Category: MIL-Submissions

New Zealand troops have proved their worth in working alongside a dozen other militaries during a large-scale combat exercise in Australia.

Around 300 New Zealand Defence Force (NZDF) personnel are returning home after participating in the largest-ever iteration of Exercise Talisman Sabre, which ran in Queensland from late July to early August and involved around 30,000 military personnel from 13 countries.

During the exercise, a 150-strong NZ Army combat team, mounted in NZ Light Armoured Vehicles formed a battlegroup with soldiers from Fiji, Australia, France, and the United States.

The combat team used its speed and firepower to clear and destroy enemy defensive positions and seize objectives, to allow the wider battlegroup freedom to take further action.

Battlegroup headquarters had access to direct and indirect fire support, reconnaissance assets and sniper teams.  New Zealand liaison officers at headquarters learned about Australian process and procedures, as well as assisting the Australians with planning and their understanding of New Zealand capabilities.

This enabled the battlegroup to best use NZ Army capability on the battlefield.

The exercise confirmed the NZ Army’s readiness to conduct combat operations and to test interoperability with the Australians and others, as well as the integration of signals, intelligence, infantry, armour and others.

Major Steffan Wuts, the Officer Commanding the combat team, said the soldiers’ performance confirmed New Zealand’s training was of a high calibre.

“The great part about this exercise is that we get to practise operating in an unfamiliar environment with other factors like flanking multinational forces, which adds a level of complexity that we wouldn’t get in our usual training,” he said.

“Although the overall tempo of the exercise is probably slower than what we were expecting because of its size, we did have contact with the enemy, we went into our trained and rehearsed standard operating procedures and for the most part that put us in good stead to beat the enemy’s actions.”

Three Royal New Zealand Air Force NH90 helicopters and 50 personnel, including aircrew, aircraft maintenance, safety, communication and information systems, intelligence, medical and logistics, also participated in the exercise.

They formed part of an Anzac unit contributing to an aviation battle group which supported air mobile operations and troop movements.

A 10-strong Royal New Zealand Navy autonomous underwater vehicle team embarked on expeditionary ship USS Miguel Keith, joining a Royal Australian Navy combined mine counter measures task force.

They practised sonar searching of areas to detect mines and provided in-depth underwater examination prior to dive teams being deployed to disarm or destroy the ordnance.

Lieutenant Colonel Jacob Murray, the NZDF Senior National Officer for the exercise, said the NZDF’s purpose was to keep New Zealand safe and secure.

“To achieve this, the core role of the NZDF must be the readiness to conduct combat operations,” he said.

“The performance of our team demonstrates the professionalism of our people and the quality of our training systems.”

Talisman Sabre was also the first time New Zealand and Australia have exercised together since the signing of the Plan ANZAC bilateral service cooperation plan, which formalises Army to Army cooperation across strategic engagement, capability, training, readiness and common personnel issues.

“This has given us the chance to observe the Australian Army’s application of its doctrine in a large-scale combat focused activity,” said Assistant Chief of NZ Army for Training, Colonel Aidan Shattock.

“The analysis of these observations will inform our doctrinal alignment with Australia and define our future approach to training and tactics.”

Lieutenant Colonel Benjamin Watson, Commanding Officer, 8th/9th Battalion, The Royal Australian Regiment, said the New Zealand combat team was well prepared and integrated easily into the battlegroup.

“It was very reassuring to have the Kiwis as part of the team. Our history, as two Armies working alongside each other, is rich and this exercise only highlighted that the future remains brighter than ever,” he said.

08 August 2023 – The Reserve Bank of New Zealand – Te Pūtea Matua (RBNZ) has published the results of its first life insurance industry stress test (LIIST). The 2022/23 LIIST demonstrates the largest insurers in the sector are well placed to withstand severe economic and insurance shocks, while continuing to pay out on policy claims.

Deputy Governor Christian Hawkesby says stress tests assess how the finance sector can cope with hypothetical scenarios that are severe, but plausible.

Previous stress tests have involved banks or general insurance providers, but this is our inaugural stress test for life insurers. Stress tests assess entities’ resilience by demonstrating whether they have enough capital to withstand extreme shocks. They also indicate potential impacts on the broader financial system.

“This is the first time we have run a stress test with New Zealand’s life insurance industry and the results were reassuring. Participating insurers were able to pay out substantial claims from policy holders and remain solvent during a hypothetical three-year scenario which included long COVID, a new pandemic and a period of severe economic stress.”

“Stress tests play an important role in helping build understanding of how particular risks may impact financial stability as well as building capability across industry to manage these risks. Insurers recognised the value of participating in the stress test and we identified areas of good practice from some insurers that could be considered by others. We appreciate the engagement of participants and look forward to building on this experience in 2024, when we carry out the next life insurance Industry stress test.” Mr Hawkesby says.

The 5 largest New Zealand-incorporated life insurers with a market share of 75% of premiums participated – AIA, Asteron Life, Cigna, Fidelity Life and Partners Life. The stress test scenario was developed by the RBNZ in consultation with participating insurers.

The 2022 LIIST scenario and results

The stress test scenario was developed by RBNZ in consultation with participating insurers.
The scenario covered 3 years from 2022 to 2025 and consisted of a combined economic and insurance shock.
The economic shock consisted of worsening economic conditions with high inflation and rising interest rates. The insurance shock combined long COVID, a new pandemic and higher mortality and morbidity rates. Both shocks included ratings downgrades for reinsurers.
Insurers used their own models to estimate the effects of the scenario on their financial conditions. They submitted detailed results for profit, balance sheet and solvency before and after any mitigating actions.
Insurers are required to maintain a minimum amount of solvency capital as determined by applying the Reserve Bank solvency standards. The solvency margin (SM) was used to measure the resilience of insurers to these shocks. The stress results were benchmarked against a base case submission which excluded the shocks.
Insurers overall were well positioned to withstand the economic shock, despite some recording losses on their long-term bond portfolios. However, the insurance shock had a much greater impact due to higher claims expenses, higher lapse rates, and lower new business volumes.
All insurers were able to remain solvent. However, the combined effects of the scenario caused the solvency margin of some insurers to fall outside their own risk appetite and triggered mitigating actions. These actions included cost reductions, premium increases, reductions to commissions and changes to reinsurance arrangements.

More information

Outcomes of our first Life Insurance Industry Stress Test (LIIST) Bulletin https://govt.us20.list-manage.com/track/click?u=bd316aa7ee4f5679c56377819&id=7b8e6ff4da&e=f3c68946f8
Stress testing regulated entities https://govt.us20.list-manage.com/track/click?u=bd316aa7ee4f5679c56377819&id=8d55d8d9f1&e=f3c68946f8

The Cancer Society of New Zealand is in full swing gearing up for its Daffodil Day street appeal on Friday 25 August.

The country is about to see a lot more yellow everywhere as the annual fundraiser and awareness-raiser, now into its 33rd year, hits airwaves, print and online channels. It culminates with 8000 yellow hi-vis-clad volunteers hitting the streets for collection.  

So far more than 1600 individuals, community groups, schools and workplaces have signed up with fundraising activities of their own in conjunction with Daffodil Day, many involving getting kitted out in top-to-toe yellow as part of an event.  

The Cancer Society is calling on the public to ‘Give today so no one faces cancer alone’.  

This year’s fundraising campaign features the faces and voices of Cancer Society staff, volunteers, a cancer researcher, and cancer patients who have used Cancer Society services.

Cancer Support Nurse Rangihoia Hollis is one of those campaign faces and the voice for the campaign’s radio messages this month.  She’s seen first-hand how vital the Cancer Society services are.

“The patients always talk about how helpful it is to have someone to help them navigate through all of those trying times. If the Cancer Society didn’t offer support like our volunteer driving services or free accommodation at our lodges, life would be a lot harder for everyone.”

“The way that I describe it to patients is that we are like a korowai (Māori cloak) that is wrapping support around them,” says Rangihoia.

Thanks to the ongoing support from its long-term major sponsor ANZ, the Cancer Society is delighted to also have Kiwi comedy legend Dai Henwood on board as ANZ Daffodil Day Ambassador for 2023.

Dai will host a comedy fundraiser ANZ Presents – The Comedy Treatment on the eve of Daffodil Day, Thursday 24 August, at 8.30pm at Q Theatre in Auckland. The show will be broadcast live on Three and all proceeds and money raised during the show will go to the Cancer Society.

ANZ New Zealand Chief Executive Antonia Watson says staff are right behind the important work the Cancer Society does.

“Cancer impacts the lives of most New Zealanders and ANZ New Zealand staff are no different. We know our support of the Cancer Society is vital to ensuring New Zealanders across the country can continue to benefit from the support services they provide.

“Cancer is a tough subject to talk about, so this year we’re using comedy to start a conversation while raising money for this important cause.”

Cancer Society National Chief Executive Rachael Hart says it is great to have Dai’s support to raise both funds but also awareness of Cancer Society’s services such as the free counselling services he and his family used.

“More New Zealanders will get cancer this year than ever before. As increasing numbers of people are diagnosed with cancer, demand for Cancer Society services surge,” says Rachael. “We were able to be there to support Dai and his family because of the generosity of New Zealanders who have donated on Daffodil Day in the past. We call on our communities to show that generosity again, so we can be there for the people who will need us tomorrow.”  

Look out for Daffodil Day street collectors on Friday 25 August. Daffodil Day donations can also be made at any ANZ branch, anywhere a daffodil day QR code is displayed or online at daffodilday.org.nz Give today so no one faces cancer alone.

Aotearoa New Zealand’s residential property downturn continues to decelerate, with the nation’s three-month rolling rate of decline reducing for the fourth straight month.

The QV House Price Index for July 2023 shows the average home decreased in value by 1.5% nationally this quarter, which is a smaller rate of decline than the 1.8% change experienced back in June, and considerably lower than the 3.5% and 3.4% quarterly declines experienced back in April and May respectively. The national average now sits at $888,999.

That figure is now 10.2% less than the same time last year, but just 0.3% lower than at the end of June. Four of the 16 main urban areas we monitor recorded small amounts of positive home value growth in the three months to the end of July nationwide – Hamilton (0.1%), New Plymouth (0.4%), Christchurch (0.8%), and Invercargill (0.8%).

Home values continue to diminish in Auckland (-1.5%) and Wellington (-1.7%), with the average rate of reduction increasing in Nelson (-2.4%), Whangarei (-1.4%), Queenstown (-1.3%), and Rotorua (-0.5%). The latter two recorded positive growth in last month’s index, reflecting the current level of heightened volatility in the market.

Quotable Value (QV) operations manager James Wilson said it wouldn’t be unusual to see home values continue to yo-yo across the motu for the foreseeable future, largely as a result of reduced sales activity.

“Though low sales volumes continue to impact the monthly value change results significantly, causing some short-term spikes in average home value levels, the longer term trend is pretty clearly a residential property market that is bottoming out after some very significant home value reductions over the last 18 months or so,” he said.

“But it’s still early days and we’re unlikely to see the market reach a consistent bottom overnight. Instead, we’re likely to see significant variations in performance in sub markets across the country, as we see demand return in certain areas and for certain property types at different times. Meanwhile, that heightened level of volatility is set to continue until sales volumes increase further.”

Mr Wilson said first-home buyers remained most active in the market today, but investors were beginning to show some renewed interest generally. “While investors never removed themselves from the market entirely, they have adopted more cautious attitudes in recent times. Now we’re starting to see growing numbers competing for entry-level stock in areas they view as offering good value for money.”

“There are still also some property types, like small to medium development sites, for example, which have taken significant hits to their value levels since the downturn began and are likely to continue to decline as demand for these properties has really dropped away. New building consent numbers are forecast to remain suppressed throughout the year, as interest rates, build rates and overall demand continue to hamper demand,” he added.

Northland

Northland’s residential property downturn has deepened this quarter, with the rate of decline increasing from June to July.

Home values have reduced across the wider region by an average of 12% in the last 12 months, with the Far North District (13.4%) leading the pack. Values are also down 11.5% annually in Whangarei and 10.5% in Kaipara.

Local QV registered valuer Renee Pilkington said Whangarei’s average home value had decreased by 1.4% to $727,387 in the July quarter. “High interest rates and the upcoming election continue to remain at the forefront of purchasers’ minds.”

“The coastal market has been quiet over the autumn and winter months – though the number of enquiries has picked up in the last few weeks, predominantly from out-of-town buyers. Good quality properties are selling well, but ones at the lower end of the market are taking longer to sell. Cash buyers are few and far between, with less properties being sold at auction as a result.”

Auckland

Auckland’s rolling rate of home value decline has eased for the fourth consecutive month – just as it has nationally.

The region’s three-month rolling average has reduced from 5.2% in March, to 4.4% in April, 2.3% in May, 2.2% in June, and now 1.5% in July. The average home value is now $1,243,610, which is 11.8% lower than at the same time last year.

Local QV valuer Hugh Robson said only time would tell whether or not the market was indeed bottoming out, but there were obvious signs that buyer sentiment was beginning to change.

“There appears to be a slight increase in sale volumes over the past 4-5 weeks. Agents say first-home buyers are still actively looking for property, but there is still a shortage of listings on the market across Auckland. This may result in some price movement in the coming months.”

“Investor demand is still fairly quiet overall. Mortgage rates remain high and rents are continuing to increase right across the city,” he added.

Tauranga

Home values continue to fall in Tauranga, but there are signs that market sentiment is shifting.

The latest QV House Price Index shows home values have reduced by an average of 2% in the July quarter – a slower rate of decline than the 2.9% quarterly decline in the previous index. The average home value is now $994,791 in Tauranga, which is 12.3% less than the same time last year.

QV property consultant Derek Turnwald commented: “There are further indications that the correction is coming to an end now and that the residential market is close to its low point. Sales turnover is starting to increase and value declines are decreasing.
 
“First-home buyers are realising that the market is reaching the end of a decline and are showing stronger interest. Banks are beginning to relax a little with loan application scrutiny and, as of 1 June, the Reserve Bank has relaxed Loan to value ratio criteria slightly for owner occupiers and investors.”

He said investors were also starting to show renewed interest in the market. “There’s definitely been a small but noticeable shift in market sentiment over the previous couple of months with open home attendance on the increase.”

Waikato

Hamilton recorded its first quarterly increase in average home value for more than a year – albeit a very small one.

The QV House Price Index for July shows the city’s average home value increased by 0.1% to $777,024 this quarter. However, heightened volatility as a result of reduced sales activity means it’s likely that Hamilton’s average rate of home value growth will both increase and decrease in the coming months, with the city’s annual rate of negative home value growth sitting at 9.5%.

Local QV property consultant Marshall Wu commented: “High interest rates are the biggest constraint right now, which in combination with inflation, is weighing down on household spending. Real estate agents are reporting longer selling periods and fewer buyers in the market overall, but vendors have started to comprehend the changes that have occurred in the market over the past few months and are meeting the market accordingly.”

Meanwhile, home values have reduced across the wider Waikato region by 2.3% this quarter. The average value is down 9.9% annually.

Rotorua

Rotorua’s zig-zagging residential property market recorded a small decline in average home value for the July quarter.

The latest QV House Price Index figures show the average home value in Rotorua dropped by 0.5% to $639,396 at the end of July, after last month’s index recorded an increase of 1.9% in the three months to the end of June.

The average home value is now 9.6% lower than at the same time last year, and 4.7% less than at the start of 2023.

QV property consultant Derek Turnwald commented: “Demand is still a bit subdued at present, but it’s definitely improving. There’s a sense that market sentiment is shifting locally, which the latest data reflects with only very small declines over both a one-month and three-month period.”

Mr Turnwald said first-home buyers had been showing strong interest, with “reasonably good” open home attendance at well-presented properties. “Consents for new homes for the Rotorua District are also substantially higher than last year,” he added.

Taranaki

New Plymouth’s residential property market experienced a small rebound this quarter.

The city’s average home value increased by 0.4% to $717,250, improving on the 0.4% quarterly reduction reported in last month’s QV House Price Index.

Meanwhile, home values are down by an average of 2.8% this quarter in Stratford ($469,641), weakening further from the 1.8% decline reported in last month’s figures, with South Taranaki ($420,905) recording a 3.4% average decline for the quarter, down from a 1.3% decline.

Hawke’s Bay

Property values continue to ebb away in Napier and Hastings.

The QV House Price Index shows the average home value decreased in Napier by 1.4% to $734,100 this quarter, and by 1.9% to $759,207 in Hastings. This is an improvement on the quarterly reductions of 3% and 2.2% reported for Napier and Hastings respectively in June’s index.

Over a 12-month period, home values have decreased by an average of 12% in Napier and by 12.5% in Hastings. This compares to a national average decline of 10.2% annually.

Palmerston North

Declining home values continue to decelerate in Palmerston North.

The city’s three-month rolling rate of average home value decline has eased down for the fifth straight month, with the latest QV House Price Index recording a 0.4% decline in the July quarter. The average home value is $626,028, which is 10.8% lower than at the same time last year.

Local QV registered valuer Olivia Betts commented: “Demand for residential property appears to be picking up now, even though the number of sales remains consistent. The most recent statistics indicate that the downturn is easing with the average house price showing a relatively small decline of 0.4% over the last three months.”

Wellington

Wellington’s rolling three-monthly rate of home value reduction has eased for the fourth month in a row.

The latest QV House Price Index shows the region’s average home value has reduced by 1.7% to $824,100 this quarter. This marks a slight improvement on the 2% average reduction previously recorded for the June quarter, as well as reductions of 4.8%, 3.7%, and 2.6% in March, April, and May respectively.

Local QV senior consultant David Cornford said home values were on average 14.2% lower than at the same time last year. “Value decreases in the region have slowed or even halted altogether this quarter, with Porirua and Upper Hutt both recording small value increases.”

“Lower listing numbers are helping to inject some energy into the Wellington property market with open home attendance up and more multiple offers coming in. If listing numbers continue to decline, it will help support a recovery in the market. However, given the high interest rate environment there is unlikely to be a significant bounce in values in the short term.”

“First-time buyers are active in the market and are benefiting from a lack of competition from investors, who continue to have a significantly smaller presence in the market,” Mr Cornford added.

Nelson

The downturn deepened this quarter in Nelson, with market sentiment remaining largely cautious.

The city’s average home value decreased by 2.4% to $768,240 in the July quarter. That average rate of negative home value growth is an increase from the 1.1% recorded for the June quarter, and the exact same as the rate of reduction recorded back in the May quarter.

QV Nelson/Marlborough manager Craig Russell commented: “We are seeing a continuation of the cautious market that Nelson has been experiencing for a while now. With the election looming, we expect this to continue in the short term. But we are seeing confidence in the market beginning to re-establish itself with indications that we could be at or near the peak of interest rate hikes.”

“Well located and good quality homes in Nelson appear to be selling soundly with increased numbers at open homes. Coastal properties appear to be selling well, and we’re seeing more properties with asking prices, with a number of price reductions now taking place,” he added.

West Coast

Home values continue to yo-yo on the West Coast.

The latest QV House Price Index figures show property values increased across the wider region by an average of 0.3% this quarter. It follows a 0.6% decline in the June quarter and a similar 0.2% increase in the May quarter.

QV operations manager James WIlson said the average rate of home value growth is likely to continue to yo-yo here and in other places around Aotearoa New Zealand in the coming months due to heightened volatility as a result of reduced sales activity.

However, local property values have continued to show more resilience than much of the rest of the country. West Coast homes are worth on average 2.9% more than the same time last year, with values in Grey District up by 6.2%, Buller up by 3.6%, and Westland showing a small decline of 2.7%.

Canterbury

Despite a cold July for the housing market, Christchurch and the wider Canterbury region have recorded small quarterly home value increases for the first time in more than a year.

The latest QV figures for July 2023 show that the average home value increased by 0.1% across the wider Canterbury region this quarter to $701,002, which is an improvement on the 1.3% quarterly decline observed in June. In Christchurch, the average home value increased by 0.8% this quarter to $727,209.

However, the Garden City and the wider Canterbury region did also experience small declines in average home value of 0.4% and 0.5% respectively during the month of July, reflecting high levels of volatility in the market.

“July has seen a slight decline in average home value. As to be expected, winter has cooled the market. While sales have slowed, a falling number of listings is actually stabilising the market overall and curbing any significant declines,” said local QV registered valuer Olivia Brownie.

“With some uncertainty still to play out economically over the next few months, we expect some more inconsistency in the Canterbury market to follow.”

Dunedin

Property prices have yet to hit rock bottom in Dunedin.

Home values decreased in Ōtepoti by an average of 1.5% in the July quarter, compared to a 3% quarterly decline reported in the previous QV House Price Index. The city’s average home value is $610,057, which is 7.6% less than the same time last year.

Local QV registered valuer Rebecca Johnston commented: “These smaller decreases indicate that greater buyer confidence is returning to the Dunedin market. This will largely be due to indications that interest rate hikes are peaking, inflation is easing, and the expectation that we’re at or only several percentage points away from the bottom of the property market cycle nationwide.”

“Real estate agents are reporting more people at open homes now and that properties are starting to move faster, while property developers are also stating that investors are beginning to come back into the market,” she added.  

Queenstown

Home values continue to zig and zag in Queenstown.

The latest QV House Price Index figures show the average home value decreased this quarter by 1.3% to $1,714,703, despite a small 0.2% increase in the month of July. It’s in contrast to the 2.9% quarterly growth recorded back in June and the 2.4% quarterly growth recorded back in May.

Home values are still holding up considerably better in Queenstown than most of Aotearoa New Zealand, with an annual average growth rate of 3.8%, compared to a national average decline of 10.2%.

Invercargill

Home values in Invercargill have increased by an average of 0.8% this quarter.

It follows a similarly small average increase of 0.2% for the June quarter. The city’s average home value is now $458,944, which is 4.8% lower than the same time last year and just 1.7% lower than at the start of 2023.

Local registered valuer Andrew Ronald commented: “Home values in the city have slipped by an average of 4.8% in the 12 months to the end of July 2023, but there has been limited change to the House Price Index since March 2023, indicating that price declines may be levelling off.”

“There is still much less demand now compared to early 2022 and a greater number of properties on the market. While there is still healthy demand from first-home buyers, there are limited investors as a result of continued interest rate increases and changes to tax deductibility rules.”

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