News and Opinion, sponsored by RaboPlus

Watch video on YouTube here.

Watch on our video page here.

Bernard Hickey details the key news overnight in 90 seconds at 9am in association with ASB, including news that the 2025 Taskforce is due to recommend today a flat tax and cuts in government spending, although Prime Minister John Key has already torpedoed the report, saying he does not want big bang reform.

Figures out from the Reserve Bank show farm lending fell NZ$297 million in October to NZ$46.934 billion, the first monthly fall in farm lending since February 2001 when total lending was NZ$12.58 billion.

Meanwhile consumer lending rose for the first time since December last year.

Bank and non-bank lending to business continued to contract in August while growth in lending to the agriculture sector slowed, figures released by the Reserve Bank show. Meanwhile, housing credit lending growth accelerated over the month.

The Reserve Bank and Treasury are concerned about New Zealand’s economy becoming unbalanced with too much investment in farm land, government and property rather than in private businesses and exporting.

Agricredit lending rose NZ$319 million, or 0.7%, in August from July, the lowest nominal increase in agricultural credit since February. Year-on-year growth in farm lending slowed further to be up 13.1% in August from 14.4% in July and over 20% between May 2008 and April 2009.

Business lending in August 2009 was down 0.3% from August 2008, the first year-on-year contraction in business credit for any month since August 2003. Business lending fell NZ$506 million, or 0.6% from July.

(more…)

Banks lent an extra NZ$523 million to the agricultural sector in July, bringing the total amount lent to the sector to NZ$46.6 billion, figures released by the Reserve Bank of New Zealand show.

At the same time, business credit lending contracted by NZ$706 million from June to NZ$78 billion in July, its seventh consecutive month-on-month fall since the start of the year.

Housing credit rose by NZ$337 million to NZ$164.8 billion over the month, while other consumer lending fell by NZ$106 million to NZ$12.2 billion.

Year-on-year growth in Agricredit was 14.4%, down slightly from the 14.5% in June. However this growth is down from over 20% in each of the 12 months to April 30, 2009. Year-on-year growth in business credit slowed further from the 3.4% in June, now down to 1.6% from July 2008.

Year-on-year housing credit growth was 2.8%, the same as in June, while other consumer credit lending was down 3.6% from a year ago, worse than the 3% fall in June.

(more…)

Agriculture lending by banks and other financial institutions continued to rise in March, up 1.4% from February and 21.7% higher than a year before, data from the Reserve Bank of New Zealand shows.

In contrast, outstanding business credit fell for the third consecutive month and is now down 1.3% from its peak in December 2008.

By the end of March, the amount of outstanding agricredit had grown at over 20% year-on-year for each month since May 2008. It eased slightly to growth of 21.7% in March, meaning there was NZ$44.7 billion worth of credit lent to the sector at the end of the month.

Business credit grew 8.2% from March 2008, but year-on-year growth has been slowing in the past few months. The level of credit lent to the business sector had fallen to NZ$79.2 billion by the end of the month.

(more…)