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RNZ News
an hour ago
- RNZ News
‘Crippling' bills likely in South Wairarapa with water reform
Local Government Minister Simon Watts. Photo: RNZ / Samuel Rillstone South Wairarapa Deputy Mayor Melissa Sadler-Futter says the government needs to step up and offer more support for smaller councils to undergo water reform. Water reform will "cripple" South Wairarapa ratepayers, unless urgent financial support is delivered by central government, the council's deputy mayor says. On behalf of her council, Melissa Sadler-Futter has written to Local Government Minister Simon Watts urging him to support small and rural councils grappling with the growing scale and cost of water infrastructure reform. The letter was in support of a plea from Central Hawke's Bay Mayor Alex Walker whose ratepayers could face annual costs of $7000 per household under water reform by 2034. Modelling for South Wairarapa showed that ratepayers could face annual costs of almost $5000 per household under the proposed Wairarapa-Tararua joint entity. "Like Central Hawke's Bay, we're a small rural council doing everything we can to plan ahead, invest wisely, and collaborate with our neighbours - but the scale of the challenge is now beyond what small communities can carry alone," Sadler-Futter said. "Councils are now overwhelmed by compliance, unfunded mandates and escalating financial impacts of decades of underinvestment." Both leaders had called for government-funded capital injections for small and rural councils to help address the backlog of investment, especially for wastewater compliance. South Wairarapa District Council. Photo: LDR The leaders also want a national definition of what "affordable" meant and how the Commerce Commission would intervene in small rural situations. Sadler-Futter said the Wairarapa-Tararua model offered "a sound approach to rural reform". "However, without government support, the cost of transition, compliance, and service delivery under this new model will simply cripple our community." "Whilst we are extremely grateful for the transition funding received at the end of June, the continued financial pressures that are already being felt by our ratepayers will become untenable in the future." She said many rural and provincial councils were facing similar pressures and were "doing the right things" regarding investment and planning. "But the scale of the challenge now far exceeds the capacity of small districts to carry alone." South Wairarapa District Council was responsible for operating four wastewater treatment plants, four freshwater treatment plants, and an extensive rural road network - all with just 7,500 rateable units. Two of the district's wastewater plants were currently under abatement notices, limiting new housing connections despite growing demand. The council was working with Carterton, Masterton, and Tararua district councils to develop a regional water services model, under the government's Local Water Done Well framework. Sadler-Futter said the regional model offered a "sound approach" to rural water reform, "but we need central Government to work alongside us to share the load". "Without targeted funding and a fair approach to affordability, our ratepayers will face costs that are simply unsustainable." In a response to Walker, Watts said affordability was up for councils to determine, and that the Government was working to reduce costs and regulatory burdens for wastewater plants in particular. A recent government study into proposed changes to environmental standards for water treatment plants could result in 40 percent to 60 percent cost savings, he said. - LDR is local body journalism co-funded by RNZ and NZ On Air
RNZ News
2 hours ago
- RNZ News
Businesses should pass Paywave costs on through prices, Nicola Willis says
Photo: RNZ / Samuel Rillstone The Finance Minister says when a ban on contactless card payment surcharges comes into effect, businesses should pass on the cost to customers as they would any other business cost, if they can't absorb the bill. The government plans to ban surcharges on contactless card payments no later than May 2026. Commerce and Consumer Affairs Minister Scott Simpson announced the change on Monday afternoon, declaring: "That pesky note or sticker on the payment machine will become a thing of the past." "Shoppers will no longer be penalised for their choice of payment method, whether that's tapping, swiping or using their phone's digital wallet." The ban builds on the Commerce Commission's recent decision to reduce the interchange fees imposed on businesses for accepting Visa and Mastercard payments. Finance Minister Nicola Willis told First Up that change has led to an average reduction in costs for a typical retailer - a small business - of about $500 each week. "So our concern has been, now that reduction has happened, how do we make sure that gets passed through to you, when you're at the shop. What's to stop the retailer just charging you the same fee even though their costs has dropped." Banning the payway fee was the simplest and most transparent thing to do, Willis said. Businesses need to treat the interchange fee like any other cost in their business "and just include it in the price tag on the shelf", she said. "It'll make it easier for people to compare what they're really having to pay. Just think about how many times you've been at the counter and then suddenly you learn that it's a 2.5 or a 3.5 percent surcharge and that gets added to the price of whatever it is you're buying. That's not very transparent." Photo: The sector is warning prices may need to rise at restaurants and cafes due the ban. Asked if she thinks the ban will lead to inflationary prices, the minister said "I think that overall, people will charge the price that they think they can get away with". The change doesn't include international credit card payments or online payments. Willis said these payments were usually much more expensive to process and people using these systems have to pay a bit more because they are protected from things like online scams and fraud. Consumer NZ chief executive Jon Duffy told Morning Report with a reduction in the interchange fee, businesses would be making a profit off the surcharges if they remained in place. "Retailers still pay a small amount ot offer those services, we think that once... the decrease comes into effect it will be less than 1 percent of the total cost of the transaction," Duffy said. Many businesses would absorb this into the prices though there may be some who need to increase prices to cover the cost, he said. "But it would be just the same as if their... power bill or their rent went up." Consumer NZ was a bit disappointed online transactions were not included but it was understandable for now, he said. Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
RNZ News
2 hours ago
- RNZ News
High butter prices are actually a good thing for New Zealand, economists say
File photo. Photo: Margaret Jaszowska for Unsplash Butter prices might be biting at the supermarket checkout, but there's a warning that anyone hoping they'll fall should be careful what they wish for. The price of butter has increased about 50 percent over the past year, pushed up by high global dairy prices. But economists say that's actually a good thing for New Zealand. Household Economic Survey data shows that in 2023, households spent about $124 million on butter. Between 15 percent and 30 percent of households would buy butter over a one- or two-week period. But the country exported $5.2 billion worth. "It's not nearly worth trying to change the domestic butter game at the expense of our very lucrative export potential," Brad Olsen, chief executive at Infometrics said. "Being in China at the moment, I've been looking around here ... we are still charging more in our premium export markets than we are seeing domestically. "I mean in New Zealand, butter is $8.50 to $11 depending on who you're talking to or what shop you're going to. I've found an Anchor block in China that was only 454 grams for about $13.52. So the export stuff works for us." India is also a large producer of butter and has comparatively low prices, but Olsen said that was not comparable because farmers there were getting a subsidy of up to a third. In Australia, there was no GST on fresh food. Butter is about 7 percent of total New Zealand exports. "So yes, consumers get hit with higher butter prices in New Zealand," Olsen said. "But we make a lot more as a country from the exports that we send out overseas. And I guess you know, cause there's all this talk of, well, what happens if butter prices were lower ... I do think that there is this conception that if magically butter prices were lower, everything else would be the same too. "And that's just a complete false economy. If you had persistently lower butter prices, then there wouldn't be quite as many people farming. Or they wouldn't be the same profits from manufacturing and similar from Fonterra and what have you. That would mean there would be less money going into the economy across the country, people would have fewer jobs than they would at the moment. And so you might be paying cheaper, better prices. But you might not have a job. "That's the trade off that, that to a degree we're talking about ... I also think we talk a lot about butter. How much butter does every household in New Zealand consume? Like how many blocks are you guys buying?" Westpac chief economist Kelly Eckhold said it was good for the country overall that dairy prices were high. "Exports of cheese is $3 billion. All these dairy products are rising for the same underlying reason - demand for milk fats is increasing. Butter and cheese in particular are the things the world wants." He said the conversation was influenced by the fact that everyone encountered the retail price but not everyone was exposed to the export earnings. "One thing to think about is the gains from the income are more narrowly shared than the costs that come to all of us. We all go to the supermarket and buy a bit of butter and cheese and milk. "But if I look at employment trends on a regional basis, you can see in the last few months the regions where jobs are growing are Canterbury, Otago, Southland, West Coast, Marlborough ... these are areas that have a much higher agricultural and dairy input. There are more jobs in those parts of the country whereas Wellington and Auckland are very weak. There aren't many dairy farms in Remuera unfortunately." He said a wider problem was not that dairy products' price was rising but that New Zealand incomes were not keeping up. "Prices are being bid up by people overseas who are wealthier than us and their incomes are growing more strongly. "That's why they can afford to pay the prices that are pushing the prices up. The question isn't should we be redistributing further the profits form those sector. The question should be what can we do to improve the incomes of Kiwis so when demand goes up overseas we can keep pace. If we can do something that gets job growth up that's unequivocally better than putting price controls on butter or cheese." Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
