1. Level: 3 Credits: 3 Version: 1
Personal Financial Management Unit Standard
© Young Enterprise Trust 2015
28104 – Analyse the impact(s) of external factors on personal finances.
Level: 3 Credits: Version: 1
Part B

2. National
& Global
Events
7. Political Change

3. 7. Political Change
Political risk is the risk of financial, market or personnel losses because of political decisions, disruptions and changes. For example, political decisions by governmental leaders about the following can affect business conditions and profitability as well as personal finances:
taxes
housing
currency valuation
health system
pensions and social benefits
Investment
wage levels
benefits
education
environmental regulations
labour laws
security
development priorities

4. 7. Political Change
Similarly, non-economic factors can affect individuals and business.  For example: political disruptions such as:
terrorism,
riots,
coups,
civil wars,
international wars, and
even political elections that may change the ruling government,
can dramatically affect personal finances and a businesses’ ability to operate.

5. 7. Political Change
Impact of political change abroad can have an impact on the personal finances of New Zealanders.  Such as:
Ukrainian War leading to a reduction in NZ exports by Russia
the ongoing Eurozone negotiations and depressed demand
debt ceiling debate in the United States affecting the US$
Arab Spring protests throughout North Africa and the Middle East took form rapidly and with little advance warning and continue today. 
Threats by the Iranian government to close the Straits of Hormuz likely had a direct effect on oil prices. 

6. 7. Political Change
Some examples of the effect of these changes on personal finances: 1. Tax Rate – a new government could introduce a range of new tax rates. Such as an increase in GST or a decrease in personal tax rates. 2. Changes in the public health system may lead to a reduction in services and the increased need for personal health insurance 3. The retirement age may rise from 65 to 67 years.

7. 7. Political Change Class discussion:
Class Activity
Class discussion:
Discuss and make a list of all of the ways that students in your class could be affected by political change over the next 5 years.
Discuss the financial impact of these changes.

8. 8. Environmental Issues
Global
Event

9. 8. Environmental Issues
There are a range of environmental issues that affect New Zealand and have an impact on individual personal finances.
These range from the cost to clean up contaminated soil to the inability to collect shell fish due to water contamination.
They affect people to varying degrees depending on their lifestyle and where they live.
30 examples follow:

10. 8. Environmental Issues
Contamination of Drinking Water: Contamination of fresh water used for household needs, including pollution of oceans, rivers, lakes, and reservoirs.
Water Pollution: Water pollution and associated environmental issues. Related issues include acid rain, ocean dumping, urban runoff, oil spills, ocean acidification and wastewater.

11. 8. Environmental Issues
Soil Contamination: Soil erosion, soil conservation, soil salination and soil contamination by waste, pesticides and lead
Wildlife Conservation: such as endangered species, animal and plant extinction, coral bleaching, introduction of invasive species, poaching and loss of natural animal habitats, resulting in relocation and a break in the food chain.

12. 8. Environmental Issues
Air pollution: indoor and outdoor air quality, carbon emissions, tropospheric ozone, particulate matter, sulphur oxides, volatile organic compounds, radon, refrigerants and methane emissions.
Biological pollutants, including bacteria, viruses, moulds, mildew, dander, dust, mites, pollen, ventilation and infection.

13. 8. Environmental Issues
Carbon footprint and the responsibility of individuals to reduce their effect on the environment, including the use of renewable energy sources (solar power, geothermal heat pumps), recycling and sustainable living.
Climate change and issues related to global warming, such as the greenhouse effect, global dimming and the gradual rise in sea level.
Consumerism and over-consumption and their effect on the planet.

14. 8. Environmental Issues Dams and the impact of dams on the environment
Ecosystem destruction and associated environmental concerns, such as aquaculture, estuaries, shellfish protection, landscaping, wetlands and ecological restoration.
Energy conservation issues, including renewable energy for home and business, energy efficiency and fossil fuel depletion.

15. 8. Environmental Issues
Fishing and its effect on marine ecosystems, blast fishing, cyanide fishing, bottom trawling, whaling and over-fishing.
Food safety concerns and the effects of hormones, antibiotics, preservatives, toxic contamination and lack of quality control on health.
Genetic engineering, including concerns about genetically modified foods and genetic pollution.

16. 8. Environmental Issues
Intensive farming, irrigation, overgrazing, monoculture, methane emissions and the damaging environmental effects of deforestation for farming and cattle.
Land degradation and related problems, such as desertification and soil and land pollution.
Land use, urban sprawl, lack of free space and habitat destruction and fragmentation.

17. 8. Environmental Issues
Logging, deforestation, clear-cutting, destruction of wildlife habitats and greenhouse gas emissions that contribute to global warming.
Mining and its role in global warming, acid mine drainage and soil and air pollution resulting from toxic emissions and heavy metals.
Nanotechnology and the future effects of nanopollution and nanotoxicology.

18. 8. Environmental Issues
Natural disasters and their impact on all aspects of the environment.
Nuclear issues, including the effects of nuclear fallout, nuclear meltdown, radioactive waste and the population's reliance on nuclear power.
Other pollution issues, such as light pollution and noise pollution and their effects on human health and behaviour.
Overpopulation concerns, such as continued building and burial.

19. 8. Environmental Issues
Ozone depletion and damage to the Earth's ozone layer caused by CFC.
Resource depletion, the need for newer, cleaner energy sources, and exploitation of natural resources.
Sustainable communities and issues such as reducing reliance on fossil fuels, supporting local farmers and merchants, encouraging green practices and building, consideration of native wildlife, and adoption of mass transportation and cleaner methods of commuting.

20. 8. Environmental Issues
Toxins, including chlorofluorocarbons, heavy metals, pesticides, herbicides, toxic waste, PCB, DDT, bioaccumulation, endocrine disruptors, asbestos and poorly implemented hazardous waste management.
Waste and associated environmental issues, such as litter, landfills, recycling, incineration, marine debris, E-waste, and contamination of water and soil caused by improper disposal and leaching toxins.

21. 8. Environmental Issues Raetihi Water supply contamination:
Class Activity
Class discussion:
Discuss the financial impact for the residents of Raetihi of the water supply contamination

22. 8. Environmental Issues Christchurch soil contamination
Class Activity
Class discussion:
Discuss the financial impact of soil contamination in Christchurch and other NZ cities

23. 8. Environmental Issues Air pollution in Auckland Class discussion:
Class Activity
Class discussion:
Discuss the financial impact of air pollution in Auckland and other NZ cities

24. Local & National
Events
9. Legislation

25. 9. Legislation Legislation is the process of making or enacting laws.
Legislation (or “statutory law”) is law which has been produce by a governing body in order to regulate, to authorise, to sanction, to grant, to declare or to restrict.

26. 9. Legislation
Some examples of changes to legislation that will impact on personal finances:
GST
Income tax
Sales Tax
Kiwisaver
Minimum wage
Rates
Water/sewerage
RMA

27. 9. Legislation GST (Goods and Service Tax)
The rate of goods and service tax (GST) rose from 12.5 percent to 15.0 percent on 1 October 2010.
Economists call GST a regressive tax. That is, as a percentage of income, the GST will impact lower income individuals much more than high-income individuals.
Negative impact on those on fixed incomes

28. 9. Legislation GST (Goods and Service Tax)
Everybody pays more for all of their goods and services.
An increase in GST has a negative impact on those on fixed incomes as they are paying more but not able to earn more.

29. 9. Legislation GST (Goods and Service Tax)
Potential impact of GST increase - video
Nadine Chalmers-Ross gives some insight at the potential impact of the expected increase in GST from 12.5 per cent to 15 per cent.

30. 9. Legislation Kiwisaver - What is KiwiSaver?
KiwiSaver is a voluntary savings initiative designed to encourage New Zealanders to save for retirement.
What are the benefits?
$1,000 kick-start payment.  
A member tax credit of up to a maximum of $521 per year  
3% compulsory employer contribution.  
First home deposit subsidy of up to $5,000.

31. 9. Legislation
Kiwisaver – possible changes that could have an impact on personal finances:
Contribution rate by employees
Contribution rate by employers
Government contribution
Exemption, for first home etc
Changes in the age Kiwisaver can be used for retirement

32. 9. Legislation Minimum Wage
For employees between 16 and 17 years old or for employees in training, the minimum wage is $11 per hour. The training wage applies to people doing recognised industry training involving at least 60 credits a year.
For employees 18 and older, the minimum wage is $14.25 per hour before tax.

33. Class Activity
9. Legislation
Minimum Wage:
Class discussion:
Discuss what you think should be the minimum wage and why?
How would an increase in the minimum wage affect your classes personal finances?

34. Class Activity
9. Legislation
Discuss the personal financial impact of changes to the following legislation:
Income tax
Sales Tax
Minimum wage
Rates
Water/sewerage
RMA

35. Local, National
& Global
Events
10. Natural Disasters

36. 10. Natural Disasters
In today's increasingly interconnected economy, the economic fallout from a natural disaster is rarely relegated solely to the geographic area that it hits.
Ultimately, it's difficult to imagine the extent of the economic repercussions a major natural disaster can bring about.
In fact, even natural disasters that take place thousands of kilometres away can affect others’ personal finances
Although the majority of disasters impact the devastated area's economy adversely, they can have an impact on a larger scale.

37. 10. Natural Disasters Infrastructure Destruction
Besides loss of life, infrastructure destruction is by far the most obvious type of damage that comes to mind when we think about natural disasters.
But the economic consequences are rarely considered beyond what the cost will be to rebuild.
That's a serious problem for the victims of natural disasters because it's the economic fallout that leaves some of the longest-lasting scars.

38. 10. Natural Disasters The Unforeseen Problem
One of the biggest problems for areas affected by natural disasters is business disruption.
With road, communication infrastructure, and building damage common after sizable disasters, it's not uncommon for local businesses to be shut down for some time after the aftershocks settle.

39. 10. Natural Disasters
Unemployment can increase if many businesses are destroyed.
This can lead to a severe cutback in consumer spending (at the few places that were open for business).
Tax revenues are needed to aid in the rebuilding efforts.

40. 10. Natural Disasters Individual Impact
At the individual level, the impact can often be felt physically, mentally and emotionally.
Natural disasters cause destruction of property, loss of financial resources, and personal injury or illness.
The loss of resources, security and access to housing and shelter can lead to massive population migrations.

41. 10. Natural Disasters
Although it can be very easy to lose focus on anything beyond trying to get home, car and other property back in order, it’s important that disaster victims remember to remain on top of their bills.
Unfortunately, the mortgage, credit card bills and utilities are all still due, despite any setbacks.
If victims let any of their bills get out of their control, they will often have to face late fees and increased interest rates.

42. 10. Natural Disasters Summary - Impact on personal finances:
Loss of home and personal assets
Costs of finding and renting a new home
Loss of job if workplace closes
Bills still needing paying, such as insurance and rates even if house is unliveable
Increased price of essential goods due to reduced supply, such as fruit and vegetables

43. 10. Natural Disasters Summary - Impact on personal finances:
Possibility of needing to move to a new area, if damage great or workplace moves
Possibility of tax increase due to cost of rebuild
Shortage of some goods if they’re being redirected to disaster area
Possibility of rise in petrol prices if disaster strikes in area supplying large amounts of oil / petrol

44. 10. Natural Disasters
Class Activity
Watch the following videos and then, as a class, discuss the consequences for personal finance for the people experiencing these natural disasters.

45. 10. Natural Disasters 1. Tongariro explosion November 21, 2012
Class Activity
10. Natural Disasters
1. Tongariro explosion November 21, 2012

46. Class Activity
10. Natural Disasters
2. Japanese Tsunami 2011

47. Class Activity
10. Natural Disasters
3. Christchurch Earthquake

48. Class Activity
10. Natural Disasters
4. Flooding

49. Class Activity
10. Natural Disasters
5. Snow

50. Class Activity
10. Natural Disasters
6. Iceland Volcanic Eruptions

51. 11. Man-made disasters or events
Local, National
& Global
Events
11. Man-made disasters or events

52. 11. Man-made disasters or events
A disastrous event caused directly and principally by one or more identifiable deliberate or negligent human actions.

53. 11. Man-made disasters or events
25 worst man-made disasters

54. 11. Man-made disasters or events
Rena Disaster in New Zealand
On 5 October 2011 the Mediterranean Shipping Company-chartered, Liberian-flagged container ship Rena astonished local mariners by grounding on the clearly marked Astrolabe Reef in the Bay of Plenty, while approaching Tauranga Harbour.
The Rena is the largest ship ever lost in New Zealand waters.
Environment Minister Nick Smith is describing the Rena stranding as New Zealand’s ‘worst maritime environmental disaster’.

55. 11. Man-made disasters or events
Rena Disaster in New Zealand

56. 11. Man-made disasters or events
Rena Oil Spill - cleanup

57. 11. Man-made disasters or events
Rena Disaster in New Zealand
Class Activity
Discuss how people in New Zealand and abroad will have been affected by the Rena disaster.
Discuss the impact this disaster will have had on their personal finances.

58. 11. Man-made disasters or events
2010 Pike River mine accident Two explosions on 19 and 24 November resulted in the deaths of 29 coalminers at the Pike River mine on the West Coast. It was this country's worst mining disaster since 1914.

59. 11. Man-made disasters or events
Pike River Disaster in New Zealand
Class Activity
Discuss how people in New Zealand will have been affected by the Pike River disaster.
Discuss the impact this disaster will have had on their personal finances.

60. 11. Man-made disasters or events
1995 Cave Creek disaster On 28 April a Department of Conservation viewing platform built over a cliff at Cave Creek in the West Coast’s Paparoa National Park collapsed, killing 14 people.

61. 11. Man-made disasters or events
Cave Creek Disaster in New Zealand
Class Activity
Discuss how people in New Zealand will have been affected by the Cave Creek disaster.
Discuss the impact this disaster will have had on their personal finances.

62. 11. Man-made disasters or events
Gulf of Mexico Oil Spill

63. 11. Man-made disasters or events
Gulf of Mexico Oil Spill
In the BP Oil Spill, more than 200 million gallons of crude oil was pumped into the Gulf of Mexico for a total of 87 days, making it the biggest oil spill in U.S. history.
16,000 total miles of coastline have been affected, including the coasts of Texas, Louisiana, Mississippi, Alabama, and Florida.
The initial oil rig explosion killed 11 people and injured 17 others.

64. 11. Man-made disasters or events
Gulf of Mexico Oil Spill
Over 8,000 animals (birds, turtles, mammals) were reported dead, just 6 months after the spill, including many that were already on the endangered species list.
BP is responsible for close to $40 billion in fines, clean-up costs and settlements as a result of the oil spill in 2010, with an additional $16 billion due to the Clean Water Act.

65. 11. Man-made disasters or events
Gulf of Mexico Oil Spill
Class Activity
Discuss how people living near the Gulf of Mexico will have been affected by the disaster.
Discuss the impact this disaster may have had on New Zealanders.

66. 11. Man-made disasters or events
Interesting video:
Digging into the Great Pacific Garbage Patch:

67. 11. Man-made disasters or events
Digging into the Great Pacific Garbage Patch
Class Activity
Discuss how the Great Pacific Garbage Patch will have financial implications for all of us.

69. 12. Technological Development
National
Event

70. 12. Technological Development
Technological development is the process of research, creation and improvement of technology. Technology is the use of knowledge tools and machines to solve a problem.

71. 12. Technological Development
Some examples of recent technological developments:
Internet and mobile technology
Banking
Medicine and health care
Virtual education (e-learning)
3D printing
Robots
Driverless cars
Alternative energy, electric cars
Wearable technology – glasses, watches

72. 12. Technological Development
Top 5 Futuristic Technologies That Exist Today!

73. 12. Technological Development
10 Most Influential Devices of All Time!

74. 12. Technological Development
Our personal life is highly dependent on the technology that people have developed.
Technology has advanced with years and it has changed the way we purchase products , the way we live , the way we communicate , the way we travel , the way we learn and so many changes have been brought about by these continuous technological advancements.
As people’s demands and life style change, the demand for advancing the type of technology we use has increased.

75. 12. Technological Development
Positively, technology advancement has simplified the way we do things, it saves time, it increases on production, it simplifies communication, it has improved health care and it has also improved our educational environment.

76. 12. Technological Development
E.G: Technology Advancement in Medicine and Health care:
Technology has helped in saving lives.
Human medicine and health sciences have improved.
Doctors and medical students have embarked on medical technological tools to carry out extensive research on human health problems and challenges.
This extensive research has resulted in the development of new drugs and treatments, which have helped in curing most challenging human diseases and this has helped in saving so many lives and it has also prolonged the human lifespan.

77. 12. Technological Development
E.G: Technology Advancement in Medicine and Health care: 3D printing:

78. 12. Technological Development
E.G: Technological Advancements in Agriculture:
Agricultural technological advancement has played a big role in changing the face of agriculture. This has resulted in increased production and abundant food supply.
A farmer who uses advanced technology will be able to increase their output as well as produce high quality products.

79. 12. Technological Development
EG: Technological Advancements In Education:  
Technology advancement has greatly changed the education sector. Students now learn through mobile devices.
Technology has simplified the way teachers reach their students and it has also helped students learn from numerous sources, as well as enabling them to access academic information at any time from anywhere.

80. 12. Technological Development
EG: Technological Advancements In Education:  
Information is power, so both students and teachers can use advanced technologies for education to undertake research on subjects of interest. 
The use of the internet has transformed the teaching and learning experience.
Some examples: Use of smart phones, tablets, mobile computers, smart whiteboards, robotics and distance learning using virtual classrooms

81. 12. Technological Developments
Class Activity
Make a list of the technological advancements in the last five years that you’ve benefitted from.
Discuss the impact on personal finances of these advancements.

82. 13. Transport Development
Local & National
Events
13. Transport Development

83. 13. Transport Development
Transport dominates every aspect of our lives, our health, the form of our communities, our environment, economy and our personal financial well-being.
Smart Transport means providing a full spectrum of appropriate, sustainable and integrated transport choices.

84. 13. Transport Development
Smart transport choices
are integrated, universally accessible, and not private car dependent,
will be viable now and in the future, and less dependent on overseas resources,
are affordable for governments and individuals,
enable resilient communities and individual independence,
support good public health, particularly in terms of obesity and air pollution,
are environmentally sustainable, reducing our carbon footprint,
include institutional goals for mode shift, with achievable medium term benefits.

85. 13. Transport Development
Communities need a diverse transportation strategy centred on fuel efficiency, clean biofuels, and advanced vehicle technologies.
Together these solutions can help reduce oil consumption, decrease global warming emissions, and improve air quality.

86. 13. Transport Development
Integrated transport systems:
Smart transport solutions – good for the environment, safety and cost-efficiency
Combining different transport methods makes it possible to utilise resources more efficiently and reduce the environmental impact.
By considering entire journeys and thinking across modes of transport, transport systems are safer, more efficient and more sustainable to use and operate.
The goal of a smart transport system is to:
create environments where more people can enjoy integrated, seamless journeys.

87. 13. Transport Development
The Evolution of Mobility is what we're all about at Bombardier Transportation. We offer smart transportation solutions for sustainable transport, high speed journeys, urban traffic flow and passenger comfort.

88. 13. Transport Development
Examples of Smart Transport Solutions:
an economically competitive electric bus route with zero tailpipe emissions, with inductive charging points that make it possible for the electric buses to operate continuously all day
a pay-per-hour car club with a fleet of zero-emission Electric Vehicles

89. 13. Transport Development
Cloud Enabled Mobility (CEM). This concept seeks to connect users with information and other cloud-based services (e.g., booking and billing systems) in such a way as to make spontaneous public transport decisions.

90. 12. Transport Developments
Class Activity
Visit:
As a class, discuss how some of these ideas could be incorporated into the town/city you live in or live near.
Discuss what the impact on personal finances would be.

91. Sources: Wisegeek: http://www.wisegeek.com/what-causes-inflation.htm
Tutor2U
Dinehbakshi:
Wikipedia:
Economic Help:
Statistics New Zealand:
Greenliving:
Smart Transport NZ
Investing Answers:
Use of Technology:
MK Smart:
Education Portal:

92. youngenterprise.org.nz