screen debut “To Have and Have Not” a smouldering Six billion kilometers and a decade after launch the success. In To Have and Have Not (1944) European Space Agency’s space probe Rosetta reached (1946), Dark Passage (1947), and Key Largo the 3kms long comet 67P/Churyumov-Gerasimenko (1948) Bacall and Bogart swapped some of travelling through the solar system at 400,000 km/h. the greatest one-liners in show business. She Rosetta is now synchronizing its orbit with the comet famously asked Bogart, who played ‘Steve’ in preparation for the descent of a lander onto the Morgan in To Have and Have Not: “You comet’s surface. Kiwi technology company Rakon know how to whistle, don’t you Steve? You is providing frequency oscillators to help probe the just put your lips together and blow.” comet’s interior.

MG | SEPTEMBER 2014 31

HEARTLAND

n South Waikato ratepayers have been left before and the truck driver delivering them clearly paying off”. with a $24,000 bill after a failed effort was too frightened to help him draft them. n Greater Wellington Regional Council to oppose the opening of an unmanned The horses kept ‘smashing in the gates’ and has a new road safety campaign to find petrol station next to Tokoroa’s main road, ‘jumping over the yards.’ For three weeks Sexy Zen drivers. The series encouraged reports the Waikato Times. The 2240-hour he didn’t touch them, but sat with them to aggressive drivers to find their inner peace station proposed by Gull and landowner win their trust. and slow down through Wellington’s Ruakaw was approved by an independent n When the Australian band The Seekers 50kmh zones, reports the Dominion Post. commission. The station is planned next returns to New Plymouth’s Bowl of The ads chronicle the journey of three to SH 1 on the site of town’s former bus Brooklands on November 29 after playing impatient motorists as they are coached station. in Christchurch, Auckland and Hamilton it by a zen driving master who puts them n A protesting prisoner climbed onto a roof will be 46 years since a record-breaking two through a ‘wax on, wax off, Mr Miyagi at Ngwha Prison but came down after two shows in 1968 when 26,500 fans attended style training course. days and one bitterly cold night, reports at the Bowl, said the Taranaki Daily News. n Spotted anyone sporting an Omega the Northern Advocate. The mercury The band is making a Golden Jubilee Tour. Speedmaster Professional Moonwatch? fell to 3 degrees and then there were Dunedin man Benjamin Sexton is thunderstorms, rain and wind gusts strong appealing for the return of the mint enough to fell trees near Kerikeri. No-one condition watch lost in a bright red case could say what he was complaining about between the city’s Meridian Mall and apart from the weather. Cargill Street, reports the Otago Daily n Planemaker Jack Godfrey has run out of Times. The watch was left to him by his space in his 5-metre communal workshop late father, who engraved the watch ‘BS’ at Alandale Lifestyle Village as he races to on the strap. complete a replica World War 1 fighter n One of New Zealand’s longest serving plane before his Armistice Day deadline. school principals, Elizabeth Wilson, is The Waikato Times says the Hamilton retiring after 35 years leading Columba retiree is looking for more room for his College, Dunedin, reports the Otago Daily non-flying Bristol Scout as it takes shape Times. Her successor is Juliette Hayes, and he looks to attach its wings. “Each principal of Geraldine High School. wing panel — the four panels — attaches n Healthcare job listings jumped 76 per to the structure then the wire bracing has cent in Tauranga to the end of June, to be done. In order to do that we need to reported the Bay of Plenty Times. Connect assemble the whole aeroplane. . .” Recruitment director Michel Lynn said n The Gisborne harbour tug Turihaua has n Nearly 40 per cent of Auckland University on average it filled about 15 positions a been the mainstay workhorse in the port students had significant sleep problems month for support workers and healthcare since 1977, reports the Gisborne Herald. with depression and anxiety the leading assistants. New Zealand’s ageing population Its day are now numbered as Eastland Port causes, a study by Auckland University and meant the need for healthcare workers look forward to the arrival of its new $12 Middlemore Hospital has found, says the would continue to grow for community million tug Waimata which arrives from NZ Herald. Other causes were a delayed services and resthomes, she said. Vietnam’s Haiphong shipyard in September. cycle of sleeping and waking, problematic n The cost of repairing July storms in the n Anyone going for a country drive cannot alcohol use and parasomnias such as sleep- far North has soared to more than $30 help but notice the gunfire graffiti on walking, sleep-talking and tooth grinding. million, two-thirds of the district’s total our road signs, wrote Rotorua Daily Post The researchers said high schools and annual roading budget, reports the columnist Brian Holden. He says “when universities ought to consider starting and Northland Age. The Far North District you see so many perforated signs up and finishing classes later. Council expects to will take 12 months to down the country, it’s evident that more n Spending $60 on a bus ticket to Auckland fix the most urgent slips and slumps of the wayward bullets have passed through the was a small price to pay for the $18,000 293 triggered by the storm. air than one would care to imagine.” scholarship 17 year old Palmerston North n Auckland ratepayers face a bill of $40 n Craft groups, the RSA and crochet Girls’ High student Alicia Craig earned in million to prevent part of the downtown enthusiasts are getting behind an ambitious return. The Manawatu Standard reports seawall between Princes and Marsden goal of making 5,000 poppies by Anzac that she took part in a girls-only computer wharves failing in a moderate earthquake, Day next year, reports the NZ Herald. The science competition at Unitec where she reports the New Zealand Herald. “The project’s national co-coordinator, Trena had to plan, design and code a mobile risk of failure is considered low but the Lile, said the 5000 Poppies NZ project had application. She was one of three students council has patched a section between (the nearly reached 5000 handmade poppies to scoop a scholarship to Unitec, her wharves) at a cost of $700,000, pending and planned to exceed this by making more winning app a sleep cycle calculator. permanent repairs next year.” Rick Walden, than 18,000 (the total of New Zealand n Almost 3 million guests spent a night in who heads a council group co-ordinating troops to die in World War 1). Queenstown in the June year, reports several downtown projects, told the Herald, n The Wanganui Chronicle carried the story the Southland Times. Statistics NZ’s “There is no immediate risk to limb or life of Ratihi horse trainer Tom Waara who Commercial Accommodation Monitor and nothing physically threatening at the risked his life training some of the 25 wild shows guest nights in the resort town were moment. What we are really doing is taking stallions saved from slaughter and mustered up 9.8 per cent to 2,908,025. Destination account of what the impacts of a shake by helicopters near Waiouru in May. Mr Queenstown chief executive Graham Budd might be.” Parts of the seawall are 100 Waara said the most challenging part is said targeting more guests for Junbe, years old and contain boulders cemented surviving. The horses had not seen humans traditionally one of the quieter months, “is in place.

32 SEPTEMBER 2014 | MG

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