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Hustle ... Self-determination to go out there and work it out until you made it.

News & Views July 2023


Upcoming Seminar

Thursday 20 July 2023 - 9am to 11am at Waipawa Town Hall

Governments around the world are virtue signalling with climate goals based on belief and food production goals based on ideology. It doesn't take a crystal ball to see that the result will be ongoing

food price inflation. Bringing observations from recent trips to Sri Lanka, UK and Ireland, Jacqueline will update us on the situation in other countries, while outlining thoughts for New Zealand's future. As always, she will be delighted to engage in debate and answer questions (as much as she can).

Register at or phone Raewyn at 06 857 8901


BM Farm Benchmarking

Benchmarking provides an independent perspective about how well your farm is performing compared to others. Key performance indicators can include -

  • Gross Farm Income return per ha

  • Mix of income and the percentage return being obtained.

  • Farm Working expense breakdowns.

  • Expenditure ratios to Gross Farm income.

  • Farm surplus performance on a per ha basis

The benefits from this can be

  • identifying areas that are going really well within the business. With the opportunity to put in place systems to maintain this performance or ways to mitigate disruption.

  • Finding areas of opportunity within your farming business to improve.

  • To understand the key areas of income and/or expenditure within your business, and what you can influence/manage.

  • Also look at the farm surpluses being produced and understanding where this money is going or what it could be used on. Such as interest, drawings, tax, capital improvements, debt repayment, etc.

Given the ever-increasing ability to capture, track and use data and information, BM is increasingly asked by farmers how their farm(s) are performing on a year on year basis, as well as how they compare to others within their industry.

Due to this demand, BM has created a new service for our clients – BM Farm Benchmarking.

We have created a standardised process and format to present farmer’s financial information in a clear and concise manner.

By using the information in their Financial Accounts, and presenting it in a visual manner, Farmers are able to view these key performance indicators on how their farm is tracking. This also displays the areas of opportunity within their business which they may wish to focus on.

The interactive and visual reporting also incorporates the Beef and Lamb Economic Farm survey data. This provides a benchmark comparison for our farmers to compare themselves against. We believe this helps farmers to not only mark and measure their business, but also help them to better understand the trends within their farming business, which can help with future planning too.

If you wish to find out more about our BM Farm Benchmarking please don’t hesitate to contact us.


Interest Rates

What a roller coaster ride it has been, after a period of record low interest rates, to quite a marked increase in interest rates, from the impacts of the economic stimulus and restrictions the recovery from Covid is having on immigration and supply chains, as well as uncertainty from local political and geopolitical influences.

We are seeing CPI inflation at rates unseen since the 90’s, and on-farm inflation rates are the highest since 1981. This has resulted in the RNBZ lifting the OCR to 5.5%, the highest it has been since 2008, which only started increases off the low of 0.25% in October 2021. Resulting in a sharp increase in interest rates, as shown below.

The table above shows, on a macro level, the general rate movements across over the past 3 years.

The RBNZ Governor has indicated this is as high as the OCR will go, but several other commentators feel there may still be a further hike yet.

What can you do about it?

It is important to look at trends and continue to ask questions of your own individual circumstances and exposures. We regularly discuss these questions with clients to improve awareness and clarity around this important area of financial management.

  • Are you aware of your debt profile and how are you managing this?

  • What is your average cost of borrowing and term lending spread?

  • Are you aware of all the products and services your Bank offers, and can these be leveraged to help you manage your borrowings more effectively.

  • Have you asked your Bank what you can do to manage your risk margin?

Actively managing this part of your business; having a strategy in place and working with your team of professionals is one of the keys to overall financial freedom and success. At BM, our purpose is to work more closely and proactively with you to provide better clarity and support better decision making. Contact us today for a banking and debt profile analysis to start being more strategic.


Employee Accommodation

Do you provide accommodation to your employees?

Employers can arrange accommodation for their employees and deduct the cost from their wages if agreed. This rental agreement must be in writing in either:

A tenancy agreement

An accommodation agreement

It should be separate from the employment agreement, or able to be separated.

How much to charge?

As an employer you will need to estimate the value of the accommodation you are providing. Think about what is likely to be paid for similar accommodation in a similar location. For income tax purposes the “market rental value” of the accommodation must be treated as salary and wages. You will need to deduct PAYE from this, along with the employee's income for hours worked.

Market rental value is what is likely to be paid for similar accommodation in a comparable location by someone who is not related to the employer or employed by them. In a farming situation, there may be different factors to consider before arriving at a figure, but judgement must still be made using relevant information on a reasonable basis. It is the employer's responsibility for coming up with the market rental value. Please contact your BM advisor to discuss.

Are your employees your tenants?

If you provide accommodation for your staff to live in, you are also likely to be their landlord. Tenancy laws will apply to you and you will need a tenancy agreement. This type of tenancy is called a service tenancy. Service tenancies are linked to the employment, so typically end when the employment relationship ends. As the landlord, the accommodation you’re providing must meet all the minimum requirements for rental properties, including building, health and safety requirements. For example, you ‘ll need to provide working smoke alarms, keep the property in a maintained and liveable condition and make sure the accommodation is not overcrowded. Insulation and healthy home standards – these are minimum requirements for rental properties to improve heating, insulation, ventilation and drainage, reduce moisture and stop draughts. New and existing requirements come into effect in stages from 1 July 2019 to 1 July 2024.

See the link to for more information around the healthy home standards.


MPI Grants – to assist with the recording of how funds have been used we suggest setting up separate codes to record the expenses if needed for evidence if an audit is undertaken.

Recording of Insurance claims and what these proceeds have been used for – as we are still waiting on IRD finalising the legislation that determines the effect insurance claims will have on income and depreciation recovery on assets effected by Cyclone Gabrielle. We are finding it is useful to have separate codes in your computer system to record any amounts received or expenses incurred so these amounts can easily be identified.

Fuel rebates – reminder to complete your quarterly excise duty rebate for the petrol you used on your farm, further information can be found at

Withholding tax deducted from invoices – check if any contractors you use have deducted withholding tax from the invoices they have issued you with, this withholding tax must be paid to IRD on the contactors behalf through the PAYE system.

MPI have released another grant to assist with Cyclone Gabrielle damage - this grant is for commercial entities to help with the removal of silt from business premises. Applications close 30 June 2023. Applications are made through the HB Regional Council –

Employing staff – a written employment agreement is required, you must pay at least minimum wage for all hours worked and to ensure this is the case staff need to complete time sheets. You are responsible for maintaining holiday records, a tenancy agreement is required for employees who live in farmhouses, and we recommend it is a service tenancy agreement (meaning it is linked to the employment) and if you take a bond you are required to lodge this with tenancy services.

Wage Increases from 1 April 2023 Minimum wage went up to $22.70 per hour. ACC earner levy went up to $1.53 per $100 of earnings, as this is included in the amount of PAYE deducted from employees’ wages. Wages APs will need to be updated.

Income Equalisation (IE) – Due to the large scale adverse effect caused by Cyclone Gabrielle, IRD is allowing farmers a possible tax relief measure through the use of the IE by allowing late deposit for the 2022 year until 30th June 2023 and early withdrawals into either the 2023 or 2024 year depending on when the refund is requested.

Provisional tax payments – the third instalment of provisional tax is due for most of our farming clients on either the 28th June or 28th July. If you believe that there has been a significant change in the profitability of your business, please get in contact with us today to look at a provisional tax estimation. Not only does this assist you with tax planning but it can also reduce any UOMI (use of money interest) exposure.


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