June 15 2017 Indian Newslink Digital Edition

JUNE 15, 2017
Check your credit score online and be surprised
Frank Newmani
How good is your credit
score?
Checking is simple, and
free.
All you need is some details from
a driver’s licence (or passport) and a
click on the website creditsimple.co.nz.
It literally takes less than a couple of
minutes.
A credit score is a number between 0
and 1000 that indicates how credit-worthy
you are, and how likely you are
to pay your bills on time. Most credit
scores are between 300 and 850. The
higher the score, the better your credit
rating is. A good score is more than 500.
The higher the score the more likely
it is that you will be able to get credit
from suppliers, lower interest rates
from banks, and better deals from
telcos, insurance companies and utility
companies. A bad score can lead to
companies being reluctant or unwilling
to give you credit, or charging a higher
interest rate.
As well as viewing a credit score,
Credit Simple provides a credit report,
which is a history of bill payments, any
defaults, court judgements, and how
much credit a person has (such as a
mortgage or credit cards).
Negative Credits
Credit reporting has until recently
been based on ‘negative credit events’
- payments not being made. But it is undergoing
something of a transformation
with two major banks now providing ‘positive’ information to the
big credit ratings agencies, and the other major banks likely to do so
before the end of the year.
That means good money habits like paying bills and loan repayments
on time are now recognised and can influence a person’s
credit score. That is providing greater differentiation between those
with good and bad credit records, and giving banks a greater ability
to tailor their lending to risk profile.
Virtually everyone has a credit score, even though they may not
know it, and everyone should know what it is. Those with a good
credit record can use it to their advantage, like using it as a basis to
negotiate a lower mortgage rate from their bank, or tenants applying
for a rental could use it to show they are a low credit risk - after all,
a person who is responsible with their money is more likely to be a
responsible tenant.
Given how simple it is to obtain a credit score, it is surprising
how few landlords do so when vetting potential tenants. It is also
surprising how many businesses give credit to customers without
first undertaking a credit check, only to end up regretting it later.
Ethical KiwiSaver
Staying with things simple, a low-cost KiwiSaver provider called
Simplicity is offering something new to the KiwiSaver scene:
low fees and ethical investing (its investments exclude tobacco,
landmines, cluster bombs and nuclear weapons!).
Their website (simplicity. kiwi) states the fees are $30 a year plus
$3.10 for every $1000 in an investor’s account (0.31%), for all their
fund types. That compares to fees that typically average between
1.07% for conservative funds to 1.45% for growth funds. Their
promise is to keep their fee to at least 50% less than the industry fee
average, and to continually lower fees over time as the fund grows.
According to Simplicity, a person making a $50,000 investment
would be better off by $13,000 after 10 years as a result of the lower
fees. That is very significant when taken over a lifetime of saving.
While ethical investing is not new to New
Zealand (and has gained little traction, it has
to be said) the low-fee message seems to be
resonating. Since August last year, they have
gained just over 5500 members and have over
$100 million under funds management.
No doubt, other managed funds will argue that
actual performance is more important than fees.
They are of course right. The test will be whether
Simplicity can achieve returns at least as good as
the other high fee-paying funds, but at this stage
there is no reason to assume their returns will
be lower, as their investment approach is quite
typical.
Here are some interesting facts and figures
about KiwiSaver:
As at March 2017, the total value of KiwiSaver
funds under management was $38.8 billion.
The six largest KiwiSaver providers currently
have over 85% of market share.
About 55% of the funds are invested in fixed
interest securities, 40% in shares and 5% in
property. 52% are in overseas investments.
ANZ has the largest market share with $10
billion under management. ASB is the second
largest at $7.1 billion.
In the year to the end of March 2016, 175,000
members switched from one KiwiSaver provider
to another. The amount switched was just over
$2 billion.
If you want to learn more about the performance
of KiwiSaver funds, have a look at http://
fundfinder.sorted.org.nz.
Frank Newman is the author of numerous
books on investment. He has worked as
a share broker, investment adviser and
University lecturer. He was a member of the
Whangarei District Council for six years. He
writes a weekly article for ‘Property Plus.’
The above article appeared in the New Zealand
Centre for Political Research Weekly,
reproduced with the permission of its Editor
Dr Muriel Newman ©
Businesslink
Public Meetings on
trade opportunity
Venkat Raman
venkat@indiannewslink.co.nz
11
Trade Minister Todd McClay has planned to hold
a series of trade-related public, iwi and business
events for public engagement to help New
Zealanders identify new opportunities and benefits
from trade agreements.
These meetings, to be held in June and July throughout
New Zealand will include discussions on trade negotiation
agenda, the NZ-China FTA upgrade, the prospective
NZ-European Union FTA, Brexit, the Trans-Pacific
Partnership (TPP), the Regional Comprehensive Economic
Partnership (RCEP), and the Pacific Islands FTA – Pacer
Plus, as well issues with the
Pacific Alliance and countries of
Mercosur.
Wealth and Job creators
The meetings follow significant
engagement in 2016 on
TPP, RCEP, EU FTA and Trade
Agenda 2030.
“Trade is important to every
region of the country and the
jobs of more than six hundred
thousand New Zealanders are
Todd McClay
linked to our export sectors. It is important the public can
talk about their priorities with our trade experts and discuss
why we fight so hard for greater fairness in important
overseas export markets,” Mr McClay said.
The first discussion, focusing on the recently concluded
Pacer Plus agreement between 12 Pacific Island countries,
Australia and New Zealand was held early this month
with the Council of International Development at Oxfam’s
Auckland office.
Quality pacts
“We want New Zealanders and New Zealand businesses
to give their views. This feedback will help inform the
Government’s approach to future negotiations,” Mr McClay
said.
Information on the public meetings can be found at:
www.mfat.govt.nz/tradeengagemen/
Sharing
information
to combat global taxevasion
It’s importanteveryonepaysthe right amount of tax.
That’swhy theNew ZealandGovernment hassigned
up to an international initiative to automatically
share information aboutforeign taxresidentswith
financial accounts in NewZealand.
Thismeansfrom1July 2017 your financial
institution mayask you aboutyour tax residency.
Find outmoreatwww.ird.govt.nz/infoshare