Cheques and Balances
Is The NZ Economy Broken? Rising Business Liquidations Explained | Episode 499
18 Jun 2026
Transcript generated automatically by AI and may contain errors.
Chapter 1: What are the current trends in New Zealand business liquidations?
We are back in your life and today are rising liquidations, a sign that the economy is broken. They are up year on year. Michael, if I was to describe what's happening in the New Zealand economy at the moment, I'd probably say it's like day five in Colombo on a dust bowl of a pitch. I've got spinners at both ends. I've gone like, surely at some point lunch or a drink is coming.
Or a cloud, something. Yeah, it's gonna make the conditions slightly better, but it just keeps fizzing out of the hand. Shane Warne, 2005. And I go, can I just get a bit of a break? Can I have the odd pie, a full toss that I can put into the stands?
What do you think? I'm going, nah, I'm shutting up shop. I'm going to block this one out, right? I'm Rahul Dravid the wall. I'm Rahul Dravid the wall right now. I'm not spending any money. I'm not buying anything. I'm definitely not hiring people. Just a defensive play. I might even believe in the leave every now and then if you do get a seamer on.
Especially if it's outside leg, you just like put your pad out there. Nah, I'm not even going with the pad. Just leave. No way you're fishing me into that. So what we're here to talk about today is the best nicknames in cricket.
So business is hard at the moment and Coming back to the cricket analogy, you got to play to win, right? You got to get out there and attack the ball. Otherwise, you know, it's, you're going to get one with your name on it at some point.
And these 3000 businesses in New Zealand that have gone to liquidation over the past 12 months, they've had one that's got their name on it and they're out and they're done.
I don't think it's just like one ball that's got their name on it though. You know, like if we look at it, yep, they're at a 15 year high. Liquidations are up 20% over the last 12 months. 3,000 companies have gone into liquidation. That is huge, right? But I don't think it's just one thing, right? You've got probably five years now of just back-to-back pretty tough conditions.
And if you made a lot of money in 2021, yep, you probably got a bit of cash in the bank to survive on. That'll keep you going for a while. But if you didn't make much money in 2021, like maybe you were in the tourism industry or something like that, It's been a long time since you've had a tailwind, right? So very tough to survive.
Hopefully those tourist businesses in the South Island, they will definitely be doing a little bit better. I mean, if we look at it, Auckland, remember, our hardest hit region accounts for over 50% of all national liquidations. Now we've also got to remember where the population is. Construction accounts for roughly 30% of all liquidations. Hospitality is up nearly 50%.
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Chapter 2: Which industries are experiencing the highest liquidation rates?
That would be a good buy. We should buy one of those. Yeah.
Just need some money. So the question I guess, Mike, is are these businesses failures or is the economy failures?
Well, technically, yes, the business are failures because they have failed. Is one of the symptoms of that the economy? Yeah, I'm sure for a lot of them it is the economy. With anything, there's good operators and bad operators and some operators that are somewhere in the middle. But I would say that even the good operators are struggling at the moment.
The economic conditions, mate, they're tough. It is tough, isn't it?
And it just doesn't get any better. And I bump into people and, you know, they love to chew my ear off. They go, James, let me tell you about what I'm seeing at the moment. Hit me, mate. And they go, it sucks. And I feel like I've had a lot of those conversations. Maybe back in the last year, like there was some optimisms and some green shoots.
But I feel like most people I talk to at the moment are just like, It's hard.
But like at the end of the day, you're looking for an easy ball to hit, you know, and we just haven't had a lot of them.
A juicy half volley.
Yeah, a juicy half volley. And we have not had a juicy half volley for a while. Arguably, there was like a bit of a slower ball when the government came out with their depreciation policies for capital purchases and businesses. Yeah, arguably, that was something. But like,
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Chapter 3: How have economic conditions impacted New Zealand businesses?
There's definitely some people who are doing well, some people who are doing okay, and some sectors of the economy that are definitely struggling a bit more. You kind of pointed them out, like construction and the hospitality industry. Different areas in the country aren't doing as bad. Like if you look at Christchurch, there's a lot going on down there, a lot happening in Queenstown as well.
Some of the smaller regions are definitely failing, Northland especially.
Yeah. I want to do a roadie down to Christchurch. I know you've been a couple of times.
You want to do a roadie?
I want to get on a flight. Oh, okay. Yeah. Have a little lads week.
We're doing a little lads week in Queenstown in a couple of weeks. We are.
I'm looking forward to it. But like if there's any businesses or anybody that wants to come and talk down Christchurch, Mike and I want an excuse to head down there, right?
Go on then.
Yeah. Why not? See what happens. I think like the big thing, right, is a business can like absorb like a hit or two, but the problem is like you're facing Mike Tyson in the prime and you just keep taking shots.
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Chapter 4: What role does government policy play in business liquidations?
I would reduce. Why? All it does is bump up house prices. It's ridiculous. I agree. I would... What else would I do? Absolutely some tax, some proper tax incentives for small businesses, not large businesses, right? Like not multinationals, for small businesses, for one-man bands, two-man bands. I'd make it...
Probably, I think it's reasonably balanced at the moment between your ability to hire people and let people go. So I probably wouldn't change that too much. I think from a finance perspective, like a government perspective, that'd be initial things that I would start with. But after that, I would try and promote business in the economy. It's like, get out there.
What is the foreign minister ever doing in this country? The foreign minister should never be in New Zealand, should constantly be out there selling New Zealand to the rest of the world.
Work the glow, baby. Yeah. Yeah, no, I agree with most of that. Do you think capital gains tax is good for the economy?
Yeah. I'd smack a capital gains tax on property as well. Property specifically. I probably wouldn't do it on business. I would do it on property. Because what I want is you're trying to direct capital into productive areas of the economy so that that revenue and income kind of trickles through the economy or that money multiplier is spinning. I just don't think property does that.
Yep. No, I agree. So, I mean, what we're saying is the government didn't do enough for businesses in the budget.
Nah, get creative, man. Like, I've thought about this in the last 10 seconds, right? Like, your job is to sit there and get creative about this. Like, do something.
Nicky's like, of course you thought about this for 10 seconds, Michael.
Yeah. You're an idiot.
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