Summary One door opens, another closes. While the Waikato moves to step two of level three today, the Far North moves to level three. The RBNZ is giving an update on NZ’s economy today with the release of its financial stability report.
One door opens Waikato’s shops spring open today and household bubbles expand to 25 people as long as they’re outside. Meanwhile, the Far North town of Kaitaia has shut up shop and schools are closed in the region as a soft border is put into place separating it from its most populous neighbours in Kerikeri, Kaikohe, Dargaville and Whangarei. Two unlinked covid cases were found in one of NZ’s lowest-vaccinated areas. The region enjoyed two weeks of level three, after an initial lockdown when covid cases were first discovered there.
Employment figures NZ labour statistics today are expected to show unemployment has fallen even lower, after a surprising drop to 4% in June. Economists are expecting it to ease further in the September quarter. Market conditions caused by the delta variant are being blamed for the increasingly overheated labour market. Another focus today will be any wage rises caused by a constrained labour supply, with plenty of anecdotal evidence of recruiters having to pay more. The tight labour market will put further pressure on bank interest rates.
RBNZ update The RBNZ will give a steer on the NZ economy when it provides its six-monthly Financial Stability Report with a media conference today. In a preview speech to the Property Council of New Zealand's retail conference yesterday, the central bank's governor Adrian Orr said property prices were a high risk to stability, Affordability and prices were the result of a series of factors, including immigration, tax policy, government benefits or transfers, land availability, building standards, infrastructure and training programmes.
Cafe consternation The chief executive of coffee roastery Supreme says many of its Auckland customers are yet to reopen their shops and some may never do so. Freshly appointed CEO, Jesse Newson told BusinessDesk it hadn’t lost any customers yet, but he worried some would not return even under the traffic light system. Supreme could afford to operate even with weaker demand at higher alert levels, but many of its customers couldn't.
Too late Ministerial consideration of a loan to keep Marsden Point operating as an oil refinery, revealed yesterday in a September cabinet paper, would have been irrelevant. The pathway to close the refinery began at the start of last year with the appointment of a restructure expert as CEO and decisions have been set in stone for months. There has also been no request for assistance from the refinery, a listed company that has focused on maintaining debt covenants as it restructures. The government has far more likelihood of playing a role in underpinning greater fuel storage capacity.
Sustainability loan Genesis Energy and Westpac NZ have agreed to a $100 million sustainability-linked loan with the power company saying it would have liked even greater incentives to reduce things such as carbon emissions. The 10-year loan includes both penalties and rewards based on how Genesis performs in a range of areas including greenhouse gas emissions. Under the agreement, Genesis was committed to targets of removing more than 1.2m tonnes of carbon annually by 2025 – from a 2020 base year – and reducing generation emissions by 36%. This is a significant target for the company, which runs the Huntly power station – the country's major source of thermal-based electricity generation. Genesis will begin a biomass trial at Huntly next year.
Boys club One of NZ’s last explicitly men-only clubs has opened to women, with 91-year-old June Cardno the first to be invited to join the Hawke's Bay Club in Napier since it started 158 years ago. The club voted 89-25 to allow women, who were already allowed to accompany men, to become members themselves. “The men-only is a ridiculous damn thing to have. We got rid of it and women are joining. They need the same privacy, the same vicinity as anyone else,” said chairman Marc Nel. “What is interesting is that younger people and younger families like husband and husband, or husband and wife are joining, because there’s no stigma any more,” he told Stuff. The Nelson Club is believed to be the last remaining men's club that does not allow female members.
Mighty totara NZ’s first female governor general and Auckland’s first female mayor, Cath Tizard, was a trail blazer who broke moulds and defied expectations. “She was always herself, which is why she was a good governor general,” said former chief justice Sian Elias, who’d crossed paths with Tizard regularly since she was a teenager. Former PM Helen Clark said: "Cath's voice was always a progressive one across the spectrum of human rights and for sexual and reproductive health and rights. Many young women of my generation saw her success in public life and knew that that door could open for us too.” PM Jacinda Ardern said Tizard was a true trailblazer for women in public life." Tizard died on Sunday, aged 90.
Debt defaults Auckland business debt defaults are up 18% this year and Northland business debt defaults are up 12% compared to pre-covid times, according to credit bureau Centrix. Keith McLaughlin. Centrix managing director, blames the pandemic. "Auckland and Northland have recorded increased levels of debt stress compared to the rest of New Zealand. As alert level 3 remains in place in Auckland – and following Northland's snap lockdown – uncertainty is hampering small businesses as they try to operate under restricted conditions."
Markets update Early afternoon US equities trading continued to hit new record highs as investors awaited a steer from the US central bank. The Dow Jones Industrial Average continued its rise, today by 0.4%, the S&P 500 rose 0.4%, and the Nasdaq Composite rose 0.2%. Across the Atlantic, the FTSE 100 slumped by 0.19% as mining shares dropped due to declining iron ore prices. The pan-European Stoxx 600, however, briefly hit a new all-time high before closing 0.14% up on the day before. France’s CAC 40 also eased off a new record high earlier in the day to close up 0.49%. Germany’s Dax 30 was the best performer, rising nearly 1%.