Category: Business

Source: Radio New Zealand

In the small, predominantly Māori town of Kaikohe, residents struggling with high living costs are using Afterpay to buy things like gas.

The buy-now-pay-later service lets you purchase goods and services at a quarter of the cost, then pay off the total in three fortnightly instalments.

For some families, it means being able to get kai on the table that week. But it is also not without risks. While the repayments are interest-free, any users who miss an instalment, or are late with a repayment, are charged a fee.

On the main street in Kaikohe, locals had mixed feelings about the service.

One woman Checkpoint spoke to described it as a “sucker punch or sucker pull”.

“It’s like spending your money before you have the money. I think it just suckers people in. They get all these things, and then they can’t pay for it.”

Another local said he liked Afterpay because it lets him “spread out my tick”. The man said he last used it to pay for birthday presents.

Alex “Moko” Tango had been dubbed the “Afterpay queen” of Kaikohe, because she used it to pay for nearly everything, including groceries, hair appointments and vet visits.

The week Checkpoint spoke to her, she had used it buy groceries and household items from The Warehouse. She had also paid for a tank of gas, and taken her two dogs to the vet.

In Kaikohe, a range of stores let people pay with Afterpay, including the Z petrol station, the chemist, The Warehouse, a mechanic’s garage and a flooring installer and bed shop.

Tango said without Afterpay, she would not be able to pay for a lot of the things she needs.

She was not currently working due to health reasons and relied on the supported living payment.

“It’s the reality of knowing I’d have to save that money over eight weeks,” she said.

“So even though it’s fortnightly for Afterpay, I know what my weekly budget would be to cover, instead of having to wait eight weeks after the fact to save in my budget to pay [for things].”

That week, the vet bill for Tango’s two dogs came in at just under $300 and her petrol cost $148. The Warehouse grocery shop came to about $170, which Tango says should last for two weeks.

Tango also stressed Afterpay only works for those who are diligent budgeters, which she had learnt to do as someone who lives on a benefit.

“I can honestly say as a beneficiary, it has conditioned me to be able to live in this type of budget-threshold.”

And while Tango had never been penalised for missed or late repayments as an Afterpay user, the Salvation Army warned not everyone finds the buy-now-pay-later service easy to manage.

Senior policy analyst Ana Ika said it was easy for people to rack up debt without realising it.

“Last week, I looked over a of our client’s case notes and they were spending over someone’s case and they spending over $367 a week in payment back buy-no-pay-later. The majority of that is paid out of their benefit so it creates a lot of financial hardship for that individual and their family.”

Nationally, more than 500,000 people in New Zealand have used Afterpay in the past nine years, according to the company.

The popularity of services like Afterpay among people Salvation Army works with showed current benefit and income levels simply were not enough, Ika said.

Ultimately, income and benefit levels should be adequate so people could afford essentials like petrol and groceries, and not turn to buy-now-pay-later service like Afterpay, she said.

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

Source: Radio New Zealand

Air New Zealand is making further cuts to its flight schedules and lifting ticket prices in response to the high cost of jet fuel.

The airline said the changes apply to some of its services in May and June, affecting 4 percent of flights, and 1 percent of total passengers due to travel in the period.

“We have worked hard to keep disruption to a minimum, with the vast majority of impacted customers still travelling on the same day,” the airline said in a statement.

It said affected customers would be notified from Tuesday morning, and all notifications would be completed by the end of the week.

“These changes are relatively small compared to others in the New Zealand market, where some airlines are reducing capacity by more than 10 percent,” the airline said.

The global cost of jet fuel has soared since the start of the US-Israel-Iran War this year. Asian jet fuel prices soared to US$230 a barrel according to the Platts benchmark, compared to below US$100 a barrel before the war.

“Like airlines globally, we’re experiencing jet fuel prices that are more than double what they would usually be,” Air New Zealand said.

“This is driving higher costs across the industry, and we’ve made further increases to some airfares to help manage this.”

The airline said customers whose updated flights did not suit their plans could choose a refund or credit.

“If you don’t hear from us, your flight is operating as scheduled.”

Bay of Plenty MP Tom Rutherford said the airline had assured him it was a short-term response on Tauranga flights.

“For the May and June schedule they will be consolidating Auckland services by 27 rotations (averaging 4 per week), Wellington services by 30 rotations (averaging 4 per week), and Christchurch services by 10 rotations (averaging 1 per week),” he said on Facebook.

“These changes are on top of the earlier reductions already in place from 16 March to 3 May, which were, Auckland services being reduced by 31 rotations (averaging just one daily rotation most weeks, but maintaining full capacity during April school holidays). Wellington services down by 21 rotations (about three per week on average). Christchurch services reduced by 3 rotations.”

Rutherford said he would be advocating strongly to “protect Tauranga’s connectivity”.

“I know how vital reliable air connections are for the Bay of Plenty, whether it’s for business, tourism, family visits or medical appointments,” he said.

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Source: Radio New Zealand

The sale of Synlait Milk’s North Island operations has been completed with the focus a back-to-basics approach, in order to return to a consistently, high quality production of infant formula.

The dairy company, majority owned by China’s Bright Dairy, planned to use the $283.1 million proceeds from the $307m sale to pay down debts and simplify its operations.

“This is an important turning point for Synlait. It will strengthen and simplify our business while giving us the space to drive our recovery forward with a focus on where Synlait was founded, in Canterbury,” chief executive Richard Wyeth said.

The sold assets included the Pōkeno manufacturing facility and associated inventory, as well as leasehold Auckland sites, including assets held at the blending and canning facility on Richard Pearse Drive and the leased warehouse facility on Jerry Green Street.

The company’s balance sheet had been hit by costs associated with the recent manufacturing challenges, which saw it report a first half net loss of $80.6m for the period ended January 2026.

Of the sale proceeds, $200m would be used to repay Synlait’s bank facilities, leaving its balance sheet in a strong operational position.

However, Wyeth said there was more work to do.

He said his focus was on achieving steady, high quality output, without exception.

“So we’re looking to simplify the business. We’re looking to stabilise the business. Then we can scale from there,” Wyeth said.

“Making advanced nutritional infant formula is relatively complex, and when it goes well, you get really good results.

“If it doesn’t go well that product goes straight to stockfeed as opposed to a high value product. That’s why that focus on operational performance is so important.”

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Source: Radio New Zealand

Families trying to find rest homes for their elderly relatives have been shocked to discover that they must pay anything from $10 to $85 a day for care, even when they qualify for the government subsidy.

That is because rest homes are permitted to charge surcharges any time a room is not “standard” – and many providers are no longer building or offering standard rooms.

Tracey Martin, chief executive at the Aged Care Association, said it was a known problem and reflected the fact that government funding did not cover the cost of building, maintaining and upgrading facilities.

“As cost pressures have grown and funding has not kept pace, providers have had limited options to sustain operations and maintain quality environments. This has led to a greater dependence on premium charges to cross-subsidise the cost of care and infrastructure.”

People were seeking care when they were in a more frail state than in previous generations, she said, and requiring more assistance.

“Across New Zealand we are seeing a reduction in care beds, at rest home, hospital level, dementia and even psychogeriatic. We are seeing a reduction in care beds that are able to be provided for just the amount of money that the state has said they should get.”

“For a hospital level bed that’s on average $353 a day. That’s what they are allowed to charge for care because that’s what the state has decreed.”

“But they are allowed to put a premium charge on top of that if the accommodation has something different or extra, and that’s what the premium charges are for.”

Who pays what?

People who are going into a rest home can access a government subsidy for care, if they meet the asset test. This requires that single people needing care have assets below $291,825, or a couple with only one person needing care has assets of $291,825 or $159,810 plus their home and car.

The government then takes all of the pension except from about $57 a week, then tops up the difference, to $352 a day for hospital level care.

Not-for-profit providers offer about 60 percent of the country’s rest home care and tend to charge lower premium rates, or, in some cases, standard rooms. But they were facing large costs and many were having to add large premiums to break even, Martin said.

“It’s really impacting on New Zealand families. They just cannot find a place for their loved one to be. It’s also backing up emergency departments. We’ve got seniors in hospital who need to come into residential care and they can’t find a residential care bed so they can’t discharge them from hospital, so they can’t put people out of ED up into the wards.”

No standard rooms being built

Good Shepherd community financial well-being advocate Bruce Smith said he had recently been through the process for his mother.

“Anybody will need to pay for what is known as a premium room and that is a room with ensuite or attached bathroom. Cost seems to start around $25 per day for the added luxury. If they don’t have a standard room available and the family can’t afford to pay for the premium room then they will need to shop around at other rest homes.

“We were very fortunate in Timaru to use Glenwood which is a charitable trust-owned home where a jack and jill bathroom was considered standard and no additional cost.”

But another woman, who sought care for her father in Wellington, said it had seemed almost impossible to find a room that did not have a surcharge. Her father had had to move out for renovations and was told that after that happened there would be no rooms that met the standard rate requirements.

Another said she had been quoted $35 to $85 a day on top of the subsidy, depending on whether it was a shared room.

Ryman said in many newer or redeveloped villages, all rooms would exceed the minimum standard. Metlifecare said it, too, did not offer standard care rooms.

Logan Mudge, head of communications at Summerset, said it had been converting standard rooms into premium rooms or care occupation right agreements since 2024.

“Situations where a resident’s family could pay may happen, however if family were unable to assist, they would need to look for availability of a standard room with another aged care provider, which would more likely be a facility in the not-for-profit sector.”

Karen Billings-Jensen, chief executive at Age Concern, said in some smaller centres around the country there could be more standard rooms available because the sites might be older.

Government acknowledges reform needed

The Ministry of Health said aged residential care providers could charge residents more when they offered things like an ensuite, more space or garden access.

“Aged residential care providers are required to admit a person without charging them a premium if the person requests a standard bed and there are no standard beds at the right care level available within a 10km radius, and that facility is their preferred choice.

“This requirement applies regardless of what type of rooms providers are building.”

The spokesperson said the Government recognised that there needed to be a more sustainable system.

“While New Zealanders generally have good access to a range of aged care services, reviews have identified a range of challenges, including that the way services are funded is outdated and that access to the right services can be inconsistent and inequitable.

“The Government has established the Aged Care Ministerial Advisory Group to provide expert advice on long-term reform of the system.”

The scope of that work would include includes reviewing funding models and mechanisms to support sustainable services, including a sustainable supply of standard aged care beds.

“It is also looking at how costs are shared between those receiving care and the Government.”

The spokesperson said the group was expected to provide advice and recommendations by mid-2026.

It said the government was also increasing funding by 4 percent for aged residential care and had included a a $44 million increase for home and community support services in Budget 2025, plus a $24 million allocation for regional initiatives to support timely transfers from hospitals to other forms of care.

Martin said her association wanted a shift to a split funding model similar to Australia’s.

“Our argument is that the clinical care that this individual has been assessed as needing is the responsibility of the government.

“Because whether you’re 90 or 19, if you need some clinical care, you can go to hospital and get it for free.

“So why are 90-year-olds in this country having to pay, in the first instance, for their clinical care? And then we want the accommodation split out and the living expenses split out because New Zealanders know they’ve always had to pay for their accommodation, either through mortgage or rates or rent, right?

“And New Zealanders have always understood that they’ve had to pay for their food, their power, their toothpaste, all of that.

“So we want to see a more transparent approach to a funding model so that New Zealanders can see what they are paying for and the government can be shown up for what they are paying for.”

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

Source: Radio New Zealand

With the economy facing many weaknesses, including war in the Middle East, it is the mum-and-dad investors shouldering the impact.

Independent economist Tony Alexander regularly surveys a group of 200 existing property investors.

He says his findings show a record number of mum-and-dad landlords are planning to sell their properties.

The survey found 38 percent planned to sell their properties and that just 12 percent were looking to buy.

Alexander said professional long-term investors were staying, but small investors have been exiting the market.

“The professional investors in residential property who look for a positive cash flow along the way who’ve done it perhaps for generations, those people are still there.”

He said concerns about running costs, council rates and a shortage of good tenants remain high.

Now the Iran war has added another layer of uncertainty.

“If we look more specifically just at what’s happening at the moment of course it’s a concern about interest rates going back up again as a result of conflict in the Middle East and a new weakness in the economy.”

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Source: Radio New Zealand

A business association says Easter Sunday trading rules are confusing and need an overhaul.

Restrictions on alcohol sales have just been eased, so that venues that could already open over Easter can now sell alcohol to customers without the requirement they buy a meal.

Employers and Manufacturers Association (EMA) head of advocacy Alan McDonald told RNZ now was a good time to look at the Shop Trading Hours Act as well.

“Obviously they’ve eased up some of the alcohol laws to clarify them because they were very complex – the Easter ones are just as complex.

“It’s been time to look at them for a long time,” he added.

Easter Sunday was not a statutory public holiday and retailers should be able to decide for themselves whether they open on that day, McDonald said.

A 2016 change to the Shop Trading Hours Act also meant city and district councils could create their own Easter Sunday shopping policies for their respective territories, adding to the confusion, he said.

“You get all sorts of anomalies. Queenstown for example, I think, opens, Rotorua doesn’t. Parts of Parnell in Auckland are allowed to open, but other parts of Auckland aren’t allowed to open.

“You just end up with a multitude of confusing options.”

There are three types of exemption to the shop shutdowns:

• Tourist resorts such as Taupō and Queenstown on Easter Sunday only
• Places where the local council has said shops can open on Easter Sunday only
• Certain kinds of shops (limited to “small grocery shops”, service stations, takeaways, bars, cafes, duty-free stores, “shops providing services” (and not selling things), real estate agencies, pharmacies, garden centres (only on Easter Sunday), public transport terminals, souvenir shops and exhibitions “devoted entirely or primarily to agriculture, art, industry and science”).

The rules needed to be standardised, McDonald said.

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Source: Radio New Zealand

Got questions? RNZ has launched a new podcast, ‘No Stupid Questions‘, with Susan Edmunds.

We’d love to hear more of your questions about money and the economy. You can send through written questions, like these ones, but even better, you can drop us a voice memo to our email questions@rnz.co.nz.

You can also sign up to RNZ’s new money newsletter, ‘Money with Susan Edmunds‘.

I’ve been in a LAT (living apart together) relationship with my partner of six years – meaning we are considered partners, but we don’t live together, and we have completely separate finances. We spend about a night or two together a week, normally at my place, but sometimes at his. I understand these sorts of relationships are becoming more common, particularly for those of us that have been through a divorce.

From a net worth perspective, I’m worth more than my partner. From a relationship property act, we’re over the three-year threshold, however given our separate finances and living arrangements could I be at risk if we ever did break up? Note we will eventually move in together and at this point we plan to put a legal agreement in place.

I think you could find that you’re already caught by the relationship property laws, depending on your situation. In the past when I’ve looked at this, I’ve found that not living together is often not enough to stop the timer from starting.

Public Trust said what would define a “de facto” relationship would depend on a range of factors.

“It’s not just about whether you live together or not, or share finances or not. In deciding, the court will look at the overall nature of the relationship,” a spokesperson said.

“This can include things like how long the relationship was, whether the couple lived together, whether there was a sexual relationship, and how financially connected they were. This looks at whether one person relied on the other for money, whether they shared finances, and whether there were any arrangements to support each other financially. It also considers who owned or used property, and how property was acquired.

“Other factors include how committed the couple was to building a life together, whether they cared for or supported children, how household tasks were shared and how the relationship was seen by others – for example, whether they presented themselves publicly as a couple.

“All of these factors are considered together. No single factor automatically carries more weight than the others. We recommend you get legal advice from a specialist property relationship lawyer.”

Public Trust said, if you do not want the Property Relationships Act to apply to your relationship, you could have a contracting out agreement set up.

“This enables you to decide how your assets will be dealt with if the relationship was to end or one person was to die.

“Another important point is if you’re putting a will in place and you have a contracting out agreement, you’ll need to make sure they work together and don’t contradict each other. If they don’t line up, it can create complications after death, adding time, cost and unnecessary stress for those left to deal with the estate.

“If your situation changes, these documents need to be reviewed and you may wish to seek additional legal advice.”

As I understand the annual superannuation adjustment is calculated based on a percentage of the average wage increase (2.91 percent) up to December the previous year. If inflation (CPI) is higher (3.11 percent) an adjustment can be made to ensure that purchasing power is not lost.

What percentage increase was applied for the 2026 adjustment for married and living alone rates? Generally superannuants carry the cost increases in the year they are incurred. But the adjustment is applied for the forthcoming year and not backdated to the year they occurred.

Is this the reverse of compounding interest? If so what could be the cumulative loss over a 10, 20, 30 year period? For example, I get the living alone superannuation rate. Last year my major expenses like rates, utilities, insurances, food and transport costs all increased at a much higher percentage than the increase (2.22 percent) that was applied last year.

NZ Super went up by 3.11 percent this year.

You’re right that it reflects the increase that has happened over the past year rather than what is going to happen over the coming year.

While you lose out in situations like we’re facing into at the moment, where inflation is expected to pick up, you might potentially be in a better position next year when your increase will reflect the inflation over the past 12 months – and hopefully the rate of increase will have slowed by then.

I received an email from Tower Insurance that says if my vehicle is written off and I make a total loss claim, it will no longer refund any remaining premium on the policy. Is this now standard? I moved to Tower and monthly payments because I had been screwed over by one of their competitors previously on a total loss claim? I had just reinsured and registered an old Corolla before the total loss and didn’t get a lot back.

I asked Rebecca Styles, Consumer’s insurance expert, about this. She says it’s standard across insurers. State said it did not refund or credit any premium after a total loss, Cove said it would cancel the policy and give no refund. AA said it would take any unpaid monthly installments from the settlement amount if a claim was a total loss.

“I can understand why people would think it unfair because it’s unlikely insurers are upfront about this clause when people take out the policy, and people only discover it when they make a claim,” she said.

“However, it’s unlikely to be deemed an unfair term under the Fair Trading Act given it’s an annual premium – even if you’re paying monthly.”

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Source: Radio New Zealand

Essential workers in some parts of the country face much higher fuel bills than in others, new data shows – and it has raised questions about how support should be targeted.

Simplicity chief economist Shamubeel Eaqub has compiled data showing the average commute of workers across a range of industries around the country.

It shows healthcare and social assistance workers in Southland, Central Otago, Westland, Hurunui, Kaikoura, Central Hawkes’ Bay and Wairoa have some of the longest average commutes in the country.

Even within Auckland, typical commutes varied. Healthcare workers in Waitemata had the longest average commute, and areas such as Waitakere, the Puketapapa local board area and Whau local board area had the shortest.

For education and training, Hurunui, central Hawkes Bay and Southland feature again, as well as areas such as Clutha.

Eaqub said the data some areas would be more exposed to fuel price rises than others. “It’s all happening piecemeal… like nurses need help or the fire service needs help but it’s so specific and it kind of misses that geographic aspect.

“What I was trying to get at is who are the essential workers, and how far did they travel, where are those people based?

“Where people can work and live in the same area, that’s awesome. When you can, it’s wonderful. But it’s those people, the nurses who have to drive for 40 minutes or whatever to get to work everyday. That is an unbearable cost and burden on those people.”

He said that raised questions about how support could be targeted more precisely.

“How do we get that overlap right? We don’t expect some kind of handout for people to get to work every single day but people who have to travel for their work and they’re essential, why aren’t they being looked after?”

Rural essential sectors have double burden, economist says

Otago University economist Murat Ungor agreed rising fuel prices did not affect regions equally.

“Across several districts, the data suggest that essential workers in rural and provincial areas drive more than double the distance of their urban counterparts.

“For example, essential workers in the Mackenzie District travel an average of 15.8 km, in the Southland District 16.4 km, and in Central Otago 13.7 km, all predominantly rural districts. In contrast, essential workers in Dunedin City travel 6.3 km, in Porirua City 7.1 km, and in Hamilton City 7.2 km. This means an essential worker in Mackenzie or Southland drives more than twice as far as one in Dunedin.”

He said rural essential sectors had a double burden.

“Those most critical to the rural economy, particularly agriculture, have the longest commutes, while urban essential sectors such as health and education have shorter ones. In Southland, agricultural workers commute 16.5 km; in Central Otago, 15.8 km; and in Waitaki, 16.0 km. By comparison, in Dunedin City, health care and social assistance employees commute 5.9 km, while in Wellington City, education and training employees commute 7.4 km.

“One may argue, using these comparisons, that the workers putting food on the country’s table are the ones driving the farthest. A fuel or diesel price spike therefore directly increases both the cost of food production and the cost of living for the very people who produce it.”

He said essential workers in many areas had no practical alternative to driving so they were not able to avoid being subject to fuel price volatility.

“In the Gore District, 82 percent of essential workers in public administration and safety drive…In Invercargill City, the figure is also 82 percent. In Hamilton City, 83 percent of manufacturing workers drive, and in Tauranga City, 81 percent of transport workers drive. By contrast, in Wellington City, only 27 percent of essential workers in public administration drive.

This is perhaps the clearest evidence of geographic inequality. An essential worker in Gore or Hamilton has no choice but to pay whatever the pump price is. An essential worker in Wellington, by contrast, has a viable escape hatch through public transport or walking, insulating them from the worst of the price shock.”

Wellington workers were not necessarily travelling shorter distances but they had more options.

He said fuel vulnerability was not just a rural issue but a transport inequality one shaped by where people worked, how far they travelled and whether they had a realistic alternative.

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Source: Radio New Zealand

Explainer – As the war between Iran and the United States and Israel enters its second month, New Zealand is feeling the pinch at the petrol pump. But what other everyday items could face possible shortages if the conflict escalates?

We all know about the rising cost of fuel and the immense impact diesel prices will have on the entire country’s infrastructure, but there are several other everyday necessities that could be hit by a prolonged war.

Only 0.6 percent, or $642 million, of New Zealand’s total imports are sourced from Middle Eastern countries, the Ministry of Foreign Affairs and Trade notes in its most recent report on supply chains and the Iran conflict.

But because of the intricate network of supply chains that make up the global economy, there’s no easy way for New Zealand to avoid the impacts being felt worldwide.

Dr Sarah Marshall is a senior lecturer at the University of Auckland business school and director of the university’s Centre for Supply Chain Management.

“I think the Iran conflict has highlighted vulnerability in our supply chains, but in many ways Covid-19 already did that,” she said.

“Since 2020 there’s been a much stronger awareness in New Zealand of what a supply chain actually is and how exposed we are to global disruptions.”

“If fuel prices continue to rise or supply is disrupted, that feeds through into almost every stage of the supply chain. Each stage faces higher costs, and those are eventually passed on to consumers.”

University of Auckland economics professor Robert MacCulloch said if the war carries on, it could potentially be an oil shock on the scale of the 1970s.

“I don’t think it’s overblown to say that potentially the effects are going to be enormous,” he said. “In this country it inspired in the ’70s the government of Rob Muldoon to change the whole national strategy.”

“We can see you can be held to ransom maybe by someone who’s very critical in that supply chain.”

Here are some of the everyday staples that could face more supply and cost issues because of war in the Middle East.

Food

One of the biggest impacts we’re already starting to see is how much we pay at the grocery store.

Eat New Zealand chief executive Angela Clifford recently told RNZ’s Nine to Noon that she would like to see more investment in keep locally produced food on the shelves, rather than imported food.

The recently announced closure of plants by food processors Wattie’s and McCain’s was also troubling, she said.

“We have continued to see the lack of ownership of our food system increase over recent years. You know, we have no security plan, no vision to feed our own people.

“In food systems we talk about the need for redundancy – that is so we don’t find ourselves in a situation with just a few manufacturers, because if anything goes wrong, say like a global fuel crisis, it means that you run out of options.”

A food security plan should include a point that “we value feeding our own people first, and we would work hard to make sure that we would continue to have food for New Zealanders.”

And we should all be careful to avoid the kind of frantic panic-buying that left toilet paper shelves empty during the pandemic, Marshall said.

“We saw during Covid that if demand spikes unexpectedly, it can turn a manageable situation into a real shortage. This often gets amplified as that surge in demand moves through the supply chain, so panic buying can make things worse.”

Shortages could most likely come from foods that are imported or require imported products for production.

Which brings us to …

Fertilisers

Fertilisers are essential for food production and New Zealand gets nearly 22 percent of its overall supply from the Middle East, according to MFAT.

Around half of the world’s urea – the most widely used fertiliser – and large amounts of other fertilisers are exported through the Strait of Hormuz.

“There have been shortages before and farmers can use different products, they normally are more expensive but we have never got to the point where we’ve run out of fertiliser,” Federated Farmers arable chair David Birkett told RNZ recently.

“Farmers should start planning ahead – talk with their fertiliser companies to give them an idea of what demand will be like come spring time.”

Medicines and medical supplies

Pharmac said this week it was closely monitoring potential medicine supply risks due to the war.

The Iran war has affected the global supply of a range of raw ingredients, and there were warnings recently that the UK is “weeks away” from possible shortages of everything from painkillers to cancer treatments.

Pharmac said a small number of supply issues had been identified so far and there were currently no problems stemming from those for New Zealanders. It said it was working with suppliers, Health New Zealand, Medsafe, and the logistics sector to identify risks early and secure alternative products if necessary.

Substances few people would think about may be caught up in the war – for instance, the Middle East is a key producer of helium gas, and supplies for it are used in MRI machines and the semiconductor sector.

“The best example of where it gets delicate is in medicine,” MacCulloch said.

“There was concern that there could be great shortages in helium and MRI scans… We’re reliant on these sorts of gases which we may have to import. We’re not able to achieve total self sufficiency in that sense.”

Aluminium

Good old lightweight aluminium is a key component in transport, construction, electronics and packaging, just to name a few.

New Zealand gets about 9 percent of its aluminium from the Middle East, MFAT says.

And prices for the prized metal have hit four-year highs this week after Iran launched airstrikes at major production facilities in Bahrain and the UAE.

Plastics

The famous quote from Dustin Hoffman’s movie The Graduate is “There’s a great future in plastics. Think about it.”

Unfortunately for the immediate future, oil is basically how plastic is made, with 99 percent of plastics and polymers made using fossil fuels.

Prices of plastics used in everything from machine parts to toys have risen to their highest price in years.

Anything that’s made from polyethylene, a petroleum-based material which is the most widely used plastic in the world, is likely to be hit if the war drags on.

“The last 20 or 30 years so many products, components of them, are made in so many different countries,” MacCulloch said.

“And you know, this was lauded as a wonderful success of international trade and free trade. And we’re beginning, maybe, to see the limitations of that.”

Disposable cutlery, bottled drinks and garbage bags could be among the first to rise in the coming weeks, Patrick Penfield, a professor of supply chain practice at Syracuse University, told CNN recently.

Reuters reported that between US$20 to $25 billion (NZ$35 to $43 billion) of petrochemical products pass through the strait annually.

…And so many other oil-based products

Paint, road bitumen, clothing, cleaning products, electronics – it’s all part of the great supply chain that makes the world go round and while alternative energy sources are out there, oil is still the primary grease that keeps that chain turning.

The Warehouse Group chief executive Mark Stirton told The Post this week that the retailers were monitoring the crisis closely. “We haven’t been notified of any major delays, but there’s no stock shortages,” he said.

In truth, the list of things that could end being affected by a prolonged war and supply chain constrictions is close to endless.

For instance, 7.2 percent of New Zealand’s jewellery supply is imported from the Middle East, MFAT says.

So what should we as consumers do next?

“I think expectations are already starting to shift,” Marshall said.

“For a long time we’ve been used to goods being relatively cheap and consistently available, but that has relied on a fairly stable global environment. What we’re seeing now is not a breakdown of global trade, but more volatility in how it operates.”

MacCulloch said successive New Zealand governments of both National and Labour have failed to build supply chain resilience.

“They’ve had 50 years to prepare for this shock, you know, half a century.”

He noted that Labour and the Greens when in power shut down oil and gas exploration and closed Marsden Point, while National and its partners have pulled back on electric vehicles and incentives for alternative energies.

“For government, the focus should be on resilience,” Marshall said.

“That means making sure supply chains are as diverse as possible, thinking about strategic reserves for critical goods, and supporting domestic capability where it makes sense.

“Clear communication is also important. Uncertainty can drive overreaction, so giving people a realistic sense of risk helps avoid unnecessary pressure on the system.”

As a potential inspiration going forward in an uncertain time, MacCulloch cited the work of the late American economist Richard Easterlin, who explored the intersections of wellbeing and economics.

“He was a great believer in the idea that people had gone too far with materialism, buying a lot of consumer stuff they didn’t really need.

“Anything you don’t really need, any consumables that are not really necessary to your quality of life, I think drop. It’s not the time to spend on things that you maybe don’t really, really need.”

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Source: Radio New Zealand

The Co-operative Bank has been penalised nearly $2.5 million by the High Court for overcharging its customers.

It comes after the bank admitted to the breaches last year after reaching a settlement with the Commerce Commission.

The commission said the bank overcharged just over 48,000 customers approximately $7.225 million, which has since been remediated.

The Co-operative Bank self-reported the breaches under the Credit Contracts and Consumer Finance Act, and accepted the overcharging occurred after a series of compliance and process failures.

“Investing in compliance and rigourously auditing processes and controls is a crucial step towards avoiding an investigation, court action and a hefty penalty,” Commerce Commission director of credit Sarah Bartlett said.

The commission said the bank charged 12 “unreasonable fees” across its lending products involving its home and personal loans, with most being charged between June 2015 and November 2021.

In her judgement, Justice Victoria Heine noted the circumstances behind the breaches varied from fee to fee. However, they suggested “there was a fundamental failure within Co-operative at that time to appreciate what was needed to comply with the fees provisions”.

“I am satisfied that the penalty proposed is sufficient to contribute to deterring others from running the risk of non-compliance,” she said.

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