Optimising Rural Land Use Could Add Tens Of Billions To New Zealand Economy, New Report Shows
Mixed revenue streams from diversifying farm systems key to driving value in future.
Innovation from finance sector vital in supporting land use transition.
ASB to launch research-backed land transition programme.
A new report from ASB and Lincoln University shows how smarter, more diverse land use could unlock billions in value for farmers and the wider economy, transforming the future of food and fibre by rethinking how we use our most valuable asset – our land.
The Future Use of Land and How to Fund It, a collaboration between ASB and Lincoln University's Centre of Excellence in Transformative Agribusiness, outlines how land use optimisation across the food and fibre sector could significantly boost the country's GDP, while also delivering social and environmental benefits.
Developed with input from leaders across the primary sector, including dairy, horticulture, sheep and beef, agritech, finance and government, the report explores four possible futures for New Zealand. Each scenario focusses on a single factor that will impact the food and fibre sector, for example greenhouse gas (GHG) emissions targets, or the government's goal to double export values, and pushes them to the extreme, demonstrating the pressing need for change.
The research sets out seven transformational pathways, such as diversifying farm systems to introduce mixed revenue streams, increasing horticultural production, and unlocking underutilised Māori land. It demonstrates how better land use, paired with innovative funding, can unlock sustainable value across rural New Zealand.
Researchers have also developed a land transition model, providing land-use insights on a regional level. Agri-consultants can use the model to help inform potential paths forward for farmers.
'The food and fibre sector has always been a key driver of our economy, yet many producers operate on slim margins. We speak with farmers every week who are deeply committed to their land and legacy but grapple with viability, as they're not getting the returns to operate sustainably into the future,' says ASB's General Manager Rural Banking, Aidan Gent.
'This research brings together the insights and tools to help landowners make informed decisions for future prosperity.'
Rural land use transformation needed at scale
Alan Renwick of Lincoln University says optimising land use by just 10% could add $10 billion in value to the economy if it's done in the right way, and this, or even more could be achieved in the next 5-7 years.
'The challenge facing the food and fibre sector is how to meet economic, environmental and social goals simultaneously. This requires practical, future-focused solutions – like integrating horticulture into traditional pastoral systems, developing on-farm processing to capture more value locally, or growing Māori agribusinesses around high-value niche products like manuka honey or native botanicals,' he says.
'We know these innovations are happening in pockets across Aotearoa – some stand out examples are included in our report as case studies – but we need to see this kind of transformation at scale.'
ASB launches New Zealand-first land use optimisation programme
Taking the research findings to the farm, ASB is launching Every Hectare Matters, a unique programme to support farmers to diversify and future-proof their businesses. This will begin with a small group of farmers, before being extended widely early next year.
The programme will pair participants with independent agri-consultants, who will use the new land transition model to help guide farmers through diversification and implementation scenarios, with wrap around support and tailored funding from ASB to bring their new business model to life.
ASB's response to land optimisation was inspired in part by ASB customer High Peak Station in Canterbury, a once-traditional sheep and beef farm that has evolved into a diversified, family-run operation spanning tourism, honey, hunting and livestock. While their journey hasn't been without challenges, the High Peak experience demonstrates what's possible when landowners take a multigenerational view of land use.
Aidan Gent says: 'This is about working alongside farmers ready to explore new opportunities – enabling change across generations, and helping farms stay in families. We're not just backing farmers with capital. We're backing them with insights, partnerships and the long-term thinking that makes meaningful transformation possible.'
ASB rural customers who would like to learn more about the land optimisation programme should contact their ASB Rural Manager.
ASB Bank
Helping you get one step ahead.
In 1847, ASB opened as the Auckland Savings Bank with the pledge: 'to serve the community; to grow and to help Kiwis grow'. And that is very much what ASB is about today.
ASB is a leading provider of integrated financial services in New Zealand including retail, business and rural banking, funds management and insurance.
ASB strives to consistently provide its customers with outstanding service and innovative financial solutions. They're dedicated to providing simple financial products that allow their customers to bank with them how and when they want.
We all have our own ways to measure progress, and our own stories about the things that matter to us. Whatever way you choose to measure progress, and whatever your goals, ASB is there to help you get one step ahead.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
NZ Herald
4 hours ago
- NZ Herald
I've got cancer so how should I invest my KiwiSaver?
True, you miss out on higher average returns. But you don't need the worry that the markets might be down at the very time you might have to withdraw. If anything, you should perhaps move all your money into a lowest-risk defensive fund. These funds, sometimes called cash funds, typically invest in bank term deposits and the like. Investors' balances usually just keep growing steadily. It's slow but smooth sailing. But if you want to be 'in the market' to some extent, your current mix is fair enough. And perhaps you could encourage other family members to take a bit of risk with their KiwiSaver choices. Note, though, that you may not be able to withdraw your KiwiSaver money when you want to. Inland Revenue says your health reason has to be either: 'An illness, injury or disability that permanently affects your ability to work or poses a risk of death. 'A life-shortening congenital condition that lowers your life expectancy below the age of eligibility for New Zealand Superannuation (currently 65).' Some people have been turned down because they don't quite fit the criteria. You can read about a woman in a similar situation to you on the Financial Services Complaints website, here: You might want to ask your provider about your eligibility before you count on it. I hope the time ahead of you goes as well as possible. Yes, but what about mortgages? Q: We hear much about the need to increase retirement savings, compulsory contributions to KiwiSaver etc – often from obviously self-interested providers. Have you seen any analysis about whether more people are retiring with mortgage debt who wouldn't have previously, or more debt than they would have had if they hadn't been contributing so much to savings? Is everybody truly better off at retirement? It's always presented as if it is a pure win. A: You raise an interesting point. It must be true that at least some contributions to KiwiSaver would otherwise have gone into reducing mortgages or other debt. While it sounds good to reach 65 with, say, $100,000 in KiwiSaver, nothing is gained if the person owes $100,000 more on their mortgage. Actually, that's not quite accurate. Because of the extra KiwiSaver input from the Government and employers, our person's KiwiSaver balance would probably be higher than the extra mortgage debt. But still, encouraging people – or forcing them by compulsion – to increase their KiwiSaver contributions would probably make people better off at retirement only if there are added KiwiSaver incentives. And they need to be genuine incentives, not increased employer contributions – as in this year's Budget – that Treasury assumes will largely come out of people's future pay rises. There doesn't seem to be any research specifically on this issue. NZIER says 2022 research shows 66% of people 65 and over own their homes mortgage-free, 13% have a mortgage and 20% rent. It adds: 'Less than half of Māori seniors and about one-quarter of Pacific seniors own their homes outright.' It also says: 'The number of people 65 and over with mortgage debt has grown from 118,000 in 2018 to 134,000 in 2022.' Associate professor Susan St John, of the University of Auckland's Pensions and Intergenerational Equity (PIE) research hub, doesn't link that trend to KiwiSaver. 'While I think that we see more people coming into retirement renting, or with a mortgage, I don't think there is evidence to attribute that to KiwiSaver contributions.' However, Treasury seems to disagree. It assumes about 80% of the 2025 Budget increase in employee contributions to KiwiSaver 'will come from a redirection of other forms of saving (eg, lower mortgage repayments or contributions to other investments)'. Either way, St John sums up the situation: 'Saving for retirement should not be viewed as an alternative to home ownership. It may mean that homes have to be more modest. It may mean governments have to increase attractiveness with subsidies rather than reduce them.' Hear, hear! Tax break for homeowners? Q: In a Q&A last week you pointed out that the mortgage interest rate was, say, 5.5% and that the return on savings is 'unlikely to be anywhere near 5.5%' – after tax and fees. True indeed. However, the equation is probably even worse. Mortgage interest is paid with tax-paid money – so if the person's top tax marginal rate is, say, 33%, the 5.5% mortgage rate is really 8.2%. You need to earn $8200 to have the $5500 after tax to pay the interest on $100,000. The mortgage interest rate is always way worse than it looks. Unfortunately, mortgage interest is a case of the miracle of compound interest – but in reverse. A: I think your point is that mortgage interest is not tax-deductible in New Zealand. A 2023 OECD report on tax relief for home ownership lists 17 countries as giving some kind of tax relief for homeowners' mortgage interest. They are Austria, Belgium, Chile, Colombia, Denmark, Estonia, Finland, Iceland, Italy, Luxembourg, Mexico, Netherlands, Portugal, Russia, Slovak Republic, Sweden and the United States. Should New Zealand do the same? Wikipedia points out: 'Most economists believe mortgage interest deduction is bad policy and is counterproductive. They note that it increases inequality, is an unnecessary market distortion, and contributes to housing unaffordability.' While the idea has strong appeal for homeowners, New Zealand doesn't really need to further encourage home ownership, which is already overrated as the only way to do well financially. Nor do we need more tax dollars flowing towards generally better-off people. So I'm afraid I'm not on that particular bandwagon! Your final comment is really a different issue. But you're right – interest on any debt compounds in the same way as interest on savings. It's not uncommon for people to take out, say, a $400,000 mortgage and end up paying more than twice that over the years. It's always a great move to cut any debt as fast as possible to reduce the compounding. Go with lowest fees Q: With so many index funds tracking the same index, such as the S&P500, why don't investors just invest with the fund offering the lowest fees? What other points of difference do funds offer? A: I reckon the lowest fee should be the main basis on which you choose a fund. However, if you're investing in KiwiSaver, there's also data on which providers offer better services and that could sway your decision somewhat. Here are the KiwiSaver providers that have told the Retirement Commission, in its regular services survey, that several or all of their funds are 'passively managed in their entirety and track an index': AMP, InvestNow, Kernel, Koura, Sharesies, SuperEasy and SuperLife, Also, NZ Funds' Balanced Fund is passive. Of these providers, NZ Funds got the highest score for services. Then came AMP, SuperLife, Koura, Kernel, Sharesies and, in a draw for the bottom slot were InvestNow and SuperEasy. But of course many of their services might not interest you. If there's a particular issue for you – perhaps ease of deposits or withdrawals – you can always ask providers if they offer it. Email or phone them, and if they don't reply within a few days, cross them off the 'good services' list. You can compare the different funds' fees using the Smart Investor tool on Or use Sorted's KiwiSaver Fund Finder to get an estimate of the total fees you will pay in each fund until you retire. What if you want to invest outside KiwiSaver? Many of the above providers also offer non-KiwiSaver funds. And Smart Investor also ranks fees on non-KiwiSaver managed funds. Another option is to use overseas-based funds. But that introduces complications with tax, settling estates and so on. It's much simpler to use a New Zealand-based fund that invests in overseas indexes. Many baskets? Q: Interesting stuff in last week's column about low fees and index funds. I note you do though also emphasise diversification. I recently switched from a major bank to a fund that allows me to split my KiwiSaver over several providers. So I can invest with Generate, Milford, Pathfinder and Nikko to name but four, and can do so in a mixture of conservative, balanced and growth funds. Thus my eggs go into many baskets. The trade-off is of course higher fees. Would it be better to go with a pure index fund that has low fees? I like Buffett's idea of 20% bonds and 80% index funds for people like me who are total amateurs. Which KiwiSaver provides this option? A: Several KiwiSaver providers enable you to invest in a range of funds run by other providers. And it's true that would give you further diversification. But that comes at the price of simplicity. And you won't necessarily get a higher total after-fees return, or less volatility. The providers you name tend to offer actively managed funds, as opposed to the passive index funds discussed above. And their fees are almost always higher, sometimes a lot higher. In any given year, some actively managed funds will perform better than the always middle-of-the-road passive funds, while some will do worse. But over time, it doesn't tend to be the same ones that outperform. Looking at what has done well so far doesn't guarantee their success will continue. Passive funds, with their lower fees, tend to be the best bet. Choose one that follows an index with many shares in it, such as the MSCI world share index, and you will have wonderful diversification. Rentals in retirement Q: I was surprised when you stated that most people invest in rental properties for the capital gain. We purchased a two-bedroom, cross-lease property in 1986 only to provide extra income on retirement. If we sold the property now for the Auckland Council capital valuation we would receive more income from a term deposit at 4% than we do from our rental, even before deducting expenses, rates, insurance, agent's fees, maintenance etc. A: At the risk of sounding mean, why don't you sell then? I don't really understand using rental property as a retirement investment – unless you are wealthy and enjoy being a landlord, or regard the property as your children's inheritance. But if you're having anything less than a financially comfortable retirement, it doesn't make sense to tie up all the money in a property when you could be gradually spending the proceeds from selling it, along with returns earned on that money in the meantime. On your first sentence, I've looked through recent columns and I don't think I've said that. I have, though, written that many new landlords find their expenses exceed their rental income, so they have to top up mortgage payments. Presumably they hope this imbalance will ease over time. But my guess is that many also hope to sell at a gain. Exempt employers Q: The Financial Markets Authority administers the register of exempt employers of KiwiSaver. The full list is available to view on the FMA website. A: You're right. You can see the list here: However, that list includes only employers who had qualifying employee superannuation schemes back in the early days of KiwiSaver, before November 2009, says the FMA. 'A scheme offered to employees by the employer had to have a minimum contribution rate of 4% of gross base salary of the member, which could be from either the member or the employer or a combination of both. 'Today only a new employee who joins the employment of an employer who holds exempt employer status and who is not already a KiwiSaver member would be covered by these provisions.' The FMA list does not include employers discussed in last week's Q&A, such as an employer that is not a New Zealand resident or does not carry on a business 'from a fixed establishment in NZ'. Mary Holm, ONZM, is a freelance journalist, a seminar presenter and a bestselling author on personal finance. She is a director of Financial Services Complaints Ltd (FSCL) and a former director of the Financial Markets Authority. Her opinions do not reflect the position of any organisation in which she holds office. Mary's advice is of a general nature, and she is not responsible for any loss that any reader may suffer from following it. Send questions to mary@ Letters should not exceed 200 words. We won't publish your name. Please provide a (preferably daytime) phone number. Unfortunately, Mary cannot answer all questions, correspond directly with readers, or give financial advice.
Newsroom
20 hours ago
- Newsroom
A bottle of whisky brings controversial payments platform in from the cold
It was the online payment platform that the banks disdained. Westpac's Australian parent bank refused to accept it. ASB was scathing of its security. But now, those two New Zealand banks have embraced it, and other big banks are likely to follow with partnership deals by the end of the year. The story of how POLi has come in from the cold centres around a trial with Taupō-based online retailer Whisky and More – and a $179 bottle of Japanese whisky.
Newsroom
2 days ago
- Newsroom
Geothermal Strategy can be catalyst for transformational change
Opinion: The launch of the Government's draft Geothermal Strategy, 'From the Ground Up – a draft strategy to unlock New Zealand's geothermal potential', a first for our country, is a watershed moment. It signals that geothermal energy is no longer the quiet achiever in our energy system – the revived focus on its potential recognises that geothermal can be central to our national vision for a sustainable, resilient, and economically empowered future. We have worked in the geothermal sector with engineers, scientists, Māori trusts, and industry leaders for decades, here and globally, and it's clear his strategy is welcomed with enthusiasm and optimism. The direction is right. The language is ambitious. And the need is urgent. At the Geothermal Institute at the University of Auckland, we see this as more than a policy milestone – it's a long-awaited catalyst for transformational change. Hearing Ministers Shane Jones, Louise Upston and Shane Reti tell it, educating our young people and providing compelling career opportunities in geothermal needs to be at the heart of it. The importance of signals One of the most powerful aspects of the strategy is what it signals: that geothermal matters. That it has a future that can rival its storied past. That government sees the long-term opportunity and is willing to put its weight behind it. That's no small thing. As any developer or technology innovator will tell you, long-term certainty is the foundation of long-term investment. This strategy builds on tangible commitments already made – particularly in the Government's investment to accelerate research-backed supercritical geothermal technology development. This technology aims to harness extremely high-temperature fluids from deep underground to generate renewable energy more efficiently than conventional geothermal technology. That backing will keep New Zealand at the forefront of technology to tap ultra-hot geothermal fluids to produce radically more energy per well. This is complex science and engineering with high stakes and high rewards. If we get this right, we not only unlock more clean energy, but also more industrial process heat, more energy-dense sites, and more export opportunities for our solidified globally leading expertise. The ripple effects for regional economic development are significant: the creation of highly skilled, highly paid jobs in engineering, geoscience, subsurface modelling, advanced manufacturing and programme and environmental management in regions including Taupō, Kawerau and Rotorua, from Northland to the Central Volcanic Plateau. The students at the Geothermal Institute will be the first to tell you: these are real jobs that future-proof careers and bolster local economies. From field to frontier – the role of innovation, research and education Geothermal is a mature sector, but it's also a frontier sector. What struck me at the New Zealand Geothermal Week in Taupō this year wasn't just the technical excellence on display, but the dynamism. I had conversations with rangatahi curious about career pathways, with iwi-led developers eyeing up direct heat projects, with engineering consultants pitching AI-assisted reservoir models, and with international visitors in awe of the collaborative NZ Inc spirit in the room. Future skills were a strong emerging theme throughout, where the message was loud and clear: the sector is hungry for talent, and young people are hungry for purpose. We need to meet them in the middle – with curriculum pathways, internship pipelines, scholarships targeting local communities and a long-term commitment to Stem education throughout the education value chain. But building a globally competitive innovation pipeline requires sustained support. Training world-class geoscientists and engineers doesn't happen overnight. It needs the right investment and long-term partnerships. And to meet the Government's ambition to double geothermal energy use by 2040 will require scaling up education and training. That's why the strategy's success will ultimately rest not only on the high-level vision of geothermal growth, but also what sits behind it to fuel that growth. Reinforcing New Zealand's global leadership New Zealand already enjoys a stellar reputation in geothermal internationally. Our engineers and consultants are in demand in Southeast Asia, East Africa, North America, Latin America, the Pacific, Europe and beyond. Our training programmes and postgraduate education programmes have produced alumni who now lead geothermal policy development, regulation, production and scientific research on every continent. This strategy, if paired with smart investment and coordinated delivery, could elevate that leadership to the next level. We could be the first country to commercialise supercritical geothermal knowhow. We could be the global centre for geothermal workforce training, standards and certification. We could supercharge the export of integrated geothermal solutions, from power plant designs and drilling capability to stakeholder partnering frameworks, carbon capture innovations, critical minerals extraction, cutting-edge digital modelling and real-time assessment tools, and more. This is the soft power of geothermal – and it's rooted in decades of practical excellence, technical ingenuity, and manaakitanga. A call to action The Government's draft Geothermal Strategy establishes a clear framework for the growth of geothermal. At the launch this week, ministers set a challenge for our geothermal community to turn it into a bold, coherent vision for the future. The geothermal sector is ready – meeting challenges is what we do.
