Investor Newsletter - March 2017

Welcome to our March 2017 General Finance quarterly newsletter. We appreciate your support. The purpose of this newsletter is to keep you informed about the company and various financial matters that may interest you.

Anti Money-Laundering Changes
Anyone dealing with financial organisations will know how much identification has to be provided. You have to prove your identity, (most often with photographic identification such as passport or drivers’ licence), and your residential address (with a utility bill). Depending on the nature of the transaction, you may also have to confirm where your funds came from. New legislation is being passed this year to put other organisations that receive and transfer funds (such as lawyers, real estate agents, accountants and car dealers) on the same footing as banking and finance entities. This is all due to the tightening up of illegal money being laundered. This is a major inconvenience to the vast majority of honest people, but it is the sign of the times. Suitable identification and proof of source of funds will be required more often in the future.

Rates Rises
Over the past decade we have seen numerous price decreases (or more features for the same price) on a number of items, including whiteware, brownware, electronic goods, overseas travel and lower prices for smaller items at places such as the Warehouse. One area that has not got more competitive over time, or may have become less efficient, is the local regional and city councils. Their rates bills just increase year on year. It has reached a point where for many low income or retired homeowners, it is now one of their major expenses. Over the years, due to council amalgamations and so called economies of scale, rates should in fact be going down, not up. Voters need to insist on lower rate increases and push much harder for efficiency gains. They are occurring in most other industries.

Non-residents Must Build
It is more difficult to borrow funds for construction than for the purchase of an existing dwelling. Lenders have become more conservative. However, we need to build more dwellings, particularly in Auckland. One obvious solution is to get non-residents, wishing to buy property in this country, is to allow them to only buy brand new dwellings, as is the case in Australia, Canada and Singapore. If non-residents wish to buy here, they should be the ones providing the scare construction finance and as a result they would not be competing with the local population in the second hand housing market.

Little Mention of a Capital Gains Tax
We are now in the election stage of the year. Interestingly, this time three years ago, a capital gains tax was being talked about - particularly by the Labour and Green parties. So far, this issue appears to have died. Another issue that was topical at the same time, was electricity prices and the creation of a central power purchasing authority. This unworkable plan seems to have totally died. It looks like one of the main elections issues will be housing and its associated issues.

Next Interest Payment
Our next quarterly interest payment will be made on Friday 31 March 2017. Direct credits will be processed that evening, with cheques (if applicable) and paperwork being forwarded during the week.

As this is our last newsletter for the 2016, we wish everyone a Merry Christmas and a happy New Year. We appreciated your support this year and look forward to your continued support in 2017.

If you have any questions about your investment, please do not hesitate to contact James Lockie on 09 526 7800 or by email to jlockie@general.co.nz.  Our website is www.general.co.nz.          

If you want to invest more funds, you can obtain an investment statement and application form from Computershare Investor Services, our securities registrar.  Their freephone number is 0800 500 602

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Your continued support is appreciated.