1 00:00:00,200 --> 00:00:02,200 Speaker 1: Not everyone's reveling in the so called green shoots of 2 00:00:02,200 --> 00:00:04,480 Speaker 1: an economic recovery. We've got warnings this morning from the 3 00:00:04,519 --> 00:00:07,440 Speaker 1: insolvency folks. More trouble coming next year, they think as well. 4 00:00:07,840 --> 00:00:11,320 Speaker 1: Insolvencies are up nearly forty percent on pre COVID levels. 5 00:00:11,480 --> 00:00:14,520 Speaker 1: Brian Williams, founder of BWA in solvency as with us, Brian. 6 00:00:14,400 --> 00:00:17,120 Speaker 2: Morning, good morning, make good morning. 7 00:00:17,440 --> 00:00:19,800 Speaker 1: These guys last to fall. So is this like the 8 00:00:19,920 --> 00:00:22,279 Speaker 1: job numbers? So we go through the tough days and 9 00:00:22,320 --> 00:00:24,479 Speaker 1: at the very end of the worst of times we 10 00:00:24,560 --> 00:00:26,479 Speaker 1: get the insolvency. Is that what's happening? 11 00:00:27,480 --> 00:00:29,720 Speaker 2: I think this is the after glow. I think this 12 00:00:29,800 --> 00:00:33,559 Speaker 2: is the latency that's expected by the downturn and the 13 00:00:33,600 --> 00:00:37,879 Speaker 2: economy that we're rising out of. And the pipeline has 14 00:00:38,000 --> 00:00:40,360 Speaker 2: got to clear out and it'll take probably through to 15 00:00:40,680 --> 00:00:43,800 Speaker 2: mid twenty six before that's all cleared out. 16 00:00:44,080 --> 00:00:46,199 Speaker 1: So when you say mid twenty six, we're sitting here 17 00:00:46,200 --> 00:00:50,440 Speaker 1: this November morning, what's happening in a business right now 18 00:00:50,720 --> 00:00:53,440 Speaker 1: that they're going to fall over in April of next year. 19 00:00:55,680 --> 00:00:58,440 Speaker 2: I think they simply run out of gas and there 20 00:00:58,520 --> 00:01:03,800 Speaker 2: is a persistent motivation by directors and there are shareholding 21 00:01:03,800 --> 00:01:10,120 Speaker 2: interests to survive, motivated to continue, hoping for perhaps if 22 00:01:10,120 --> 00:01:12,920 Speaker 2: you're in the retail industry, for future sales across the 23 00:01:12,959 --> 00:01:16,160 Speaker 2: next two or three months that would bring about gross profit, 24 00:01:16,240 --> 00:01:19,080 Speaker 2: which would bring about a retirement debt, and if that 25 00:01:19,160 --> 00:01:21,880 Speaker 2: doesn't occur, then they just lose grip. 26 00:01:22,200 --> 00:01:25,000 Speaker 1: Okay, So be looking at the books right now saying, look, 27 00:01:25,040 --> 00:01:27,959 Speaker 1: things are type, we're in trouble, but Christmas will save us. 28 00:01:27,800 --> 00:01:29,800 Speaker 1: That's sort of what's driving the mood at the moment. 29 00:01:30,680 --> 00:01:33,600 Speaker 2: I think there is that human endeavor to say we 30 00:01:33,680 --> 00:01:37,320 Speaker 2: will not succumb, we will continue, and I think that's 31 00:01:37,360 --> 00:01:40,680 Speaker 2: reflective of almost every file that comes across my desk 32 00:01:41,080 --> 00:01:44,479 Speaker 2: has got virtually no assets remaining, and while there are 33 00:01:44,560 --> 00:01:48,840 Speaker 2: resources within the control of the directors, they'll continue to 34 00:01:48,920 --> 00:01:51,760 Speaker 2: use them for the purposes of continuing to survive. 35 00:01:51,960 --> 00:01:54,520 Speaker 1: Well, there's heartbreaking. Who are these companies? Are the big 36 00:01:54,520 --> 00:01:56,360 Speaker 1: boys a little bit? You know? Is it mum and 37 00:01:56,480 --> 00:01:58,520 Speaker 1: dad is someone who's been around for six months or 38 00:01:58,560 --> 00:01:59,520 Speaker 1: twenty seven years or what? 39 00:02:00,560 --> 00:02:05,120 Speaker 2: Yeah, Mostly they are smaller companies in the food and 40 00:02:05,160 --> 00:02:09,600 Speaker 2: beverage industry. There are people that have just decided to 41 00:02:09,600 --> 00:02:13,480 Speaker 2: get out and hang their shingle. The construction industry still 42 00:02:13,560 --> 00:02:16,600 Speaker 2: wins the race. It's way up across all of the 43 00:02:16,639 --> 00:02:20,639 Speaker 2: other sectors, although that's declined across this last quarter of 44 00:02:20,720 --> 00:02:24,600 Speaker 2: three percent, but profiting in real estate argument's sake, that's 45 00:02:24,680 --> 00:02:27,639 Speaker 2: up ten percent on the last quarter. And there will 46 00:02:27,720 --> 00:02:33,320 Speaker 2: be long standing businesses that just simply have run a gas, 47 00:02:33,440 --> 00:02:34,440 Speaker 2: run out of resources. 48 00:02:34,800 --> 00:02:36,680 Speaker 1: How much of it is about the economy, how much 49 00:02:36,720 --> 00:02:38,960 Speaker 1: of it's about the economy versus IID coming in and 50 00:02:39,000 --> 00:02:40,720 Speaker 1: going we'll need money, thanks very much. 51 00:02:41,680 --> 00:02:46,320 Speaker 2: I think IID is a significant driver. They are a 52 00:02:46,480 --> 00:02:49,799 Speaker 2: large part of any balance sheet. And if they are 53 00:02:49,840 --> 00:02:52,880 Speaker 2: not going to be settled, then their viewpoint the viewpoint 54 00:02:52,919 --> 00:02:55,440 Speaker 2: right now as well. If you can't pay, then you 55 00:02:55,440 --> 00:02:59,519 Speaker 2: shouldn't exist. And in a sense it's a healthy destruction 56 00:02:59,600 --> 00:03:04,839 Speaker 2: that'stinuing at the moment, or even constructive destruction where if 57 00:03:04,840 --> 00:03:07,120 Speaker 2: you can't survive, if you haven't got the resources, if 58 00:03:07,160 --> 00:03:10,960 Speaker 2: you can't generate profits, then you shouldn't be on the register. 59 00:03:11,080 --> 00:03:11,920 Speaker 2: You shouldn't exist. 60 00:03:12,080 --> 00:03:14,799 Speaker 1: Brian, appreciate you time very much. Brian Williams, bw A 61 00:03:14,840 --> 00:03:18,200 Speaker 1: and Salvancy found a famous situation many years ago. Keating 62 00:03:18,240 --> 00:03:20,200 Speaker 1: said this was the recession in Australia. Of course, this 63 00:03:20,360 --> 00:03:22,640 Speaker 1: was the recession we needed to have, if you remember that. 64 00:03:23,120 --> 00:03:25,240 Speaker 1: And the Deputy Reserve Bank Governor at the time said, 65 00:03:25,280 --> 00:03:27,400 Speaker 1: actually this is good because we can go in and 66 00:03:27,440 --> 00:03:31,360 Speaker 1: all these businesses that don't exist shouldn't exist, they're going 67 00:03:31,400 --> 00:03:33,880 Speaker 1: to go and that's ultimately good for the economy. Not 68 00:03:33,960 --> 00:03:35,840 Speaker 1: that that sort of news. If you're in the middle 69 00:03:35,880 --> 00:03:39,119 Speaker 1: of it right now, is there any comfort at all? 70 00:03:39,200 --> 00:03:42,080 Speaker 2: For more from The Mic Asking Breakfast, Listen live to 71 00:03:42,200 --> 00:03:45,280 Speaker 2: news talks that'd be from six am weekdays, or follow 72 00:03:45,320 --> 00:03:46,880 Speaker 2: the podcast on iHeartRadio.