Our supposedly healthy economy is an illusion propped up my immigration and debt. Government debt is at record levels. Household debt has been far too high for far too long. The IMF is warning [the piece has been edited since this note]:
High NZ household debt a risk to stability, IMF warns
The International Monetary Fund (IMF) says rising levels of household debt are a risk to New Zealand’s financial stability, while the country’s central bank said it was considering increasing bank capital requirements.
The IMF said on Tuesday that the Reserve Bank of New Zealand (RBNZ) should be allowed to include debt-to-income limits in its toolkit, a measure that must be approved by the Government and that the central bank has already requested.
“With high household debt, you worry about the amplification of large external shocks,” Thomas Helbling, the IMF mission chief for New Zealand, told reporters in Wellington. …
In another sign of how bad things are getting:
Renters forced to draw on KiwiSaver for payments
There’s been a spike in people withdrawing funds from their KiwiSaver accounts because they can’t pay the rent.
One budgeting centre says once clients have used up all their Government entitlements, people are raiding the future for day-to-day survival.
“Many of our families are in rental arrears, so the reality is either lose your home or apply to take some money out of KiwiSaver,” says Darryl Evans, from Mangere Budgeting Services.
He says his agency gets eight clients a day asking for help with a KiwiSaver financial hardship application. …
Not to put a deposit on a home, but to pay the rent. And when the Kiwisaver is gone, then what?