Category: Business

Source: Radio New Zealand

Air New Zealand says four return flights to Samoa for April and May have been cancelled because of rising fuel costs.

The cancellations are part of scheduled changes that the airline had announced at the start of this month.

Air New Zealand said it had nine services to Samoa each week and described the change as “minimal”.

It said like other airlines it was dealing with unprecedented volatility with jet fuel prices due to the conflict in the Middle East and was adjusting schedules to manage the impact.

Air New Zealand earlier said that it would cancel around 1100 flights from early March through until early May, but that most passengers would be moved to flights on the same day.

‘We might need to be careful with that jet fuel’ as supplies reduce

Airlines are pleading for assurance from the government, as the supply of jet fuel could be limited due to the conflict in the Middle East.

Board of Airline Representatives chief executive Cath O’Brien told Morning Report that New Zealand is a known as a “fuel risk destination”.

New Zealand had a history of experiencing issues with jet fuel allocation, she said.

“We saw that in 2017. We had the pipeline rupture. We saw it in 2022 and 2023 when we had insufficient jet fuel imported into the country.”

She was concerned that there had been no information, as suppliers could give 12 hours notice of rationing but airlines could not respond in the same way as usual because if there was limited jet fuel in New Zealand, the same would apply elsewhere.

“If we knew how a scarce resource of jet fuel might be managed, then we would be able to say how airlines might respond and whether that jet fuel is allocated more or less to long haul, or short haul, or freighters, or licensed flights, or regional services.

“At the moment, we’re kind of operating in this dearth of information.”

However, O’Brien said airlines were comfortable that there was currently a sufficient fuel supply, and could continue their usual operations.

“If we get to a point, as we have in the past in New Zealand, where jet fuel is 10 days away from arriving and we have a limited amount to get us through, then we might need to be careful with that jet fuel that we have as we wait for the next shipment.

“I think that’s increasingly likely as an outcome of the conflict up in the Middle East … so we need to know how we will manage that delay.”

Meanwhile, regional airlines are warning key air links are under growing pressure due to the rising fuel prices and operating costs.

Originair is poised to scrap its Wellington to Westport route, while Air Chathams has introduced a $20 fuel surcharge per ticket.

Barrier Air chief executive Grant Bacon said fuel price rises so far equated to about $15 extra per person on an average Wellington to Tākaka Golden Bay Air flight.

Reuters reports that jet fuel prices have soared from US$85-90 per barrel to US$150-200 per barrel in recent days leading to a number of airlines including Air New Zealand increasing fuel surcharges.

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

LiveNews: https://nz.mil-osi.com/2026/03/24/air-new-zealand-cancels-four-return-flights-to-samoa-as-airlines-call-for-clarity/

Source: Radio New Zealand

Retailer KMD Brands has rejected a proposal from a US surfwear company to slice off its Rip Curl label and marry the two brands together.

The NZX and ASX-listed company disclosed the details of the concept, suggested by California-based Stokehouse, on Tuesday following a report in the Australian Financial Review.

KMD Brands says the proposal would see Rip Curl de-merged into a separate dual-listed company, then merged with Stokehouse to create a new company.

“The concept proposed by Stokehouse creates no value for shareholders and is challenging from an execution standpoint,” KMD Brands chairman David Kirk said.

“In addition, the combination of multiple surf brands that directly compete with each other is not a strategy that has proven effective.”

If the deal had gone ahead as proposed, Stokehouse would own 22 percent of the new business, and Stokehouse’s chief executive would also head up the entity, according to KMD’s market update.

“This proposed ownership structure is misaligned with the earnings delivered by the Stokehouse and Rip Curl businesses given Stokehouse’s immaterial contribution to combined EBITDA [earnings before interest, taxes, depreciation and amortisation], and would unfairly dilute KMD Brands shareholders,” KMD said in a statement.

In addition to Rip Curl, KMD Brands also owns Kathmandu and Oboz brands. Stokehouse’s core brand is surf label Vissla, and is run by former Billabong chief executive Paul Naude.

The dual-listed company said it carefully considered the concept but had decided it was not in the best interest of shareholders and would instead continue with its current strategy.

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LiveNews: https://nz.mil-osi.com/2026/03/24/rip-curl-de-merger-bid-rejected/

Source: Radio New Zealand

Airlines are pleading for assurance from the government, as the supply of jet fuel could be limited due to the conflict in the Middle East.

Board of Airline Representatives chief executive Cath O’Brien told Morning Report that New Zealand is a known as a “fuel risk destination”.

New Zealand had a history of experiencing issues with jet fuel allocation, she said.

“We saw that in 2017. We had the pipeline rupture. We saw it in 2022 and 2023 when we had insufficient jet fuel imported into the country.”

She was concerned that there had been no information, as suppliers could give 12 hours notice of rationing but airlines could not respond in the same way as usual because if there was limited jet fuel in New Zealand, the same would apply elsewhere.

“If we knew how a scarce resource of jet fuel might be managed, then we would be able to say how airlines might respond and whether that jet fuel is allocated more or less to long haul, or short haul, or freighters, or licensed flights, or regional services.

“At the moment, we’re kind of operating in this dearth of information.”

However, O’Brien said airlines were comfortable that there was currently a sufficient fuel supply, and could continue their usual operations.

“If we get to a point, as we have in the past in New Zealand, where jet fuel is 10 days away from arriving and we have a limited amount to get us through, then we might need to be careful with that jet fuel that we have as we wait for the next shipment.

“I think that’s increasingly likely as an outcome of the conflict up in the Middle East … so we need to know how we will manage that delay.”

Meanwhile, regional airlines are warning key air links are under growing pressure due to the rising fuel prices and operating costs.

Originair is poised to scrap its Wellington to Westport route, while Air Chathams has introduced a $20 fuel surcharge per ticket.

Barrier Air chief executive Grant Bacon said fuel price rises so far equated to about $15 extra per person on an average Wellington to Tākaka Golden Bay Air flight.

Reuters reports that jet fuel prices have soared from US$85-90 per barrel to US$150-200 per barrel in recent days leading to a number of airlines including Air New Zealand increasing fuel surcharges.

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LiveNews: https://nz.mil-osi.com/2026/03/24/operating-in-this-dearth-of-information-airlines-pleading-government-for-assurance/

Source: Radio New Zealand

• RBNZ govenror says NZ is likely to see higher short-term inflation
• Rates could rise if there are effects on medium-term inflation or inflation expectations
• Economic growth likely to be dampened

The Reserve Bank governor is warning of higher inflation and weaker economic growth due to the Middle East crisis.

The Israel and United States-led war against Iran has sent global energy prices soaring due to the closure of the Strait of Hormuz, and attacks on key energy infrastructure in the Gulf.

Economists had already warned of the inflationary impact facing the New Zealand economy.

In speech notes published on Tuesday, Reserve Bank (RBNZ) governor Dr Anna Breman echoed that sentiment.

“We are likely to see higher headline inflation over the near term, and somewhat weaker growth momentum,” Breman said.

Annual inflation was at 3.1 percent in the December quarter, above the RBNZ’s 1-3 percent target band.

The remarks come two weeks ahead of the RBNZ’s next monetary policy decision, where the Official Cash Rate is expected to remain on hold.

“A short-lived disruption and a temporary increase in petrol prices can – and should – be looked through from a monetary policy perspective if it is unlikely to have an impact on medium-term inflation outcomes,” Breman said.

“For this type of disruption, we would likely see higher inflation over the next few quarters, along with squeezed real incomes and demand.”

She said the peak impact of monetary policy on inflation took about six to nine quarters.

“So, tightening monetary policy in response to a short-lived disruption would only dampen growth without materially improving near-term inflation outcomes,” Breman said.

“If there are effects on medium-term inflation or inflation expectations, the appropriate policy response could be to increase interest rates to prevent these second round effects.”

Breman said “it is critical” for monetary policy to be forward-looking and focused on medium-term inflation pressures.

She said global supply chains were feeling the effects of the conflict, and it “will take time for the full effects of this shock on the global economy to play out”.

“We should try to avoid reacting too early to near-term inflation pressures that monetary policy can do little about – or reacting too late if above-target inflation becomes embedded in the economy.”

High near-term inflation, weaker growth

Breman said the higher short-term inflation spike would primarily be driven by higher petrol and diesel prices, which made up about 4 percent of the Consumer Price Index.

Higher fertiliser prices were another factor, and she believed it could take up to nine months to fully pass through to supermarket prices.

“Autumn fertiliser requirements are already on-hand in New Zealand, and fertiliser imports usually decrease over the winter months,” Dr Breman said.

“We expect fertiliser use to pick up for spring planting, which is when we may see more direct impacts on farms.”

Breman said the conflict meant New Zealand’s economic growth momentum would be “somewhat weaker” than the RBNZ’s previous assessments.

The bank’s February Monetary Policy Statement published forecasts of GDP growth of 1.1 percent in the March quarter, and 0.5 percent in the June quarter.

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LiveNews: https://nz.mil-osi.com/2026/03/24/reserve-bank-governor-anna-breman-warns-of-higher-inflation-lower-growth/

Source: Radio New Zealand

ASB and Kiwibank have become the latest to increase interest rates, on the back of market fears the rising oil prices may push up inflation.

Wholesale rates have lifted since war broke out, even though the Reserve Bank has not yet moved the official cash rate.

Kiwibank is increasing its special one-year rate from 4.49 percent to 4.59 percent, its three-year rate from 5.25 percent to 5.35 percent, its four-year rate from 5.69 percent to 5.79 percent and its five-year rate from 5.79 percent to 5.89 percent.

Standard rates shift by a similar amount.

It is also lifting its term deposit rates by 20 basis points for one year, to 3.75 percent, 10 basis points for two years, to 4.1 percent, and 30 basis points for three- to five-year terms, to 4.4 percent, 4.6 percent and 4.7 percent, respectively.

ASB is cutting its six-month rate and increasing longer home loan terms and term deposit rates.

ASB’s two and three-year fixed home loan rates have increased by 14 and 20 basis points respectively, while the six-month rate is down 10 basis points.

It will offer 4.59 percent for a year, 4.49 percent for six months, 5.09 percent for two years and 5.69 percent for five years.

ASB has also lifted term deposit rates by up to 50 basis points across 12-month to five-year terms, including a five-year rate of 5 percent. Its one-year rate is 3.7 percent, up 20 basis points.

ASB’s executive general manager personal banking Adam Boyd said it was driven by market pricing.

“Wholesale interest rates have remained volatile and continue to trend higher. These movements reflect heightened global economic uncertainty and renewed pressures across global markets. For savers, the same environment means stronger returns, and it’s worth considering how your money could work harder.

“We understand that any increase to home loan rates is significant for households. We encourage customers to talk to us about their situation. There’s no one-size-fits-all answer, and we want to help people find the approach that works best for them.”

Westpac and ANZ announced increases last week.

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand

LiveNews: https://nz.mil-osi.com/2026/03/24/more-banks-hike-interest-rates-as-fuel-threatens-to-push-up-inflation/

Source: Radio New Zealand

Electricity networks around the country will soon provide rebates for power exported during peak periods – but not every power company will pass those on to consumers directly.

From 1 April, the Electricity Authority will require distributors to pay rebates to reward customers generating electricity, such as rooftop solar, when the power network faces highest demand.

Vector was offering 5.24c per kWh for 7am to 11am export in June, July and August and 5pm to 10pm export in May through to September. WEL Networks is offering 6.35c per kWh from 7am to 9.30am and 5.30 to 8pm between 1 June and 31 August. Powerco is offering 7c on weekdays from 7am to 11am and 5pm to 8pm between 1 April and 30 September. Scanpower’s rebate reaches 13c.

Power companies separately offered their own prices to customers exporting power, and these could vary a lot.

The Electricity Authority said ensuring customers were fairly rewarded for supplying power to the network was part of its work programme.

“In January we announced the decision that electricity distribution businesses – lines companies – will need to pay rebates when households and small businesses supply power to the network at peak times, from April 1.

“This applies to those with a network connection size up to 45kVA and that can export up to 45kW of electricity back to the network.

“The electricity distribution companies’ rebates will be passed on to consumers through the electricity bills they receive from their retailer. While these rebates will be repackaged by the retailer, they may not be itemised on consumers’ power bills as a clear amount of money back. Some retailers itemise their bills more than others.”

Larger companies also needed to offer time-of-use pricing to encourage people to shift use to off-peak times.

Genesis chief revenue officer Stephen England-Hall said the company took into account distribution charges and rebates when it set its plans and pricing for customers.

“Customers on our day/night or other time-of-use plans typically benefit from lower network charges during off-peak periods, and these are already reflected in the appropriate tariffs.

“Effective from 1 July 2026, the Electricity Authority’s new regulations regarding export rebates will require retailers to offer time-varying plans that ‘provide a financial benefit’ to customers for export patterns that reduce pressure [on] the electricity system, including at peak times.

“Our range of products and plans will be updated to reflect this and enable customers to choose the one that suits them the best.

“We regularly review and update our pricing and product features, and will take the form and scale of these new rebates into account in this process.”

Mercury said it set buyback rates using a range of inputs including expected wholesale costs, network charges and network rebates. “We will factor these rebates into our time-of-use plans which we are due to launch in the next couple of months.”

Lisa Hannifin, chief customer officer at Meridian, said it offered customers 17c for solar export across all periods of the day.

“We’re pleased there are now more incentives available to encourage customers to export at peak times. We’re currently upgrading our billing system, which will allow for this new rebate to be incorporated into our solar plans and expect this will be reflected in our products from the middle of the year.”

At Octopus, chief operating officer Margaret Cooney said the full rebate should be passed on when it became available.

“The rebate will vary by network depending on what the circumstances are in that network and how much value they’re essentially getting based on the state of the grid and times of the year in which it’s of value to them.

“Some of them are much more generous than others, but we think it’s a great start. And I think one of the things that we hope to see is that networks learn that value of the distributed energy providing a more cost-effective solution rather than just building out more poles and wires.”

She said the rebates were intended to reward customers for what they were doing so it made sense to pass them on.

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LiveNews: https://nz.mil-osi.com/2026/03/24/will-you-get-a-solar-rebate-from-your-power-company/

Source: Radio New Zealand

Explainer – Regional airlines across New Zealand are warning key air links are under growing pressure, as rising fuel and operating costs force tough decisions.

Westport is the latest town at risk of losing its only air connection and industry leaders warn it might not be the last.

Here’s what’s happening.

What changes have regional airlines made?

Originair is poised to scrap its Westport to Wellington route, unless it gets more government support, leaving the town without flights.

Air Chathams has introduced a $20 fuel surcharge per ticket citing “recent events in the Middle East impacting global fuel markets”.

Golden Bay Air chief executive Richard Molloy said his airline had reduced the number of flights between Tākaka and Wellington in May.

The airline was also the first recipient of a loan from the government’s $30 million package supporting struggling regional routes.

Sounds Air cut two routes and sold six aircraft last year with managing director Andrew Crawford warning that might not be the end of cuts.

Since the Covid-19 pandemic he said small airlines had been grappling with “spiralling, absolutely out of control costs”.

“Airways, airports, fuel, parts, finance, everything. Since Covid it’s just been an absolute nightmare trying to keep the costs under control in regional aviation,” Crawford said.

“The pressure on these airlines is extreme. Regional aviation in this country has been decimated and there’s more to come, I would say, if things keeps going like this.”

How much extra pressure is coming from fuel price rises?

Barrier Air chief executive Grant Bacon said the conflict in the Middle East had prompted sharp price shocks for regional airlines – sometimes with very little notice.

“After receiving a 95 cents per litre increase [last week] we have now also received a 12 cent increase… so it just goes on and on. Funny enough, I’ve just received another notification email from BP stating potentially more price rises. I’m too scared to open it,” he said.

“The issue is we sell tickets months in advance and we price in fuel and we consider perhaps that the fuel may increase, it may decrease and it’s a game of averages. But when you’re talking a 60 percent move in one bound it is certainly difficult to cope with.”

Molloy said fuel price rises so far equated to about $15 extra per passenger on an average Wellington to Tākaka Golden Bay Air flight.

Airlines simply could not rely on customers to pay that, he said.

“There’s a subtle equation there with fares and demand. Obviously if you increase your fares then eventually you will start to lose potential bookings,” he said.

Sounds Air managing director Andrew Crawford said he expected fuel prices would eventually double.

“This is a big problem what’s going on here – big problem. And I don’t think we’ve quite got the brunt of it yet,” he said.

Why do regional links matter?

Bacon said regional airlines, like Barrier Air, not only carried passengers and leisure tours, they also carried “freight, medical supplies, doctors, passengers that are visiting Auckland in order to receive treatment such as ongoing chemotherapy”.

“These links are just vital to communities,” he said.

Ruatoki resident Lisa Rua said she had been flying from Whakatane to Auckland for treatment of a pelvic mesh injury.

She had taken the trip about six times in the past year and could not imagine what she would do without flights.

“Driving is definitely not an option and I haven’t got a family member who is able to do that for me either… It would definitely be very difficult for my recovery if I can’t catch a plane,” she said.

“It is our only in and out of the area unless we catch a bus, which if you’re not well is not really a good option.”

New Zealand Airports Association chief executive Billie Moore said there had been a trend towards larger aircraft in New Zealand, making it harder for regional routes to be commercially viable.

“That’s why you saw some time ago, for instance, Air New Zealand withdrawing their Beechcraft fleet. Some of those routes were then picked up by smaller regional airlines.

“That overall trend – most major airlines moving to larger aircraft – means that the role of these smaller operators around New Zealand becomes more and more critical. They’re the only ones flying the types of planes that are going to work for these kinds of routes,” she said.

“What you need is a system that allows those larger airlines to grow, to support whatever regional networks they can, but also allows smaller operators to continue operating efficient fleets that serve regional New Zealand.

“At the moment that is getting harder and harder.”

What government support is available for regional airlines?

The Regional Connectivity Fund provided $30 million in concessionary loans to allow some regional airlines to consolidate debt, refinance loans and invest in aircraft maintenance or upgrades.

Associate Minister of Transport James Meager said the fund, announced last August, was designed to “stabilise the regional sector” and give airlines more headroom.

Moore said it took a lot of work and commitment from senior ministers to get off the ground but it was not a perfect fix for the current pressures.

“While the loan funding will be extremely useful and valued by these airlines, as they look to try and restructure some of their operations, it’s not going to deal with the ongoing operational cost and making some of these routes more commercial,” she said.

“There may well be points where the economics of it all make it too hard for some of these routes to operate.”

Golden Bay Air said it was yet to receive lending it had secured.

“We’re still going through the quite considerable due diligence attached to that being approved. But look, it will be good timing for sure,” Molloy said.

Bacon said the Regional Connectivity Fund appeared to be “incredibly slow moving”.

“I wouldn’t want to rely on continuity of services based on that package at this time… And I wouldn’t want to get into debt to fund loss-making routes,” he said.

What more support do airlines want?

Bacon said the most effective support would be relief from government-imposed costs.

“Probably the most valuable thing that the government could do… is that we need to see some relief on levies such as airways charges and also CAA levies,” he said.

It might also be time for the government to consider ongoing subsidies to keep regional routes operating, Bacon said.

“Overseas that’s a very regular occurrence especially in North America, Canada, a lot of routes in Europe. We bought an airplane from France a couple of years ago from an operator and that airplane was 100 percent subsidised – and they were servicing an island probably not too dissimilar to one of our main routes, which is Great Barrier Island,” he said.

Moore said that also made sense to the New Zealand Airports Association.

“Intervention now shouldn’t be seen as a point of failure but we should recognise that we’ve had a lot of decades of success where we haven’t had to intervene with government funding.

“We’re at the point now where we should think carefully about how to make sure the system is resilient for the future,” she said.

“Most countries provide some kind of foundation of support for regional routes. And there’s a reason for that.”

However, Molloy said longer-term support should focus on reducing compliance and airport costs rather than directly subsidising routes.

“For us what the government has done is quite fitting over the longer term. From our perspective the route should be inherently viable and the government – by reducing sort of compliance costs, limiting landing fees – these kind of things are more appropriate measures rather than underwriting certain routes.”

What is the government planning?

Meager said the government was doing a lot of work to try to reduce cost pressures across the board.

Criticism the Regional Connectivity Fund was slow was probably fair, he said.

“With increasing pressure on prices with the conflict in Iran it’s timely that we’ve got that fund but it’s also timely that we look at what other things we can do to support regional connectivity,” he said.

While that was unlikely to include cuts to Civil Aviation Authority levies or airways charges, Meager said he had tasked the authority with a wider rules reform programme “to make sure that we aren’t putting any unnecessary regulation and costs on the aviation sector”.

“We’re looking at what the range of options are depending on how long this conflict goes.

“So in a similar way that ministers are looking at what are the triggers and scenarios for interventions on the fuel price, similarly for me in the aviation sector what are the triggers for intervention when routes are at risk particularly routes to vulnerable areas?

“We’ll be considering those options in the coming few days or weeks and making some decisions as things change.”

As the part-owner of some airports, the government was continuing to invest in capital upgrades and maintenance “to make sure that they are viable and continue to operate”, Meager said.

“I understand the arguments for more intervention. At the moment, where we are placed is that we prefer to make investments around infrastructure.”

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LiveNews: https://nz.mil-osi.com/2026/03/24/how-rising-costs-are-reshaping-new-zealands-regional-air-links/

Source: Radio New Zealand

Any businesses planning to offer extra support for their staff facing fuel cost rises will need to consider the tax implications.

Fuel prices have risen sharply in the past month as conflict in Iran has put pressure on oil supplies.

The price of 91 is now more than $3.30 a litre on average across the country, and forecast to rise further.

That adds to the cost of commuting – the Public Service Association earlier called for employers to allow staff to work from home to help offset the cost.

Deloitte tax partner Robyn Walker said any form of payment from an employer to an employee would generally be taxable through the PAYE system – even if it was a short-term fix for the petrol problem.

If it was offered in the form of goods or services, that could trigger fringe benefit tax.

But she said there were some exceptions for transport, which employers could consider.

The fringe benefit tax legislation has an exemption for ebikes, bikes, scooters and escooters provided by employers and used for commuting to work.

That means that as long as the employee is intending to use the bike mostly for commuting, it can be provided without needing to pay any fringe benefit tax (FBT).

She said there could also be significant benefits for employees taking a “salary sacrifice” arrangement.

This means their income is reduced by an amount equal to the cost of the bike. Because the cost of the bike was taken out of pre-tax income the final impact on the employee would be lower than if the bike was paid for out of after-tax income.

She said it could help someone afford a bike they might not otherwise be able to purchase. Some providers such as WorkRide and Northride have set up systems to streamline this process.

Another option is Extraordinary, which allows employers to offer public transport benefits either by salary sacrifice or as part of a total remuneration package, without attracting FBT.

This also has the potential to make public transport cheaper for employees.

Walker said employers could also start getting more claims for mileage from employees travelling for work in their own vehicles, where previously they might not have thought the administration was worth it.

“There are some quite detailed rules around how this works and generally ‘home to work’ travel can’t be reimbursed tax-free, but travel from home to a client – in excess of normal travel distances, or from work to a client is able to be paid tax exempt.

“Inland Revenue issues new reimbursement rates each year, which are based on historic costs. These are essentially a ‘safe harbour’, whereby they are comfortable that reimbursement at that level is reasonable; employers are not bound to use those rates, so could opt to pay a higher amount while fuel costs are high. This would need to be supported with some calculations to explain why the amount paid is reasonable.”

At present, the rate for a petrol car is $1.17 per kilometre.

“It is technically possible for an employer to provide tax-free allowances for employee transport costs in some limited circumstances. This exemption is targeted at scenarios where an employee’s commuting costs are more than what would ordinarily be expected – for example, if the employer operates in a remote location or if the location isn’t serviced by public transport and/or the employee is working hours where public transport isn’t available.”

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LiveNews: https://nz.mil-osi.com/2026/03/24/employers-offering-transport-perks-warned-of-tax-rules/

Source: Radio New Zealand

Home loan borrowers are taking cashback incentives to stay with their current banks, as competition continues in the mortgage market.

The focus on cashback incentives intensified through the end of 2025, when ANZ ran a campaign offering cash payments equal to 1.5 percent of loan amounts to new home loan borrowers.

That prompted other lenders to match it, and in some cases offer borrowers incentives to stay, too.

Helen Stuart, a mortgage adviser at Compass Mortgages, said she had seen “retention payments” offered by several banks lately, especially when someone had all their lending come off a fixed term.

She had one client turned down who still had a year to run on half his lending.

It is harder to change to a different lender when some of the loan is still fixed, because it usually means a break fee has to be paid.

Stuart said it was common for retention payments to be about 0.4 percent of the loan amount. “But it varies.”

Campbell Hastie, of Hastie Mortgages, said it was still happening, although the activity had slowed since December.

“The number of retention payments we organised was probably higher than the number of refinance deals we concluded.

“That’s because by the time you paid the legal fees for moving, in many cases the retention cash payment looked about the same as the refinance cash less legal fees, not to mention the effort required to actually make the change.”

Jeremy Andrews, of Key Mortgages, said what people could get would depend on how long a customer had had their loan, whether they had taken a cashback previously and whether they had more than 20 percent equity.

“Some banks will refuse retention cash if the clients are already fixed in and they see it as of no benefit to the client to refinance to another bank. Some examples include if it’d be detrimental either in break fees – they’re already on higher than market rates, or if they would need to move to higher rates in the market, or the legal costs associated exceed any cashback benefit of moving.

“When retention cash is offered it’s typically a lot less than the same bank will offer for new business – often between 0.25 percent to 0.4 percent of the lending amount, compared to currently up to 0.9 percent or even 1 percent cashback for new or refinanced lending.”

Banks said it was a response to competition in the market.

ANZ said it was “fighting to hold on to and win new customers in a very competitive market”.

“Customers consider a number of things when choosing who to get a home loan from – pricing, product, approval times and other incentives on offer. At times we will offer deals like cash contributions for customers.

“For existing customers, we encourage people to connect with us to ensure they are aware of all the options available to them. We’ll always endeavour to give our customers the most competitive offer – our bankers can sometimes offer cash contributions to existing customers.”

Westpac agreed competition was fierce.

“We’re working hard to both retain existing customers and win new ones. We consider a range of options to make sure we are providing great value for all our customers.”

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