The SME Stream Weekly Wrap -27 March

Kia ora and welcome to the SME Stream Weekly Wrap.

My name is Willamina Ok, and I'm here to wrap up all of the latest business news you

need to know.

Now, as a small business owner myself, I know what it's like to do it all.

It's hard enough trying to keep up with your own day today, little on what's happening

with the economy and how to fix it.

But don't worry, because that's where I come in.

Calling together everything you need to know, all may have missed into a short, digestible,

audio snack.

So you can stay informed all while focusing on the tasks that matter most to your business.

This week, fuel prices are still going up, and supply is still going down.

So do we have enough to keep going?

There's fears for what all of this means for interest rates and inflation, and the ban

on card surcharges could be a thing of the past.

Plus, why one expert says we need to change our views around renting.

All eyes and ears are on our ever-increasing petrol prices, and the decreasing fuel stocks

says the Middle East conflict rages on.

There's around 48 days of petrol, 46 of diesel, and only 43 days worth of jet fuel left

in the country, with just two ships expected to deliver more stock in the next two weeks.

Jetstar has now followed Air New Zealand and scaling back both domestic and international

flights, with other overseas airlines weighing up whether to continue flying to New Zealand.

But the government is confident we still have a steady supply coming into the country.

And Associate Transport Minister James Megas says there's no need for anyone to panic.

Normally, we look at about 50 days, have seen that come back a little bit, but there's

nothing to indicate the orders that we have had placed around the world aren't on the

way.

We haven't had any signs of disruption.

But there are still concerns that we don't have a clear plan to deal with potential shortages.

The board of airline representative says international carriers are worried about planes, potentially

getting stranded here.

Executive Director Kather Bryan says airlines normally book jet fuel in advance, but fuel companies

can limit how much they get during shortages.

She says she's raised the issue with the government, but is yet to see a well-understood plan

for what to do about it.

If I look at those boats and there could be a delay in a shipment, and it's reasonable

to think that that might happen, and so we should plan appropriately now.

A deal with Singapore, however, could provide a boost to our petrol stock.

Prime Minister Christopher Luxon has spoken with Singaporean PM Lawrence Wong and agreed

a deal to provide food supplies in exchange for fuel supply.

Singapore supplies roughly a third of our petrol in diesel, and Luxon says a formal treaty

is expected to be signed.

We can mutually support each other as two small countries that have some challenges in

our supply chains, and this is de-risking that.

There's also potential for reviving aspects of Marsden Point.

Resource Minister Shane Jones says there's an option to recommission some storage at

the oil refinery.

He's asked officials to provide advice.

Jones says Marsden Point has a vast storage capacity and should never have closed.

They've got 700 million litres worth of storage, and about half of it is currently functioning.

I don't know how quickly we could recommission.

There is, of course, also jitters about what rising fuel prices will mean for inflation,

but the reserve bank governor is keeping a cool head.

Unabrimson says the around war is likely to lead to higher inflation and lower growth

in the short term.

Bremson says, however, that's unlikely to make them hike their official cash rate.

But she does say they will, if it looks like higher inflation will persist longer across

the next 18 to 24 months.

If we see that these higher fuel prices are transmitted into higher inflationary pressures

overall in the economy, then we would react with monetary policy.

Many New Zealanders are adapting to pain at the gas pump, trying to offset the increased

costs.

A Westpac survey of more than 400 customers has found three and four have changed their

behaviour or spending.

41% are driving less, 28% are reducing non-essential spending, and 16% have stopped up on fuel.

Managing Director of Business Banking Ruben Tucker says it's now a question of how long

the impact lasts.

Our current core scenario is that the straight will be closed for another month, and then

there will be a tail beyond that of around six to nine months.

Meanwhile, Westpac economists are also forecasting an outright fall in house prices this year,

along with higher unemployment and inflation over 4% and lower GDP growth.

With all of that in mind, the finance minister says we must avoid a repeat of COVID error

inflation.

Nicola Willis says the government will keep spending under control to avoid another period

of sustained inflation.

What was initially a global issue got compounded here at home with excessive spending that led

inflation to stay out of control for 33 months in a row, spiking to intergenerational highs.

Now there is one silver lining to the travel turmoil.

Our tourism market could see a winter boost from the Middle East conflict of airlines

choose to keep flying here.

A tourism export council survey shows 77% of UK and European operators reported cancellations

for March and April.

Our chief executive, Linda Kean, says recent feedback suggests some travelers are now redirecting

their plans here in New Zealand, offering a potential lift for the sector.

We are definitely seeing new inquiries starting to come through for next one to two months,

because that would be the summer season in the Northern Hemisphere and those are coming

from the US, from India.

The retail industry is welcoming the potential scrapping of the government's proposed surcharge

ban.

Consumer Affairs Minister Scott Simpson says no final decisions have been made on the

planned ban to contact list and credit card surcharges announced by the government last

year.

But actually, David Seymour says the change won't be going ahead.

Retail and Z Chief Executive Carolyn Young says the ban would make retailers bear the cost

of card transactions, when every cent matters right now.

The government's been urged to do what it can to counter the ongoing slowdown in construction.

The latest GDP data shows our tourism operators and meat and dairy exporters are doing well.

However, that's been offset by the construction sector, which shrank 6.2% last year.

During industry federation Chief Executive Julian Lays, who's speeding up the National

Infrastructure Plan could help.

Local clothing stores appear to be bearing the brunt of cheaper foreign websites.

Stats and Zedata shows spending on a parallel at local retailers has been trending downwards

in recent years, while spending on sites like Timo and Shien are surging.

The total spend last year was about 8.4% lower than in 2023.

But Glassons has been bucking the trend with continued revenue growth, driven by stores

in Australia and in South Island centres, including Christchurch and Queenstown.

Glassons Australia boss James Glassons says on both sides of the Tasman consumers are

demanding value for money.

There's a push to address the stigma around debt, as fresh data shows 6 in 10 New Zealanders

are struggling.

A new survey by debt managers released to mark the country's first debt awareness week

shows that 60% of respondents are struggling with more than a third telling no one and

suffering in silence.

86% feel embarrassed to admit they're struggling.

Debt managers' commercial general manager Isaac Menace says having open conversations

about debt will benefit everyone.

We all understand that debt is an all part of life, but that highlights our hesitation

to be vulnerable when it doesn't work out and that the second that things get difficult,

we struggle to actually open up.

Homeownership is often viewed as the market of success, but look,

chemes of the Keep the Change podcast and next advisory sees it differently.

Hey, thanks, we need to view renting through a different lens and tells the prosperity

project that people who do shouldn't feel like second-class citizens.

I think people need to hear that, because for so long, we have pushed home ownership

down people's throats of nothing to do, and we can probably get into why that is,

and again, I'm not saying that we shouldn't be doing that, but where I'm at at this stage,

I'm heading towards 40, I still don't own a home, I've previously owned a home,

it's not what I thought it was going to be, and I think I learned through that too.

But for me personally, at the moment, the stage of my life and also building a business,

tying up my capital, i.e. my house deposit, was just not going to be a good use of my money.

And you can listen to the full interview in the Smith Street.

And that's it for the weekly wrap. We'll be back again next Friday with all of the latest

business news and, of course, the best bits in the Smith Street.