Research

This paper examines the structural barriers preventing New Zealand’s small and medium-sized enterprises (SMEs) from accessing affordable debt. Despite representing 99% of all businesses and a third of national GDP, SMEs face far tighter lending conditions than residential borrowers. Through quantitative scenarios, the paper demonstrates how short loan terms, high interest rates, and restrictive loan-to-value ratios severely constrain cash flows, leading many profitable firms toward financial stress. It also highlights how regulatory incentives—particularly the Reserve Bank’s high capital adequacy ratio—encourage banks to favor residential mortgages over business loans. The analysis identifies three key issues: limited understanding of cash-flow dynamics, policy-driven risk aversion among banks, and a feedback loop reinforcing SME credit scarcity. Recommended measures include recalibrating risk weights, strengthening bank verification processes, and launching nationwide financial education initiatives to help SMEs manage debt sustainably and unlock growth potential.

This article examines how government incentives shaped France’s long-standing reliance on diesel, creating both economic advantages and unintended social costs. After WWII, diesel tax cuts supported recovery by lowering costs for farmers, haulers, and artisans. In the 1980s, facing Japanese competition and a surplus of unused diesel, the government doubled down, aligning fiscal policy with manufacturers specialized in diesel engines. The result: by 2018, 61% of French cars ran on diesel — one of the highest rates in Europe. Yet diesel’s hidden costs soon surfaced: increased fine particulate emissions, soaring public health risks, and an estimated 10,000 premature deaths per year. When the state sought to reverse incentives by equalizing diesel and petrol taxation, it triggered widespread protests and the Yellow Vest movement. This paper analyzes the role of incentives in this crisis, evaluates alternative strategies, and explores policy options for a sustainable, health-conscious transport future.