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Advocacy for business by the BusinessNZ Network | |
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Plunge in business profits | A new StatsNZ GDP income measure shows a big drop in profitability in NZ businesses over the last 18 months, with business profits per capita now around 2017 levels. Shamubeel Eaqub analysis shows that once data from the period of Covid lockdowns and wage subsidies is removed, a significant decline in business profitability is evident. The BusinessNZ Planning Forecast notes that in the current reporting season around 2/3 of listed companies are reporting less profitability compared to the previous 6 months. | | | |
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The Govt’s Action Plan for the next quarter includes practical changes for the business environment - on emissions trading, resource management, infrastructure provision, land zoning, rental regulations, building materials availability, renewable electricity generation, and oil and gas exploration. BusinessNZ’s Catherine Beard says the Action Plan recognises the physical, resource-based nature of many NZ businesses, and moves to improve the regulatory burden on the sector will contribute to the rebuilding of the economy. | | | |
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The Action Plan also includes reforming consumer credit legislation that has been blamed for a tightening of credit, delays in getting loans approved, and difficulties getting mortgage finance. The CCCFA Act has led to a decline in lending and needs to be simplified while still containing protections for vulnerable borrowers, the Commerce Minister says. BusinessNZ had advised that regulating all lenders to address irresponsible lending by a small subset could result in generalised difficulties in the loan market, and better targeted regulation was required. | | | |
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Small businesses can be vulnerable borrowers too, Financial Services Complaints Ltd says. FSCL has seen a recent increase in business lending complaints from small business owners facing difficulties repaying loans, with a common complaint that the terms of a loan were allegedly unaffordable. Business loans carry risk since a lender may have the power to place a caveat on property, require security over assets including the family home or take personal guarantees, the Financial Ombudsman warns. | | | |
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Transport policy aids business | BusinessNZ says the draft Govt Policy Statement on land transport is well-focused on how land transport can meet the future needs of business, and allows for a greater range of options for business involvement in its provision. The draft GPS allows for other funding sources beyond the National Land Transport Fund and direct govt funding, including tolling new highways and new public-private partnerships, and also allows for third parties to be able to bid for and operate transport services currently delivered by NZTA. | | | |
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AdvocacyUpdate is an update on recent activity & advocacy by the BusinessNZ Network | |
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