New Zealand Immigration – are we coming or going?
New immigration figures are out today – which (kinda) tells us how many people emigrate to New Zealand, versus how many people bugger off and go somewhere else (usually Australia). According to the National Business Review, it’s not that good news for New Zealand, with the exodus to Oz continuing. (No idea why – they can’t make coffee properly).
It turns out that a staggering 35,400 more people left New Zealand for Australia permanently, than came from Australia permanently. That is not good news for New Zealand. It’s also an extra 7,400 people that made the move out this year compared to last year – which means its getting worse.
On the other hand, more people arrived in New Zealand from the UK than left. 7,800 in fact. It’s not a huge amount though. What I can’t see though, and as far as I am aware there are no figures you can find: is how many UK migrants go back?
On the whole though – there is certainly a lull in overall numbers of people moving to New Zealand.
Basically – cutting through all the waffle and numbers, only 3,800 more people emigrated to New Zealand last year, than emigrated from New Zealand. Given that the highest figure was over 40,000 in 2003 – it’s a bit of a drop.
One would think NZIS would be a little less draconian and stop mucking so many would be migrants round!
As to why there is such a drop? From what I’ve understood in the past few years of talking to people – it’s simply a cycle. Like the housing market cycle, it all goes round and round, with ups and downs. The problem is that the exchange rate being so bad has put a lot of people off. Your £ just doesn’t go as far these days. Also remember that at the moment, while migrants to New Zealand may be able to get their visas, they are going to struggle to sell their homes in order to come over here. It will change back again some day.
How much does it cost to send you child to school in New Zealand? – Follow up.
Filed under: Cost of living, General Budgeting, Life in New Zealand
After writing a while back about the costs involved in funding your child’s school year, I watched a rather interesting piece last night on Campbell Live. (7pm TV3)
Marlborough Boys College have nearly doubled the “donation” that parents are asked to pay – from $110 last year – to $200 this year. The cause of this is apparently due to a $1.7m debts incurred, some of which was lost when the school decided to open an Overseas branch in China, offering New Zealand qualifications. The school board is apparently putting the problem down to having too many teachers. Hmmm. That’s a bit like saying the UK NHS has too many nurses.
(Why is it that Front line staff – the ones that actually produce the work – are the ones that get axed first? The mind Boggles).
It appears that the school also spent $250,000 on a computer network believing it would be funded by the Ministry Of Education – but didn’t follow the process properly and can’t get the funds back.
My thought on this is that its quite appalling to expect the parents of the students to fork out extra payments to cover what appears to be some appalling business decisions made by the school. There is just something quite awful about that: lets face it – no one is going to bail me out if my business decisions for the last year end up in a pickle.
On a positive note – there was also a small section about a group of Auckland Uni students who have set up a scheme to go into schools and teach the kids basic money management skills. They mentioned that 88% of high school students do not know how to read a bank statement. I wonder if the number for adults is much higher?
This is something that desperately needs to happen. Financial literacy in the UK and in NZ is appalling – and to be honest – it’s really not at all hard to learn the basics of opening bank statements, keeping track of your sending, and spending less than you earn.
The most head turning quote of the whole thing was from a young girl how said, “I find it harder to spend the money I earn, rather than the money my Mum gives me”.
Hmmm,I think that suggests maybe all these bailout packages may not have the effect they are intended to.
Petrol Price drops in New Zealand – well that didn’t last long did it???
For the forth time in a week – petrol prices here in New Zealand have gone up 5c a litre. For the usual excuses reasons: Cost of oil and the exchange rate. Humpf.
So any happiness we may have felt at prices being back down to the level they were about 3 years ago – was very short lived. I wonder if that had anything to do with Christmas and the big petrol companies not wanting to been quite so badly.
I mean – just before Christmas we were getting up to $2.20 a litre.
Over the holiday – it dropped to $1.33 a litre.
Now its $1.53 a litre.
(Prices for 91 Octane)
You know – the thing I hate most about this – is how on earth do you set a budget for the next years fuel costs? I’ve been happy as Larry this last month or so – because we have saved a good $300 in fuel bills, but that doesn’t look like its going to last long.
But how do I price up my proposed spending for the next year. I can’t bank on prices staying at $1.55. I at the moment – I’m looking at having to take my most expensive month from last year – and budget that amount every month for this year. I guess on the positive side – that should give me a nice bit of leeway – and if petrol prices don’t shoot all the way back up then we would have a bit of spare cash each month.
I just wish we could have had the cheap fuel a bit longer. I’m sure I can’t be the only one who was breathing a sigh of relief when the prices came down. It really does make a huge impact on the cost of living. We were paying about $30 less on a tank of fuel compared to when prices hit their highest.
That’s over 7 coffees.
And: while it’s not exactly a money saving tip – as you don’t really get “cheaper petrol” by going to a different station as much as you do in the UK, there is a website that keeps a track of petrol prices at different stations in your area.
Check out Pricewatch
How much is your life worth?
Filed under: Cost of living, General Budgeting, Property & General Investing, Retirement, Pensions and Kiwisaver
Yesterday we went to have a chat with our Financial Planner – Alan at FSB4. We really had to sit down and tackle our insurance policies: Life, Trauma, Critical Illness and Income Protection. None of which even I can consider exciting – but has to be done.
Now – generally when we have sat down with people about this – the conversation usually runs along the lines of the Sales person asking who much cover we want, and then getting us quotes for what it will cost us.
This one however –went a little differently (and I always like Different).
Alan asked us what we needed to cover.
So we had to go through all our mortgages, how we wanted to be “sent off” when we pop our clogs, how many people we wanted to supply flights for to send us off (Tough – you are on your own – pay for your own flights if you want to say goodbye!), any bequests, for how many years we wanted to not have to work if anything happened, and a really cool “Recovery fund” which is basically money we can use to help us “get over the trauma” of whatever goes wrong.
It was a VERY BIG NUMBER.
And – it’s going to COST A LOT.
How many suitcases stuffed with money we will need to spend to buy the level of cover we need – is being worked on. But I may have to add a shot of brandy to the coffee that Alan had better be buying me when we have that conversation.
Now – here’s an interesting thing: turns out we have “a lot” of investment properties (that’s 3!), and basically in times past – when people died – they just sell enough properties so that they can live of the rent. Only that ain’t gonna happen now – because prices have tanked. So one way or another – we actually need to make sure we can pay off those mortgages if Hubby is no longer able to earn.
We were woefully underinsured when we sat down and worked it out. At a rough guess – our Life Insurance is probably about half what it needs to be.
And also at a rough guess – we may need as much as an extra $500 a month to pay for it. As good as I think I am at budgeting – that is gonna be tough. We were due to do one of our Budget Reviews at the weekend, but I have decided that we may as well wait till we have some firmer numbers about the cost of this – and then at least I know what to aim for.
At that point – we have to prioritise our insurance requirements (because I’m not giving up my Coffee Budget for life Insurance – no way!).
Insurance and risk planning are things that tend to get forgotten about – but it doesn’t hurt to occasionally sit down and work out just how many $$$ your life is worth. It is probably an awful lot more than you think it is.
Interest rates in New Zealand – Investigation into rip-off break fees.
Filed under: Banks, Interest Rates, Credit Cards & Mortgages in NZ
(Is that too much of a Tabloid Headline???)
Apparently the Commerce Commission and Banking Ombudsman are looking to launch an investigation into the hideous break fees the New Zealand banks are charging their customers to get out of horrendously high fixed- rate mortgages.
It’s about bloody time.
It’s not that I disagree 100% with break fees – after all – if the rates go up, we as the customer get a good deal and the bank takes the hit – but to insist on them now – with the financial crisis causing absolute chaos for everyone – well, a bit of common sense and decency wouldn’t have gone amiss.
According to the Sunday Star Times today, they have found that to break a $200,000 mortgage, fixed for 5 years in 2007, break fees charged by the different banks ranged from $8,000, up to a whopping $21,000.
“Consumer NZ chief executive Sue Chetwin said the discrepancy suggested borrowers were being ripped off, and welcomed the Commerce Commission investigation. She could not see how one bank could justifiably charge a break fee three times higher than a competitor.”
Kiwibank and Westpac are the worst offenders. Funnily enough – I too used the term “rip off” when my Westpac account manager told me he wanted a sickening $46,000 to break a 5 year mortgage of $465,000.
Apparently the banking ombudsman has received a barrage of complaints about this – so many that they are considering introducing a waiting list to deal with them all.
Whether or not this will result in the banks being taken to task and having to refund the break fees no-knows. But to be honest – I actually think it’s about time someone took a very close look at the charging practices of the New Zealand banks anyway.
And given that they are all insisting on the break fees being paid – I sincerely hope that not one of the New Zealand banks has the gall to ask for a Government Bailout. I fail to see why it’s is so far the Banks and Big Industry that are getting bailouts all over the show, and yet we as the public have to cough up every penalty charge imaginable. We can’t seem to use the excuse that there’s a financial crisis going on!
Did New Zealand invent the Banking System?
Ages ago, I was having coffee with a friend of mine (not a hugely unusual occurrence it has to be said), and we were discussing Banks in New Zealand. Now most people know that I don’t really think they are that great. And I have always found it odd that by and large Kiwis think their banking system is the bee’s knees. You will find this especially at Immigration Expos – where I remember them telling us how much more advanced than the UK banking system it was.
But I was gobsmacked when my friend told me that while talking to a Kiwi, she was told that New Zealand had in fact actually INVENTED the banking system.
So, who did invent the banking system? I always thought it was the Templars, with their vast sums of money and preceptories throughout Europe and the Middle east, which allowed people to deposit money in one country, and withdraw it in another using a promissory note – sort of like a Mediaeval Travellers cheque.
Well, according to Wikipedia – that fount of a million things you never knew you needed to know – banking has been around in its simplest form since about 3000 BC. Ancient Babylon developed loans and the Greeks had a system for allowing deposits in one city to be removed in another city. The first individual banker recorded in history is a guy called Pythius, at the beginning of the 5th century B.C In the Aegean, the island of Delos became a centre for banking in the region in 300 BC.
It all went horribly wrong with the Romans: they did well with the administration of banking, and improved the charging and payment of interest, but they liked Cash too much, so banking didn’t work out so well for them.
Banking didn’t come back to Europe till the Crusades, in about 1100 AD. And yes – the Templars did help out a bit J. In the 13th and 14th century – it gets a bit messy – with the papal banks and Italian merchants fighting it out as to who had the best banks at the time, and an English King or two defaulting on loans!
(See its not just the Hoi Polloi who have money worries and can’t pay their debts – the whole downfall of the Templars was due to the king of France running out of money to fund a new war. How about that for a Financial Crisis! “I need some money – I know – let’s torture some Knights for a few years, burn em at the stake and nick their treasury!”)
Essentially at this point – the Italian merchants get into Banking, and in the 15th century in Florence it becomes legal to charge interest (prior to this it was illegal and called Usury).
In the UK funnily enough, banking seems to have started in coffee houses, with the royal exchange opening in 1565.
So there you have it. Whether or not you love or loath the New Zealand banks – they defiantly cannot claim to have invented banking.
Will New Zealand be okay in the economic crises?
If you read my book (go on – dare you) you will know that I tend to be really quite sceptical of people who are prepared to say what the economy is going to do with any certainty. You may as well toss a coin. Heads it will get better, tails it will get worse, coin falls down the drain – it will stay the same.
Which is about as much as you get from reading most commentaries as far as I can see.
Anyway – I was chatting to my mum the other day (she is back in the UK at the moment), and she was telling me the news from there. It seems that over the Christmas period, a lot of well known high street stores and businesses have gone bust.
Probably the most shocking is Woolworths. (For those Kiwi readers – UK Woolworths is more like The Warehouse than the NZ Woolworths you know). The last of the Woolworths stores closed this week, after they failed to find a buyer for the company. It was a bit of a shock: it feels like woolies have been around forever; definitely it was the place to buy toys when I was growing up! (My Star Wars Collection would not be as big as it is without them!).
Woolies is joined by; Officers Club (kinda like Hallensteins I guess), Zavvis (Used to be Virgin Megastore – maybe they shoulda kept the name), Adams (Children’s Clothes), Roseburys (Soft Furnishings); Whittards Tea has been bought out by someone else, and good old Wedgwood & Waterford Crystal. Wow!
The scary thing – these all fell over rapidly in the last few weeks.
Now – I’m not an economist – but something struck me as a bit odd about this – and it makes me wonder about how things are in New Zealand. You see, so far – the high street stores in New Zealand aren’t falling over. Some of them are grumbling – sure – but not going bust. Instead – we have had over 20 finance companies fail – but over the past 2 to 3 years, and most of them during 2007. That has put a huge dent in the ability to borrow money, and it has caused a lot of hassle for property development and investing which relied heavily on the money these companies lent out, but it doesn’t seem to have hit the high street!
The only Hight St store here I can think of that went bust was Sounds, selling Cd’s and DVD’s.
Also, New Zealand’s economic crisis has been in flow for a while now. The finance companies started going bust back in 2006. 15 had fallen by February 2008, and by then, the banks had started being rather strict in their lending.
Whereas in the UK – it seemed to come crashing down REALLY fast. With 2 major banks falling over in October and the government bailout coming so rapidly, along side the Iceland savings nightmare; it was a completely different scenario. A short sharp kick in the ghoolies vs. being stretched on a rack I guess.
So my opinion, for what its worth, is that New Zealand just isn’t reacting in the same way as the UK. People are spending less (mostly – there is still a lot of money being chucked around by some people!), but it just feels a bit less intense at the moment. While there is less money available, it really is mostly in the form of boring for property. People have certainly had it hard with high interest rates (remember – even with rates falling: many people are on Fixed rates which are expensive to break, and even than, rates are always higher here than in the UK.
The main difference that this will cause is that in the UK, the high streets are going to start looking very empty. In New Zealand – you can’t see that – it is not so “in your face”.
I think we will survive for the most part. It is going to be tough for some of us, no matter which country we are in. But as ever – if you look after your money, and take care of it, and live within your means – you can get through it.
Of course – that may change next week, but hey – that’s just the way I see it at the moment.
Today – mum tells me that even the great Marks and Spencers are closing 27 stores.
Wehey! We Don’t Need to dip into our Emergency Fund after all!
I mentioned here that we may need to dip into our emergency fund:
IBM were only taking staff on as 2-year contractors, and that was coming to an end next April, and hubby has been trying for months to get the contract made permanent.
Finally, after a lot more hassle and way more meetings with managers than should have been needed, the approval has come through for Hubby’s contract to be made permanent.
The funniest thing? Or perhaps the most utterly annoying and frustrating thing (that had us screaming and grinding our teeth)?
15 people had to sign off on making the contract permanent:
Manager (New Zealand Based)
2nd Line Manager (New Zealand)
2nd Line Business Executive (Aus)
Finance Manager (NZ)
HR Manager (NZ)
Resource Manager (Aus)
Talent Leader (??!) (Aus)
HR Manager (Aus)
3rd Line Business Manager (NZ)
General Manager 1 (Aus)
General Manager 2 (Aus)
General Manager 3 (Aus)
Finance Manager (Aus)
Vice President of Finance (Japan).
Director of HR (China)
Notice: only 5 people on that list are actually based in New Zealand!
Maybe THIS is why so many migrants find it hard to get job offers from NZ companies. The problem we found, both here and with Unisys, is that the New Zealand company is seen as a bit of a poor relation to the Australian branch. It’s not the first time that hubbys job has been decided by people in Australia rather than New Zealand.
Anyway – as we were shoving extra money aside – we now have a few extra thousand dollars in the emergency fund. I figure it may as well stay there.
But as we don’t need it just yet – I’m going back to pouring the money into the mortgage. I was able to divert my normal mortgage payments into the slush fund because I’m years ahead on the mortgage anyway – but I have to say I’m real glad to be able to get back to killing the mortgage!
P.S. All this effort was just to get approval for the transfer. Salary negotiations are still to take place.
Lowering Interest rates in New Zealand – what does it mean for Migrants to New Zealand?
Filed under: Banks, Getting to New Zealand, Interest Rates, Credit Cards & Mortgages in NZ, Life in New Zealand, Property & General Investing
For the past 3 years in New Zealand, Interest rates have been going one way – up. When we first took out our mortgage we could get around 7.5% on a two year fixed rate. By July this year – we were lucky to get under 10% as a fixed rate, and the floating rate was almost 11%. And things were looking a bit grim as rates were predicted to keep rising.
This happened because Alan Bollard, the governor of the Reserve Bank of New Zealand wanted us all to stop spending money and for house prices to go down. Which happened this year, as we were hit with 
High Interest rates
High Petrol Prices
High Food Prices
High Heating bills
High House Prices.
So after a year of ratcheting the interest rates up really fast, the economy in New Zealand came to a screeching halt early this year.
So then, Mr. Bollard – without ever saying he may have stuffed things up a bit – started dropping the interest rates again. Only this time – he did it really, really fast. You see they went up about 0.5% every time he made an announcement, but going down – it’s happening at 1% or 1.5%.
This is pretty much the same all over in the western countries as we struggle with one helluva financial meltdown.
So what does it mean here in New Zealand, and what does it mean if you want to Emigrate to New Zealand.
Well, you can now get a fixed rate mortgage for 2 years at a pretty reasonable 6.85% to 7.2% at the major banks (Interest.co.nz). This is cheaper than it’s been at any time since we moved here 4 years ago,
Which is good news right? (Well for New Zealand anyway – where you need to remember that interest rates are always higher than in the UK). Only not quite so good for many people. Because the banks now want 20% deposits before lending any money – and in some cases 30% if you want to buy an investment property.
And not many people in New Zealand have that kind of savings. And with house prices in the UK dropping as well – as a migrant you may not have the 20% deposit either.
So – as if often the case – the banks giveth with one hand and nick it straight back with the other one.
When looking at your dream home on the Internet, remember that you may now need a big deposit. And also take into account that the lending rules from the banks are changing rapidly at the moment. We have just had a case where the National Bank held back our application for 3 days so that it would come under new finance rules and whereas we could have got 90% lending on a property, they would now look at only 80%.
If you are a migrant with some savings you can bring over – then you are in a VERY good bargaining position for you new dream home. So bargain hard! If you have no savings – then right now – it may be a bit tricky to get a mortgage!
How to read newspapers.
Filed under: General Budgeting, Retirement, Pensions and Kiwisaver, The Book and Website
Our local paper – Wairarapa News had the following piece of fantastic English grammar this week:
The National Government will inevitably have a potential negative impact on the function, fortunes and fate of local government …..
(Wairarapa News Nov 26th, reporter Michael Kopp).
Ok, so why am I blogging about this? Well because its something I’ve noticed a lot over the years since I started actually reading the papers for Economic news, and personal finance information.
That sentence doesn’t say what you are supposed to think it says.
If something is inevitable – it ain’t a potential. Its gonna happen. If it’s only a potential – then it may or may not happen – but it’s not inevitable.
(Unless you are a quantum physicist – in which case you could actually be right – I wouldn’t have a clue!)
So, like I say in my book – READ the article. And learn to weed out the stuff that is designed to make you believe something that isn’t necessarily true.
The above line wouldn’t grab anywhere near as much attention if it said:
Well, the National Government may have a negative impact on local services – but we don’t really have a clue yet, cos they have only been at it for 2 weeks, and we have only just found out who the cabinet are. But come back in a month and we might have some real information for you.
Avalon’s Guide On Facebook
-
