Category: Business

Source: Radio New Zealand

Miscommunication from the Reserve Bank has driven interest rates higher than they should be, Kiwibank economists say, but they expect the economy to recover next year, anyway.

Kiwibank has released its outlook for 2026, noting that the Reserve Bank is currently “at the centre of some confusion”.

Wholesale rates have lifted since the bank’s last official cash rate announcement, even though it reduced the rate.

It was firmer than some had expected in its view that rates would not have further to fall.

The resulting increase in swap rates led to Westpac and the Co-Operative Bank increasing what they charge some fixed-term home loan borrowers.

Kiwibank economist Sabrina Delgado said the issue could be easily addressed by the Reserve Bank, when it made another announcement in February.

“Ultimately, it’s a bit annoying and premature to be seeing financial conditions tightening, and it’s frustrating, because it is coming from another misstep from the Reserve Bank,” she said.

“Although the Reserve Bank cut rates, with the obvious intention of lowering retail rates for businesses and households, a higher-than-expected OCR track has catapulted wholesale rates higher. Traders are now factoring in rate hikes – no longer cuts – in early 2026.

“That’s way too aggressive and premature.”

Kiwibank’s economists said the misstep “is all too familiar”.

“Over the last few years, the Reserve Bank have bounced around from being hawkish in November, dovish in February, hawkish in May and then dovish in August. There seems to be some seasonality to their mishaps.

The miscommunication in November, along with climbing wholesale rates and higher retail lending rates, suggest we may indeed get another dovish commentary in February.

“It’s silly, we know. At the end of the day, retail rates are in a lower bound, although not as low as they should be.

“The Reserve Bank can – and should – lower wholesale rates with the stroke of a pen in February or from a speech at any time.”

Delgado said it would not change her outlook for an improvement next year.

“For us, rate hikes are still a 2027 story. It’s just that markets were given a bit of a poor signal.”

She said unemployment was probably at its peak and employment growth should rebound from the middle of next year.

The housing market was likely to pick up too, she said.

“Sales are up 6 percent, compared to October last year, and where sales go, prices follow.”

Kiwibank expected house prices to rise about 2-3 percent next year.

“That’s not exactly shooting the lights out, but it is an improvement from trekking sideways over the last two years.”

The economy was likely to grow about 2.4 percent next year and about 3 percent the following year, they said.

This year was tipped to be the year of recovery, but it stalled mid-year.

They said that was for two reasons – the hit to confidence from US President Donald Trump’s tariffs and the fact the Reserve Bank kept interest rates higher than would support growth.

“It was only in October, that the Reserve Bank took the cash rate below neutral and into more stimulatory territory. For most of the year, policy remained restrictive.

“We won’t dwell on the Reserve Bank’s past mistakes though. It would take too much ink and paper, and we’re mindful of climate change.

“What matters most for the Kiwi outlook is that policy settings are now at levels which should encourage activity. A cash rate at 2.25 percent is more supportive of a solid recovery in 2026.

“Compared to last year, interest rates are meaningfully lower and they should stay low for a while yet.”

Delgado said they were excited for a broad-based recovery.

“We finally have all the right settings, with interest rates being at levels that encourage activity, we’re already seeing those markets for recovery now with everything on the table for a great year of recovery – we’ve got consumption up, business confidence firmer, the job market is stabilising, housing activity is starting to pick up.”

She said discretionary “fun” spending was already showing improvements.

“We’re also hearing from businesses they’re experiencing more activity and they’re feeling more confident with the outlook.”

She said the economy should normalise to something like its pre-Covid form, rather than the experience before the downturn, when there was a lot of fiscal and monetary policy stimulus.

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

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’.

Does using a credit card and incurring the transaction fee cost more than the hot points earned if you pay it off every month?

If you’re paying a surcharge on every transaction you make, then you’re probably paying more than you’re getting in rewards.

According to investment adviser Jeremy Sullivan, the rate of reward you can get from a credit card at the moment ranges from anything from 0.5 percent of your spending to 1.43 percent (on an Amex Airpoints platinum card).

So, if you’re paying two percent on all your transactions, plus your card’s annual fee, you’re not keeping up.

But you might find that you have quite a few transactions that don’t have a surcharge attached at all – the supermarket, for example, doesn’t charge you to use a credit card. And new rules are still intended to take effect that would rule them out on in-store payments by May.

It’s generally a good idea to have a rewards card if you spend a lot on your credit card (at least $10,000 a year). If you don’t, you’re probably better going for a lower-fee, no-rewards option. And if you carry a credit card balance, you’re best to go for a low-interest card.

I’m employed, 57, one wife, no kids. What happens to my KiwiSaver if I die without a will?

KiwiSaver becomes part of your estate if you die. If you have a will, it’s distributed according to that.

If you don’t, there are rules that kick in.

If you have a spouse and no kids or living parents, your wife will get the whole thing. She might also have a claim under the relationship property act anyway because KiwiSaver is relationship property.

When you have a spouse and kids and don’t have a will, your spouse gets personal effects like your furniture and household belongings, $155,000 and a third of anything left, and kids get the other two thirds.

If you don’t have kids but your parents are still alive, they can claim a third after that same calculation.

If you don’t have any family at all and no one can find anyone who might stand to inherit, the money could go to the government. Public Trust says anyone who thinks they should have benefited from the estate can apply to the New Zealand Treasury to be considered.

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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 major Queenstown tourism operator and two other contractors have been sentenced for contributing to a landslip that inundated a residential street, forcing dozens of evacuations during record rainfall.

Skyline Enterprises, along with contractors Naylor Love Central Otago Limited and Wilsons Contractors Limited, were charged for breaches of the Resource Management Act.

A major landslip inundated Reavers Lane during torrential rain in September 2023, leaving 10 homes red-stickered.

Judge John Hassan sentenced the companies in the Christchurch District Court on Friday afternoon.

Skyline Enterprises were fined $130,000, Naylor Love $154,000, and Wilsons Contractors $61,600.

As part of an enforcement order, the companies were ordered to cover repair costs incurred by the Queenstown-Lakes District Council of over $200,000, as well as emotional reparation payments amounting to $12,000.

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

Source: Radio New Zealand

Another bank has increased its fixed home loan rates, as pressure continues on wholesale rates.

Although the Reserve Bank cut the official cash rate at its most recent review, it was firmer than the market expected in its view that further reductions were unlikely.

That has prompted attention to turn to when rates might start to rise again, and wholesale interest rates to rise, which affects bank funding costs.

The one-year swap rate has lifted from 2.4 percent in late November to more than 2.7 percent.

The two-year rate has lifted from 2.5 to more than 3.1 percent.

Westpac increased some of its fixed home loan rates earlier in the week.

Now the Co-Operative Bank has said it will increase its two-year rate from 4.49 percent to 4.79 percent, its three-year rate from 4.79 percent to 5.09 percent, its four-year rate from 4.99 percent to 5.29 percent and its five-year rate from 5.19 percent to 5.49 percent.

“Longer term fixed-rate mortgages are influenced primarily by wholesale interest rates and the future rate outlook, as opposed to the current OCR. The two- to five-year interest wholesale rates available to banks have increased by 0.5 percent to 0.6 percent since the last OCR change on 26 November, so people should expect longer term fixed rates to increase,” chief executive Mark Wilkshire said.

“As long term wholesale rates have risen quickly in recent weeks, on the expectation we are around the bottom of the interest rate cycle, we have had to start to increase our longer-term fixed home loan rates. However, we’ve reduced our short-term six-month rate.

“We’ve balanced these changes by also increasing term deposit rates, benefiting savers,” he 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

New Zealand exporters appear to have coped with the first six months of the US government’s tariffs, according to a new report.

Westpac and the International Business Forum have looked at the impact of the tariffs on the country’s annual $9.3 billion export trade to the US, New Zealand’s second biggest market, and found they have been manageable.

Westpac senior economist Darren Gibbs said the tariffs were clearly unhelpful but the impact had been manageable.

“Strong demand – and high commodity prices – are shielding most primary goods exporters from the negative impact of reciprocal tariffs where applicable.”

About 70 percent of New Zealand exports to the US had been affected by the 15 percent reciprocal tariffs, which were imposed on top of any other existing quotas and tariffs.

Different impact on different sectors

The report assessed the impact on the main goods, beef, dairy, fruit, wine, wood, and mechanical machinery.

“The good news, for the most part, has been the continuation of high export prices, we have seen decline in the dairy field as a result of some very good supply conditions rather than any drop off in demand, and we’re still seeing very good prices beef and lamb, and likewise for kiwifruit and apples,” Gibbs said.

He said the US decision to suspend the tariffs on beef and fruit in November had further helped those commodities, and for some products the US was less important to them while for others the US was more significant.

“The most notable decline is in exports of mechanical machinery. Exports of beverages are also tracking slightly below year earlier levels, while some other categories – such as meat and electrical machinery – are seeing slowing rates of growth.”

Gibbs said many exporters had also been successful in getting the US importer to bear the tariff cost.

“Those that have been most successful are those selling commodity products currently in high demand with few near-term substitutes and those selling high-tech and somewhat unique manufactured goods with no substitutes.”

But exporters were also being advised to look at finding other markets, strengthening their supply chains and US links, and innovate products to make them more desirable and special for US consumers.

World trade disrupted not destroyed

Gibbs said initial fears that the global trade system would be derailed by the tariffs had not come to pass.

“We’re progressively seeing consensus forecasts of global growth being revised higher over the second half of the year, back in April the fear was that the tariffs might be the trigger for a broader trade war… if that had happened the growth impacts would undoubtedly been much larger than we have seen to date, tariffs have definitely dropped down the list of global worries.”

However, the tariffs had seen changes in trade policies and behaviour by China, the world’s second largest economy.

Gibbs said tariffs would remain an area of uncertainty, and if US growth slowed and consumer spending fell that would have consequences for trade, as might the case currently before the US Supreme Court about the legality of the tariffs.

“It is possible the current set of tariffs is ruled illegal and if that is the case there would be a renewed period of uncertainty because it’s not clear what the White House would do in response to that.”

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

Source: Radio New Zealand

Mana whenua are set to take a major role in running Milford Sound, with Ngāi Tahu joining Milford Sound Tourism as a shareholder.

From 31 March, Ngāi Tahu Holdings and several Papatipu Rūnaka are set to take a 33 percent stake in the company that owns and operates Milford Sound’s key infrastructure and visitor services.

Milford Sound Tourism chief executive Haylee Preston said the move would help protect Piopiotahi for future generations, with talks over the past six months creating a strong foundation for the future.

“We’re delighted to partner with mana whenua. We all share the same goal, ensuring this special place is respected, protected and valued by our community and visitors for generations to come,” she said.

The partnership was announced in Queenstown on Friday morning, with a formal ceremony planned for March in Milford Sound.

Milford Sound Tourism, funded largely through a levy on cruise tickets, was currently 49 percent owned by RealNZ and 49 percent owned by Skeggs Group, the owner of Southern Discoveries.

The company managed the harbour, wharves, visitor terminal, parking, staff accommodation, Eglinton Valley Camp, Knobs Flat visitor centre and the area’s wastewater, rubbish and recycling systems.

Awarua Rūnaka chairman Barry Bragg, who represents one of the eight Kāi Tahu Papatipu Rūnaka with interests in Piopiotahi, said the move would strengthen Ngāi Tahu’s long-term stewardship of a place deeply significant to the iwi.

“Kāi Tahu welcome the opportunity to become the third equal shareholder and play a greater role in decision-making for a special place that holds deep significance to our people. This is an investment in the future of Piopiotahi and strengthens our commitment to its long-term care,” he said.

Te Rūnanga o Ngāi Tahu Kaiwhakahaere Justin Tipa hoped the iwi would have a more visible presence in Piopiotahi.

“Having the opportunity to be formally part of the tourist operations in Milford is significant. It allows us to exercise our kaitiakitanga obligations in a way that has been difficult in the past,” he said.

“Our journey in tourism began several decades ago as a way for us to invest in our takiwā, tell our own stories, and share our heritage with the world. We look forward to strengthening how Kāi Tahu history is shared and understood by all who visit Piopiotahi.”

Southland District Council would sell its two percent shareholding as part of the deal.

Chief executive Cameron McIntosh said it was a significant but appropriate move to bring the council’s involvement to an end.

The council was glad to be part of a transaction that let Ngāi Tahu have more of a say in Piopiotahi, he said.

“The future for Piopiotahi under this arrangement is very positive and I look on with interest to see how it goes. I’m very confident that this is a good step forward,” McIntosh said.

Preston said she did not expect any immediate changes to the way Milford Sound was run.

In the long run, the partnership with Ngāi Tahu was for the best, 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

• Manufacturing activity expands marginally in November
• Four of five sub-indexes in expansion – employment first since April
• Manufacturing expands five months in a row
• Points to broader economic recovery

The manufacturing sector expanded for a fifth consecutive month in November, led by rising production and employment.

The BNZ-Business New Zealand Performance Of Manufacturing Index (PMI) for October rose by 0.2 points to 51.4 from 51.2 in October, but is still below its long-run average of 52.4. A reading above 50.0 indicates expansion.

The sector has been gradually recovering from the mid-year slump when the economy stalled.

BNZ senior economist Doug Steel said the PMI has settled into growth territory, but he is hoping for bigger improvements in the months ahead.

“We want to see more upbeat out turns from this survey and the Performance of Services Index, to provide us with some comfort that the expected lift in Q3 GDP can be sustained into Q4.”

Steel said manufacturing was struggling to gain momentum, and its current activity was nothing to get excited about.

However, the survey attracted fewer negative comments from manufacturers, with the proportion of negative comments falling to 45.6 percent, down from 54.1 percent in October and 60.2 percent in September.

BusinessNZ’s director of advocacy Catherine Beard said in the current economic climate, any move higher was a welcome step.

“Manufacturers reported a lift in demand driven by seasonal Christmas activity, improving economic conditions and rising customer confidence.”

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

Source: Radio New Zealand

Minimum wage workers will get a pay increase from April 1, but its less than the current rate of inflation.

Workplace Relations and Safety Minister Brooke van Velden said the rate would go up by 2 percent, from $23.50 to $23.95.

She said it would benefit about 122,500 working New Zealanders and struck a balance between keeping up with the cost of living and not adding further pressure to businesses.

“I know those pressures have made it a tough time to do business, which is why we have taken this balanced approach. With responsible economic management, recovery and relief is coming.

“I am pleased to deliver this moderate increase to the minimum wage that reflects this Government’s commitment to growing the economy, boosting incomes and supporting Kiwis in jobs throughout New Zealand.

“The increase aims to help minimum wage workers keep up with the cost of living, with inflation projected to remain relatively stable at around 2 per cent from June 2026,” she said.

The increase was in line with the recommendation the Ministry of Business, Innovation and Employment (MBIE) made to the minister.

It said it would be the best balance between protecting real income of low-paid workers and minimising job losses.

“CPI inflation forecasts suggest annual inflation will ease to be within the 2-2.5 percent range in the first half of 2026 and remain relatively stable at around 2 percent from June 2026 through to 2028,” MBIE said.

“These forecasts indicate that a 2 percent increase would largely maintain the real income of minimum wage workers relative to the level of the minimum wage when it last increased on 1 April 2025.”

MBIE said the groups most likely to be affected included young people, part-time workers, female and Māori workers.

The effects would be concentrated in tourism, horticulture, agriculture, cleaning, hospitality and retail, it said.

It recommended increasing the starting-out and training wage rates from $18.80 to $19.16 per hour, maintaining the current relativity of 80 percent of the adult minimum wage rate. This recommendation was also adopted.

Infometrics chief economist Brad Olsen said the increases were probably closer to the rate of inflation than people might think.

“Only because of course these figures start from April 1 next year. At that point, it’s forecast would have inflation up 2.3 percent. So you’re sort of a lot closer than when we’re currently sitting at 3 percent for the September quarter.

“The minister’s been quite clear in her work to try and balance, supporting workers and the increasing cost of living, but where business conditions are at the moment and and you see that in terms of businesses highlighting cost pressures and the fact that job ads have not really improved all that much.”

Job numbers were not particularly “upbeat” at the moment, Olsen said, with unemployment at its highest since 2016.

“So all of that is a bit more of a balance that I think the government has had to go through this year.”

He said increases in previous years had been much bigger than the rate of inflation.

“Although in one year you might not have the minimum wage increase relative to inflation, the minimum wage is still considerably above where it would be if it indexed to inflation from, say, 2018 onwards.”

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

Source: Radio New Zealand

The National Business Review (NBR) says it has banned Inland Revenue from taking out any subscriptions to its news website after the department breached its copyright by sharing articles across a number of staff.

IRD had a group subscription for 220 users until March last year when that was replaced by a single subscription for a member of its media team.

NBR said between 28 March last year and 17 November this year, 22 different NBR articles were shared with staff members as word documents. Seven articles were shared with 600 staff.

A group subscription to NBR covering 600 staff for four months would ordinarily have cost IRD about $36,000 plus GST, it said in a statement.

NBR has been cracking down on businesses sharing logins and stories from its paywalled site.

It has secured three other settlements.

NBR has also disabled the ability for subscribers to copy, print or save articles to PDF.

NBR co-owner Todd Scott said at the time, NBR had developed a sophisticated system to flag those who were breaching its terms and copyright conditions and the publication would give those firms already flagged by the system until the end of November to put their houses in order.

He said it was “shocking” the government department tasked with making sure New Zealand businesses and individuals paid their fair share had admitted they were not properly paying for their use of a privately-owned business’s product.

“It is, however, worse that they have then refused to pay the appropriate damages in recognition of the seriousness of the breach.

“The irony of the IRD’s refusal to pay for its breach will not be lost on the thousands of New Zealand businesses who have been struggling to make ends meet for several years.

“Following a couple of years in which several high-profile media businesses have folded in this country, New Zealand business and government departments need to ensure they are backing the industry appropriately.”

Inland Revenue said it had looked into the issue as a matter of importance and wrote to NBR’s lawyer with information about what happened and why.

“We accepted that an error had occurred and apologised for the error in our understanding of the extent of the licence.

“We wanted to put right what had happened. We also sought legal advice. We made what we consider a reasonable offer – $12,500 including GST – in redress, keeping in mind what had actually occurred and what is a reasonable use of taxpayer funds in the circumstances. That was not accepted by Mr Scott. A counteroffer was subsequently made to IR that we did not accept.

“Inland Revenue has a daily email that refers to various media articles on relevant matters. It is circulated to approximately 600 persons. Over an 18-month period, an NBR article was circulated (as an individual word document attachment) to that email list on seven separate occasions.

“Of the seven articles, the number of people actually viewing the article ranged from 18 to, in one instance, 130. We were genuinely engaging with NBR to increase the number of subscriptions to 22 as well as put right our error. However, it was during the discussion to increase our subscription that Mr Scott cancelled the one subscription we had.

“We have now decided not to take up any NBR subscription in the foreseeable future. We are not concerned about not having any subscriptions.”

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

Source: Radio New Zealand

Comvita has made progress on its recapitalisation plans after a recent takeover bid failed to find enough shareholder support.

The honey exporter said it reached agreement with its lending syndicate, which would improve its capital position while meeting its obligations to consider the interests of all shareholders.

The company’s board failed to convince shareholders to support a $56 million deal with Florenz, owned by Canterbury businessman Mark Stewart.

Comvita calculated it still needed as least $25m to position the company appropriately, and was working with several parties interested in supporting a future capital raise, though no binding commitments or arrangements had been agreed.

“The board is very pleased with the level of interest shown by prospective investors and is now focused on executing options that put the company in a sustainable financial position,” it said in a market statement.

The agreement with the lending syndicate will extend Comvita’s expiring banking facilities, and grant covenant waivers for the 31 March 2026 testing date.

Comvita also agreed to a temporary covenant related to earning a minimum underlying profit for the six months ending in December, along with staged facility reductions through to the end of March, which it expected to meet based on its current business performance.

Comvita said it will provide further updates to shareholders in line with its continuous disclosure obligations.

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