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It could be the beginning of the end of the closed border. (Hagen Hopkins/Getty Images)
It could be the beginning of the end of the closed border. (Hagen Hopkins/Getty Images)

The BulletinSeptember 28, 2021

Self-isolation trial to start next month

Contributing writer
It could be the beginning of the end of the closed border. (Hagen Hopkins/Getty Images)
It could be the beginning of the end of the closed border. (Hagen Hopkins/Getty Images)

Up to 150 business people will try home isolation after an overseas trip, as government looks at ways to reopen, Justin Giovannetti writes in The Bulletin.

A first step to reopening the country’s border. A self-isolation pilot, allowing 150 travellers to leave the country on a short business trip and return with only self-isolation at home will debut next month. First proposed in August, the trial will allow returnees to avoid managed isolation, where bookings have been exceedingly difficult to obtain. The pilot will be limited to fully vaccinated business people who have the full backing of their employers and will return by December. The prime minister has promised to name and shame any returnees and businesses that break the rules. And those rules are pretty strict; they’ll need to be isolated in a private dwelling, without shared ventilation, but with cellular coverage to ensure frequent checks.

The pilot is a sign of the opening possible with high vaccination levels. The country’s border facilities have been the frontline in the Covid fight since last year, but Jacinda Ardern confirmed yesterday that changes are coming as vaccination rates climb. “There has been no room for error with this virus, it has been very tightly run,” the prime minister said of managed isolation. “The only reason that we are running this self-isolation pilot now is in preparation for a highly vaccinated population.” Stuff has written an explainer with more details on the pilot programme.

It’s a trial for three big changes proposed to MIQ in the coming months. So what else is coming? Shorter stints at border facilities are being contemplated, self-isolation at home for returning residents could start in the first quarter of 2022 and more rapid testing could be rolled out at work places and at the border, Ardern said after cabinet yesterday. The changes would be a relief for the tens of thousands of New Zealanders overseas looking to come home. As well as the frankly unknowable number within the country who haven’t been able to leave in nearly two years to see family, study or work abroad with confidence they can come home. Another release of 3,000 MIQ rooms is planned for this evening.

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It’s not as significant as the change some have been calling for. The MIQ system is under a heavy level of scrutiny at the moment, especially from the one million strong diaspora. According to The Guardian, the closed border has led to questions abroad about what it means to be a New Zealander. While Sir John Key can write about a “hermit kingdom,” Ardern has been carefully dismissive of concerns. There was little subtlety when she noted last Monday that many of the thousands who queued in the MIQ lottery were only interested in spots around Christmas. Polling for the NZ Herald (paywalled) found that 64% of respondents don’t want changes to MIQ until at least 90% of the population has been fully vaccinated. One unpopular proposal in the poll was to allow for private MIQ. The NZ Herald also reported that Amazon had unsuccessfully pitched such a facility before scrapping its massive Lord of the Rings project.

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Image: Getty Images
Image: Getty Images

The BulletinSeptember 27, 2021

Buy now, pay forever?

Image: Getty Images
Image: Getty Images

Calls for buy-now, pay-later providers to be regulated as millions of dollars in late fees are paid annually by New Zealand consumers. Madeleine Chapman writes for The Bulletin.

Buy now, pay forever?

Consumer NZ is calling for buy-now, pay-later services to be regulated under the Credit Contracts and Consumer Finance Act after its survey found that New Zealanders are paying more than $10 million a year in late fees charged by such services as Afterpay, Laybuy, Humm and Zip. The survey also found that over half of buy-now, pay-later customers say they had felt encouraged to make purchases they otherwise wouldn’t have.

What is buy-now, pay-later? 

Through buy-now, pay-later services, consumers purchase goods upfront without paying the full cost, then pay the rest in small instalments (four instalments for Afterpay, six for Laybuy). The payment option is appealing thanks to being interest-free, but late payments incur a fee. Consumer’s survey found that 40% of New Zealand consumers had used a buy-now, pay-later service and more than one in three had paid a late fee.

So what’s the problem?

By charging no interest, buy-now, pay-later providers are not considered lenders of credit and therefore don’t fall under the Contracts and Consumer Finance Act, which requires lenders to conduct affordability checks and take further steps to ensure they are not causing harm to the customer.

Consumer NZ’s Gemma Rasmussen says no matter how it’s dressed up, these providers are in the lending space. The breaking up of payments can help to minimise the feeling of taking on a debt, making it more palatable, but “the implications are the same”.

Afterpay, for example, is available through an app, proclaims to “never do credit checks”, and takes mere minutes to join before users are informed they have $600 “available to spend”. Users can then shop at dozens of retailers directly through the app. Anecdotal reports of people signing up to multiple platforms and finding themselves with up to a dozen small loans to repay simultaneously have become more frequent for some 900 financial mentors around the country.

Jake Lilley, policy advisor at FinCap, the organisation that supports those financial mentors, says by not being required to conduct affordability checks, buy-now, pay-later providers are able to supply multiple lines of credit to consumers who are already struggling. He says it’s not about shutting down the services, but ensuring they “check before they lend to someone that taking up a loan wouldn’t mean they have to decide between paying rent and buying food”.

So what’s the solution?

Regulation. “It’s good for there to be competition for things like credit cards but it’s just more about where it’s sitting,” says Rasmussen. “We think it should be sitting as a credit product and it’s really problematic that it’s not covered under the Act.”

Lilley agrees. “It might be a lot better for people than other types of loans but they should be regulated like any other lender.”

Is that likely to happen?

When new regulations for lenders were being discussed in 2018, buy-now, pay-later was brought up as a growing area, leading to a provision allowing for the commerce and consumer affairs minister to bring them into the regulations at a later date if they feel there’s enough evidence to warrant it.

In July, Newshub reported that minister David Clark had met with representatives from six buy-now, pay-later providers and warned them they may soon be made to comply with responsible lending laws. Clark was seeking more information from the six providers before the release of a discussion document on the sector later this year. The $10 million per year that New Zealanders are currently paying in late fees certainly falls under “more information”.

This is part of The Bulletin, The Spinoff’s must-read daily news wrap. To sign up for free, simply enter your email address below