With all commodities prices high, a large stock of farms for sale, and future price trends optimistic, will agriculture's debt be addressed in this period or will it be ignored to be sorted by another generation?
This period could give NZ farmers an ideal opportunity to repay a good proportion of their debt burden, which has been it's weakness for years.
They will face difficult choices on where to spend their surplus dollars but under the current climate debt reduction will be the smart one.
Farmers have been branded conservative, but with the markets, weather, pests and diseases and the currency all often not in their control, survival has bred this stance.
Will you continue to reduce debt, or will these times present opportunities for capital growth if you can convince a sympathetic financier?
Think it's all good down on the farm? Think again. Property values are plunging, and the crisis could yet hit the cities too. If you asked a city-dweller, most would probably guess that things were pretty good down on the farm right now. Sure, the value of the NZ dollar remains stubbornly high, but meat and wool prices finally appear to be improving, and dairy farmers are widely perceived to be creaming it reports The NZ Herald.
While that should translate to a healthy income for most dairy farmers, in inflation-adjusted terms the payout has mostly fallen since the 1970s, with only a very recent rise. And in the meantime, like their city cousins, many farmers have committed themselves to huge amounts of debt. Between 1990 and 2000, the price of rural land doubled. It doubled again between 2000 and 2005. And again between 2005 and 2008.
Prices were largely fuelled by a flood of cash from the banks. According to data collated by the Reserve Bank, over the past seven years alone the amount banks have dished out to the agricultural sector has more than doubled from $19 billion to $47 billion. Two-thirds has gone to dairy farmers, or to people wanting to convert land to dairying. The dam burst in early 2008, and since then land prices have plummeted. In some parts of the country, values have halved and many farmers now owe more to their banks than their farms are worth - a situation known as negative equity.
But former banker and registered valuer Bruce Wills can quite correctly point to a paper he wrote in 2006, while taking part in the Kellogg Rural Leadership Programme at Massey University, which has indeed proved prescient. The paper, titled The NZ Rural Property Market: Where To From Here?, concluded that the market was experiencing "irrational exuberance", and that the prices being paid for rural land could not be justified by farm incomes. It predicted prices would fall by 20 to 30 per cent. "I did a number of presentations of that around the country and in several of them the room was full of bankers, and basically I got bollocked from pillar to post," he recalls. Part of the problem, he believes, is that bankers have a direct financial incentive to approve as many loans as possible because that's what their bonuses are based on.
But some veterans, such as Wills, are not convinced the worst is over. As Wills pointed out way back in 2006, a "correction" may be painful, but it is also necessary so that young people can continue to enter the industry and to see a future in farming. "Debt in rural New Zealand is still the elephant in the room, and it's still a significant problem that we haven't yet addressed," he says. "Sure, the banks have slowed down their lending and attitudes have changed and we're all a little bit wiser now, but what worries me is we haven't really started deleveraging our sector. And that has got to happen and when that happens, it's going to really hurt."
58 Comments
"This period could give NZ farmers an ideal opportunity to repay a good proportion of their debt burden, which has been it's weakness for years. """""""jjh
...not sure about the "good proportion "bit...
a lot of S&B farmers bought land @$750su plus....(many would have $500/su debt on this land( possibly more when plant and stock are taken into a/c)
What will GFI,s(gross farm incomes) be this year?$100/su??
costs 55%($55) leaves $45 surplus....interest(8%)=$40/su
THEY can pay a massive $5/su off their debt
In 100 years time they will be debt free........Yipee say their great great grand kids!
I know iflation will redce the debt effect but i dont see large inroads being made into many mortgages...the debt is too big..
selling is the only way out for many
Selling is the way out for many.
23% of farmers in "intensive care" fact despite Banking industry saying only 10%
$47 bn 23% roughly means 10.8 bn impaired.
Banks forced sales on s&b farms realising only around 60% GV 2008
The top 20% s&b farmers income $60 /su bottom 20% -ve$35 / su median about $45/su
85 PLA notices served 22nd Dec.
As more sales take place the more farmers with debt equity issues. Wills is right the deleveraging hasn't even started and when it does it will be a blood bath.
Many farmers have cut back capital expenditure, lack of inputs reduce profitability and any income being used to reduce debt. Fertilizer going up again very shortly.Most farmers have sold their lambs and cull ewes and will not have income again (apart from a bit of wool,)till next crop of lambs
Banks need to find a better solution than what they are doing currently
I think what you mean is net income of $60/su, not gross. The bottom 20% aren't earning negative income, thats impossible.
Also most farmers haven't sold all their lambs, quite the contrary in the south island where most farms have 50 - 80% of saleable lambs still on farm.
The 23% will be on a watch list, impaired implies that there have been specific provisions set against these assets, where as you will find that the 10% is actually a correct reflection of this.
OK. I realise your've delved into this alot and I realise we have to get through the hangover of afew years of low returns and for many climatic challenges. However I would describe the mood down south here as really upbeat. Most cockies I talk to are really excited about the lift in prices. Yes theres certainly a need for this level to hold but it seems pretty solid this time. Infact if you look at farmgate returns internationally it could be argued there is more upside yet. Theres talk down here that the per kg lamb price into the winter will have a $7 infront of it. The best way to silence the banks is to churn out a bloody stonking profit!
I think that it is great with the higher payout and hopefully a sustained meat schedule, but
there are still basic problems to get fixed before farmers can carry on with confidence.
first is the issue of debt and falling land value
second productivity and returns to the farm gate
third succession in farming
fourth increasing costs of production
I speak to farmers everyday that are doing that putting out a healthy surplus but are still being told to sell,I personally think that if a farmer is able to pay interest and principle,cover costs of production,and produce surplus banks should leave them alone to get on with the job despite what their debt equity position is.
I absolutely agree on the last point, especially in the present enviroment.
It will be interesting to see how the land market performs. I suspect a two tier market developing where top quality properties could see good demand and priceing and poorer properties in lesser locations continueing to languish. During the boom purchasers were'nt decerning enough IMHO.
Cost of production is always an issue and I guess some of it like fertiliser is linked to high international commodity prices. Id rather pay abit more for my super and get better returns from my stock. 4 years ago it took the gross income from 10 lambs to buy a tonne of super now its about 3.5x. Interest is the one that has the ability to really shake things and for now its stayed historically pretty low. Rates, fuel, frieght etc are all on the rise but other stuff likes of drench and chemicals are actually getting cheaper.
I do agree with your listing of farm succession as a big issue and its one of the reasons I try to push a positive viewpoint. We need the next generation to be excited about the prospect of entering our industry which is why we need to highlight the positives as well.
Trev, my figures are correct and the the bottom 20% figures are correct. Those farmers are making a loss. Fed Farm survey a week or so ago approx 14% farmers borrowing for survival position. As for the farms in intensive care that figure is also correct. Banks publically tout only 10%, but privately say the figure is 20%. The 23% figure is reputable
Survey I did when asked when did you make a profit 19.4% responded they never have.
2007/08 13.7% 2008/09 21.8% 2009-10 10.5% had reported a profit.
The figures on profit /su was gross not net
By watch list I assume you mean, reduced overdraft, removal of overdraft, selling capital stock and other assets, getting an of farm job, interest rate put up, bank approval on expenditure, od rates anything from 9%-21% etc, etc.
Sheep Shagger I agree that farm sales are getting two tiered, the top sales seem to be going to equity investors my farms etc as they are wanting farms that can increase production and supposedly capital gain. Many farmers can'6t put fert on because banks won't allow.
"Survey I did when asked when did you make a profit 19.4% responded they never have.
2007/08 13.7% 2008/09 21.8% 2009-10 10.5% had reported a profit.
The figures on profit /su was gross not net "
Janette.....since when did farmers have to make a profit.?
If you make a profit you pay tax..Better to make losses(using family trusts LAQC,s etc)
Put any "spare income" into developing the farm to avoid making a profit and then rely on the farm doubling in value every 5-10 years.(Tax free capital gains)
The problems start when there is no capital gain and the farm stuggles to meet debt servicing requirements.These high land values also prevent the next generation from starting their farming career.
To use a farming analogy.."the chickens are comming home to roost"
Farm prices HAVE to reflect their income generating ability.....eventually.
If you want current returns read Dom Post article on Meat and Wool economic Sector report todays edition
The problem starts when the goal posts are shifted ie GFC.Farms should reflect generating income ability and while that adjustment is made what happens to our food production base ie land we sell our assets of to corprorate farming practices and if you think that this is going to let young people enter the industry,banks are requiring 80% equity on most lending.Think again.
Perhaps to you Dom m. When I made enquiries it was 65% equity, 35% debt, 'but we do take individual's circumstances in to consideration and will consider 40/50% equity if there is good property security' - in other words you have other property you they can secure the loan over.
Send a first time farm purchaser (non corporate/non equity partner) to National bank and see if they will still accept 35% equity.
I would have to agree with you there Dom. My experience is that some banks as you mentioned are still doing the 65 35 equity to debt split even for first buys provided the budgets stack up. I know of a couple near us done by National lately at those ratios in the sheep and beef sector.
I have a real problem with all of the scare mongering going on out there. No doubt banks are addressing some credit issues, but the extent to which some out there are determined to create a "them versus us culture" between banks and farmers is doing more harm than good. There will be cases of the odd "burnt" farmer, be it as a result of land price crash, costs, even swaps, but they are not the majority in my experience, just the most vocal. The squeeky wheel gets the grease.
New financial legislation proposed is aimed at "preventing another GFC style crisis." It is not about repairing damage done by the current one. Janette's idea that the banking system is stuffed because they are bringing in such new legislation is floored.
Reading. Officially it is about "restoring investor confidence in financial markets". There isn't a lot of mention of protecting or enhancing the rights of borrowers.
There aren't actually that many farms being "sold up". Herald did a report at end of last year comparing number of foreclosures by financiers accross different industries. Farming came in as one of the very lowest. With that in mind, why should farmers expect any better treatment than the average home owner or business in the city that has too much debt that can't be serviced.
I'm not aware of any of the banks using "ratios" as policy, i was under the impression they were used as guidelines. At the end of the day a loan can only really be called up if it is in default.
vc at the end of the day loans can only really be called up if it is in default JOKE.Read your mortgage docs, loans can be called up anytime od's 24 hr notice. For my bank default was death of myself.Banks create their own reasons for default and you would be surprised at how creative they are.Debt equity ratios is all banks talk about when they are justifying pulling the pin.
" There aren't actually that many farms being sold up," why? there is no market, banks don't want to lend particularly s&b because as Wills said the floor hasn't been reached yet, but I guess guys like Wills is scaremongering also, what would he know. The reserve bank has had to delay implementing some of the further,compliancy changes for bank accreditation because of the impact on the rural sector but I guess the Fed Farmers are scaremongering also.
I have Banked with my bank for 20 years and I never for one minute would have thought they would behave in the way they have. Good luck with yours if you use one
Probably true, but the reputational risk to banks of pulling pin on farmers who are meeting their debt servicing would be marketing suicide.
Debt to equity ratios may well be talked about a lot, but i would think that is because it is a simple way of explaining the situation in a way that can be compared easily, as apposed to being written in the scriptures in the ivory towers of sydney.
We have always had a good relationship with our bank, and know we are not the only ones. I feel genuinly sorry for those farmers out there struggling at the moment even with good product prices accross the board. But we have to remember that farming is still a business, and in business there will always be casualties. I wouldn't go as far as using your collateral damage taliban analogy, but in simple terms to use a bank or not is your choice.
Federated farmers have also been apposed to a lot of the proposed financial regulation, because it will increase costs to farmers.
Janette, I think a policy of name and shame is appropriate if banks are behaving unfairly and irrationally and good luck to you if you or anyone who highlights such behaviour.
I however find it hard to believe that banks who spend millions cultivating a brand, would risk heavy handed behaviour. I just cant believe that banks would give farmers two weeks notice of a major change in their banking relationship. Surely the cases you refer too have drawn out over a period of time with the farmers involved having underperformed for whatever reason be it climatic or incompetence or just dumb luck .
VC is right why should farmers be treated any differently to home owners,moteliers,publicans or cafe owners?
sheep shagger I don't have to name and shame because all the banks exhibit the same behaviour and I get in enough crap as it is.Some of the cases have taken time it starts with selling capital stock bank pressure and at the same time reduction of od facility till it reaches a point you are living from month to month, the interest rate is put up because of increased risk and it simply becomes to hard. That is one senario and the sudden notice that your bank no longer supports you can be very quick indeed in my case 6 weeks.
The reason I think farmers need support is that we do produce income for this country and our economy needs a viable sector. Do we want to become tenants in our own land?
VC,
Its got nothing to do with preferential treatment. Farms are being sold up via a threat from the bank that if the farmer doesnt sell "voluntarily", the bank will. All or most mortgages are payable on demand. Until recently, the bank did not have to give a reason for demanding the mortgage be repaid. They are in fact selling farmers up who are not in default. In some cases the bank has engineered a default.
"Ratio" is the new policy in line with incoming regulation. Additionally, legislation designed to "protect the unsuspecting borrower" (this from Bill English's office) is at the submission stage. The submissions from the banks are weak. They are on line if you google them. May I suggest "BNZ submission, Ministry of consumer affairs, Consumer Law reform July 2010"
Thanks Ma'am, I'll definately give that a read.
My point about "preferential treatment" is that we are not seeing any higher levels of wind ups in farming than in any other sector of the economy, in fact well lower. Regardless of the methods being employed or language being used by the banks achieving this, it would imply that in actual fact the banks are showing greater care and patience with farmers than with other business or personal lending.
Forced sales i would think would be bad for banks in current market. If you use your ratio idea that is bandied around a lot on here, if equity is low and a forced sale results, banks would be in danger of losing money.
Banks would be in danger of loosing money.NoSh..t Sherlock. They are writing of millions already and they have provsioned already substantial losses. Why are impaired loans increasing? One bank has provisioned $600 million and as Wills stated the deleveraging hasn't even started.
If you are implying the fact that they have written off some losses already and by that token are happy to write off more which is why they are selling up the odd farmer then i'm not following you.
$600M or whatever of provisions each bank has will not come close to being realised, but its mandated by the regulators that a certian ammount is accounted for as a contingency. Wouldn't mind betting these ammounts will be written off for tax benefits this year and brought back in slowly over time.
Deleveraging by farmers would reduce bank provisions, not increase it. Unless they sell for less than their debt, in that case it isn't called deleveraging, its insolvency.
I could cite $44m three farms that banks sold and wrote of and that is only a start.The only way farmers can deleverage is through profits and selling of assets and we all know what land values are doing generally.As Wills stated rural debt is the elephant in the room that no one wants to talk about.
I sincerely hope the banks havnt been as bad with commercial and residential. At the moment their is a kind of filtering of bank amendments. Im going to "Rank the Bank" during the coming weeks. Some are genuinely sorting out customer situations that they couldve viewed with higher intellect earlier, but unfortunately not all banks are.
They are forcing sales and loosing money. One recent case alone is a loss of approximately 3mill to the bank (they must be recovering it all or partially another way, other than from the farmer) but to give credit to the bank, they have begun negotiating a humane exiting package for the farmer that wasnt previously offered.
Excuse my ignorance, but what is "Rank the Bank" ?
The writeoffs are higher in commercial and residential i am told. Ironic since residential lending is supposed to be cheaper than farm rates to account for there being more risk in farming than houses. Something not lining up there
Your question isnt ignorant. A Bank Rank gives each bank a score from 1 to 5, using individual case studies from each lender. Its similar to the way they rank us as borrowers to determin our interest rates and method of foreclosure or method of sustainability.
The ranking decision however, is a last resort and something that we do not take lightly.
VC. I didn't say the Banks were stuffed though without the guaranteed deposit scheme it would have been an interesting scenario.
As for the scaremongering going on out there get your hand out of your pocket, Banks are doing harm take alook at their submissions to the commerce act re unconsionable behaviour they sure as hell didn't want any changes in legislation that was going to address that issue!
Tell farmers that are given 2 weeks notice to put farms on market or else. The odd burnt farmer you have no idea. Get in the real world mate.
The reason I am so focused on bank behaviour is I hate seeing peoples lives destroyed.simple and there needs to be a better way of managing it. Currently the attitude is a bit of collateral damage boo hoo. A bit like looking for Taliban in a village, whoops killed a few friendlies, oh well they shouldn't have been there in the first place.
The 2 weeks notice thing is bollocks Janette. Have seen it in our district, and by the time it gets to that stage, everyone in the valley knows they will have to sell. The farmer will still scream blue murder, that it was a total shock, but only because they haven't been listenting to their advisers, bankers, neighbours etc for years.
Those sorts of claims are the scaremongering i am talking about. It breeds fear in the industry, and does more harm than good. Yes banks have had a role in what has happened in last few years, they have also made a lot of farmers very very rich if you want to follow that logic. End of day, to take on debt for growth is a decision that goes through accountants, solicitors, families, not just banks. Yet to hear of a banker holding a gun to someones head forcing them to borrow.
Deposit guarantee scheme made no difference to the banks, in fact it was of detriment to them. What you are referring to was the wholesale funding guarantee that the government provided to ensure banks could still get funding from off shore. Deposit guarantee scheme served to maintain liquidity in the smaller lenders, banks had to join by default as otherwise everyone would just put their money into SCF and Hanover.
I think it is you that may need to get into the real world Janette. In life there are those that let bad feelings consume them, and those that get on with the job in spite of adversity. I prefer to think of kiwi farmers like us as being in the second group, although a few out there are trying to prove me wrong.
@ weeks notice not bollocks. At Deloittes meeting yesterday young farmer gobsmacked received letter from bank that morning, has had no bad history never defaulted etc etc told he had 2 weeks to prepare a marketing plan for selling farm.
Contrary to what you might think I don't let this consume me, I have had a broken leg since august and have access to a computer for the first time and I love that send button. Also I can't stand rank stupidity. Cheers
When the government introduced it, Mum and Dad saver were given a choice. 2% interest in Main bank, or 5% in Finance Company (eg SCF) with poorer rating, but government promise that money is safe. Banks were forced to join or have zero competitiveness in attracting the local deposits they so desperately needed. This scheme however came at a considerable cost, and more of that cost was born by Big banks than small finance companies due to the way the shceme was structured.
Contrast this to a world where the scheme had not been introduced (hypothetical). Major banks (all double A rated, reliable) paying 2% interest. Mr Finance company paying 5% but with 2 or 3 dropping dead every day (Nathans, Blue Chip.....). Where would mum and dad depositor put there money. Some in the matress of course, but the vast majority would flock to the main banks for the greater security. This scenario provided no cost to banks while increasing deposits to them.
We had our margin increased mid 2009. Part of justification was increased deposit funding costs, of which paying for the deposit scheme was a contributing factor. I would have thought any banker worth their salt could have understood this if us farmers can.
donm,you are entitled to your opinion.Lending for s &b $100 /su. If banks are lending as you say then why aren't the sales happening. Tararua district 3 sales in the last 3 months.If I was to quote Charlie Graham who states quite clearly National banks lack of apetite for lending s&b farms and they are expanding into Asia for new business.
A lot of farmers I talk to were able to meet committments pre GFC and during and as for relief from interest rates many locked into SWAPs a product National Bank in particular pushed and have been unable to take advantage of lower rates because the break costs massive, I don't talk Bullshit Donm and there is no need for you to be so offensive unless of course you represent the financial institutions.THose that are under "intensive Care" have had their floating rate adjusted upwards some as much as a whole 4% on top of basic
If everything was so hunky dory with the banking sector why the need for the raft of new financial legislation currently rolling out, Basel2,Basel3. Why has the reserve Bank attempted to " rein in Bank behaviour"
If Farmers were already in the shit why did banks lending go up 22.2% in the period 2006-2008? What did banks base their lending on? Bank lending was about loose credit, incentivise practice and a push for market dominance,
"donm,you are entitled to your opinion.Lending for s &b $100 /su. If banks are lending as you say then why aren't the sales happening. Tararua district 3 sales in the last 3 months."
Farms in the Tarura region are not selling because they are way over priced.They used to be cheap but got swept along on the coat tails of the Wairarapa and Manawatu.
Farm sales are not happening because vendors want prices that require an eneconomic proposition.Buying s&b farms in excess 0f $700/su(unless they could become a dairy farm) was stupid.Why did rural lending increase between 2006-08?
LOTS of reasons..
1 farmers were capitalising losses from poor incomes and rising costs/interest rates(the banks let them do this cos land values inexplictly kept rising)Basically they were digging a deeper hole in the hope that a miricle would happen
2 farmers with this "new found equity" got greedy/empire building and bought the neighbours with the justification of economies of scale.Unfortunately their new found wealth had little to do with their farming abilty and more to do with the equity in the home farm.Any new lending didnt have to stand on its own but was ok,d if the system as a whole could support it(these rules have now changed a bit
3 you are correct that banks were not giving you a mortgage but in reality were selling you debt.And competition was hot to sell as much as possible.
(1)Land values kept inexplicity rising because Bank Managers were doing their own valuations and valuers were valuing farms as well, and valuers roles have been forgotten in this whole debacle.
(2)Banks were desperate to get market share and engaged in practices to entice farmers to borrow,I for one didn't farm because I was greedy, What happened for a lot of farmers was a result of poor returns, and successive years of drought and weather issues and rising costs of production.
The drive for larger enterprises encouraged by Banks, Farm Consultants and the basic human desire to strive.
True to some extent but...........
Did those who borowwed have any idea as to what they were getting themselves into?Were they dumb enogh to believe that the bank had the farmers best interest at heart?("dont pay it back...just go interest only...)
Was the "basic human desire to strive" just in fact GREED?
Were the farm consultants just telling them what they wanted to hear?
Maybe they should have talked to their accountant instead(they tend to be more conservative and know the "true " state of the farms financials)
farming is a tough game.Many borrowed while doing budgets(if they did one at all) which were founded on all good scenerios with no "fat" in case of adverse events.
With regard to rising costs...the most expensive of these is usually interest payments.A cost which as a "collective" farmers can control by restricting the price they pay for land.
farm valuations were often done by the vendor ..no surprises when they come out higher than necessary
True to some extent but...........
Did those who borowwed have any idea as to what they were getting themselves into?Were they dumb enogh to believe that the bank had the farmers best interest at heart?("dont pay it back...just go interest only...)
Was the "basic human desire to strive" just in fact GREED?
Were the farm consultants just telling them what they wanted to hear?
Maybe they should have talked to their accountant instead(they tend to be more conservative and know the "true " state of the farms financials)
farming is a tough game.Many borrowed while doing budgets(if they did one at all) which were founded on all good scenerios with no "fat" in case of adverse events.
With regard to rising costs...the most expensive of these is usually interest payments.A cost which as a "collective" farmers can control by restricting the price they pay for land.
farm valuations were often done by the vendor ..no surprises when they come out higher than necessary
I hope im not one of them.Just have to resist temptation and hold off.
In the past "low risk" entities subsidised the high risk ones regarding interest rates.
Now the setting of interest rates is more closely correlated to percieved risk
Not much help to those in the system but a good move "going forward"
Boy, did NZ snatch defeat from the jaws of victory. Just think where we'd be if our banks were NZ-owned, and Kiwis had been encouraged to save, and irresponsibility in the local markets was not permitted. There'd be a vast pool of accumulated wealth to tap, permitting high interest deposits and low interest loans. Startups would have a show, and existing businesses could develop, while Kiwis could be assured of owning an a affordable and decent home if they wished. Tight reins would have prevented a Japanese-style blowout. But instead we make an Albanian dirt farming village pyramid scheme look sophisticated.
Hi Janette,
I think my grandfather used to farm out your way, up the Mara near the Three Kings. A long time ago mind you, back in the 20s, 30s, and 40s. During the war, my mum can remember lying in bed and seeing the search lights from navy boats light up the sky as they patrolled off the coast looking out for German or Japanese craft. I still have a distant cousin in the district. Odd to think that one of the world's most important scientific discoveries of all time came in part from a chap born at Pongaroa isn’t it? I hope your troubles are working themselves out.
sheepshagger, I understand what you are saying, I didn't go in undercapitalised 70% equity. Three consecutive years of droughts and poor returns stuffs anyone. Ironically if Ihadn't been made to sell capital stock with this seasons prices I would have been ok and if I hadn't entered into grazing contracts from other Bull owners that was put into receivership by the bank I use I would have produced a surplus. And if the Bull guy wasn't in receivership and been paid I would have produced surplus. My area is getting surrounded by trees and every likelihood my block will be put into pines.
David B. It always surprises me the number of people that have lived up the Mara.Your granparents would have been near my place they may have actually lived on it.The Mara used to have 36 families livng there.own school, hall etc. Now up my road two families, school closed, hall gone, access apalling in winter. I am on Birch Hill It used to be Birch Farm and Pukeruru. Pongaroas claim to fame. They have a DNA Helix in the rest area of Pongaroa. Hard to believe that Pongaroa had apopulation of 10,000. Population now 100 Had its own Hospital, Banks, POstOffice ,Schools,employment, now it is an area that Winz won't pay the Dole to people if they live there because it is one of three areas in NZ that is recognized by WINZ as a no employment available zone.. That is what happens to rural communities sheep shagger when farming business is destroyed through a variety of reasons. The three kings are still pretty amazing geology, The current owners organise a walk up the three kings once a year if you are intersted.
Had some interesting mail the other day. We set up another company and as a result of that got letters from National and Westpac congratulating us on starting a new business and offering us the opportunity to discuss loan requirements with their business managers. We bank with niether of them.
VC first time I have heard GG being used as an excuse to increase existing loan lending margins. We haven't had that. Would be interested to know how widespread that was.
co if you are still interested
http://www.treasury.govt.nz/portal_css/Treasury%20Default%20Skin/bg-dd-right.gif... for the cost of gg charges by the NZRB.
hhtp://www.interest.co.nz/ratesblog/...arontee-costs/ Commentary on interest rate hikes.
Finally discussion paper by New Zealand Banking Asoc, on New Zealands Banking system, Economic Summit Page 7&8 26th Feb 2009. the bankers talk about extra cost of gg 90-150 bps.
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