Here are the key things you need to know before you leave work today (or if you work from home, before you shutdown your laptop).
MORTGAGE RATE CHANGES
ICBC has launched a market-leading one year fixed rate special at 4.55%. They have also raised their top cashback limit to $30,000. TSB trimmed their rate card. The Police Credit Union has trimmed rates too. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
Rabobank trimmed a number of TD and savings rates today. Heretaunga Building Society did too. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
UNEXPECTED, BUT WELCOME
StatsNZ data shows retail sales volumes delivered a surprising +0.5% lift for June quarter, up +2.3% from a year ago. Conditions remain tough in the retail sector, but some analysts say this data is a sign of the long-awaited recovery is taking shape.The unexpected rise may also cast some doubt on the Reserve Bank's forecast that GDP shrank by -0.3% during the quarter.
WESTPAC BREACHES BRING COMCOM ACTION
The Commerce Commission has filed proceedings against Westpac for allegedly breaching New Zealand lender responsibility principles, after multiple failures meant customers did not receive legally required information about their loans and, in some cases, agreed interest rate discounts. The Commission believes Westpac failed to invest in adequate systems and processes to ensure it complied with its CCCFA obligations.
NZX50 STARTS WEEK FIRM
As at 3pm, the overall NZX50 index was up +0.5%, regathering some of the OCR cut momentum after Friday's hesitation. It is now up +1.0% over the past five days and up +0.2% year-to-date. It is now sitting +4.0% higher year-on-year. Market heavyweight F&P Healthcare is down -0.3% today so far so the overall gains are despite the FPH headwinds. Heartland, Scales, Gentrack, and Chorus lead the gains while Meridian, Napier Port, Investore, and SkyCity casino are the main decliners.
SOME KEY PROFILE UPDATES
More NZX50 companies are reporting, and our profiles for Vector, Chorus, PFI and Tourism Holdings have been updated.
A NEW BANK BOND
ASB is launching a new five year $100 mln bond issue for "general business purposes", with the ability to accept unlimited oversubscriptions. The last time it issued a bond like this was in November 2022 with a four year term. That one raised $650 mln at 5.93% yield. This time the margin indication is "0.77" to 0.80%". With the current five year swap rate at 3.37%, that means the yield will likely come in at about 4.15%.
MORE GREEN BONDS
Meanwhile, Meridian Energy (MEL, #2) announced plans to issue up to $300 mln of 6.5-year unsecured, unsubordinated fixed-rate Green Bonds.
FROM AIAL TO VONTOBEL
Auckland Council's "Auckland Future Fund" Board has appointed Swiss manager, Vontobel Asset Management AG as its global investment manager with the responsibility to manage $1.3 bln in funds on behalf of the council. All these funds came from the sale of Auckland Airport shares.
KEY BANK METRICS
The RBNZ Dashboard to June 2025 was released today. We will have analysis over the next few days.
UGLY OUTCOME
It was a 'poor' quarter for KiwiSaver funds. The total in these funds rose just $2.5 bln in the quarter, about the same as in 2016. And don't forget this 'rise' is largely due to contributions, not earnings. The IRD collected $2.482 bln from members and paid those contributions to fund managers. Fund managers paid themselves their fees. But after that the net earnings and gains/losses in the quarter only amounted to $51 mln - for all 3.4 mln members. That is an average of just $15/member for the three months in earnings. It's not just 'poor', its terrible.
SWAP RATES SOFT AGAIN
Wholesale swap rates are will probably be lower by about -3 bps today across the curve. Keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was up +1 bp at 3.03% on Friday. Today, the Australian 10 year bond yield is down -4 bps at 4.28%. The China 10 year bond rate is up +1 bps at 1.78%. The NZ Government 10 year bond rate is down -2 bps at 4.39%. The RBNZ data is now all delayed by one business day now, and and up +3 bps on Friday to 4.38%. The UST 10yr yield is up +1 bp from this morning, now at 4.27%.
EQUITIES FIRMISH
The local equity market is now up +0.3% in late Monday trade. The ASX200 is up +0.2% in afternoon trade. Tokyo has opened up +0.7%. Hong Kong is up +2.1% with a spurt at its open and Shanghai is up +1.3%. Singapore has opened up +0.1%. Wall Street futures suggest the S&P500 will open up a mere +0.1% when it opens tomorrow - but that will probably be enough to claim another record high.
OIL STABLE
The oil price in the US is unchanged at US$63.50/bbl and the international Brent price is still just on US$67.50/bbl.
CARBON PRICE STILL HARD TO KNOW WITH SO FEW TRADES
There have been few trades yet again today, in another dry patch, with the price holding down at $56. The next official carbon auction is on September 10, 2025. See our daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD SOFTISH
In early Asian trade, gold is down -US$7 from this morning at US$3363/oz.
NZD STABILE
The Kiwi dollar is down -10 bps from this morning, now at 58.6 USc. Against the Aussie we are unchanged at 90.4 AUc. Against the euro we are also unchanged 50.1 euro cents. This all means the TWI-5 is holding at at 66.3.
BITCOIN HOLDS
The bitcoin price is now at US$113,352 and down -0.9% from where we opened this morning. Volatility has been modest at just over +/-1.3%.
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43 Comments
Rabobank trimmed a number of TD and savings rates today. Heretaunga Building Society did too.
A new round of TD cuts across the board can't be far off.
Does anyone honestly believe Labour can announce any form of CGT or wealth tax and win the next election? I don’t think National have anything to worry about, regardless of whether the economy is picking up.
Labour wouldn't lose many of their constituents & may gain some by a CGT virtue signal such as extending the Brightline to 5 or even 10 years again. Then it would probably have to have some more sensible exemptions for people selling / moving for employment changes, going to work overseas or similar force majeure which was a reported problem last time they extended it.
However to win Labour does have to unequivocally rule out the Greens wealth tax (Hipkins mumbled something about this already?)
They need to win some coalition voters back. I doubt a new tax can do that.
Maybe if that new tax allowed for some big income tax cuts, but I’m not convinced that’s possible.
A CGT on its own is just a tax increase, it is not an outline of a series of economic reforms to return us to a quality of life for the average NZer.
Labour do not have the vision required to outline this, neither do National.
i personally feel that as part of a well articulated vision a CGT is probably required, as this will force us to promote investment in non capital gaining assets, with associated rentier benefits. We are going to have hard yards why not make them usefull.
As I posted on another topic, making a new engine of growth that gives every homeowner a tax free income bigger then their salary for the next 20 years may be a hard ask, but the last 20 years are not going to repeat, let's get started with the hard economic reforms required and stop hoping that houses are going to rise to 1.5 or 2mil average value in NZ, it's not going to happen.
Exactly right, great comment
They certainly can't win by announcing a new tax first.
They can only win by announcing a major change to the tax system like first $10k tax free ,some how lowering the excessive marginal rates some pay. Then announce the wealth/cgt/Tobin tax at a later date.
Yeah they are between a rock and a hard place with working for families and some stupid marginal rates.
- agree on 10k tax free,
- also compulsory KiwiSaver as you turn 18- or aggressively those under 25 ... Think bold or go home.
- CGT on any home worth more than 1 mil
But the reality in the Labour room, is co governance , how cis males cause all violence and other BS social engineering. Lets face it Labour have not offered economic solutions since Roger Douglas, and he had to leave in the end and start ACT.
They lack a Michale Cullen as much as National do.
Clowns to the left of me
Jokers to the right
Here I am stuck in the middle with you
When you started off with nothing
And you're proud that you're a self-made manAnd your friends they all come crawling
Slap you on the back and say
Please
PleaseTrying to make some sense of it all
But I can see it makes no sense at all
Is it cool to go to sleep on the floor?
'Cause I don't think that I can take anymore
I’m not convinced Cullen would touch a wealth tax either.
Wealth taxes rely on valuations.Valuations in themselves, as the courts will testify, can be subjective and wildly variable from year to year and change can arrive, at a moments notice for the most unexpected reasons. Compiling, maintaining and auditing a ledger on all of that throughout NZ will create a bureaucracy of unimaginable monumental proportions.
Here is why I can’t see any form of wealth tax working:
CGT: makes no (immediate) money, needs lots of exemptions
Wealth tax: won’t make much money once the rich hide it away. Could cause the rich to leave (or at least threaten to)
Land tax: how will the retired boomers pay it?
Stamp duty; probably the most acceptable, but hard to know its purpose
Brightline: this makes some sense, but not exactly revolutionary
Sort of a basic question.Family have owned a standard three bedroom one bathroom home for forty years. During that time increased from a single to double garage and extended to go upstairs with a master bedroom and en suite. So when they go to sell how and where do you commence a calculation for capital gain. Extrapolate that question all over NZ and all you achieve is a livelihood for valuers, accountants and more than likely, lawyers.
And what about inflation. Anyone who thinks you can ignore that is an idiot. CGT is too hard.
Oh well, too hard let's do nothing - A clichéd warcry from vested interests.
No implementation will be perfect, nor does it have to be. Incremental change will get us there and we'll look back and wonder what all the fuss was about.
While not disagreeing that valuers, accountants and lawyers will all attempt to milk it for all it is worth surely the simple mechanism is to deduct the cost of improvements from the the value gain..i.e the improvements cost 50 k and the current nominal value increase is 300k, tax on 250k
People live a long time. Let’s say I bought a house in 1950 for $20k, and now I sell for $500k. How much of that is improvements (including things like heat pump, insulation, modern kitchen, etc that have been added over the years). How much is inflation? And how much is profit? And what about maintenance, things that a PAYE paying homeowner can’t claim against income.
The only fair way I can think of would be an estimate of what that house would be worth had the owner never invested a cent. In most cases it would need to be bulldozed. Then subtract inflation.
You make the mistake of assuming tax must be fair (or even logical)...tax is a tool to produce outcomes.
Take a look at the current anomalies.
Making things fair is hard, lets just wait for the next property boom.....
hippy needs something, anything, lets do CGT as the focus group said no to wealth tax ( that actually may make more sense but people would rather puke before voting for that......)
Labour is just another focused group polling tony blair look alike
you will see no radical plan from labour, just a plan to win enough votes to get to the controls of power, tested by focus group
Selling any tax regime as "fair' is the epitome of a successful marketing campaign
We do not want change, we want to get back on track.
- everyone wants there job to pay more
- there investment strategy to pay off
- to pay less tax and get better services
its not possible to make an omelete without breaking eggs
Who are these 'we'?....'back on track' for many is a continuation of a declining lifestyle.
If you don’t want to even pretend it’s fair, then go for something that makes a better income than CGT does. Stamp duty, etc. Or the exception of interest from an investment property that the last Labour government did, that is probably the best outcome.
I agree that an alternative to a CGT is probably a better option( though I suspect you would like that even less)....but as has been noted whatever proposed has to garner the required voter support.
I pay a lot of income tax, I could be on board for a new tax that reduces the disproportionate taxation on income. But I still don’t think it’s a very big a vote winner.
and tax on everything you spend GST... 15% (after paying PAYE on it)
and tax on petrol $1.20 a L
and tax on top of rates - 15%
and tax on property already called rates running about 50-80 per week in AKL, gst on top as above
and 17% from the first cent you earn, rising real fast
and tax on the water you drink, at least in Auckland, plus GST
and tax on the power you consume - ie GST
2% for looking in the mirrow twice... (ok thats from Les Miss.... but we are f, ed there can be no more tax.... FFS sake cut the cloth)
really maybe we need to cut our cloth and cut some expenses
we are taxed too highly...
smartest are leaving for Aussie, this is nuts we cannot go on like this
no wonder we want no CGT its the only way we have stayed afloat
https://www.youtube.com/watch?v=vgA1TjJICaM
how have we lived with these bastards in the house
and if they come up with a new ..... Levy i am going to rise up and .... protest even
Agree tax is never fair. But people also have a fear of the unfair, something the opposition can use to their advantage. Expect these kinds of anecdotes to come out of the woodwork, all creating uncertainty.
It’s a very hard sell, especially a CGT that won’t make any income to offset into other tax cuts or new services. Maybe in the days when property investors were making millions, these days we almost feel sorry for them.
how many Labour voters do not want National to get in
how many National voters do not want Labour to get in
how many are voting to avoid the peril
is it 10-25%?
Not really that improvement’s value will have, in the mix, compounded and not exactly pro rata either. And then if that is to be taken into account, how about all the other improvements, repaint, new carpet, up grade bathroom and kitchen. The point is if one element is tax deductible than so too are all the other improvements for which, over the years, any household is highly unlikely to be able to retrieve all the outlay receipts involved. Appreciate this is pedantic comment but the minutiae involved becomes quickly overwhelming.
yeah but somehow almost every over OCED country manages it... I do not want to see a CGT but think its probably coming, sooner or later after a decent crisis. We are just not broke enough to kill the only goose that lays the special tax free eggs yet.
All with exemptions? Is there anywhere in the world that would tax a homeowner 33% of the “profit” they made by buying a house 80 years ago? If they bought it for 20k and sold it for $500k, would they expect a $158k bill anywhere in the world?
We do actually have CGT in NZ, just with a big exemption (“ I didn’t mean to make a profit”).
correct its not normally aimed at first home, and it should probably not be, unless dady buys you a 500 hectare first farm?
issue is that all situations need to be documented.
lets face it there will be no CG to be had for ages, that horse has long bolted
Yes. I recently paid ATO that kind of CGT on a house I’d owned in Sydney for 20+ years. Of course it can be done. Of course not everyone likes it, but it is a viable option for broadening tax base, reducing income tax, and taxing a significant form of income that many have been getting a free pass on, so it’s inherently fairer I think. And indirectly encourages investment in more productive areas.
CGT shouldn't be a concern to those with housing "investments" that are slowly losing value anyway. I think it's broadly accepted that it needs to, and is going to happen at some stage and the more this lot flail about the more likely it'll be soon. Media seem to have been priming us for a while now.
The branding will be the kicker, see "bright line" or "road user charge" taxes.
Poor Kiwisaver returns? They must have their KiwiSavers at the banks, as the specialist providers have been going great!
Currently mines with simplicity defensive.
Dog shit. You'd think it would at least get TD returns. Not even close
NZ Cash is not good, better balanced. unless we get a global equity meltdown.
This is pretty wild. Aussie retirees earn more than younger workers, so no wonder productivity is dead. Even though many will refuse to accept this, the game is rigged in favour of the boomers.
The average 60+ Australian earns a similar post-tax income to the average 40-year-old, i.e. someone in the prime of their career and likely at peak earning potential.
Whatever way you want to spin it, this is objectively terrible for an economy that is already struggling with anaemic growth and poor productivity.
https://www.livewiremarkets.com/wires/retirees-earn-more-than-young-wor…
And when she goes she goes big
I mentioned a while back, would CBA ever regain 185, now I ask will CBA.AX ever gain 175?
"It was a 'poor' quarter for KiwiSaver funds. The total in these funds rose just $2.5 bln in the quarter, about the same as in 2016. And don't forget this 'rise' is largely due to contributions, not earnings. The IRD collected $2.482 bln from members and paid those contributions to fund managers. Fund managers paid themselves their fees. But after that the net earnings and gains/losses in the quarter only amounted to $51 mln - for all 3.4 mln members. That is an average of just $15/member for the three months in earnings. It's not just 'poor', its terrible."
And therein lies the purpose....securing future financial security for the contributor is way down the list.
Appalling return for those who're supposed to be the ultimate beneficiary.
Number must go up or disaster
Not as bad as the next Q is going to be, they IMHO are not hedged correctly
do we have a media problem
Herald NOW panel on how to stimulate our cities, foreign buyers and going to Mars
FFS sake look at NZ politics and we have this?
I do not even want to F buyers let alone goto some planet that does not have oxygen to breath.,
we need that apple iphone app to vote on stupid ideas like the swiss have that would quieten down a lot of idiots
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