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…

COVID-19’s impact on the business world is unprecedented, presenting a challenge to all companies and businesses. Some companies have evolved quickly and some have or are falling behind. Managing a business is a delicate balance anyway. The deadlines, the finances, cashflow, controlling costs, the need to generate income and improve margins, the human emotions, staff needs, skill shortages and with Covid-19 in the mix, it is simply hard to navigate. Many businesses will rise to the challenge and get through it. Some businesses are no longer viable. Many have closed the doors or considering it. Struggling NZ Business in First Quarter 2022 – the Why NZ business owners have struggled in the last while with lockdowns, inflation, increased oil prices,…

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…

For many businesses in Auckland, it’s been a tough year. Navigating Level 4, Level 3, Level 3.1, Level 3.2, and Red have all had their own challenges and a move to Orange will have both rewards and challenges for businesses that have made it to this point. The $60 million Government support package for Auckland businesses that was announced on 22 October 2021 is now open. There is $50 million available to fund advice and planning support for businesses and the implementation of that advice. A further $10 million is available for mental health and wellbeing support. In order to access this support, you will need to be registered with Activate Tāmaki Makaurau. This link will take you to the…

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.…

Liquidations advanced through the High Court require Court fee approval in most cases. Shareholder appointments also subject to some form of review and oversight. In some liquidations a committee is appointed. Every insolvency practitioner now needs to be licensed and is subject to a complaints and disciplinary process. A reasonable and competent liquidator should take into account the amount owed to creditors, the prospects of recovery and consider the cost versus benefit of advancing claims and legal actions. It is a liquidator's obligation to maximise the return to creditors and to act in a reasonable and efficient manner. There have been a number of cases now where liquidators have been scrutinised for charging excessive fees. Liquidators facing criticism It was…

Business Advice to Auckland based businesses The Business Advice & Implementation Grants are now available for application. Auckland businesses can apply for up to $3000 + GST through Business Advice support. An Implementation Grant will pay for specific services to put your business advice or plan into action. If you’re looking for expert advice and support in areas such as Continuity, Financial Planning, Business Hibernation, Compromises or Exit, we can help get you there. You can access advice if you are considering hibernating or closing your business, or are looking to restructure. The advice should lead to a plan to overcome challenges and/or identify opportunities and map out the scope of the work required to achieve the plan. Implementation Grant…

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…

The Impact of Covid-19 Delta Outbreak on Companies under Level 3 restrictions Many small and medium businesses are in serious strife, some hanging on by a thread. Businesses are seeking certainty about how and when they can get back to business. A recent MYOB survey has revealed confidence among small and medium businesses is plummeting and states SME revenue has taken its biggest hit since the 2008 global financial crisis. The drop in revenue and profits smashed from the current Covid-19 lockdowns, staff retention and skill shortages, the supply chain crisis, surging house prices, rising interest rates, closed borders, climbing inflation and general consumer confidence are all impacting business and will continue to have an impact for the foreseeable future.…

Economic Rundown Pressure and frustration continues to build for business owners and the wider economy; due to the lack of transparency, a proper plan in place as to when we may once again open up the country and what needs to be achieved to have these lockdown restrictions lifted. We have now had our first full calendar month with Auckland and the surrounding regions at Alert Levels 3 & 4; while the rest of the country remains at Alert Level 2. The lockdown effects are being felt across the country, both financially and emotionally. As we saw with the first round of lockdowns in 2020, lockdowns have a negative effect on insolvency figures, which have once again taken a sudden…

August 2021 has been a story of two halves. Between 1 and 17 August 2021, the outlook for economic growth was continuing to look positive. On 17 August 2021, the government called a press conference and, at 6:00 pm that evening, Jacinda Ardern told New Zealand that the country would be moving to alert Level 4 from 11:59 om that night. From 18 August 2021, most businesses were again forced to shut their premises as we returned to Level 4 lockdown and our home bubbles. Those of us that could, readjusted to working from home but Level 4 left many businesses unable to operate. The short notice also meant that many businesses – including those in hospitality, agriculture (who do…