Wednesday, June 30, 2010

Petrol and electricity prices to rise with ETS

Life is getting harder and harder, everything seem to go up at the 3rd quarter of the year. GST and ETS. Increase the petrol and electricity will trigger the food price and etc to shoot up. The business operation increase, the thrifty business owner will only charge on the consumer. Consumer or normal citizen will always get the blow 1st.

Petrol prices will increase by up to 3c and electricity by up to 3.3 per cent on Thursday when the emissions trading scheme takes effect.

Energy, fossil fuels, industrial processes and transport will face extra costs from July 1 as a result of the scheme.

Prime Minister John Key said yesterday "a disproportionate amount" of the costs will be paid by households in relation to their emissions.

Mr Key warned power companies against using the scheme as an excuse to raise prices.

The government has estimated on its climate change information website that the average household will face $165 a year in additional costs.

Many power and petrol companies have announced exactly how much more their customers will pay from Thursday.


* Mercury Energy is increasing electricity prices by 3.3 per cent starting from Thursday and Contact Energy by 3.2 per cent.

* Trust Power said it would not make any one-off increases, but extra costs would be gradually absorbed.

* Genesis Energy said it would take some time to review the impact of the ETS on its business before making a decision about retail pricing.

* Meridian Energy has not yet returned calls but has previously said it had no plans to increase prices in the short term.


* Caltex said it would be raising its petrol prices by 3c and diesel by 4c on Thursday.

* BP said it did not yet know how it would change its prices and would review the situation on Thursday.

* Gull said it would "definitely not" raise its prices until at least next week. It had planned for the emissions trading scheme by introducing biofuels, which would be spared from much of the expected price increases on fossil fuels, it said.

* Shell's New Zealand owner and operator, Greenstone Energy, said it could not say exactly how much its prices would increase on Thursday, but the government's estimate of 3c to 4c "should not be too far off".

* Mobil said it could not say how much it would increase its prices as it would depend on "competitive responses".

By Michael Dickison

Auckland, Wellington, among 'best value' cities in the world

Listed "Best Value" Cities in the world ? Is this a good sign or a bad sign ?

The bad sign is the Economy isn't growing strong enough. Wages is not increasing yet GST is going to increase soon. Inflation is coming to hunt the citizen. What more to say the government is going to charge the citizen on "Emissions Trading Scheme".

The good sign is Nz will attract more visitors coming for holiday, will this boost up the economy on average ? Nope, cause workers dont get wage raise, so they cant spend extra, and the money wont be circulating to boost the economy.

Auckland and Wellington have emerged as two of the cheapest cities to live in the world, according to a global study of 214 centres.

The latest Cost of Living Survey from Mercer puts Auckland in 149th place and Wellington in 163rd place, beating all Australian cities surveyed in offering value for money.

The survey measures the comparative cost of more than 200 items in each location, including housing, transport, food, clothing, household goods and entertainment.

It is used to help multinational companies and governments determine compensation allowance for their expatriate employees.

Auckland was placed 138th and Wellington 139th in 2009 but only 143 cities were measured in that study.

Topping the list of most expensive cities across five continents this year was Luanda in Angola, with Tokyo coming in at second place, followed by Ndjamena in Chad in third.

Karachi in Pakistan is ranked as the world's least expensive city in the survey.

It is the first time the ranking of the top 10 most expensive cities has featured three African urban centres.

Mercer senior researcher Nathalie Constantin-Metral said the results reflected the growing economic performance of the African region to global companies across all business sectors.

The top 10 also features three Asian cities Tokyo (2), Osaka (6) and Hong Kong (8=).

Moscow (4), Geneva (5) and Zurich (8 =) are the most expensive European cities, with Copenhagen rounding out the top 10.

Constantin-Metral said New Zealand and Australian cities remained cost competitive destinations for companies extending their business into the Asia-Pacific region and when compared to cities including Tokyo (2) and Osaka (6) and other major commercial hubs including Hong Kong (8), Singapore (11), and Beijing (16) - which ranked within the top 20 cities.

New Zealand was also ranked more affordable than Australian cities in the study, including Sydney (24) Melbourne (33), Brisbane (55), Perth (60) and Canberra (74). Adelaide (90) is the Australia's least expensive city.

The New Zealand and Australian dollar significantly strengthened against the US dollar as of February, making these cities more costly for expatriates coming from the US, the report said.

The currency movements reflected the stability of the Australian and New Zealand economies earlier this year, relative to the rest of the world, Mercer said.

Auckland was named as having the fourth-best quality of living, while Wellington was judged 12th worldwide in a separate survey produced by Mercer last month.

Costly cities

1. Luanda, Angola
2. Tokyo, Japan
3. Ndjamena, Chad
4. Moscow, Russia
5. Geneva, Switzerland
6. Osaka, Japan
7. Libreville, Gabon
8. Zurich, Switzerland
8= Hong Kong
9. Copenhagen, Denmark

Most affordable

205. Windhoek, Namibia
206. Tegucigalpa, Honduras
207. Kolkata/Calcutta, India
208. Addis Ababa, Ethiopia
209. Bishkek, Kyrgyztan
210. Ashkhabad, Turkmenistan
211. La Paz, Bolivia
212. Islamabad, Pakistan
212. Mangua, Nicaragua
214. Karachi, Pakistan

Friday, June 18, 2010

Soros: Europe faces recession, stagnation

LONDON: Europe faces almost inevitable recession next year and years of stagnation as policymakers’ response to the eurozone crisis causes a downward spiral, billionaire US investor George Soros said on Tuesday.

Flaws built into the euro from the start had become acute, Soros told a seminar, warning that the crisis had the potential to destroy the 27-nation European Union.

The lack of a correction mechanism or of a provision for countries to leave the eurozone could be a fatal weakness, he said.

Germany had imposed its criteria on how a 750 billion euros rescue mechanism for the eurozone should be used and was imposing its own standards – a trade surplus and a high savings rate – on the rest of Europe, Soros said.

“But you can’t be a creditor country, a surplus country, without somebody being in deficit.

“That’s the real danger of the present situation – that by imposing fiscal discipline at a time of insufficient demand and a weak banking system, by wanting to have a balanced budget you are actually ... setting in motion a downward spiral,” he said.

Germany would do relatively well because the decline in the euro had boosted its economy, he told the seminar on the eurozone crisis organised by two think-tanks, the European Council on Foreign Relations and the Centre for European Reform.

“Germany is going to smell like roses but (the rest of) Europe is going to be pushed into a downward spiral, stagnation lasting many years and possibly worse than that,” he said.

“In other words, I think a recession next year is almost inevitable, given the current policies,” Soros said, later clarifying that he meant a recession in Europe as a whole.

“If there is no exit, (it) is liable to give rise to social unrest and, if you follow the line, social unrest can give rise to demand for law and order and (sow the) seeds of what happened in the inter-war period,” he said.

Political-will to forge a common fiscal policy in Europe was absent and since Europe was liable to move backwards if it did not advance, “the crisis of the euro could actually have the potential of destroying the European Union,” he said.

European banks had bought large amounts of the sovereign bonds of weaker eurozone countries for a tiny interest rate differential, Soros said.

“That’s one of the reasons why the banks are so over-leveraged and why the German and the French banks own Spanish bonds,” he said.

“Now ... they have a loss on their balance sheets which is not recognised and it reduces the credibility of those banks, so the banking system is in serious trouble.

“The commercial paper market, for instance, in America is now refusing to lend to European banks so there is even a funding crisis and the ECB (European Central Bank) has to step in and the banks are unwilling to lend to each other,” he said. — Reuters

More than 50,000 jobless in Auckland

About 51,000 Aucklanders are jobless, with job-market observers warning that figure is unlikely to fall any time soon, reports The Aucklander.

The unemployment rate climbed from 5.1 per cent in March 2009 to 7.3 per cent three months ago, the last official figure.

"The largest employment declines in Auckland have occurred in manufacturing, retail trade and construction. In addition, there has been a decline in employment in the financial and insurance service industry," says Benedikte Jensen, the Government's Labour Market Information head.

She says the labour market is not yet as robust as before.

"While employment is expected to recover in many of these industries, it is important to understand that because many of these sectors were severely affected during the downturn, it will be some time before activity and employment levels return to pre-recession levels," she says.

At the start of the year, only 38 per cent of businesses surveyed by the Northern Employers and Manufacturers Association thought they would hire permanent staff by the second half of the year - in other words, the next few months.

"My key message here is that it's improving but it's still very patchy," says David Lowe, EMA's employment services manager.

In the short term, more salespeople will be needed than administrators. "It's not unexpected that when businesses recover the first area they look for is sales to grow their businesses," he says. "Once they begin to generate work, obviously they need to get staff to look after the business."

Heather Walker, director of the NZ JobSquad and Mana Recruitment, says more jobs are being advertised, both online and in print. "Top shortages have been reported as IT consultants, engineering managers, nurses and midwives, local government staff and solicitors."

Mr Lowe says employers may be needing tradespeople as soon as the recession eases. "We are saying to businesses, if they think they are going to need these people in the next little while, they should think about actually getting them now so they get the pick of the bunch."

Wednesday, June 16, 2010

NZ trailing Australia on pay rises

New Zealand continues to lag behind Australia when it comes to salary increases, a survey has found.

The Hays Salary Guide - which examined salary and recruiting trends for over 1800 job functions in 16 sectors across Australia and New Zealand - found 43 per cent of Australian employers were planning salary increases in their next review, compared with 33 per cent in this country.

Thirty-three per cent of New Zealand employers were also planning to take on new staff this year, the survey said, while the number across the Tasman was around 10 per cent higher.

Hays New Zealand managing director Jason Walker said Australia was four to six months ahead of New Zealand in terms of its economic recovery and there was a risk of losing workers across the Tasman where more opportunities were available.

New Zealand firms needed to concentrate on retaining staff now, he added, in order to lessen the impact of a future skills shortage that was looking increasingly likely.

"We believe in the next 12 months ... we'll start seeing skills shortages and candidates in higher demand probably having more control over the recruitment process."

Employers and Manufacturers Association advisory services manager David Lowe said a "level of uncertainty" still existed among New Zealand employers regarding the economic recovery.

Salary increases were a permanent investment, similar to buying machinery, he said.

"It really comes down to the confidence people have in the future, and I think one in three [New Zealand employers planning salary increases] is a reflection of the improving confidence, but also recognition that people are still a bit cautious."

Lowe said a strengthening Australian economy was positive for New Zealand as that country was our biggest trading partner.

The survey also indicated 80 per cent of employers in New Zealand's mining sector were planning salary increases of between 3 and 6 per cent in their next review.

Forty-seven per cent of employers in the professional services sector, and 42 per cent in IT & Telecommunications, indicated they would give pay rises in the same range.

Eighteen per cent of employers planned to increase temporary workers, up from 12 per cent last year.

By Christopher Adams

Sunday, June 6, 2010

G-20 Fails to Agree on Bank Tax, Calls for Joint ‘Principles’

By Gonzalo Vina and Theophilos Argitis

June 5 (Bloomberg) -- Group of 20 nations failed to agree on an effort to impose a global tax on banks that was aimed at making the financial industry shoulder the cost of bailouts, settling instead for a common set of guidelines.

G-20 finance ministers and central bank governors said in a statement in Busan, South Korea, that governments will take account of each nation’s “circumstances and options.” The result allows nations such as Canada, China and Brazil, whose banks suffered less during the global financial crisis, to skip introducing a tax. European countries and the U.S. have advocated the levy.

“If we’re living in an ideal world, a global financial tax would be a good idea but in reality, it is almost impossible to implement,” said Tomo Kinoshita, an economist at Nomura Holdings Inc. in Hong Kong. “There are too many obstacles.”

Today’s statement leaves in place an initiative to seek tighter global standards for capital levels at banks, which is a “more practical” way to help reduce the risk of financial crises, Kinoshita said. Banks have opposed the effort, warning that the costs may curb credit expansion and economic growth.

European governments and the U.S. have advocated a bank tax to be adopted in every major country to prevent lenders from relocating to jurisdictions that don’t charge the levy. The International Monetary Fund was asked by the G-20 last year to recommend how to tax the industry.

Ministers today said they now recognized that there’s a “range of policy options” open to countries and agreed instead to adopt “principles” that protect taxpayers and reduce the risks of further crises.

Canada’s Opposition

Canadian Finance Minister Jim Flaherty, speaking at a press briefing at the conclusion of the two-day G-20 gathering in Busan, said the plan lacked majority backing among G-20 nations and is a “distraction.” He said “there is no agreement” to proceed with a tax.

Instead, Canada has proposed that countries force lenders to keep “contingent capital” on hand to ensure taxpayers don’t end up paying the bill for any future bailouts. Such securities could convert to equity in a time of crisis to ensure that lenders remain well capitalized.

The IMF recommended that financial institutions’ non- deposit liabilities and the sum of their profit and compensation should be taxed to help pay for future bailouts. Led by Canadian opposition, G-20 officials at a meeting in Washington pushed back talks by ordering the IMF to study the issue further.

IMF Task

“The problem is not uniformity, the problem is to do things which are consistent and that do not create arbitrage in terms of regulation and taxation,” the fund’s Managing Director Dominique Strauss-Kahn said in Busan, Korea’s second-largest city. The principles will be written in a way that avoids inconsistency in the different systems, he said.

The G-20 separately said that “it is critical that our banking regulators develop capital and liquidity rules” tough enough to ensure lenders can withstand further crises. The rules should be agreed by November, with implementation targeted for the end of 2012, the statement said.

Chancellor of the Exchequer George Osborne said that Britain will push ahead with a plan to implement a tax and that he will unveil further details in his June 22 budget. The U.K. wants tax revenue to finance general government expenditure, marking it aside from other European nations who want the tax to fund future bailouts.

“If one country goes alone in the bank tax, there will be a risk of regulatory arbitrage,” said Venkatraman Anantha- Nageswaran, who helps manage about $140 billion in assets as global chief investment officer at Bank Julius Baer & Co. in Singapore.

Thursday, June 3, 2010

Kiwis willing to miss mortgage payments

Up to 20 per cent of New Zealanders say they would be prepared to miss a mortgage repayment over the next 12 months, according to new research.

The latest Consumer Priorities Study by credit reporting agency Dun & Bradstreet showed that up to a quarter of New Zealanders said they would be late paying bills over the next year, with 20 per cent saying they might even skip a mortgage repayment.

In the past 12 months 21 per cent of New Zealanders were late in settling their credit card accounts, 20 per cent were late in paying their home phone bills, and 19 per cent were late in paying their mobile phone, internet and pay TV bills.

Tough economic times were cited by the majority of respondents as the reason behind their late payment, with 47 per cent saying they simply didn’t have enough money to pay on time. For others it was a case of laziness or forgetfulness – with 31 per cent saying they had just forgotten to pay their bills on time.

Different age groups had different problem areas with their financial obligations. People aged 18-34 were more likely to be late in paying their internet and pay TV bills, 35-49 year-olds were more likely to be late with their mobile and home phone bills, while older Kiwis were more likely to struggle to pay their credit card or council bills on time.


John Scott, general manager of Dun & Bradstreet New Zealand, said New Zealanders needed to realise that lagging in paying their bills would have a negative impact on their credit history.

"A late payment, or worse, recurring late payments, have disapproving effects on an individual’s credit history and can cause long term damage that takes years to amend," he said.

Mortgage lenders, banks, utility companies and other credit providers all rely on a person’s credit history when deciding if they want to do business with them.

Wednesday, June 2, 2010

Kiwis losing four homes a day to mortgagee sales

New mortgagee sales figures show ordinary Kiwis are losing their homes at a rate of four a day, as the effects of the recession still linger.

Terralink International's latest data shows there were 202 registered mortgagee sales in March of this year, and two thirds of the affected properties were owned by private homeowners.

At the height of the recession it was largely companies and property investors who were facing mortgagee sales.

But a year on Terralink Managing Director Mike Donald says it's now mums and dads who are unable to make payments on their family homes.

“Increasingly we’ve got mum and dad homeowners that are now struggling, for instance they have lost their job, haven’t been able to secure another job, run out of capital; it puts pressure on trying to pay that mortgage.”

In March there was an average of six mortgagee sales a day.


Govt's online tax calculator 'misleading'

The forecast inflation rate is not included in the online tax calculator which helps people figure out the impact of the budget on their taxes, Finance Minister Bill English confirmed today.

The budget last month included income tax cuts across the board. Budget documents showed the cuts off-set by the increase in GST to 15 percent.

Labour today said the Government had misled the public by overstating the benefits of the tax cuts.

It was "unacceptable" the Government's online tax calculator did not take into account Treasury's forecast of 5.9 percent inflation in 2011, the party's finance spokesman David Cunliffe said.

The calculator also did not include potential increases in rent, ACC and childcare costs, he said.

Labour's calculations said minimum wage earners would be worse off until 2014 under the changes.

Mr English said the online calculator included income tax cuts, the rise in GST and compensation in Working For Families, Superannuation and benefit payments.

It did not include forecasts, he said.

The calculator had seen 360,000 page views from New Zealand, Australia, the United Kingdom, Europe, the United States and Asia.

Mr English said the website was "conservative" in its estimates as it assumed people spent all their income.

Countering Mr Cunliffe's figures, Mr English said forecasts showed wage growth was projected to be greater than price increases over the next four years.

Mr English skirted around the subject of the calculator in Parliament today until Speaker Lockwood Smith told him to answer the question.


House sellers drop their prices

House sellers have dropped their prices to the lowest level since January, as large numbers of houses remain unsold heading into winter, according to a monthly property report.

The average asking price fell 3.6 percent in May to $407,349, compared with April, property website said.

With the large number of houses remaining unsold - it would take 46.9 weeks to sell the 51,980 properties on the market - a tipping point was reached in May where both high inventory and prices were unsustainable, chief executive Alistair Helm said.

"Last year we were in a similar situation, but it was the volume of sales that decreased. This year it's price," Mr Helm said

New listings were up 17 percent on a year ago, but fell 4 percent from April to 11,733.

There had been no evidence so far that the Government's budget on May 20, making property investment less attractive, had had any effect on asking price, he said.

The asking price was up 1.5 percent in May on a year ago, although it was still 5 percent below the market's peak in October 2007.

"While we've not seen a deluge of cheap property for sale, it does appear that we've peaked on price and there's an opportunity here for buyers," Mr Helm said. is half-owned by the Real Estate Institute of New Zealand, with six real estate companies owning the rest.