Latest / Early Edition with Ryan Bridge / Catherine Beard: Business NZ Advocacy Director on the Government's loan scheme to help businesses transition from natural gas

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Catherine Beard: Business NZ Advocacy Director on the Government's loan scheme to help businesses transition from natural gas · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: Government stepping into guarante all bank loans to get the
• 0:02
  Speaker 1: profitable businesses off gas.
• 0:04
  Speaker 2: Spaghetti fund was hundreds of millions of dollars handed out
• 0:08
  Speaker 2: willy nilly at the behest of a minister. This is
• 0:12
  Speaker 2: commercial banks determining who is credit worthy and making loans
• 0:17
  Speaker 2: so that firms can invest their own money in the transition.
• 0:21
  Speaker 1: So this is how it works. Government underwrites eighty percent
• 0:23
  Speaker 1: of the loan banks can offer cheaper rates individual loans
• 0:27
  Speaker 1: being capped at fifty million. Taxpayers exposure is max fifty
• 0:30
  Speaker 1: million for bad debts. Catherine Baird Business and Z Catherine,
• 0:33
  Speaker 1: good morning, Good morning. What rates were the banks offering
• 0:37
  Speaker 1: for this kind of work to be done then, versus
• 0:40
  Speaker 1: what do we think that a business will be charged
• 0:43
  Speaker 1: after this intervention?
• 0:44
  Speaker 3: Do you know, Oh gosh, that's a tough question. It's
• 0:48
  Speaker 3: probably going to depend on the bank. I'd say there'd
• 0:50
  Speaker 3: be more than one bank involved in this. But the
• 0:53
  Speaker 3: aim should be for it to be considerably more affordable
• 0:58
  Speaker 3: than it would have been otherwise. And we think this
• 1:02
  Speaker 3: is very necessary because there's probably a whole lot of
• 1:05
  Speaker 3: businesses that could actually get a lower energy cost if
• 1:09
  Speaker 3: they went to something like an electric heat pump. But
• 1:12
  Speaker 3: the barrier is the capital expenditure, and so we're very
• 1:17
  Speaker 3: much in favor of helping business to get over that
• 1:20
  Speaker 3: that hump total. But my question, they've got to pay
• 1:24
  Speaker 3: it back.
• 1:24
  Speaker 1: They've got a pay back. But my question in Catherine
• 1:26
  Speaker 1: is we have a solid we're told solid and sound
• 1:29
  Speaker 1: banking system in New Zealand. If we have a profitable business,
• 1:32
  Speaker 1: a profitable business who's got a long term relationship with
• 1:35
  Speaker 1: the bank, and they go to the bank and they say,
• 1:38
  Speaker 1: I need some money to lower the capital expenditure, to
• 1:41
  Speaker 1: lower the cost of my inputs and secure my business.
• 1:45
  Speaker 1: Why would a bank say no, or why would the
• 1:48
  Speaker 1: cost be so prohibitive it couldn't be done.
• 1:52
  Speaker 3: Look, I think there's an element of uncertainty there for
• 1:55
  Speaker 3: businesses in terms of does the business case stack up
• 1:58
  Speaker 3: to do it under normal learn loan circumstances? And also
• 2:04
  Speaker 3: what's the future look like? So you know, what are
• 2:06
  Speaker 3: my alternatives? And part of the package here is some
• 2:10
  Speaker 3: more funding for ECA to lean into businesses, help them
• 2:13
  Speaker 3: with the business case, help them look at the long
• 2:16
  Speaker 3: term future viability of their business. So are there cheaper
• 2:20
  Speaker 3: fuel options out there? What would they need to do
• 2:23
  Speaker 3: to actually, you know, move through that. I think for businesses,
• 2:28
  Speaker 3: there's been short term contracts, has been concerned about the
• 2:32
  Speaker 3: availability of gas. The price has obviously gone up, and
• 2:37
  Speaker 3: you know we've already seen quite big businesses closed down
• 2:40
  Speaker 3: and energy has been part of the problem.
• 2:43
  Speaker 1: Absolutely, Catherine. No one arguing with that, Catherine Beard, Business
• 2:46
  Speaker 1: and Z. Nice to have you on the show this morning.
• 2:48
  Speaker 1: For more from earlier edition with Ryan Bridge, listen live
• 2:52
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• 2:55
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