INDEPENDENT NEWS

Small Business Loses From Insolvency Laws Change

Published: Fri 23 Nov 2001 09:34 AM
Small Business Loses From Change To Insolvency Laws
Changes to insolvency laws will disadvantage contractors and small business, says Business New Zealand.
Executive Director Anne Knowles says small businesses and contractors, often tradesmen, will now be put so far behind employees in the queue for payment that there will be nothing left for them.
"Priority in the queue is normally determined by statutory obligation - but now employees are being given additional priority despite the fact that there is no statutory obligation to pay redundancy," Ms Knowles said.
"Businesses that have provided goods or services in good faith to a company they may not even be aware is ailing, will be penalised by this move.
"Further disadvantage derives from the fact that Inland Revenue remains a priority creditor - Government is holding to itself the ability to claim priority ahead of all others with just as good if not better claims. In fact Inland Revenue already has a privileged status because it is likely to be in an early position to know the true financial state of a business before any other creditors, and has the power to take funds from business accounts.
"The good intention of protecting employees' position therefore turns out in practice to be a penalty for small businesses - an unfortunate move since growth in jobs depends largely on the health of the small business sector."
Ends

Next in Business, Science, and Tech

OceanaGold Announces Receipt Of WKP Mining Permit
By: OceanaGold
COVID-19 lockdown has widespread effects on labour market
By: Statistics New Zealand
New Research By NZ Post Shows Online Shopping Grew 105% In Alert Level 3
By: New Zealand Post
Westpac NZ Lowers Merchant Fees For Small Businesses
By: Westpac New Zealand
Million Dollar Plus Property Sales Increase 11.7% Nationally, Says REINZ
By: REINZ
Government To Regulate Environmentally Harmful Plastic Packaging, Tyres, E-waste
By: New Zealand Government
Ice-olation For Antarctica New Zealand
By: Antarctica New Zealand
July House Price Index illustrates market resilience
By: QV Valuations
Queenstown Rents Experience Biggest Drop In Seven Years
By: Trade Me Property
The Quiet Earth
By: Auckland University
James Shaw says Kiwibank, not ministers should decide on investors
By: RNZ
Kiwis Confident Financial Markets Will Recover From COVID-19, Plan To Increase Investments
By: Financial Markets Authority
Warehouse Using Covid For Cover As Extensive Restructure Makes Everyone Worse Off
By: FIRST Union
Stronger Green Voice Needed Next Term To Stop More Mining On Or Under Conservation Land
By: Green Party
Unemployment Figures Don’t Tell The Full Story
By: New Zealand National Party
View as: DESKTOP | MOBILE © Scoop Media