Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Businesses Default As Recession Bites


Businesses Default As Recession Bites - Helps Explain Low Tax Take

AUCKLAND, 5 November 2009 – Thousands of businesses up and down the country are falling victim to the recession as increasing numbers default on loans and lines of credit.

Veda Managing Director John Roberts says “business always lags about 18 months behind consumers when it comes to a downturn in the economy and they are really hitting the tough times now.”

Latest statistics from the country’s largest credit bureau Veda Advantage show a 49.47 percent increase in commercial defaults for the year to October 2009 compared with the same period last year. Defaults for the October month alone are up 55.34 percent compared with the same month last year.

“These are the numbers which explain, in part, why the government’s tax take is down. Businesses are experiencing tough trading conditions and now we are seeing the end result – businesses can’t pay their bills. This means they are paying less tax and for some - businesses closing down, shops empty and people losing their jobs.”

Mr Roberts expects commercial defaults to get worse before they get better. “The recession may be technically over, but the bad times still have to feed through the economy and businesses will be feeling it well into next year. The tough times aren’t over yet.”

Veda Advantage statistics also show consumer defaults on loans and credit up 429 percent for the first 10 months of the year compared with the same period last year. Defaults by Baby Boomers remain high at 16.80 percent for the same period.

Consumer applications are down for credit cards (13.38 percent), personal loans (405 percent) and hire purchase (20.45 percent) for the January to October period compared with the same 10 months in 2008.

Mortgage applications are bucking this trend. Applications are up 20.20 percent for the 10 month period compared with same period in 2008. Baby Boomers are leading the charge. Applications for mortgages by those aged 44 to 62 are up 25.63 percent for the period.

Note: this release is supported by a power-point containing graphics illustrating these trends. Actual numbers cannot be released.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Westpac: Sets Out Plan To Go Cheque-Free

Westpac NZ has announced details of its plan to phase out cheques, after signalling in May that it would be supporting a move to other forms of payment. Cheques will cease to be available as a means of payment after 25 June 2021. Westpac NZ General ... More>>


NZTA: Major New Zealand Upgrade Programme Projects Go To Tender

Two major New Zealand Upgrade Programme projects are beginning tenders for construction. The New Zealand Upgrade Programme is a $6.8 billion investment to get our cities moving, to save lives and boost productivity in growth areas. The first Auckland ... More>>

Reserve Bank: RBNZ Seeks To Preserve Benefits Of Cash

The Reserve Bank – Te Pūtea Matua is taking on a new role of steward of the cash system “to preserve the benefits of cash for all who need them”, Assistant Governor Christian Hawkesby told the Royal Numismatics Society of New Zealand annual conference ... More>>


Economy: Double-Dip Recession Next Year, But Housing Rolls On

New Zealand's economy is expected to slip back into recession early next year as delayed job losses, falling consumer spending, and the absence of international tourists bites into growth. More>>


Microsoft New Zealand: Microsoft Expands “Highway To A Hundred Unicorns” Initiative To Support Startups In Asia Pacific

New Zealand, 14 October 2020 – Today Microsoft for Startups launches the Highway to a Hundred Unicorns initiative in Asia Pacific to strengthen the region’s startup ecosystem. This follows the initiative’s success in India, where 56 startups were ... More>>

Fonterra: Farmers Taking Another Step Towards New Zealand’s Low Emissions Food Production

They’re hot off the press and intended to help take the heat out of climate change. Fonterra farmers are already among the world’s most sustainable producers of milk and now have an additional tool in their sustainability toolbox. Over the last few ... More>>


Courts: Businessman Eric Watson Sentenced To A Four-Month Jail Term

New Zealand businessman Eric Watson has been sentenced to a four-month jail term in the UK for contempt of court, TVNZ reports. More>>

OECD: Area Employment Rate Falls By 4.0 Percentage Points, To 64.6% In Second Quarter Of 2020

The OECD area employment rate – the share of the working-age population with jobs – fell by 4.0 percentage points, to 64.6%, in the second quarter of 2020, its lowest level since the fourth quarter of 2010. Across the OECD area, 560 million persons ... More>>

Spark: Turns On 5G In Auckland And Offers A Glimpse Into The Future Of Smart Cities

Spark turned on 5G in downtown Auckland today and has partnered with Auckland Transport (AT) to showcase some of the latest in IoT (Internet of Things) technology and demonstrate what the future could look like for Auckland’s CBD with the power of 5G. 5G is ... More>>

Stats NZ: Monthly Migration Remains Low

Since the border closed in late-March 2020, net migration has averaged about 300 a month, Stats NZ said today. In the five months from April to August 2020, overall net migration was provisionally estimated at 1,700. This was made up of a net gain ... More>>

University of Canterbury: Proglacial Lakes Are Accelerating Glacier Ice Loss

Lake Tasman, New Zealand | 2016 | Photo: Dr Jenna Sutherland Meltwater lakes that form at glacier margins cause ice to recede much further and faster compared to glaciers that terminate on land, according to a new study. But the effects of these glacial ... More>>


Dairy: Fonterra Sells China Farms

Fonterra has agreed to sell its China farms for a total of $555 million (RMB 2.5 billion*1), after successfully developing the farms alongside local partners. Inner Mongolia Natural Dairy Co., Ltd, a subsidiary of China Youran Dairy Group Limited ... More>>