September 10, 2024 • 7 mins
Our weekly business chat is with our business guru.
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Speaker 1 (00:00):
From the sports field to the shearing shed. It's the
Country Sport Breakfast with Brian Kelly on gold Sport.
Speaker 2 (00:07):
You're trying to say, oh, yeah, is business is business time,
business time, It's time to get down to business. Catch
up with Managing director of Iron Duke Partners, Phil O'Reilly morning, Phil, Morning.
Speaker 1 (00:22):
Today.
Speaker 2 (00:22):
Being the eleventh of September twenty three years ago, of
course it was the attack on New York's World Trades
And where were you when all that happened.
Speaker 1 (00:29):
I was in Sydney, as I recall, and my wife
and I were watching it on TV and I was
I didn't go to work a day. I was transfixed.
I was horrified, and you realize it was going to
be one of the biggest days you've ever lived in.
You know, It's like those eventure a man landing on
the moon and Susy. It's one of those days you think,
this day will be a day when history changes, and
of course it is lad Distry changing. It's one of
(00:51):
the most historic events of the of the twentieth century,
so there was of this century and it will be
so a remarkable day and also it's bad ways.
Speaker 2 (01:01):
Yeah, I guess maybe you would have had the odd
meeting or two. Then the World Trade Center.
Speaker 1 (01:05):
I never went there from any thing, I visited it there,
you know that widows on the World thing, to look
at that and look the place. But of course you're
in New York. I knew grew well. I know while
I spent a lot of time in New York, so
I knew that part of town. One of the great
things they've done, actually, because for many of the listeners,
if you've been since, they've they've created a really amazing
memorial to it all. You know, the shadows of the
center of the trade centers of there now and you
(01:26):
go underground to a to an extraordinary display in the
museum which really celebrates the heroism of what went on
that day. And you know, the Americans see that drew
me very well. They've got the money to invest in
in those kinds of memorials, and so it's a really
so if you're visiting New York and so it's a
moving place to go. It's an incredible both inspires you
as much as it horrifies you about one on that day.
Speaker 2 (01:44):
Absolutely, all right, let's move on. There's a few things
to talk about.
Speaker 1 (01:47):
First.
Speaker 2 (01:47):
We often talk about compliance costs for small business there is,
and a new study has found out more about them.
I'm guessing it's it's not good news.
Speaker 1 (01:57):
Yeah, it's right be Oftentimes, when you hear about compliance costs,
and god knows, I've been talking about the years and
years and years, you'll get a whole bunch of stories
back from officials and minister saying, wow, you know they're
not that bad, or they're just cost of their business
and so on, and you have a chat without much
data and detail about what they actually mean and Burl. Actually,
the economics forecasters have done an interesting little study based
(02:18):
on based on a hypothetical business, a small business, a
trade basically, you know, a subby on building site, and
what would be the compliance costs for that particular business
starting up and they've given it a turnover and a
couple of employees and so on, and compliance costs a
huge and then multitudinous all people whom work safe a
sec KIWI, Saber insurance premiums and there because you've got
(02:39):
the massive costs the councilors levy on resource consents and
so on. And what striking thing about is not only
the size of them. They're about five to ten percent
of turnover according to Berl this particular little business, but
also who they come from. They come from everywhere, but
they come from all any number of government agencies, from
local government and so on, and none of it's coordinated.
And I think one of the extra it's the government
(03:00):
to listen to about studies like this is that story.
Not only are they huge, and some of them are
justified by the way not only are they big, but
they come from everywhere, and they don't take a view
from the business out And I think if government was
to look at reforming regulations round compliance costs, not only
focusing on how much they are, that's a good thing
to focus on, but also the fact that they're uncoordinated.
(03:21):
Businesses can't plan for them, they can't recover them, and
different agencies are doing them in different ways, and certainly
in many of the businesses and sectors i'm working with,
that the same story. So you know, five up to
ten percent a turnover is potentially quite a chunky of
profit and so no wonder you've got small businesses complaining
about them. And I think this BIRL report is a
really useful way of drawing attention to the reality of
(03:43):
how they hit a business and how government agencies really
need to respond as you're taking a business trick view
and saying what can we do to make sure that
we lessen cost of the business, even if many of
those compliance costs might have be in completely reasonable.
Speaker 2 (03:57):
Yeah, very very good points. So sad news really actually
yesterday about the Winston mill closing in the Central North Island.
Do you think the government should have stepped in to
save it?
Speaker 1 (04:08):
Yeah? And for disclosure, BK, I've been helping Wiston a
bit over the last few months, trying to make sure
that they get there or shod oneas and I think
the government should have done something big of them the hand
when they subsidized the skifield just just down the road.
So I don't know why they couldn't subsidize a you know,
a big part of the productive economy in the Central
North Island. And the news talks about three hundred and
twenty jobs going. It'll be more than that, of course,
right he will be fashed and stream jobs and downstream
(04:31):
jobs in forestry, we're processing, ports, railways, all sorts of
jobs are going to be impacted because these things sitting
in the big pulp and paper mills. These big industrials
offer and isolated parts of New Zealand because they're close
to forests, you know, a big employers in the business
and the country, and they also guarantee the employment of
(04:51):
many many others. So you know, I just know the
government's going to talk about energy markets and how important
are there's to have certainly form investments. And if you
look at you he Weaver account this morning, you see
the energy companies to go and gang busters right now
in New Zealand. What sort of market is it where
energy companies are successful and the market acts to close
down some of its biggest users. So I just can't
(05:12):
see that. I don't think that's a successful market. Frankly,
I'm a market guy, So you know, I really do
think if the government's going to allow us to occur,
they really do need to go back and say what
is happening in the energy market. That means that energy
companies are some of our highest profit makers in the
stock exchange. There they're just a you know, a monopoly providers,
just a provider of services effectively, and our productive companies
(05:34):
are struggling. That can't be right, And I think I
hope this is an illustration for them to a really
think about those market settings.
Speaker 2 (05:41):
And Shane Jones has come out and said it's not
just about the energy market as well.
Speaker 1 (05:45):
Oh yeah, well that's right now. There are some most
use other issues in terms of pulp prices and a
few other bits of pieces. But really there there are
some structural challenges I think for these big businesses in
New Zealand. We don't want to de industrialized New Zealand.
These are these are massive employers and they're very productive business,
the hotway players, and they have an impact on our exports.
So we just need to be thinking in the round
(06:05):
about to Shane James' point, about what we might do
to make them more successful because otherwise, well we won't
get foreign investment in a country for the next the
next generation for these these kinds of investments countries, and
so it's too hard.
Speaker 2 (06:17):
Yeah, absolutely, all right. We'll ex finish on some good news.
The dairy industry player Tattoo has announced a significant expansion,
and I guess that's good news for shareholders certainly.
Speaker 1 (06:28):
I don't know if many of your listeners will know
about Tatoo. It's a bassetting business. To know, I've never
actually been on their site. I'd love to go one day,
but it's it's in it's at a madam and if
he's drive down from workload into towerm RA Hamilton, you'll
often see it out there. And the kind of apocryphal
story is that all of the shareholders, all of the
all of the farmers can actually see the stack and
(06:49):
see the and see the chimney from the plant. So
it's a very tightly held cooperative. And this sounds most
most profitable on a on a on a on a
per per killer or a milkshol's based and really interesting.
They do all sorts of specialist products and they're a
great story. I think about how New Film's dairy industry
can be can be highly profitable in niches, not just
(07:10):
to milk powder and ingredients as Fonterra is doing, but
in some of these highly niche areas, and I really,
I really admire the business. They've stuck to the missing.
They've got a great strategy, they haven't tried to over
expand they've tried to focus on great returns to their
to their their milkers and so on. And I just think,
you know a wonderful example of New Zealand businesses going well.
So in the downtimes and we all get depressed about
(07:31):
the economy. You look at those businesses and say, g
there going well, and why can't more businesses be like them?
Speaker 2 (07:36):
Nice to finish on a good note, Phil, I have
a great week and we'll talk next week.
Speaker 1 (07:41):
Spe Hello.
Speaker 2 (07:42):
Riley Joining is managing director of Iron Duke Partners.
From the sports field to the shearing shed. It's the
Country Sport Breakfast with Brian Kelly on gold Sport.
Speaker 2 (00:07):
You're trying to say, oh, yeah, is business is business time,
business time, It's time to get down to business. Catch
up with Managing director of Iron Duke Partners, Phil O'Reilly morning, Phil, Morning.
Speaker 1 (00:22):
Today.
Speaker 2 (00:22):
Being the eleventh of September twenty three years ago, of
course it was the attack on New York's World Trades
And where were you when all that happened.
Speaker 1 (00:29):
I was in Sydney, as I recall, and my wife
and I were watching it on TV and I was
I didn't go to work a day. I was transfixed.
I was horrified, and you realize it was going to
be one of the biggest days you've ever lived in.
You know, It's like those eventure a man landing on
the moon and Susy. It's one of those days you think,
this day will be a day when history changes, and
of course it is lad Distry changing. It's one of
(00:51):
the most historic events of the of the twentieth century,
so there was of this century and it will be
so a remarkable day and also it's bad ways.
Speaker 2 (01:01):
Yeah, I guess maybe you would have had the odd
meeting or two. Then the World Trade Center.
Speaker 1 (01:05):
I never went there from any thing, I visited it there,
you know that widows on the World thing, to look
at that and look the place. But of course you're
in New York. I knew grew well. I know while
I spent a lot of time in New York, so
I knew that part of town. One of the great
things they've done, actually, because for many of the listeners,
if you've been since, they've they've created a really amazing
memorial to it all. You know, the shadows of the
center of the trade centers of there now and you
(01:26):
go underground to a to an extraordinary display in the
museum which really celebrates the heroism of what went on
that day. And you know, the Americans see that drew
me very well. They've got the money to invest in
in those kinds of memorials, and so it's a really
so if you're visiting New York and so it's a
moving place to go. It's an incredible both inspires you
as much as it horrifies you about one on that day.
Speaker 2 (01:44):
Absolutely, all right, let's move on. There's a few things
to talk about.
Speaker 1 (01:47):
First.
Speaker 2 (01:47):
We often talk about compliance costs for small business there is,
and a new study has found out more about them.
I'm guessing it's it's not good news.
Speaker 1 (01:57):
Yeah, it's right be Oftentimes, when you hear about compliance costs,
and god knows, I've been talking about the years and
years and years, you'll get a whole bunch of stories
back from officials and minister saying, wow, you know they're
not that bad, or they're just cost of their business
and so on, and you have a chat without much
data and detail about what they actually mean and Burl. Actually,
the economics forecasters have done an interesting little study based
(02:18):
on based on a hypothetical business, a small business, a
trade basically, you know, a subby on building site, and
what would be the compliance costs for that particular business
starting up and they've given it a turnover and a
couple of employees and so on, and compliance costs a
huge and then multitudinous all people whom work safe a
sec KIWI, Saber insurance premiums and there because you've got
(02:39):
the massive costs the councilors levy on resource consents and
so on. And what striking thing about is not only
the size of them. They're about five to ten percent
of turnover according to Berl this particular little business, but
also who they come from. They come from everywhere, but
they come from all any number of government agencies, from
local government and so on, and none of it's coordinated.
And I think one of the extra it's the government
(03:00):
to listen to about studies like this is that story.
Not only are they huge, and some of them are
justified by the way not only are they big, but
they come from everywhere, and they don't take a view
from the business out And I think if government was
to look at reforming regulations round compliance costs, not only
focusing on how much they are, that's a good thing
to focus on, but also the fact that they're uncoordinated.
(03:21):
Businesses can't plan for them, they can't recover them, and
different agencies are doing them in different ways, and certainly
in many of the businesses and sectors i'm working with,
that the same story. So you know, five up to
ten percent a turnover is potentially quite a chunky of
profit and so no wonder you've got small businesses complaining
about them. And I think this BIRL report is a
really useful way of drawing attention to the reality of
(03:43):
how they hit a business and how government agencies really
need to respond as you're taking a business trick view
and saying what can we do to make sure that
we lessen cost of the business, even if many of
those compliance costs might have be in completely reasonable.
Speaker 2 (03:57):
Yeah, very very good points. So sad news really actually
yesterday about the Winston mill closing in the Central North Island.
Do you think the government should have stepped in to
save it?
Speaker 1 (04:08):
Yeah? And for disclosure, BK, I've been helping Wiston a
bit over the last few months, trying to make sure
that they get there or shod oneas and I think
the government should have done something big of them the hand
when they subsidized the skifield just just down the road.
So I don't know why they couldn't subsidize a you know,
a big part of the productive economy in the Central
North Island. And the news talks about three hundred and
twenty jobs going. It'll be more than that, of course,
right he will be fashed and stream jobs and downstream
(04:31):
jobs in forestry, we're processing, ports, railways, all sorts of
jobs are going to be impacted because these things sitting
in the big pulp and paper mills. These big industrials
offer and isolated parts of New Zealand because they're close
to forests, you know, a big employers in the business
and the country, and they also guarantee the employment of
(04:51):
many many others. So you know, I just know the
government's going to talk about energy markets and how important
are there's to have certainly form investments. And if you
look at you he Weaver account this morning, you see
the energy companies to go and gang busters right now
in New Zealand. What sort of market is it where
energy companies are successful and the market acts to close
down some of its biggest users. So I just can't
(05:12):
see that. I don't think that's a successful market. Frankly,
I'm a market guy, So you know, I really do
think if the government's going to allow us to occur,
they really do need to go back and say what
is happening in the energy market. That means that energy
companies are some of our highest profit makers in the
stock exchange. There they're just a you know, a monopoly providers,
just a provider of services effectively, and our productive companies
(05:34):
are struggling. That can't be right, And I think I
hope this is an illustration for them to a really
think about those market settings.
Speaker 2 (05:41):
And Shane Jones has come out and said it's not
just about the energy market as well.
Speaker 1 (05:45):
Oh yeah, well that's right now. There are some most
use other issues in terms of pulp prices and a
few other bits of pieces. But really there there are
some structural challenges I think for these big businesses in
New Zealand. We don't want to de industrialized New Zealand.
These are these are massive employers and they're very productive business,
the hotway players, and they have an impact on our exports.
So we just need to be thinking in the round
(06:05):
about to Shane James' point, about what we might do
to make them more successful because otherwise, well we won't
get foreign investment in a country for the next the
next generation for these these kinds of investments countries, and
so it's too hard.
Speaker 2 (06:17):
Yeah, absolutely, all right. We'll ex finish on some good news.
The dairy industry player Tattoo has announced a significant expansion,
and I guess that's good news for shareholders certainly.
Speaker 1 (06:28):
I don't know if many of your listeners will know
about Tatoo. It's a bassetting business. To know, I've never
actually been on their site. I'd love to go one day,
but it's it's in it's at a madam and if
he's drive down from workload into towerm RA Hamilton, you'll
often see it out there. And the kind of apocryphal
story is that all of the shareholders, all of the
all of the farmers can actually see the stack and
(06:49):
see the and see the chimney from the plant. So
it's a very tightly held cooperative. And this sounds most
most profitable on a on a on a on a
per per killer or a milkshol's based and really interesting.
They do all sorts of specialist products and they're a
great story. I think about how New Film's dairy industry
can be can be highly profitable in niches, not just
(07:10):
to milk powder and ingredients as Fonterra is doing, but
in some of these highly niche areas, and I really,
I really admire the business. They've stuck to the missing.
They've got a great strategy, they haven't tried to over
expand they've tried to focus on great returns to their
to their their milkers and so on. And I just think,
you know a wonderful example of New Zealand businesses going well.
So in the downtimes and we all get depressed about
(07:31):
the economy. You look at those businesses and say, g
there going well, and why can't more businesses be like them?
Speaker 2 (07:36):
Nice to finish on a good note, Phil, I have
a great week and we'll talk next week.
Speaker 1 (07:41):
Spe Hello.
Speaker 2 (07:42):
Riley Joining is managing director of Iron Duke Partners.
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