Wednesday, 18 December 2013
Merry Christmas and a happy New Year!
Thursday, 12 December 2013
Go visit Perth!
Last week I had the good fortune to travel on the Air New
Zealand inaugural flight from Christchurch to Perth. It was a great experience
and I commend the airline and the destination to you.
Perth is a city that is
reinventing itself. Christchurch is a city that is recreating itself. The
parallels are compelling!
Perth has a population of 1.5million, 70,000 of whom
are kiwis. 80,000 more kiwis visit the city every year. Perth is growing by
about 50,000 per year and the affluence shows.
We took some time out to visit
Rottnest Island, about 40 kms off the coast. It is the home of the Quokka and I
thought you might be interested in these pictures. A very pretty and
interesting island.
Air New Zealand is flying direct to Perth from Christchurch twice a week until at least April 2014.
One week to go before the Christmas season really sets in. I wish you all the best for the festive season and a highly productive 2014. From a
Tuesday, 3 December 2013
We've been through some interesting times in Christchurch
If you look at disasters elsewhere in the world it is not unheard of to have a 30% depression in business activity, for example following Hurricane Katrina in New Orleans. It didn’t happen in Christchurch.
There are four fundamental reasons why it didn’t happen and they are really important reasons for all of us to learn from.
The first reason was Central Governance.
Post the 4 September 2010 earthquake, I was on Morning Report on 6 September 2010 from a broken Christchurch saying that we were really in trouble as we had no sewerage, no electricity, no water, we couldn’t get up and down the street, and there was no business activity to speak. I said if we don’t do something about that we are going to have business collapse within a week. As most businesses, particularly small businesses, rely on their cash flow to pay their employees and if you can’t pay your employees you will be out of business. It turns out Bill English was listening to Morning Report and he rang me immediately and said “I understand what you are saying and I get it, what do you want us to do?” I said “I think the Government needs to treat Christchurch as a place where there is business as usual – but where there is no business.“ What that meant was pumping cash in and protecting cash flows. Bill said “he got that and how much?” I said “$15m”. He said “how many businesses?” I advised “2,500”. We agreed we would see how we would go.
As it turned out post September there were 2,300 businesses and 11,700 employees who received $10.2m and it was done on a high trust basis i.e. name of company, IRD number, how many employees and the cash was given. There was money going into bank accounts during the week of the September earthquake.
Post 22 February Bill English rang and said “don’t worry Peter we know this is much more serious and we are going to up the earthquake support subsidy from $350 per employee per week, to $500 per employee per week and it’s going to apply to all companies, not just small companies”.
On 24 February, two days after the earthquake, there was money sitting in bank accounts. You just had to supply your company name, IRD number, and how many employees. Since then the Government has done some work on fraud, because this is real high trust issue, and the number of companies taking advantage of the situation was lower than the fraud rate of the structured unemployment benefit. That says something about how people responded. Post 22 February there was $200m cash put into companies. I’m still getting phone calls today from companies who say that if it hadn’t been for the earthquake support subsidy they would have gone out of business. Post 22 February it was thousands of businesses (something like 15,000) that were recipients of that money. It was a really significant thing to protect the fabric of business and to protect the relationship between the employer and employee. The other option would have been to put in place a ramped up unemployment benefit so that the employees continued to get paid, but that would have destroyed the fabric of the relationship between the employee and the company; and that would have destroyed the company – which would have been a real economic disaster.
So the first lesson is cash.
Click here to read more.
There are four fundamental reasons why it didn’t happen and they are really important reasons for all of us to learn from.
The first reason was Central Governance.
Post the 4 September 2010 earthquake, I was on Morning Report on 6 September 2010 from a broken Christchurch saying that we were really in trouble as we had no sewerage, no electricity, no water, we couldn’t get up and down the street, and there was no business activity to speak. I said if we don’t do something about that we are going to have business collapse within a week. As most businesses, particularly small businesses, rely on their cash flow to pay their employees and if you can’t pay your employees you will be out of business. It turns out Bill English was listening to Morning Report and he rang me immediately and said “I understand what you are saying and I get it, what do you want us to do?” I said “I think the Government needs to treat Christchurch as a place where there is business as usual – but where there is no business.“ What that meant was pumping cash in and protecting cash flows. Bill said “he got that and how much?” I said “$15m”. He said “how many businesses?” I advised “2,500”. We agreed we would see how we would go.
As it turned out post September there were 2,300 businesses and 11,700 employees who received $10.2m and it was done on a high trust basis i.e. name of company, IRD number, how many employees and the cash was given. There was money going into bank accounts during the week of the September earthquake.
Post 22 February Bill English rang and said “don’t worry Peter we know this is much more serious and we are going to up the earthquake support subsidy from $350 per employee per week, to $500 per employee per week and it’s going to apply to all companies, not just small companies”.
On 24 February, two days after the earthquake, there was money sitting in bank accounts. You just had to supply your company name, IRD number, and how many employees. Since then the Government has done some work on fraud, because this is real high trust issue, and the number of companies taking advantage of the situation was lower than the fraud rate of the structured unemployment benefit. That says something about how people responded. Post 22 February there was $200m cash put into companies. I’m still getting phone calls today from companies who say that if it hadn’t been for the earthquake support subsidy they would have gone out of business. Post 22 February it was thousands of businesses (something like 15,000) that were recipients of that money. It was a really significant thing to protect the fabric of business and to protect the relationship between the employer and employee. The other option would have been to put in place a ramped up unemployment benefit so that the employees continued to get paid, but that would have destroyed the fabric of the relationship between the employee and the company; and that would have destroyed the company – which would have been a real economic disaster.
So the first lesson is cash.
Click here to read more.
Tuesday, 26 November 2013
Air New Zealand Wine Awards in Queenstown!
Last weekend I attended the Air New Zealand Wine Awards in
Queenstown. This was the first time the awards had been held in
Queenstown and they proved to be a real success. Of course,
Central Otago is renowned for its wine production, particularly Pinot
Noir and with the beauty of Central Otago , the ability to get close
to the source of some outstanding wines, the food prepared by Peter
Gordon and the excellent functionally of the Queenstown Events
Centre - they really pulled it off!.
However what is even more impressive was
the quality of the New Zealand wine offering. Right across
the range, we now produce world class wines. Some of the longstanding wine producers such as Villa Maria starred, but so did
some of the smaller boutique producers who are making relatively
small volumes of wines of outstanding quality.Air New Zealand has been the principle sponsor of the Awards since their inception and it is exciting to see the integration of International tourism, wineries and food as part of the unique New Zealand offering.
I was surprised to learn that sustainability is
high on the winegrowers agenda with 96% of the medal winners certified as
sustainable; which is interpreted as 'delivering excellent wine, to
consumers in a way that enables the natural environment, the businesses
involved and the communities to thrive'.
It was so good to see we can stand up and be counted anywhere in the world with our increasingly valued wine offering.
AIR NEW ZEALAND CHAMPION WINE OF THE SHOW
Nautilus Cuvee Brut NV
O-I NEW ZEALAND RESERVE WINE OF THE SHOW
Villa Maria Reserve Hawke's Bay Chardonnay 2012
Villa Maria Reserve Hawke's Bay Chardonnay 2012
Click here to view all the winners.
Wednesday, 20 November 2013
Hillary Institute of Leadership 2013 Laureate Dinner
This week I had the pleasure of attending the Hillary
Institute of Leadership 2013 Laureate Dinner.
The 2013 Hillary Laureate is Atossa
Soltani who was awarded the Laureate for Exceptional Mid-Career
Global Leadership in Climate Equity.
Atossa has worked for over two decades with Indigene in the Amazon Basin, fighting to protect their homelands, the
Amazon Basin, and the “Lungs” of our planet. The Amazon Basin is
the most bio diverse place on the planet and is truly under threat. Compromising
the Amazon Basin destroys the habitat of Indigenous peoples
and has a very serious impact on world climate.
Atossa has a wonderful story to tell about her work with
Amazon Watch. I strongly suggest you have a look at her website www.amazonwatch.org.
Atossa finished her address with the following quote from Alberto Villoldo.
“ As soon as you awaken to the power you have, you begin to
flex the muscles of your courage. Then you can dream bravely: letting go
of your limiting beliefs and pushing past your fears”
Tuesday, 12 November 2013
Housing progress in the Christchurch rebuild
I have just received up-to-date information of the insurance status of houses to be rebuilt or repaired in Christchurch.
According to the Insurance Council of New Zealand there
are 24,660 over-cap (damage in excess of $100,000) houses subject to a
repair or a rebuild in the Insurance companies portfolios. We think that number is light, but even if that is the
number, what is startling is the high number of cash settlements the Insurance
Industry statethey have settled or anticipated to be settled.
According to their figures there are currently 10,000
properties where cash settlements have been concluded and a further 2,600
where a cash settlement is probable. Now, that is a total of 12,600
over cap properties where the control of the rebuild has been transferred
from the Insurance Company to the policy holder.
That means a lot activity in the future will be
in the hands of individuals, which we as a community need to
be prepared for. I think this realistically means an avalanche of cash
flowing into our community in the first two quarters of 2014 as repairs
and rebuilds of housing stock gather momentum.
In analysing the Insurance council’s figures and
including EQC liabilities and payouts made, it looks like we can
all agree that the total damage to housing stock won’t be far away from
the rule of thumb estimate of 60% of the total damage. If that total is $40
billion then we are looking at around $24 billion for all housing damage. That
is an enormous amount of cash, most of which is destined to flow back
into greater Christchurch.
Get prepared!
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