Waikato Business News August/September 2023

WAIKATO BUSINESS NEWS, AUGUST/SEPTEMBER 2023 15
An open letter to
the new government
It seems all anyone can talk about at
the moment is the upcoming, hotlycontested,
general election, with
political parties making promises
they’re backing themselves to keep,
and the country thinking about which
leaders will help with the current
challenges we’re facing.
I’m diverting slightly today
from the usual format of
my columns so bear with
me! As a mortgage adviser
speaking with clients daily
about the ups and downs of
property, lending and personal
finance, I thought writing a
letter to our new leaders could
offer valuable perspective on
the changes that are needed in
this space.
First home buyers are traditionally
the segment of property
purchasers the government
wants to support. I’d like
to see the income cap criteria
for the first home loan vary a
little like the first home grant
caps do, by region. You’re
likely to need to earn more in
Auckland or Wellington to purchase
a similar type of home to
other regions.
Starting with some positivity,
the first home loan is
working really well. Since the
changes made to first home
loans in 2022, the increase in
first home buyers being able
to use the first home grant has
been huge. Pre-approval is
possible, it helps the process go
smoothly, and we have plenty
of options in terms of lender,
rates and structure. It’s a big
tick from me on this front!
However, there are some
challenges too.
For first home buyers, one
of the biggest ones is having
existing personal debt. Banks
are always tougher on approving
loans for new borrowers
when they have consumer
debt in place, for example car
loans, credit cards, Afterpay
or personal loans. I’d love to
see the government reward
first home buyers who actively
save, spend their money wisely
and have no existing debt. A
simple credit check included in
the application to Kainga Ora
would verify this. It would be
great to see these first home
buyers provided with additional
first home grant funds,
similar to those building a
new home, as it incentivises
would-be borrowers to reduce
their debt and become more
attractive to a lender.
For most middle-income
households, their single biggest
cost is childcare for their
under-5s, and it worries me
that it’s more expensive for
working parents to return to
work than it is to stay home -
dependent on their income. It’s
a big cost, with some families
spending up to $20,000 per
year on childcare and they’re
barely making ends meet. Supporting
these families would go
a long way to getting parents
back to work - if they choose to,
of course - which in turn supports
businesses.
Property investors have
been somewhat of a scapegoat
for the current government
as interest deductibility was
removed, the bright line test
switched back to ten years and
rent freezes have been talked
about. I think this approach is
all wrong - the investor-tenant
relationship is symbiotic and it
should be treated as such. Each
needs to support the other and
policy-makers would do well
to consider more carefully the
impact of these rushed pieces
of legislation. From my perspective,
supporting the reversal
of these policies is a win for
tenants, who are currently paying
higher rents and have less
surety because some investors
are being forced to sell
property to pay tax on income
they’ve actually already spent -
on paying the bank. More still
are selling existing properties
in favour of new builds, which
is more disruptive for tenants.
It’s no secret that CCCFA
has been the most challenging
piece of legislation to hit
the financial services industry
in years, and unfortunately, I
haven’t seen any big changes
to the problem it was trying to
solve - protecting vulnerable
borrowers. To actually achieve
that outcome would mean
administrating more compliance
across smaller lenders
and that takes more resources
and a united industry.
What it has done is frustrated
advisers and bank staff,
and add to an already high
BEYOND THE
BANKS
BY CLAIRE WILLIAMSON
Claire Williamson is a mortgage
advisor for My Mortgage
workload for little to no gain
for borrowers. Although I gripe
about it from time to time,
believe it or not, banks actually
have really good mechanisms
in place for picking up vulnerable
borrowers, and I think
the Responsible Lending Code
does a great job of that already.
We don’t need another set of
rules!
I would also be happy to
see LVRs for investors reduced
to 50% for existing properties
and a further increase in RBNZ
limits for low LVR lending.
Put simply, let’s allocate more
funding for lower deposits -
it’s tough for first home buyers
who are outside eligibility
for the first home loan, so this
would allow more of them to
get into their own homes.
I accept that not everyone
wants to own a house - this
is something a lot of people
assume is the case and a lot
of young people are transient.
They don’t want to put down
roots; they want to live with
their mates and spend their
money on smashed avocado,
and that’s ok! (and if you’d
like to do both, check out my
book Smashed Avo to Smashed
Goals!)
Property and lending is
a tough gig, and I’m sure no
government will get it 100%
right. But from someone out
there in the trenches talking
to those doing it tough to fulfill
their goal of home ownership,
I hope this advice is useful for
our incoming leaders and can
set in motion positive changes
to future lending for Kiwis.
Dear Prime Minister
Hipkins…
and cost on all New Zealand
Migrant exploitation - a blight
New Zealand has historically had a reputation as being
relatively
Congratulations
free of corruption,
on your promotion,
but this reputation
and for this
is at
timely
serious
risk
opportunity
with the current
to contribute
high incidence
our 30+ years
of migrant
of experience
exploitation
in
now New rife Zealand in the immigration country. work to help inform your thinking
about your approach to the immigration portfolio.
Reports of substandard properties
crowded with migrant workers with
Historically
no food are likely
the immigration
just the tip of
portfolio
It is quite was seen probable as somewhat that there of are
a
the
iceberg.
several
poisoned
thousand
chalice,
workers
and
in these
it was
same
not
situations
until the
throughout
first John
New
Key
Zealand.
government
Most of
in
these
2008
workers
that this
have
approach
been duped
changed,
by a range
and
of
immigration
scams involving
began
unscrupulous
to be viewed
tricksters,
more as
money
an economic
lenders,
tool rather
various
than
intermediaries,
just a means
migration
to protect New
agents
Zealand
and New
jobs.
Zealand
The immigration
portfolio
based
employers. Many
has
have
since
paid
developed
large amounts
into one
of
of
money,
significant
sometimes
strategic
as
importance
much as $50,000,
which
to
influences
obtain their
many
job
aspects
and their
of
work
New
visa,
Zealand
and
have
society,
sold
workforce
everything
and
to
the
realise
economy.
their dream
Immigration
of a better
is now
future
a key
for
Government
their family
portfolio.
in New
Zealand.
Looking
A dream
at the big
many
picture.
will never realise.
These
New Zealand
scams are
should
all premised
not rest
on
on
an
its
offer
laurels
of
and
employment
expect that
from
it continues
a New
to
Zealand
be one
employer
of the most
who
desired
has been
migrant
accredited
destinations,
by Immigration
as
it is not,
New
and
Zealand
we are trending
(INZ), and
backwards.
this is where
In
the
fact,
problem
we will
begins.
be doing
The
well
employer
just to
accreditation
hold onto
the new
regime
migrants
was introduced
that we do
in
initially
July last
attract
year
with
to this
the
country.
objective to ensure only suitably credentialed
We are
employers
an aging
could
population
employ
and,
migrant
by
workers.
2028, 1 in
However,
every 5 people
the accreditation
will be 65+
application
years.
Our birth
process
rate of
was
1.6
undertaken
children is
as
well
a
below
“high
trust”
the replacement
model with employers
rate of 2.1.
simply
Our
having
rural
to
townships
declare that
are
they
losing
met
infrastructure
financial, employment
and
services,
and
and
compliance
while our
thresholds
schools need
with
more
very
little,
teachers
if any,
now,
substantiating
in a few years’
evidence,
time school
or
checks
rolls will
undertaken.
be declining
It is
and
now
these
apparent
teachers
that
INZ
will need
employer
to find
accreditation
other jobs or
status
go overseas.
has provided
Family
“Government
and lifestyle
credibility”
have always
to a number
been
of
the
“unscrupulous”
main reasons
employers
migrants
who
choose
have used
New
this
Zealand.
standing
However,
for their
these
own
alone
financial
may
gain
not be
–
something
sufficient to
that
attract
could
and
have
retain
been avoided,
the people
or
at
and
least
skills
minimised,
our country
if the
needs
accreditation
to maintain
process
our living
had been
standards,
more robust.
let alone to grow. We
need
The
younger
second
people
stage of
who
the
can
work
contribute
visa process,
more,
the
and
Job
for
Check,
longer,
normally
to New Zealand.
requires the
role
New
to be
Zealand
advertised
must attract
and evidence
the migrants
there
are
it wants,
no New
and
Zealanders
needs,
available
in an increasingly
and qualified
competitive
to work in
and
the role.
dynamic
The fact
international
that a Job
Check
market,
can
and
be approved
one where
for
people
a role for
can
which
now
no
work-from-home
work experience
anywhere
or qualifications
in the world. We
are
no longer enjoy the competitive advantages
Level 2
586 Victoria Street
Hamilton 3204
Level 2
586 Victoria Street
Hamilton 3204
required speaks (again) to the very low level
of scrutiny applied to this process. Then,
after
we once
arriving
had,
in
but
New
one
Zealand,
thing
the
within
migrant
our
worker
control
finds
is to make
there
the
was
immigration
no actual job,
process
or the
employer
easier and
no longer
quicker,
has
and
any work
world-leading,
available,
or
and
they
to
begin
promote
working
“the
only
visa
to
process”
find their
as
role
one
terminated
reason to
within
choose
the
New
90 day
Zealand.
trial period.
Online
visa
The
applications,
cost to New
and
Zealand
the move
of this
to
immigration
more
automated
fraud
assessment
is significant.
processes,
The Government
will help
now
but there
has to
is
allocate
a very long
resources
way to
to
go.
address the
humanitarian
One area which
needs of
would
these
help
workers,
is for
and
the
to
seek
Government
out and bring
to engage
to account
in
the
more
employers
robust
and
and
agents
well-planned
who are
policy
parties
settings,
to these
and
scams
to
–
pressure-test
something much
such
easier
settings
said
before
than done!
these
More
are implemented.
significant is the
It is
reputational
acknowledged
damage
that
New
policies
Zealand
have
has
been
suffered
necessarily
with the
“reactive”
integrity
over
of
the
our
past
immigration
3 years but
system
there have
being
been
so easily
too
many
compromised.
instances of
It
back-tracking
is little wonder
of
that
newly
the
Government
introduced policies
has now
when
ordered
better
an urgent,
planning
but
belated,
and consultation
review into
would
the accredited
“get-it-right-firsttime”.
employer
work visa
The
regime
new
-
Active
after denying
Investor
there
Policy
was
any
should
problem
be first
just
on
a
the
few
chopping
days beforehand!
block!
Immigration
We also need
New
forward
Zealand
looking
has responded
policies
as
which
it always
are fit-for-purpose
does – and turned
in today’s
the screws
world.
completely
Policies which
around!
focus
It
on
is
enabling
now vetting
the
every
most
application
desirable migrants
to the “nth”
the
degree
opportunity
and has also
to
announced
experience New
that 90
Zealand
day trial
and,
periods
if they choose
are no
longer
to stay,
allowed
then great.
in migrant
We should
worker
not
employment
demand
that these
agreements.
people
It
commit
will not
indefinitely
now be such
to
a
stay.
simple or straightforward process to end
any
The
such
Productivity
employment
Commission
relationship and
report
the
time
into
to
immigration
process all applications
recommended
will materially
a
Government
increase.
Policy Statement to set a clear
strategic
Whether
direction
these
for
changes
immigration
achieve
policy.
the
desired
This would
objective
be a
of
good
reducing
start and
the
provide
current
high
some
level
overriding
of migrant
guidance
exploitation
(ideology!)
we will
to
just
inform
have
policy
to wait
settings
and see.
with
We
a focus
suspect
on
those
what
perpetrators
immigration
who
can deliver
have scant
for the
respect
good
for
of
the
New
rules
Zealand
will
in
continue
the longer
to
term.
flout them, and
law-abiding
What about
employers
a work-from-homein-NZ
will continue to pay
a higher
visa?
price
People
to do business.
could
It
live
would
in New
have
been
Zealand
so much
and
better
work
to
anywhere
have taken
in
a little
the
more
world,
time
now
and effort
that
to
would
get the
really
process
put
and
desired
New Zealand
outcomes
on
right
the map!
in the
Yes
first
-
place
Prime
–
now
Minister!
all New Zealand has to pay the cost.
Level 3
50 Manners Street
Wellington 6011
07 834 9222
enquiries@pathwaysnz.com
pathwaysnz.com
Level 3
50 Manners Street
Wellington 6011