Keith McLaughlin: Centrix Managing Director on the number of arrears falling slightly in June

The number of people behind on payments in June fell slightly from May, but is largely unchanged compared to the same time last year. 

Latest Centrix data shows there were 478 thousand people in arrears, representing more than 12% of the credit-active population. 

Managing Director Keith McLaughlin says they'd normally expect the figure to fall further over winter - but people are being impacted by things outside their control. 

He says the costs of insurance, rates and power are leaving their mark, and that's why arrears are a bit sticky at the moment. 

He told Mike Hosking there will be an ongoing improvement in household budgets as interest rates continue to fall. 

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Episode Transcript

Speaker 1 (00:00):
Money wise, what have we got data well from June
when it comes to paying four bills, good news, the
number of people behind on payments done by seven to
four hundred and seventy eight thousand. Mortgage inquiries are up
sixteen point seven percent, driven mainly by that refinancing we
told you about earlier in the week. We got company
liquidation still a problem though twenty six percent up year
on year. Keith McLaughlin is of course, Centrics Managing director

(00:22):
and is back with us. Keith, morning to.

Speaker 2 (00:23):
You, Good morning.

Speaker 1 (00:25):
So summarize this for me. Are we on the end?
Are we stuck in a rut? Are we down the drain?
What does this tell us?

Speaker 2 (00:32):
Look, I think we're still improving. I think the amount
of the areas are still falling, but not as quickly
in jutant as who would have liked. I think there's
a little bit more pressure on households many around the
areas of things like rates and insurance and power and
things like that which approach put a bit of on
the household budget. But look, generally speaking, looking across all

(00:53):
the numbers, there is definitely a continuing trend of improvement.

Speaker 1 (00:57):
And when we look historically speaking, four hundred and seventy
eight thousand. Is that a lot of people to owe
money or have problems with payments?

Speaker 2 (01:05):
Certainly going back five or ten years, Yes, it is.
We were finding going back a stapy that areas we're
trending down, certainly on the back of better information a
quality of credit decisions, so areas worth falling post COVID,
they climbed up again and we're having trouble just giving
them back down to that downward trend that we have
tried to come.

Speaker 1 (01:25):
Now you've isolated the cost plus accounting problem, so the
interest rates are flowing through the count and the interest
rates that we're feeling better until the bill arrives from
the insurance company from the council, and that's the issue,
isn't it.

Speaker 2 (01:35):
That's correct. I mean there's going to be an ongoing
improvement in household budget as interest rates continue to fall.
But you know about seventeen percent of mortgages are going
on to a repricing over the next twelve months, So
there will be an improvement in the household budget, provided
that's not taken up by the non discretionary spending.

Speaker 1 (01:54):
That mortgage inquiry number up sixteen point seven percent, can
you break it down to the point, are these new
peace people borrowing new money to buy new houses or
is it just a lot of refinancing sent the money's
going around around.

Speaker 2 (02:05):
Yeah, I think there's a combination of both of I
certainly think the waiting of that is the money going
around and around with the refinings through a different organization.

Speaker 1 (02:12):
Okay, so two rate cuts to come allegedly, is that
going to make a material difference to the economy of
people going to feel better? Where are you at with
this whole twenty five is going to slowly come? Right? Vibe?

Speaker 2 (02:24):
Well, I think what we relying on is improving the
consumer confidence so that those who do have money in
the bank are more haby to go out and spend it,
and that those that are struggling do have more leeway
and their household budget. So any contribution to their household
budget certainly will be a positive trend.

Speaker 1 (02:39):
Always a pleasure, Keith, you have an excellent week nd
Keith McLaughlin, Centric Managing Director. I read a piece yesterday.
You never know about whether these people are promoting stuff.
It's a group called finn Cap Fincappo organized the financial
mentors in the country they're telling us that there are
large numbers of what they call really really, really wealthy
people who are still having trouble with money. Of those

(03:00):
four hundred and seventy eight thousand people who have got
a rears on the bills, how many of them are
really struggling because they don't have enough money, and how
many are just a bit useless with the dough. For
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