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Animal Welfare – Proposed welfare code betrays animals and the law – SAFE

Source: SAFE For Animals

SAFE is demanding that the Ministry for Primary Industries’ proposed Code of Welfare for Sheep and Beef Cattle be scrapped, calling it a legal shield for cruelty that fails to meet even the most basic obligations under the Animal Welfare Act 1999.
The animal rights organisation says the code legitimises inherently harmful practices – including mud farming, feedlots, and painful procedures like castration and tail docking without pain relief – while continuing to allow animals to suffer without access to shelter.
“If this code is accepted in its current form, it would effectively become a manual for animal cruelty,” says SAFE CEO Debra Ashton.
SAFE warns that the code is not an isolated failure, but a symptom of a broken regulatory system that routinely favours industry convenience over animals’ needs, experiences, and rights.
“We’ve engaged in good faith for years, but this draft proves the system can’t be trusted. It’s time to draw a line,” says Ashton.
The organisation has written to NAWAC Chair Dr Matthew Stone, MPI Director of Animal Health and Welfare Carolyn Guy, Minister for Agriculture Todd McClay, and Associate Agriculture Minister Andrew Hoggard, urging them to abandon the draft and take urgent action to address these systemic failures.
“It’s a betrayal of our welfare law and the animals it’s meant to protect.”
SAFE’s full statement reads:
Proposed Code of Welfare Entrenches Cruelty and Undermines Animal Welfare Law
The proposed Code of Welfare for Sheep and Beef Cattle, currently open for public consultation, represents a profound failure of New Zealand’s animal welfare system. Rather than lifting standards or upholding the Animal Welfare Act 1999, this code would entrench practices that cause widespread suffering – including painful procedures without pain relief, intensive confinement in mud farms and feedlots, and a diluted shelter standard that puts animals’ lives at risk in extreme weather.
SAFE rejects the premise that this code provides meaningful guidance for compliance with the Animal Welfare Act. It does not. Instead, it offers legal cover to inherently harmful farming systems and practices that cause serious and avoidable suffering.
For that reason, SAFE will not be participating in the consultation process for a code that attempts to sanitise cruelty.
When animals are confined on mud farms, concrete, or barren feedlots, they are stripped of their most basic expressions of life – grazing, playing, resting comfortably, ruminating, and relating to one another. These are not abstract ideals, but the everyday needs of sheep and cattle.
Codes of welfare are intended to support our animal welfare legislation — not undermine it. If this code is adopted, it will set a dangerous precedent: where cruelty is legitimised, public expectations are ignored, and the intent of the Animal Welfare Act is effectively nullified.
This failure is not isolated. In 2023, the Regulations Review Committee recommended a prompt and substantive review of how secondary legislation under the Animal Welfare Act is developed – and whether existing instruments, particularly codes of welfare, are consistent with the purpose and intent of the Act. Almost two years have passed without action. It must now be prioritised to ensure that regulation genuinely reflects the law and protects the animals it exists to serve.
SAFE is calling for the proposed Code of Welfare for Sheep and Beef Cattle to be scrapped. The code must be rewritten in full alignment with the Animal Welfare Act — not shaped to prioritise profit, productivity, or convenience over animals’ wellbeing and legal rights.
We urge the Government and the public to reject this code and demand a future where animal welfare law is not just symbolic but lived. It’s time to build a system that reflects what the Animal Welfare Act already affirms: that animals are not merely commodities to be managed, but sentient beings with needs, feelings, experiences, and intrinsic worth.
SAFE is Aotearoa’s leading animal rights organisation.
We're creating a future that ensures the rights of animals are respected. Our core work empowers society to make kinder choices for ourselves, animals and our planet.
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Consumer NZ – New Zealanders have rising concerns about insurance costs as financial pressures mount

Source: Consumer NZ

New insights reveal insurance is a growing financial burden for New Zealand households, as trust in the industry dips and climate pressures loom.

Insurance has jumped to the fourth most significant financial pressure for households, behind housing, food and household debt, marking a notable rise from sixth place in October 2024. This shift reflects a growing sense of strain as premiums continue to climb across house, contents, car and health insurance.

At the same time, trust in the insurance industry is falling, based on results of the latest Consumer NZ Sentiment Tracker survey of more than 1,000 New Zealanders.

“Insurance is meant to provide a safety net, but for many people, it’s becoming increasingly difficult to access. When you add the complexity of policies and the lack of transparency, it’s easy to understand why trust in the industry is falling,” says Rebecca Styles, Consumer investigations team leader.

Insurance affordability now in focus

Consumer’s upcoming report on house and contents insurance will delve deeper into these issues, exploring how rising premiums are affecting consumers’ ability to access appropriate cover. With the effects of climate change increasing risk and, in turn, premiums, more New Zealanders are feeling financially exposed.

“We’re hearing more and more from consumers who feel they’re being priced out of essential cover,” Styles says.

Interestingly, this comes as climate change concerns are cooling. Fewer New Zealanders now rank climate change as one of the top three most pressing issues — now at 12% (down from 15% in January and 17% a year ago), as more immediate pressures take priority.  

Cost of living still top concern

The cost of living remains the number one issue for New Zealanders, with 65% of respondents identifying it as their top concern – a new high. Financial pressures across housing, food, debt and now insurance continue to weigh heavily.

Trust in the insurance sector drops

As premiums rise, trust in the insurance sector has taken a hit. More people now say they distrust insurers than trust them – a reversal from previous sentiment tracking and part of a broader decline in trust across sectors such as healthcare and energy.

Consumer warns that the decline in trust signals a need for the insurance industry to do more to demonstrate value, transparency and fairness in its offerings.

Climate risks compound affordability issues

With climate change increasing the frequency and severity of weather events, insurance affordability is a growing concern. Many New Zealanders living in high-risk areas are already facing pricier premiums or are being denied insurance altogether.

“Our upcoming report will highlight how the affordability of house and contents insurance impacts resilience in Aotearoa,” Styles says.

 

Notes

The Consumer NZ Sentiment Tracker is a quarterly nationally representative survey of 1,000 New Zealanders. It provides a snapshot of public opinion on key consumer issues, including financial wellbeing, trust in institutions and sector-specific sentiment.

The winter issue of Consumer magazine has a focus on insurance and will be on newsstands Monday 9 June 2025.

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Health – Pressure on addiction treatment services highlighted

Source: Te Hiringa Mahara – Mental Health and Wellbeing Commission

New analysis shows a 10.5% reduction in the number of people accessing addiction treatment services over the last five years raising concerns about whether there is sufficient capacity to respond to an increase in demand.
“Recent reports show drug use has increased, yet over the past five years there has been a drop in the number of people accessing treatment and support. The Mental Health and Wellbeing Commission is concerned that people may not be able to access support when they need it,” said Sonya Russell, Director Mental Health and Addiction System Leadership.
In 2023/24, around 45,000 people accessed addiction treatment services, 5,000 fewer than five years earlier. Referrals have also dropped, down 14.6% in 2023/24 compared with the peak in 2020/21. And the percentage of declined referrals has almost doubled over the last five years from 4.7% of total referrals in 2019/20 to 8.6% in 2023/24.
“A reported surge in methamphetamine use in the last year is likely to put further pressure on services. At a time that we need to be bolstering services, we’re seeing fewer people access addiction services.”
“Another sign that the system is under pressure is the wait time for people seeking support. For those seeking support from a specialist addiction service, the wait is getting longer.”
“There is a strong case for increased investment in addiction services,” Sonya Russell said.
“We are concerned there is not sufficient capacity within the health system to cope with increasing needs. By bringing a dedicated focus to investment, workforce and removing barriers, we will ensure more people will get the help they need.”
Alongside a focus on addiction specialist services, Te Hiringa Mahara has published further insights into access to publicly funded mental health and addiction services.
Notes:
You can get copies of the two new data summaries here: www.mhwc.govt.nz/2025-data {Live from 5am Thursday 29 May 2025]
In February the Commission released a factsheet with details of Access to specialist mental health and addiction services, 2023/24, and in April the Access and Choice programm: Monitoring report on progress and achievements at five years report was published .
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Health – Statement on "run it straight" from the Royal Australasian College of Surgeons Aotearoa New Zealand Trauma Committee

Source: Royal Australasian College of Surgeons

The Aotearoa New Zealand Trauma Committee of the Royal Australasian College of Surgeons expresses profound concern regarding the increasingly prevalent informal activity known as “run it straight.” This practice, characterised by two players charging directly at each other in a high-speed collision, poses significant risks to participants, leading to severe injuries and, tragically, fatalities.

We call on everyone who can influence this activity to:

  • raise awareness so participants understand the potential for serious injuries and the long-term consequences of high-speed collisions,
  • support regulatory measures such as medical evaluation, age restrictions and safety protocols to minimise risks,
  • promote safer alternatives for fundraising events that do not involve high-risk physical competition,
  • encourage educational about the risks, and help young athletes protect their health, and
  • engage healthcare professionals to provide valuable insights into injury prevention and help inform public policy decisions.

Recent tragic events, including the death of a young man during a “run it straight” challenge, have brought the dangers of this practice into focus. This incident is not an isolated case; it highlights a broader issue within both organised and informal sports where the emphasis on toughness and bravado can lead to reckless behaviour. The glorification of head-on collisions as a measure of strength is outdated and harmful, particularly for youth and young adults who may feel pressured to participate in these dangerous activities to prove their worth or bravery.

The biomechanics involved in “run it straight” significantly increase the risk of serious injuries, including concussions, cervical spine injuries, and long-term neurological damage. Unlike controlled tackles within the framework of regulated gameplay, this practice lacks tactical purpose and amplifies the potential for high-impact forces that can result in catastrophic consequences. The repetitive head trauma associated with such collisions poses a well-documented risk for developing chronic traumatic encephalopathy (CTE), a degenerative brain disease increasingly recognised among athletes in contact sports.

The environment in which “run it straight” typically occurs – often informal, unsupervised and unregulated – further compounds the dangers. Most of these events happen outside of structured sporting contexts, frequently in casual settings where safety protocols are absent. This lack of regulation exposes participants to unnecessary risks and highlights the urgent need for action from the broader community, including parents, coaches, schools and sporting organisations.

To combat the rising trend of dangerous practices like “run it straight,” the Aotearoa New Zealand Trauma Committee of the Royal Australasian College of Surgeons calls upon all stakeholders to take immediate and concerted action:

Raise awareness: public health campaigns must educate individuals, especially young athletes and their families, about the dangers of participating in “run it straight” and similar activities. It is crucial that participants understand the potential for serious injuries and the long-term consequences of high-speed collisions.

 Support regulatory measures: we advocate for the establishment of clear guidelines and regulations governing informal and organised sporting events. This includes mandatory medical evaluations for participants, age restrictions and well-defined safety protocols to minimise risks.

Promote safer alternatives: charitable organisations and community groups should seek safer alternatives to fundraising events that do not involve high-risk physical competition. Engaging communities in activities that encourage fitness and camaraderie while prioritising safety is essential.

Encourage educational initiatives: educational institutions and sports organisations must incorporate discussions about the risks associated with “run it straight” into their curricula and training programs. By promoting a culture of safety and informed decision-making, we can help young athletes understand the importance of protecting their health.

Engage Healthcare Professionals: collaboration with healthcare professionals is vital to advocate for participant safety in all forms of sports, including informal activities. Their expertise can provide valuable insights into injury prevention and help inform public policy decisions.

“Run it straight” represents an alarming trend that requires immediate attention from all associated parties. We urge stakeholders to prioritise safety and foster a culture that values wellbeing over reckless displays of toughness.

About the Royal Australasian College of Surgeons (RACS)

RACS is the leading advocate for surgical standards, professionalism and surgical education in Australia and Aotearoa New Zealand. The College is a not-for-profit organisation that represents more than 7000 surgeons and 1300 surgical trainees and Specialist International Medical Graduates. RACS also supports healthcare and surgical education in the Asia-Pacific region and is a substantial funder of surgical research. There are nine surgical specialties in Australasia being: Cardiothoracic Surgery, General Surgery, Neurosurgery, Orthopaedic Surgery, Otolaryngology Head and Neck Surgery, Paediatric Surgery, Plastic and Reconstructive Surgery, Urology and Vascular Surgery. www.surgeons.org

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Banking – ASB cuts interest rates

Source: ASB

ASB has responded to the RBNZ's OCR announcement today, and is reducing interest rates across personal, business and rural lending by up to 0.25%.

ASB’s Executive General Manager Personal Banking Adam Boyd says, “As the easing interest rate cycle continues, we are maintaining support for our customers with lower lending rates.  Our variable loans are held by nearly 150,000 New Zealanders across personal, business and rural lending and these rates are the lowest they’ve been in more than two years.”

“We carefully consider the impact rate reductions have for all our customers. Today’s response to the OCR will bring relief to households and businesses while acknowledging the needs of our savers by not passing on the full 25 basis point cut to our savings products,” says Mr. Boyd.

ASB’s Housing Variable Rate will drop 20 basis points from 6.64% to 6.44%, while Orbit Variable will move from 6.74% to 6.54%. ASB’s Business Base Rate will drop 25 basis points from 11.77% to 11.52% while its Rural Base Rate will also drop by 0.25% from 9.01% to 8.76%.

In response to the OCR decrease, ASB is lowering some of its savings products, including Savings On Call and Headstart, by 20 basis points.

 

 

Home Loan* 

Current Rates 

New Rates 

Rate Change 

Housing Variable 

6.64% 

6.44%

– 0.20% 

Orbit Variable

6.74% 

6.54%

– 0.20% 

Back My Build 

4.19% 

3.99%

– 0.20% 

Note – Back My Build applications are no longer open to new customers. 

*These changes are effective from Wednesday 4thJune 2025 for new lending customers, and Friday 6thJune 2025 for existing lending customers.

 

Business Loan*

Current Rates 

New Rates 

Rate Change 

Business and Rural Floating Base Rate

 

4.94%

 

4.69%

 

– 0.25%

Business Base Rate

11.77%

11.52%

– 0.25%

Rural Base Rate

9.01%

8.76%

– 0.25%

Corporate Indicator Rate

6.18%

5.93%

– 0.25%

Special Purpose Base Rate

4.75%

4.50%

– 0.25%

*These changes are effective from Thursday 5th June 2025 for both new and existing customers.

 

Savings 

Band 

Current Rates 

New Rates 

Rate Change 

Savings On Call & ASB Cash Fund*

All Balances 

0.90% 

0.70% 

– 0.20% 

Savings Plus**

No Bonus 

0.70% 

0.50% 

– 0.20% 

Partial Bonus

0.80%

0.60%

– 0.20%

 

Full Bonus

2.90%

2.70%

– 0.20%

Headstart*

All Balances

2.90%

2.70%

– 0.20% 

*These changes are effective from Friday 6thJune 2025 for new and existing customers.

 

ASB has practical information for customers on the current interest rate environment available on its website as well support to help customers take control of their financial wellbeing and achieve their goals at its Financial Wellbeing Hub.

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Environment – Antarctic footprint clean-up challenges – How a remote Antarctic base clean-up protected one of Earth’s clearest lakes

Source: NIWA

The clean-up and site restoration of a New Zealand research station in Antarctica has provided valuable lessons on the challenges of contaminated sites, according to a study in the journal Polar Record, recently published by Cambridge University Press. 
The study found that while tonnes of contaminated materials were removed from the former Vanda field station, some residual contamination still remained. However, the remediation of the site in Antarctic’s Dry Valleys, which had served as a research base for a quarter of a century, didn’t affect measurably the water quality of the area’s largest and deepest lake or the biological communities that colonised the station footprint.
There was no detectable human-induced environmental change to the pristine Lake Vanda following the decommissioning of the research station, conclude researchers from NIWA, Waikato and Canterbury universities, and Antarctica New Zealand. The successful site rehabilitation shows that in a harsh environment, amongst delicate ecosystems, it is possible to ensure minimal impact from the restoration of a contaminated site, says NIWA aquatic scientist Dr Clive Howard-Williams.
“Located in Antarctica’s largest ice-free area, the arid Dry Valleys, Vanda Station is one of the few research stations that have been decommissioned under more stringent Antarctic environmental standards. Neither minimizing human impact nor climate change may have been top-of-mind when construction commenced in 1968. The eight-building complex was built on a ridge 200m away from Lake Vanda, which has a depth of 78m and some of the clearest water on earth, with a unique warm bottom layer that is more saline than the Dead Sea.”
The station facilities included a workshop, lab, generator room, huts for a dozen people, and a toilet above a removable drum, with a tractor hauling supplies and fuel from three helicopter landing areas to the station. The station was occupied every summer from 1968 (and even had staff year-round for three winters), hosting scientists, surveyors, maintenance staff, aircraft crews and VIPs. By the time it was closed in 1992, the site had hosted nearly 17,000 person-days – the equivalent of nearly 46 years. For a polar desert site, this is a substantial human footprint, says Antarctic inland water expert and veteran of more than three decades in the Dry Valleys, Waikato University’s Dr Ian Hawes.
It wasn’t the cumulative human impact that prompted the decision to close the research station, but the consequences of changes in climate. 
“While the station was located 15 m above the level of the large, ice-covered Lake Vanda, over time more glacial meltwater flowed from Antarctica’s longest waterway, the Onyx River, into the closed-basin lake. So by 1991, it was just 2.5m below the site. The threat of inundation meant removing the buildings and structures became critically important. In 1991, the Antarctic Treaty Parties had just agreed on the Protocol on Environmental Protection to the Antarctic Treaty, which provides for the comprehensive protection of the Antarctic environment. Its Annex III on waste management and disposal outlines the requirements for the management of wastes associated with present and future activities. Annex III called for programmes to clean up existing waste disposal sites and abandoned work sites so long as their removal didn’t result in a greater environmental impact than leaving the structure in its existing location. It was decided that decommissions of the station would be compliant with the Protocol even though New Zealand did not implement the Protocol into domestic legislation until 1994 as the Antarctica (Environmental Protection) Act.”
One concern was that compounds not normally found in the lake, such as organic phosphates, hydrocarbons, fats and soot, might contaminate Lake Vanda, says Professor Hawes. 
“A site survey found soil contamination around the station and other locations with hydrocarbons and domestic waste, including high metal concentrations, and contamination associated with detergents, food scraps, packaging and fuels, particularly in the area known as Greywater Gully. If contaminants or nutrients were released into the lake, it could affect the unique microbial mat communities that grow on the floor of Lake Vanda .So, a great deal of effort was put into removing the most contaminated soils and groundwater before the site was flooded. To assess the effectiveness of the rehabilitation, these microbial mats have been monitored, along with levels of trace metals and nutrients in the lake water at the station site.”
Rather than return the site to a pristine state, the plan focused on ensuring minimum impact on the lake ecosystem, ensuring that benefits outweighed the damage of remediation activities, says Dr Howard-Williams. 
“The plan included excavating and removing the soils and contaminated groundwater, including lead-based painted rocks and fuel-splattered dirt, and returning the terrain to a more natural, pre-human appearance. Around 400kg of contaminated groundwater from the gully along with 7,000kg of soil were shipped back to Scott Base for treatment and disposal.” 
Results showed that while initial research suggested contaminants from the gully could potentially impact the lake’s ecosystem, 20 years after decommissioning and the complete flooding of the site, there was no evidence of contaminants entering the lake water and the microbial communities colonising the station site were not significantly different from those developing in uncontaminated areas.
Dr Howard-Williams says while recent guidelines on cleaning up contaminated sites in Antarctica outlined in the Antarctic Clean Up Manual are useful, challenges remain particularly when not much is known about the consequences of contamination of Antarctic ecosystems. 
“It has been estimated that across Antarctica there may be around two million cubic metres of abandoned waste materials and hydro-carbon contaminated sediment. Effective remediation in Antarctica requires early planning, robust environmental baselines, and adaptive strategies grounded in research – recognising that full decontamination is rarely possible and must be balanced against the risk of further environmental harm. Despite the lack of comparable data, detailed clean-up guidelines, and contaminant baselines, Vanda’s clean up not only demonstrates New Zealand’s commitment to good environmental management, but it will also serve as an example to other countries involved in operations across Antarctica.”
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Health and Employment – Auckland theatre nurses begin one-month on-call strike

Source: New Zealand Nurses Organisation

More than 370 Te Toka Tumai Auckland Te Whatu Ora theatre nurses have begun a month-long on-call strike over short-staffing which has forced them to do involuntary overtime.
It involves members of the New Zealand Nurses Organisation Tōpūtanga Tapuhi Kaitiaki o Aotearoa (NZNO) working at Auckland City Hospital, Starship Hospital and Greenlane Hospital. Perioperative nurses are those working in preoperative, theatre and postoperative care.
NZNO delegate and Starship perioperative nurse Haim Ainsworth says the month-long on-call strike follows rolling two-hour strikes by Auckland theatre nurses on 1 May.
“There are chronic and ongoing staff shortages in Auckland’s hospitals which are forcing us to work longer than we should.
“We stay late when we are needed because we care about our patients. Te Whatu Ora needs to ensure our shifts are adequately staffed and we are paid properly for any overtime we have to do.”
Haim Ainsworth says Te Whatu Ora needs to stop taking advantage of the goodwill of perioperative nurses.
“We won’t walk out on our patients. But short staffing which leads to nurses having to frequently do overtime is a risk to patient safety. It prevents nurses having enough time to care properly for their patients and leads to burnout. It is not sustainable and it's time it stopped,” he says.
NOTES:
– The strike began Monday 26 May at 7am and will run until Monday 23 June.
– The “on-call strike” involves perioperative nurses refusing to participate in the on-call roster which results in them having to do overtime they are not properly compensated for.
– NZNO has worked with Te Whatu Ora to ensure Life Preserving Services are in place for the duration of the strike.
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Economy – The lowering of the OCR by 0.25% to 3.25% is welcome news – FMAANZ

Source: Finance and Mortgage Advisers Association of New Zealand

May 28, 2025 – Comments from Leigh Hodgetts, country manager, Finance and Mortgage Advisers Association of New Zealand (FAMNZ)

RBNZ interest rate decision – “The lowering of the OCR by 0.25% to 3.25% is welcome news to borrowers and potential home owners across New Zealand.

Finance and Mortgage Advisers Association of New Zealand members have reported a steady stream of first home buyers entering the market and the news today will bring more comfort to Kiwis as they take on new mortgages.

Banks have started to factor in the lowered rates before the announcement today.

Both 1-2 year and 3-5 year fixed term rates are looking attractive as an option to the regular short term view.

Floating rates are still popular as borrowers gamble to see if we have reached the lowest rates for 2025.

This move today may encourage Kiwis to review their loans. As always we recommend you speak with a mortgage adviser to work out the best structure for your own mortgage that will reflect your personal circumstances.”

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Sport – Five New Zealand and Ellerslie AFC Forge New Partnership to Champion Women’s Football

Source: Five New Zealand and Ellerslie AFC

Auckland, New Zealand – 28 May 2025 – Five New Zealand Limited (https://www.fivenz.com), a leading strategy and transformation consultancy dedicated to building high performance organisations, is proud to announce a new three-year sponsorship partnership with Ellerslie AFC’s Women’s NRFL First Team.
This partnership reflects a powerful alignment of shared values between Five and Ellerslie – both organisations are deeply committed to excellence, inclusiveness, community, and the advancement of women in sport and beyond. Five’s core values – create what others can’t, bring a point of view, do good in the world, and strive for excellence, always – naturally complement Ellerslie’s mission to foster growth, integrity and inclusiveness across all levels of football.
Nick Mackeson-Smith, Founder and Director at Five New Zealand, says:
“At Five, we help organisations unlock their highest potential, and we see that same drive for excellence, progress and inclusion in Ellerslie AFC. We are thrilled to support a club that is not only developing incredible athletes but is also playing a leadership role in promoting the visibility, participation and progression of women in football. This sponsorship is about much more than a logo on a shirt – it’s about actively contributing to a movement that creates space for women to thrive on and off the pitch.”
The sponsorship agreement will see Five’s branding featured on the front of Ellerslie’s Women’s NRFL First Team playing shirts, prominent visibility across digital platforms, and collaboration on joint initiatives that elevate the team’s profile and strengthen connections with the local community.
Ellerslie AFC has reaffirmed its commitment to supporting the Northern Region Football Gender Equity Action Plan and Charter, ensuring a welcoming and empowering environment for all women who wish to engage with the game.
Ellerslie AFC Chairman Tim Adams commented:
“We are incredibly excited to welcome Five New Zealand as a key partner in our journey. Their belief in high performance and their commitment to positive impact mirror our own. Together, we aim to raise the profile of women’s football and provide opportunities for players to develop, compete and lead, on the field and in the wider community.”
As the partnership launches, both organisations are eager to engage supporters, families, and the wider football community in celebrating women’s sport and amplifying the importance of inclusion and representation at all levels.

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Economy – OCR lowered to 3.25% – Reserve Bank of NZ

Source: Reserve Bank of New Zealand

28 May 2025 – The Monetary Policy Committee today voted to lower the OCR by 25 basis points to 3.25 percent.

Annual consumers price index inflation increased to 2.5 percent in the first quarter of 2025. Inflation expectations across firms and households have also risen. However, core inflation is declining and there is spare productive capacity in the economy. These conditions are consistent with inflation returning to the mid-point of the 1 to 3 percent target band over the medium term.

The New Zealand economy is recovering after a period of contraction. High commodity prices and lower interest rates are supporting overall economic activity.

Recent developments in the international economy are expected to reduce global economic growth. Both tariffs and increased policy uncertainty overseas are expected to moderate New Zealand's economic recovery and reduce medium-term inflation pressures. However, there remains considerable uncertainty around these judgements.

Inflation is within the target band, and the Committee is well placed to respond to domestic and international developments to maintain price stability over the medium term.

Read the full statement and Record of meeting below:

Summary Record of Meeting – May 2025

Annual consumers price index (CPI) inflation remains within the Monetary Policy Committee’s 1 to 3 percent target band. While measures of inflation expectations have increased, core inflation and spare productive capacity in the economy are consistent with inflation returning to the target mid-point over the medium term. Elevated export prices and recent reductions in the OCR are expected to support a modest pace of growth in the New Zealand economy, even as increased global tariffs are expected to slow global economic growth.

Higher global tariffs and policy uncertainty are expected to lower global growth

The Committee noted that projections for global economic activity have weakened since the February Statement, reflecting the shift towards protectionist policies in some major economies.  There have been downward revisions to economic growth projections for China and the US, reflecting the scale of tariff increases between these two countries.

The Committee noted that, in addition to the direct effect of higher tariffs, increased policy uncertainty in the international economy is likely to weigh on global investment and consumption. As well as uncertainty about tariff retaliation, it was unclear how countries would respond with fiscal and monetary policies. For example, it is possible that China could respond to weaker economic activity with a sizeable fiscal stimulus. US fiscal policy could place strains on the sustainability of its public debt. More generally, the uncertain trajectory of geoeconomic fragmentation and the decline in the quality of macroeconomic institutional arrangements were likely to result in precautionary behaviour by firms and households. In aggregate, economic growth in New Zealand’s main trading partners is expected to remain below potential over 2025.

Headline inflation within New Zealand’s trading partner economies has fallen over the past year. Projections for inflation for most of our trading partners have been revised down in recent quarters. The main exception is the US, where higher tariffs are expected to increase inflationary pressure.

The New Zealand economy is starting to recover, after contracting over the middle of 2024

The Committee noted that spare productive capacity remains in the New Zealand economy. This is projected to dissipate over the medium term as the economy recovers. Elevated export commodity prices and lower interest rates are supporting overall economic activity in the New Zealand economy. The Committee noted that the full economic effects of cuts in the OCR since August 2024 are yet to be fully realised.

The Committee discussed conditions in New Zealand’s labour market. Nominal wage growth is slowing, while firms report that it is easier to find workers. Employment growth is currently modest but expected to increase from the second half of the year in line with the broader economic recovery.

The announced increase in US tariffs will lower global demand for New Zealand’s exports, particularly from Asia, constraining domestic growth. Heightened global policy uncertainty is expected to weigh on business investment and consumption in New Zealand.

On balance, the Committee expects the increase in global tariffs to result in less inflationary pressure in the New Zealand economy. However, as discussed below, there is significant uncertainty about this assessment, depending on whether the impact of tariffs proves to be predominantly demand- or supply-side in nature. The domestic monetary policy response will focus on the medium-term implications for inflation.

Domestic fiscal policy is assessed as being broadly neutral from a medium-term inflation perspective, relative to February Statement projections. The change announced in Budget 2025 enabling businesses to bring forward depreciation allowances is assumed to increase investment activity. However, the inflationary consequences of this policy are assumed to be offset by an announced reduction in government spending.

Annual CPI inflation is expected to remain in the target band, and converge to the mid-point

The Committee discussed domestic inflationary pressure. New Zealand’s annual CPI inflation increased to 2.5 percent in the March 2025 quarter, largely in line with previous projections. Most annual core inflation measures continued to decline in the March 2025 quarter, and all are now within the target band for headline CPI inflation.  

Annual CPI inflation is projected to increase to 2.7 percent in Q3 2025, then return to near the 2 percent target midpoint from 2026. The near-term increase in headline inflation includes higher food and electricity price inflation.

Non-tradables inflation is expected to continue to decline, consistent with spare productive capacity in the economy. Annual tradables inflation is projected to remain around 1 percent over the medium term, reflecting below average global growth and falling inflation within our trading partners.

The financial system remains stable

The Committee noted that most wholesale interest rates have fallen since the February Statement, resulting in lower mortgage and term deposit rates. The average interest rate on the stock of mortgages is expected to continue to decline in coming quarters as more mortgage holders refix at lower fixed-term interest rates. Close to half the stock of mortgages is due to reprice during the June and September 2025 quarters.

The Committee was briefed on financial system stability. While non-performing loans in the housing and small business sectors have increased in line with the past contraction in the economy, the banking system remains well capitalised and in a strong financial position to support customers. The Committee agreed that there is currently no material trade-off between meeting inflation objectives and maintaining financial system stability.

The Committee was briefed on the status of the Large Scale Asset Purchase programme. The Committee noted there has been increased volatility in domestic wholesale interest rates, reflecting increased global policy uncertainty. Despite this volatility, wholesale interest rate markets continue to function, without impeding monetary policy transmission.

Risks around the economic outlook are heightened

The Committee discussed several key risks around the central projection. Measures of business and household inflation expectations have increased. The Committee discussed whether this increase reflected factors like higher food prices and current reporting on the inflationary effect of tariffs in the US. The projections assume that medium-term inflation expectations remain consistent with the target mid-point. Some Committee members emphasised the risk that these increases reflect a more generalised and persistent increase in inflation expectations.

The Committee discussed the medium-term outlook for import prices. Members noted that a less productive global economy, against a background of deglobalisation, presents an upside risk to the current import price projection.

The Committee noted downside risks to the outlook for export prices. This reflects a weaker global growth outlook and the potential for a quicker international supply response to high prices from global meat and dairy producers.

The Committee noted the risk that large economic policy shifts in overseas economies could lead to additional volatility in financial markets. For example, concerns about US debt sustainability could lead to increased bond yields or declines in global asset prices.

There are alternative scenarios for the domestic outlook

In addition to the uncertain scale and duration of tariff policies, it is unclear how these will transmit to the New Zealand economy. Some members emphasised that the costs of trade could increase more than currently assumed, as global supply chains adapt to trade barriers and geoeconomic fragmentation. This could result in greater domestic medium-term inflationary pressure than in the central projection. Other members emphasised that policy uncertainty could lower global investment, and trade diversion could lower import prices by more than currently assumed. This could, instead, lower medium-term inflationary pressure relative to the central projection.

Two scenarios in the May Statement highlight how the realisation of these risks could affect the outlook for the domestic economy. These scenarios represent just two of many paths the economy may take as higher tariffs and uncertainty transmit through the system. They are intended to broadly highlight the trade-offs and considerations facing the Committee should these risks eventuate.

The Committee noted that, in practice, a broad range of factors contribute to its monetary policy decisions. Its response to any of these risks would depend on economic conditions at the time, the outlook for inflationary pressure, and its secondary objectives of avoiding unnecessary instability in the economy and having regard to financial system stability.

The Committee voted to reduce the OCR to 3.25 percent

The Committee agreed on the projected central path for the OCR.

The Committee discussed the options of keeping the OCR on hold at 3.50 percent or reducing it to 3.25 percent. The case for lowering the OCR to 3.25 percent highlighted that CPI inflation is in the target range and there is significant spare capacity in the economy. Measures of core inflation and wage inflation have continued to decline. In addition, there is a weaker outlook for domestic activity and inflationary pressure relative to the February Statement, because of international developments. Some members also emphasised that non-tradable inflation was currently being boosted by administered prices. Given these factors, a 25 basis point decline in the OCR was seen as consistent with medium-term price stability.

In considering the merits of holding the OCR unchanged at 3.50 percent for this meeting, some members noted that this would allow the Committee to better assess whether increased economic policy uncertainty was having a noticeable impact on household and firm behaviour. An unchanged OCR could also further consolidate inflation expectations around the target mid-point, and guard against the risk of higher-than expected inflation from the supply-side effects of increased tariffs.  

On Wednesday 28 May, the Committee took the decision to vote on the two options. By a majority of 5 votes to 1, the Committee agreed to decrease the OCR by 25 basis points from 3.50 percent to 3.25 percent.

Inflation is within the target band, and the Committee is well placed to respond to both domestic and international developments to maintain price stability over the medium term.

Attendees

Members of MPC: Christian Hawkesby (Chair), Bob Buckle, Carl Hansen, Karen Silk, Paul Conway, Prasanna Gai
Treasury Observer: Dominick Stephens
MPC Secretary: Adam Richardson.