Straggle Muster 147 - 18/3/2005

The Life and Times of a Farm Accountant - Bruce McPherson, Malloch McLean

This being my final article for the Straggle Muster as I retire on 31 March this year, I feel it would be appropriate to cover some of the highlights in my 28 years in the accounting profession.

I arrived in Gore in 1984 to what in hindsight can only be described as very trying times. Days of the Rural Bank discounting meetings remain vivid in my memory and have shaped my thinking all through my accounting career. You may recall when people met with their financiers and through an arbitrary system were either discounted to give them a chance to stay on their land, not discounted because they didn't need it or not discounted because they had to go out the back door - certainly horrific for ourselves but more particularly for the farmers involved in those heady days of the 1980's.

The same decade GST was introduced, which resulted in farmers improving their paper work dramatically and was the beginning of the end of the Inland Revenue Department showing any practicality and logic when it came to tax laws for farmers. The loopholes in the initial GST laws cost the country millions and millions of dollars, remember the days that sheep were deemed to be second-hand. Farming partnerships could buy the sheep off the individual partners and claim back 1/9 of the market value of those sheep. The Government in their wisdom left this loophole open for three years until every farmer who was in a position to claim had done so and then closed the stable door after the horse had bolted. There was a debate about whether hay was new or used, whether you could have a second-hand dog or not and the big one, they said that land could be a second-hand good and once again there were land transactions between partnerships and Trusts throughout the land resulting in large sums of money being refunded to the farmers for no reason other than bureaucratic incompetence.

Just as the dust settled on these claims tax rates had been re-adjusted downwards to reflect the increased tax take from GST the Government of the day decided that all "rich" New Zealanders should pay a higher tax rate, they moved the top tax band to 39% resulting in yet another flurry of paper work for farmers to set up Trusts and companies to beat the high tax rate. We worked for long periods of time to set up these new structures so that people could maximise their entitlement to family support, student allowance, community services cards and to minimise their outgoings in the area of tax, child support payments, student loan repayments, ACC and use of money interest payments to Inland Revenue Department. A high percentage of these structures were set in place purely because our friends in Government felt that anyone earning over $60,000 a year was (a) rich and (b) should be penalised for it. I hope, but doubt that the bureaucrats have learned from this.

But on a more positive note I have enjoyed my time contributing to the Farmingshow for the last eleven years, I always thought it would be a challenge to come up with a new topic every two weeks but it turned out that there was always something to discuss. Accounting is a little bit like economics the topics remain the same, but the answers change. I laugh when young people say these days "I want to become an accountant because I enjoy dealing with figures". In light of the fact that the topics we have discussed over the last few years include employment law, insurance and ACC, International Financial Recording Standards, dealing with droughts, forestry, Government legislation to name but a few, dealing with the figures makes up a very small part of the job.

Probably the thing I've gained the most from writing these articles and doing the radio spot was the knowledge I gained whilst researching the subject and keeping up to date with current happenings in the accounting world. It has been invaluable and I thank the Farming Show for the opportunity.

All the best. Signing off.

Bruce McPherson
Farm Accountant

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