*|IF:FNAME|*
Dear *|FNAME|*,
*|ELSE:|*
Hello,
*|END:IF|*
Well, August seems to have crept up on us quite quickly. Some of us are looking forward to a little bit of time out either later this month or early September.
That will be welcome as we have been very busy—in particular, advising our SME clients under the two government grant schemes being administered under the Regional Business Partner Network.
Subsidised support via Regional Business Partner Network Grants
Grants from this fund are available to help businesses access expert advice and support in a number of areas. Canterbury Legal is a registered provider and can advise eligible SMEs in:
The process
Is a cashless society an option?
We were interested to see that Otago University is experimenting with becoming a cashless campus. Contactless payment was certainly the preferred option generally during the COVID-19 lockdown mainly due to hygiene concerns, and this saw banks increase contactless payment limits from $80.00 to $200.00.
But it’s not all about contactless payments. In the lead up to the lockdown the Reserve Bank of New Zealand (RBNZ) also increased the amount of cash in circulation by $1 billion.
What implications does all this have for us? Here’s a bit of a rundown of the basics of cash in New Zealand.
How much cash is out there?
March figures from RBNZ record that there was $7.32 billion in circulation at that time. That’s up from just under $2 billion in 2000, and an increase of $1 billion from last year, compared to an increase of $175 million in the previous twelve-month period before that. RBNZ also reported a “significant uplift” in that amount due to stockpiling of cash in the lead up to the lockdown.
A 2017 survey by RBNZ found 96 per cent of the adult population used cash. Of that group, the older you are, the more likely you are to use cash more frequently.
Yet they also found that ninety per cent preferred to pay electronically. Only six per cent had used cash exclusively in the week leading up to the survey.
Where does the cash come from?
The sole supplier and manufacturer of New Zealand banknotes and coins is RBNZ.
The bank acts as a wholesale distributor to the trading banks and also sets the official cash rate (OCR), which it uses to control inflation. OCR is the rate the banks pay the Reserve Bank (with the addition of a small margin on top) when they need to borrow money—essentially the baseline for interest rates in New Zealand.
RBNZ also withdraws damaged or unusable notes and coins to manage the quality of currency in circulation. They will always pay face value for old or damaged currency provided they can verify it.
Who can refuse cash?
RBNZ says there is no obligation on any person or organisation to pay out or accept cash— except to receive it as payment for a debt.
Cashless or not?
Last year, RBNZ published a paper on the future of cash, which concluded that New Zealand could still be a long way off becoming a cashless society. So it looks like we’re not all quite ready to go the way of Otago University.
New Resource Management Act (RMA) needed
Retired Environment Court Judge Tony Randerson has produced a 531-page report recommending splitting the law that has governed both economic development and environmental protection into two separate Acts:
A third proposed piece of legislation, the Managed Retreat and Climate Change Adaptation Act, raises for the first time a way for compensating landowners for losses caused by sea-level rise and other climate change impacts.
It includes a proposal for an adaptation fund that would see central and local government support the steps necessary to address climate change. It would also deal with the process of managed retreat due to rising sea levels.
Another major change affects Māori interests, which would strengthen by requiring policymakers to “give effect to” to the principles of the Treaty of Waitangi. That’s a significantly stronger wording than the RMA’s present requirement to “have regard to” those principles.
Mortgage holidays could extend
Minister of Finance Grant Robertson says the Reserve Bank could extend mortgage holidays to help hard-up loan customers, particularly those who have lost their jobs.
“The advice that I've had from the Reserve Bank is that they are considering looking at the extension of the mortgage deferral schemes – of the support that they give to enable the banks to provide those schemes – and I think judging from the conversations I've had with trading banks, that would be justified" he said.
The original scheme is due to expire at the end of the six-month period in September.
That’s it for our August edition. As always, we’re just an email or phone call away for any questions, help or advice. Otherwise, we look forward to chatting with you come spring.
That will be welcome as we have been very busy—in particular, advising our SME clients under the two government grant schemes being administered under the Regional Business Partner Network.
Subsidised support via Regional Business Partner Network Grants
Grants from this fund are available to help businesses access expert advice and support in a number of areas. Canterbury Legal is a registered provider and can advise eligible SMEs in:
- Business Planning
- Capital Raising
- Managing Resources
- Governance and Finance
The process
- Register your business at the Regional Business Partner Network website.
- You’ll receive an email from Business Partners asking you to fill out a pre-assessment form.
- After completing that, one of their team will contact you to finalise the assessment.
Is a cashless society an option?
We were interested to see that Otago University is experimenting with becoming a cashless campus. Contactless payment was certainly the preferred option generally during the COVID-19 lockdown mainly due to hygiene concerns, and this saw banks increase contactless payment limits from $80.00 to $200.00.
But it’s not all about contactless payments. In the lead up to the lockdown the Reserve Bank of New Zealand (RBNZ) also increased the amount of cash in circulation by $1 billion.
What implications does all this have for us? Here’s a bit of a rundown of the basics of cash in New Zealand.
How much cash is out there?
March figures from RBNZ record that there was $7.32 billion in circulation at that time. That’s up from just under $2 billion in 2000, and an increase of $1 billion from last year, compared to an increase of $175 million in the previous twelve-month period before that. RBNZ also reported a “significant uplift” in that amount due to stockpiling of cash in the lead up to the lockdown.
A 2017 survey by RBNZ found 96 per cent of the adult population used cash. Of that group, the older you are, the more likely you are to use cash more frequently.
Yet they also found that ninety per cent preferred to pay electronically. Only six per cent had used cash exclusively in the week leading up to the survey.
Where does the cash come from?
The sole supplier and manufacturer of New Zealand banknotes and coins is RBNZ.
The bank acts as a wholesale distributor to the trading banks and also sets the official cash rate (OCR), which it uses to control inflation. OCR is the rate the banks pay the Reserve Bank (with the addition of a small margin on top) when they need to borrow money—essentially the baseline for interest rates in New Zealand.
RBNZ also withdraws damaged or unusable notes and coins to manage the quality of currency in circulation. They will always pay face value for old or damaged currency provided they can verify it.
Who can refuse cash?
RBNZ says there is no obligation on any person or organisation to pay out or accept cash— except to receive it as payment for a debt.
Cashless or not?
Last year, RBNZ published a paper on the future of cash, which concluded that New Zealand could still be a long way off becoming a cashless society. So it looks like we’re not all quite ready to go the way of Otago University.
New Resource Management Act (RMA) needed
Retired Environment Court Judge Tony Randerson has produced a 531-page report recommending splitting the law that has governed both economic development and environmental protection into two separate Acts:
- a Natural and Built Environments Act, and
- a Strategic Planning Act.
A third proposed piece of legislation, the Managed Retreat and Climate Change Adaptation Act, raises for the first time a way for compensating landowners for losses caused by sea-level rise and other climate change impacts.
It includes a proposal for an adaptation fund that would see central and local government support the steps necessary to address climate change. It would also deal with the process of managed retreat due to rising sea levels.
Another major change affects Māori interests, which would strengthen by requiring policymakers to “give effect to” to the principles of the Treaty of Waitangi. That’s a significantly stronger wording than the RMA’s present requirement to “have regard to” those principles.
Mortgage holidays could extend
Minister of Finance Grant Robertson says the Reserve Bank could extend mortgage holidays to help hard-up loan customers, particularly those who have lost their jobs.
“The advice that I've had from the Reserve Bank is that they are considering looking at the extension of the mortgage deferral schemes – of the support that they give to enable the banks to provide those schemes – and I think judging from the conversations I've had with trading banks, that would be justified" he said.
The original scheme is due to expire at the end of the six-month period in September.
That’s it for our August edition. As always, we’re just an email or phone call away for any questions, help or advice. Otherwise, we look forward to chatting with you come spring.
Regards,
Clive, Grant and the Team at Canterbury Legal
