With the availability of government subsidies becoming harder to obtain the Inland Revenue Department (IRD) and Ministry of Social Development (MSD) have begun the process of reviewing a business’ entitlement to the various covid subsidies they had received. It was well publicised at the time that both the wage subsidy and resurgence support payment scheme were “high trust” models, with emphasis placed on getting the funds out to business’ in need quickly, rather than a proper review of the evidence upfront. Initially the “audits” of the wage subsidy scheme by the MSD were more of a check box exercise, where they accepted verbal confirmations from business owners rather than conducting a proper review. This subsequently resulted in the Auditor General…

Economic recap With inflation figures for the final quarter of 2021 coming in at 6%, it was of no surprise that the OCR would be getting a lift from the Reserve Bank, the question was how much? Last month we mentioned the possibility of a 50-basis point lift with a few commentators backing this size lift. We ended up seeing a 25-point lift with the Reserve Bank using strong language that the next OCR review would likely see the rate lift 50 basis points. The consensus seems to be that with the invasion of Ukraine, we will see inflation continue its upward trend for the year. Adding to the trend are the food cost increases and the possibility petrol prices…

Yearly recap It would be generous to say 2021 ended with a bang for appointments in the insolvency sector, it was more of a dull fizzle. Personal and corporate insolvency figures continued the downward trend, they have been following in the second half of the year. Winding up applications on the other hand, fell off a cliff, racking up 4 total applications for the whole country in the month of December. A considerable drop from the years high point of 83 in June. With the bulk of the country moving to the Orange Alert Level in the final days of the year (excluding northland) and the Auckland border closure being lifted in the middle of the month, it was somewhat…

Economic Rundown While it feels like we have powered through the last quarter of this year, unbelievably it is already mid-December, and we are one week out from Christmas. Everyone is in a flurry of busyness trying to clear their desks before the holiday period and we enter the seasonal slowdown. Due to the late move in the alert level system and reopening of hospitality venues, especially in Auckland, a lot of the usual Christmas functions from clients, associations and work do’s have been cancelled. Due in part to the uncertainty of the time and the months of planning required. Businesses will no doubt be feeling the hurt having missed out on a traditionally busy time of year for them.…

Economic Rundown As we pass the 100-day mark of Auckland’s lockdown businesses unable to trade at 100% capacity continue to struggle due to the alert level restrictions in place. The country was given the target of 90% fully vaccinated to move into the traffic light system, this has now been pulled forward for all regions from the start of December. The percentage of people vaccinated will have some influence at what traffic light setting the regions enter the new system at. For Auckland this can only mean a drop in restrictions as the highest vaccinated region however for some small regions with lower vaccinated levels they will likely see tighter restrictions in their region. Until then neighbouring regions phaze in…

Our membership with the Global Restructuring and Insolvency Professionals (GRIP) network gives our clients and their referrers access to qualified and highly experienced insolvency and business recovery practitioners in over 36 countries worldwide. The GRIP network was created in 2014 in Europe to provide a cross-border referral and marketing network for independent insolvency firms. Members are invited to join and commit to supporting each other to secure locally based work and resolve complex issues. GRIP members are based in Europe, Canada, Central and South America, Australia and the Asia-Pacific region. Whether you need professional assistance with restructuring, selling assets, or winding up a company, a fellow GRIP member who has strong local knowledge, understanding of local regulatory and legal requirements,…

Video Link Here July has mirrored the insolvency appointment figures over the last couple of months. The pressures affecting our economy have also remained fairly consistent over the last few months:- Countries are continuing to fluctuate in and out of COVID-19 lockdowns - Businesses and consumers are facing ongoing shipping delays and supply shortages- Consumer demand for goods continues to exceed supply in many areas- Labour shortages remain an issue- Inflation remains higher than RBNZ’s targets and the affordability of goods remains an issue To the end of July, the outlook for growth has continued to look positive:- Unemployment rates have now fallen to pre-COVID-19 rates. - The construction industry and the housing market continue to run hot - Consumer…

We have passed the halfway point of 2021 and it is now less than six months until Christmas. Quite a bit has happened in the first half of the year so let’s look at how the NZ economy has tracked to June 2021. The global economy continues to face a number of challenges, which are impacting many countries to varying degrees: - Countries are fluctuating in and out of lockdowns as a result of ongoing COVID-19- Shipping delays are continuing- There are materials shortages affecting many industries- Consumer demand for goods continues to rise while international travel continues to be restricted We see the building industry as one to watch. In New Zealand, COVID-19 brought a further increase in demand…

This article was prepared for RITANZ by James McMillan, Patrick Glennie and Nicole Thompson of Dentons Kensington Swan. 2020 was a year of reform in the insolvency sector. Most of the provisions of the Insolvency Practitioners Regulation Act 2019 (IPRA) came into force on 1 September 2020, with several other significant reforms coming in at or around the same time. In this article, we look back at some of the key issues insolvency practitioners were readying themselves to grapple with, and trace developments since the IPRA came into force. Key reforms Some of the key reforms in 2020 were: • Unlicensed insolvency practitioners can no longer accept new insolvency assignments (and have until 31 August 2021 to complete existing assignments).•…

Let’s look at the NZ economy and the insolvency space in May 2021. In the media, the concerns about the current labour shortages grew. While these concerns were previously focused on the horticultural sector (a shortage of pickers during harvest) and the hospitality sector, the number of industries calling out for workers is increasing. Of late, the labour shortages in the construction sector – an issues that has been around for some time – have been noticeable, as anyone who has tried to organise a tradie or become a DIY expert thanks to YouTube can attest to. Supply shortages for building materials is also biting, which is not helping New Zealand’s ever present housing crisis. The pressure points for the…

Typically, April is a quieter month for company insolvencies than March is and April 2021 followed this pattern. April starts the new financial year for most companies and, hopefully, allows businesses to put the COVID-disrupted 2021 financial year behind them. We anticipate that the statistics for the 2021 financial year will become the outlier and that the 2020 financial year will be a better measure of insolvency trends. Let’s look at what happened in April 2021. The minimum wage increased $1.10 per hour from 1 April 2021 to $20.00 per hour ($41,600.00 per annum). While the additional cost of $44.00 per employee per week ($2,288.00 per annum) may not have a huge impact on some smaller businesses with very few…

Welcome to the month of double lockdowns and Americas Cup racing. February is typically the first month of the year where we see a steep uptake in all insolvency appointments across the board after the lower months of December and January. Directors will take a hard look at their company after a quiet Christmas period and January break and make the call on whether they want to continue through another year or pack it in. Individuals will often go through a similar process after having spent up large over the Christmas period and having little to show for it and no prospects of paying off the debts they may have racked up and will need to assess their insolvency options.…