Category: Business

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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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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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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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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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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Source: Radio New Zealand

The head of Airways NZ is confident there were no mistakes made by his staff after a 20-year-old software glitch left planes circling in the air.

The aircraft service provider has released its investigation into the 16 August issue with its oceanic air traffic control system.

It was caused by a problem with its software’s code that had been there for more than 20 years.

The organisation did regular testing of its system but, Airways NZ chief executive James Young told Morning Report it was not picked up.

“It has never presented itself in the past, no.”

Young said the computer problem had since been patched.

His workers managed the situation effectively, he said.

“They followed all of our established procedures, they ensured safety was protected at all times and they also restored the system quite quickly. The outage itself lasted for 49 minutes.”

As the owner of the software Airways NZ took responsibility for the problem, Young said.

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Source: Radio New Zealand

You might be on track to save a lot more in your KiwiSaver than you think.

When you receive an annual statement from your KiwiSaver provider, it will show you what lump sum you are on track to have saved by the time you are 65, and what that should mean per week.

The projections are based on assumptions set by the government, which include what returns you can expect from your fund.

These assumptions are also used in most calculators that you might use online.

But the problem is that many funds have been delivering more than twice those projected returns for a number of years.

The government says conservative funds need to assume a return of 2.5 percent a year after fees and tax. Balanced funds need to assume 3.5 percent, growth 4.5 percent and aggressive 5.5 percent.

Morningstar data director Greg Bunkall said the growth fund benchmark had returned 8.8 percent a year for the past 10 years, before inflation.

Rupert Carlyon, founder of Koura Wealth, said tax would take off up to about 1 percent.

“I guess it is important to point out that the last 10 years has delivered market returns of about 14 percent in New Zealand dollar terms, compared to a longer-term average of 9 percent. Blackrock are estimating equity returns for the next 10 years to be in the range of 5 percent to 6 percent. After adjusting for fees and tax, you are well below the 5.5 percent assumption currently used for a growth fund.

“The FMA is potentially being conservative with their assumptions, though I think that is the right approach. You are better off ensuring people have a little more than expected rather than using a heroic assumption that then means they come up short. The flip side is you are encouraging people to save too much and making their goal a little harder than anticipated.

“I don’t think the returns have been reviewed since they were created and it would also be nice to understand the maths on what has driven those returns. “

Mike Taylor, founder of Pie Funds, said there could be an argument to expect 6 percent from growth funds and 8 percent for aggressive funds.

At Kernel, founder Dean Anderson said it was important the assumptions were standardised, and it was better if the assumption was too low rather than too high.

“They’ve created consistency and said we’re not going to enable people to effectively market and attract customers through making up assumptions about the future but conversely it’s obviously now potentially sort of understated – there’s quite a conservative assumption about very long term returns.”

Danielle McKenzie, financial markets manager at the Ministry of Business, Innovation and Employment said the ministry was aware the regulatory formula for calculating future returns on KiwiSaver investments, set out in the Financial Markets Conduct Regulations, needed review.

“This is not in our current work programme but will be considered as we look ahead. There is no timeframe for a review, which will depend on government priorities.”

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Source: Radio New Zealand

An Inland Revenue system fix last weekend has rectified an error that affected more than 150,000 student loan borrowers.

Inland Revenue said in 2020, as part of its business transformation project, student loan accounts were moved into a new system.

“This was extremely complex and with complexity errors can arise.”

Last year, Inland Revenue found an error with the student loan interest calculation for some student loan accounts, which resulted in borrowers being overcharged or underchanged interest. The error was worth $15 million.

“Student loan interest calculations are complex, and some of the underlying causes relate to before the system upgrades were made through our business transformation.

“It took some time for us to establish the causes, establish fixes and test them. We also needed to do some manual work in preparation for making a system fix. Implementing the system fix required a system outage and to limit the impact the outage needed to take place on a weekend that is not on (or close to) a significant tax filing date.

“Inland Revenue successfully implemented a system fix over the weekend of 6 and 7 December 2025. We are confident that the system fix we have implemented has resolved this system error,” a spokesperson said.

About 23,000 people who had paid off their loans had been given a refund, an average of $10.50.

Another 64,500 still paying off their student loans received a credit, of an average $10.

About 67,000 people had interest added and then written off. IRD said most had less than $20 written off.

IRD said it had notified the affected borrowers.

“Customers will not receive an unexpected bill due to this error. Inland Revenue has written off the undercharged interested that was applied to affected customers’ accounts. Customers have been credited overcharged interest or refunded if the loan has been repaid.

“The total amount written off due to this error is approximately $15 million, which is less than 0.1 percent of all student loan balances.”

One affected borrower said she had been told she owed $276.61 for loan interest that was incorrectly calculated during her time overseas.

She refused to pay while she asked for more information, during which time IRD contacted her employer to deduct from her pay directly.

When she filed an Official Information Act request to find out more about what had happened, she was told the balance had been reduced to zero.

She was then told the problem had been resolved and she was getting a $1.31 refund.

Inland Revenue said it was not always possible to fix problems immediately.

“Some errors take time to be discovered and appropriate fixes to be worked through. When we do find an error, or someone alerts us to something that is not working as intended, we work as quickly as we can to understand what the error is and fix it. Every year, we update our systems and processes multiple times to make improvements. While very few errors come from these updates, occasionally there are some.”

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