Category: Business

Source: Radio New Zealand

The Supreme Court has thrown out Uber’s appeal against treating drivers as employees.

It comes after a group of four Uber drivers took the ride-sharing company to the Employment Court in 2022 over their employment status.

They argued that drivers should be considered employees rather than contractors and be entitled to benefits such as leave entitlements, holiday pay and a minimum wage.

The Employment Court ruled in favour of the drivers, which Uber appealed unsuccessfully at the Court of Appeal in 2024.

Uber then appealed that decision at the Supreme Court, where on Monday five justices unanimously voted to throw out the appeal yet again.

“Uber offers a rider the fare for the trip and the rider accepts that offer. Neither drivers nor riders can effectively select one another, and they are practically anonymous vis-à-vis one another throughout the entire transaction,” a written summary of the court’s decision said.

“Uber earns its revenues by charging riders for trips, and resolves any difficulties which might arise during each trip. A passenger could not reasonably be expected to think they were contracting with the driver when they got into the car.”

Workers First Union, which represented the drivers alongside E tū, celebrated the decision.

“It hasn’t been easy, but it has absolutely been worth it,” deputy secretary Anita Rosentreter said in a statement.

She called for Minister of Workplace Relations and Safety Brooke van Velden to axe her Employment Relations Amendment Bill, which would exclude specified contractors from being able to test their employment status as the four Uber drivers did.

“It would show maturity from Brooke van Velden if she were to take a moment to reflect on the Supreme Court’s judgement and consider that New Zealanders will not accept exploitation under the illusion of ‘flexibility’ or ‘certainty’,” Rosentreter said.

Uber’s general manager for New Zealand, Emma Foley, expressed disappointment in the Supreme Court’s findings.

“Independent contracting is a cornerstone of not just Uber but also our broader economy – from tradespeople and creatives to IT consultants and health professionals – and hundreds of thousands of Kiwis value the freedom and control it provides,” she said in a statement.

“While the implications of this decision could be far reaching, for now this decision relates to only four drivers and delivery partners, and Uber and Uber Eats will continue to operate as normal.”

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Source: Radio New Zealand

• Services sector PSI rises for second month, but still in contraction territory
• Sales and employment rise, while new orders fall
• Proportion of negative comments falls for third consecutive month

The services sector is still contracting – but at a slower pace.

BNZ – BusinessNZ Performance of Services Index (PSI) for October rose 0.4 points to 48.7, which is still below the long-term average of 53.

A reading below 50 points indicates the services sector – which makes up about three-quarters of the economy – was contracting.

The October result was also still well below the survey’s historical average of 52.8.

BusinessNZ chief executive Katherine Rich said despite the level of activity rising for the second consecutive month, the fact that no sub-index results got above 50.0 during meant it was still tough times for the sector.

Activity/Sales (48.9) recorded its highest value since January 2025, new orders/business (49.5) slipped slightly from September, and employment (48.8) rose 0.9 points from September, its highest value since March 2025.

The proportion of negative comments for October (54.1 percent) was down from September (58.0 percent) and August (59.6 percent).

Service sector business continued to report weak demand and reduced customer spending due to the economic downturn, cost-of-living pressures, and low confidence.

Other concerns included rising operating costs, delays, competition, and project cancellations which reduced sales.

BNZ senior economist Doug Steel said the better-looking Performance of Manufacturing Index (PMI) last week might have started thoughts of a quick economic recovery, but Monday’s PSI result pushed against that.

Steel said the news was not all bad, as combined activity showed small improvement.

“It is getting closer to a level that would be consistent with the modest economic growth rates we are forecasting,” he said.

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Source: Radio New Zealand

Annual food inflation has edged higher, as rising grocery prices offset cheaper fruit and vegetables.

Stats NZ’s food price index rose 4.7 percent in the year ended October, from 4.1 percent the month before.

Groceries, notably dairy products, eggs and instant coffee, increased 4.9 percent for the year.

Meat was also more expensive.

For the month, overall prices were marginally lower as fruit and vegetables became more abundant.

Among other goods and services, power, gas, fuel and accommodation prices rose, while airfares fell.

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Source: Radio New Zealand

Exporters are expected to continue to reap the benefits of a weak dollar and strong demand, despite a drop in prices for key agricultural products, including dairy, forestry and fruit.

Major commodities were traded in US dollars and ASB’s latest commodity index was marginally higher on last year, while a differently calculated and weighted ANZ index was about 6 percent higher on a year ago.

The New Zealand dollar (NZD) traded between 54.85 and 61.2 US cents this year, and for the year to date was about 1.5 percent higher. A weaker NZD meant better export returns.

Dairy prices engulfed by supply

However, the global dairy auctions run by Fonterra had been falling over recent months, putting pressure on the co-op’s mid-point $10 per kilogram of milk solids (kgMS), with its $9.75 forecast more in line with the NZX’s forecast of between $9.68 to $9. 80 kgMS.

NZX dairy analyst Cristina Alvarado said dairy prices had fallen as global volumes increased, however, New Zealand’s grass-fed dairy products were still in strong demand.

“It’s the quality, it’s the flavour, but also the safety that many countries have,” Alvarado said, adding free trade agreements had benefited New Zealand during the ongoing global trade disruption sparked by the introduction of President Donald Trump’s US tariff policies.

“Countries that bought more from the US before, have been buying more from New Zealand,” she said.

Soft NZ dollar helps returns

Westpac chief economist Kelly Eckhold said the export sector remained strong, helped by the weak currency, which was also supporting the tourism sector, as visitor numbers increased.

“For most of the last six months to a year, we’ve had the unusual situation where the New Zealand dollar has been a bit weaker at the same time as external prices have been strong and also growing conditions have been good,” Eckhold said.

“Usually, there’s a bit of a counterbalance between some of these sort of factors, but they’ve all pushed in the right direction. Right now, what we’re seeing is the New Zealand dollar weakening, so therefore that’s helping support prices.”

Eckhold said the New Zealand dollar would also continue to be supportive, with its weakness expected to persist until the economy improved and interest rates stabilised.

“I don’t think that the exchange rate is likely to appreciate significantly until such time as it becomes clear that growth is starting to pick up sustainability in New Zealand, and the interest rates are no longer likely to fall,” he said.

“Next year’s outlook remains pretty uncertain still at this stage.”

Eckhold said rural communities were expected to remain resilient to the soft economy, and for dairy farmers to make the most of the likely a large cash payout from the sale of [https://www.rnz.co.nz/news/business/577378/fonterra-ceo-says-lactalis-deal-will-allow-it-to-grow

F onterra’s consumer brands business].

A further confidence boost will also come from the Trump administration’s move to scrap the 15 percent tariff on imported beef and kiwifruit to reduce cost of living pressures on US consumers, although the sometimes erratic US tariff policy is making producers cautious.

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Source: Radio New Zealand

Spring came late for the housing market but it arrived last month, the Real Estate Institute says.

It has released its latest data that show the number of sales across the country was up 6.4 percent year-on-year in the month, at 7505.

Gisborne had 70 percent more sales, at 63, the West Coast was up almost 52 percent, to 44 and Taranaki up 26 percent to 184.

The national median Days to Sell decreased by one day to 41 days.

For New Zealand, excluding Auckland, it decreased by two days to 41 days.

The largest reduction in median Days to Sell was observed in Southland, down 13 days from 44 to 31. The greatest year-on-year increase in median Days to Sell was on the West Coast, rising 23 days from 24 to 47 days.

Institute chief executive Lizzy Ryley said even when the figures were seasonally adjusted, activity had picked up more than normal.

“I think at the moment what we are seeing is good weather suddenly appearing made it feel like it was spring.

“The weather just suddenly went form being winter because October was so much better than September.

“Seasonally we were expecting to see something in September which we’ve seen in October. Talking around the country to everybody it feels like it just switched overnight … if the market doesn’t move in October and November when will it move? And it’s moving.”

New Zealand’s median price decreased by 1.1 percent year-on-year, to $786,000. Excluding Auckland, the median price increased by 0.6 percent year-on-year to $710,000. The house price index, which smooths out variation in the median sale price caused by the types of properties selling was up 0.3 percent year-on-year.

Auckland’s median price lifted over $1 million for the first time since March. West Coast and Queenstown Lakes also hit new records.

“It really shows that demand isn’t just holding up, but actually lifting, especially in premium and regional areas,” Ryley said.

Shed said Auckland seemed to be showing more confidence.

“You’ve got people starting to lose that fear of paying too much. They’re starting to go ‘ok it’s safe for me to do something’. There’s also probably a sense of house prices have dropped quite significantly over the last few years…. Now they are stabilising, just moving gently up a bit and people go ‘ok, it’s a good time’.

“I suspect people do feel like it’s likely they’ll stay flattish or level but there is always that feeling that with the OCR impact they could move up … there’s going to be potentially an opportunity.”

New listings continue to rise around the country, up 5.5 percent year-on-year to 12,209. New Zealand, excluding Auckland, also recorded an increase, up 4.2 percent year-on-year to 7783. Inventory levels have returned to over 33,000, up 3.9 percent nationally year-on-year to 33,588.

“First-home buyers continue to be a dominant group across the country, taking advantage of lower interest rates and a stabilised market in terms of price, closely followed by owner-occupiers,” Ryley said.

“Salespeople are telling us that the warmer weather, lower interest rates, and easing lending criteria have brought more people back into the market and boosted activity in many regions, which we can see from the data.”

She said people were optimistic without being too excited. “The cost of living is so high still.”

ANZ economists said prices seemed likely to finish the year at about their forecast for 0.5 percent to 1 percent year-on-year growth.

“However, sales volumes were stronger, rising 4.2 percent month-on-month to be above their historical average, indicating some resilience in demand. Days to sell were steady around their past year’s average. Overall, there hasn’t been any decisive charge in the direction of the market this month, though higher sales volumes provide some tentative evidence of stronger demand.”

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Source: Radio New Zealand

The electricity sector regulator wants to be able to intervene to control prices for connecting to electricity networks.

The Electricity Authority said some lines companies were charging high up-front costs for connections, which can be a barrier to development, slow down electrification and leave consumers worse off.

The authority’s general manager of networks and system change, Tim Sparks, said high connection fees could affect new housing and commercial developments, EV charging stations and other critical infrastructure.

“Reducing very high up-front charges would help enable and encourage efficient development. Not only is this good for the economy, it means the network costs would be shared among more people on the network.”

He said there were excessively high connection costs in some parts of the country.

“Data indicates a small number of lines companies have been requiring newly connecting customers to pay more than their share,” Sparks said.

He said any controls would be targeted and most of the 29 lines companies and their customers would not be affected.

“This proposal could mean the few lines companies that would be affected respond by increasing their lines charges for existing customers on their network.”

Sparks said any increase would be likely be small, for example in Auckland existing households might initially face an increase of between 22 cents and 66 cents a month.

The regulator is asking for feedback on the proposal along with a move to introduce obligations for when lines companies must offer and maintain connections to their networks.

“We think there should be some obligations for when lines companies must supply electricity. This would provide greater clarity from the outset about lines companies’ obligations for connections.”

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Source: Radio New Zealand

Meridian Energy is seeking new leeway over the country’s largest hydro lake, in a proposal that has locals and experts conflicted.

The gentailer wants permission to draw Lake Pūkaki down to lower levels than usual – from 518 metres above sea level to 513 – for up to three winters in a row, without needing special approval from Transpower.

It secured referral to the fast-track process in August and said it would carry out a full socio-economic impact assessment as part of its full application.

It was also seeking to reinforce the Pūkaki Dam with rock armouring to handle lower water levels.

Meridian said it would ‘rarely’ need to access contingent storage, “and most likely only a fraction into the available amount”.

However, modelling in the fast track referral documents showed the move could release enough energy to power 75,000 homes and reduce wholesale electricity prices by about seven percent, by removing uncertainty over when Meridian could tap into its backup water storage, letting it plan generation more efficiently.

The company’s general manager of development, Guy Waipara, said the change would reduce the impacts of future droughts by ensuring a steady supply of electricity for New Zealanders.

“Over the last couple of months, we’ve seen how healthy levels in the hydro storage lakes contribute to lower wholesale prices. We’ve calculated that freeing up access to contingent storage is likely to save wholesale purchasers of electricity approximately $500 million a year by reducing the need for the system to rely on expensive thermal fuels,” he said.

For Mt Cook Lakeside Retreat co-owner Kaye Paardekooper, fluctuations in the lake level were nothing new.

However, she wanted to know what the proposed changes would mean for tourism and aquifers, and said Meridian needed to be frank with residents.

“We’re in two camps. We realise how important the power is for New Zealand, and we’re very much into sustainability so we recognise that hydro, it’s actually a very clean energy that’s being generated,” she said.

“I would love to see a visual – to see ‘this is what it looks like now, this is what it’s going to look like’. It’d be good to have more information, even if it’s fast-tracked. As a responsible neighbour – we see Meridian as our neighbours – it’d be nice for them to talk to us.”

Experts caution lake could shrink by a fifth

Earl Bardsley, a hydrologist and associate professor at the University of Waikato, said the option to dip into the lake would give Meridian a buffer during dry years – especially with the country running out of gas “fairly unexpectedly”.

However, he estimated that if Meridian dropped the lake to the minimum 513 metres, it would cause a 20 percent reduction in the lake’s size compared with the existing permitted drawdown, and could expose an additional 35 square kilometres of lakebed.

He said he would not want to see the measure become long-term.

“There’ll be a big visual impact, and that’s not desirable by any means, but we’re getting to somewhat desperate times,” he said.

Earlier this year, the government declined Contact Energy’s fast-track referral application to lower Lake Hāwea’s operating range.

Bardsley said Meridian’s application was different because Lake Pūkaki was in a relatively unpopulated area.

“Pūkaki is the major hydro storage lake in New Zealand, so it’s really geared towards hydro storage. If you had to choose one lake to get something done quickly, you would probably choose Pūkaki. You wouldn’t choose Hāwea, because there are all kinds of implications with the community.”

Environmental questions

Meridian’s experts believed the environmental effects could be kept minor – but in fast-track referral documents, government agencies and councils suggested more information was needed about the impacts on native lizards, black stilts and lakeshore plants.

Commenting on Meridian’s referral application, Transpower said there was merit in the company having greater flexibility to access some of the contingent storage.

However, the national grid operator described it as a “complex” issue.

Transpower executive general manager of operations Chantelle Bramley told RNZ that if contingent hydro storage was used faster or earlier than necessary and it did not rain, New Zealand could run out of energy very quickly.

Contingent storage played a critical role as the country’s fuel of last resort, she said, especially during extended dry periods such as last year’s.

For Meridian’s Guy Waipara, though, last year’s dry period was a key example of why the company needed easier access to contingent storage.

“Meridian is already authorised to utilise Lake Pūkaki from 518m down to 513m, but currently this is controlled by Transpower. During the energy shortage of Winter 2024 we found that by the time approval came through we no longer needed to access that water,” he said.

‘Band-Aid’ fix

Environmental Defence Society chair Gary Taylor argued Meridian’s move to dip into contingent storage was underpinned by wider structural problems.

“The electricity market is not delivering a package of renewables that’s workable quickly enough. And so we’re having to do these Band-Aid fixes as we go along. I think the problem with the market is it was designed in a different era – climate change and pushing hard on renewables wasn’t part of the objective and it’s now out of date. It needs a fundamental reset so that we can build renewables faster,” he said.

He said the fast-track process was too superficial and did not give serious thought to the implications of dropping the lake by up to five metres.

Meridian should offset any loss of biodiversity or landscape with “robust” compensation, he said.

“Meridian has got plenty of resource to do that. What it’s proposing to do is to take what is essentially free water, to increase its profits. It needs to come up with a properly sized compensation package – and that might involve putting more effort into ridding the Mackenzie Basin of wilding pines, for instance, which are ecologically damaging. There are a number of things that they could do.”

Company says lower lake levels ‘highly unlikely’

In a statement, Waipara said Meridian had applied for a three-year timeframe while new electricity generation and battery storage were built “and more robust long-term security settings are developed”.

“The sudden decline of gas as a firming fuel has put additional pressure on New Zealand’s electricity industry, and like others we have had to increase the size of our investment over the coming years and think more broadly about how we produce electricity. We’ve invested more than $1 billion in the past five years, and we have a further $2 billion of investment planned over the next three years,” he said.

Asked about the potential environmental implications, he reiterated that contingent storage would only be accessed “when the country really needs it and most likely only a fraction of the available amount”.

“We care deeply about the wellbeing of native wildlife in the Waitaki Basin. Meridian is working closely with DOC and other partners in the Waitaki Valley through Project River Recovery, which preserves flora and fauna in braided river habitats in the Upper Waitaki Basin.”

Waipara said the application was about “easier access, not access to new depths”.

He said none of the company’s modelling showed lake levels reaching the minimum level of 513 metres above sea level.

“While access to contingent storage may result in the lake being taken below 518 metres, it’s more likely that over the three years of access, that storage will not be used.”

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Source: Radio New Zealand

US President Donald Trump has raised the idea of a 50-year mortgage term to help first-home buyers – but would it work for New Zealanders trying to buy houses, too?

Media reported that Trump wants the US Government to back a 50-year mortgage option that would help address concerns about housing affordability.

Federal Housing Finance Agency director Bill Pulte reportedly said it was “a complete game changer” for home-buyers.

But is it actually a solution?

Ed McKnight, economist at property investment firm Opes Partners, said it could be an expensive one over the long term, although there would be some immediate repayment savings.

He calculated that for every $100,000 of home loan a borrower had, the payment on a loan at 5 percent interest rate would be $19 lower per week lower with a 50-year term than a 30-year one.

“A $600,000 mortgage would save $114 a week in repayments.”

He said home-buyers would also be able to borrow about 13 percent more. Investors might be able to borrow an extra 20 percent.

But the flipside of this would be that the loan overall would become a lot more expensive.

The longer a loan term, the more interest you have to pay overall.

McKnight calculated that it could mean paying $172,000 in interest on every $100,000 of home loan borrowed, compared to $93,000 on a 30-year home loan.

“One of the things I’ve thought for a while is if home ownership is becoming more expensive, because house prices keep going up, what are the different levers that banks or the government could pull in order to make it slightly more affordable? Paying the loan off over a longer period might be one of those levers.”

But he said it was substantially more expensive. “I’m going to take over 60 percent longer to pay off my mortgage but I can only borrow an extra 20 percent if you’re an investor or less than that if you’re an owner-occupier.”

He said it would help people who were on the cusp of mortgage affordability.

But it could also contribute to rising house prices. “If you allow people to borrow 10 percent more money or 20 percent more money it doesn’t necessarily mean that all goes straight into higher house prices and they are 10 percent tot 20 percent higher than they would otherwise be.

“But it is absolutely certain that it would lead to some amount of house price inflation and some of that money would flow through into higher house prices because you’ve got more money in the system but the same number of houses. You might get a few more houses being built because you’ve got some extra demand but initially you would except to see a house price bump.”

While New Zealand borrowers usually take out home loans over a 30-year term, many people pay them off more quickly.

A survey of the banks by RNZ showed significant numbers had paid off more than they needed to – in some cases up to 65 percent of customers.

David Cunningham, chief executive at mortgage broking firm Squirrel, said he thought most people took 25 to 30 years to get from buying their first home to making their final mortgage payment, probably on a different house.

“The average age for a first-home buyer is around 36 and it’s those last few years pre-retirement where the big reductions in the mortgage happen.”

He said people would usually increase their mortgage payment as their income rose over time.

“Pretty consistently most but not all homeowners hit retirement with minimal or no mortgage.”

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Source: Radio New Zealand

An economist says US president Donald Trump’s flip-flopping on tariffs has New Zealand businesses on edge.

Trump has cancelled tariffs on several US food imports including beef and kiwifruit.

Sense Partners economist John Ballingall said it was good news for a lot of businesses – but many were still finding it hard to relax.

“The [frequent] changes are making life very difficult for our businesses. When businesses are uncertain they tend not to invest or hire people, and the constant flip-flopping is certainly affecting businesses’ planning,” he said.

“When the global economic environment is uncertain it can be a bit risky making big investment decisions or hiring a whole bunch of people because you don’t know how the market’s going to change.”

“Right now the US economy is very hard to predict and that makes long term planning very difficult … They’re both nervous and fully expect Trump to change his mind again.”

Trump’s latest reversal could be a sign of things to come, Ballingall said.

“I think what we will see over the next few months is that US consumers, and therefore voters, are starting to get very frustrated with the high cost of living and that’s what has driven the cancellation of these tariffs,” he said.

“If inflation continues to increase in the US, which most people expect it will do, then it’s entirely possible that we could see more tariffs come off.”

The approaching midterms could ramp up that pressure further, he said.

“The fact that US voters are starting to become much more concerned about cost of living issues will be troubling the administration, because the midterm elections are now not that far away and they probably don’t want to be going into those elections fighting a cost of living crisis,” Ballingall said.

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Source: Radio New Zealand

Got questions? RNZ has launched anew 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’.

When I remarried, I kept my home and rented it to help pay off the mortgage.

I have made a loss for the past few years, as the house required quite a few serious repairs, due to its age. For the past two years, my son and partner have been renting it.

I am retiring this year and have little superannuation. My question is, when I sell it at the end of next year, how can I give my children $150,000 each, without them being hit with a tax of some sort?

You shouldn’t have any tax to pay on money you give to your children.

New Zealand no longer has a gift duty, but you may need to be aware that this could count against you, if you apply for a rest home subsidy in the future.

You can only gift up to $8000 per person per year in the five years before you apply for a subsidy or $27,000 per year for gifts made five years ago.

We discussed this on the podcast an episode or so back, if you want more information.

If that is a concern to you, you could seek some advice from a lawyer on the best way to manage it.

With many people working two or even three part-time jobs with low pay, there is a problem with being eligible for the full government contributions.

If part of your full contribution comes from one job and the remainder from another job, I was told you are not eligible for the full government contribution. I found myself in this position – nowhere is this explained.

On enquiring why I didn’t receive the full government contribution, I was told that the minimum amount for qualifying for the full contribution has to come from one source – multiple sources do not qualify.

You’ve been misled here.

Inland Revenue confirms this is “totally untrue”.

“You can contribute from as many sources as you like – multiple employers, direct contributions – and they all count towards your total contributions, which are included in the annual government contribution calculation.”

Employer contributions don’t count towards your $1042 required to get the full contribution, though, only what you put in yourself.

Every time my home loan comes up for refixing and I have to worry about which term to choose, I wonder why don’t New Zealand banks offer a 30-year, home-loan fix like people can get in the US?

Wouldn’t that be a better option?

In the United States, it’s possible to lock in a 30-year mortgage term when you buy a house and stick with that interest rate the entire time, unless you sell and move.

In New Zealand, that’s not an option. We can generally fix for terms out to five years, and 1-2 years are usually the most popular.

There are a couple of reasons for that.

Infometrics chief executive Brad Olsen said one was just the size of the New Zealand home-loan market.

When banks lend money, they have to know that they can get funding on the other side at interest rates that work for them.

New Zealand’s market is not really big enough for banks to be able to manage that interest rate risk.

“If we were to offer those long-term rates, they’d often be more expensive than otherwise, because banks have to hedge their bets a bit on what they would be repaid over time,” Olsen said.

“If it’s not as big a market, if there’s risk, they have to price that risk, which would make this more expensive.”

In the US, government mortgage entities like Freddie Mac and Fannie Mae (Federal National Mortgage Association, which bundles loans into mortgage-backed securities) help to manage this.

At times, New Zealand banks have offered a seven or 10-year mortgage option, but they have not been hugely popular.

“Barely anyone took it, so the banks are going, ‘well, I have to make sure all the funding lines up, but also barely anyone calls me about them’, so they are a lot of effort to do and very little return.

“Yes, people crave stability, but there’s realistically not quite as big of a market and not quite as much of an ability to fund those loans over the long term.”

The US is a bit of an outlier – other countries don’t really do it either.

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