Latest / Best of Business / Alan McDonald: EMA Head of Advocacy on the increase in businesses seeking advice about redundancies

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Alan McDonald: EMA Head of Advocacy on the increase in businesses seeking advice about redundancies · Best of Business

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  Speaker 2: First, though, news Justin and the Herald is that Smith
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  Speaker 2: and Coey has just announced it will close for good.
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  Speaker 2: It will close its doors for the final time within
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  Speaker 2: the next ten weeks, by July the thirty first. Now,
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  Speaker 2: this is going to mean a loss of one hundred
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  Speaker 2: jobs and also the end of one hundred and forty
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  Speaker 2: five years of history. Smith and Coey, if you've been
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  Speaker 2: following this, have obviously try to make it work lately.
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  Speaker 2: They've kept the Queen Street store going. They've tried to
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  Speaker 2: curate the collection there. They closed the Newmarket store, but
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  Speaker 2: it hasn't worked, and they say, unfortunately the foot traffic
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  Speaker 2: on Queen Street is significantly lower than it was this
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  Speaker 2: time last Year's very very sad news, Heather, do for
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  Speaker 2: see Allen, Right, Remember all those businesses telling themselves they
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  Speaker 2: just have to survive till twenty five, Well, it sounds
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  Speaker 2: like they may now be telling themselves they need to
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  Speaker 2: hang on till twenty six. The EMA says it's received
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  Speaker 2: a huge number of queries, over four hundred from businesses
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  Speaker 2: in the first three months of the year, all wandering
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  Speaker 2: about restructuring and redundant. The EMA's head of advocacy, Alan
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  Speaker 2: McDonald is with me. Now, hey, Alan, Heather, what about
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  Speaker 2: the news about Smith and Coe.
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  Speaker 3: Oh, that's a real shame. I mean, that's that's been
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  Speaker 3: part of the Auckland landscape for as you say, one
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  Speaker 3: hundred and forty odd years, that's slightly older than the EMA. Actually, yeah,
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  Speaker 3: I mean there's one hundred people losing their jobs.
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  Speaker 2: That's snuggod case in point exactly what you were talking
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  Speaker 2: about here, which is that businesses just cannot hold on
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  Speaker 2: through this.
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  Speaker 3: Yeah, it's you know, there's been a lot of good
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  Speaker 3: news and I think we're talking earlier about the export
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  Speaker 3: numbers and things like that, but it's still really really
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  Speaker 3: tough on the ground. And you know, business conference is
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  Speaker 3: going up, some of the indicators are turning, but that's
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  Speaker 3: not what's happening on the ground. We've seen, unfortunately, a
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  Speaker 3: record number of inquiries around restructuring and redundancy in the
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  Speaker 3: first quarter.
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  Speaker 2: What is it is it that they Is it that
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  Speaker 2: people had sort of just been too optimistic about how
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  Speaker 2: much of a recovery we would experience, or is it
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  Speaker 2: that basically everything's just banked up and they had expected
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  Speaker 2: to last until this point and then no longer.
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  Speaker 3: Really, yeah, I think there's a few things in there.
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  Speaker 3: So I think really it's the combination of what six
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  Speaker 3: or seven years of really tough economic conditions. I mean,
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  Speaker 3: if you go back even pre COVID, you know, the
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  Speaker 3: economy was turning down. Then then we had COVID. Then
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  Speaker 3: we had supply chain shocks and inflation and high interest
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  Speaker 3: rates and all of those things. And I think the
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  Speaker 3: last resort play for a lot of businesses when they
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  Speaker 3: look at their costs and all that is, well, we're
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  Speaker 3: going to have to restructure the number of people. And
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  Speaker 3: that's what's happening. They are at that last chance to
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  Speaker 3: leon if you like, and that's been reflected in some
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  Speaker 3: of those numbers.
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  Speaker 2: Trouble is, though, Allan, isn't there a risk that business
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  Speaker 2: is cut deep, They get rid of the people, they
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  Speaker 2: try to cut down in terms of their size, and
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  Speaker 2: then when the economy starts to recover, they find that
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  Speaker 2: the replacing those people is actually really hard.
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  Speaker 3: Yeah. We did see that post GFC actually where the
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  Speaker 3: numbers of businesses closing continued to rise. Actually as the
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  Speaker 3: economy improved, and that was the case, then it would
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  Speaker 3: cut too deep. So really it's about just making sure
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  Speaker 3: that while you're kind of making those adjustments to right
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  Speaker 3: size yourself, you don't leave yourself short of capabilities and
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  Speaker 3: skills and capacity when things do turn. And that's a
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  Speaker 3: very fine balance and that's where organizations like ourselves and
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  Speaker 3: others can help.
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  Speaker 2: What's on your wish list for tomorrow? You must have something.
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  Speaker 3: Well, there's been a lot of hints dropped about something
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  Speaker 3: around the accelerated depreciation and I think that would be
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  Speaker 3: really good for a small business economy. The one that
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  Speaker 3: maybe in the frame is just raising that threshold on expenses.
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  Speaker 3: So it's currently in one thousand in Australia it's twenty thousand.
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  Speaker 3: I don't think we'll go that high, but something in
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  Speaker 3: either one of those areas would be great, even if
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  Speaker 3: it's just a simplication not a big headline number. Yeah,
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  Speaker 3: that would help with the confidence.
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  Speaker 2: Good stuff. Hey, Allen, always lovely to talk to you.
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  Speaker 2: Thank you very much, Allen McDonald, Head of Advocacy AMAT.
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