A review of things you need to know before you go home Wednesday; ANZ cuts two home loan rates, REINZ reports sales slide, Nash moves on online GST, RBNZ slaps Westpac, swaps down, NZD holds

Here are the key things you need to know before you leave work today.

MORTGAGE RATE CHANGES
ANZ has cut home loan rates for two terms. It cut -10 bps for one year fixed taking its 'special' rate down to 4.45%, and it cut its two year 'special' by -4 bps to 4.65%.

DEPOSIT RATE CHANGES
No changes to report today.

SLIDING SALES VOLUMES
The REINZ reported its October sales outcomes today, and they were soft as expected. Median house prices are lower in Auckland, Northland, Bay of Plenty, Taranaki, Wellington, Tasman and Nelson. It has been a difficult start to summer for the housing market with sales volumes down -16% in October from the same month a year ago, and they are down -23% in Auckland. That is the sort of decline we have been getting in Auckland since April. In fact, year-on-year volume changes have been negative since October 2015 (with one very minor exception in May 2016). This downward volume pressure is now telling on pricing. Auckland median prices have been essentially flat for 20 months. No region in the whole country is reporting volume growth.

RETAILERS 1, CONSUMERS 0
Local retailers have a friend in the new Revenue Minister. Stuart Nash said today that the Government will move to ensure GST is collected on all online transactions with overseas suppliers. He said that the current situation gave an unfair advantage to overseas sellers over New Zealand retailers.

WINNING JOURNALISM
In case you hadn't noticed earlier, both Gareth Vaughan and Jenee Tibshraeny won their categories in the NZSA Business Journalism Awards last night. We are all smiles here today.

EYE WATERING
We have done a comparison of what the payday loan industry charges as effective finance costs, as equivalent % pa.

MANAGEMENT CHURN
Yet another NZ bank CEO is leaving. Rabobank NZ says CEO Daryl Johnson has resigned and a search is underway for his replacement. By our count that is the fifth bank CEO change in the past few weeks, and of course the RBNZ is also looking for a new permanent Governor. All this activity follows a long period of relative stability at the top of these organisations.

DISAPPOINTING BREACH
Westpac has been caught with a dodgy capital adequacy model, meaning it has breached its banking licence with the RBNZ. Everyone is 'very disappointed', and the RBNZ has raised its capital minimums for the bank until things are sorted properly.

'YES' WINS
Australia joined the 21st century today, voting overwhelmingly in favour of 'marriage equality' in a national voluntary referendum. All states and territories recorded a majority Yes response. Of the 150 Federal Electoral Divisions, 133 recorded a majority Yes response, and 17 Federal Electoral Divisions recorded a majority No response. 12.7 mln people participated in the voluntary survey – representing almost 80% of the more than 16 mln eligible voters. New Zealand might be a loser in all this; we have gained considerable tourism benefits because of their archaic laws. However, the issue is not completely sorted yet; it needs Parliamentary action and parliamentarians are much more conservative than their constituents. Notably however, Tony Abbott, a No campaigner, has said "the people have spoken".

CUTTING OUT EARLY
The US President has skipped out of the East Asia Summit early today, surprising the leaders gathered in Manila. The move reinforces scepticism about the US commitments in Asia.

WHOLESALE RATES DOWN
Swpa rates fell -2 bps across the curve today. The 90 day bank bill rate is unchanged at 1.94%.

NZ DOLLAR HOLDS, BITCOIN HOLDS
The NZ dollar is stable at its lower level today, now 68.9 USc. On the cross rates we are softer as well at 90.8 AUc and at 58.4 euro cents. The TWI-5 is now at 72.2. The bitcoin price is at US$6,782, a +2.3% gain.

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34 Comments

Being economically occupied by China, politically owned by America and what EVERYONE is missing about how to defeat TPPA

https://thedailyblog.co.nz/2017/11/14/being-economically-occupied-by-chi...

You might have at least one of those things mixed up.

???

Re GST on offshore purchases below $400, imported to NZ:

Yes, it will bolster the GST take (although the reason for the $400 threshold was, allegedly, the cost of recovery exceeded receipts at much below that...)

No, it won't alter buying habits much, simply because the offshore pricing is so far below NZ retallers'. So NZ retail's hopes for the vaunted 'level playing field' are toast. All that will be exposed is that sales volume and size of market determines pricing, and That ain't gonna change.....so the offshore pricing advantage and its disclosure via the InterWebs, continues its rampage....

And will also disadvantage the working poor more than the upper and upper-middle classes who frequently travel overseas and can bring things back duty free. I certainly know I will take more advantage of my work trips to Australia, pay retail over there, claim the Australian GST back on the way out of the country.

That is a pretty lame argument to allow foreign companies a 15% advantage over local ones. The think of the poor argument is normally the last resort of the rich.

Oh well, that's easy fixed, just put the word around to all the poor people that you are heading off and will bring back whatever they want so they can dodge the tax as well.

Answer 1)Hmmm, that would be illegal. Duty free personal allowances are just that.. for you personally.

Answer 2) Poor people.. oh, no, i don't go there :P

Also difference in collection, in my business I do the paper work and send the govt a cheque. If they want to tax my offshore purchases they have to do the work and send me the bill.
My daughter purchased a Violin out of the States took over 3 weeks to clear NZ customs. Why bother trying to collect if costs exceed benefit, I mean who do they really work for? Scamming some poor solo mother out of affordable nappies and Vacuum cleaner bags seems a bit extreme.

"Scamming some poor solo mother out of affordable nappies and Vacuum cleaner bags seems a bit extreme"

Really ?!?

They actually did some research on what people purchased on line and a lot of it was every day stuff not expensive clothing but household goods, stuff you use about the house or for the children. So I gave it a try and got 40 vacuum cleaner bags, look like the real deal for £10 including freight, work fine. About $10 for three here.
So while we think people are importing expensive luxury items in reality lots of people are using the net to drop the cost of living.

I would like to add that NZ is very expensive with little competition, we need free movement of goods.

Yup , I find things like Drills and taps (engineering) is where the big price differences are. Economy of scale I guess.

You can't buy good quality tools in NZ anyway. Impossible. Got to get them from overseas.

$10 for 3 vacuum bags, I think you were scammed when you bought whatever machine takes those.

its an odd ball but 20 years on and still going strong

I think Customs should have a fast track system . People voluntarily declare the ( real , not made up Chinese invoice) cost of the items they have ordered overseas, how they are been shipped etc, and pay the GST /duty in advance. When there parcel arrives it is fast tracked through the payment side of customs , may still be randomly checked for contrabrand / mpi requirements. Once the app etc is set up , very little collection costs for Customs. Still have random checks or check anything suspicious, anyone caught cheating goes on a blacklist or is not allowed to fast track .

Easiest tax system for modern times and shopping all around the world is a simple low % financial transactions tax. GST has outlived its usefulness for this.

Excellent! A Global FTT.

Please advise how we can all, over 180+ countries Vote that in.....

Well that would be ideal, but not necessary. If you transfer money out of your bank here to Amazon or whatever, you pay a tax, what happens at the other end is that country's problem. If you do shop online and if you are looking for something a bit obscure, you will find that many suppliers do not ship to NZ, I suspect because they don't want to get caught up by our taxes. FTT, no probs.

Are you trying to boost bitcoin/cryptcurrency prices, because that sure would make crypto look good to me.

I see nz post processes about a million items a day around xmas. A big chunk would be overseas parcels. I struggle to see how these can be tracked for gst, any label can be wacked on these things. The cost to build a system to cope with volumes, revenue collection and the like without creating a huge backlog would be immense.

The likes of Ali express or Amazon will not be interested.

the bill will come from the express company that clears the goods, they will be tasked with collecting the GST as they already do for purchases over the 400 CIF limit , or 60 GST.
also the bill will be more than GST it will include admin fees to pay for the extra staff needed.
the reason national backed off on this was when they found out how many entries NZ customs "write off" and the cost that will be incurred to process them by the NZ customs department and the freighting companies that will need to be passed onto purchasers.
if people are saying its ok its only 15% I'm sorry but the cost will be greater than that
on the plus side it will create hundreds of new jobs

Cost of recovery: why not chuck a sticker on every item entering the country saying that gst may need to be paid, give a website for payment, and the threat of fine for not paying. Have a small team that chases up and issues large fines. Probably get 80% payment for little cost.

In terms of the 15% extra, that is quite a large amount. If something was 20% more at a store where I know it is good quality and I know I have protections like the CGA I’d probably shop there, but 35% dearer is a different story.

"By our count that is the fifth bank CEO change in the past few weeks, and of course the RBNZ is also looking for a new permanent Governor...."

Coincidence?
Or do they not like what they see coming?
This is an excellent observation by Tim Morgan further down in the comments section here...
https://surplusenergyeconomics.wordpress.com/2017/11/13/112-will-things-...

"we’re supposedly living in a “capitalist” system – but how can we have capitalism without positive returns on capital? If politicians and others tell us to trust (or simply accept) the workings of market forces, we need to ask them this: “so why didn’t you let market forces destroy reckless borrowers and reckless lenders in 2008-09?” Some politicians today attack “capitalism”. Others defend it. Yet capitalism was actually abolished back in 2008-09"

(Ongoing)

"To members of the Zimbabwe defence forces, all leave is cancelled and you are all to return to your barracks with immediate effect. State broadcaster says President Robert Mugabe and family are safe but army is ‘targeting criminals around him"

Could be false hope, but with any luck, change will come, and hopefully to Jacob Zuma as well...

False hope I believe - it looks like the army was getting pissed off with young Mrs grace (mugabe) looking to take charge (after the old guy finally does the right thing and karks it) when they have their own guy in mind....

the more things change in Africa the more they stay the same.

Probably. But if you've ever stood in the bush on a quiet night and understood why "There is nowhere like Africa", then you always hope....latest....
"Once you get the guy in uniform on the TV then its a coup. Especially when he says the president is “safe and sound”

“safe and sound”, in a lead-lined box, with a wooden stake through the heart, at the bottom of an abandoned farm's well.....

Hey, we can Hope.

Sometimes tyrants are better than a vacuum which results when they are gone.....

Sometimes = almost always

In percentage terms, Auckland home sales spiked over 40 percent of the national total in 2015, Auckland real estate commissions over 50 percent.of the national total , mortgage lending over 60 percent of the national total. Auckland sales made up just 28 percent of national sales in October 2017, The C30 data is disturbing, Auckland is a proverbial powder keg, Perhaps the upcoming M13 data will reinforce the trend. Wealth effects aside, the direct economic downside to declining sales nationwide in coming months will start to show thru in a number of sectors. 8 percent of all Auckland homes are in all likelihood worth less than 18 months ago if the REINZ index is a fair reflection.. Sweden with negative rates has just seen a two month decline in pricing, altering the LVR settings may provide only a short term respite. 240 Billion in mortgage debt, and we trust our Australian banks to comply with regulations. Asset pricing , easy on the way up.

Congratulations to Gareth & Jenee, well done !

About time Australia joined the 21st century on marriage equality!

Robertson has confirmed Stuart Nash is wrong about GST on all online purchases. They're "looking at the issue and no decision has been made".
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1194...
I'll give this govt their dues they're providing endless entertainment.