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Credit: Joshua Drummond
Credit: Joshua Drummond

The BulletinOctober 11, 2018

The Bulletin: Crackdown on crooked lenders

Credit: Joshua Drummond
Credit: Joshua Drummond

Good morning, and welcome to The Bulletin. In today’s edition: Crackdown coming on dodgy lending practices, Fonterra revises forecast down again, and a new twist in the Simon Bridges expense leak tale.

The government has launched a long-signalled crackdown on predatory lenders and the interest they’re able to charge, reports Radio NZ. Interest will be capped at 100% of a loan – the example being given is that if $500 is lent, then $1000 is the maximum that will have to be paid back. A “fit and proper person” test will also be introduced which lenders and the like will have to comply with, which Interest has usefully illustrated with a cartoon of a besuited shark sitting behind a desk. Also part of the crackdown will be mobile shopping trucks, which go door to door offering wildly overpriced goods on credit. An example of their practices can be found in this Newsroom story.

Why is this needed? Shouldn’t borrowers just take personal responsibility? No, it doesn’t really work like that. These sorts of loans and credit systems are deliberately targeted at people at most risk of becoming trapped – take for example a line from this Stuff story: “Some short-term lenders had extraordinarily high numbers of borrowers struggling to make repayments, despite laws requiring responsible lending.” When you’re desperate in the short term, the long term consequences just don’t come into it all that much. Debt like this can spiral – an example of which can be found in this Radio NZ story.

In political terms, it’s something that consumer affairs minister Kris Faafoi has been working on a while now. That E-Tangata interview that was shared a few days ago had a tease of this announcement in it, and it’s something the minister has talked about seeing a lot of growing up. The new laws themselves won’t actually be in place until 2020. They’ve still got to go through Parliament. So in the meantime, the best advice is still to avoid taking on this sort of debt.

Fonterra has revised down its farmgate forecast to $6.50-6.25 per kg of milksolids, reports the NZ Herald. It’s the second downward revision for the season, after one was made at the end of August. Supply from New Zealand is forecast to be up for the season, but that’s not necessarily great in part because strong worldwide supply is keeping global prices lower. Dairy NZ estimates farmers need payments of about $5.50 per kg to break even.

Remember the never ending Simon Bridges expenses leak inquiry? The story was originally broken by Newshub, and they’re back with another twist in the tale. Speaker Trevor Mallard ordered his own inquiry, in order to ensure that about 20 parliamentary staff (and Mallard himself) were in the clear – it turned up no evidence any were involved. That narrows the list down significantly, and increases the likelihood it was someone involved with National. However, exactly who and what their motivations were remain unknown.

Even the Greens – co-signatories to the Budget Responsibility Rules – are calling for more spending after the government’s announcement of a big surplus, reports Radio NZ. Party leader James Shaw says he’s putting questions to finance minister Grant Robertson as to what the point of a surplus is when people are in hardship. Mr Robertson, in response, says he’s trying to balance those calls with the need to keep an eye on a proverbial rainy day in the future.

Trained teachers are stuck at the same pay level if they don’t have degrees, even though they’ve basically done them by another name. The NZ Herald’s front page (behind a cover page advertising a movie) carries the story of Eileen, a teacher with decades of experience who is paid $12,000 less than her son, who trained as a teacher 30 years later but did a degree with the correct name. It’s a bizarre situation, and one more likely to affect more experienced teachers, amid a general teacher shortage.

Here’s another interesting take on why climate change can’t be ignored, from business journalist Pattrick Smellie writing for StuffHe’s been at the Environmental Defence Society’s conference on climate change and business, where the room has heard that climate change poses a financial risk to companies (perhaps an obvious point given it poses a risk to human civilisation) But therefore, directors who ignore climate change are betraying their fiduciary obligations, which is to act in the best interests of the company and its shareholders. “To do otherwise is to have your head in the sand on a beach with a rapidly rising tideline.”

Here’s a response to a story covered in yesterday’s Bulletin about advocates calling for heavy rail to Auckland Airport. Greater Auckland have looked over the proposals and found them lacking. Why? Because in the author’s view, the current light rail plans are much better for the network and city as a whole, rather than just providing a quicker route between the airport and the CBD.

I got an interesting question in the emails about the fast-tracked law that will allow the Commerce Commission to undertake market studies on potentially anti-competitive behaviour. The question was – will this law aimed at fuel companies also be allowed to apply to other areas, like building materials monopolies? The answer is yes, extrapolating off this Stuff story, in which the PM doesn’t rule out supermarkets finding themselves in the firing line of a study.

Here’s how the process will work. Once the law is passed, commerce minister Kris Faafoi will receive nominations as to what sectors should be looked into, and will then decide whether or not they should go ahead. So, I want to know, what sector would you target? Are there areas where New Zealanders are getting ripped off? Email me –

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Right now on The Spinoff: A new edition of The Side Eye is out, with Toby Morris taking a look at what actual bravery on drug policy would be like. Sudanese-Kiwi and former refugee Clench Enoka asks why African people are now being squeezed out of the refugee quota. And Dylan Reeve goes for a ride on the police helicopter that buzzes all over Auckland at night.

The rise of the gig economy has changed the relationship people have with their careers, their cars, and even their homes. And as this fascinating account from Overland Journal argues, the changes make for increasingly dehumanised interactions between people, and become more like a constant, exhausting business hustle. The author, Laura Wynne, speaks from experience – she rents out her home on AirBnb. Here’s an excerpt:

“What does this to do our relationships with one another? When every interaction becomes a rateable exchange, we can no longer just be two humans holding a conversation: we are conducting a business transaction in which your ‘communication’ will be given a score out of five. Knowing what is real becomes a tricky task: was that Uber driver genuinely nice, or just very good at performing for customers? Complicating it all, of course, is that we all have varying expectations: one person’s understanding of ‘minimal’ ‘guest interaction’ might be different to another’s. How are we to know whether we’re coming off as standoffish or overbearing? And how will this affect our score?

If we’re all entrepreneurs of the self, we’re now being thrust into an environment in which we’re potentially competing against one another. There are, now, 7.5 billion other enterprises out there that we must outdo. Social interactions then become either opportunities to assess one another or opportunities to compete with one another – we’re expecting to be constantly evaluating or being evaluated.”

Now I promise I’m not just going to subject you to Plunket Shield results for the next 6 months, but please indulge me today. An astonishing 21 wickets fell on the first day of Northern Districts vs Otago, with both teams utterly collapsing on a tasty pitch for seamers. Here’s the scorecard – and get a load of who top scored so far. It’s the flamingo himself, Black Caps bowler Trent Boult. Meanwhile, Jimmy Neesham started his Wellington career with a half century and an early wicket against Auckland – this move might already be paying off.

And in domestic rugby, Southland have been bad for a while, but did anyone realise quite how bad? They’ve now lost 20 games in a row, reports Stuff, which is a record for top flight provincial rugby. The most recent loss was a 49 point thumping at the hands of Auckland, and they haven’t won since 2016. It could be worse though – Ngati Porou East Coast in the Heartland Championship haven’t won since 2013.

From our partners, Vector’s sustainability manager Karl Check explains why the company is pushing for more urban forests, despite recent storms in Auckland bringing trees down on powerlines, and cutting electricity to parts of the city.

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