NZ Businesses Are Going Broke: Is the Worst Yet to Come? Ft. Brent Norling | Episode 542
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Is the worst of New Zealand’s business crisis already over?
We are back in your life and today we are asking a pretty grim question. Is the worst actually over for New Zealand businesses? Liquidations are climbing, billions of dollars is tax still owed, and thousands of businesses are still battling with the IRD. But the numbers only tell part of the story. So today, we've got Brent Norling with us, commercial law expert and director at Norling Law, who sees firsthand what's actually happening with businesses at the moment. Brent, welcome to the podcast. Thank you for having me. This is an interesting one. We've had a few recently where we've been a bit more upbeat. And we're like, green shoots, green shoots. It'd be great
if
you just had
the Grim Reaper thing on. You just took the hood off
and put the
sickle down. You're like, don't
worry about
it.
Surely that's a social... Brent, I'm hoping you're going to tell me business isn't any good for you. That we're not having record periods. But that's just not where New Zealand just continues to battle at the moment, don't they?
Yeah, and look, I suppose, unfortunately, business is good for those in my industry right now. We've not been busier since the GFC. I mean, to give an example, last month we had 290 new business owners reach out booking a call at my firm. And that number is climbing just every month.
And do you see on both sides of the, I don't know if transaction's the right word, but like in terms of those that are like the businesses moving into liquidation and also those that are trying to, I guess, get their money back?
Yeah, 100%. So we will act for both creditor and debtor. Example, I'm not sure if you guys heard of Springbank Honey. Liquidated that recently.
What does Brent Norling see on the ground with rising liquidations?
It owes like $22 million to beekeepers around New Zealand. But equally, we act for shareholders of companies like that that will walk into our doors. How do you get $22 million in the hole for honey? Yeah, I mean, my client was owed $600,000. So these guys, yeah, it's, these guys, I mean, it's their retirement. And that was, you know, they delivered barrels of honey for processing and it just was never paid for.
It was
shipped offshore. And he did that. at scale to a lot of beekeepers.
Man, that's tough. And often in that scenario, is it a case of mismanagement? Is it a market thing? I know you can't specifically talk about an individual case, but is a lot of it mismanagement? Is it a market thing? Is it like a hangover from COVID thing? What are you kind of seeing with that?
It's a real mixed bag, but I can talk to some themes. I think in certain industries, it's a market thing. So right now, it's probably helpful to say, first, the liquidation numbers are the highest they've been since the GFC. And almost a third of those are made up in the construction space. And I'll sit down with thousands of people in that space, and stories are pretty similar. If you ask them what happened, they can trace it back to COVID response. And then... you know, that'll be the first event and then someone else has gone into liquidation, not paid them or they've mispriced a job, which one job they could recover from, but it's usually like a series of events. And I suppose that's part of the difference is now it's a lot of external forces that are driving the liquidation.
Five years ago, I would have given you a different answer and I would have said a lot of mismanagement. Yeah. But in the construction space, it is more of a mix.
And what do you see, like, obviously when somebody has come to you, you know, a series of events have happened. At what point do you usually get involved in, I guess, proceedings or whatever it might be? And then the second piece is, do people tend to come to you and go, I wish you came to me
earlier? Yeah. So, I mean, 99 times out of 100, I wish they came to me earlier. Yeah. And that's on both sides of the equation. So the longer... If you're a creditor, the longer you let that debt drag out, the lower the chances of getting paid. So good proactive collection policy is going to get people paid quicker. So often... My approach is a really, just a really trunicated process.
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Chapters
6 chapters
1
Is the worst of New Zealand’s business crisis already over?
0:00–1:53
2
What does Brent Norling see on the ground with rising liquidations?
1:53–12:04
3
Why are construction and hospitality sectors hit hardest by cash‑flow delays?
12:04–24:41
4
How is the IRD’s growing tax debt affecting small‑to‑medium businesses?
24:41–30:59
5
What proactive steps can creditors and debtors take before it’s too late?
30:59–37:47
6
Should the government introduce a ‘circuit‑breaker’ for struggling firms?
37:47–38:12
Speakers
1 identifiedMore from Cheques and Balances
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