September 13, 2026 • 6 mins
Christchurch-based farm accountant says farm expenses are coming up to meet incomes.
See omnystudio.com/listener for privacy information.
Listen
Watch
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
He is a Christchurch-based farm accountant and raconteur. He has
generously given some of his time today on the country
to inform and entertain. Peter, normally you send me a scribbled,
handwritten message, which I can barely read. Your secretary has
typed out some key topics to talk about. I'll be
forever thankful for that. I want to talk about number one,
(00:22):
and this follows on from the Federated Farmers' latest confidence survey.
On farm in New Zealand at the moment, expenses are
rising to meet income, which is a shame.
Speaker 2 (00:34):
Yes, before you go any further, Jamie, at your age,
I would have thought you could read my writing, but
we won't go into that. Yes, you're quite right. At
the moment, I'm striking every day, expenses rising to meet income.
We've had a good year and we needed it, sheep
and beef, but this year is not going to be
(00:55):
as good. The income will still look sound, but the
expenses keep rising. The old story, the expenses keep going
up and up and up. And it's very frustrating, but
we've got to deal with it.
Speaker 1 (01:10):
Well, what's happening in the Middle East is helping nobody.
That's a war that's going to get worse, I think,
before it gets better. Obviously, there's fuel and fertilizer. They're
really key things on a farmer's cost side of the ledger,
if you want. The other one is interest rates. We
had Rabobank on last week saying a couple more OCR rises.
(01:33):
We might get to 3.25%. But then you're telling me
what everyone knows. Anyhow, the global bond markets are starting
to get a bit twitchy.
Speaker 2 (01:43):
Yes. Now, that is a very interesting issue. If you
said what's one of the most things that's cheered me up,
it's that. At the moment, I read the Wall Street
Journal and New York Times every day, and Mr. Trump
is getting twitchy with the bond market, just like Mrs.
Truss did, and it's on the rise. The moment it
(02:06):
starts rising, it will flow onto all interest rates. So
in one way, it's a credit, it's a plus, but
in another way, it's hard on every business. At the moment, it's...
The bond market in the UK, in France, in Italy,
(02:26):
in Germany, it's all starting to react. And when I
say react, they are getting annoyed with the amount of
the debt and they want more interest to cope with
that more risk.
Speaker 1 (02:39):
Where do you reckon interest rates are going to settle here?
If we do have an OCR that peaks or plateaus
or settles, get my terminology right at 3.25%. Where does
that leave, for instance, floating mortgage rates for farmers and businesses?
Speaker 2 (02:56):
Yeah, that's a good question. I would guess 5.75%. I
don't think you'll borrow much below that.
Speaker 1 (03:03):
Mind you, Peter, historically, and we're both getting longer in
the tooth, especially you, I mean, 5.75%. I used to
have a mantra when I started out in the radio
business 30-odd years ago, If it was below 7%, I'd fix.
Speaker 2 (03:19):
Yes, no, you're quite right. That comment is quite correct.
But our expenses, when you're talking back when you were
a young boy before the war, the farm working expenses
to gross farm income ratio was 45%. Now you're at 65%, 67%
of the gross farm income. So you're in a different era.
Speaker 1 (03:41):
Peter, one thing I do remember from my farming days,
and that's a few years ago now, was at the
behest of my accountant, using the Farm Income Equalisation Scheme.
Do farmers still use that?
Speaker 2 (03:55):
Yes, they do. It's being used by a hardcore farmer.
It's a damn good scheme. You get 3% while the
money's in there, so it's not complete loss. The IRD
look after it. There's no risk with it. With these volatility,
the minute you've got volatility, you should be looking at
(04:15):
the interpupilisation scheme more than you are now.
Speaker 1 (04:19):
Well, it's a good way to even out your income
and therefore your tax payments. You carry on to suggest,
and this is such a pleasure chatting to you today,
I can actually read what you want to talk about.
It's a wonderful change, Peter. The present... Did you ever
think of becoming a doctor with handwriting like that?
Speaker 2 (04:35):
Yeah, get on with it. All right, OK.
Speaker 1 (04:37):
The present coalition you're suggesting is the wrong structure for
digging us out of a financial hole. What is the
right structure?
Speaker 2 (04:46):
The right structure is really a party that's got a
stronger mandate. I mean... The Labour Party in the UK
had a stronger mandate and it still didn't work. The
coalition in France, I mean, France is an absolute financial shambles.
They've got another election coming up in about six months
(05:08):
and they're still letting their debt rise and rise and rise.
Their coalition can't agree on anything. A coalition is not
the right structure to dig yourself out of a hole.
You need more strength, more mandate.
Speaker 1 (05:23):
Hey, Peter, be careful what you wish for. The last
time we had a government that wasn't dependent on a coalition,
in fact, could rule alone and do what it wanted. Jacinda,
2020 to 23 with Chippy at the end, that didn't
end that well.
Speaker 2 (05:40):
No, I agree. And Mr. Trump's another good example. But
I wouldn't change what I've said. A coalition in France
isn't working. A coalition here is not working. None of
these coalitions reduce debt. Hardly any of these politicians reduce debt.
They just haven't got the stomach for it.
Speaker 1 (06:01):
What is that, the old saying I learned many, many
years ago? The best form of an investment is to
repay debt.
Speaker 2 (06:08):
Yes.
Speaker 1 (06:09):
Well, we're both sounding like boring accountants, Peter.
Speaker 2 (06:12):
Yeah, okay. I think a good accountant can still add value.
Maybe you're past it, but a good accountant can still
add value.
Speaker 1 (06:23):
I always appreciate you adding value to my show. Thanks
for your time, Peter Alexander.
Speaker 2 (06:27):
Righto, Jamie. Okay.
He is a Christchurch-based farm accountant and raconteur. He has
generously given some of his time today on the country
to inform and entertain. Peter, normally you send me a scribbled,
handwritten message, which I can barely read. Your secretary has
typed out some key topics to talk about. I'll be
forever thankful for that. I want to talk about number one,
(00:22):
and this follows on from the Federated Farmers' latest confidence survey.
On farm in New Zealand at the moment, expenses are
rising to meet income, which is a shame.
Speaker 2 (00:34):
Yes, before you go any further, Jamie, at your age,
I would have thought you could read my writing, but
we won't go into that. Yes, you're quite right. At
the moment, I'm striking every day, expenses rising to meet income.
We've had a good year and we needed it, sheep
and beef, but this year is not going to be
(00:55):
as good. The income will still look sound, but the
expenses keep rising. The old story, the expenses keep going
up and up and up. And it's very frustrating, but
we've got to deal with it.
Speaker 1 (01:10):
Well, what's happening in the Middle East is helping nobody.
That's a war that's going to get worse, I think,
before it gets better. Obviously, there's fuel and fertilizer. They're
really key things on a farmer's cost side of the ledger,
if you want. The other one is interest rates. We
had Rabobank on last week saying a couple more OCR rises.
(01:33):
We might get to 3.25%. But then you're telling me
what everyone knows. Anyhow, the global bond markets are starting
to get a bit twitchy.
Speaker 2 (01:43):
Yes. Now, that is a very interesting issue. If you
said what's one of the most things that's cheered me up,
it's that. At the moment, I read the Wall Street
Journal and New York Times every day, and Mr. Trump
is getting twitchy with the bond market, just like Mrs.
Truss did, and it's on the rise. The moment it
(02:06):
starts rising, it will flow onto all interest rates. So
in one way, it's a credit, it's a plus, but
in another way, it's hard on every business. At the moment, it's...
The bond market in the UK, in France, in Italy,
(02:26):
in Germany, it's all starting to react. And when I
say react, they are getting annoyed with the amount of
the debt and they want more interest to cope with
that more risk.
Speaker 1 (02:39):
Where do you reckon interest rates are going to settle here?
If we do have an OCR that peaks or plateaus
or settles, get my terminology right at 3.25%. Where does
that leave, for instance, floating mortgage rates for farmers and businesses?
Speaker 2 (02:56):
Yeah, that's a good question. I would guess 5.75%. I
don't think you'll borrow much below that.
Speaker 1 (03:03):
Mind you, Peter, historically, and we're both getting longer in
the tooth, especially you, I mean, 5.75%. I used to
have a mantra when I started out in the radio
business 30-odd years ago, If it was below 7%, I'd fix.
Speaker 2 (03:19):
Yes, no, you're quite right. That comment is quite correct.
But our expenses, when you're talking back when you were
a young boy before the war, the farm working expenses
to gross farm income ratio was 45%. Now you're at 65%, 67%
of the gross farm income. So you're in a different era.
Speaker 1 (03:41):
Peter, one thing I do remember from my farming days,
and that's a few years ago now, was at the
behest of my accountant, using the Farm Income Equalisation Scheme.
Do farmers still use that?
Speaker 2 (03:55):
Yes, they do. It's being used by a hardcore farmer.
It's a damn good scheme. You get 3% while the
money's in there, so it's not complete loss. The IRD
look after it. There's no risk with it. With these volatility,
the minute you've got volatility, you should be looking at
(04:15):
the interpupilisation scheme more than you are now.
Speaker 1 (04:19):
Well, it's a good way to even out your income
and therefore your tax payments. You carry on to suggest,
and this is such a pleasure chatting to you today,
I can actually read what you want to talk about.
It's a wonderful change, Peter. The present... Did you ever
think of becoming a doctor with handwriting like that?
Speaker 2 (04:35):
Yeah, get on with it. All right, OK.
Speaker 1 (04:37):
The present coalition you're suggesting is the wrong structure for
digging us out of a financial hole. What is the
right structure?
Speaker 2 (04:46):
The right structure is really a party that's got a
stronger mandate. I mean... The Labour Party in the UK
had a stronger mandate and it still didn't work. The
coalition in France, I mean, France is an absolute financial shambles.
They've got another election coming up in about six months
(05:08):
and they're still letting their debt rise and rise and rise.
Their coalition can't agree on anything. A coalition is not
the right structure to dig yourself out of a hole.
You need more strength, more mandate.
Speaker 1 (05:23):
Hey, Peter, be careful what you wish for. The last
time we had a government that wasn't dependent on a coalition,
in fact, could rule alone and do what it wanted. Jacinda,
2020 to 23 with Chippy at the end, that didn't
end that well.
Speaker 2 (05:40):
No, I agree. And Mr. Trump's another good example. But
I wouldn't change what I've said. A coalition in France
isn't working. A coalition here is not working. None of
these coalitions reduce debt. Hardly any of these politicians reduce debt.
They just haven't got the stomach for it.
Speaker 1 (06:01):
What is that, the old saying I learned many, many
years ago? The best form of an investment is to
repay debt.
Speaker 2 (06:08):
Yes.
Speaker 1 (06:09):
Well, we're both sounding like boring accountants, Peter.
Speaker 2 (06:12):
Yeah, okay. I think a good accountant can still add value.
Maybe you're past it, but a good accountant can still
add value.
Speaker 1 (06:23):
I always appreciate you adding value to my show. Thanks
for your time, Peter Alexander.
Speaker 2 (06:27):
Righto, Jamie. Okay.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
The Bobby Bones Show
Listen to 'The Bobby Bones Show' by downloading the daily full replay.