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Speaker 1: We might have a bubbling or a building fiscal problem

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Speaker 1: for some small businesses who borrowed money during COVID. Our

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Speaker 1: deadline for payback is June. We got about a billion

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Speaker 1: a billion still owing. Ten thousand businesses are already behind

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Speaker 1: in payments to the tune of one hundred and sixty

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Speaker 1: one million. The default interest is almost eleven percent. Managing

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Speaker 1: director of ABC Business Sales, Chris Smallbeck, Well, this Chris,

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Speaker 1: very good morning to you.

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Speaker 2: We might be doing very well.

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Speaker 1: Indeed, thank you. No security on the loans at the time.

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Speaker 1: In other words, if you said you needed them, you

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Speaker 1: got it. Was that a risk?

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Speaker 2: Yeah, it's a huge risk, Mike. You know in hindsight

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Speaker 2: that the previous regime could look back. I'm sure they

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Speaker 2: would wind it back and put a few more bells

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Speaker 2: and braces in there, because what they're now finding is

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Speaker 2: people basically took the money thinking it was unlikely they're

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Speaker 2: going to pay it back, and sure enough they haven't

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Speaker 2: paid it back with little consequences. No security was taken

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Speaker 2: in the way pg's personal guarantees or any GSAs over

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Speaker 2: the businesses, so it was a real free hit for

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Speaker 2: the business owner at the time.

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Speaker 1: So where where does the responsibility set. Ultimately, is the

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Speaker 1: business owner going to get pinged in some way if

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Speaker 1: they don't pay it back or not, And if they do,

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Speaker 1: what does that mean for the business community in general? Now,

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Speaker 1: are we going to see whole bunch of small companies go.

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Speaker 2: Under No, I don't believe so, because there was no

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Speaker 2: security taken, so their houses aren't at risk, no personal guarantees,

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Speaker 2: so they can't get personally bankrupted. All the ID from

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Speaker 2: what I haven't seen, the RED can do is put

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Speaker 2: the list to fauld interest. Rate Y said, it will

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Speaker 2: keep mounting up and capitalizing. And certainly the sole traders position,

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Speaker 2: they may just walk away and set up a new

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Speaker 2: entity or just ignore it. But I don't think it's

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Speaker 2: realistic for the IOD to go around and just administration

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Speaker 2: to speak of these one hundred and twenty odd thousand

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Speaker 2: people to chase. It's just not going to happen. So

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Speaker 2: it's just it was a balls up that's going to

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Speaker 2: cost US hundreds of millions of dollars unfortunately.

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Speaker 1: So we're on the hook for that. It's money. At

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Speaker 1: what point, I don't know, if this is a new wheelhouse,

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Speaker 1: At what point does a government because this will be

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Speaker 1: on the government books as as a you know it's

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Speaker 1: coming back, it's our money, will get it. At what

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Speaker 1: point do they then write that off and go we'll

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Speaker 1: never see it again.

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Speaker 2: Well they won't certainly won't do it this regime. It's

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Speaker 2: a bit like student loans. They never really wipe them off.

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Speaker 2: They to see them go for perpetuity and keep saying

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Speaker 2: it's on the balance sheet, but that the realistic situation

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Speaker 2: is I'll never see the money, a fair bit of

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Speaker 2: it anyway.

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Speaker 1: Jee talk to me while I've got you. The market

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Speaker 1: for sales and business generally, are we are we bullish?

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Speaker 1: Are we seeing any light? Are we still turning over?

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Speaker 2: Yeah? Good, good question. So we just we just finalized

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Speaker 2: numbers to the end of Feb sits. In the eleven

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Speaker 2: months we were fifteen percent up on transactions, largely driven

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Speaker 2: by unskilled ethnic groups coming into New Zealand, Indians, Filipinos,

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Speaker 2: Chinese buying businesses like service stations, fruits stores, bottle stores.

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Speaker 2: So up hasn't really been a drop off in business sales,

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Speaker 2: but that's largely driven by unemployment and unskilled immigration coming

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Speaker 2: into New Zealand. So we're a little bit charcacistical. Well,

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Speaker 2: good for business, but good for business sales? Is it

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Speaker 2: good for New Zealand? And these people do bring workI

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Speaker 2: fick to the economy. And you know, small businesses are

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Speaker 2: the lifeblood of New Zealand. So I don't think it's

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Speaker 2: necessarily a bad thing. There's plenty of put this a way,

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Speaker 2: there's plenty of keys who don't want to buy these

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Speaker 2: types of businesses, well, those types of ours. So I

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Speaker 2: think we need that.

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Speaker 1: Balance to I broadly like it, but I do worry

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Speaker 1: about when you say unskilled, how does an unskilled person

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Speaker 1: get into the country.

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Speaker 2: Well, without Delvin and too deep. They seem to have

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Speaker 2: relations and cousins, ands and new news who live here.

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Speaker 2: I think there's some expert on immigration, but it seems

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Speaker 2: to be the large driver that the reason is large

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Speaker 2: families who have sort of multiple touch points in New Zealand.

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Speaker 1: So up fifteen percent. All right, Chris, nice to talk

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Speaker 1: to you, appreciate it. There's always Chris small ABC business Sales.

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Speaker 1: I'm sure there's a conversation that we had with Erica

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Speaker 1: Stanford there somewhere, isn't there for more from the Mic

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Speaker 1: Asking Breakfast Listen Live to News talks that'd be from

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Speaker 1: six am weekdays, or follow the podcast on iHeartRadio