What happened Tuesday

Business / news

A review of things you need to know before you sign off on Tuesday; rent a rising problem for retirees, credit stress at record low, demand for cheap beef rising, swaps hold high, NZD stays low, & more

[updated]

30th Aug 22, 3:59pm by David Chaston

Here are the key things you need to know before you leave work today (or if you already work from home, before you shutdown your laptop).

MORTGAGE RATE CHANGES
There were a couple of floating rates raised today. The Bank of China raised their by +50 bps to 5.95%. Bluestone raised their by +60 bps to 7.49%.

TERM DEPOSIT RATE CHANGES
None here today so far.

TRAPPED IN RENT
The Retirement Commission engaged The Treasury to do a large-scale analysis of the Statistics NZ Household Economic Survey. That shows superannuitants still paying rent are much more likely to be spending 40% or more of their NZ Super income on housing, and long-term trends suggest more older householders are likely to be renters in the future. Superannuitants who still have a mortgage at retirement face similar issues. NZ Super was never designed to also cover rent or mortgage payments they say.

MINIMAL CREDIT STRESS
Credit stress plumbed to new lows again in July. Personal bankruptcies totaled just 39 in July taking the 12 month total to just 495 for the whole country. That is the first time it has been below 500, ever. No Asset Procedures (bankruptcy lite) fell to 42 in July, and the 12 month total is 511 and also a 112 month low. As a proportion of the over 20 population these are obviously also all-time lows. In the GFC there were more than 6000 people going bankrupt per year or in NAPs. Now we are running at less than 20% of those levels even though our population is larger.

A GROWING EXPORT OPPORTUNITY
Rabobank is reporting that international demand for New Zealand beef is likely to rise as consumers go down-market to save costs. That is apparently because we are large exporters of beef ‘trimmings’ (the cheaper meat cuts which remain after prime cuts are removed). Currently the US is flush with these cuts as they cut back their dairy cow herd. But that is expected to end soon, creating this new export opportunity.

OCD PAYS A PREMIUM
Open Country Dairy (Talleys) have released their 2021/2022 final milk payout at $9.35/ks/MS and +5c above the equivalent Fonterra level for the same season. They also point out that they pay four times/year in-season giving rise to a "cash flow advantage" which they value as worth 8c. A comparison of all dairy company payouts is here.

FMA HALTS KALKINE SALES CALLS
The Financial Markets Authority (FMA) has directed Kalkine New Zealand Ltd, which describes itself as an equities research firm and holds a transitional financial advice provider licence from the FMA, to stop making outgoing sales calls to people in NZ due to concerns about misleading marketing conduct. The FMA says Kalkine sales reps have made numerous calls to people offering the purchase of stock analysis reports, which provide buy, sell or hold recommendations. The FMA describes the calls as concerning, believing Kalkine materially breached the Financial Markets Conduct Act. The FMA's direction says Kalkine can't make outgoing sales calls to people in NZ until the FMA is satisfied its compliance processes are sufficient for outgoing sales calls to resume.

AUSSIE HOUSEBUILDING IN THE DOLDRUMS
Australian building permits were expected to fall -2% in July from June, but they actually fell -17%, a huge miss. Year-on-year they slumped -18%. Much of this is because approvals for new apartment building are now very weak, down -45%. But even for houses, the year-on-year retreat is approaching -20%. Rising RBA interest rates are getting the blame.

SWAP RATES HOLD HIGHER
Wholesale swap rates are probably little-changed today but holding yesterday's sharp rises. Our chart will record the final positions. The 90 day bank bill rate is up +1 bp at 3.47%. That is its highest since July 2016. The Australian 10 year bond yield is now at 3.68% and down -2 bps from this time yesterday. The China 10 year bond rate is at 2.68% and little-changed. The NZ Government 10 year bond rate is now at 3.97% and unchanged from this time yesterday, and now the same as the earlier RBNZ fix for this bond which was up +8 bps at 3.97%. The UST 10 year is now at 3.09% and down -1 bp from this time yesterday.

EQUITIES MIXED
The S&P500 fell away at the end of Monday trade, ending down -0.7%. Tokyo is up +1.0% in Tuesday trade making back some of yesterday's sharpish fall. Hong Kong is down -1.3% however, and Shanghai is down -0.6% in early trade. The ASX200 is up +0.5% in afternoon trade, and the NZX50 is up +1.1% in late trade. Much of today's gain is coming from a surge in recovering A2 Milk (ATM, #10), but others are chiming in too in support.

GOLD FALLS
In early Asian trade, gold is back up +US$11 from its level this time yesterday, up to US$1,728/oz.

NZD STAYS LOW
The Kiwi dollar is now back up to 61.6 USc and a gain of nearly +½c from this time yesterday. Against the AUD we are at 89.2 AUc and unchanged. Against the euro we are at 61.5 euro cents also little-changed. That all means our TWI-5 is now at 70.8 and up a modest +30 bps since this time yesterday..

BITCOIN RECOVERS
Bitcoin is making a recovery today, now at US$20,263 and up +2.5% from this time yesterday. Volatility over the past 24 hours has been moderate at +/- 2.1%.

Daily exchange rates

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Source: RBNZ

Source: CoinDesk

Daily swap rates

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Source: NZFMA

This soil moisture chart is animated here.

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91 Comments

by hum | 30th Aug 22, 4:16pm 1661832971

Bluestone raised their by +60 bps to 7.49%

7. The prophecy was correct.

by kazadi | 30th Aug 22, 5:24pm 1661837081

https://www.youtube.com/watch?v=HzdjMLKKdgk

Freddie can confirm.

by J.C. | 30th Aug 22, 4:26pm 1661833608

Rabobank is reporting that international demand for New Zealand beef is likely to rise as consumers go down-market to save costs. That is apparently because we are large exporters of beef ‘trimmings’ (the cheaper meat cuts which remain after prime cuts are removed).

I was at a Vietnam trade fair a few weeks back in Saigon. Not a single beef producer from Aust / NZ / U.S. On the other hand, from memory. at least 7-8 buffalo meat producers from India and Pakistan.

by lowercase capitalist | 30th Aug 22, 4:56pm 1661835400

On the other hand, from memory. at least 7-8 buffalo meat producers from India and Pakistan.

Why do you suppose that is?

by Carlos67 | 30th Aug 22, 5:28pm 1661837310

Because they cannot afford Beef ? Lets get real half the people in NZ can no longer afford a decent steak.

by Whatwillhappen | 30th Aug 22, 5:57pm 1661839027

If you go vegetarian for 3 months (like we did) you can save up for a 1/4 beast, which for us works out to $12.50 a kilo for all cuts, or ($16.50/kg for sausages). Steak night can be a thing again.

by J.C. | 30th Aug 22, 5:33pm 1661837616

Because there's a market I guess. Buffalo meat sells at about a 25-30% discount to beef. But if it fits the local cuisine, makes good sense.

Vietnam is a big market for Aussie beef.

Vietnam is the sixth largest market for Australian red meat and livestock exports and one of the fastest growing. Total red meat and livestock export value to Vietnam for 2020–21 totalled A$588 million, representing 4% of Australia’s total export value. Vietnam possesses strong demand growth fundamentals for Vietnam Australian exports including a large population with increasing incomes, resilient economic growth, continued urbanisation and growing popularity of red meat, especially among young, affluent consumers.

https://www.mla.com.au/globalassets/mla-corporate/prices--markets/docum…

by Foxglove. | 30th Aug 22, 5:37pm 1661837878

It doesn’t need to be produced to EU & USDA standards for which compliance is very expensive. Likewise for mutton.

by Pa1nter | 30th Aug 22, 6:28pm 1661840938

NZ doesn't have the capacity to be a major exporter of beef. So markets get developed for various reasons, while other markets are almost totally excluded. The US and China are our largest markets, by a huge amount. After that are more niche markets who will pay a premium for NZ beef, because in many countries its pretty hard raising nice plump cows without a lot of extra inputs.

One benefit is that values for some NZ products command a higher premium than an Australian version. You're always better off selling 10 things for a grand each than 1000 things for 10 bucks a pop.

by Foxglove. | 30th Aug 22, 7:55pm 1661846159

Apart from second grade, or prime beef tenderloins, cow meat as you generally describe it, or in the trade cow fores & hinds, are manufacturing grinding meat that are blended as lean meat in the hamburger trade. You appear to fail to distinguish the difference in that trade, more or less a by product of dairying, and the specialty cuts produced from premium steer. Even so much of those end up in manufacturing too. You also overlook the difficulty in marketing grass fed beef in competition to where grain fed is generally preferred by tradition. Perhaps a read of the history of the excellent work by Five Star Beef near to Ashburton, would be educational.

by Pa1nter | 30th Aug 22, 8:10pm 1661847006

I figured that was implicit in identifying our larger markets (who are taking the bulk cheaper stuff) vs niche markets who value premium cuts.

Much like our wine, where the volume is bulk in bladder at a lower value, and the higher ticket stuff is totally processed locally.

by Foxglove. | 30th Aug 22, 4:27pm 1661833624

Paying rent as a retiree not the only challenge. This government proposes to collect 15% GST on Kiwi Saver Fees. Net result. Fees will increase. Savers will save less. My first thought went way back to the days when there was actually some fire in the house. Robert Muldoon, under Keith Holyoake in opposition, something like - that’s all they do, that’s all they can do, tax and spend. No fan of Muldoon myself, but that doesn’t mean he was wrong about everything, and he was certainly on the mark with that one.

by morepork | 30th Aug 22, 4:43pm 1661834616

Adding GST to Kiwisaver fees feels like a pretty minimal impact on your savings. Say you're with Simplicity the fee increase would be from 0.31% to 0.36%. With $500k invested, annual fees are $1550/year, GST on that would be $232/year. Returns of 5% would be $25,000 for comparison.

by ShoreThing | 30th Aug 22, 4:49pm 1661834974

Goes to show that Kiwisaver will be treated like a piggybank by any government of the day. Not content with taxing your contributions as they go into the fund, and taxing the profit the providers make managing the fund, they have found they can also tax the fees the providers charge you for the privilege.

by morepork | 30th Aug 22, 4:54pm 1661835297

Yep, nothing new. National brought in the ESCT on your employer's matching contributions in 2012. I wonder what's next.

by kiwikidsnz | 30th Aug 22, 5:14pm 1661836450

What's next ? perhaps a deemed annual rate of return as is done for share investments outside Australasia, irrespective of actual performance & no refund when it goes backwards.

Of course Parliamentary Pensions will continue to be gold plated.

by imhenry | 31st Aug 22, 7:14am 1661886872

About time we abolished Politicians Superannuation entitlements and put them on National Super and Kiwi Saver like all other Kiwis bet you that will waken them up

by Roger the dodger | 30th Aug 22, 5:16pm 1661836560

Yeah you wonder why labour could be so stupid for such a small return.

Everything they do at the moment is a blunder.

I mean cmon, read the room!

by Pa1nter | 30th Aug 22, 6:31pm 1661841074

Someone has to pay for the last 24 months.

Our options are defer things (pass on to kids), have less things or pay more money.

You knew we were going to be paying for all this, right?

Inflation is just a bonus kick in the knackers.

by paashaas | 30th Aug 22, 8:29pm 1661848194

they cannot help themselves .. more tax , everywhere is the basic instinct with them

by Poppyc | 30th Aug 22, 5:30pm 1661837418

$232 is huge when you compound it annually over decades

by morepork | 30th Aug 22, 6:53pm 1661842434

Not really, as you're not going to have 500k for that long.

If you invest 500/month for 40 years in Simplicity's fund and get a 6% return before fees, without this tax you'd end up with 880k, with the tax 870k, not to be sniffed at, but not what I'd call huge

by kiwikidsnz | 30th Aug 22, 5:25pm 1661837114

When I started full time work in the early 1970s contributions to private super funds & insurance endowment policies were tax deductible. So that people would be encouraged to save for eg childrens education and retirement

We've forgotten/choose to ignore these principles in a lot of Govt grabs over the years.

by EdwardD | 30th Aug 22, 5:36pm 1661837786

I read about the Government's proposal to add 15% tax on Kiwi Saver Fees - what a discouragement to savers, especially when very few are in the green at present.

by Hamish | 30th Aug 22, 6:43pm 1661841808

Then they can feel sorry for kiwisaver account holders and create a 'Cost of Savings' payment to be credited to your bank account.

They've had their first trial run with COL allowance so I'm sure a lot of glitches will be ironed out before then.

by Audaxes | 30th Aug 22, 4:33pm 1661834009

The ASX200 is up +0.5% in afternoon trade, and the NZX50 is up +1.1% in late trade. Much of today's gain is coming from a surge in recovering A2 Milk (ATM, #10), but others are chiming in too in support.

FAANG 2.0: The Energy Crisis Is Ushering In A New Era Of Growth Stocks

NASDAQ is already down 22.2% this year, firmly in bear territory.

Big tech is losing its momentum and is slowly being replaced by new areas of rapid growth.

The new FAANG consists of fuels, aerospace, agriculture, nuclear and gold

by J.C. | 30th Aug 22, 4:38pm 1661834318

Nice insights Audaxes. I'm a proud owner of gold miners and Woodsides. On the A2M angle,

A2 Milk has outlined a renewed focus on building back its pandemic-battered Chinese daigou community while announcing a share buyback of up to $NZ150 million ($133.6 million).

The milk and infant formula maker swung back to profit in the 2022 financial year, with revenue up 19.8 per cent to nearly $NZ1.5 billion and net profit after tax rose 42.3 per cent to $NZ114.7 million.

https://www.smh.com.au/business/companies/turning-a-corner-a2-milk-reta…

by sit23 | 30th Aug 22, 6:34pm 1661841258

Oh dear. Straight out of the US buy your own shares back at inflated price scam. Check to see if A2 milk top executives have an income component which depends on their share price being at certain levels at certain times. Check to see if A2 have borrowed money for this exercise. Classic. Might be a buy on the dip after this temporary rise falls through.

by mfd | 30th Aug 22, 10:19pm 1661854774

Certainly no debt taken on to pay for it, A2 will still have a few hundred million in the back after the buy back and no debt.

Not sure on the incentive scheme rules, but it's a relatively small buy back for a $4 billion company. The main reason the price has risen is the good results rather than the buy back, I suspect.

by HW2 | 30th Aug 22, 4:34pm 1661834063

Man I hate looking at her, does anyone else feel the same. If not then you will by the time you have read this

Government quietly introduces $103 billion tax on Kiwisaver

https://www.nzherald.co.nz/nz/government-quietly-introduces-103-billion…

by dumbthoughts | 30th Aug 22, 4:43pm 1661834636

Say the words ... "I refute that".

by Foxglove. | 30th Aug 22, 5:22pm 1661836972

.Likewise. I freely admit I am repelled by the image. And worse, I am even more repelled by my own naivety, and ingenuous belief in the beginning, that there was something of value and sincerity present in this PM.

by HW2 | 30th Aug 22, 5:28pm 1661837292

Becoming a laughing stock imo though there is still the FB fan club :)

by Foxglove. | 30th Aug 22, 7:45pm 1661845518

Oh the Praetorian Guard are always on song aren’t they. Banging their little sharp witty swords on their great big red shields. Trying to be a centurion with all their might.

by HW2 | 30th Aug 22, 10:11pm 1661854260

How are you with the cryptic crosswords Foxy

by Foxglove. | 31st Aug 22, 6:58am 1661885886

Absolutely clueless!

by HouseMouse | 30th Aug 22, 6:37pm 1661841450

Likewise. I had an element of skepticism to begin with, but I managed to get conned the first time. Coming around to the Jacinda Zeitgeist. But that had pretty much vanished by the year 2 mark.

Awful.

by theglc | 30th Aug 22, 5:24pm 1661837074

"strongly refute"

by Noncents | 30th Aug 22, 5:30pm 1661837404

Her MO is to reject the premise of the question first, only once that has been overcome does she refute it.

by Whatwillhappen | 30th Aug 22, 6:01pm 1661839310

Hopefully the new speaker will crack down on that. From first look, he's going to be better than Mallard

by iliketobike | 30th Aug 22, 7:49pm 1661845788

Geez that's a low bar, if he refrains from accusing anyone of rape he'll be better than Mallard.

by dumbthoughts | 30th Aug 22, 6:21pm 1661840501

Must be awesome to simply deny reality and refute and reject anything that is even mildly inconvenient to you.

Might call up Amex tomorrow and simply reject the premise of my latest credit card statement.

by Noncents | 30th Aug 22, 9:34pm 1661852084

For AMEX you need to do a reverse Jacinda. First you refute the bill, then reject the premise of the question "When will you be paying?"

by KH | 30th Aug 22, 4:48pm 1661834910

Kiwisaver is special and should not be taxed at all. Nil, nothing, Because it's important, locked in for most of your life and a social protection instrument. Also it's money they have not had until recently, so why do it at all. ?

So no tax at entry, or on earnings, or at payout.

by lowercase capitalist | 30th Aug 22, 5:05pm 1661835915

The fact that it's locked for life makes it kind of shitty for the government to be applying tax increases to kiwisaver specifically.

At least with other investment vehicles you have the option to reallocate your capital if tax changes make your investment non viable.

by Uninterested | 30th Aug 22, 6:20pm 1661840455

I'd like the option of converting some or all to term deposits with the bank which have a 0% fee.

I acknowledge that at the moment inflation is higher than term deposits but this may not be the case for too long.

by nktokyo | 30th Aug 22, 6:46pm 1661841993

Because they have spent money they have not had until recently and need to get it back from somewhere

by JimboJones | 30th Aug 22, 6:49pm 1661842169

I don’t think anything is special and everything should be taxed evenly, otherwise you get all sorts of weird edge cases. With KiwiSaver for example, if it has tax advantages then old people get to take advantage of those with very little lock in remaining, whereas young people have to either choose a different savings mechanism and pay tax or lock their money away for decades.

by powerdownkiwi | 30th Aug 22, 8:50pm 1661849450

KH - no, it isn't. It's an unrealisable forward bet.

Just because someone 'earned' the proxy, doesn't mean the proxy is future-underwritten.

by jeremyr | 30th Aug 22, 4:57pm 1661835437

That is why it is a dumb thing to put your money into.

The proper way to run this would have been to allow people to put money into this thing, and do it tax-free, as other countries do.

But, no, we make it so that it comes from after-tax money, and then hang this little carrot of a few hundred bucks a year that they 'give' you, and then put it into employers to add a few % and then have some crazy system where employers can get this money back and so on and so on.

they will take management fees (well the manager will), and then they will charge GST (which the government will take), then they lock it in and reserve the right to change their mind about what date you can access it, then put a bunch of loopholes in place so you can take money out and buy a first home and end up in negative equity.

I opted out of this, and I am quite happy managing a 7 figure portfolio with no silly fees, and no GST on said silly fees and hardly any tax to pay either, as long-term investments are exempt from capital gains tax. With a little education, anyone can do it, and there would be no need for these advisors and the government sucking small amounts of money away that overall end up being a huge amount in taxes and fees.

This won't be the last time they make a grab for the money here. Next thing KiwiSaver funds will be forced to invest in infrastructure projects because the government can't afford it and the returns will be minimal, and then there will be fees and taxes. Just wait.

by mfd | 30th Aug 22, 5:27pm 1661837241

I think the sensible compromise is to play the Kiwisaver game with the minimum amount of money required to get the government bonus and employer match (if applicable) and keep the rest of your savings out.

I get something like an 80% instant boost to my Kiwisaver contributions (once you account for the tax on employer contributions + the government sweetener) - that's enough to make up for small inconveniences. Stuck into low cost index funds provides a bit of a balance against the majority of my investments which I actively manage outside KS.

by EdwardD | 30th Aug 22, 5:42pm 1661838123

I agree, savers should be encouraged to save as hard as they can for their retirement - like in OZ.

by Hardly | 30th Aug 22, 5:28pm 1661837312

And the prize for the most misleading headline ever goes to the New Zealand Herald. Shame on them.

Edit: I don’t love this policy because it effects me negatively. But considering the logic of universal GST it makes sense. It will also put pressure on fund managers - especially those who paid $300M to buy customers with the hope of levying high fees - to lower their fees.

So yes, not happy, but also likely a logically consistent policy decision.

Labour do need to think about tax cuts. They should outflank national with a tax cut plan offering cuts for the bottom bracket. That would contrast nicely with Nationals priority of cutting taxes for property speculators and people earning over $180K.

by sparrow | 30th Aug 22, 5:53pm 1661838781

I'm not clicking on that link, but the whole of government revenue for the year is a bit less than 100 billion.

So the Herald's headline is implying adding GST to kiwisaver fees would raise 103 billion, with the aim of generating a bit of outrage. Guess a few here took it hook, line and sinker.

by Noncents | 30th Aug 22, 5:58pm 1661839093

The $103b is over the life of an average person investing now.

Clickbait? yes...but still a valid assessment, when people cannot remove their money.

by Hardly | 30th Aug 22, 8:38pm 1661848721

They are talking about it raising $200M a year. To get to $103B that is going to take 500 years at 0.2M per year. Granted it will accelerate as the amount invested grows but not that fast to be a fair reflection of what the government will collect.

I believe $103B was a calculation of the money that the tax would discourage people front investing, not the tax take.

by sit23 | 30th Aug 22, 6:47pm 1661842059

By clicking on that link I found I could read a whole lot of other Herald articles that are not paywalled. Including the vaccine death in Dunners story. And another Meth fuelled ram raid in Northland. Grotesquely incompetently done, as well.

Thanks to all concerned.

by JimboJones | 30th Aug 22, 6:54pm 1661842441

Yes I think labour will be in a position to offer a big tax cut to everyone while National will be mainly throwing their money at property investors and high income earners. If I was labour I would offer the same total tax cut value as National but apply it to the bottom threshold so everyone gets it, it would be very hard for National to compete with that.

by Carlos67 | 30th Aug 22, 5:31pm 1661837501

Yep HW2, I have to change TV channels.

by HouseMouse | 30th Aug 22, 6:39pm 1661841557

You even watch TV?

by KH | 30th Aug 22, 4:39pm 1661834358

".......TRAPPED IN RENT......"

Yes indeed. Yet another social disaster out of the housing ponzi governments allowed.

We need to get serious about things like Kiwisaver and home ownership. Understand we need to value ownership of assets and despise debt. And understand the mad borrower Robertson is leading us even further down the path to disaster.

by Kate | 30th Aug 22, 10:47pm 1661856420

The rental market needs regulation. I find it amazing that no one is talking about it.

by Justa comment | 30th Aug 22, 5:01pm 1661835712

Looks like petrol is on the way back up. USD strengthening. Northern winter coming with no Russian gas, those energy prices in the UK are horrendous.

by kiwikidsnz | 30th Aug 22, 5:26pm 1661837195

I just returned from 3 weeks in Oz, petrol at least $1/lt cheaper there.

by dumbthoughts | 30th Aug 22, 6:23pm 1661840614

Saw some interesting calculations on a UK-based motoring forum where someone had worked out that on an equivalent 'cost per mile' basis it will potentially be more expensive to run an electric vehicle in the UK (if these projected electricity price hikes come to pass) than running a fuel efficient petrol car e.g. Prius.

by sit23 | 30th Aug 22, 6:50pm 1661842200

One of my kids has been in Malaysia. Petrol 80 cents a litre, going out for lunch $3.00, 30 degrees every day.

by JimboJones | 30th Aug 22, 6:57pm 1661842679

Will be 40 degrees every day soon, especially with all that cheap fuel.

by Let me be Frank | 30th Aug 22, 7:52pm 1661845925

And the average nurse earns $950 a a month....so in effect more expensive than here.

by Uh Oh | 30th Aug 22, 5:12pm 1661836362

Looks like labour wants to tax our kiwisaver savings now... wtf?

Mutual funds are terrible enough with providers and now the government taking their share of our retirement wealth and severely impacting future savings

No new taxes.... (but we will lift existing taxes....)

Seems like labour is destined to keep shooting themselves in the foot.....! hope there is a kickback on this as it's a just a bad idea

by nktokyo | 30th Aug 22, 5:35pm 1661837743

Would you look at that, people who work and save and invest are being taxed more.

Didn't see that one coming.

by JimboJones | 30th Aug 22, 7:07pm 1661843252

They have been all to the invest category. In most cases prior to the changes those people were paying little to no tax. As someone who works but doesn’t have money left over to save, I am very happy that you now have to pay some tax.

by Palmtree08 | 30th Aug 22, 7:34pm 1661844880

Peoples savings are being inflated away, faster than they are being taxed away.

by Uh Oh | 2nd Sep 22, 1:54pm 1662083645

Yeah ok - that's a pretty ignorant comment nktokyo, I think the point is they said 'no new taxes'... and yet here we are with some in print

Everyone knows businesses have accountants that legally avoid tax, investors also use loopholes to reduce taxes and the middle class/ high earning employee gets screwed by the tax laws... with low/ no control over how much or when they pay taxes

All you need to do is look at a few financial statements of business to see the tax as a % of revenue is well less than the company tax rate based on how it's applied - i.e. after expenses instead of before expenses with employees

Still, the low-middle class need retirement accounts and to take more from them now at the expense of future growth is plain stupid, and if we don't protect it who do you think the government will come after next?

by Uh Oh | 2nd Sep 22, 1:55pm 1662083740

by Carlos67 | 30th Aug 22, 5:34pm 1661837699

40% of your super on rent ? I'm calling BS on that for a couple now 100% of your Super will go on rent in Auckland. You are living in a Caravan on a camp site at 40%.

by Pa1nter | 30th Aug 22, 6:32pm 1661841141

I'm already seeing lots of retired boomers living in caravans, and not for fun.

So I can't imagine what it'll be like when my generation retires.

by Rob Reid | 30th Aug 22, 8:46pm 1661849206

No caravan for me. I'm one of the classy Boomers who should be able to score a garage in the wop wops. Living the dream.

by Carlos67 | 30th Aug 22, 9:01pm 1661850098

You must be Brock's new neighbour

by Whatwillhappen | 30th Aug 22, 5:54pm 1661838883

Our export of lamb flaps (and beef flaps too I imagine) to the Pacific is shameful. I wish we'd stop. Some say they're a delicacy in the Islands (because they're meat, which (of any kind)used to be a delicacy? That's how it is in Korea with fatty pork, which is harder to come by). I say we're exporting health problems to poor nations.

by Pa1nter | 30th Aug 22, 6:33pm 1661841190

I'm sure if eye fillet were the same price they'd pick that instead.

by Eschaton | 30th Aug 22, 6:57pm 1661842649

Meat is not unhealthy, excess energy consumption is.

by J.C. | 30th Aug 22, 5:56pm 1661839016

Brisbane suffers worst monthly house price decline in 40 years.

According to the latest CoreLogic index results, the Brisbane market has lost more than 1.7% over the first 29 days of August. In the prior 42 years of Brisbane housing history, the worst monthly loss was 1.5%

https://www.livewiremarkets.com/wires/aussie-house-prices-suffer-bigges…

by Te Kooti | 30th Aug 22, 6:11pm 1661839915

Look at the collapse in new building permits over there - very very ugly. Recession ugly....

As an aside, the 3rd richest man is now a coal miner no one has heard of. Going to be a lot of money to be made in fossil fuels as the West tortures itself with CC.

https://www.smh.com.au/business/markets/one-time-college-dropout-is-now…

by powerdownkiwi | 30th Aug 22, 8:59pm 1661849948

Think about that comment.

What will that 'money' (it's debt-issued proxy, it isn't 'made') buy beyond fossil energy? Even beyond the growth inflection?

But I grant you that the closer your proxy is linked to energy, the better chance it has of being recognised.

For a while...

by HouseMouse | 30th Aug 22, 9:52pm 1661853149

I'm struggling to work out why Australia's residential development sector is collapsing faster than ours - so far. Does anyone have any thoughts?

The only thing that really springs to mind is that because most of their mortgages are on floating interest rates, the impacts of increases in their OCR hit more quickly?

Conversely, other than Sydney, their housing affordability is nowhere near as stretched as here, so I would have thought their residential development sector would have more resilience in terms of increasing cost of finance.

Struggling on this one....

by Pa1nter | 30th Aug 22, 10:17pm 1661854657

You mean why are more Aussie residential construction firms falling over, or why is demand for new homes dropping off quicker?

by HouseMouse | 30th Aug 22, 10:50pm 1661856629

Well both, and of course they are related.

by Pa1nter | 30th Aug 22, 11:05pm 1661857554

Demand for new houses will be impacted by higher interest rates as you have mentioned.

The high rate of construction firms falling over much less so, that's a result of firms spending 24 months attempting to cater to much higher demand, much higher prices, and much longer completion times. They are running on fumes.

As to why the disparity between Aussie and NZ, the two key differences I guess was the RBA sending a signal of low rates until 2024, and the Australian government juicing construction early on in the pandemic by handing out cash for people to build or renovate.

Anecdotally, the construction firms I interact with in NZ have for the last 12-18 months been fairly proactive with making end clients aware of the fluid pricing situation, fairly common to get head contractors checking quoted prices are still relevant - the sources I know in Aussie say this has been less of the case.

by Zen20 | 30th Aug 22, 6:24pm 1661840670

Maybe providers will reduce fees to minimize tax obligation?

by ShoreThing | 30th Aug 22, 6:38pm 1661841480

The only reason a provider would reduce their fees is if there was a competitive market for fund providers. A single glance at the number of kiwisavers stuck in default accounts tells us this is not the case.

by paashaas | 30th Aug 22, 8:37pm 1661848646

brilliant thinking . Let us tax food ( especially healthy food ) more - that would force the supermarkets to drop the prices ( to minimize tax obligation of course ) - everyone better off all around. And applying the other side of that "logic" - drop tax on tobacco.