Archive for September, 2021

AND THEN THERE IS THE LAW

Sunday, September 19th, 2021

Swimming New Zealand’s (SNZ) website explains the plan for their invasion into learn to swim. Here is what SNZ say.

To enable the expansion of its education training programmes currently being provided, the Board is working with a third party on a proposed purchase of an established aquatic training provider, currently a limited liability company, that will position Swimming NZ as a lead provider of aquatic education to NZQA unit standards.

My guess is that the “aquatics training provider” SNZ are hell bent on buying is both the Millennium Institute Swim School and management of the two Millennium aquatic centre pools. In fact, I’d be prepared to bet any Swimwatch reader a cup of Wholefood coffee that’s their planned targets. That’s why SNZ need to cover pool management and learn to swim in their proposed changes to the constitution.

Here, as a reminder, is what the two AGM motions say.  

Motion 5: To promote the safety and cleanliness of swimming pools and waterways in which our Members swim.

Motion 6: To own and operate commercial ventures which further the Object

And so, having determined that SNZ want to own the Millennium Swim School and manage the two aquatic centres, what happens next? The following points are of interest.

  1. What will SNZ do with two pools and a learn to swim school?
  2. Is it legal or does the SNZ plan run afoul of Charities tax rules?
  3. Will it be successful?

What will SNZ do with two pools and a learn to swim school?

You can bet SNZ will have more in mind than being the proud owner of a North Shore swim school and a couple of swimming pools. There is more to it than that. There is a hint in SNZ’s description of their plans. They say:

lead provider of aquatic education to NZQA unit standards

There you have it. SNZ’s plan is to take over the swim school and impose the Australian method of teaching on NZ learn to swim. SNZ will then obtain Government approval for their Australian programme to be the only qualification authority approved method. SNZ will order every swim school in the country to use only SNZ’s Australian method and charge every NZ learn to swim provider an annual fee for NZQA registration. Now we are talking real money. Antares Place offices can expand – maybe a dining room and kitchen. Company cars – who knows, maybe a Porsche SUV.  

I don’t know how many swim schools there are in New Zealand. There are about 1300 school pools plus 159 clubs plus some smaller schools. The total could be close to 2000. Just think 2000 swim schools at $500 per year. That’s $1,000,000 a year. Shelve the Porsche – SNZ will take the Bentley.

In the meantime, swim schools across the country that have operated to very high standards for many years are being shoehorned into a SNZ/Australian curriculum and forced to pay SNZ $1,000,000 a year, for an Australian programme that is probably not as good as the one they had in the first place.

The problem is SNZ are about to destroy, for a second time, the variety that is such a strength of New Zealand swimming. Take the following examples.

My own background in learn to swim is based on the American Red Cross method. That programme has taught many more millions of children to swim than the Australians. But SNZ would refuse my application for registration.

The Waterhole Swim Club has probably taught more New Zealanders to swim than any other organisation in the country. For hours I have watched them brilliantly teach children to swim. They have their own unique method. But without change SNZ would refuse their application for registration.

For years Duncan Laing ran a huge swim school in Dunedin. He had very distinct and personal methods. SNZ would have refused his application for registration. Not that I think Duncan would have cared.

For years my brother ran what was then New Zealand’s largest swim school with about 1900 lessons a week. Before deciding on a programme for Wellington he looked at the Australian programme and those used by Judith Wright and Hilton Brown. He ended up using a mix of the Judith and Hilton methods. SNZ would have refused his application for registration.

Very few people know as much about swimming as Margaret McRae who runs a swim school in Mairangi Bay. I have not seen her programme, but I bet it is good and unique. SNZ would probably refuse her application for registration.

A swim school in Dunedin taught my daughter to swim. They certainly did not use the Australian method, but Jane got her 800-meter certificate when she was THREE. SNZ would refuse their application for registration.

I’m sure you get the point. There are many good ways of teaching learn to swim besides the Australian model. Hilton Brown, Margaret McCrae, Judith Wright, Gwen Ryan, the Millennium Swim School, Donna Bouzaid, Jon Winter, Sue Southgate, Trevor Nichols, William Benson, Dave Pratley, Gary Martin, Greg Meade, Liz van Wellie, Mark Bone, Brett Naylor and dozens of others certainly do not need to be told by SNZ or the Australians how to teach someone to swim. They also don’t need to pay SNZ $1,000,000 a year for some useless advice.

I suspect SNZ have their eyes on pulling the same stunt with the care and registration of swimming pools.

That might not be exactly what SNZ have their eyes on. But it is not too far away. How do I know. Because it is exactly what they tried in competitive swimming – and failed.    

Is it legal or does the SNZ plan run afoul of Charities tax rules?

There is a huge question mark over whether these SNZ plans are legal. Will they result in SNZ losing its charitable status? I will ask the IRD to check that out. But right now, I suspect there is serious cause for concern.

SNZ came close to losing its certification as a charity a few years ago when the IRD said the way SNZ ran their high-performance programme was not a charitable purpose.   

The key question in determining an organisation’s charitable status is: does the activity benefit a charitable purpose? In the case of what is being proposed here, that is the purchase of the Millennium Swim School and management of both the Millennium pools, I do not see any chance of the IRD accepting that as benefitting a charitable purpose. I will ask the IRD to decide but here is my point of view.

This is what the IRD says and is where SNZ will struggle to meet the IRD test.

Under section CW 42 a tax charity is exempt from income tax on business income it derives either directly or indirectly so long as that income is applied to charitable purposes.

If SNZ buys into the Millennium Swim School and assumes management of the two Millennium pools the income SNZ earns will be derived by SNZ indirectly. But that is okay. That is allowed.

But the next clause says, “so long as that income is applied to charitable purposes.” SNZ are not going to be able to show that. Income from the swim school and the pool management is not going to be used by SNZ to benefit its charitable purposes – not in a hundred years. That income is going to be used

  1. To further grow the pool and swim school registration business, neither of which are charitable. That is not allowed.  
  2. To pay for the Antares Place wages, cars and lifestyle which are only 35% paid for by SNZ right now. And that also is not a charitable purpose. That is a benefit to those who can direct the money earned by the swim school and pools. And that is specifically not allowed. Here is how the IRD put it, “no person with some control over the business activities of the charity is able to direct or divert income derived from the business to their benefit or advantage.”
  3. Not one cent will see its way to anything resembling a charitable purpose. Are you kidding me? The only charity SNZ have ever helped is themselves. There is no way SNZ can satisfy the IRD’s test of applying the money earned from this invasion into pool management and lean to swim registration to a charitable purpose. They have never done it before. They are not going to do it now.

But we will see. My question to the IRD has been submitted. Its number is 1-115-274-464. We will see what the IRD have to say and let you know.     

Will SNZ be successful?

No.

FOLLOW THE MONEY

Friday, September 17th, 2021

The previous Swimwatch post considered a most serious question members should be asking at the Annual General Meeting. For those who own or manage a swim school, the questions are more than serious. Why would members possibly approve Swimming New Zealand (SNZ) involving itself in commercial pool management and learn to swim when its invasion of competitive coaching was such a disaster? There are some activities private enterprise does better. Managing pools, learn to swim and competitive coaching are three of those.

And if the answer of SNZ is we need registered uniformity, that’s what SNZ said about competitive swimming and look where that got us. Our variety, our capitalism, our diverse competition is our strength. Why on earth do SNZ want to be the socialist boss of everything? Because that is where the money is.

Why would SNZ possibly want to involve itself in pool management and learn to swim when its invasion of competitive coaching was such a disaster? Isn’t the fact that over 25 years SNZ wasted $26 million on competitive coaching enough? How much is this next little excursion into private enterprise going to cost the NZ taxpayer before it too gets ditched in chaos.

But we know why SNZ want to take over a swim school near you. They need the money. And they see invading and regulating private enterprise activities such as pool management and learn to swim as a perfect place to make money. As well as money from each swim school they will fleece Water Safety New Zealand for additional funds. Already SNZ could not survive without Water Safety New Zealand’s $600,000 donation.

For 25 years competitive coaching provided SNZ with a huge income (about a million dollars a year) from High Performance Sport New Zealand (HPSNZ). SNZ built an empire that reflected that income. Competitive failure after competitive failure followed until a year ago the whole programme was dropped. Broken and dispirited competitive coaching returned to private enterprise for repair.

But there was a problem. SNZ still has the empire it built on HPSNZ’s money but no income to pay for it. The answer? Find some new business to make a dollar. What about pool management and learn to swim? SNZ’s constitution does not allow that but slip it through the AGM and SNZ have 25 years of bleeding another swimming sector dry.

What SNZ should be doing is reducing the size and cost of the empire – not profit stripping someone else’s business. They should be lowering costs not increasing income by stealing money from others who do a good job already.

So how do we know money is SNZ’s motive? Well, the accounts reveal all and are the basis of two further questions that should be asked at the AGM.

Question Two

The SNZ Board is a simple group to understand – not complicated at all. They quickly realised that income from HPSNZ was drying up. Why? Because HPSNZ had been telling them for five years that there was no more money if results stayed as they were. HPSNZ are not good at rewarding failure. As HPSNZ’s income went down SNZ realised their accounts were looking increasingly fragile. Money earned by the business was only paying for about 35% of the organisation’s costs. The other 65% was being paid for by charity handouts. It would only take one or two of those charities to pull the plug on their donation and no more SNZ. The answer the Board came up with was find something else that could earn a dollar. What about swimming pools and learn to swim, they said.

How do we know? We know because the only two growth incomes in SNZ financial report this year have come from revenue related to swimming pools and learn to swim. For example, Water Safety NZ’s income has increased by $k324 or 117% (from $k277 to $k602). Programme fees have increased by $k310 or 343% (from $k91 to $k401). These days that is where the SNZ Board is spending its time.  

And if these two motions are anything to go by, the effort being put into swimming pools and learn to swim is going to get worse. Right now, that’s the goose that’s laying the golden eggs. The core business is doing nothing. Membership is down again from 18,730 in 2018 to 17,255 in 2019, 17,084 in 20210 and 16,322 in 2021. Membership fees increased because SNZ increased their prices. The amount was a paltry $k31 or 11% (from $k262 to $k293). Not much point in working like mad for $31,000 when you can steal someone else’s business and make ten times that amount.

And so, the question I would ask is what, apart from getting involved in pool management and learn to swim is SNZ going to do about improving the income derived from their core business. Because right now that looks pretty rubbish.

Someone might also like to find out why when inflation was less than 2% SNZ managed to increase its charges to the membership by 11%. Were we screwed do you think?

 Question Three

The other side of improving a set of accounts is to reduce costs. Are there any signs SNZ has made any effort in that direction? After all they have known for years HPSNZ’s income was a lost cause. HPSNZ was more interested in their new toys at Cambridge and Karapiro.

I imagine you know the answer to the costs question. And you are right. Here is the list:

  • Accountancy Fees No change
  • Administration Up $13,000 (make sure wages go up)
  • Audit Fees Up $650
  • Consultation/Communication/Marketing Up $5,000,
  • Depreciation/Amortisation Up $9000
  • Events Up $224,000
  • Education Up $368,000 (the biggest increase is in SNZ’s new area of interest)
  • Governance Up $13,000 (that’s the Board expenses up by 31%)
  • High Performance Athlete / Coach Support Up $44,000
  • High Performance Programmes / Other Up $44,000
  • Legal Expenses Up $2,000
  • Motor Vehicle Lease Up $2000 (cars and bigger cars)
  • Rent Expense Up $9000 (15% in a rent freeze what’s that about, barns and bigger barns)
  • Rewards Incentive Scheme Up $18,000

So those cost items have increased this year by three quarters of a million dollars, suggesting that cost savings have not been a Board priority.

Conclusion

So there we have it. The membership knows SNZ turned over competitive swimming to the clubs (a good thing) but only after SNZ spent 25 years stuffing it up.

But are they replacing that folly with an equally dangerous excursion into the worlds of swimming pool management and learn to swim? Because, it seems, that is the story being told in these accounts.

A very good South Island friend of mine said to me, just before lockdown, “David you are giving SNZ too much credit on Swimwatch. You wait and see. They have given up on competitive swimming but like a starving rattle snake they will be after something else that right now belongs to someone else.”

I said, “No I think you are wrong. SNZ has seen the private enterprise light. Once bitten twice shy.”

Please tell me my mate is wrong. Otherwise, I have no idea how to reply to the email that says, “I told you so.”

Other Sundry Questions

  1. Creditors have gone up by a huge 474% to $179,298. Who does SNZ owe $179,298 to and has it been paid?
  2. Employee entitlements have gone up by 67% to $149,989. Does SNZ Have a holiday pay problem and has the amount been reduced?
  3. Cash has gone up by a huge 118% to more than the company is worth $578,674. Is that related to the high creditors and what is the cash amount now?
  4. Are the Board happy that after more than 100 years of trading SNZ is worth $50,000 less than one year’s donation from Water Safety NZ? Is that their idea of a healthy financial position?

And Finally

Remember the Moller Report? It is the basis for SNZ’s current structure and operation. It is the ultimate irony that the one Moller Report recommendation SNZ rejected was – do not get involved in learn to swim. Now SNZ is not only involved, it is planning to buy a swim school. Without learn to swim SNZ would not exist. It seems Moller was right.     

2021 ANNUAL GENERAL MEETING SWIMMING NEW ZEALAND

Thursday, September 16th, 2021

Regular Swimwatch readers will have realised by now that my support for swimming in New Zealand has changed. The new decentralised structure is making a difference. Those involved in running the business in Antares Place, in the Regions and in Clubs can get on and do what they should be doing without Bruce Cotterill or Jan Cameron interfering where they are not needed. Swimming New Zealand (SNZ) should take the opportunity of the AGM to pat itself on the back for a remarkable transition.

Of course, decentralisation means more work for everyone. But that effort now has a purpose. A purpose that will result in a better, happier, safer, bigger and more successful sport.

That does not mean there will not be problems to solve. The Annual General Meeting is an event where the membership can ask questions of Tongue and Johns. The purpose is not to tear down but to obtain information and ask about events that might need to be addressed. In other words – constructive questions. Here is the first question that came to my mind when I read the 2021 Annual Report.

This post will address only this first question. It is an important one and merits a post of its own. The next Swimwatch post, this weekend, will address the financial issues raised in the Report.  

Question One

The Board needs to be asked serious questions about the proposed new Motions 5 and 6. These have the effect of allowing SNZ to get itself involved in the management of swimming pools and learn to swim businesses throughout New Zealand. It would not be unreasonable to see this as another step outside the organisation’s core business.

This is what motions 5 and 6 say.

To promote the safety and cleanliness of swimming pools and waterways in which our Members swim.

To own and operate commercial ventures which further the Objects

Having failed to make the take over of elite training work, SNZ are now attempting to clear the way to extend their empire from the bottom up. Just like elite training, who manages swimming pools and runs learn to swim schools is none of SNZ’s business. But that appears to be what these two clauses are trying to achieve. SNZ just can’t help themselves. They must get themselves involved in businesses that are better run by private enterprise.

Businesses that currently run pools or swim schools should look on these proposed changes with horror and concern. Imagine what would happen to the Waterhole business if SNZ took over learn to swim at West Wave, the Trent Bray Swim School, Mairangi Bay and the Millennium Institute. Imagine the effect on private enterprise companies if SNZ took over the learn to swim and pool management in Wellington. If you are a learn to swim operator in Stratford, or Taihape or Dannevirke or Palmerston North or Nelson or Gore image the effect on your business when SNZ takes over the management of your local pool or the competitor you work alongside at present.

Because that is what the effect of these two motions will be. There are occasions when SNZ needs saving from itself, and this is one of them. Just like what happened when SNZ tried its hand at elite coaching, the invasion into pool management and learn to swim management will fail and will damage those two activities in the process. Worse than that it will damage SNZ’s core business for another 25 years.

For the good of swimming in New Zealand and for the good of SNZ these two motions need to be soundly defeated. I am no great religious scholar but there is a verse that describes the danger of these two motions. It says, “Then said Jesus, Father, forgive them; for they know not what they do. And they parted his raiment and cast lots”.

The SNZ membership should not allow the private enterprise assets of swimming in New Zealand to be subject to the socialist empire building that has spoilt SNZ once before.

Incidentally I am uncomfortable with the knowledge that Davin Bray is Head of SNZ’s Education and Water Safety and for many years (11) was Managing Director of the Trent Bray Swim School. For 2.5 years he was also General Manager of contracted swimming facilities for the Auckland Council. Is this whole thing just an effort to flog-off a swim-school and make some money for the Bray family on the way through? Is it a way of getting more money out of pool and learn to swim businesses in order for them to obtain a registration or operate according to SNZ imposed rules? The membership needs to be told if Davin Bray has been involved in any meetings or correspondence or telephone calls that discussed, recommended, or voted on the introduction of these two AGM motions. If he has and there is a proposal for SNZ to buy into the Bray family business, then that would be most serious.   

Finally, it beats me how the same three guys who did away with SNZ’s failed invasion of elite training (Tongue, Johns and Francis) can turn around and propose the same invasion of pool management and learn to swim. One of them needs to explain the logic of that to the membership. And Davin Bray needs to declare a conflict of interest with the whole thing. I’m surprised and disappointed he hasn’t already.  

We will consider the financial matters that arise in the Annual Report next week.

WRIGHTING

Wednesday, September 15th, 2021

I understand my limitations as an author. I think I got 54 marks out of 100 in School Certificate English. My wife, Alison, my daughter Jane and I’m guessing my son-in-law, Stephen, all scored more than that. I know Jane was really close to double my score on her own. Jane and Stephen went on to earn degrees in English and Alison included English as a major portion of her degree.

I, on the other hand, stayed well away from studying my native tongue. There were many reasons. I couldn’t spell. I used too many words. I had no idea what words like participial [sic] meant and all those rules, like “i before e, or is it o, except after c or d or f” were as meaningless as the London Times cryptic crossword. I am certainly no Tolkien or Jane, Alison or Stephen for that matter.

However, what I have done is soldier on writing a blog called Swimwatch for twenty-five years. I’ve also had three books on swimming published by the very reputable German publisher, Meyer and Meyer. Those literary Everests were achieved because of a love of the subject. None of them, I would recommend for their literary merit.

What my writing experience and my close contact with real masters of English has taught me is, throw grammatical stones with caution. The next time you open your laptop might be the beginning of a glass house disaster.

With this background I was interested to read Kiwi Swimming’s Facebook report on the Swimming New Zealand Annual Report. Instead of discussing the organisation’s financial performance Kiwi Swimming went on about a misspelt heading.

“If we want our swimmers to set high standards, this is not really a good spelling example set by Swimming NZ in its Annual Report. TECHINCAL OFFICIALS.”

I read the Report long before Kiwi Swimming alerted me to the misspelt heading. I hadn’t even noticed the error. I knew what Swimming New Zealand meant. And that was good enough for me. One thing I am sure of though – Swimming New Zealand’s spelling of Technical, as sure as God made little green apples, made no difference to the standard of my coaching in the morning. How well I spell or cook a perfect souffle has no relevance to my ability to play American football. What a load of rubbish that Facebook page comes up with.

Kiwi Swimming’s public horror at Swimming New Zealand’s spelling is thrown into perspective when in the very next post Kiwi Swimming explains itself with this gem of a phrase:

“going forward in the near future”        

Well, there you go. Isn’t that brilliant English? While Swimming New Zealand’s spelling error may have missed my attention altogether, this nonsense stopped me in my tracks. I think we should all go off to bed early tonight. When we wake up, and after eight hours “going forward in the near future”, we might understand what he or she means.

PS – People in glass houses should not throw stones. I wonder what Kiwi Swimming got in School Certificate English.

SOME PEOPLE DRAG US BACKWARDS

Wednesday, September 15th, 2021

For twenty-five years I argued against centralised training. Jan Cameron and Bruce Cotterill were the first to impose it on any sport. Why swimming drew the short straw I have no idea. After spending $26 million trying to prove their point, swimming was also the first sport to fail. Cameron and Cotterill were blissfully unaware that “The end was contained in the beginning.” But oh, what destruction had been caused in between.  

Finally, more enlightened minds took control of Swimming New Zealand. And a year ago Tongue, Johns and Francis relegated centralised training to the rubbish heap of history and restored a decentralised club-based structure. If ever there was one giant leap for mankind this was it. Of course, what took twenty-five years to tear apart is going to take longer than one year to put right. But patience and firm management will see the new structure work. The sport will develop into a happier, safer and more successful place.

BUT, there are dark clouds in the sky ahead. Swimming is still in a fragile condition and can easily be hurt by those without the knowledge or courage to know better. Who do I mean? Well, take someone like a guy called Craig Ashby who wrote this:

I guess when organisations have no money they make it easy on themselves …….

Destroying the hopes and dreams (and pathways) of the many who might just deliver

A Quax, A Dixon , A Walker , A Loader

Most sports do not provide a plan A, let alone a plan B or C.

Mr Ashby is clearly living in a centralised past. Relying on handouts from the granny state he wants Johns or Francis to provide a centralised pathway. He does not realize we have moved on from centralised, socialist control to a decentralised American club model. The task of providing a pathway is now his responsibility. It is not Francis and Johns’ job. We wanted that power back in the hands of clubs. Now that has been done, we provide the pathways. We do not blame Swimming New Zealand for not doing something we begged them for twenty-five years to stop doing.

Incidentally it is ironic beyond belief that Ashby should use as his examples, Quax, Walker, Dixon and Loader. If ever four men rowed their own boat with no programme from Athletics New Zealand or Swimming New Zealand it was those four. Yes, we do want to go back to how they did it – making our own plans without being suffocated by the granny state. Mr. Ashby should stop spending his time complaining about Swimming New Zealand and start delivering on the responsibilities he has recently inherited.

But sadly, Ashby is not the only obstruction standing in the way of Swimming New Zealand’s new and enlightened approach. For example, try this gem from Jason Hunt:

Now we know where Steve Johns get his ignorance from. Gerrard is misinformed of what is going on or just ignoring what is happening in club land.

Gerrard and Johns are not ignoring what is happening in club land. In fact, Gerrard’s Annual Report highlighted the most important success of New Zealand swimming in Tokyo. The three best swimmers came from decentralised club programmes – Dunedin, Christchurch and Wellington. Clubland, Mr Hunt, is now your responsibility. Get on and make it work. Stop blaming Gerrard and Johns for your own inadequacies. Some of us fought hard to put you in charge of your clubland. So put your big boy’s pants on and act like an adult.

Finally, there is someone called Kiwi Swimming who is also hell-bent on dragging swimming back to the 1990s. For example, he or she, recently said this:

This is being overseen and observed by Swimming NZ and Swimming Welllington [sic], who are doing nothing at all about it except either ignoring or slagging off people who complain.

 Here again we have a Johnny-come-lately who wants Swimming New Zealand to take up arms and storm down the Desert Road to fix some club problem in Wellington. Again, it is worth reminding Kiwi Swimming that for twenty-five years we pleaded for Swimming New Zealand to stay away from our local affairs. The people who need to sort out a club problem in Wellington are the people of Wellington. That’s what decentralisation means. My advice to Kiwi Swimming is to stop being a baby dashing off to mummy in Antares Place every time things get a bit tough.

For what it’s worth, I hope dearly that Johns and Francis have the courage to stick to their guns and avoid the Ashby, Hunt and Kiwi Swimming dark clouds.