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Waikato Business News August/September 2023

Waikato Business News has for a quarter of a century been the voice of the region’s business community, a business community with a very real commitment to innovation and an ethos of cooperation.

Waikato Business News has for a quarter of a century been the voice of the region’s business community, a business community with a very real commitment to innovation and an ethos of cooperation.

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WAIKATO BUSINESS NEWS, AUGUST/SEPTEMBER <strong>2023</strong> 15<br />

An open letter to<br />

the new government<br />

It seems all anyone can talk about at<br />

the moment is the upcoming, hotlycontested,<br />

general election, with<br />

political parties making promises<br />

they’re backing themselves to keep,<br />

and the country thinking about which<br />

leaders will help with the current<br />

challenges we’re facing.<br />

I’m diverting slightly today<br />

from the usual format of<br />

my columns so bear with<br />

me! As a mortgage adviser<br />

speaking with clients daily<br />

about the ups and downs of<br />

property, lending and personal<br />

finance, I thought writing a<br />

letter to our new leaders could<br />

offer valuable perspective on<br />

the changes that are needed in<br />

this space.<br />

First home buyers are traditionally<br />

the segment of property<br />

purchasers the government<br />

wants to support. I’d like<br />

to see the income cap criteria<br />

for the first home loan vary a<br />

little like the first home grant<br />

caps do, by region. You’re<br />

likely to need to earn more in<br />

Auckland or Wellington to purchase<br />

a similar type of home to<br />

other regions.<br />

Starting with some positivity,<br />

the first home loan is<br />

working really well. Since the<br />

changes made to first home<br />

loans in 2022, the increase in<br />

first home buyers being able<br />

to use the first home grant has<br />

been huge. Pre-approval is<br />

possible, it helps the process go<br />

smoothly, and we have plenty<br />

of options in terms of lender,<br />

rates and structure. It’s a big<br />

tick from me on this front!<br />

However, there are some<br />

challenges too.<br />

For first home buyers, one<br />

of the biggest ones is having<br />

existing personal debt. Banks<br />

are always tougher on approving<br />

loans for new borrowers<br />

when they have consumer<br />

debt in place, for example car<br />

loans, credit cards, Afterpay<br />

or personal loans. I’d love to<br />

see the government reward<br />

first home buyers who actively<br />

save, spend their money wisely<br />

and have no existing debt. A<br />

simple credit check included in<br />

the application to Kainga Ora<br />

would verify this. It would be<br />

great to see these first home<br />

buyers provided with additional<br />

first home grant funds,<br />

similar to those building a<br />

new home, as it incentivises<br />

would-be borrowers to reduce<br />

their debt and become more<br />

attractive to a lender.<br />

For most middle-income<br />

households, their single biggest<br />

cost is childcare for their<br />

under-5s, and it worries me<br />

that it’s more expensive for<br />

working parents to return to<br />

work than it is to stay home -<br />

dependent on their income. It’s<br />

a big cost, with some families<br />

spending up to $20,000 per<br />

year on childcare and they’re<br />

barely making ends meet. Supporting<br />

these families would go<br />

a long way to getting parents<br />

back to work - if they choose to,<br />

of course - which in turn supports<br />

businesses.<br />

Property investors have<br />

been somewhat of a scapegoat<br />

for the current government<br />

as interest deductibility was<br />

removed, the bright line test<br />

switched back to ten years and<br />

rent freezes have been talked<br />

about. I think this approach is<br />

all wrong - the investor-tenant<br />

relationship is symbiotic and it<br />

should be treated as such. Each<br />

needs to support the other and<br />

policy-makers would do well<br />

to consider more carefully the<br />

impact of these rushed pieces<br />

of legislation. From my perspective,<br />

supporting the reversal<br />

of these policies is a win for<br />

tenants, who are currently paying<br />

higher rents and have less<br />

surety because some investors<br />

are being forced to sell<br />

property to pay tax on income<br />

they’ve actually already spent -<br />

on paying the bank. More still<br />

are selling existing properties<br />

in favour of new builds, which<br />

is more disruptive for tenants.<br />

It’s no secret that CCCFA<br />

has been the most challenging<br />

piece of legislation to hit<br />

the financial services industry<br />

in years, and unfortunately, I<br />

haven’t seen any big changes<br />

to the problem it was trying to<br />

solve - protecting vulnerable<br />

borrowers. To actually achieve<br />

that outcome would mean<br />

administrating more compliance<br />

across smaller lenders<br />

and that takes more resources<br />

and a united industry.<br />

What it has done is frustrated<br />

advisers and bank staff,<br />

and add to an already high<br />

BEYOND THE<br />

BANKS<br />

BY CLAIRE WILLIAMSON<br />

Claire Williamson is a mortgage<br />

advisor for My Mortgage<br />

workload for little to no gain<br />

for borrowers. Although I gripe<br />

about it from time to time,<br />

believe it or not, banks actually<br />

have really good mechanisms<br />

in place for picking up vulnerable<br />

borrowers, and I think<br />

the Responsible Lending Code<br />

does a great job of that already.<br />

We don’t need another set of<br />

rules!<br />

I would also be happy to<br />

see LVRs for investors reduced<br />

to 50% for existing properties<br />

and a further increase in RBNZ<br />

limits for low LVR lending.<br />

Put simply, let’s allocate more<br />

funding for lower deposits -<br />

it’s tough for first home buyers<br />

who are outside eligibility<br />

for the first home loan, so this<br />

would allow more of them to<br />

get into their own homes.<br />

I accept that not everyone<br />

wants to own a house - this<br />

is something a lot of people<br />

assume is the case and a lot<br />

of young people are transient.<br />

They don’t want to put down<br />

roots; they want to live with<br />

their mates and spend their<br />

money on smashed avocado,<br />

and that’s ok! (and if you’d<br />

like to do both, check out my<br />

book Smashed Avo to Smashed<br />

Goals!)<br />

Property and lending is<br />

a tough gig, and I’m sure no<br />

government will get it 100%<br />

right. But from someone out<br />

there in the trenches talking<br />

to those doing it tough to fulfill<br />

their goal of home ownership,<br />

I hope this advice is useful for<br />

our incoming leaders and can<br />

set in motion positive changes<br />

to future lending for Kiwis.<br />

Dear Prime Minister<br />

Hipkins…<br />

and cost on all New Zealand<br />

Migrant exploitation - a blight<br />

New Zealand has historically had a reputation as being<br />

relatively<br />

Congratulations<br />

free of corruption,<br />

on your promotion,<br />

but this reputation<br />

and for this<br />

is at<br />

timely<br />

serious<br />

risk<br />

opportunity<br />

with the current<br />

to contribute<br />

high incidence<br />

our 30+ years<br />

of migrant<br />

of experience<br />

exploitation<br />

in<br />

now New rife Zealand in the immigration country. work to help inform your thinking<br />

about your approach to the immigration portfolio.<br />

Reports of substandard properties<br />

crowded with migrant workers with<br />

Historically<br />

no food are likely<br />

the immigration<br />

just the tip of<br />

portfolio<br />

It is quite was seen probable as somewhat that there of are<br />

a<br />

the<br />

iceberg.<br />

several<br />

poisoned<br />

thousand<br />

chalice,<br />

workers<br />

and<br />

in these<br />

it was<br />

same<br />

not<br />

situations<br />

until the<br />

throughout<br />

first John<br />

New<br />

Key<br />

Zealand.<br />

government<br />

Most of<br />

in<br />

these<br />

2008<br />

workers<br />

that this<br />

have<br />

approach<br />

been duped<br />

changed,<br />

by a range<br />

and<br />

of<br />

immigration<br />

scams involving<br />

began<br />

unscrupulous<br />

to be viewed<br />

tricksters,<br />

more as<br />

money<br />

an economic<br />

lenders,<br />

tool rather<br />

various<br />

than<br />

intermediaries,<br />

just a means<br />

migration<br />

to protect New<br />

agents<br />

Zealand<br />

and New<br />

jobs.<br />

Zealand<br />

The immigration<br />

portfolio<br />

based<br />

employers. Many<br />

has<br />

have<br />

since<br />

paid<br />

developed<br />

large amounts<br />

into one<br />

of<br />

of<br />

money,<br />

significant<br />

sometimes<br />

strategic<br />

as<br />

importance<br />

much as $50,000,<br />

which<br />

to<br />

influences<br />

obtain their<br />

many<br />

job<br />

aspects<br />

and their<br />

of<br />

work<br />

New<br />

visa,<br />

Zealand<br />

and<br />

have<br />

society,<br />

sold<br />

workforce<br />

everything<br />

and<br />

to<br />

the<br />

realise<br />

economy.<br />

their dream<br />

Immigration<br />

of a better<br />

is now<br />

future<br />

a key<br />

for<br />

Government<br />

their family<br />

portfolio.<br />

in New<br />

Zealand.<br />

Looking<br />

A dream<br />

at the big<br />

many<br />

picture.<br />

will never realise.<br />

These<br />

New Zealand<br />

scams are<br />

should<br />

all premised<br />

not rest<br />

on<br />

on<br />

an<br />

its<br />

offer<br />

laurels<br />

of<br />

and<br />

employment<br />

expect that<br />

from<br />

it continues<br />

a New<br />

to<br />

Zealand<br />

be one<br />

employer<br />

of the most<br />

who<br />

desired<br />

has been<br />

migrant<br />

accredited<br />

destinations,<br />

by Immigration<br />

as<br />

it is not,<br />

New<br />

and<br />

Zealand<br />

we are trending<br />

(INZ), and<br />

backwards.<br />

this is where<br />

In<br />

the<br />

fact,<br />

problem<br />

we will<br />

begins.<br />

be doing<br />

The<br />

well<br />

employer<br />

just to<br />

accreditation<br />

hold onto<br />

the new<br />

regime<br />

migrants<br />

was introduced<br />

that we do<br />

in<br />

initially<br />

July last<br />

attract<br />

year<br />

with<br />

to this<br />

the<br />

country.<br />

objective to ensure only suitably credentialed<br />

We are<br />

employers<br />

an aging<br />

could<br />

population<br />

employ<br />

and,<br />

migrant<br />

by<br />

workers.<br />

2028, 1 in<br />

However,<br />

every 5 people<br />

the accreditation<br />

will be 65+<br />

application<br />

years.<br />

Our birth<br />

process<br />

rate of<br />

was<br />

1.6<br />

undertaken<br />

children is<br />

as<br />

well<br />

a<br />

below<br />

“high<br />

trust”<br />

the replacement<br />

model with employers<br />

rate of 2.1.<br />

simply<br />

Our<br />

having<br />

rural<br />

to<br />

townships<br />

declare that<br />

are<br />

they<br />

losing<br />

met<br />

infrastructure<br />

financial, employment<br />

and<br />

services,<br />

and<br />

and<br />

compliance<br />

while our<br />

thresholds<br />

schools need<br />

with<br />

more<br />

very<br />

little,<br />

teachers<br />

if any,<br />

now,<br />

substantiating<br />

in a few years’<br />

evidence,<br />

time school<br />

or<br />

checks<br />

rolls will<br />

undertaken.<br />

be declining<br />

It is<br />

and<br />

now<br />

these<br />

apparent<br />

teachers<br />

that<br />

INZ<br />

will need<br />

employer<br />

to find<br />

accreditation<br />

other jobs or<br />

status<br />

go overseas.<br />

has provided<br />

Family<br />

“Government<br />

and lifestyle<br />

credibility”<br />

have always<br />

to a number<br />

been<br />

of<br />

the<br />

“unscrupulous”<br />

main reasons<br />

employers<br />

migrants<br />

who<br />

choose<br />

have used<br />

New<br />

this<br />

Zealand.<br />

standing<br />

However,<br />

for their<br />

these<br />

own<br />

alone<br />

financial<br />

may<br />

gain<br />

not be<br />

–<br />

something<br />

sufficient to<br />

that<br />

attract<br />

could<br />

and<br />

have<br />

retain<br />

been avoided,<br />

the people<br />

or<br />

at<br />

and<br />

least<br />

skills<br />

minimised,<br />

our country<br />

if the<br />

needs<br />

accreditation<br />

to maintain<br />

process<br />

our living<br />

had been<br />

standards,<br />

more robust.<br />

let alone to grow. We<br />

need<br />

The<br />

younger<br />

second<br />

people<br />

stage of<br />

who<br />

the<br />

can<br />

work<br />

contribute<br />

visa process,<br />

more,<br />

the<br />

and<br />

Job<br />

for<br />

Check,<br />

longer,<br />

normally<br />

to New Zealand.<br />

requires the<br />

role<br />

New<br />

to be<br />

Zealand<br />

advertised<br />

must attract<br />

and evidence<br />

the migrants<br />

there<br />

are<br />

it wants,<br />

no New<br />

and<br />

Zealanders<br />

needs,<br />

available<br />

in an increasingly<br />

and qualified<br />

competitive<br />

to work in<br />

and<br />

the role.<br />

dynamic<br />

The fact<br />

international<br />

that a Job<br />

Check<br />

market,<br />

can<br />

and<br />

be approved<br />

one where<br />

for<br />

people<br />

a role for<br />

can<br />

which<br />

now<br />

no<br />

work-from-home<br />

work experience<br />

anywhere<br />

or qualifications<br />

in the world. We<br />

are<br />

no longer enjoy the competitive advantages<br />

Level 2<br />

586 Victoria Street<br />

Hamilton 3204<br />

Level 2<br />

586 Victoria Street<br />

Hamilton 3204<br />

required speaks (again) to the very low level<br />

of scrutiny applied to this process. Then,<br />

after<br />

we once<br />

arriving<br />

had,<br />

in<br />

but<br />

New<br />

one<br />

Zealand,<br />

thing<br />

the<br />

within<br />

migrant<br />

our<br />

worker<br />

control<br />

finds<br />

is to make<br />

there<br />

the<br />

was<br />

immigration<br />

no actual job,<br />

process<br />

or the<br />

employer<br />

easier and<br />

no longer<br />

quicker,<br />

has<br />

and<br />

any work<br />

world-leading,<br />

available,<br />

or<br />

and<br />

they<br />

to<br />

begin<br />

promote<br />

working<br />

“the<br />

only<br />

visa<br />

to<br />

process”<br />

find their<br />

as<br />

role<br />

one<br />

terminated<br />

reason to<br />

within<br />

choose<br />

the<br />

New<br />

90 day<br />

Zealand.<br />

trial period.<br />

Online<br />

visa<br />

The<br />

applications,<br />

cost to New<br />

and<br />

Zealand<br />

the move<br />

of this<br />

to<br />

immigration<br />

more<br />

automated<br />

fraud<br />

assessment<br />

is significant.<br />

processes,<br />

The Government<br />

will help<br />

now<br />

but there<br />

has to<br />

is<br />

allocate<br />

a very long<br />

resources<br />

way to<br />

to<br />

go.<br />

address the<br />

humanitarian<br />

One area which<br />

needs of<br />

would<br />

these<br />

help<br />

workers,<br />

is for<br />

and<br />

the<br />

to<br />

seek<br />

Government<br />

out and bring<br />

to engage<br />

to account<br />

in<br />

the<br />

more<br />

employers<br />

robust<br />

and<br />

and<br />

agents<br />

well-planned<br />

who are<br />

policy<br />

parties<br />

settings,<br />

to these<br />

and<br />

scams<br />

to<br />

–<br />

pressure-test<br />

something much<br />

such<br />

easier<br />

settings<br />

said<br />

before<br />

than done!<br />

these<br />

More<br />

are implemented.<br />

significant is the<br />

It is<br />

reputational<br />

acknowledged<br />

damage<br />

that<br />

New<br />

policies<br />

Zealand<br />

have<br />

has<br />

been<br />

suffered<br />

necessarily<br />

with the<br />

“reactive”<br />

integrity<br />

over<br />

of<br />

the<br />

our<br />

past<br />

immigration<br />

3 years but<br />

system<br />

there have<br />

being<br />

been<br />

so easily<br />

too<br />

many<br />

compromised.<br />

instances of<br />

It<br />

back-tracking<br />

is little wonder<br />

of<br />

that<br />

newly<br />

the<br />

Government<br />

introduced policies<br />

has now<br />

when<br />

ordered<br />

better<br />

an urgent,<br />

planning<br />

but<br />

belated,<br />

and consultation<br />

review into<br />

would<br />

the accredited<br />

“get-it-right-firsttime”.<br />

employer<br />

work visa<br />

The<br />

regime<br />

new<br />

-<br />

Active<br />

after denying<br />

Investor<br />

there<br />

Policy<br />

was<br />

any<br />

should<br />

problem<br />

be first<br />

just<br />

on<br />

a<br />

the<br />

few<br />

chopping<br />

days beforehand!<br />

block!<br />

Immigration<br />

We also need<br />

New<br />

forward<br />

Zealand<br />

looking<br />

has responded<br />

policies<br />

as<br />

which<br />

it always<br />

are fit-for-purpose<br />

does – and turned<br />

in today’s<br />

the screws<br />

world.<br />

completely<br />

Policies which<br />

around!<br />

focus<br />

It<br />

on<br />

is<br />

enabling<br />

now vetting<br />

the<br />

every<br />

most<br />

application<br />

desirable migrants<br />

to the “nth”<br />

the<br />

degree<br />

opportunity<br />

and has also<br />

to<br />

announced<br />

experience New<br />

that 90<br />

Zealand<br />

day trial<br />

and,<br />

periods<br />

if they choose<br />

are no<br />

longer<br />

to stay,<br />

allowed<br />

then great.<br />

in migrant<br />

We should<br />

worker<br />

not<br />

employment<br />

demand<br />

that these<br />

agreements.<br />

people<br />

It<br />

commit<br />

will not<br />

indefinitely<br />

now be such<br />

to<br />

a<br />

stay.<br />

simple or straightforward process to end<br />

any<br />

The<br />

such<br />

Productivity<br />

employment<br />

Commission<br />

relationship and<br />

report<br />

the<br />

time<br />

into<br />

to<br />

immigration<br />

process all applications<br />

recommended<br />

will materially<br />

a<br />

Government<br />

increase.<br />

Policy Statement to set a clear<br />

strategic<br />

Whether<br />

direction<br />

these<br />

for<br />

changes<br />

immigration<br />

achieve<br />

policy.<br />

the<br />

desired<br />

This would<br />

objective<br />

be a<br />

of<br />

good<br />

reducing<br />

start and<br />

the<br />

provide<br />

current<br />

high<br />

some<br />

level<br />

overriding<br />

of migrant<br />

guidance<br />

exploitation<br />

(ideology!)<br />

we will<br />

to<br />

just<br />

inform<br />

have<br />

policy<br />

to wait<br />

settings<br />

and see.<br />

with<br />

We<br />

a focus<br />

suspect<br />

on<br />

those<br />

what<br />

perpetrators<br />

immigration<br />

who<br />

can deliver<br />

have scant<br />

for the<br />

respect<br />

good<br />

for<br />

of<br />

the<br />

New<br />

rules<br />

Zealand<br />

will<br />

in<br />

continue<br />

the longer<br />

to<br />

term.<br />

flout them, and<br />

law-abiding<br />

What about<br />

employers<br />

a work-from-homein-NZ<br />

will continue to pay<br />

a higher<br />

visa?<br />

price<br />

People<br />

to do business.<br />

could<br />

It<br />

live<br />

would<br />

in New<br />

have<br />

been<br />

Zealand<br />

so much<br />

and<br />

better<br />

work<br />

to<br />

anywhere<br />

have taken<br />

in<br />

a little<br />

the<br />

more<br />

world,<br />

time<br />

now<br />

and effort<br />

that<br />

to<br />

would<br />

get the<br />

really<br />

process<br />

put<br />

and<br />

desired<br />

New Zealand<br />

outcomes<br />

on<br />

right<br />

the map!<br />

in the<br />

Yes<br />

first<br />

-<br />

place<br />

Prime<br />

–<br />

now<br />

Minister!<br />

all New Zealand has to pay the cost.<br />

Level 3<br />

50 Manners Street<br />

Wellington 6011<br />

07 834 9222<br />

enquiries@pathwaysnz.com<br />

pathwaysnz.com<br />

Level 3<br />

50 Manners Street<br />

Wellington 6011

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