Section 215 Emissions Pricing Report Shows Progress

17 January 2023

A section 215 report, released by the Government shortly before Christmas, outlines several changes to the proposed emissions pricing system that give greater certainty for farmers, and better recognises on-farm sequestration.


According to Beef + Lamb New Zealand (B+LNZ), “The Section 215 agricultural emissions pricing report and accompanying commentary released by the Government today is a step forward, but there is still significant work to be done on critical details before sheep and beef farmers can feel confident in the final agricultural emissions pricing system.”


It confirms that the Government has agreed to a farm-level split gas levy rather than agriculture entering the NZ Emissions Trading Scheme (ETS).


Then Prime Minister, Jacinda Ardern said, “The most important thing is getting an emission reduction system set up that lasts. We are working hard alongside the agriculture sector to strike the balance between building good levels of sector buy in, while also ensuring the system is robust and meets our emissions reductions goals. With or without the Government’s proposals the world is changing and New Zealand needs to be at the front of the queue to stay competitive in a market that is increasingly demanding sustainably produced products.”


B+LNZ chief executive Sam McIvor says the report is a significant improvement on what the Government proposed in October and follows the He Waka Eke Noa partners’ consultation submission (see the earlier article on Climate Change in the Beef & Lamb February 2022 newsletter which discusses He Waka Eke Noa) and ongoing work to address a range of issues. “The Government has committed to designing a system that is practical to implement while ensuring that a viable and productive agricultural sector continues – we’ll hold them to account on that.”, says Sam McIvor and adds, “In this regard the Government has committed that methane and nitrous oxide prices should be as low as possible and be fixed for a five-year period to provide certainty. Given that New Zealand is the first country in the world to price agricultural emissions, it’s essential a cautious approach is taken and that we ensure what farmers are asked to do is fair and equitable, doesn’t threaten farm viability or result in emissions leakage.”


The sector will be given greater input into pricing decisions and widen the criteria of factors to be considered to include social, cultural and economic impacts. Agriculture Minister Damien O’Connor has said, however, that oversight of this levy setting system will rest with the Climate Change Commission, but that they are establishing a board with representatives from the agriculture sector and Māori to provide advice and act as an avenue for sector input. B+LNZ disagrees with the proposal that the Climate Change Commission advice should have priority: “The Government has recognised the disproportionate impact on sheep beef and deer farmers of its earlier proposal and committed to ensure that the impacts are equitable across sectors – we’re working with them on potential provisions to ensure sheep and beef farmers do not face an unfair burden of emissions management. The viability of sheep and beef farming cannot be threatened through this pricing scheme.”


Sequestration remains a key area of focus for B+LNZ. It believes that, though the report commits in principle, to recognising all categories of sequestration and transitioning to the ETS, there is more clarity required on this.


B+LNZ’s message is consistent on this – if farmers are to pay for their emissions, they must be recognised for their sequestration at a fair value and it needs to be from 2025.


Sam McIvor also notes B+LNZ is heartened that the Government has acknowledged and committed to act on two issues that B+LNZ has long advocated for. 


The first is the consideration of different ways to track warming impacts, such as global warming potential, on the related issue of emissions reduction targets.


The second is noting the impact of offsetting rules within the ETS on sheep and beef farming and rural communities, and the admission of the need for urgent efforts. McIvor asserts that “We won’t stop pushing for them to turn concern into action.”


McIvor says the Government has listened to feedback to date. “I want to acknowledge the willingness of Ministers and officials to make changes, and their commitment to work with He Waka Eke Noa partners including B+LNZ to find the right solutions. We now need to nail down the detail to ensure equity, fairness and a viable pathway for our sheep and beef farmers.”


Final decisions on agricultural emissions pricing will be made by Cabinet in early 2023 with the aim to introduce legislation by the middle of the year.

The art of delegation

11 August 2025
How often do you get to the end of a working day and wonder where the time went? Perhaps you never got to item 3 (or even item 1!!) on your to-do list. How can you solve this problem without working longer hours? The answer is very simple, but the art in the solution is where the gold is. The answer to free up time is to delegate more – either to existing team members, new people you recruit, or externally to outside contractors. However, if delegation were that easy, everyone would be doing it now, right? So, what is the art of delegation? We say art, because delegation is not an exact science; different approaches are needed depending on who the ‘delegate’ is. Time and effort are required to effectively pass on tasks to others. Often, the time the delegator needs to put in initially is greater than if they did the work themselves – that’s why so many people don’t delegate. The view that ‘it’s quicker for you to do it yourself’ holds you trapped and unable to be more productive and effective yourself. It also stops others from developing better ways to do things than you already know, i.e. if you teach them your way, then they can master that AND add their own value – two minds being better than one. Here are some essential principles to apply to help you to delegate (as opposed to abdicate!): Delegation Assess the task, issue to the right person and support - helps build trust and respect Be specific and crystal clear for greater communication Request they repeat back instructions, so you know you were understood, enabling higher productivity Set a time frame and request clarification that the task has been achieved, ensuring jobs are completed on time and are profitable Both parties to review - opens the door for future work Abdication Issue tasks to anyone and forget about it - shows distrust and a lack of respect Giving unclear and little information results in poor communication Don’t ask if you were understood - results in low productivity Don’t set a time frame – it can mean jobs are delayed and over budget Different expectations can result in disgruntled clients No review results in no future work Delegation is a skill to be learned; applying these principles consistently will ensure long-term success. “No person will make a great business who wants to do it all himself or get all the credit” – Andrew Carnagie Action list: Which tasks am I currently doing that I could delegate to others? What can I do with the time I free up? Who are the best people for me to delegate these to? (Make sure they want to do these as part of their career development). What is the best way to document what is expected and how it should be done? What support and review process is needed to ensure success?

Work vehicles? Stay on top of tax with logbooks

11 August 2025
Logbooks are useful records of business expenses relating to work vehicles and this is important when calculating what tax deductions you can claim. Depending on your business entity type, different tax rules apply when you use motor vehicles to earn income, and you might use a logbook to track expenses in different ways. Sole traders and partnerships can claim income tax deductions for motor vehicle expenses if the vehicle is used to help earn income for the business. If you don’t use the vehicle exclusively for business, you can’t claim 100% of vehicle expenses. You need to work out the business use of the motor vehicle to calculate what deduction you can claim. You can do this either by using a logbook to track actual costs or using a logbook over a test period to establish the average business usage. Companies are a bit different. Where company vehicles are used partly to earn income and partly for private use, vehicle costs associated with private use are liable for FBT. Companies can use logbooks to keep track of work-related costs and show either that the vehicles are work-related vehicles which don’t attract FBT where used for work purposes only, or that FBT is accounted for correctly where there is some private use of other vehicles. The logbook becomes a record of work-related use and of private use subject to FBT. Where a company restricts private use of the vehicle, a logbook is used as evidence that employees have complied with the restriction. Whatever type of business structure you have, we can advise you on keeping good records and understanding what you can claim.

Changes to KiwiSaver: How to get your business ready

11 August 2025
Major changes to KiwiSaver were announced in Budget 2025. The KiwiSaver voluntary savings scheme is aimed at helping New Zealand workers save for retirement or buy a first house. But with the rising cost of living, action was needed to make KiwiSaver fit for purpose and more fiscally sustainable as a savings scheme. How will these changes affect your employees and your small business? Let’s take a look at the details of these KiwiSaver changes. Changes affecting your employees First off, let’s outline how the initial changes announced in Budget 2025 will affect your employees and other Kiwi workers: Since 1 July 2025: Younger workers will qualify for government contributions: People aged 16 and 17 will qualify for government contributions, so long as they meet other eligibility requirements. Prior to 1 July 2025, members must be 18 or older to qualify. Government contributions to halve: The government KiwiSaver contribution will halve, reducing the maximum government contribution from $521.43 to $260.72 each year. High earners to lose government contributions: People who earn more than $180,000 of taxable income in a year will no longer qualify for government contributions. No change to 2025 government contributions: There’ll be no change to government contributions for the year ending 30 June 2025. These will be paid in July and August at the current government contribution rate. Changes affecting your small business Next, let’s lay out the KiwiSaver changes that will directly affect your business: From 1 April 2026: Employer contributions will rise to 3.5%: From April 2026, the default KiwiSaver contribution rates for both employers and employees will rise to 3.5% – up from 3%. Employees can choose to remain contributing at 3%: Employees who are members of the KiwiSaver scheme will be able keep their contributions at the current rate. They can apply for a temporary rate reduction from 1 February 2026, if they want to continue contributing at 3% from 1 April 2026. Employers can match the rate reduction: As an employer, you’ll be able to match your employee’s temporary rate reduction. Once your employee moves to a higher contribution rate, you’ll need to increase your employer contributions to the default 3.5% rate. Inland Revenue will notify you of this change. Younger workers will qualify for KiwiSaver contributions: People aged 16 and 17 will qualify for employer contributions. If they contribute to KiwiSaver from their wages, you will need to start making employer contributions. From 1 April 2028, the default contribution rates for employers and employees will rise again to 4% (up from 3.5%). Getting ready for the KiwiSaver changes These amendments to KiwiSaver could have a significant impact for your small business. Increased employer contributions will increase your payroll costs and stretch your cashflow, as will making contributions for younger workers in the 16 to 17-year-old age bracket. You'll also need to update your payroll software and processes, to ensure you’re making the correct contributions for the right people, at the right rates. 
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