Economy is doing far worse than feared and it’s Government’s Austerity strategy at fault

Mortgage arrears at an eight-year high – Centrix

The economic climate remains challenging with all manner of debt creating hardship for consumers and businesses alike, according to the latest report by credit agency Centrix.

The February credit report indicates mortgage arrears were at an eight-year high, with personal loans, buy-now-pay-later (BNPL), retail energy and telco arrears on the rise.

Consumer credit defaults also increased by 42% on the year earlier, while personal insolvencies showed signs of an uptick, but remained below historical levels.

Financial hardship cases reached the highest level in five years, at 14,700 accounts, though arrears were 3% down over the year earlier — the first year-on-year improvement since December 2021.

But hardships were still up 20% on the year earlier, with 46% related to mortgage payments, 30% to credit card debt and 16% to personal loans.

Consumer and personal loans arrears rose 9.7% and BNPL arrears increased by 8.6%, month on month, though were down on the year earlier.

Retail energy payment arrears rose to 5.2% month-on-month or by 6% on the year earlier, while telco arrears rose nearly 11%.

Mortgage arrears reached an eight-year high, with 23,700 home loans past due — a 6% year-on-year increase.

The economy is in far worse shape than is being acknowledged and it’s being driven by this Government’s inane user pays Austerity agenda.

While National have borrowed more than Labour, most of that was for tax cuts we can’t afford while hollowing out public service budgets.

National will scream they have put more money into health than Labour, but what that always misses is that National has underfunded what Health actually needed!

This Government purposely under funded Public health so that they could manufacture a crisis and slash costs so as to fund their tax cuts and landlord loop holes!

In the Budget, National allocated just 2.9% increase to health services but inflation was 3.3% and population growth 2.6% while an ageing population adds more to costs.

National gave 2.9% for health but we needed 8% to stand still, that under funding has manufactured a crisis National are attempting to use privatisation to solve.

On top of this Austerity Agenda, National have quietly moved everything to a User Pays model.

Bernard Hickey is scathing…

An administered, unnecessary & counter-productive inflation shock

Govt’s move to user-pays in transport & infrastructure is administering an inflation shock; Shift from Govt-funded investment to private funding is forcing the RBNZ mortgage rates higher for longer

1. 1. The Government is widening its drive to turn public capital and investment costs into consumer price inflation that the Reserve Bank has to control with high interest rates.
   2. In recent days a rash of Government-controlled and driven price setters have signalled double-digit rises in prices, rates and fees in the next couple of years, due to the Government’s drive to reduce public borrowing and force their capital costs and investments off into private sector and council debt serviced through new or higher user charges, and higher council rates.
   3. They include: Metlink (43% increase for off-peak bus and train fares from July 1), 51%-Government-owned gentailer Mercury (9.7% increase in average residential electricity bills from April 1), Environment Canterbury (9.9% rates increase from July 1) Dunedin City Council (10.5% from July 1, followed by 10.2% and 10.1% increases in the following two years), Tauranga City Council(12.5% from July 1), Hutt City Council (13.4% from July 1, then 12.9% in 2026/2027), Invercargill City Council (9.5% from July 1) and Ashburton District Council (9.8% from July 1).
   4. This comes on top of plans announced over the last year to increase Government insurance levies by as much as 72%, to nearly treble the international tourist levy, to hike work visa fees 53%; to increase motor vehicle registration fees by 45%; to lift MPI fees by 18%; to reimpose the $5 prescription charge, and to remove subsidies for electric vehicles.
   5. The Government has argued it needs to return the Budget to surplus and reduce borrowing to take inflation pressure off the economy, which would allow the Reserve Bank to lower interest rates faster than would otherwise have been the case, which would in turn stimulate the economy.
   6. However, the administered price shock is forcing the Reserve Bank to hold interest rates higher for longer than expected and higher than seen after previous recessions, which means the cost-shifting and debt-shifting is proving counter-productive.

…this constant scam of giving you a pittance in tax cuts while charging you huge increases tricked the sleepy hobbits of Muddle NuZilind.

What’s the point of that $15 a week Tax cut when they are then charging you $200 extra a month in new charges?

Nicola Willis is a former acolyte of the Free Market NZ Initiative and her next budget is so severe the Reserve Bank Governor resigned and Winston is eyeing up a snap election, so I’m not sure hoping her idealogical fervour is any solution.

Dear Kiwis, your post-covid bitterness has been manipulated by the Political Right so they can strangle off the common good for their donors interests while our hungriest kids are fed corporate slop, but as long as da Māaares and da Trans get owned, you don’t mind getting robbed by the rich do you?

Happy Days.

 

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