Good morning and welcome to The Bulletin. In today’s edition: What the new lending restrictions mean, major leaky buildings class action ends abruptly, and farmers cop warnings from labour inspectorate over breaches.
An MOU has been signed between the Reserve Bank and finance minister, giving the RBNZ new powers to restrict mortgage lending. The NZ Herald reports it will take the form of debt-to-income restrictions, which the RBNZ will develop. The balancing act for them will be tricky, because on the one hand there’s fears of too much risky lending going on, with some owners likely to have a significant chunk of negative equity if prices fall. But on the other hand, minister Grant Robertson is very keen to ensure first home buyers aren’t affected by new restrictions.
You may have noticed that house prices have got rather inflated recently, so should this have happened sooner? Interest reports Robertson has defended the timeline, saying there was a need to move at a responsible pace. The target of the policy is investors, whose activities in the market have been what has fueled the extreme price rises, coupled with a lack of supply.
What’s at stake here? Basically, the stability of the financial system, so it’s kind of a biggie. Having a lot of risky lending raises the prospect of a lot of mortgage defaults happening all at once, which could have a cascading effect through everything else. This is something the RBNZ has been warning about this year, particularly because of the increase in debt being held. Also on Interest, David Hargreaves has an analysis post about the technicalities of what the RBNZ could do from here.
A major class action lawsuit over leaky buildings has ended abruptly, with no compensation for homeowners. Logan Church of One News reports the end of the James Hardie suit came with a settlement, after the London-based funders of the class action are understood to have pulled the plug. James Hardie will not have to make any admission of liability as a result of the settlement. The NZ Herald’s John Weekes reports a representative of the homeowners described it as a “terrible day”.
Farmers have been warned by the Labour Inspectorate at MBIE, after a huge proportion of farms checked were found to have labour law breaches. Farmers Weekly reports 35 farms were inspected last season, with some level of breach being spotted at 24 of them. None of the cases were deemed serious enough to escalate to the Employment Relations Authority, which currently has a long backlog. Of the breaches, the most common kind related to poor record-keeping by farmers.
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A South Wairarapa council meeting has turned ugly over anger from members of the public at rate rises, reports Sue Teodoro and Marcus Anselm for the Times-Age. Their concern was that the actual rate rises were higher than they’d been led to believe. What followed apparently included the mayor Alex Beijen trying to gavel down the protests, before a mass walkout from the public gallery. Having followed similar stories a bit, I have a feeling we’re going to see a lot of council meetings just like this around the country ahead of elections next year.
We know the country has a serious shortage of medical professionals right now, but it turns out that applies to animals too. Bonnie Flaws reports for Stuff that wait times for vets are increasing sharply, even for routine treatment. There has been a significant recent growth in pet ownership, and it has become much more difficult to recruit vets from overseas given the closed borders.
The walking and cycling track over the Auckland Harbour bridge may end up scrapped, with a senior government MP now talking about speeding up a second crossing. The news came out of this NZ Herald story, with deputy PM Grant Robertson only saying the add-on to the existing bridge was the current proposal, rather than giving a guarantee it would actually happen. Actual construction work on a second crossing is not expected to take place until well into the 2030s and cost at least $10bn, and given how infrastructure projects tend to go in this country let’s double the cost and add another decade to be safe.
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Right now on The Spinoff: The latest edition of The Side Eye is out, this time looking at the growing gap between those dominating the property market, and those locked out. On a similar note, Bernard Hickey looks at the things the government has done, and what it could do if it actually cared to fix this problem. Stewart Sowman-Lund reports on a conspiracist group having their billboards outside Radio NZ taken down. George Driver vindicates David Tua, who never said “O for Awesome” on TV. Alix Higby writes about the pain and poetry of online beauty reviews. And Jihee Junn talks to the writer of a new play about the earliest Chinese New Zealanders – and the families they left behind.
For a feature today, a fascinating look at cities that are trying to be the Silicon Valley of tomorrow. Rest of World has looked at six places with burgeoning tech industries, and how they developed along different lines and from different starting points. Here’s an excerpt about one of them – Bengaluru in India.
The tide had already started to shift by the middle of the last decade. India had long stood out for its young, capable, English-speaking software engineers and programmers, but that talent pool had its eyes on careers overseas. “I just felt like I wouldn’t get that opportunity in India,” said Hemant Mohapatra, who left home to work for Google and Andreessen Horowitz in the U.S. But as time passed, Mohapatra and others like him began to sense that real opportunities lay back home and returned to invest their money and experience in India.
The shift was marked by the rise of homegrown unicorns like Flipkart and ride-hailing service Ola, success stories at a scale not seen before. Bengaluru is now one of the startup capitals of the world, with 14 unicorns based in the city.
In sport, Lisa Carrington is a paddling Queen. The canoe sprinter won two different gold medals yesterday, one as an individual, and the other with doubles partner Caitlin Regal. Newshub was with family members after Carrington brought it home, who were rightly thrilled. “She’s a warrior for her country,” said Carrington’s granny Doreen.
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