NZ Engine

Source: Radio New Zealand

Chef and barista Sam Wilson hopes the re-opening of his cafe in a rustic railway station flanked by Mt Ruapehu is a pointer to something good for a region suffering economic hardship.

He lives at nearby Kakahi, far from his old life in the city.

Now he’s fuelling hikers day-to-day and creating a meeting point for people in the Central Plateau.

“There’s been a great deal of loss in the region, with the Chateau closing and with a lot of the businesses closing in what was National Park,” Wilson said.

“The failure of the skifield and the timber mills closing, and then having us opening is something really positive.

“A lot of people have a lifelong association with the railway station and a deep fondness for that building, and that’s why it’s been so well received.”

Wilson’s Station Cafe is up and running after a full refurbishment.

Within the last week, the government has announced it will invest $10.8 million in tourism around the mountain to help the district.

The completion of Ruapehu’s cycle trail network is one of the council’s major economic development goals.

The latest funding is for two sections of the Mountains to Sea trail from the Tūroa Ski Area to Whanganui.

Once completed, both the Te Ara Mangawhero trail and Te Hangāruru trail, to the Last Spike, will be linked to the Mountains to Sea ride.

The historic station, which dates to an era when engineers first linked Auckland and Wellington by train, sits exposed at 800 metres above sea level.

Located beside the National Park park and ride, the cafe is well placed for more than 100,000 hikers taking on the Tongariro Crossing each year.

With the cycleway developments, you’d expect more lycra-clad riders coming in.

“The crossing season started about a week ago, and we’ve started getting tired and exhausted looking… people in the afternoon, looking for a slice of cake and a coffee.”

Wilson was running the Milk and Honey cafe at Victoria University until he shifted north in the Covid lockdown.

He wasn’t put off by the gloomy local economy, when he decided to make a go of it.

Wanting to create something of quality for locals, he’s hit something of a sweet spot.

“People from places like Taumarunui, Ohakune, Tūrangi, people come from Taupo,” he said.

It’s not unusual to see gumboots by the door, as busy farmers drop in, or families holidaying in the area sit on the sofas and around the tables.

Re-elected Ruapehu Mayor Weston Kirton ticks the Taumarunui box as a resident there. He’s also a staunch supporter of heritage buildings.

“We were going down to an old school theatre down at Raetihi and we thought we’d have dinner at the Station,” Kirton said.

“We were delighted. National Park, Waimarino was developed around the railway of course.

“It’s got a lot of history and as the skifields developed, it made it more attractive to go there.”

The bigger prize for Kirton and many people around the country is to see the decaying Chateau Tongariro restored to its former glory.

Kirton’s campaign to save the Chateau has taken another step forward.

Once the jewel in the crown, the district council submitted its petition calling for urgent government action earlier this month.

“We need a clear government pathway to resolve any hurdles, so investors can get on with the job,” Kirton said.

On the southern side of the mountain in nearby Ohakune, Bayleys real estate agent Jenny Dekker has seen all the highs and lows of the ski town.

Values had now fallen so far, there’s renewed interest from buyers, she said.

“Prices have dropped $100,000, so new people can come into the market,” Dekker said.

“I’m not selling rumpty old houses to first-home buyers – they’re beautiful and warm, and you’d be proud to own them. They’re great for the family.”

Dekker said there was a glimpse of increased activity among first-time buyers and downsizers, with people moving in from other regions.

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

Got questions? RNZ has launcheda new podcast, No Stupid Questions, with Susan Edmunds.

We’d love to hear more of your questions about money and the economy. You can send through written questions, like these ones, but even better, you can drop us a voice memo to our email questions@rnz.co.nz.

You can also sign up to RNZ’s new money newsletter, Money with Susan Edmunds.

I have recently started investing more seriously and have heard many positive things about the S&P500. However, from my research, I understand that if I invest directly into this fund, I will be liable for FIF tax once my portfolio exceeds $50,000 in value.

It is possible to invest in the S&P500 from a NZ domiciled fund within a PIE structure, and these are advertised as ‘taking care of the tax for you’ and keeping your tax rate to 28 percent or less depending on your earnings bracket.

My question is, isn’t the fund manager of the NZ domiciled fund still required to pay FIF tax, and as any cost is generally split over all the investors, and the combined value of the fund is way over $50k, isn’t FIF already triggered? So even if you had just started investing and had less than $50k invested in the S&P500 through the NZ domiciled fund, you would still proportionally have FIF tax deducted?

If this is correct, shouldn’t this be more transparent by the fund managers, as investors I know think they’re avoiding FIF altogether by investing in this type of PIE NZ domiciled fund and the funds note tax is deducted on your behalf, but there is no mention of FIF tax?

You are right that if you put more than $50,000 into certain types of foreign investments, you will be captured under the Foreign Investment Funds (FIF) regime. Under that level, you only pay tax on the income received.

New Zealand funds that invest in international shares such as the S&P500 index fund are subject to the regime without the $50,000 cap.

PIE fund are required to calculate their FIF tax using the fair dividend rate (FDR) method which means they work out what investors have to pay with a calculation of the investor’s prescribed investor tax rate on 5 percent of the average daily portfolio value.

If you are earning a higher income, you might find that the 28 percent cap on the PIR rate is a benefit.

Dean Anderson, founder of Kernel, said one of the reason he launched the shares and ETFs feature was to help navigate this.

“For some tax optimising investors, they could reduce their total tax costs by purchasing an offshore ETF or shares to the combined value of say $49,000, and then investments above that they start direct to a PIE structured fund.

“One thing investors need to be conscious of, is some broking platforms have a ‘money market’ fund for their wallet. This means that an investor may intend to purchase just under $50,000 in an investment, but then when those investments start to pay out dividends and they land in the money market fund it gets captured and counts towards their FIF threshold and they can be triggered over $50,000 and now have to calculate FIF tax on their entire portfolio.”

He said whether there was more tax to pay overall by investing offshore would depend on the investment.

“It is possible to have lower tax by buying offshore investments directly for the first $50,000. However, if the dividend yield was high then that may not be the case. Investors also need to consider the other costs of investing – including brokerage fees, foreign exchange fees…”

My mum and the rest of my family and I (two adults, two teens) are about to move to a new house with two units, and I’m looking for advice on the simplest way to run our bills banking-wise. We both bank with the same bank, which helps a little.

My husband and I will be solely responsible for the mortgage and our power is split by unit, but other than that we will be splitting 80/20 for rates, piped gas, broadband, insurances (house, contents, two cars), food box subscriptions, takeaways, and groceries. We will continue to share our main family meal each evening.

The two unpredictable values (per month) are groceries and gas costs. But I don’t want either us or mum to need to be adjusting the amount to put into a shared account each month. We need to pay for the subscription box by debit card, and would like to also be able to access the debit card-linked account for our streaming accounts.

Do we make the account we get paid into the bills account too? And get everything going out of that, with mum just paying a set amount per month into it, setting aside our regular spending money into a different account? But how do we budget for gas? Is there any predictable value we can put on this, allowing for peaks in winter?

I took your question to David Verry, at North Harbour Budgeting Service.

He said, for the regular expenses, a good way to work it out would be to use history to guestimate what you might each have to pay under your new structure.

“Take the last six – or 12, even better – months and work out what each expense cost and then work that out on a monthly basis for the mother’s contribution.

“Some expenses may also be set for the next six or 12 months – rates, insurances, broadband, possibly even the foodboxes – so these can be calculated with some accuracy. It’s the grocery costs that tend to move around a bit but averaging them out usually works out pretty well.

“Vehicles can be a bit tricky depending on who is paying for what – mother may be running her own vehicle – WOFs, regos and insurance can be calculated reasonably accurately. Petrol can be worked out by keeping a mileage log – I recall having to use a logbook when I was using the family vehicle and living at home. Repairs and maintenance are the biggest unknowns – I generally default to $400-$500 per year for this per vehicle.”

He said you would probably need to repeat the exercise regularly to ensure your budget was working once you were in your new place.

As for the account structure, he said it would need to be worked out so that it suited everyone without too much transferring going on.

Verry said he would generally recommend three accounts for households.

One would be a general or everyday account into which income was paid and from which weekly and fortnightly expenses were paid.

A monthly account would cover monthly bills, and you would transfer a set amount in each time you were paid to build up a buffer to cover these.

Then an annual account could be used to build a fund to cover yearly expenses.

“The general/everyday account then becomes the wash-up account. So, if a household has a budget surplus, what’s left over in this account can go into an interest-bearing savings account. It can act as an emergency fund too.

“Account structure is very family-dependent and what works best. For instance, in our household we put as much as we can on credit card but ensure we have sufficient to pay the balance owing off every month.”

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand