Prime Minister Jacinda Ardern has said New Zealand should remain another month in Level 2. Photo / Mark Mitchell
Prime Minister Jacinda Ardern has said New Zealand should remain another month in Level 2. Photo / Mark Mitchell
A top business restructuring expert, whose firm makes money from insolvency work, has called on Prime Minister Jacinda Ardern to announce a level 1 Covid-19 regime immediately to save "unjustifiable" business failures and job losses.
KordaMentha partner and restructuring specialist Grant Graham in a social media post says New Zealandbusinesses cannot wait further weeks with minimal Covid-19 cases "knowing that the cost will not only be extreme but unjustifiable".
He says he is dealing with people under "incredible pressure that grows day by day".
"We will simply not find replacement jobs and looking ahead, please PM, do not tell us in 2021 that the top tax rate must be increased to solve this unjustifiable delay.
Graham said taking to social media was a rare event for him. He only used the platform to link with old friends.
He has been approached for comment.
The financial restructuring part of his firm's work was unsurprisingly hot at the moment, he said.
"The people we find ourselves dealing with are under an incredible pressure that grows day by day. It is for this reason I comment.
"Our PM who has done a great job in restricting the virus now suggests we should wait another month (22 June earliest) to move to a point (level 1 where business owners have a realistic chance to again control their own destiny.
Grant Graham says the country must move out of level 2 immediately to save 'unjustified' job losses. Photo / Supplied
"These people I deal with are not stupid. They, like all of us, see the Covid numbers daily. Nil is nil. They know that as long as Dr Ashley [Bloomfield] has control of the clusters, and the PM has the borders, the risk if far, far less, than the pressures they now face trying to reignite stalled or failing businesses.
"Frankly does anyone still not think we need to get on with this? We cannot wait further weeks with minimal cases knowing that the cost will not only be extreme but unjustifiable."
Yesterday Deputy Prime Minister Winston Peters said New Zealand has been in lockdown for "far too long" and needed to be at level 1 now with a transtasman bubble already operating.
Meanwhile, Waterstone Insolvency principal Damien Grant said he's expecting liquidations to gather pace in late June and July.
He's getting two to three calls a day from SMEs, his main area of business, when pre-Covid-19 he received one.
"There's not a rush at the moment with people heading for the insolvency gate. At the moment people are waiting and my advice is there is no downside to waiting."
Many businesses, while under stress, were continuing on Government Covid-19 emergency money and Inland Revenue wasn't being as "forceful" in its demands as previously which was taking immediate pressure off, Grant said.
Also available to businesses trying to avoid insolvency was to use Part 14 of the Companies Act. This enabled companies which were struggling but confident of eventually emerging from the crisis to make an offer to creditors to part-pay them.
This avenue, which Grant was recommending to clients, requires 75 per cent of creditors to agree to the terms.
Grant said he didn't have a view about a speedy return to level 1 because people were ignoring level 2 restrictions anyway.
Large corporates might be sticking to the rules but cafes and restaurants and small businesses he had seen operating would rather get on with business and risk a penalty fee, he said.
