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Mainfreight's Plested talks taxes, climate change and succession

Thursday 1st August 2019

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Mainfreight chairman Bruce Plested spoke out about multi-nationals who don’t pay tax in New Zealand and addressed climate change at the company’s annual meeting earlier this week. 

In his opening remarks, the Mainfreight founder ran through the usual profit and revenue figures, but also drew attention to the $54 million in tax the company will pay for the year ended March 31, a $9 million increase on the previous year. 

Plested noted that the company would pay that money for “health, education and roading” and warned many would agree with French economist Thomas Piketty that multinationals who don’t pay tax in many jurisdictions, and those who register themselves and interests in tax havens, encourage social unrest. A film based on Piketty's thesis is currently being screened at the New Zealand international film festival. 

“Individuals and companies, which are not paying a fair share of taxes, are enabling themselves to accumulate excessive wealth, and are not contributing to the welfare of their own countries,” he said. 

“There are billions of tax dollars not being put into the governments and as a result, we see less roading, less welfare, less hospitals,” Plested told BusinessDesk after the meeting. 

“I think we have to get the price of housing down and the way we do that is to open up more land,” Plested added. Looking bigger picture, he said he was attracted to Switzerland’s model whereby indirect taxes are localised, rather than going to central government. 

During his address, Plested said climate change is the most serious challenge the world is facing. 

“In some ways, we’re not doing much with climate change, while in some ways we’ve always been chasing the environment,” Plested said, pointing out that since 1998 Mainfreight had been encouraging its teams to bring recycling from home to work. 

The company makes compost from grass clippings and uses rainwater for irrigation, cleaning and flushing its toilets, he added. 

When BusinessDesk pointed out parts of its core business, such as air freight and trucking, are not particularly environmentally friendly, Plested said: “We have to wait for the invention of electric trucks, and then we will be into it. But, for example, we have nearly changed over completely to electric fork hoists.”

About 150 shareholders attended yesterday’s annual meeting in Auckland where Plested, who knew many shareholders by name, took questions from the floor. 

Many were messages of congratulations rather than actual questions, and it has become customary for shareholders to humble brag about when they first bought into the company. 

Today, the share price sits at $41.75, but many shareholders taking to their feet yesterday had bought in more than a decade ago within a $1-2 price range. 

Shareholder Jenny Miller questioned whether there was a succession plan. Plested is 77 years old and two other board members, Richard Prebble and Bryan Mogridge are over 70 years of age.

Plested responded: “I’m doing a 100 years, and so is Don.” 

Group managing director Don Braid added that management were becoming more capable than he and Plested, and that the company’s style of business, with decentralised profit and loss reporting, empowered individuals in the business to make the right decisions. 

“You should have comfort that [Mainfreight] won’t die just because Bruce and I get run over by a truck tomorrow.”

(BusinessDesk)

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