31 Jul Mixed messages, banning paywave charges and anti-money laundering
Mixed messages
Depending on which economic headline you read, we are either in the midst of an economic recovery, or the world is in dire straits, and the sky is about to fall on our heads.
On the one hand, the first quarter GDP measure was positive, the imposition of tariffs by the USA isn’t panning as badly as expected, debt servicing is becoming easier for many households and exports are going well. On the flip-side, retail spending is down, cost pressures are on the rise, building consents for both new houses and renos are in the doldrums and unemployment remains high. So, are things getting better or worse?
Our opinion: it’s probably not worth worrying about. Don’t get us wrong here – if you’re under financial strain, that’s no fun place to be and we certainly don’t diminish that. But economists and forecasters of all stripes have consistently misread the economic trajectory.
Rather than trying to read the economic tea leaves, we suggest you dedicate that energy to looking at different sales avenues, how to manage costs, different income streams that you can generate and so on. Because irrespective of how the economy shakes out, it’s these things that will make a meaningful difference to your life.
But if you just can’t help yourself, here’s a great wide-angle analysis of some of the global risks presently at play. If you do read it, just remember, the sun will still come up tomorrow!
If you are feeling the financial pinch and want to look at how to ease the strain, get in contact.
How would you like to pay?
In what is a win for the consumer, the practice of banning surcharges for paying via contactless payment will be in effect soon-ish. It’s got to work its way through parliament but *should* be in place by May of next year.
It really is as simple as it sounds – retailers/merchants will no longer be able to apply a surcharge when you tap your card.
While overall, this is good for the end payer, it’s worth considering the mechanics behind this – or rather why businesses were applying surcharges in the first place. Unfortunately, the transaction costs that the retailers/merchants face are higher than those in other jurisdictions. And even more unfortunately, this legislation won’t change that. It’s a shame because it’s the right intent, just the wrong execution. So, our expectations are that in businesses with already squeezed margins, these costs will be passed on in the form of increased prices.
Just in case you’re thinking that a shift back to cash would be the way to go, partially because of a reduced branch network and partly because of a higher admin cost, cash is the most expensive form of payment for a business to receive.
Provisional tax time!
Provisional taxpayer? Good news, your next payment is just around the corner! OK, maybe that isn’t the best news, but if your balance date is 31 March, then the next provisional payment date for you is probably the 28hof August. We’ll be sending out the usual reminder letters over the next couple of weeks.
Anti-Money Laundering
There are a few changes to how the Anti-Money Laundering rules work. We very much think this is messing about at the fringes and will make no real difference to money laundering in NZ, while continuing to reduce our nation’s productivity. We shared these thoughts on a recent interview with Radio NZ. Have a listen here.
