Reducing business tax to a flat 10% - good or bad?

Last week there was a flurry of media activity around reducing business tax to a flat 10% to aid  recovery and investment in Canterbury.

Superficially this sounds attractive but practically I cannot see how it would work.

I was asked for comment by the media and the full text of my comment is as follows

"I personally do not favor a differential business tax rate. My board has not considered this specific proposal. It would create too many distortions and would be an administrative nightmare. The relative  simplicity of our NZ Tax system is one of this country advantages. The key to encouraging business and investment is to concentrate on creating an environment that is overtly supportive of business. All stakeholders need to recognise the importance of being encouraging and welcoming of business. We need to establish a reputation as a city, and a community, of being seen to be overtly supportive of existing and new business and investment. We also need to be seen to be action-orientated, strategic and efficient in the context of the rebuild. Finally it is vitally important that Central Government, Local Government and the community are all being seen to be working towards common objectives. That will encourage investment."    

As we gear up fully for the recovery, supporting businesses right across the rebuild environment in all ways is going to be critical. We want Christchurch to be seen to be the easiest place to do business in New Zealand and we want all stakeholders to embrace and deliver on that concept.

www.cecc.org.nz 

So we are back and ready for action!

I hope most of you managed to find time to catch a bit of a break. I did, in beautiful Wanaka. I have attached a sunset that was one of the more attractive I saw. It was good to get away and reflect on the past year. I also spent a fair amount of time considering what we have ahead of us  in 2013.

I have no doubt that this is the year when our problems will mostly be around managing the scale of the Christchurch rebuild. Already (and over the holiday break) there was significant debate about where and how the people we require for the rebuild will be sourced. We can also expect significant strain on other resources. It is a little scary that more ready-mix concrete is being poured in Christchurch right now than in the whole of Auckland. This says to me that we need to be thinking lead times, we need to be considering how we are going to manage the growth of our businesses and we certainly need to be positioning ourselves to maximise the advantage we gain from being involved in New Zealand’s biggest ever Economic Development project. As always CECC is at your service, refreshed and ready to assist you with all of your business issues. Happy New Year!

www.cecc.org.nz

HAPPY CHRISTMAS!

Wishing you all a very merry Christmas and a happy and safe New Year!

After a pretty hectic year I'm hoping you are all winding down and planning on getting away for a bit of a break before you come back refreshed and raring to go in 2013.

Just a reminder of our opening hours during the holiday period:

Friday 21 December 2012          8:30am to 12.00noon
Monday 24 December 2012       8:30am to 12:00noon
Tuesday 25 December 2012       Closed
Wednesday 26 December 2012  Closed
Thursday 27 December 2012      9:00am to 3:00pm
Friday 28 December 2012          9:00am to 3:00pm
Monday 31 December 2012       9:00am to 12:00noon
Tuesday 1 January 2013             Closed
Wednesday 2 January 2013        Closed
Thursday 3 January 2013            9:00am to 3:00pm
Friday 4 January 2012                9:00 am to 3:00pm
Monday 7 January 2013             Normal hours resume – 8:30am to 5:00pm

My blog will resume in late January.

So until then, wishing you a fantastic holiday period and all the best for 2013.

www.cecc.org.nz

We've been out of Kilmore St for ages!

CECC has been out of  it’s Kilmore Street offices for a year and nine months. After six months of being located at Holmwood Rd we moved to the Westpac Business and Community Hub in Addington. The Hub  has been a fantastic location for us. Total  foot traffic through the Hub is estimate at around 40000 since it opened over a year ago.

The CECC team have shown great tolerance working in unusual conditions and we are all grateful to Westpac for accommodating us so well.

Plans are advancing for the rebuild and repair of 57 Kilmore Street. We are determined to get back into the central city as soon as we can. The target is to be home by Christmas 2013. Home will  be new and  redesigned to better meet the needs of our members. We are looking forward to it despite the fact that we will be one of the few remaining buildings on the western end of Kilmore Street, at least for a while.

In the meantime we are all committed to meeting the needs of our members and the wider business community through the provision of services from the Hub.

www.cecc.org.nz

Letter to Christchurch City Councillors

Dear Christchurch City Councillor,

The Canterbury Employers' Chamber of Commerce is the largest Business Support Agency in the South Island and represents the interest of thousands of Christchurch based businesses.

Since the release of the news regarding the extra days holiday to be given to all council staff, each month for the next 11 months we have received many calls and emails from our members. We have also been contacting members to ascertain their opinions on the issue. The responses have been overwhelmingly negative.

As has been reported in The Press and other media the concerns are as follows:

1. This unilateral action sets a costly precedent which will need to be managed by all Christchurch based businesses. Already employees across Christchurch are asking their employers why they cannot be treated in the same way. The answer is very clearly, that employers simply cannot afford this sort of largesse.
2. Giving all staff an extra 11 days leave through to next November sends a strong signal that the Council is over resourced. If this can be accommodated within current resources then that indicates that there is fat in the system. Of course if current resources have to be unreasonably stretched to cater for an effective 5% reduction in the workforce then that will only increase stress. This is exactly the opposite of what is trying to be achieved.
3. Whichever way this is looked at, it is a cost to the ratepayers. The calculation can be easily done if total remuneration figures are analysed, but it clearly runs into many millions of dollars. There are also serious concerns about a reduction in service level capability as a result of reduced resources.
4. We, as an employers’ organisation, consider the gifting of an extra days paid holiday per month to each employee, to be poor employment practice under these circumstances. If the objective is to be a good employer and to deal with members of the team who have the potential to become stressed, then this should be managed on a case by case basis. We all appreciate that people are our greatest resource but their issues can be much better addressed on an individual, as needs, basis.
5. Many are asking questions as to the legitimacy of the proposal. A change in working conditions of all staff of this magnitude would be regarded as a significant policy shift in the private sector, requiring Governance approval. We seriously question whether in this instance delegated authorities have been breached? We will be seeking advice on this matter.
6. Many of our members were deeply concerned at the cost of the $80,000 communications review carried out by the Council earlier this year. The results of that review were hard hitting. Undertakings were given to change behaviours in Council including no surprises to Councillors and the Council’s commitment to engagement with the community on significant issues. It seems that nothing has changed in terms of communication, with Councillors only learning of the significant shift in employment policy through the media. The requirement of community engagement on significant issues also seems to have been overlooked.
7. The other issue of potential significance is the status of employees of Council controlled companies and companies operated through Christchurch City Holdings Ltd. Is it intended that this policy will spill over into these companies and if so with what justification?

The Canterbury Employers' Chamber of Commerce wants to see these issues addressed immediately. We believe a full and detailed inquiry must be conducted, the real costs identified and any breaches of delegated authority identified and addressed.

We do not expect one of the largest employers in Christchurch, who remunerates using public funds to act in this manner.

It works against the interest of the business community, most of whom have toiled assiduously in the face of significant challenge to ensure that our city and our region will continue to thrive and prosper. We can assure most are angered by this issue and want to see it addressed quickly and effectively.

As the leaders of the entity involved in this matter we seek your assurance of a prompt and effective resolution.

Yours sincerely

Peter Townsend
ON BEHALF OF THE BOARD OF THE CANTERBURY EMPLOYERS’ CHAMBER OF COMMERCE

www.cecc.org.nz

Exciting stuff going on out at the Air Force Museum

There is some really exciting stuff going on out at the Air Force Museum of New Zealand at Wigram.

The  major expansion of the multimillion dollar facility is well under way and expected to be completed early 2013. Last week 120 concrete trucks delivered 850 cubic metres of concrete for a continuous pour of the new main gallery floor. That is a lot of concrete!

This new facility will enable the Museum to continue to archive and store many precious and unique exhibits that were salvaged from various Christchurch and Canterbury museums after the Feb 11 earthquake. It will also provide a temporary, but highly versatile space, for large meetings and conventions, until we get a  new permanent convention centre in the Central City. Longer term it will be the much enlarged home for the Air Force Museum and provide world class display and restoration capability.

The Museum will reconfirm its status as an iconic tourism destination in Canterbury.

From every perspective this is a big, brave, exciting and extremely timely undertaking, which will serve our wider community well, in many respects,  for years to come

Watch that space!

www.cecc.org.nz

The Power of Two

Case Study: Lane Neave and Minter Ellison Rudd Watts, working together for Canterbury.

When you look at some of the great moments in New Zealand history, where hardship and adversity are overcome, many of them are accomplished by people working closely together. Take for example the New Zealand men’s double skulls London Olympics gold medallists Nathan Cohen and Joseph Sullivan. Neither would have beaten the world’s best athletes by themselves, yet together they took their place in the record books. There is something powerful about partnerships that collaborate to achieve results.

The Canterbury earthquakes have had a major impact on all the citizens and businesses of Christchurch. Every day their effects continue to be felt physically, economically and emotionally and we now have our own Olympic Games to win in terms of creating the new city, its infrastructure and supporting its people.  More resources will be required to support the recovery than Christchurch can supply on its own. The only way this is going to be achieved is through collaboration.

A great example of two businesses taking the initiative to combine their strengths, people, skills and expertise is the alliance between local law firm Lane Neave and national law firm Minter Ellison Rudd Watts. This alliance is to the obvious benefit of both the people and businesses of Christchurch by combining the capacity and the capability to meet the demands of the recovery. Rather than an “outsourcing model” giving a local firm access to a greater number of lawyers to cope with excess demand, this collaboration recognises the need for clients to have access to the best resources, wherever they happen to be located.

Lane Neave and Minter Ellison Rudd Watts realise the recovery of Christchurch is not going to be accomplished without the support and efforts of the far wider community at a national and international level. The rise of collaborations that span regions will be fundamental to success.

Lane Neave is a well established and highly respected law firm in the Christchurch and South Island business communities. As a local firm they have a real understanding of the adversity faced by the people of Christchurch. This is coupled with their deep legal expertise, knowledge and passion for the recovery, which leaves them superbly placed to help get Christchurch back up and running. With two offices in Christchurch and an office in Queenstown they are on the ground day to day, shoulder to shoulder with the people of Canterbury assisting them to navigate the complex legal issues surrounding the recovery of the region.

Minter Ellison Rudd Watts brings some extra muscle and resource to the alliance. It’s recognised as one of the top law firms in the country and has the benefit of drawing upon the vast resources of the Minter Ellison Legal Group, which have offices in Australia, Europe and Asia.  Being based in Auckland and Wellington, they are also well positioned to tap into their relationship networks within Government and the large corporates in the banking and construction sectors to assist with mobilising the recovery, adding an additional dimension and level of expertise needed to complete entire transactions.

Lane Neave and Minter Ellison Rudd Watts are already collaborating on providing information to the Canterbury business community through a series of highly successful seminars. The alliance between these two well respected firms is ultimately about harnessing the power of collaboration to deliver the best legal advice for the people of Christchurch as they transition to an exciting new city.

www.cecc.org.nz