1 00:00:05,559 --> 00:00:09,880 Speaker 1: Kiyota m Chelsea Daniels and this is a compilation episode 2 00:00:10,000 --> 00:00:13,800 Speaker 1: of The front Page, a daily podcast presented by the 3 00:00:13,840 --> 00:00:20,600 Speaker 1: New Zealand Herald. The economy has been in an uncertain 4 00:00:20,760 --> 00:00:24,200 Speaker 1: place for quite some time, and twenty twenty four was 5 00:00:24,280 --> 00:00:27,480 Speaker 1: no different. Over the last year, we've seen some improvement, 6 00:00:27,520 --> 00:00:31,360 Speaker 1: though in October the annual rate for inflation had fallen 7 00:00:31,400 --> 00:00:34,519 Speaker 1: from three point three percent to two point two percent. 8 00:00:34,960 --> 00:00:37,880 Speaker 1: The official cash rate ended the year on four point 9 00:00:38,000 --> 00:00:43,680 Speaker 1: twenty five percent. Elsewhere, though, the news hasn't been so positive. 10 00:00:44,120 --> 00:00:48,839 Speaker 1: The country's gross domestic product contracted zero point two percent 11 00:00:48,960 --> 00:00:52,280 Speaker 1: in the June quarter, only just missing out on a 12 00:00:52,360 --> 00:00:57,160 Speaker 1: technical recession. Job cuts across multiple sectors have seen job 13 00:00:57,240 --> 00:01:01,360 Speaker 1: seeker benefit numbers surged to over two hundred thousand, and 14 00:01:01,440 --> 00:01:04,280 Speaker 1: the government books released just this week show that it's 15 00:01:04,360 --> 00:01:08,000 Speaker 1: unlikely we'll return to a surplus until twenty twenty nine, 16 00:01:08,400 --> 00:01:12,080 Speaker 1: about a year later than originally anticipated in this year's budget. 17 00:01:14,520 --> 00:01:18,160 Speaker 1: So what's going on in our economy and how soon 18 00:01:18,360 --> 00:01:21,399 Speaker 1: until we start to see some change. Let's start back 19 00:01:21,400 --> 00:01:25,480 Speaker 1: in May, when Finance Minister Nikola Willis announced her first budget. 20 00:01:25,800 --> 00:01:29,200 Speaker 1: We got analysis from Enzet Herald Business editor at large, 21 00:01:29,240 --> 00:01:32,959 Speaker 1: Liam Dan starting with those much promised tax cuts. 22 00:01:34,920 --> 00:01:38,240 Speaker 2: So I'm trying to give government benefit of the doubt here. 23 00:01:38,319 --> 00:01:39,920 Speaker 2: They want to give people a little bit of hope, 24 00:01:39,959 --> 00:01:42,120 Speaker 2: a little bit of money back, a squeeze middle all 25 00:01:42,120 --> 00:01:44,640 Speaker 2: that sort of stuff. But there are some issues I 26 00:01:44,680 --> 00:01:46,880 Speaker 2: think around timing. Look, no, but no tax expert i've 27 00:01:46,920 --> 00:01:49,400 Speaker 2: spoken to thinks it's a bad idea to adjust these 28 00:01:49,440 --> 00:01:52,200 Speaker 2: threshold It's been about fourteen years since they've been adjusted. 29 00:01:52,200 --> 00:01:54,840 Speaker 2: So that's moving the brackets at which you move to 30 00:01:54,880 --> 00:01:58,080 Speaker 2: the next higher tax rate, adjusting them up effectively for 31 00:01:58,160 --> 00:02:01,400 Speaker 2: the inflation, it just means you don't pay quite as 32 00:02:01,480 --> 00:02:03,920 Speaker 2: much tax and so we get our twenty dollars a week, 33 00:02:04,000 --> 00:02:07,200 Speaker 2: probably for a large chunk of New Zealand. The issue 34 00:02:07,240 --> 00:02:09,280 Speaker 2: is that the timing. When you're putting twenty dollars a 35 00:02:09,320 --> 00:02:11,360 Speaker 2: week in people's pockets, it's a bit like you know, 36 00:02:11,480 --> 00:02:14,400 Speaker 2: labor did different things with the cost of living crisis 37 00:02:14,720 --> 00:02:17,800 Speaker 2: last year, but they cut petel taxes and things, and 38 00:02:18,000 --> 00:02:20,960 Speaker 2: when you do that, it's inflationary. It sort of keeps 39 00:02:20,960 --> 00:02:23,200 Speaker 2: the economy ticking over, which normally is a good thing 40 00:02:23,320 --> 00:02:25,920 Speaker 2: in a recession. You want to stimulate. But we've had 41 00:02:25,960 --> 00:02:28,400 Speaker 2: so much stimulus through COVID, we've got this high inflation, 42 00:02:29,040 --> 00:02:31,200 Speaker 2: and that means the Reserve Bank is going to be 43 00:02:31,240 --> 00:02:33,800 Speaker 2: looking at it very closely, doing the maths on them 44 00:02:34,320 --> 00:02:37,800 Speaker 2: whether it really balances out, because the balancing force in 45 00:02:37,840 --> 00:02:40,520 Speaker 2: all of this is the cuts to public services, so 46 00:02:40,560 --> 00:02:42,320 Speaker 2: that comes out of the economy and that should be 47 00:02:42,360 --> 00:02:46,320 Speaker 2: a disinflationary force, and Nikola Willis has said they've got 48 00:02:46,320 --> 00:02:48,880 Speaker 2: that finally balanced so that it won't be inflationary. She's 49 00:02:48,919 --> 00:02:49,960 Speaker 2: quite adamant about that. 50 00:02:51,360 --> 00:02:55,280 Speaker 3: Wild times may feel tough for everyday, Kiwis right now, 51 00:02:55,520 --> 00:03:00,840 Speaker 3: the economy will recover and inflation will come down. Tax 52 00:03:00,880 --> 00:03:04,680 Speaker 3: relief in Budget twenty twenty four is fully funded from 53 00:03:04,800 --> 00:03:09,480 Speaker 3: savings and revenue initiatives, and I can confirm that because 54 00:03:09,480 --> 00:03:13,320 Speaker 3: of this, the government is not borrowing to fund this 55 00:03:13,480 --> 00:03:16,280 Speaker 3: tax relief and it will not add to inflation. 56 00:03:21,600 --> 00:03:25,240 Speaker 2: You know, already some economists like Cameron Baggery are questioning 57 00:03:25,480 --> 00:03:27,960 Speaker 2: that because you know the timing of the cuts. We 58 00:03:27,960 --> 00:03:29,640 Speaker 2: don't know that they're going to take a lot longer 59 00:03:29,639 --> 00:03:32,240 Speaker 2: to implement, and frankly, it could be quite a long 60 00:03:32,280 --> 00:03:35,120 Speaker 2: time before the sort of disinflationary impulse of the tax 61 00:03:35,160 --> 00:03:38,160 Speaker 2: cuts flows through, whereas after July one, we should all 62 00:03:38,200 --> 00:03:41,440 Speaker 2: be starting to see I say all, there's certainly all 63 00:03:42,240 --> 00:03:44,680 Speaker 2: middle wage journers, and wage journers will start to see 64 00:03:44,720 --> 00:03:49,000 Speaker 2: some tax back. It doesn't deliver for beneficiaries, for example, 65 00:03:49,040 --> 00:03:51,080 Speaker 2: so it's worth remembering that too. So they're always going 66 00:03:51,120 --> 00:03:53,920 Speaker 2: to have a hard sell at that social issues end 67 00:03:54,000 --> 00:03:55,720 Speaker 2: of the political spectrum. 68 00:03:55,880 --> 00:03:58,480 Speaker 1: It's hard, isn't it, Because we speak about the squeezed 69 00:03:58,560 --> 00:04:03,160 Speaker 1: metal and income families, etc. But what about those beneficiaries, 70 00:04:03,160 --> 00:04:05,440 Speaker 1: what about those on minimum wage? I feel a bit 71 00:04:05,480 --> 00:04:07,880 Speaker 1: ecky knowing that I'm going to get more back a 72 00:04:07,920 --> 00:04:11,080 Speaker 1: week than someone on a minimum wage. 73 00:04:11,240 --> 00:04:13,040 Speaker 2: Yeah, and not to mention all the money you'll get 74 00:04:13,080 --> 00:04:18,080 Speaker 2: back on all those properties. Even wealthier people with multiple 75 00:04:18,160 --> 00:04:21,800 Speaker 2: properties investment properties will also be able to claim tax back, 76 00:04:21,839 --> 00:04:24,240 Speaker 2: of course, And so there is a sense that there 77 00:04:24,279 --> 00:04:27,440 Speaker 2: is a political, some might say ideological, aspect to this. 78 00:04:27,680 --> 00:04:30,680 Speaker 2: National has talked about wanting to get people off the benefit. 79 00:04:30,839 --> 00:04:33,120 Speaker 2: There's plenty of other people who see that as punitive, 80 00:04:33,520 --> 00:04:36,800 Speaker 2: but there's certainly a sense that they want to make 81 00:04:37,200 --> 00:04:40,440 Speaker 2: life easier for those who are working. Worth mentioning, I 82 00:04:40,480 --> 00:04:44,760 Speaker 2: suppose that unemployment in this whole equation of economic rebalancing. 83 00:04:44,800 --> 00:04:48,080 Speaker 2: Unemployment is expected to keep rising, so it's a tough 84 00:04:48,160 --> 00:04:49,760 Speaker 2: job market to get off for benefit. 85 00:04:51,320 --> 00:04:55,600 Speaker 4: The government could choose to prioritize keeping New Zealanders and work. 86 00:04:55,839 --> 00:04:59,840 Speaker 4: It could choose to prioritize lifting children out of poverty 87 00:05:00,160 --> 00:05:03,760 Speaker 4: rather than forcing more children into poverty. It could choose 88 00:05:03,800 --> 00:05:10,240 Speaker 4: to prioritize tackling climate change. It is not making those choices. Instead, 89 00:05:10,560 --> 00:05:13,880 Speaker 4: it's choosing to prioritize tax cuts that are going to 90 00:05:14,000 --> 00:05:16,440 Speaker 4: lead to higher inflation for longer. 91 00:05:19,600 --> 00:05:22,080 Speaker 1: When we spoke last week, we discussed the worry that 92 00:05:22,120 --> 00:05:25,320 Speaker 1: the government would end up borrowing to fund these tax 93 00:05:25,360 --> 00:05:28,240 Speaker 1: cuts in some kind of way. Does it seem like 94 00:05:28,320 --> 00:05:30,560 Speaker 1: that's the case now that we've actually seen the books. 95 00:05:30,720 --> 00:05:32,680 Speaker 2: Well, I don't think much has changed in terms of 96 00:05:32,680 --> 00:05:35,200 Speaker 2: how people are going to argue this point. Nikola Willis 97 00:05:35,279 --> 00:05:37,920 Speaker 2: is adamant they are not borrowing for tax cuts, but 98 00:05:38,040 --> 00:05:41,800 Speaker 2: the government will be borrowing twelve billion more over the 99 00:05:41,800 --> 00:05:45,240 Speaker 2: next four years. They've got a program of tax cuts 100 00:05:45,279 --> 00:05:48,320 Speaker 2: of about fourteen billion over the next four years, different 101 00:05:48,320 --> 00:05:51,200 Speaker 2: pools of money. Apparently, that's what they're saying, So that 102 00:05:51,480 --> 00:05:54,760 Speaker 2: they're borrowing for some other stuff, not the tax cuts, 103 00:05:55,000 --> 00:05:58,120 Speaker 2: but they will have less money because of the tax cuts. 104 00:05:58,680 --> 00:06:01,520 Speaker 2: In a narrow accounting sense, they're balancing up, you know, 105 00:06:01,560 --> 00:06:03,920 Speaker 2: the spending cuts and the tax cuts. In the big 106 00:06:03,960 --> 00:06:08,120 Speaker 2: picture of government spending, it still means we take longer 107 00:06:08,160 --> 00:06:10,599 Speaker 2: to get out of deficit. So take till the twenty 108 00:06:10,600 --> 00:06:13,240 Speaker 2: seven to twenty eight year instead of twenty six twenty seven. 109 00:06:13,720 --> 00:06:17,440 Speaker 2: And there's that extra bond program, twelve billion dollars of 110 00:06:17,839 --> 00:06:19,800 Speaker 2: New Zealand government bonds that we will go out and 111 00:06:20,120 --> 00:06:20,920 Speaker 2: sell to the world. 112 00:06:25,240 --> 00:06:29,160 Speaker 1: In November, as signs the economy wasn't performing as well 113 00:06:29,200 --> 00:06:32,760 Speaker 1: as it could be became clearer, the Reserve Bank cut 114 00:06:32,800 --> 00:06:35,839 Speaker 1: the official cash rate to four point twenty five percent. 115 00:06:36,480 --> 00:06:39,960 Speaker 1: We spoke with Simplicity chief economist Schamabel Jakub for his 116 00:06:40,080 --> 00:06:44,039 Speaker 1: analysis on how things had performed since the budget, starting 117 00:06:44,160 --> 00:06:46,480 Speaker 1: with cuts to home loan interest rates. 118 00:06:50,160 --> 00:06:53,040 Speaker 5: We desperately need this good news. For the last couple 119 00:06:53,080 --> 00:06:56,040 Speaker 5: of years, people have been refixing their mortgages from very 120 00:06:56,080 --> 00:06:59,039 Speaker 5: cheap to very expensive rates, and we've now just turned 121 00:06:59,040 --> 00:07:01,800 Speaker 5: the corner and the lower interest rates are going to 122 00:07:01,800 --> 00:07:04,280 Speaker 5: give a lot of relief to people who are refixing 123 00:07:04,279 --> 00:07:07,080 Speaker 5: In the next year or so, so absolutely good news, 124 00:07:07,200 --> 00:07:08,600 Speaker 5: but it takes a little bit of time for them 125 00:07:08,600 --> 00:07:09,200 Speaker 5: to flow through. 126 00:07:09,680 --> 00:07:11,600 Speaker 1: How much time does it take to flow through, do 127 00:07:11,680 --> 00:07:13,360 Speaker 1: you think? And what kind of numbers are we going 128 00:07:13,400 --> 00:07:15,760 Speaker 1: to be looking at after this decision. 129 00:07:16,320 --> 00:07:18,960 Speaker 5: Look, it usually takes somewhere between six and twelve months 130 00:07:19,000 --> 00:07:21,640 Speaker 5: before these interest rate cuts really kind of become broad 131 00:07:21,680 --> 00:07:25,400 Speaker 5: based better news for the economy. That's because the current 132 00:07:25,480 --> 00:07:28,160 Speaker 5: level of interest rates are still quite painful. They're quite high, 133 00:07:28,320 --> 00:07:31,000 Speaker 5: so people aren't borrowing and investing like the who are 134 00:07:31,040 --> 00:07:34,200 Speaker 5: doing during good economic times. So we probably need to 135 00:07:34,520 --> 00:07:37,120 Speaker 5: assume that for the next three to six months things 136 00:07:37,160 --> 00:07:39,440 Speaker 5: are still going to remain a little bit painful. We'll 137 00:07:39,480 --> 00:07:41,640 Speaker 5: initially get just a better relief that people are not 138 00:07:41,680 --> 00:07:44,920 Speaker 5: paying so much when mortgages, and then eventually, when interest 139 00:07:45,000 --> 00:07:47,240 Speaker 5: rates get low enough, we're going to start borrowing and 140 00:07:47,280 --> 00:07:49,680 Speaker 5: investing again, and that's when the party begins. 141 00:07:50,040 --> 00:07:52,560 Speaker 1: If you could explain to me, like I'm a five 142 00:07:52,640 --> 00:07:57,720 Speaker 1: year old, how ocr rates then translate to a better economy, 143 00:07:57,880 --> 00:07:58,520 Speaker 1: could you do that? 144 00:07:59,000 --> 00:08:01,720 Speaker 5: Of course, the OCA is kind of like the interest 145 00:08:01,760 --> 00:08:03,640 Speaker 5: rates from very short term money. You and I don't 146 00:08:03,640 --> 00:08:07,440 Speaker 5: borrow that money. But when the reserve Bank changes the OCA. 147 00:08:07,520 --> 00:08:10,320 Speaker 5: It also changes your floating mortgage rate. It also changes 148 00:08:10,360 --> 00:08:12,800 Speaker 5: you fixed mortgage rates, not by the same amount, but 149 00:08:12,920 --> 00:08:16,320 Speaker 5: it influences all those costs of borrowing for all of us. 150 00:08:16,800 --> 00:08:18,880 Speaker 5: And so when the reserve bank drives and the cost 151 00:08:18,920 --> 00:08:21,640 Speaker 5: of debt, it means that we are paying less for that. 152 00:08:22,200 --> 00:08:26,040 Speaker 5: And when we see less expensive debt, when we see 153 00:08:26,080 --> 00:08:28,960 Speaker 5: banks being more willing to lend, not only do we 154 00:08:29,000 --> 00:08:31,440 Speaker 5: get relieved from the debt we already have, but we 155 00:08:31,480 --> 00:08:33,920 Speaker 5: are willing to take on more new debt. And so 156 00:08:33,960 --> 00:08:36,880 Speaker 5: we are spending, we're investing, We've got more spare cash, 157 00:08:37,440 --> 00:08:39,800 Speaker 5: and it means there is just more money going around 158 00:08:39,840 --> 00:08:41,400 Speaker 5: in the economy. We all feel better. 159 00:08:44,240 --> 00:08:47,240 Speaker 3: Since August, the rate has now been dropped one point 160 00:08:47,240 --> 00:08:50,600 Speaker 3: two five points, and this is welcome news for families 161 00:08:50,640 --> 00:08:54,400 Speaker 3: and businesses. For people with mortgages, the impact will of 162 00:08:54,400 --> 00:08:57,520 Speaker 3: course depend on the size of their mortgage, whether they're 163 00:08:57,559 --> 00:09:01,200 Speaker 3: floating or fixed, and what rates their current on. But 164 00:09:01,280 --> 00:09:04,680 Speaker 3: to give one example, a family with the twenty five year, 165 00:09:04,760 --> 00:09:08,400 Speaker 3: five hundred thousand dollars mortgage could expect to be about 166 00:09:08,440 --> 00:09:11,080 Speaker 3: one hundred and eighty dollars a fortnight. 167 00:09:11,400 --> 00:09:12,240 Speaker 6: Feet are off. 168 00:09:16,559 --> 00:09:20,760 Speaker 1: The ocr is obviously just one snapshot of the economy, right, 169 00:09:20,840 --> 00:09:24,400 Speaker 1: what other data have you seen recently that shows that 170 00:09:24,440 --> 00:09:26,680 Speaker 1: it's doing quite well well. 171 00:09:27,480 --> 00:09:30,200 Speaker 5: The OCI is very much the tool to try and 172 00:09:30,280 --> 00:09:32,600 Speaker 5: influence the economy. What's going into the rest of the 173 00:09:32,600 --> 00:09:35,080 Speaker 5: economy is we're just in a recession. We're quite late 174 00:09:35,120 --> 00:09:37,920 Speaker 5: stage in a recession. It's this is probably the deepest 175 00:09:37,920 --> 00:09:41,440 Speaker 5: and longest recession since the global financial crisis. So, you know, 176 00:09:41,480 --> 00:09:43,800 Speaker 5: the pain that people are feeling, the kind of gloom 177 00:09:43,840 --> 00:09:47,360 Speaker 5: that's out there entirely justified, but also is short lived. 178 00:09:47,679 --> 00:09:49,839 Speaker 5: Once in a recession and the Reserve Bank is cutting 179 00:09:49,920 --> 00:09:52,439 Speaker 5: interest rates, we know things will get better. So right 180 00:09:52,480 --> 00:09:55,040 Speaker 5: now what we're seeing is people are spending less, people 181 00:09:55,080 --> 00:09:57,680 Speaker 5: are investing less. We're not buying in something houses so much, 182 00:09:58,080 --> 00:10:01,040 Speaker 5: businesses are not investing so much, in not hiring so much. 183 00:10:01,240 --> 00:10:03,439 Speaker 5: So that's the kind of the I guess, the anatomy 184 00:10:03,440 --> 00:10:06,240 Speaker 5: of a recession. But once we kind of work through 185 00:10:06,280 --> 00:10:09,120 Speaker 5: this painful part, what we tend to start to see 186 00:10:09,160 --> 00:10:11,160 Speaker 5: is there is a return of hope. 187 00:10:11,200 --> 00:10:16,080 Speaker 1: A big draw card for voters was nationals tax relief policy. 188 00:10:16,120 --> 00:10:20,000 Speaker 1: You kind of wrap up of tax bracket changes, family 189 00:10:20,120 --> 00:10:23,960 Speaker 1: tax credits things like that, has this actually done anything 190 00:10:24,000 --> 00:10:24,840 Speaker 1: for the economy? 191 00:10:25,400 --> 00:10:27,560 Speaker 5: Look, I mean we've still had a recession and households 192 00:10:27,559 --> 00:10:30,720 Speaker 5: are still spending less. We can see that household spending 193 00:10:30,760 --> 00:10:33,920 Speaker 5: is still falling and people are still struggling. I guess 194 00:10:33,920 --> 00:10:36,280 Speaker 5: the counterfactual is they might have had even less money 195 00:10:36,280 --> 00:10:38,640 Speaker 5: to spend, and they might have spent even less in 196 00:10:38,679 --> 00:10:41,440 Speaker 5: the absence of the tax cuts. So it's a little 197 00:10:41,440 --> 00:10:43,400 Speaker 5: bit hard to kind of look at it and go, oh, 198 00:10:43,440 --> 00:10:46,320 Speaker 5: there has been no effect. But it's not clear that 199 00:10:46,360 --> 00:10:48,480 Speaker 5: those tax cuts have actually made any difference to the 200 00:10:48,520 --> 00:10:51,199 Speaker 5: current recession, because on the one hand, there is more 201 00:10:51,200 --> 00:10:54,240 Speaker 5: money in consumers hands, but on the other hand, the 202 00:10:54,320 --> 00:10:56,640 Speaker 5: government investment and government spending, which is also part of 203 00:10:56,640 --> 00:10:58,120 Speaker 5: the economy, has been a lot less. 204 00:10:58,480 --> 00:11:01,600 Speaker 1: And so do you expect that perhaps change next year 205 00:11:01,640 --> 00:11:04,280 Speaker 1: with the next budget, because there have been whisperings that 206 00:11:04,360 --> 00:11:07,760 Speaker 1: this budget is going to be obviously economy focused and 207 00:11:07,800 --> 00:11:10,800 Speaker 1: focused on building on that government spending. 208 00:11:11,520 --> 00:11:12,160 Speaker 6: Not really. 209 00:11:12,679 --> 00:11:14,360 Speaker 5: I don't think there's going to be much good news 210 00:11:14,360 --> 00:11:17,000 Speaker 5: in the next budget either. So this government is very 211 00:11:17,040 --> 00:11:19,559 Speaker 5: focused on fiscal austerity. That means they want to spend 212 00:11:19,679 --> 00:11:23,160 Speaker 5: less money. And when the government spends less money, those 213 00:11:23,360 --> 00:11:25,680 Speaker 5: parts of the economy that are reliant on government spending 214 00:11:25,679 --> 00:11:28,560 Speaker 5: will be smaller. Now, the question is if the government 215 00:11:28,600 --> 00:11:31,360 Speaker 5: spends less, will somebody else spend more money? Well, not 216 00:11:31,600 --> 00:11:34,160 Speaker 5: in health or infrastructure or education. Right, That's just not 217 00:11:34,200 --> 00:11:37,240 Speaker 5: how it works. So my sense is that actually government 218 00:11:37,280 --> 00:11:39,200 Speaker 5: will remain a bit of a headwind to the economy, 219 00:11:39,440 --> 00:11:41,360 Speaker 5: and the recovery next year is going to be much 220 00:11:41,400 --> 00:11:43,920 Speaker 5: more about the private sector. It's in spite of the 221 00:11:43,960 --> 00:11:46,560 Speaker 5: government that will have a recovery rather than because of. 222 00:11:54,080 --> 00:11:57,920 Speaker 1: Job losses were a big story this year. Notably, much 223 00:11:57,960 --> 00:12:02,520 Speaker 1: of the public sector reduced to meet government savings targets. 224 00:12:03,040 --> 00:12:07,520 Speaker 1: The news industry contracted significantly, with the entire news Hub 225 00:12:07,640 --> 00:12:11,840 Speaker 1: brand shutting down, the closure of many community newspapers, and 226 00:12:12,000 --> 00:12:15,560 Speaker 1: long running current affairs shows going off air. We also 227 00:12:15,679 --> 00:12:20,840 Speaker 1: saw notable closures across the retail and hospitality sector. In June, 228 00:12:20,920 --> 00:12:24,920 Speaker 1: we spoke with First Retail's Chris Wilkinson about the changing 229 00:12:25,000 --> 00:12:29,080 Speaker 1: face of retail after Auckland, Icon Smith and Coey's announced 230 00:12:29,120 --> 00:12:32,960 Speaker 1: its closure, which was eventually scaled back to a reduced 231 00:12:33,000 --> 00:12:34,920 Speaker 1: physical footprint on Queen Street. 232 00:12:37,160 --> 00:12:41,040 Speaker 7: The situation with department stores in that dare I say 233 00:12:41,160 --> 00:12:45,679 Speaker 7: cut of that upmarket ategory is being played out across 234 00:12:45,720 --> 00:12:48,400 Speaker 7: the world at the moment. So we've seen this happen 235 00:12:48,480 --> 00:12:51,480 Speaker 7: in New Zealand over recent years with Circaldy and Stains, 236 00:12:51,920 --> 00:12:56,800 Speaker 7: David Jones and Wellington, and then Ancient j Smiths in Southland. 237 00:12:57,400 --> 00:13:02,320 Speaker 7: The challenge for the sector is that they're no longer 238 00:13:02,440 --> 00:13:07,320 Speaker 7: able to differentiate in terms of their ranges. In many 239 00:13:07,360 --> 00:13:10,880 Speaker 7: cases their sites are large and are going to require 240 00:13:10,960 --> 00:13:16,680 Speaker 7: significant refurbishment and these economic headwinds are really affecting their 241 00:13:16,720 --> 00:13:20,800 Speaker 7: customer base. So without being able to see any clarity 242 00:13:20,840 --> 00:13:23,800 Speaker 7: going forward, there are a few options open to them. 243 00:13:24,240 --> 00:13:24,400 Speaker 8: Yeah. 244 00:13:24,400 --> 00:13:27,400 Speaker 1: Are We're seeing more brands and companies choose to open 245 00:13:27,440 --> 00:13:29,840 Speaker 1: their own stores as opposed to giving their stock, say 246 00:13:29,840 --> 00:13:32,120 Speaker 1: to a big departments store to sell. 247 00:13:32,360 --> 00:13:35,319 Speaker 7: That's very true if we think about the brands and 248 00:13:35,360 --> 00:13:38,120 Speaker 7: the categories that the likes of Smith and Cohe's have 249 00:13:38,120 --> 00:13:42,360 Speaker 7: done particularly well in. Going back to cosmetics, perfumery. One 250 00:13:42,360 --> 00:13:47,960 Speaker 7: of the largest supplies lv MHD luxury goods manufacturer that 251 00:13:48,200 --> 00:13:51,360 Speaker 7: sells Chanel and all those other types of perfumes. You know, 252 00:13:51,400 --> 00:13:53,960 Speaker 7: they've all got their own stores, they've all got investments 253 00:13:54,040 --> 00:13:58,960 Speaker 7: in the likes of Sephora, and you know we're seeing 254 00:13:59,000 --> 00:14:05,000 Speaker 7: these category is now develop into specialty type stores. So 255 00:14:05,440 --> 00:14:08,120 Speaker 7: was a really good example. But also mec is another 256 00:14:08,200 --> 00:14:11,280 Speaker 7: good example. You know, stores of very large scale but 257 00:14:11,400 --> 00:14:17,240 Speaker 7: just specifically focused on these categories and in particular very 258 00:14:17,280 --> 00:14:20,920 Speaker 7: appealing to younger and successive audiences. 259 00:14:21,520 --> 00:14:26,240 Speaker 1: I know Sephora and Mecca. Well, is that mindset why 260 00:14:26,440 --> 00:14:30,360 Speaker 1: perhaps Flybys is wrapping up here later this year? Why 261 00:14:30,440 --> 00:14:33,120 Speaker 1: get your customers to join a separate rewards program when 262 00:14:33,240 --> 00:14:35,040 Speaker 1: they can just join one in store. 263 00:14:35,360 --> 00:14:40,840 Speaker 7: You are absolutely right. So successive audiences are less inclined 264 00:14:41,080 --> 00:14:46,360 Speaker 7: to be part of these traditional loyalty programs. They are 265 00:14:46,440 --> 00:14:51,120 Speaker 7: much more adept at finding deals. They're less inclined to 266 00:14:51,520 --> 00:14:54,880 Speaker 7: want to sign up to things, and it's just for them, 267 00:14:54,920 --> 00:14:57,880 Speaker 7: it's a fuss. They're more empowered consumers. 268 00:14:58,280 --> 00:15:00,800 Speaker 1: And I guess moles in New Zealand up their game 269 00:15:00,840 --> 00:15:04,280 Speaker 1: in the last decade. Hey really selling themselves as more 270 00:15:04,280 --> 00:15:07,680 Speaker 1: of a destination, a place to go. Is that where 271 00:15:07,720 --> 00:15:11,280 Speaker 1: retail is shifting towards and can standalone stores survive on 272 00:15:11,360 --> 00:15:12,160 Speaker 1: their own anymore? 273 00:15:12,200 --> 00:15:13,840 Speaker 9: I'm thinking Queen Street. 274 00:15:14,120 --> 00:15:16,840 Speaker 7: Green Street's a really good example because once upon a 275 00:15:16,880 --> 00:15:21,200 Speaker 7: time brands coming to New Zealand would have almost certainly 276 00:15:21,280 --> 00:15:23,560 Speaker 7: needed to be in Queen Street. That would have been 277 00:15:23,600 --> 00:15:27,440 Speaker 7: their flagship site because that's where the population was, that's 278 00:15:27,440 --> 00:15:32,800 Speaker 7: where the audience was. Nowadays, those retailers are being attracted 279 00:15:32,800 --> 00:15:36,800 Speaker 7: by the likes of Sylvia Park or Westfield or Commercial 280 00:15:36,800 --> 00:15:40,840 Speaker 7: Bay and those walls need those types of businesses to 281 00:15:40,920 --> 00:15:45,720 Speaker 7: create that differentiation. But increasingly so that's where the consumers 282 00:15:45,760 --> 00:15:49,080 Speaker 7: are as well. That's where a very certain audiences and 283 00:15:49,120 --> 00:15:53,840 Speaker 7: in particular those types of environments play into this big 284 00:15:53,880 --> 00:15:59,000 Speaker 7: shift that we've seen from goods to experiences. So going 285 00:15:59,040 --> 00:16:01,880 Speaker 7: to a place like Sylvia Park will give you a 286 00:16:01,920 --> 00:16:05,600 Speaker 7: great range of food, it'll give you entertainment, it'll give 287 00:16:05,600 --> 00:16:08,880 Speaker 7: you the likes of health services and all these other 288 00:16:09,040 --> 00:16:11,920 Speaker 7: types of things that you would need on a day 289 00:16:11,960 --> 00:16:16,040 Speaker 7: to day basis. So that's where our big shift is happening. 290 00:16:16,080 --> 00:16:18,840 Speaker 7: And again this is a global trend that we've seen. 291 00:16:24,520 --> 00:16:28,320 Speaker 1: And after a series of high profile restaurant closures, we 292 00:16:28,480 --> 00:16:32,560 Speaker 1: discussed where to next back in August with Harold, Deputy 293 00:16:32,600 --> 00:16:37,840 Speaker 1: Lifestyle Editor Joanna Thornton and aut hospitality and tourism professor 294 00:16:38,160 --> 00:16:39,120 Speaker 1: David Williamson. 295 00:16:41,840 --> 00:16:42,920 Speaker 9: Joanna can you run us. 296 00:16:42,880 --> 00:16:45,520 Speaker 1: Through some of the restaurants that have closed down so 297 00:16:45,640 --> 00:16:47,560 Speaker 1: far this year. Yeah, there's a few. 298 00:16:47,600 --> 00:16:49,960 Speaker 10: I mean, I suppose the biggest or the most shocking 299 00:16:50,200 --> 00:16:53,920 Speaker 10: was Espqure, which closed in July after thirty two years. 300 00:16:54,520 --> 00:16:56,920 Speaker 10: We had Madame George on kd Unhappy Road, which was 301 00:16:56,960 --> 00:16:59,800 Speaker 10: a huge loss. It's one of Viva's top fifty restaurants. 302 00:17:00,920 --> 00:17:03,440 Speaker 10: There was also Floor on K Road as well, which 303 00:17:03,480 --> 00:17:06,800 Speaker 10: is a cute little wine bar. Homeland is closed down. 304 00:17:07,400 --> 00:17:10,879 Speaker 10: Orphan's Kitchen Omni which is a little yakatory spot on 305 00:17:10,920 --> 00:17:15,680 Speaker 10: Dominion Road. Stanley AV Winebar and Milford. We also had 306 00:17:16,040 --> 00:17:18,879 Speaker 10: Conch which was more sort of a bar and restaurant, 307 00:17:19,359 --> 00:17:22,720 Speaker 10: the Wine Cellar and Tiger Burger is another one that's closed. 308 00:17:22,960 --> 00:17:25,360 Speaker 1: God, there's so many. What have some of the reasons 309 00:17:25,400 --> 00:17:26,639 Speaker 1: been behind their closures? 310 00:17:27,200 --> 00:17:29,840 Speaker 10: There's a few, and Madame George said it was the 311 00:17:29,920 --> 00:17:33,400 Speaker 10: economic downturn. Stanley AV said that there were a host 312 00:17:33,440 --> 00:17:37,720 Speaker 10: of reasons like the pandemic, weather events and strained economic conditions. 313 00:17:38,359 --> 00:17:41,240 Speaker 10: And I actually saw the Restaurant Association reported in a 314 00:17:41,280 --> 00:17:44,399 Speaker 10: recent survey that the main challenges businesses are citing is 315 00:17:44,840 --> 00:17:45,960 Speaker 10: just customer downturn. 316 00:17:46,440 --> 00:17:50,000 Speaker 1: David from your years of experience in the hospitality industry. 317 00:17:50,240 --> 00:17:53,080 Speaker 1: Is this speed of closures unusual or is it kind 318 00:17:53,080 --> 00:17:54,120 Speaker 1: of par for the course. 319 00:17:54,600 --> 00:17:58,320 Speaker 8: It's sort of hard to differentiate that it is an 320 00:17:58,440 --> 00:17:59,399 Speaker 8: unusual time. 321 00:17:59,480 --> 00:18:00,960 Speaker 6: I'm not sure the number. 322 00:18:00,680 --> 00:18:04,320 Speaker 8: Of closures is particularly different, But I think what is 323 00:18:04,359 --> 00:18:07,919 Speaker 8: different is that people are really struggling in this sector, 324 00:18:08,000 --> 00:18:11,359 Speaker 8: and I think we're going to see more closures coming through. 325 00:18:11,880 --> 00:18:13,919 Speaker 8: I was talking to a couple of veterans from the 326 00:18:13,960 --> 00:18:18,400 Speaker 8: industry recently and they were adding to that suggestion of 327 00:18:18,960 --> 00:18:22,840 Speaker 8: what's really going on is not just the difficulties right now, 328 00:18:23,320 --> 00:18:27,320 Speaker 8: but the history of really impactful changes over the last 329 00:18:27,720 --> 00:18:31,120 Speaker 8: sort of periods since COVID. So you have to understand 330 00:18:31,119 --> 00:18:35,359 Speaker 8: that this industry was shut down or massively disrupted for 331 00:18:35,400 --> 00:18:38,280 Speaker 8: a number of years through COVID, when the boarders shut 332 00:18:38,320 --> 00:18:42,280 Speaker 8: they had huge staff shortages. Then you have those weather events. 333 00:18:42,359 --> 00:18:44,359 Speaker 8: Just as we're coming out of COVID and starting to 334 00:18:44,400 --> 00:18:47,520 Speaker 8: recover from that, we get smashed with weather events, which 335 00:18:47,600 --> 00:18:50,760 Speaker 8: was really impactful on the industry. And then you have, yeah, 336 00:18:50,760 --> 00:18:53,880 Speaker 8: the high inflation cost of living. People have a lot 337 00:18:54,000 --> 00:18:57,879 Speaker 8: less discretionary income to spend on things like restaurants, cost 338 00:18:57,920 --> 00:19:01,040 Speaker 8: of goods for these industries that record high. They are 339 00:19:01,040 --> 00:19:04,840 Speaker 8: paying top interest rates on any debt they're holding. There's 340 00:19:05,040 --> 00:19:07,960 Speaker 8: perceptions of higher crime and the inner city for people 341 00:19:07,960 --> 00:19:11,160 Speaker 8: in Auckland who are coming in to dine out at night. 342 00:19:11,760 --> 00:19:14,159 Speaker 8: So you know, there's an awful lot going on, and 343 00:19:14,200 --> 00:19:17,520 Speaker 8: it's just been one challenge after another. So a lot 344 00:19:17,560 --> 00:19:22,639 Speaker 8: of these businesses are small, standalone, own or operated businesses. 345 00:19:22,720 --> 00:19:27,080 Speaker 8: They don't have huge amounts of capital reserves to survive 346 00:19:27,160 --> 00:19:30,040 Speaker 8: periods like this. So it's not so much a question 347 00:19:30,119 --> 00:19:32,879 Speaker 8: I think of, gosh, why are restaurants going down At 348 00:19:32,880 --> 00:19:34,639 Speaker 8: the moment, it's a question of how on earth are 349 00:19:34,680 --> 00:19:38,080 Speaker 8: they not going down? Given you the conditions that we've 350 00:19:38,080 --> 00:19:39,600 Speaker 8: had over the past few years. 351 00:19:43,400 --> 00:19:46,239 Speaker 11: For decades, Aucklanders have enjoyed a long lunch in the 352 00:19:46,240 --> 00:19:48,840 Speaker 11: sun at Ponsomby Institution SPQR. 353 00:19:49,280 --> 00:19:50,000 Speaker 9: But now the. 354 00:19:50,000 --> 00:19:53,520 Speaker 11: Doors are shouting it's in liquidation, owing creditors over two 355 00:19:53,720 --> 00:19:58,320 Speaker 11: million dollars, another casualty of rising costs and people keeping 356 00:19:58,320 --> 00:19:59,639 Speaker 11: their wallets firmly shut. 357 00:20:03,760 --> 00:20:07,600 Speaker 1: Johanna, can you explain to us what happened with SPQR 358 00:20:07,760 --> 00:20:08,400 Speaker 1: in particular? 359 00:20:08,640 --> 00:20:10,960 Speaker 10: Yeah, well, I mean, I suppose the announcement seemed pretty 360 00:20:11,000 --> 00:20:13,359 Speaker 10: dramatic when they said they were closing in July, but 361 00:20:13,520 --> 00:20:16,119 Speaker 10: I think it had definitely, you know, the quality of 362 00:20:16,160 --> 00:20:18,679 Speaker 10: the food maybe had dropped off in recent years, and 363 00:20:18,720 --> 00:20:20,560 Speaker 10: it wasn't sort of the hottest spot to be anymore 364 00:20:20,560 --> 00:20:23,320 Speaker 10: where it had been in the past. And owner Chris 365 00:20:23,440 --> 00:20:25,840 Speaker 10: Rupe just released a really brief statement saying that he 366 00:20:25,920 --> 00:20:28,560 Speaker 10: was really sorry for the current situation and sort of 367 00:20:28,600 --> 00:20:31,520 Speaker 10: encourage people to get out there and support hospitality. But 368 00:20:31,560 --> 00:20:33,600 Speaker 10: then it turned out they were placed into liquidation with 369 00:20:33,680 --> 00:20:36,080 Speaker 10: the business owing more than two million in land revenue 370 00:20:36,560 --> 00:20:39,560 Speaker 10: and it owes over one hundred thousand two staff in 371 00:20:39,680 --> 00:20:42,880 Speaker 10: unpaid wages and holiday pay. And then The Herald also 372 00:20:42,960 --> 00:20:47,439 Speaker 10: reported that the business that owns Specure withdrew nearly one 373 00:20:47,480 --> 00:20:50,440 Speaker 10: point four million from the business before it went into liquidation. 374 00:20:50,480 --> 00:20:51,760 Speaker 10: So I think we're going to hear a lot more 375 00:20:51,760 --> 00:20:52,640 Speaker 10: about that story. 376 00:20:52,920 --> 00:20:55,920 Speaker 1: It is quite jarring when some of our favorite places close. Hey, 377 00:20:56,000 --> 00:20:59,240 Speaker 1: I mean, Peter Gordon's Homeland closed this year's citing issues 378 00:20:59,280 --> 00:21:02,760 Speaker 1: with renewing it's lease. How often is an issue like 379 00:21:02,840 --> 00:21:05,760 Speaker 1: that to blame for a space taking on a new life. 380 00:21:05,800 --> 00:21:08,400 Speaker 10: Well, I mean I heard that the problem with Homeland 381 00:21:08,560 --> 00:21:12,120 Speaker 10: was There's a massive new retirement village going in there 382 00:21:12,119 --> 00:21:14,919 Speaker 10: called Cracker Bay, So I think the development of that 383 00:21:14,960 --> 00:21:18,680 Speaker 10: whole West Haven area didn't include keeping Homeland there. So 384 00:21:19,119 --> 00:21:21,840 Speaker 10: I'm not sure how often you a lease is to blame. 385 00:21:22,040 --> 00:21:24,320 Speaker 8: Yeah, I think there's a whole range of problems like 386 00:21:24,359 --> 00:21:27,879 Speaker 8: that that certainly would finish off a lot of places. 387 00:21:28,240 --> 00:21:32,159 Speaker 8: But yeah, again, I think it's a more complex and 388 00:21:32,359 --> 00:21:37,560 Speaker 8: a multifaceted number of pressures which brings these organizations to 389 00:21:37,640 --> 00:21:38,760 Speaker 8: the edge of collapse. 390 00:21:39,240 --> 00:21:39,960 Speaker 6: I think what is. 391 00:21:39,920 --> 00:21:42,359 Speaker 8: Interesting is it's such a resilient and it's such an 392 00:21:42,440 --> 00:21:47,040 Speaker 8: innovative industry. Often describe restaurants that's extremely nimble, and so 393 00:21:47,200 --> 00:21:49,280 Speaker 8: you know, at the moment where you have these really 394 00:21:49,320 --> 00:21:54,439 Speaker 8: difficult trading conditions, hospitality shows up as an area where 395 00:21:54,520 --> 00:21:59,280 Speaker 8: businesses do suffer and go down, but when conditions pick up, 396 00:21:59,320 --> 00:22:02,960 Speaker 8: hospitality is also the first industry to recover. We sort 397 00:22:02,960 --> 00:22:07,000 Speaker 8: of go into recessionary times quicker and lower, but we've 398 00:22:07,000 --> 00:22:09,840 Speaker 8: come out of them faster and higher. So it's a 399 00:22:09,960 --> 00:22:13,240 Speaker 8: very nimble industry. And Ram's just pointed out in their 400 00:22:13,320 --> 00:22:18,640 Speaker 8: last report that you know there is nineteen thousand, five 401 00:22:18,760 --> 00:22:22,080 Speaker 8: hundred and eighteen restaurants still in New Zealand. It's the 402 00:22:22,160 --> 00:22:25,160 Speaker 8: largest number we've ever had in the country. The growth 403 00:22:25,240 --> 00:22:28,560 Speaker 8: has very flat since twenty twenty three, only zero point 404 00:22:28,560 --> 00:22:31,960 Speaker 8: one percent growth and restaurant numbers. But you know, it's 405 00:22:32,000 --> 00:22:35,240 Speaker 8: not an existential crisis. We're not going to certainly run 406 00:22:35,280 --> 00:22:39,399 Speaker 8: out of restaurants, but it is a very real crisis 407 00:22:39,440 --> 00:22:41,879 Speaker 8: for the people who are running these businesses. 408 00:22:45,840 --> 00:22:49,520 Speaker 1: One New Zealand company that enjoyed success this year was 409 00:22:49,680 --> 00:22:54,560 Speaker 1: rocket Lab, the country's premier space business, celebrated its fiftieth 410 00:22:54,680 --> 00:22:58,280 Speaker 1: launch in June, around the time the Coalition government ramped 411 00:22:58,359 --> 00:23:01,800 Speaker 1: up investment in the era space sector. I spoke with 412 00:23:01,840 --> 00:23:05,439 Speaker 1: the company's founder, Sir Peter Beck, about where too next 413 00:23:05,560 --> 00:23:06,240 Speaker 1: for the company. 414 00:23:10,720 --> 00:23:12,160 Speaker 6: The space industry isn't just launch. 415 00:23:12,240 --> 00:23:14,680 Speaker 12: In fact, you know, two thirds of their businesses building 416 00:23:14,760 --> 00:23:19,760 Speaker 12: satellites and spacecraft and that's kind of geographically agnostic. And 417 00:23:19,800 --> 00:23:22,600 Speaker 12: there's some great startups actually in New Zealand now, great 418 00:23:22,640 --> 00:23:25,600 Speaker 12: space startups, and we're really started to see an ecosystem 419 00:23:25,840 --> 00:23:28,800 Speaker 12: build which is super exciting. So I think New Zealand 420 00:23:28,840 --> 00:23:31,840 Speaker 12: can contribute in the space industry. You know, like I say, 421 00:23:32,040 --> 00:23:35,119 Speaker 12: launch Away steals a show, but does a tremendous amount 422 00:23:35,119 --> 00:23:38,159 Speaker 12: of opportunity across the whole space sector, and you're starting 423 00:23:38,160 --> 00:23:40,840 Speaker 12: to see a number of little startups and in even 424 00:23:40,920 --> 00:23:42,080 Speaker 12: traditional companies play. 425 00:23:42,440 --> 00:23:44,800 Speaker 1: Yeah, it's quite exciting to see. Hey, we've spoken to 426 00:23:45,359 --> 00:23:49,760 Speaker 1: Space Minister Judith Collins just after she was overseas promoting 427 00:23:49,840 --> 00:23:53,439 Speaker 1: New Zealand space industry. In the US. She told us 428 00:23:53,520 --> 00:23:56,119 Speaker 1: and New Zealand was number four last year in the 429 00:23:56,200 --> 00:23:59,720 Speaker 1: number of launches worldwide, after the US, Russia, and China. 430 00:24:00,119 --> 00:24:01,160 Speaker 1: How incredible was that? 431 00:24:01,440 --> 00:24:03,640 Speaker 6: Yeah, I think I look as a proud keV. 432 00:24:03,720 --> 00:24:06,840 Speaker 12: I think it's wonderful and she's been right, like America 433 00:24:06,920 --> 00:24:09,280 Speaker 12: launches the most amount of rockets, and then it's China, 434 00:24:09,400 --> 00:24:11,760 Speaker 12: then it's Russia, and then it's the Maha Peninsula, then 435 00:24:11,760 --> 00:24:14,400 Speaker 12: it's Europe and India and so on and so forth. 436 00:24:14,440 --> 00:24:16,600 Speaker 12: So no, I think it's awesome, and you know, it 437 00:24:16,640 --> 00:24:19,359 Speaker 12: shows where New Zealand kind of sits in ranks in 438 00:24:19,400 --> 00:24:21,920 Speaker 12: the international industry and such a short amount of time. 439 00:24:22,200 --> 00:24:24,639 Speaker 1: Are you excited to see the real possibilities for New 440 00:24:24,720 --> 00:24:26,479 Speaker 1: Zealand when it comes to space. 441 00:24:27,000 --> 00:24:29,399 Speaker 12: Absolutely, I mean it's exactly the kind of thing that 442 00:24:29,440 --> 00:24:31,680 Speaker 12: New Zealand does really well. And that's kind of testament 443 00:24:31,720 --> 00:24:34,600 Speaker 12: to our success and been able to be successful in 444 00:24:34,640 --> 00:24:38,400 Speaker 12: scale in New Zealand and New Zealand, as I said before, 445 00:24:38,400 --> 00:24:42,359 Speaker 12: I had incredibly smart people, were very innovative and the 446 00:24:42,440 --> 00:24:45,760 Speaker 12: ability to kind of move across multiple functions and disciplines, 447 00:24:45,760 --> 00:24:49,040 Speaker 12: which is really important in space industry. So no, I look, 448 00:24:49,119 --> 00:24:51,560 Speaker 12: we've already seen a bunch of Rocket Lab has spin 449 00:24:51,640 --> 00:24:53,320 Speaker 12: out and start their own ventures. 450 00:24:53,080 --> 00:24:57,080 Speaker 6: Which I absolutely applaud and support. Long may that continue. 451 00:24:57,119 --> 00:25:00,320 Speaker 12: I think there's this tremendous opportunity and it's one of 452 00:25:00,320 --> 00:25:03,280 Speaker 12: those things that every country has recognized the value of 453 00:25:03,320 --> 00:25:04,800 Speaker 12: space and investing deeply in it. 454 00:25:04,880 --> 00:25:07,399 Speaker 6: I mean it's kind of like the other AI. 455 00:25:07,720 --> 00:25:09,800 Speaker 12: I mean, there's AI is obviously the talk of all 456 00:25:09,840 --> 00:25:12,960 Speaker 12: the conversations, but equally, you know something that is scaling 457 00:25:13,200 --> 00:25:14,479 Speaker 12: just as fast as space. 458 00:25:26,640 --> 00:25:30,320 Speaker 1: Amongst the policies of the coalition government, reform of the 459 00:25:30,440 --> 00:25:34,240 Speaker 1: Holidays Act is one of the many areas in the spotlight. 460 00:25:34,800 --> 00:25:38,920 Speaker 1: It's the responsibility of Workplace Relations Minister Brook van Velden 461 00:25:38,960 --> 00:25:42,760 Speaker 1: to oversee this. Just this month, she's directed officials to 462 00:25:42,880 --> 00:25:47,440 Speaker 1: change the proposed direction of the reform based on consultation feedback. 463 00:25:47,800 --> 00:25:49,720 Speaker 1: But in June, we caught up with her on what 464 00:25:49,880 --> 00:25:53,960 Speaker 1: her plans were for sorting out this part of the economy. 465 00:25:57,520 --> 00:25:59,959 Speaker 13: One of my top priorities is that we need religious 466 00:26:00,119 --> 00:26:03,919 Speaker 13: lit of change in this term of government. I understand 467 00:26:04,040 --> 00:26:08,120 Speaker 13: many successive Ministers of Workplace Relations have tried and failed 468 00:26:08,119 --> 00:26:11,520 Speaker 13: to get a Holidays Act change across the line, and 469 00:26:11,560 --> 00:26:15,320 Speaker 13: I'd love to make it easier for businesses and workers 470 00:26:15,400 --> 00:26:18,520 Speaker 13: to pay out the right entitlements and for those workers 471 00:26:18,560 --> 00:26:20,439 Speaker 13: to know that they are getting paid the right amounts. 472 00:26:20,480 --> 00:26:23,760 Speaker 13: So that's top priority for me. We're on track to 473 00:26:23,800 --> 00:26:27,800 Speaker 13: get this out in September, and it'll be targeted consultation 474 00:26:27,920 --> 00:26:31,720 Speaker 13: because it's a very technical law. But I very much 475 00:26:31,760 --> 00:26:33,880 Speaker 13: look forward to all of the feedback that comes back 476 00:26:33,960 --> 00:26:35,800 Speaker 13: to let us know if we're on the right track 477 00:26:36,000 --> 00:26:38,720 Speaker 13: to make it simpler. The last thing I want is 478 00:26:38,720 --> 00:26:41,240 Speaker 13: a new law change that's even more complex. 479 00:26:41,560 --> 00:26:43,960 Speaker 1: It is kind of one that would be difficult to 480 00:26:44,000 --> 00:26:45,919 Speaker 1: explain to someone on the street, right because it's a 481 00:26:45,920 --> 00:26:49,440 Speaker 1: lot of backroom situations in terms of payroll and things 482 00:26:49,520 --> 00:26:53,040 Speaker 1: like that that perhaps employees don't exactly see totally. 483 00:26:53,359 --> 00:26:58,560 Speaker 13: Absolutely look for most people, they'll assume that their business 484 00:26:58,680 --> 00:27:00,760 Speaker 13: or their manager is getting it right. They might get 485 00:27:00,800 --> 00:27:03,760 Speaker 13: their pay slip every fortnight or every month, and it 486 00:27:03,840 --> 00:27:06,520 Speaker 13: tells them how much they're earning that week, how much 487 00:27:06,560 --> 00:27:10,119 Speaker 13: they may have in holidays pay coming up, or you know, 488 00:27:10,200 --> 00:27:13,919 Speaker 13: what their sick leaving titlements might still be. By and large, 489 00:27:14,000 --> 00:27:16,600 Speaker 13: most people are doing a very good job. But because 490 00:27:16,640 --> 00:27:20,399 Speaker 13: the law is so complicated and so complex, even some 491 00:27:20,480 --> 00:27:24,440 Speaker 13: of our largest organizations have been getting it wrong. You take, 492 00:27:24,480 --> 00:27:28,600 Speaker 13: for example, the Ministry of Business, Innovation and Employment. You 493 00:27:28,600 --> 00:27:31,720 Speaker 13: know they even got holidays pay wrong. Now, if the 494 00:27:31,880 --> 00:27:35,680 Speaker 13: law is so complex that even the government department that's 495 00:27:35,680 --> 00:27:37,720 Speaker 13: supposed to look after this law is getting it wrong, 496 00:27:38,080 --> 00:27:40,960 Speaker 13: there's serious work that needs to be done because at 497 00:27:40,960 --> 00:27:43,359 Speaker 13: the heart of this I want all workers to know 498 00:27:43,840 --> 00:27:45,480 Speaker 13: they're going home at the end of the week with 499 00:27:45,600 --> 00:27:48,000 Speaker 13: the right pay, with the right holidays pay, with the 500 00:27:48,080 --> 00:27:51,240 Speaker 13: right sick leave, and that businesses have far more time 501 00:27:51,400 --> 00:27:53,399 Speaker 13: to actually do what they do well, which is their 502 00:27:53,440 --> 00:27:55,760 Speaker 13: real job, not figuring out compliance. 503 00:27:59,119 --> 00:28:02,800 Speaker 1: In July, Minister Chris Bishop announced that the government wants 504 00:28:02,840 --> 00:28:07,000 Speaker 1: to flood the market with more houses to improve growth 505 00:28:07,240 --> 00:28:11,560 Speaker 1: and bring down prices, going against Kiwi tradition we're owning 506 00:28:11,680 --> 00:28:15,119 Speaker 1: houses is pretty much the cornerstone of our economy. To 507 00:28:15,200 --> 00:28:18,920 Speaker 1: discuss how this might work, we spoke with Opus Partners 508 00:28:19,000 --> 00:28:21,119 Speaker 1: economist Ad mcnight. 509 00:28:23,800 --> 00:28:23,960 Speaker 14: Well. 510 00:28:23,960 --> 00:28:27,119 Speaker 15: I think the Housing Minister christ Bishop is talking a 511 00:28:27,240 --> 00:28:30,000 Speaker 15: big game, and certainly his incentivized to do that. Lots 512 00:28:30,040 --> 00:28:33,639 Speaker 15: of people want house prices to be stable over the very, 513 00:28:33,960 --> 00:28:37,240 Speaker 15: very long term. I think there will be some benefits 514 00:28:37,280 --> 00:28:39,640 Speaker 15: to it. For instance, they're saying they are going to 515 00:28:39,840 --> 00:28:43,320 Speaker 15: remove any minimum requirement about how big a house or 516 00:28:43,320 --> 00:28:46,040 Speaker 15: an apartment has to be. That will mean we get 517 00:28:46,080 --> 00:28:49,280 Speaker 15: more smaller sized departments built. On top of that, councils 518 00:28:49,320 --> 00:28:51,680 Speaker 15: won't be able to have a say in terms of 519 00:28:51,880 --> 00:28:55,240 Speaker 15: whether apartments have to have balconies or not, or how 520 00:28:55,360 --> 00:28:57,880 Speaker 15: large those balconies have to be. Well, with all of 521 00:28:57,880 --> 00:29:00,680 Speaker 15: those rules gone, we should see some cheaper and certainly 522 00:29:00,760 --> 00:29:04,440 Speaker 15: smaller apartments coming through. And at the margin, yeah, maybe 523 00:29:04,480 --> 00:29:07,200 Speaker 15: a couple more developers will build those sorts of properties, 524 00:29:07,240 --> 00:29:09,320 Speaker 15: and that will be good for people who are okay 525 00:29:09,400 --> 00:29:12,680 Speaker 15: and happy to live in slightly smaller properties. I always 526 00:29:12,800 --> 00:29:15,760 Speaker 15: take what politicians say with a grain of salt, because 527 00:29:15,760 --> 00:29:17,760 Speaker 15: they're very good at saying that they're going to do 528 00:29:17,840 --> 00:29:21,440 Speaker 15: something big and meaningful and then it doesn't always materialize, 529 00:29:21,440 --> 00:29:23,320 Speaker 15: and I'll give you an example of that. The Housing 530 00:29:23,360 --> 00:29:26,200 Speaker 15: Minister is saying that they want every single council in 531 00:29:26,240 --> 00:29:30,000 Speaker 15: the country to open up or zone for thirty years 532 00:29:30,240 --> 00:29:34,400 Speaker 15: of population growth, and often christ Church is the shining 533 00:29:34,480 --> 00:29:38,239 Speaker 15: example that the government holds up because immediately after the 534 00:29:38,280 --> 00:29:41,680 Speaker 15: earthquakes they zoned for thirty years of population growth. There 535 00:29:41,720 --> 00:29:44,280 Speaker 15: was a lot of housing being built and for a 536 00:29:44,400 --> 00:29:47,880 Speaker 15: time house prices were pretty flat down in christ Church. 537 00:29:48,200 --> 00:29:50,320 Speaker 15: But what a lot of people miss is that during 538 00:29:50,320 --> 00:29:54,400 Speaker 15: the COVID boom from twenty nineteen onwards, christ Church house 539 00:29:54,400 --> 00:29:57,840 Speaker 15: prices actually increased at a much faster rate than the 540 00:29:57,960 --> 00:30:02,160 Speaker 15: likes of Wellington, Auckland, Dunedin. And so I'm not sure 541 00:30:02,200 --> 00:30:04,480 Speaker 15: whether zoning a whole heap of land is going to 542 00:30:04,520 --> 00:30:07,600 Speaker 15: fix all of the problem, but it will certainly help. 543 00:30:08,040 --> 00:30:11,560 Speaker 1: We've already seen the growth of new builds in Auckland, 544 00:30:11,800 --> 00:30:14,800 Speaker 1: for example, outpaced population growth. So what do we need 545 00:30:14,840 --> 00:30:16,480 Speaker 1: to keep building more houses? 546 00:30:16,640 --> 00:30:18,440 Speaker 15: Well, if I take you back a couple of years, 547 00:30:18,480 --> 00:30:21,280 Speaker 15: every single media outlet, including the Herald, was talking about 548 00:30:21,320 --> 00:30:24,239 Speaker 15: a massive housing crisis and we needed to build more 549 00:30:24,280 --> 00:30:26,360 Speaker 15: and more and more homes. I think this is just 550 00:30:26,480 --> 00:30:27,600 Speaker 15: part of the catch up. 551 00:30:28,040 --> 00:30:31,440 Speaker 1: Do you worry about their plan to remove the urban 552 00:30:31,560 --> 00:30:32,760 Speaker 1: rural boundaries? 553 00:30:33,320 --> 00:30:36,600 Speaker 15: I worry more about the infrastructure. It's quite interesting because 554 00:30:36,600 --> 00:30:39,920 Speaker 15: if you remove the rural urban boundary, you're going to 555 00:30:39,960 --> 00:30:42,680 Speaker 15: get more housing sprawl, right, so you are likely to 556 00:30:42,680 --> 00:30:46,480 Speaker 15: see more housing built out Pocono Way just south of Auckland, 557 00:30:46,720 --> 00:30:49,040 Speaker 15: and also down in Bookacoi in some of those more 558 00:30:49,240 --> 00:30:52,920 Speaker 15: rural communities. Now, that obviously has benefits and drawbacks. The 559 00:30:52,960 --> 00:30:55,840 Speaker 15: benefit is that if I am a person who is 560 00:30:55,880 --> 00:30:58,080 Speaker 15: willing to live an hour out of the city because 561 00:30:58,080 --> 00:31:02,080 Speaker 15: I want a standalone house, prices are a bit cheaper 562 00:31:02,120 --> 00:31:05,240 Speaker 15: and I want that kind of lifestyle, I kind of think, well, 563 00:31:05,320 --> 00:31:07,520 Speaker 15: why do we have all these rules in place? But 564 00:31:07,840 --> 00:31:10,200 Speaker 15: we also know that we're not so good at building 565 00:31:10,240 --> 00:31:13,080 Speaker 15: infrastructure here in New Zealand. So all good, We're going 566 00:31:13,080 --> 00:31:15,400 Speaker 15: to get rid of the rural urban boundary. But now 567 00:31:15,400 --> 00:31:18,800 Speaker 15: it's Auckland Council and Auckland Council ratepayers who are now 568 00:31:18,840 --> 00:31:22,080 Speaker 15: responsible for building that infrastructure that goes in there to 569 00:31:22,120 --> 00:31:25,320 Speaker 15: support those houses. Now, yes, the developers have to pay 570 00:31:25,360 --> 00:31:28,960 Speaker 15: some taxes what's called development contributions in order to build 571 00:31:29,000 --> 00:31:32,320 Speaker 15: those properties. But often my understanding is that a lot 572 00:31:32,320 --> 00:31:35,720 Speaker 15: of that infrastructure is ultimately financed by the poor old ratepayer. 573 00:31:35,960 --> 00:31:39,560 Speaker 1: Those plans to decide the minimum size of new apartments, 574 00:31:39,560 --> 00:31:41,800 Speaker 1: could that see kind of like an influx of shoebox 575 00:31:41,960 --> 00:31:44,720 Speaker 1: style apartments, the ones that we see I'm thinking in Japan, 576 00:31:44,880 --> 00:31:47,000 Speaker 1: you know, one by one meter, et cetera. 577 00:31:47,200 --> 00:31:49,080 Speaker 15: Well, that is the risk if you don't have a 578 00:31:49,160 --> 00:31:52,040 Speaker 15: rule in place. A developer will build them if they 579 00:31:52,120 --> 00:31:54,440 Speaker 15: think they can sell them, and if they think they 580 00:31:54,440 --> 00:31:57,840 Speaker 15: can make more money by selling those shoe box apartments 581 00:31:58,360 --> 00:32:01,720 Speaker 15: compared to building something else. So ultimately it comes down 582 00:32:01,760 --> 00:32:05,960 Speaker 15: to what are home buyers or investors willing to purchase. 583 00:32:06,240 --> 00:32:08,760 Speaker 15: And if an investor is buying those kinds of shoe 584 00:32:08,800 --> 00:32:10,959 Speaker 15: box apartments and saying, y'reh okay, I'll buy that at 585 00:32:11,000 --> 00:32:13,760 Speaker 15: whatever price the developer are selling it for, whether people 586 00:32:13,760 --> 00:32:18,000 Speaker 15: are actually willing to rent those properties. I considerably foresee 587 00:32:18,040 --> 00:32:20,640 Speaker 15: a future where there are a lot of studio apartments built. 588 00:32:21,040 --> 00:32:24,000 Speaker 15: Investors then purchase them, and there we have new stories 589 00:32:24,040 --> 00:32:27,040 Speaker 15: about how small these properties are and the rents that 590 00:32:27,080 --> 00:32:29,160 Speaker 15: people are paying for them. But it ultimately comes down 591 00:32:29,160 --> 00:32:31,360 Speaker 15: to what are people willing to build? What are people 592 00:32:31,400 --> 00:32:35,080 Speaker 15: willing to buy and what are people willing to rent? 593 00:32:41,960 --> 00:32:44,760 Speaker 1: Finally, no wrap of the year in ki we business 594 00:32:44,840 --> 00:32:47,800 Speaker 1: would be complete without touching on the saga of the 595 00:32:47,880 --> 00:32:52,000 Speaker 1: Deval group. The home of company founders Kenyon and Charlotte 596 00:32:52,000 --> 00:32:55,880 Speaker 1: Clark was rated by police in early August as part 597 00:32:55,880 --> 00:33:00,840 Speaker 1: of the investigations into the Auckland apartment developers. Court hearings 598 00:33:00,840 --> 00:33:04,000 Speaker 1: have followed over recent months, and a court case between 599 00:33:04,040 --> 00:33:09,040 Speaker 1: the Financial Markets Authority and PwC against Duval and the 600 00:33:09,080 --> 00:33:12,800 Speaker 1: Clerks is set for June next year. We caught up 601 00:33:12,840 --> 00:33:16,400 Speaker 1: with Enzid Herald property editor Anne Gibson in late August 602 00:33:16,600 --> 00:33:20,680 Speaker 1: when Deval was placed into statutory management by the government. 603 00:33:24,480 --> 00:33:29,600 Speaker 14: This company is a relatively complex group, with about seventy entytes. 604 00:33:30,320 --> 00:33:36,160 Speaker 14: It is essentially an Auckland apartment and townhouse developer. Now 605 00:33:36,200 --> 00:33:40,000 Speaker 14: on its website it said it had settled the sale 606 00:33:40,440 --> 00:33:43,160 Speaker 14: of seven hundred and seventy four homes in the last 607 00:33:43,200 --> 00:33:47,360 Speaker 14: six years and it has two hundred and seventy eight 608 00:33:47,480 --> 00:33:53,320 Speaker 14: homes under construction. Are those are mainly apartments as well. 609 00:33:54,200 --> 00:33:59,680 Speaker 14: It has what their Commerce and Consumer Affairs Minister Andrew 610 00:33:59,720 --> 00:34:03,200 Speaker 14: Bailey told us yesterday one hundred and twenty to one 611 00:34:03,280 --> 00:34:08,879 Speaker 14: hundred and fifty investors, home buyers and commercial lenders. 612 00:34:09,200 --> 00:34:11,280 Speaker 1: What more can you tell us about the people behind 613 00:34:11,440 --> 00:34:12,000 Speaker 1: this group? 614 00:34:12,280 --> 00:34:15,440 Speaker 14: Well, essentially there were four people according to the Devai 615 00:34:15,600 --> 00:34:19,879 Speaker 14: business Now, the first two are the founders husband and wife, 616 00:34:19,960 --> 00:34:24,400 Speaker 14: Charlotte and Kenyan Clark. She's the CEO, he's the former CEO. 617 00:34:25,080 --> 00:34:28,560 Speaker 14: Then we have John Delzel. Now he's had many years 618 00:34:29,000 --> 00:34:34,560 Speaker 14: experience in the Auckland property market and he was Auckland 619 00:34:34,560 --> 00:34:39,160 Speaker 14: Council's waterfront regeneration project here that was see in city 620 00:34:39,640 --> 00:34:43,120 Speaker 14: were the real focus on the Winyard Quarter many years ago. 621 00:34:43,320 --> 00:34:46,719 Speaker 14: And he's the chairman of Deval. And then we've got 622 00:34:46,800 --> 00:34:50,400 Speaker 14: a lawyer on Culiny. He's also a director. 623 00:34:50,960 --> 00:34:55,399 Speaker 1: Kenyon and Charlotte Clark seem like they were quite high flyers, hey, 624 00:34:55,600 --> 00:34:57,840 Speaker 1: or at least they were trying to portray that image. 625 00:34:57,840 --> 00:35:00,760 Speaker 1: Weren't they filming a reality show about them or something? 626 00:35:01,080 --> 00:35:05,080 Speaker 14: Yes, this show is called The Property Developers and one 627 00:35:05,160 --> 00:35:09,680 Speaker 14: season is evidently made. It is a number of parts 628 00:35:09,719 --> 00:35:12,320 Speaker 14: and there was talk about a second season being made. 629 00:35:12,400 --> 00:35:15,080 Speaker 14: Now for some years the Herald has reported on the 630 00:35:15,080 --> 00:35:18,120 Speaker 14: Property Developers and you can see a trailer online which 631 00:35:18,160 --> 00:35:21,800 Speaker 14: is most interesting. It has never screenmed. But when I 632 00:35:21,880 --> 00:35:27,120 Speaker 14: talked to the person behind that in Queenstown about a 633 00:35:27,120 --> 00:35:30,480 Speaker 14: week ago, he said that he was hoping to secure 634 00:35:31,080 --> 00:35:36,880 Speaker 14: distribution to an international business and he has previously mentioned 635 00:35:37,200 --> 00:35:41,920 Speaker 14: Netflix and Neon and the likes of those sorts of businesses, 636 00:35:41,960 --> 00:35:44,520 Speaker 14: but we've never yet seen it. He did tell me 637 00:35:44,640 --> 00:35:47,839 Speaker 14: that it's more likely to be shown overseas before it's 638 00:35:47,840 --> 00:35:48,960 Speaker 14: shown in New Zealand. 639 00:35:49,440 --> 00:35:52,080 Speaker 1: Right, is it some kind of selling Sunset esque kind 640 00:35:52,080 --> 00:35:53,680 Speaker 1: of thing. I don't know whether you watch that or not. 641 00:35:54,320 --> 00:35:57,200 Speaker 14: It's a reality sort of behind the scenes of what 642 00:35:57,400 --> 00:36:00,080 Speaker 14: is the life of a property developer, and so it 643 00:36:00,160 --> 00:36:03,719 Speaker 14: is a reality serious where the clerks are shown and 644 00:36:03,760 --> 00:36:06,360 Speaker 14: their children are shown. They're filmed in different parts of 645 00:36:06,400 --> 00:36:09,840 Speaker 14: New Zealand and it looks pretty amazing. It'd be really 646 00:36:09,840 --> 00:36:11,640 Speaker 14: interesting to see it. I look forward to it. 647 00:36:13,239 --> 00:36:16,760 Speaker 1: I'm really concerned that there are some pretty serious issues 648 00:36:16,760 --> 00:36:16,960 Speaker 1: with it. 649 00:36:17,280 --> 00:36:19,360 Speaker 3: Do you know what, I actually need to call my lawyers. 650 00:36:19,880 --> 00:36:22,040 Speaker 7: It was kind of funny, but if he's putting this 651 00:36:22,400 --> 00:36:25,440 Speaker 7: up publicly, the yeah, I mean. 652 00:36:25,280 --> 00:36:26,760 Speaker 4: This is just this week's problem. 653 00:36:27,080 --> 00:36:28,960 Speaker 10: Let's just say that I think that we basically just 654 00:36:29,000 --> 00:36:32,759 Speaker 10: burned a million dollars. 655 00:36:33,080 --> 00:36:37,600 Speaker 1: The company's troubles first became public earlier this month. Why 656 00:36:37,640 --> 00:36:40,760 Speaker 1: did they come to the attention of the Financial Markets Authority? 657 00:36:41,200 --> 00:36:44,520 Speaker 14: It dates back to twenty twenty one when the FMA 658 00:36:44,680 --> 00:36:48,719 Speaker 14: talked Val to remove advertising for a mortgage fund. It 659 00:36:48,719 --> 00:36:52,480 Speaker 14: was about twenty million dollar fund and the FMA basically 660 00:36:52,520 --> 00:36:56,319 Speaker 14: said that that advertising gave the impression to people it 661 00:36:56,440 --> 00:37:00,799 Speaker 14: was low risk. But Kenny Clark said in response that 662 00:37:00,840 --> 00:37:04,360 Speaker 14: there hadn't been anyone who had complained and had raised 663 00:37:04,760 --> 00:37:08,319 Speaker 14: twenty million dollars via that mortgage offer. So that was 664 00:37:08,360 --> 00:37:12,320 Speaker 14: the first time that we began to realize that there 665 00:37:12,520 --> 00:37:15,880 Speaker 14: was action by the Chrome Authority against Juvail Group. 666 00:37:16,320 --> 00:37:19,480 Speaker 1: Take us through the events on August second, when these 667 00:37:19,520 --> 00:37:22,840 Speaker 1: actions became public and the group was put into interim 668 00:37:23,040 --> 00:37:24,680 Speaker 1: receivership is well, that's. 669 00:37:24,480 --> 00:37:28,080 Speaker 14: When the FMA announced that three accountants of Peter Receiver 670 00:37:28,600 --> 00:37:33,080 Speaker 14: interim receivers and managers of sixty four deval entities. So 671 00:37:33,160 --> 00:37:37,719 Speaker 14: there's a companies as well as partnerships, and also they 672 00:37:37,719 --> 00:37:42,960 Speaker 14: had control over Kenyon and Charlotte Clark. And so the 673 00:37:43,080 --> 00:37:47,319 Speaker 14: FMA had said it had been to the court to 674 00:37:47,440 --> 00:37:51,840 Speaker 14: have that appointment made although there had been a number 675 00:37:51,840 --> 00:37:56,520 Speaker 14: of actions by the FMA against Deval, and Deval had 676 00:37:56,640 --> 00:38:00,399 Speaker 14: challenged at least at one of those. Was the first 677 00:38:00,440 --> 00:38:04,840 Speaker 14: time on August two, when we realized the quite serious 678 00:38:04,920 --> 00:38:08,239 Speaker 14: nature of what was occurl Do. 679 00:38:08,239 --> 00:38:10,600 Speaker 1: We know why police were involved in showing up at 680 00:38:10,600 --> 00:38:13,600 Speaker 1: the Clark's house. It seems pretty unusual in a situation 681 00:38:13,760 --> 00:38:14,000 Speaker 1: like this. 682 00:38:14,520 --> 00:38:18,600 Speaker 14: So my college John Weeks, went to the police and 683 00:38:18,680 --> 00:38:22,080 Speaker 14: asked why they were involved. We knew that when the 684 00:38:22,360 --> 00:38:27,359 Speaker 14: FMA went to the Clerk's house on the second that 685 00:38:27,440 --> 00:38:30,680 Speaker 14: the police had been there as well. Now the police 686 00:38:30,719 --> 00:38:35,040 Speaker 14: said that no arrests were made, but that they had 687 00:38:35,320 --> 00:38:39,200 Speaker 14: taken custody of several firearms at the property. Now they 688 00:38:39,239 --> 00:38:42,879 Speaker 14: said staff were quired to take custody of those and 689 00:38:42,920 --> 00:38:47,480 Speaker 14: that had been seized as property. One of our photographers, 690 00:38:47,520 --> 00:38:53,280 Speaker 14: Alex Burton, took photographs of police going into this home 691 00:38:53,920 --> 00:38:56,320 Speaker 14: with what appeared to be gun cases. 692 00:38:56,920 --> 00:39:01,120 Speaker 1: A few weeks after that interim receivership, the government intervened 693 00:39:01,239 --> 00:39:04,760 Speaker 1: earlier this week. Can you walk us through the government moves? 694 00:39:05,200 --> 00:39:07,719 Speaker 14: Yes, that was a real surprise as well. There have 695 00:39:07,760 --> 00:39:10,880 Speaker 14: been a number of surprising aspects to this. So the 696 00:39:11,000 --> 00:39:15,360 Speaker 14: FMA confirmed that the Governor General, on the advice of 697 00:39:15,480 --> 00:39:19,600 Speaker 14: the Minister of Commerce and Consumer Affairs, had declared that 698 00:39:19,680 --> 00:39:23,400 Speaker 14: a number of entities within the Duval Group be placed 699 00:39:23,560 --> 00:39:29,600 Speaker 14: in statutory management. Now this is under the Corporations Act 700 00:39:29,719 --> 00:39:36,520 Speaker 14: and statutory management means effectively that one entity, in this 701 00:39:36,600 --> 00:39:41,719 Speaker 14: case PwC and those accountants who are also the receivers 702 00:39:41,840 --> 00:39:44,480 Speaker 14: and the managers of the De Rold business. As it 703 00:39:44,480 --> 00:39:48,920 Speaker 14: gets really complicated, one entity is in charge. 704 00:39:49,160 --> 00:39:49,440 Speaker 1: Now. 705 00:39:49,960 --> 00:39:54,560 Speaker 14: The FMA thought that was important to limit or prevent 706 00:39:55,040 --> 00:39:58,640 Speaker 14: the risk of further deterioration in the financial affairs of 707 00:39:58,719 --> 00:40:03,560 Speaker 14: their businesses or any fortunate activity. It to preserve the 708 00:40:03,760 --> 00:40:07,560 Speaker 14: interests of the critics and to enable the affairs of 709 00:40:07,680 --> 00:40:11,560 Speaker 14: Duval Group to be managed and what if you may said, 710 00:40:12,000 --> 00:40:13,640 Speaker 14: was a more orderly way. 711 00:40:16,760 --> 00:40:20,520 Speaker 1: That's it for this compilation episode of The Front Page. 712 00:40:20,920 --> 00:40:23,040 Speaker 9: You can read more about the stories featured in. 713 00:40:23,040 --> 00:40:27,279 Speaker 1: This episode and extensive news coverage at enziherld, dot co, 714 00:40:27,600 --> 00:40:28,160 Speaker 1: dot and z. 715 00:40:28,600 --> 00:40:30,120 Speaker 9: The Front Page is produced by. 716 00:40:30,000 --> 00:40:33,719 Speaker 1: Ethan Sills and Richard Martin, who is also our sound engineer, 717 00:40:33,840 --> 00:40:35,200 Speaker 1: along with Paddy Fox. 718 00:40:35,600 --> 00:40:36,920 Speaker 9: I'm Chelsea Daniels. 719 00:40:37,239 --> 00:40:40,440 Speaker 1: Subscribe to The Front Page on iHeartRadio or wherever you 720 00:40:40,480 --> 00:40:45,239 Speaker 1: get your podcasts and tune in tomorrow for another compilation episode, 721 00:40:45,440 --> 00:40:46,680 Speaker 1: taking a look back at some 722 00:40:46,800 --> 00:40:49,000 Speaker 9: Of the year's biggest stories.