Kiyota m Chelsea Daniels and this is a compilation episode of The front Page, a daily podcast presented by the New Zealand Herald. The economy has been in an uncertain place for quite some time, and twenty twenty four was no different. Over the last year, we've seen some improvement, though in October the annual rate for inflation had fallen from three point three percent to two point two percent. The official cash rate ended the year on four point
twenty five percent. Elsewhere, though, the news hasn't been so positive. The country's gross domestic product contracted zero point two percent in the June quarter, only just missing out on a
technical recession. Job cuts across multiple sectors have seen job seeker benefit numbers surged to over two hundred thousand, and the government books released just this week show that it's unlikely we'll return to a surplus until twenty twenty nine, about a year later than originally anticipated in this year's budget. So what's going on in our economy and how soon until we start to see some change. Let's start back in May, when Finance Minister Nikola Willis announced her first budget.
We got analysis from Enzet Herald Business editor at large, Liam Dan starting with those much promised tax cuts.
So I'm trying to give government benefit of the doubt here. They want to give people a little bit of hope, a little bit of money back, a squeeze middle all that sort of stuff. But there are some issues I think around timing. Look, no, but no tax expert i've spoken to thinks it's a bad idea to adjust these threshold It's been about fourteen years since they've been adjusted.
So that's moving the brackets at which you move to the next higher tax rate, adjusting them up effectively for the inflation, it just means you don't pay quite as much tax and so we get our twenty dollars a week, probably for a large chunk of New Zealand. The issue is that the timing. When you're putting twenty dollars a week in people's pockets, it's a bit like you know, labor did different things with the cost of living crisis last year, but they cut petel taxes and things, and
when you do that, it's inflationary. It sort of keeps the economy ticking over, which normally is a good thing
in a recession. You want to stimulate. But we've had so much stimulus through COVID, we've got this high inflation, and that means the Reserve Bank is going to be looking at it very closely, doing the maths on them whether it really balances out, because the balancing force in all of this is the cuts to public services, so that comes out of the economy and that should be a disinflationary force, and Nikola Willis has said they've got
that finally balanced so that it won't be inflationary. She's quite adamant about that.
Wild times may feel tough for everyday, Kiwis right now, the economy will recover and inflation will come down. Tax relief in Budget twenty twenty four is fully funded from savings and revenue initiatives, and I can confirm that because of this, the government is not borrowing to fund this tax relief and it will not add to inflation.
You know, already some economists like Cameron Baggery are questioning that because you know the timing of the cuts. We don't know that they're going to take a lot longer to implement, and frankly, it could be quite a long time before the sort of disinflationary impulse of the tax cuts flows through, whereas after July one, we should all be starting to see I say all, there's certainly all middle wage journers, and wage journers will start to see
some tax back. It doesn't deliver for beneficiaries, for example, so it's worth remembering that too. So they're always going to have a hard sell at that social issues end of the political spectrum.
It's hard, isn't it, Because we speak about the squeezed metal and income families, etc. But what about those beneficiaries, what about those on minimum wage? I feel a bit ecky knowing that I'm going to get more back a week than someone on a minimum wage.
Yeah, and not to mention all the money you'll get back on all those properties. Even wealthier people with multiple properties investment properties will also be able to claim tax back, of course, And so there is a sense that there is a political, some might say ideological, aspect to this. National has talked about wanting to get people off the benefit. There's plenty of other people who see that as punitive, but there's certainly a sense that they want to make
life easier for those who are working. Worth mentioning, I suppose that unemployment in this whole equation of economic rebalancing. Unemployment is expected to keep rising, so it's a tough job market to get off for benefit.
The government could choose to prioritize keeping New Zealanders and work. It could choose to prioritize lifting children out of poverty rather than forcing more children into poverty. It could choose to prioritize tackling climate change. It is not making those choices. Instead, it's choosing to prioritize tax cuts that are going to lead to higher inflation for longer.
When we spoke last week, we discussed the worry that the government would end up borrowing to fund these tax cuts in some kind of way. Does it seem like that's the case now that we've actually seen the books.
Well, I don't think much has changed in terms of how people are going to argue this point. Nikola Willis is adamant they are not borrowing for tax cuts, but the government will be borrowing twelve billion more over the next four years. They've got a program of tax cuts of about fourteen billion over the next four years, different
pools of money. Apparently, that's what they're saying, So that they're borrowing for some other stuff, not the tax cuts, but they will have less money because of the tax cuts. In a narrow accounting sense, they're balancing up, you know, the spending cuts and the tax cuts. In the big picture of government spending, it still means we take longer to get out of deficit. So take till the twenty seven to twenty eight year instead of twenty six twenty seven.
And there's that extra bond program, twelve billion dollars of New Zealand government bonds that we will go out and sell to the world.
In November, as signs the economy wasn't performing as well as it could be became clearer, the Reserve Bank cut the official cash rate to four point twenty five percent. We spoke with Simplicity chief economist Schamabel Jakub for his analysis on how things had performed since the budget, starting with cuts to home loan interest rates.
We desperately need this good news. For the last couple of years, people have been refixing their mortgages from very cheap to very expensive rates, and we've now just turned the corner and the lower interest rates are going to give a lot of relief to people who are refixing In the next year or so, so absolutely good news, but it takes a little bit of time for them to flow through.
How much time does it take to flow through, do you think? And what kind of numbers are we going to be looking at after this decision.
Look, it usually takes somewhere between six and twelve months before these interest rate cuts really kind of become broad based better news for the economy. That's because the current level of interest rates are still quite painful. They're quite high, so people aren't borrowing and investing like the who are doing during good economic times. So we probably need to assume that for the next three to six months things
are still going to remain a little bit painful. We'll initially get just a better relief that people are not paying so much when mortgages, and then eventually, when interest rates get low enough, we're going to start borrowing and investing again, and that's when the party begins.
If you could explain to me, like I'm a five year old, how ocr rates then translate to a better economy, could you do that?
Of course, the OCA is kind of like the interest rates from very short term money. You and I don't borrow that money. But when the reserve Bank changes the OCA. It also changes your floating mortgage rate. It also changes you fixed mortgage rates, not by the same amount, but it influences all those costs of borrowing for all of us. And so when the reserve bank drives and the cost of debt, it means that we are paying less for that.
And when we see less expensive debt, when we see banks being more willing to lend, not only do we get relieved from the debt we already have, but we are willing to take on more new debt. And so we are spending, we're investing, We've got more spare cash, and it means there is just more money going around in the economy. We all feel better.
Since August, the rate has now been dropped one point two five points, and this is welcome news for families and businesses. For people with mortgages, the impact will of course depend on the size of their mortgage, whether they're floating or fixed, and what rates their current on. But to give one example, a family with the twenty five year, five hundred thousand dollars mortgage could expect to be about one hundred and eighty dollars a fortnight.
Feet are off.
The ocr is obviously just one snapshot of the economy, right, what other data have you seen recently that shows that it's doing quite well well.
The OCI is very much the tool to try and influence the economy. What's going into the rest of the economy is we're just in a recession. We're quite late stage in a recession. It's this is probably the deepest and longest recession since the global financial crisis. So, you know, the pain that people are feeling, the kind of gloom that's out there entirely justified, but also is short lived. Once in a recession and the Reserve Bank is cutting
interest rates, we know things will get better. So right now what we're seeing is people are spending less, people are investing less. We're not buying in something houses so much, businesses are not investing so much, in not hiring so much. So that's the kind of the I guess, the anatomy of a recession. But once we kind of work through this painful part, what we tend to start to see is there is a return of hope.
A big draw card for voters was nationals tax relief policy. You kind of wrap up of tax bracket changes, family tax credits things like that, has this actually done anything for the economy?
Look, I mean we've still had a recession and households are still spending less. We can see that household spending is still falling and people are still struggling. I guess the counterfactual is they might have had even less money to spend, and they might have spent even less in the absence of the tax cuts. So it's a little bit hard to kind of look at it and go, oh,
there has been no effect. But it's not clear that those tax cuts have actually made any difference to the current recession, because on the one hand, there is more money in consumers hands, but on the other hand, the government investment and government spending, which is also part of the economy, has been a lot less.
And so do you expect that perhaps change next year with the next budget, because there have been whisperings that this budget is going to be obviously economy focused and focused on building on that government spending.
Not really.
I don't think there's going to be much good news in the next budget either. So this government is very focused on fiscal austerity. That means they want to spend less money. And when the government spends less money, those parts of the economy that are reliant on government spending will be smaller. Now, the question is if the government spends less, will somebody else spend more money? Well, not in health or infrastructure or education. Right, That's just not
how it works. So my sense is that actually government will remain a bit of a headwind to the economy, and the recovery next year is going to be much more about the private sector. It's in spite of the government that will have a recovery rather than because of.
Job losses were a big story this year. Notably, much of the public sector reduced to meet government savings targets. The news industry contracted significantly, with the entire news Hub brand shutting down, the closure of many community newspapers, and long running current affairs shows going off air. We also
saw notable closures across the retail and hospitality sector. In June, we spoke with First Retail's Chris Wilkinson about the changing face of retail after Auckland, Icon Smith and Coey's announced its closure, which was eventually scaled back to a reduced physical footprint on Queen Street.
The situation with department stores in that dare I say cut of that upmarket ategory is being played out across the world at the moment. So we've seen this happen in New Zealand over recent years with Circaldy and Stains, David Jones and Wellington, and then Ancient j Smiths in Southland. The challenge for the sector is that they're no longer
able to differentiate in terms of their ranges. In many cases their sites are large and are going to require significant refurbishment and these economic headwinds are really affecting their customer base. So without being able to see any clarity going forward, there are a few options open to them.
Yeah.
Are We're seeing more brands and companies choose to open their own stores as opposed to giving their stock, say to a big departments store to sell.
That's very true if we think about the brands and the categories that the likes of Smith and Cohe's have done particularly well in. Going back to cosmetics, perfumery. One of the largest supplies lv MHD luxury goods manufacturer that sells Chanel and all those other types of perfumes. You know, they've all got their own stores, they've all got investments in the likes of Sephora, and you know we're seeing these category is now develop into specialty type stores. So
was a really good example. But also mec is another good example. You know, stores of very large scale but just specifically focused on these categories and in particular very appealing to younger and successive audiences.
I know Sephora and Mecca. Well, is that mindset why perhaps Flybys is wrapping up here later this year? Why get your customers to join a separate rewards program when they can just join one in store.
You are absolutely right. So successive audiences are less inclined to be part of these traditional loyalty programs. They are much more adept at finding deals. They're less inclined to want to sign up to things, and it's just for them, it's a fuss. They're more empowered consumers.
And I guess moles in New Zealand up their game in the last decade. Hey really selling themselves as more of a destination, a place to go. Is that where retail is shifting towards and can standalone stores survive on their own anymore?
I'm thinking Queen Street.
Green Street's a really good example because once upon a time brands coming to New Zealand would have almost certainly needed to be in Queen Street. That would have been their flagship site because that's where the population was, that's where the audience was. Nowadays, those retailers are being attracted by the likes of Sylvia Park or Westfield or Commercial Bay and those walls need those types of businesses to create that differentiation. But increasingly so that's where the consumers
are as well. That's where a very certain audiences and in particular those types of environments play into this big shift that we've seen from goods to experiences. So going to a place like Sylvia Park will give you a great range of food, it'll give you entertainment, it'll give you the likes of health services and all these other types of things that you would need on a day to day basis. So that's where our big shift is happening. And again this is a global trend that we've seen.
And after a series of high profile restaurant closures, we discussed where to next back in August with Harold, Deputy Lifestyle Editor Joanna Thornton and aut hospitality and tourism professor David Williamson.
Joanna can you run us.
Through some of the restaurants that have closed down so far this year. Yeah, there's a few.
I mean, I suppose the biggest or the most shocking was Espqure, which closed in July after thirty two years. We had Madame George on kd Unhappy Road, which was a huge loss. It's one of Viva's top fifty restaurants. There was also Floor on K Road as well, which is a cute little wine bar. Homeland is closed down. Orphan's Kitchen Omni which is a little yakatory spot on
Dominion Road. Stanley AV Winebar and Milford. We also had Conch which was more sort of a bar and restaurant, the Wine Cellar and Tiger Burger is another one that's closed.
God, there's so many. What have some of the reasons been behind their closures?
There's a few, and Madame George said it was the economic downturn. Stanley AV said that there were a host of reasons like the pandemic, weather events and strained economic conditions. And I actually saw the Restaurant Association reported in a recent survey that the main challenges businesses are citing is just customer downturn.
David from your years of experience in the hospitality industry. Is this speed of closures unusual or is it kind of par for the course.
It's sort of hard to differentiate that it is an unusual time.
I'm not sure the number.
Of closures is particularly different, But I think what is different is that people are really struggling in this sector, and I think we're going to see more closures coming through. I was talking to a couple of veterans from the industry recently and they were adding to that suggestion of what's really going on is not just the difficulties right now, but the history of really impactful changes over the last
sort of periods since COVID. So you have to understand that this industry was shut down or massively disrupted for a number of years through COVID, when the boarders shut they had huge staff shortages. Then you have those weather events. Just as we're coming out of COVID and starting to recover from that, we get smashed with weather events, which was really impactful on the industry. And then you have, yeah,
the high inflation cost of living. People have a lot less discretionary income to spend on things like restaurants, cost of goods for these industries that record high. They are paying top interest rates on any debt they're holding. There's perceptions of higher crime and the inner city for people in Auckland who are coming in to dine out at night. So you know, there's an awful lot going on, and
it's just been one challenge after another. So a lot of these businesses are small, standalone, own or operated businesses. They don't have huge amounts of capital reserves to survive periods like this. So it's not so much a question I think of, gosh, why are restaurants going down At the moment, it's a question of how on earth are they not going down? Given you the conditions that we've had over the past few years.
For decades, Aucklanders have enjoyed a long lunch in the sun at Ponsomby Institution SPQR.
But now the.
Doors are shouting it's in liquidation, owing creditors over two million dollars, another casualty of rising costs and people keeping their wallets firmly shut.
Johanna, can you explain to us what happened with SPQR in particular?
Yeah, well, I mean, I suppose the announcement seemed pretty dramatic when they said they were closing in July, but I think it had definitely, you know, the quality of the food maybe had dropped off in recent years, and it wasn't sort of the hottest spot to be anymore where it had been in the past. And owner Chris Rupe just released a really brief statement saying that he was really sorry for the current situation and sort of
encourage people to get out there and support hospitality. But then it turned out they were placed into liquidation with the business owing more than two million in land revenue and it owes over one hundred thousand two staff in unpaid wages and holiday pay. And then The Herald also reported that the business that owns Specure withdrew nearly one point four million from the business before it went into liquidation. So I think we're going to hear a lot more about that story.
It is quite jarring when some of our favorite places close. Hey, I mean, Peter Gordon's Homeland closed this year's citing issues with renewing it's lease. How often is an issue like that to blame for a space taking on a new life.
Well, I mean I heard that the problem with Homeland was There's a massive new retirement village going in there called Cracker Bay, So I think the development of that whole West Haven area didn't include keeping Homeland there. So I'm not sure how often you a lease is to blame.
Yeah, I think there's a whole range of problems like that that certainly would finish off a lot of places. But yeah, again, I think it's a more complex and a multifaceted number of pressures which brings these organizations to the edge of collapse.
I think what is.
Interesting is it's such a resilient and it's such an innovative industry. Often describe restaurants that's extremely nimble, and so you know, at the moment where you have these really difficult trading conditions, hospitality shows up as an area where businesses do suffer and go down, but when conditions pick up, hospitality is also the first industry to recover. We sort of go into recessionary times quicker and lower, but we've come out of them faster and higher. So it's a
very nimble industry. And Ram's just pointed out in their last report that you know there is nineteen thousand, five hundred and eighteen restaurants still in New Zealand. It's the largest number we've ever had in the country. The growth has very flat since twenty twenty three, only zero point one percent growth and restaurant numbers. But you know, it's
not an existential crisis. We're not going to certainly run out of restaurants, but it is a very real crisis for the people who are running these businesses.
One New Zealand company that enjoyed success this year was rocket Lab, the country's premier space business, celebrated its fiftieth launch in June, around the time the Coalition government ramped up investment in the era space sector. I spoke with the company's founder, Sir Peter Beck, about where too next for the company.
The space industry isn't just launch.
In fact, you know, two thirds of their businesses building satellites and spacecraft and that's kind of geographically agnostic. And there's some great startups actually in New Zealand now, great space startups, and we're really started to see an ecosystem build which is super exciting. So I think New Zealand
can contribute in the space industry. You know, like I say, launch Away steals a show, but does a tremendous amount of opportunity across the whole space sector, and you're starting to see a number of little startups and in even traditional companies play.
Yeah, it's quite exciting to see. Hey, we've spoken to Space Minister Judith Collins just after she was overseas promoting New Zealand space industry. In the US. She told us and New Zealand was number four last year in the number of launches worldwide, after the US, Russia, and China. How incredible was that?
Yeah, I think I look as a proud keV.
I think it's wonderful and she's been right, like America launches the most amount of rockets, and then it's China, then it's Russia, and then it's the Maha Peninsula, then it's Europe and India and so on and so forth. So no, I think it's awesome, and you know, it shows where New Zealand kind of sits in ranks in the international industry and such a short amount of time.
Are you excited to see the real possibilities for New Zealand when it comes to space.
Absolutely, I mean it's exactly the kind of thing that New Zealand does really well. And that's kind of testament to our success and been able to be successful in scale in New Zealand and New Zealand, as I said before, I had incredibly smart people, were very innovative and the ability to kind of move across multiple functions and disciplines, which is really important in space industry. So no, I look, we've already seen a bunch of Rocket Lab has spin out and start their own ventures.
Which I absolutely applaud and support. Long may that continue.
I think there's this tremendous opportunity and it's one of those things that every country has recognized the value of space and investing deeply in it.
I mean it's kind of like the other AI.
I mean, there's AI is obviously the talk of all the conversations, but equally, you know something that is scaling just as fast as space.
Amongst the policies of the coalition government, reform of the Holidays Act is one of the many areas in the spotlight. It's the responsibility of Workplace Relations Minister Brook van Velden to oversee this. Just this month, she's directed officials to change the proposed direction of the reform based on consultation feedback. But in June, we caught up with her on what her plans were for sorting out this part of the economy.
One of my top priorities is that we need religious lit of change in this term of government. I understand many successive Ministers of Workplace Relations have tried and failed to get a Holidays Act change across the line, and I'd love to make it easier for businesses and workers to pay out the right entitlements and for those workers to know that they are getting paid the right amounts.
So that's top priority for me. We're on track to get this out in September, and it'll be targeted consultation because it's a very technical law. But I very much look forward to all of the feedback that comes back to let us know if we're on the right track to make it simpler. The last thing I want is a new law change that's even more complex.
It is kind of one that would be difficult to explain to someone on the street, right because it's a lot of backroom situations in terms of payroll and things like that that perhaps employees don't exactly see totally.
Absolutely look for most people, they'll assume that their business or their manager is getting it right. They might get their pay slip every fortnight or every month, and it tells them how much they're earning that week, how much they may have in holidays pay coming up, or you know, what their sick leaving titlements might still be. By and large, most people are doing a very good job. But because the law is so complicated and so complex, even some
of our largest organizations have been getting it wrong. You take, for example, the Ministry of Business, Innovation and Employment. You
know they even got holidays pay wrong. Now, if the law is so complex that even the government department that's supposed to look after this law is getting it wrong, there's serious work that needs to be done because at the heart of this I want all workers to know they're going home at the end of the week with the right pay, with the right holidays pay, with the right sick leave, and that businesses have far more time to actually do what they do well, which is their
real job, not figuring out compliance.
In July, Minister Chris Bishop announced that the government wants to flood the market with more houses to improve growth and bring down prices, going against Kiwi tradition we're owning houses is pretty much the cornerstone of our economy. To discuss how this might work, we spoke with Opus Partners economist Ad mcnight.
Well.
I think the Housing Minister christ Bishop is talking a big game, and certainly his incentivized to do that. Lots of people want house prices to be stable over the very, very long term. I think there will be some benefits to it. For instance, they're saying they are going to remove any minimum requirement about how big a house or an apartment has to be. That will mean we get
more smaller sized departments built. On top of that, councils won't be able to have a say in terms of whether apartments have to have balconies or not, or how large those balconies have to be. Well, with all of those rules gone, we should see some cheaper and certainly smaller apartments coming through. And at the margin, yeah, maybe a couple more developers will build those sorts of properties, and that will be good for people who are okay
and happy to live in slightly smaller properties. I always take what politicians say with a grain of salt, because they're very good at saying that they're going to do something big and meaningful and then it doesn't always materialize,
and I'll give you an example of that. The Housing Minister is saying that they want every single council in the country to open up or zone for thirty years of population growth, and often christ Church is the shining example that the government holds up because immediately after the earthquakes they zoned for thirty years of population growth. There was a lot of housing being built and for a time house prices were pretty flat down in christ Church.
But what a lot of people miss is that during the COVID boom from twenty nineteen onwards, christ Church house prices actually increased at a much faster rate than the likes of Wellington, Auckland, Dunedin. And so I'm not sure whether zoning a whole heap of land is going to fix all of the problem, but it will certainly help.
We've already seen the growth of new builds in Auckland, for example, outpaced population growth. So what do we need to keep building more houses?
Well, if I take you back a couple of years, every single media outlet, including the Herald, was talking about a massive housing crisis and we needed to build more and more and more homes. I think this is just part of the catch up.
Do you worry about their plan to remove the urban rural boundaries?
I worry more about the infrastructure. It's quite interesting because if you remove the rural urban boundary, you're going to get more housing sprawl, right, so you are likely to see more housing built out Pocono Way just south of Auckland, and also down in Bookacoi in some of those more
rural communities. Now, that obviously has benefits and drawbacks. The benefit is that if I am a person who is willing to live an hour out of the city because I want a standalone house, prices are a bit cheaper and I want that kind of lifestyle, I kind of think, well, why do we have all these rules in place? But we also know that we're not so good at building infrastructure here in New Zealand. So all good, We're going
to get rid of the rural urban boundary. But now it's Auckland Council and Auckland Council ratepayers who are now responsible for building that infrastructure that goes in there to support those houses. Now, yes, the developers have to pay some taxes what's called development contributions in order to build those properties. But often my understanding is that a lot of that infrastructure is ultimately financed by the poor old ratepayer.
Those plans to decide the minimum size of new apartments, could that see kind of like an influx of shoebox style apartments, the ones that we see I'm thinking in Japan, you know, one by one meter, et cetera.
Well, that is the risk if you don't have a rule in place. A developer will build them if they think they can sell them, and if they think they can make more money by selling those shoe box apartments compared to building something else. So ultimately it comes down to what are home buyers or investors willing to purchase. And if an investor is buying those kinds of shoe box apartments and saying, y'reh okay, I'll buy that at whatever price the developer are selling it for, whether people
are actually willing to rent those properties. I considerably foresee a future where there are a lot of studio apartments built. Investors then purchase them, and there we have new stories about how small these properties are and the rents that people are paying for them. But it ultimately comes down to what are people willing to build? What are people willing to buy and what are people willing to rent?
Finally, no wrap of the year in ki we business would be complete without touching on the saga of the Deval group. The home of company founders Kenyon and Charlotte Clark was rated by police in early August as part of the investigations into the Auckland apartment developers. Court hearings have followed over recent months, and a court case between the Financial Markets Authority and PwC against Duval and the
Clerks is set for June next year. We caught up with Enzid Herald property editor Anne Gibson in late August when Deval was placed into statutory management by the government.
This company is a relatively complex group, with about seventy entytes. It is essentially an Auckland apartment and townhouse developer. Now on its website it said it had settled the sale of seven hundred and seventy four homes in the last six years and it has two hundred and seventy eight homes under construction. Are those are mainly apartments as well.
It has what their Commerce and Consumer Affairs Minister Andrew Bailey told us yesterday one hundred and twenty to one hundred and fifty investors, home buyers and commercial lenders.
What more can you tell us about the people behind this group?
Well, essentially there were four people according to the Devai business Now, the first two are the founders husband and wife, Charlotte and Kenyan Clark. She's the CEO, he's the former CEO. Then we have John Delzel. Now he's had many years experience in the Auckland property market and he was Auckland Council's waterfront regeneration project here that was see in city were the real focus on the Winyard Quarter many years ago. And he's the chairman of Deval. And then we've got
a lawyer on Culiny. He's also a director.
Kenyon and Charlotte Clark seem like they were quite high flyers, hey, or at least they were trying to portray that image. Weren't they filming a reality show about them or something?
Yes, this show is called The Property Developers and one season is evidently made. It is a number of parts and there was talk about a second season being made. Now for some years the Herald has reported on the Property Developers and you can see a trailer online which
is most interesting. It has never screenmed. But when I talked to the person behind that in Queenstown about a week ago, he said that he was hoping to secure distribution to an international business and he has previously mentioned Netflix and Neon and the likes of those sorts of businesses, but we've never yet seen it. He did tell me that it's more likely to be shown overseas before it's shown in New Zealand.
Right, is it some kind of selling Sunset esque kind of thing. I don't know whether you watch that or not.
It's a reality sort of behind the scenes of what is the life of a property developer, and so it is a reality serious where the clerks are shown and their children are shown. They're filmed in different parts of New Zealand and it looks pretty amazing. It'd be really interesting to see it. I look forward to it.
I'm really concerned that there are some pretty serious issues with it.
Do you know what, I actually need to call my lawyers.
It was kind of funny, but if he's putting this up publicly, the yeah, I mean.
This is just this week's problem.
Let's just say that I think that we basically just burned a million dollars.
The company's troubles first became public earlier this month. Why did they come to the attention of the Financial Markets Authority?
It dates back to twenty twenty one when the FMA talked Val to remove advertising for a mortgage fund. It was about twenty million dollar fund and the FMA basically said that that advertising gave the impression to people it was low risk. But Kenny Clark said in response that there hadn't been anyone who had complained and had raised
twenty million dollars via that mortgage offer. So that was the first time that we began to realize that there was action by the Chrome Authority against Juvail Group.
Take us through the events on August second, when these actions became public and the group was put into interim receivership is well, that's.
When the FMA announced that three accountants of Peter Receiver interim receivers and managers of sixty four deval entities. So there's a companies as well as partnerships, and also they had control over Kenyon and Charlotte Clark. And so the FMA had said it had been to the court to have that appointment made although there had been a number of actions by the FMA against Deval, and Deval had
challenged at least at one of those. Was the first time on August two, when we realized the quite serious nature of what was occurl Do.
We know why police were involved in showing up at the Clark's house. It seems pretty unusual in a situation like this.
So my college John Weeks, went to the police and asked why they were involved. We knew that when the FMA went to the Clerk's house on the second that the police had been there as well. Now the police said that no arrests were made, but that they had taken custody of several firearms at the property. Now they said staff were quired to take custody of those and
that had been seized as property. One of our photographers, Alex Burton, took photographs of police going into this home with what appeared to be gun cases.
A few weeks after that interim receivership, the government intervened earlier this week. Can you walk us through the government moves?
Yes, that was a real surprise as well. There have been a number of surprising aspects to this. So the FMA confirmed that the Governor General, on the advice of the Minister of Commerce and Consumer Affairs, had declared that a number of entities within the Duval Group be placed in statutory management. Now this is under the Corporations Act and statutory management means effectively that one entity, in this case PwC and those accountants who are also the receivers
and the managers of the De Rold business. As it gets really complicated, one entity is in charge.
Now.
The FMA thought that was important to limit or prevent the risk of further deterioration in the financial affairs of their businesses or any fortunate activity. It to preserve the interests of the critics and to enable the affairs of Duval Group to be managed and what if you may said, was a more orderly way.
That's it for this compilation episode of The Front Page.
You can read more about the stories featured in.
This episode and extensive news coverage at enziherld, dot co, dot and z.
The Front Page is produced by.
Ethan Sills and Richard Martin, who is also our sound engineer, along with Paddy Fox.
I'm Chelsea Daniels.
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