Have there been any significant regulatory developments in New Zealand over the last 12 months?

• Mandatory Climate-Related Disclosures: The most significant development is the implementation of the Aotearoa New Zealand Climate Standards. The first reporting period for around 200 large, publicly-listed companies and financial institutions began on 1 January 2024. This has created a new, complex assurance and advisory field, requiring specialised skills in sustainability reporting and greenhouse gas emissions accounting.
• Changes to Property Tax Rules: The current government has enacted key changes impacting property investors, which directly affects client advisory and compliance work. This includes the phased reintroduction of interest deductibility for residential investment properties and the reduction of the bright-line test for taxing gains on property sales from ten years back to two years.
• Continued Focus on AML/CFT: While not new, the Department of Internal Affairs (DIA) has maintained stringent oversight of Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) compliance for accountants. Audits and reviews remain rigorous, forcing firms to continually invest in and update their compliance programmes and staff training.
• Repeal of the 'Ute Tax': The Clean Car Discount scheme was repealed in December 2023, removing the feebate system that influenced vehicle purchasing decisions for many businesses. This simplifies FBT and depreciation calculations for client vehicle fleets going forward.

How would you describe the health of the accounting industry in New Zealand in terms of customer demand, fee pressure, and staff recruitment and retention?

• Recruitment is always a challenge – particularly with less coming through via school and university into the profession.
• There are two types of accoutant coming through – those that are traditional, fit in the box, and those that are wanting more strategic involvement with clients. Firms who want to deliver strategic services must have a model that allows for development of these individuals, and that allows them to be constantly challenged and engaged.
• Recruitment is a challenge regionally – an example is that we have 1/3 of our accountants that work 100% remote because of a challenge to find appropriate talent locally.
• Compliance fees are a need, not a want, so regularly under review particularly given challenging economic conditions. Firms must ensure they are delivering value in these compliance areas.
• Demand is strong, particularly in services wider than just compliance.

Are there any services areas where demand has grown over the last 12 months?

• Strategic advisory
• Banking support, restructuring
• Business transformation
• Dynamic insights

Has there been any significant consolidation or merger activity in the accounting profession?

• Cant comment specifically, but definitely a trend of consolidation of smaller regional practices by larger firms

What are your expectations for the next 12 months – are there any potentially significant developments in the pipeline?

• AI/Automation/use of Robotisation to allow for lower cost structures, and increased capacity
• Further development of value add services/value added into Compliance
• Deepening skillsets to allow for wider delivery of strategic offerings