Farmers around the country are feeling the pinch. Photo / Mark Mitchell
Farmers around the country are feeling the pinch. Photo / Mark Mitchell
We are taking a look back at some of the memorable stories of 2022 that featured in Money. Here’s what made headlines from October to December.
Business loans secured by the house: October 22
Some businesses are secured by loans on the house. Photo / File
About $2.2 billion of business loans secured by residential property mortgages was due to be re-fixed within the next year with concerns rife for owners crippled by debt.
The news comes as rising wages, inflation, increased costs, a devalued New Zealand dollar and evaporated customer confidence are expected to continue into next year.
“Businesses have been passing on the costs by increasing their sale prices,’’ Tauranga Business Chamber chief executive Matt Cowley said. ‘’But the economy is starting to feel the pinch of rising mortgage costs, which means customers are buying less, or they are delaying major purchases.”
He said it had been a “tough and exhausting three years for everyone”.
Retail NZ chief executive Greg Harford said rising wages had a significant impact on businesses and the average wage in retail was $26.65 an hour.
‘People are under stress financially and mentally’
“Extremely challenging, frustrating and stressful.” That is how Spring Kitchen and Rise Pies owner Simon McCaul describes the current business climate.
He said the business had been affected by staff shortages and rising food costs that had gone through the roof with increases of 50 to 60 per cent on some staples.
‘’We are all exhausted’' Reg Hennessy, the owner of Hennessy’s Irish Bar and the president of the Bay of Plenty Hospitality Association, said he was working behind the bar himself due to staff sickness and shortages.
Kiwibank chief business banking customer officer Elliot Smith said a small number of its lending in the business segment was residentially secured.
Government handouts, help-ups, and support data from the Inland Revenue Department shows nationally 113,031 entities received $1.3b in Covid support.
In Tauranga 5572 received a share of $60 million and in Rotorua, 2424 businesses received a share of $28.8m.
A Ministry of Business, Innovation and Employment spokesperson said there were 551,634 small businesses in New Zealand last year including 36,108 in the Bay of Plenty compared to 548,442 and 35,730 in 2020.
There were 691,500 registered companies in New Zealand last year. On October 18, this year there were 712,257 registered companies including 69,876 in the Bay of Plenty.
Farmers hit by costs consider their future: November 6
DairyNZ chief executive Dr Tim Mackle. Photo / Supplied
Spiralling costs, regulations, rising interest rates and a severe labour shortage were hitting farmers - with some now considering whether there is a future in the industry.
Federated Farmers provincial president Colin Guyton said it was “challenging as farmers’ costs were escalating at a higher rate than other sectors”.
Bay of Plenty Federated Farmers provincial president Brent Mountford said farmers were reluctant to spend, and that would impact the economy.
“That will flow through to the wider rural community as farmers are having to spend where they have to spend. There is not that discretionary spending where you might put in an extra fence, a new set of yards, or buy another tractor or motorbike.”
DairyNZ chief executive Dr Tim Mackle said the dairy sector continues to have a ‘’severe labour shortage’'.
‘’We estimate this equates to around 4000 workers nationwide. We are seeing slightly fewer jobs advertised compared to last year, which we believe is a result of employers focusing on providing improved workplace conditions and the borders reopening.
Beef + Lamb New Zealand chief economist Andrew Burtt said rising interest costs were impacting farmers, particularly overdraft interest rates and new borrowing.
“Costs have increased across the board, so increased debt servicing adds to the squeeze on cash surplus and profitability, while interest rates for 2023 and 2024 are forecast to increase further – so there is continued pressure to come.”
Now, 30 years on, PMG Funds looks after nearly $1 billion of commercial property nationwide.
In the last decade alone, the Bay of Plenty-based funds management company has grown from 120 investors to more than 4000 across four generations, with investors from 6 months old to 94.
The company’s founder, Denis McMahon, and chief executive, Scott McKenzie, say its secret to longevity is the people: “He tangata, he tangata, he tangata.”
Where it all began
PMG Funds founder Denis McMahon said it felt “surreal” to see the company he had started in 1992 still standing today.
“I started off on my own in a small office in the old Trustpower building in Spring St. I was the only tenant.”
Three decades on, McMahon said it was reassuring to know the company had stood the test of time.
“That is why this is the year I will step back from the company. I feel it is in good hands.”
Today, the company has 40 staff spread across three offices in Tauranga, Auckland, and Christchurch, and a portfolio from Invercargill through to Whangarei.
“We are nationwide now,” McKenzie said. “We look after $930m of real estate nationwide.”
PMG Funds has grown from 120 investors in 2012 to more than 4000 today, he said.
“We have now got 6-month-olds through to 94-year-olds. Four generations of investors invested with us.
RotoruaNZ chief executive Andrew Wilson. Photo / NZME
Despite being pushed to the “brink” due to labour shortages and fears New Zealand’s visitor reputation could be tarnished, the hospitality and tourism sectors were hopeful the upcoming holiday season will be a prosperous one.
In the Bay of Plenty, international visitor spend jumped by more than 900 per cent in one city as businesses “clawed” their way back from the “rollercoaster ride” of the last few years.
RotoruaNZ chief executive Andrew Wilson said Marketview data shows in October, international visitor spend jumped 904 per cent to $6.8 million compared to the same month last year. Over the same timeframes, domestic spend hit $29.3m, up 26.3 per cent.
Operators were anticipating an extremely busy summer, and many had experienced a significant increase in visitor numbers compared to previous years.
“In addition to the high number of international tourists we are seeing, and the packed events schedule for the coming months, we expect that Rotorua will be much busier than it was pre-Covid.”
Tourism Bay of Plenty general manager Oscar Nathan said the entire region was ‘’extremely energised’' about the upcoming summer period.
Most of the available accommodation was already booked from Christmas Eve through to January 8, with another peak over Auckland Anniversary weekend.
“We are buoyed by the number of new operators and products that are coming into our local tourism sector. This includes several Māori operators offering small group tours that will encourage visitors to fully engage with our indigenous stories and culture.”
Businesshouse events prove popular December 17
Graeme Pullen was general manager of Rotorua Golf Club for the last year. Photo / Laura Smith
From bowls and golf, to squash and tennis, businesshouse sporting events in the Bay of Plenty had grown in popularity.
Businesshouse events cover a range of activities, mostly sports, and tend to be for people looking for a little competition but in a social setting. While some run year-long, many start in spring and summer.
Participants do not need to be skilled or have experience and, generally, the events offer a chance for teams to try out something they may not normally do.
Teams may not wholly be made up by the business community, and some teams might even be mixed - the point is to mingle and have fun.
Sport Bay of Plenty community sport and recreation general manager Nick Chambers said a survey conducted by Sport New Zealand last year showed work and other commitments remained the No 1 barrier to engaging in physical activity for adults in the region.
Chambers said workplaces that helped offset that barrier by providing regular access to active recreation for their workforce can help staff combat the pitfalls of a sedentary lifestyle, especially those working in office environments.
“Getting regular exercise has major benefits for health and wellbeing, both physically and mentally, and a healthy workplace can help people thrive in and feel more valued in their roles,” Chambers said.
Activities outside of work helped break down social barriers between colleagues and develop camaraderie among co-workers, which he said hopefully translated into a more rewarding work environment.
