Category: Business

Source: Radio New Zealand

Westpac New Zealand has been penalised $3.64 million by the High Court for breaching lender responsibility rules.

It comes after Commerce Commission action for multiple failures leading to customers not receiving legally required information about their loans, and in some cases, agreed interest rate discounts.

The Commission’s director of credit Sarah Bartlett said it was due to a failure to invest in adequate systems and processes.

The breach was self-reported by Westpac, which agreed to admit the breaches prior to the Commission filing proceedings.

The Commission said it was the biggest pecuniary penalty imposed under the Credit Contracts and Consumer Finance Act (CCCFA) to date.

“The pecuniary penalty sends a strong message not only to Westpac but to the consumer credit industry that continued failings to adequately invest in robust systems and compliance practices will not be tolerated and there are serious consequences for not complying with the Act,” Bartlett said.

In a statement, Westpac said it worked “promptly to close the identified compliance gaps” and it was in final stages of completing remediation for affected customers.

“Westpac co-operated fully with the Commerce Commission’s investigation and we are pleased to have resolved the matter,” a spokesperson said.

Under the CCCFA, lenders must disclose specific key information to borrowers and in some cases, guarantors.

In the judgement, Justice Anderson found Westpac’s failures related to systems that were “set up in a way that was foreseeably deficient”.

“Multiple steps could have been taken to prevent the harm, including changes to the systems, adequate staff training, and mechanisms to identify and respond where disclosure was not provided, and discounts were not applied,” the judgement said.

It said the penalty reflected Westpac remediating up to 11,398 affected borrowers a total of $2.67m.

The conduct also affected more than 3000 guarantors.

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

Tenants are in the driving seat in the rental market at the moment – but there are still rules about what they can and cannot do when they rent a property.

RNZ reported earlier on the things that still catch landlords out.

Now, here are six things that tenants can’t avoid.

Pay the rent on time

Problems with rent payments are still the bulk of the Tenancy Tribunal’s work. Two-thirds of claims before the tribunal last year related, at least partly, to rent arrears.

Tenants have to continue to pay rent even if they are involved with a dispute with their landlord. You cannot withhold rent because you think the landlord has not kept up their side of the bargain.

In one case the tribunal dealt with in June, a tenant reduced her rent payment and then withheld it completely because she was not able to use her en suite bathroom.

The tribunal said that was not an appropriate response. “The tenant suffered a loss of enjoyment of the tenancy. But along with that loss there was a loss suffered by the landlord, which needs to be acknowledge.

“The tenant reduced her weekly rent payments by $80 for a period, and then simply stopped paying rent while still remaining in possession. Although the landlord did not give evidence of the tenant’s actions regarding rent payments resulting in financial hardship, the tenant was not entitled to unilaterally reduce how much rent she paid, nor to stop paying her rent entirely.”

The tribunal said a reduction in rent would have been an appropriate response for the parties to agree on.

In another case, a tenant racked up $6335 in rent arrears because he withheld rent in lieu of money he claimed the landlords owed him for work done on the property. The tribunal said he was unable to prove he was owed this.

Keep the property reasonably clean and tidy, and leave it that way

The tribunal regularly deals with claims from landlords seeking compensation for clean-up costs incurred after a tenancy is finished.

In one case, an adjudicator said a tenant left a “huge” amount of rubbish – “including household refuse, dog toys and faeces, broken furniture, mattresses, wood, rocks, bedding, and old bath, two large drums, a number of broken plastic and containers and much other rubbish”.

That landlord was awarded $1572 for rubbish removal.

Tenants also have to leave all the items that were supplied with a tenancy.

Let a landlord know about damage or repairs straight away

In a case currently being dealt wiht by the tribunal, landlords are seeking exemplary damage from a tenant who failed to advise them of damage.

There was damage to the bedroom door, holes in walls and French doors – but the tribunal said in that case it was not satisfied there was a breach to justify exemplary damages.

Use the property mainly for residential purposes, not business activities

If tenants are running businesses from their homes, things can get tricky.

In another case, there was a dispute about tenants operating a plant business from a spare bedroom.

The tenants said their property manager had no problem with it as long as the premises were clean and tidy.

The property owner argued he had no knowledge of that agreement and wanted compensation for professional carpet cleaning in the rooms used for cultivating plants.

The tribunal said the landlord’s claim for compensation was withdrawn by the landlord during the hearing when the tenant confirmed that they had professionally cleaned the carpets when they vacated the tenancy.

Not have more than the agreed maximum number of occupants

Tenancy agreements usually specify a maximum number of occupants. The tribunal said going above that could be a problem because it could put a landlord’s insurance in jeopardy.

There could also be health and safety or security concerns.

In one case, a tenant’s partner urinated in a communal pathway in view of a neighbour, approached another elderly neighbour to ask her for cigarettes and meth, and asked another woman whether she wanted company and whether she smoked cannabis.

The tenant had her tenancy terminated on the basis of the anti-social behaviour and because she had breached a term of her tenancy agreement by having him live with her when she was allowed only one occupant.

Make alterations without consent

In a case heard in 2023 for a Halcombe property, tenants who were described as “in many ways excellent” were in dispute with their landlords after they “exceeded their rights and obligations as tenants”, the tribunal said.

It noted that they seemed to have treated the property as their own. They painted the kitchen green, maroon and gold, the master bedroom a couple of shades of blue, removed carpet in the hallway and second bedroom, put beading along the lower part of a bedroom wall and painted it maroon, put a dog door in French doors and painted another room blue, put beading on the lounge walls, painted the laundry multiple colours, installed ponds and erected a carport.

The landlords wanted compensation including $8500 to repaint the property.

The tribunal adjudicator said the tenants needed to pay $2550 for painting, $2754 to replace the carpet and other smaller amounts for carpet cleaning and glass replacement.

In addition, tenants have to leave all the keys with their landlord when they move out, and pay their own bills for things such as power and water.

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

New Zealanders generally like to lock in for the cheapest home loan rates on offer.

But some commentators say it could pay off to try something different now.

When the Reserve Bank cut the official cash rate this week, to 2.25 percent, it made it clear that it thinks it is likely that may be as low as the OCR goes this cycle.

Wholesale interest rates lifted a little in response, and some market commentators have already turned their attention to when rates might start to rise again.

Economists at the country’s biggest bank, ANZ, said it was worth borrowers considering whether a longer-term fix might be sensible at present.

Six-month fixes are priced from 4.75 percent, one and two-year at about 4.49 percent, three years from 4.75 percent, and four and five-year terms from 4.99 percent.

ANZ’s economists said it was too soon to say with confidence when rates might start increasing.

“The key point for now is that wholesale rates have stopped falling. Competition is clearly hotting up, with banks offering cash incentives to switch and that will be welcome news to borrowers.

“But when it comes to which term to select, our broad thinking remains as it was a month ago: we believe mortgage rates are likely at or near their lows, and that it is thus worth considering longer terms. With very little separating rates spanning from one to five years, borrowers with differing levels of risk appetite should be able to find a term that satisfies their own cost/certainty trade-off sensitivities.

“Fixing for five years may suit some borrowers, but it may be too long for others, for whom two to three years might be the happy middle ground.”

They said wholesale rates had put a floor under fixed terms. The two-year swap rate was 2.65 percent before the October OCR cut, and then fell to 2.44 percent. It was 2.59 percent before the November decision, and is now back at more than 2.8 percent.

ANZ expected home loan rates to rise gradually through next year.

They calculated that the six-month rate would only work out to be the cheapest option if the one-year rate fell to 4.19 percent over the next six months. “That seems unlikely if the Reserve Bank doesn’t cut the OCR again.

” If we are at the bottom of the cycle, 18-month and two-year look good compared to one-year, and three years isn’t much higher, and rates in that vicinity likely offer a happy middle ground.”

Based on a market average rate of 4.79 percent for three years, they said fixing for a year for 4.49 percent would only be cheaper if it was still possible to fix for two years at 4.94 percent next year, or 18 months at 4.45 percent and then another 18 months at 5.13 percent.

Over two years, fixing for a year now would only be cheaper if the one-year rate remained at 4.49 percent in a year’s time.

David Cunningham, chief executive at Squirrel, said borrowers were not moving to longer fixes yet.

He said the propensity to fix a the cheapest rate possible was strong. When five-year rates were 2.99 percent, more people fixed for that price, “But still the bulk went to 2.25 percent for a year”.

He said interest rates could stay on hold for a year or a year-and-a-half. “It could be a year of nothing happening while wholesale rates bubble up and down.”

Cotality chief property economist Kelvin Davidson said he was starting to think about a longer-term fix. “That experience in 2021 is still sort of fresh in mind…people who fixed for five years in the middle of 2021, they’re still on those rates.

“It’s not necessarily something I will do but it’s definitely worth giving a thought to.”

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

Motorists are being warned to expect 40-minute queues when IKEA opens its first New Zealand store in Auckland next week, along with potential hour-long waits for carparks.

IKEA will open its doors at Sylvia Park on 4 December and Auckland Transport along with NZTA Waka Kotahi are encouraging road users to paln ahead and allow plenty of extra time for their jounreys.

“We expect the opening day, and subsequent weeks or even months to draw big crowds to the Sylvia Park area, and for this to have a substantial effect on the transport network both locally and across Auckland,” Auckland Transport Operations Centre (ATOC) Manager Claire Howard said.

Travel times across the wider Auckland transport network are likely to be “substantially longer” than usual, Howard warns.

Traffic modelling shows that in a “worst-case scenario” there could be 40-minute-plus queues to get off the motorway at Mt Wellington and wait times of up to an hour to get into carparks at IKEA, she said.

“Surrounding streets in Mt Wellington will also be busy, with forecast delays of up to 40 minutes on Mt Wellington Highway in peak traffic.”

ATOC – a joint Auckland Transport and NZTA venture for managign the network in real time – has been working with the retail giant to ensure their traffic management plan minimises the traffic impacta s much as possible. It will be actively managing light signals and diverting traffic where possible as congestion levels increase.

“Like any popular event or destination that attracts a large crowd, it’s going to put pressure on the transport network,” Howard says.

Drivers are encouraged to allow extra time, check route and travel times and travel outside of peak hours if possible.

Congestion is expected to be at its worst during peak hour during the week and on Saturdays between 1 and 4pm – particularly heading northbound from South Auckland toward Mt Wellington.

For IKEA shoppers who aren’t planning on purchasing large furniture, taking the train might be your best bet.

“It’s a 19-minute train ride from Waitematā Station to Sylvia Park Station compared with expected travel times of more than an hour for the same journey by car, especially if you’re just window shopping or able to get your purchases delivered.” Howard says.

Staff will be on the ground at Sylvia Park Station to help direct people to the store who are travelling by train.

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

Chip maker Rakon slashed its half-year loss on the back of increased revenue.

Key numbers for half year ended in September compared with a year ago:

• Net loss $2.95m vs $10.4m loss
• Revenue $54.2m vs $41.7m
• Operating loss $4.1m vs $15.8m loss
• No dividend.

Rakon said the first half year marked a clear return to growth for Rakon as it posted growth in sales of its specialist systems for satellites, telecommunications, and computers.

It said it increased market share in core segments, increased capacity globally, and benefited from cost cutting at its New Zealand, India and France operations.

Chief Executive Sinan Altug said the company was recovering with a 30 percent rise in revenue, and increase in its margins and underlying operating earnings, which more than doubled.

He said the restructuring of the past two years were delivering tangible results, with its India operation focusing on volume production and its France facility focusing on aerospace and defence.

“This shift continues to free New Zealand to focus on innovation and new product introductions while India scales to meet global demand.”

It expects margins to improve in the second half year as production scales up.

Rakon maintained its 2026 full year underlying profit guidance at between $15 to $25 million, saying earnings were typically skewed towards the second half of its financial year.

The company is targeting revenue of $250 million and an underlying profit of $75 million by 2030.

The company went through a boardroom tussle in August as a dominant shareholder moved to replace most directors, causing the Stock Exchange to suspend the stock until it complied with rules about the number of independent directors.

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

• Consumer confidence lifts, although pessimists slightly outweigh the optimists
• It follows the strong business sentiment on Thursday
• Households remain cautious on spending on big ticket items

Consumer confidence has lifted to its highest level since June, with more households expecting to be better off in a year’s time.

The ANZ Roy Morgan Consumer Confidence Index lifted 6 points in November to just over 98.

However, a score below 100 indicates more pessimists than optimists.

“It’s good to see a decent lift in consumer confidence this month, though it is yet to break out of recent ranges,” ANZ chief economist Sharon Zollner said.

“Although it’s early days in terms of the economic recovery, this is not the only indicator suggesting that things are looking up for consumers,” she said.

A net 21 percent of respondents expected to be better off this time next year, the highest level since April.

“Consumer arrears have been declining, employment has returned to modest growth and retailers are reporting improved activity,” Zollner said.

ANZ said a net 9 percent thought it was a bad time to buy a major household item, suggesting ongoing caution.

Zollner said the ‘good time to buy’ indicator has not been positive in more than four years.

“Consumers’ reluctance to spend in recent years has certainly been felt by the retail sector.”

Zollner noted falling consumer arrears, employment returning to modest growth and retailers reporting improved activity.

“Our card spending data shows a return to growth across a broad range of discretionary categories, though overall spending levels are still very subdued compared to the Covid-era boom.”

Zollner said aside from lower inflation, the slowdown also led to household debt relative to incomes back to where it was before the housing bubble.

“Now we’ve taken our medicine, the stars are aligning for better times ahead.”

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

• Business confidence jumps as firms report better past activity
• The closely followed measure of expected own activity also rose to its highest in more than a decade
• One-year ahead inflation expectations steady

Business confidence has jumped to its highest level in 11 years.

The ANZ Business Outlook survey showed headline confidence rising nine points to net 67 percent confidence in November.

The more closely followed measure of businesses’ expected own activity also rose to the highest level in more than a decade – increasing eight points to net 53 percent.

ANZ said reported past activity, the best indicator of economic growth in the survey, also looked brighter for every sector except construction, although it too was off its lows.

“Green shoots are looking well established, if this month’s survey is anything to go by,” ANZ chief economist Sharon Zollner said.

“It is particularly encouraging that the improvement in sentiment is rooted in an improvement in experienced activity, not just hope.”

Zollner said “things are looking up”.

Inflation expectations were steady, with one-year ahead inflation expectations at 2.69 percent.

“With the recovery underway and CPI inflation at the top of the target band, we don’t expect the RBNZ [Reserve Bank of New Zealand] to cut the OCR again this cycle barring unexpected developments,” Zollner said.

Other inflation indicators in the survey showed the net percentage of firms expecting to raise prices in the next three months rising to its highest level since March.

But those expecting cost increases eased marginally.

Regionally, ANZ said Wellington remained the weakest for both experienced and expected activity, although it also improved.

It said the lift in past activity was broad-based across the regions, but was strong in Auckland and the South Island outside of Canterbury.

– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

New Zealand women start working for nothing from this week.

Although the country’s gender pay gap improved this year, campaigners say there is much work to be done to bring pay equality for New Zealand women.

Still Minding the Gap spokesperson Jo Cribb said for every $1 earned by a Pākehā man, a Pacific woman would earn 79c, a Maori woman 82c, an Asian woman 84c and a Pākehā woman 93c.

Cribb said this would be the week that all women started working for nothing. “It’s going to be four weeks of nothing.

“Research shows women’s education levels, occupation or experience account for less than 20 percent of why there is a pay gap.

“What is driving around 80 percent of gender and ethnic pay gaps is decisions made within organisations about pay and promotions – that is, unconscious or conscious bias. Pay differences based on performance are justified. Pay differences based on gender or ethnicity aren’t justified, and that’s what we are focusing on.”

She said the government should introduce mandatory pay gap reporting. Labour’s spokesperson for women Carmel Sepuloni has introduced a member’s bill that would require large employers to report pay differences and include pay in job ads.

“Should 61 MPs support it, we could have it very soon,” Cribb said.

“There is clear overseas evidence that when businesses are required to report their pay gaps publicly it drives meaningful action and has seen national gender pay gaps drop by 20 percent to 40 percent.”

Stats NZ said in August the pay gap this year was 5.2 percent, down from 8.2 percent a year earlier.

‘We also need a fair and consistent pay equity process’

But Equal Employment Opportunities Commissioner Gail Pacheco said the reduction could be because fewer lower-paid women were in work.

“The gender pay gap is obviously only for those that are employed… which means that if more low wage women have become unemployed in recent times because of our economic downturn, that artificially brings the pay gap down.”

Pacheco said requiring companies to report on pay gaps helped to close them over time. “We also need a fair and consistent pay equity process. The recent amendments of the Equal Pay Act made it much harder to ensure we get those fair outcomes for pay.”

She said structural drivers of the gap also needed to be addressed. “Things like making flexible working normalised and available at all job levels, strengthen parental leave for fathers and partners to share the care load – and reduce any bias or discrimination that could be occurring in the workplace.”

Pacheco said some organisations did not think they had a pay gap until they looked closely at the data.

“It could be that maybe there’s no gaps in like-for-like role. But there’s an organisational wide gap because not enough women are making it through the hierarchy within the organisation.”

Council of Trade Unions national secretary Melissa Ansell-Bridges said the gap had only dropped this year if it was calculated on median pay, not mean.

“They’re both useful to look at in conjunction, but if you’re going to pick one, we generally look at the mean and that pay gap is still 8.7 percent.

“It’s hard to know all the factors but it’s most likely that the reason that the median pay gap had decreased by a couple of percentage points was that you were seeing a lot of movement in the middle … you’re seeing the impact of the tail end of previous public sector pay increases under the last Labour government that were a bit higher than what you’re seeing now.

“It also means it’s probably a high water mark because those drivers are no longer happening.”

Cribb said all European Union nations and more than 50 percent of OECD members, including Australia and the UK, were introducing measures aimed at reducing gender pay gaps.

“We know times are tough for a lot of New Zealand businesses, so the government could choose to only mandate public pay gap reporting for businesses over a certain size and provide for a long implementation time to acknowledge the challenging trading environment. A tool already exists on the Ministry for Women website to help businesses work out their gender pay gaps and what action to take to close them.”

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

Icehouse Ventures says the response to its latest early-stage seed fund has been “phenomenal”, raising a record $70 million to help at least 30 ventures get started.

Chief executive Robbie Paul said the market was hot, with new investments continuing to flow from family offices and individuals.

“The venture capital and startup ecosystem is extremely vibrant and I think the reason is that most companies are operating on very long-term time horizons,” he said.

“They don’t start a company because the market’s bad and they don’t give up for the same reason.

“They have big missions that they’ve been thinking about and researching and working on for a very long time, and will continue to pursue those irrespective of who’s in power, who’s in the White House, what the weather is and anything else.”

The fund was capped at $75m, with an end-of-year deadline to raise the last $5m.

“It feels like we’ll hit that fairly shortly.”

A maturing ecosystem

Paul said Icehouse had been hoping to raise $30m for Seed Fund IV, but quickly attracted investment from 363 investors, with 80 percent based in New Zealand.

He said more than half of the investors were entirely new to Icehouse Ventures, while 147 had backed the firm’s prior seed funds, with a core group of 26 invested in all four, and 17 investors from the United States, China, Singapore, India and Germany contributing a combined $22m.

“The success of Seed Fund IV demonstrates a renewed belief in Kiwi entrepreneurs and signals that the startup economy is very much back in motion,” Paul said.

He said the investment represented a maturing of the venture capital ecosystem.

Past recipients pay it forward

“The rise of the ecosystem was inevitable because entrepreneurs build businesses over time horizons that far exceed presidential terms and macro-economic swings.”

Cheque sizes had grown significantly, with commitments ranging from $25,000 to $5m in Seed Fund IV.

Paul said the most encouraging trend was the rise of founder-investors who have scaled companies of their own and were reinvesting into the ecosystem that backed them.

Nearly a dozen had invested in the latest fund, including the co-founders of award-winning global educational software business, Kami.

“Founders know the difference that early capital and the right partner can make,” Paul said.

“Having a large cohort of entrepreneurs in our fund means we can tap into their expertise to help the next generation.”

Where the money goes

Seed Fund IV was the largest seed fund in the country’s history, with $6.3m already committed to eight NZ-founded startups over the next three years.

The early investments included AI presentation creator, Aether, design collaboration platform, Harth, and industrial engineering software, Spaceproof, and fraud-prevention technology startup, Static Technologies.

“Our goal with the seed fund is to invest as early as possible,” Paul said.

“Success for us is finding companies who’ve never raised money and sometimes are not even established, and to start investing with small amounts at that point, and then to invest further as they achieve technical and commercial milestones.”

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

Source: Radio New Zealand

A crypto accountant is warning investors that the tax collector is coming for them, with seven out of ten people trading in crypto assets currently side stepping their tax obligations.

In July last year IRD signalled it was honing in on people dealing crypto who were not declaring their income.

The Department had identified had 227,000 unique crypto asset users in New Zealand undertaking around 7 million transactions with a value of $7.8 billion.

Accountant Tim Doyle specialises in cryptocurrency and said nearly a third of his clients have now received letters from IRD calling in tax they owe.

Doyle told Checkpoint while the law does outline that tax must be paid on crypto, the reality is a little more confusing.

“New Zealand doesn’t have a capital gains tax, so you can own property or own shares in companies and not have to pay taxes,”

“But with crypto because it’s digital because it’s intangible, ID have the default position that it’s a speculative investment and people have it likely acquired it for the purpose of disposal and that’s why they want to tax every single dollar of gains from it.”

Not everyone has to pay tax on crypto, it is only when the crypto is acquired with an intention to dispose that it must be paid.

“So that’s actually going to capture most investors or most crypto investors.”

An investor can have crypto sitting for as long as they like without having to pay tax on it, but as soon as they sell it, tax comes into play.

“As soon as they sell it to New Zealand dollars or they sell it from one token to another, that’s the time that any gains or losses are realised, and that’s the taxable point.”

Doyle said the amount of unpaid tax on crypto was “significant”, and over the past few years his business alone has been filing two to three voluntary disclosures a week.

The tax bills that have come through his office range from a few thousand dollars to a few million.

He said he has one client currently owing around $600,000, after his crypto took a huge dive.

“He put $100,000 New Zealand dollars into crypto, he was able to turn that into about $1.6 million over a couple of years… he took those tokens and he moved them into another token, which is a taxable event.”

“Rather than cashing it out and paying his taxes because he didn’t know about crypto tax, he left his crypto investment in the market.”

Doyle said the investments declined in value, back down to $100,000, leaving the client with a debt he doesn’t have the wealth to now pay.

He said it is clear there has been a stronger crackdown from IRD recently.

“I think there’s a strong mandate from this government to not only crack down on crypto tax, but just wider taxes as a whole.”

“Certainly IRD are sending out letters and requesting information on crypto from investors.”

Every single dollar of crypto is taxable at a taxpayers marginal tax rate, which could be as high as 39%.

“It’s treated the same as normal income, which is quite unfavourable and perhaps inconsistent from other asset classes.”

Doyle said cryptocurrency asset holders who are owing tax will first receive a warning letter from IRD, and may face an audit.

If the asset holder then doesn’t become compliant, further steps will be taken.

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