From My Desk- May 2021

Mark Hughson Manager Owner Director

Good morning,

The rain that has been forecast is yet to materialize. Taranaki, whilst not as dry as other areas of NZ we certainly need some rain. We have started the 2021 tax filing season with a ‘hiss and a roar’ with work flooding into the office. Our client managers have begun processing the work very efficiently and we are seeing our filing percentages ahead of last year.

Its great that the travel bubble with Australia has opened, I tested it out with a quick ANZAC weekend in Melbourne. The Aussies were very pleased to have some tourists back and the airports were a breeze being so empty. I hear this morning that Queensland has to limit café/restaurant opening hours, as there is insufficient trained staff to open full time. Like NZ, they rely on an influx of foreign workers for these roles and are looking at opening their borders at the end of the year.

For our dairy farming clients and investors, the big news topic is Fonterra’s capital restructure. With forecast declining milk supply, the likelihood of the shareholders fund exceeding the 20% threshold for farmer ownership will they:

  1. Scrap the shareholders fund
  2. Cap the shareholders fund
  3. Do something else

There is also talk of reducing the share standard from 1 share per KGMS, to 1 share for 4 KGMS. This will mean for farmers wanting to join Fonterra, it will be cheaper than it is currently. For existing farmers, what happens to the surplus shares? We await to see how consultation plays out.

All the best,

Mark

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