Winston Peters with his ‘no’ sign, used repeatedly at a press conference when facing questions about a $100,000 donation from expatriate billionaire Owen Glenn in February 2008.
Winston Peters with his ‘no’ sign, used repeatedly at a press conference when facing questions about a $100,000 donation from expatriate billionaire Owen Glenn in February 2008.
We are all over it, aren’t we, this election that won’t quit. But is it also bad for business? Kirk Hope of BusinessNZ asks whether a longer cycle between voting would be better for all of us.
The last time New Zealand had a full debate about the pros and cons of a three-year parliamentary term was in 1990, and at that time, 60.7% of voters voted for a three-year term, and 30.7% for a four-year term.
That referendum was one of the recommendations of the 1986 Report of the Royal Commission on the Electoral System, which also of course led to MMP.
However, it is interesting to see in the same report the Royal Commission looked at 39 broadly democratic countries and found that, at that time, 19 favoured a four-year term, 17 a five-year term, and only Australia, Sweden and New Zealand had a three year term. Hence the recommendation for a referendum.
As post-election negotiations continue and people consider the political landscape in 2017, it does feel like another round of discussions about the length of our parliamentary term would be worthwhile.
Often when I speak with Kiwi business leaders they tell me they think our three-year parliamentary term is too short, and a longer election cycle would bring greater business confidence and stability. Since 1999, every election year has seen business confidence drop and uncertainty creep in just before an election, according to research from the New Zealand Institute for Economic Research. In real terms that means less business is being done, with households and businesses making fewer sales, orders and investments.
And this year is no exception, with the latest NZIER quarterly survey of business opinion finding confidence fell in the September quarter, with a net seven percent of businesses expecting improvement in economic conditions. Last month’s ANZ Business Outlook also found a net zero per cent of businesses are optimistic about the year ahead, that is the lowest level since September 2015.
These jitters are often temporary, but nonetheless, I think the business sector would welcome debate about the current three-year parliamentary term because it’s possible a four-year cycle could improve New Zealand’s long-term economic outlook, and it would certainly reduce election costs.
Across the ditch, the Australian Institute of Company Directors is “very supportive” of longer election cycles, arguing that current political discourse is weighed down with too many elections, bringing distractions and short-term thinking.
“We think the essence of good governance is supporting the long-term view. And a three-year term, which is usually two-and-a-half, hardly gives you that,” chairwoman Elizabeth Proust says. I think many Kiwi businesses would agree with her point. It seems like every election year the politicking kicks-off earlier in the cycle when businesses need long-term thinking and certainty for their investment and innovation decisions.
Proust also says it would bring the benefit of “people thinking about infrastructure, energy policy in a way which took them beyond polls and opinion. I think that if we can get to a four-year term, hopefully we can get governments to focus on planning in the national interest.” She rejects the argument that extended terms bring the risk of more damage from bad parliaments or governments, contending: “On that basis, we should give them only one year and see how they go.”
Quite.
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Kirk Hope is chief executive of BusinessNZ, an advocacy body for businesses.
The Spinoff’s business content is brought to you by our friends at Kiwibank. Kiwibank backs small to medium businesses, social enterprises and Kiwis who innovate to make good things happen.
It’s only been going since June, so how did startup Sharesies capture thousands of customers and millions of their hard-earned money? Rebecca Stevenson caught up with Sharesies founder Sonya Williams to find out how they did it.
Got a fiver? Want to make it a tenner? Up until earlier this year if you wanted to invest some loose change your easiest option was to buy a scratchie; but then along came Sharesies, an online investment tool that lets Kiwis take a slice of diversified funds without the need to make a big investment. For a set cost of $30 per year, minus the investments, you can get a spread of shares without stock picking and reading the tea leaves.
There is a crew behind it with seven founders, three of which – Sonya Williams, Brooke Anderson and Leighton Roberts – collectively, and individually, have become media darlings since hitting the market in June with a beta product. The response from the public has been equal to the hype, with the company boasting 7,500 people now actively using the platform to invest in shares.
Why is Sharesies so popular? Simply because it gives small amounts of money easy online access to the share funds, where in the past you would have needed larger amounts of cash to swim in this pool of investors. “Sharesies is just so fucking easy,” an investor says. “I’ve got an automatic payment that throws $100 in each week on pay day and then I get to invest it… It’s also addictive. I get hyped every day to check my portfolio. It’s emotional when you see you’ve made an extra 20 cents overnight.”
And, importantly for this socially conscious investor, “it makes ethical investing really straightforward too”, after Sharesies added early this month access to The Pathfinder Global Responsibility Fund and the Pathfinder Global Water Fund, which puts cash into water treatment, pipe and pump manufacturing and specialist engineering firms.
One criticism of the product has been that you can only invest by making payments from your bank account, but those who want to chuck it on the credit card for points take note; Williams says Sharesies plans to add new ways to top up the online wallet before the end of 2017.
What were you doing this time last year?
Sonya Williams: I was working at Kiwibank, and Sharesies was really just an idea. There were seven of us who wanted to make investing more accessible for Kiwis, and thought we’d come up with a way of doing this. We noticed that for most Kiwis when they think of investing they think of homeownership, but for people starting out today the idea of investing in property is getting further out of reach. There was a gap to help people build their wealth without needing a heap of money to get started.
We started validating the idea by doing in-depth interviews to understand how people felt about money, and really start to understand the market. We learned that although there was a stigma about the types of people who invest, being an investor was an aspirational thing — if only there was an easy way to get started. We’d heard about the accelerator programme, and decided to enter as a chance for us to take the idea and turn it into a business. We applied to the program and pitched for our spot, and were stoked to be selected as one of the seven teams to be accepted.
THE PITCH. SCREENSHOT.
Why did you and your co-founders enter the accelerator process?
One of the biggest things for us was having a start date. We were all working in corporate jobs at the time and doing Sharesies on the side. We knew that to give Sharesies a good go it would need some full time focus. There were also things about running a new business that the accelerator provided great support on. For example, startup businesses often need to take on capital at the start, to help them scale. A big part of the programme is helping you become ‘investment ready’. It was great to learn about this process through the accelerator programme.
What were your goals as a business for the first 12 months of operation?
At the start it was all about creating the product and making sure it met the needs of our market. Although you do your research, there are always things you can’t plan for, and you’ll only know whether or not people will actually use your product by having it out there. Now, it is around developing the Sharesies product futher and starting to scale within NZ. We want all Kiwis to know they can have access to investing.
You have a lot of young investors, but what is the age of Sharesies oldest investor? What’s your largest amount invested?
We launched to a closed group in June 2017 and now have over 7,500 active investors on the platform, who have invested over $3.5 million via Sharesies. Our investors range from 18-88 and 80% are under the age of 40. We really encourage people to make investing a habit by investing every payday, so this is how most of our customer invest. Our highest one-off investment has been $68,000.
You have a number of founders. Have you ever disagreed on decisions or goals for Sharesies? How do you share workload and define your roles?
So far there hasn’t been any disagreement on goals for Sharesies. We’re all aligned on where we’re wanting to go and why we’re doing it— which is really important. We’re all from different professional backgrounds, so that makes it pretty clear who does what. But as with all startups, there’s always a bit of everyone just doing what needs to be done. If there is a tough decision to make and we have differing points of view, we usually talk it out and set a date to make the decision. Ultimately the lead for that area has the final call.
You’ve been a bit of a hit so far. Have there been any downsides to having a high profile right off the bat?
I wouldn’t say there has been any downside. People have been really supportive. It has been great to be getting feedback from our customers early on, which really helps us shape what’s next for Sharesies. There was a slight hiccup when we were on TV1 news one Saturday night. It was great exposure for us, but at the same time the online service we rely on to do the identity checks of our customers was down for maintenance. This meant new customers couldn’t complete the sign-up process. Such a Murphy’s Law moment! We were able to jump online and help with customer support. Our new customers were super understanding, so it worked out OK in the end.
IS THIS NO STRESS INVESTING?
Most businesses try and identify potential issues that may pop up. What might be potential problems for Sharesies? How would you mitigate them?
We’re an investment product, so we have a dependence on what is happening with the markets. So far the markets have been climbing, but there is always talk of when the next market crash will happen. We try to mitigate this through educating our customers about how investing works. When you invest through Sharesies it isn’t a get rich quick scheme, it is about the long run. We help people understand how long they want to invest for and how this impacts the things they chose to invest in.
We also do this by making sure we offer a range of diverse investments on the platform. People can invest across different risk levels and industries. The investments we offer are funds (rather than individual companies) so you get diversity that way too, for example, the ‘NZ Top 50’ covers the top 50 companies in New Zealand.
What advice would you give to startups considering taking part in an accelerator?
There is so much you can get out of an accelerator programme, and people join at all different business stages. If someone was looking there are a few things I would suggest (applications are currently open for this year’s accelerator).
Be clear about what you’re hoping to get out of the accelerator – what do you need to get your specific business off the ground? Is it being connected to people within the relevant industry? Is it help and support with building a business and going through capital raising? If you can focus on what you need to you can decide if it is the right path for you, and you can make the most of your time there. It is only three months and it goes so fast.
Think you’ve got a ripper of an idea? Then it’s prob going to get even better by going out there and validating it first. When you’re moving fast you’re having to make decisions on the fly – having the insights that you gather in the validation stage can help you make that easier down the track.
Find people who share your vision and will help you make this happen. Sharesies had a tight team of people who all resonated with the problem we were trying to solve. We came at it from different angles and had what we needed to get the business off the ground.
rebecca@thespinoff.co.nz @bex_stevenson
The Spinoff’s business content is brought to you by our friends at Kiwibank. Kiwibank backs small to medium businesses, social enterprises and Kiwis who innovate to make good things happen.
