10 APRIL <strong>15</strong>, <strong>2020</strong> Businesslink Safe Harbour for directors, debt postponement for businesses Grant Robertson and Kris Faafoi The government will be introducing legislation to make changes to the Companies Act to help companies facing insolvency due to COVID-19 to remain viable and keep New Zealanders in jobs. The temporary changes include (a) Giving directors of companies facing significant liquidity problems because of COVID-19 a ‘safe harbour’ from insolvency duties under the Companies Act, enabling businesses affected by COVID-19 to place existing debts into hibernation until they are able to start trading normally again (b) allowing the use of electronic signatures where necessary due to COVID-19 restrictions (c) giving the Registrar of Companies the power to temporarily extend deadlines imposed on companies, incorporated societies, charitable trusts and other entities under legislation, and (d) giving temporary relief for entities that are unable to comply with requirements in their constitutions or rules because of COVID-19. Certainty to businesses These measures will support the Government’s work to cushion the economic impact for New Zealand and to support businesses and protect jobs and incomes. We are announcing these decisions now to give businesses certainty that these measures are being worked through. We will be asking Parliament to agree to make some of these changes retrospective. While they will help increase certainty and provide practical assistance to business owners and directors, the changes must not be seen as a workaround for obligations to creditors and the responsibility of directors to act in good faith. Not a free ride We want to emphasise that these changes will not mean that directors are free to disregard the consequences of their actions for the next six months. Other protections in the Companies Act, such as those addressing serious breaches of the duty to act in good faith and punishing those who dishonestly incur debts, will remain in place. The changes would help retain jobs and support the New Zealand economy to recover as quickly as possible. We know that, whether real or perceived, the threat of a director being held personally liable for a company’s solvency problems will likely make them inclined to advise closing down a business. A ‘safe harbour’ will help them keep trading, rather than prematurely closing up, which will minimise disruption to the economy as much as possible. Business debt hibernation The proposed move to place existing debts into hibernation, to be known as a Business Debt Hibernation (BDH), would only happen with the agreement of 50% of a business’s creditors. Going into a BDH will give businesses the space to talk to their creditors about prioritising paying some debts, and deferring others for six months. It is inevitable that some businesses are going to have to go into liquidation. However these measures provide an accessible and pragmatic means of helping some businesses to weather the storm in a way that does as little harm as possible to creditors’ interests. We urge businesses to talk to their creditors and banks, and also reminded them that the government had a Wage Subsidy scheme in place as well as a Business Finance Guarantee Scheme, which can offer loans up to $500,000 over three years. For more information, please visit www. companiesoffice.govt.nz Post-Covid-19 Tourism Plan on the cards Venkat Raman Arguably, Tourism is the worst hit sector since the world was gripped by Covid-19 and New Zealand closing its borders. Other countries have followed suit, virtually stopping all international travel. Most airlines have grounded their aircraft fleet and have started laying off staff. New Zealand earns more than $41 billion annually (about $112 million every day) from tourism and the industry accounts for more than 230,000 direct employment and another 164.000 people indirect jobs. Thousands of other establishments depend on Tourism, all of which have shutdown now. Capital injection needed The world economy will eventually recover, some sectors immediately while others will take time. Among those that will need careful nursing and injection of capital is Tourism. Tourism Minister Kelvin Davis said that the government, industry and business are working together to develop a plan on how tourism will operate in a post-COVID-19 world. ‘Tourism New Zealand’ will lead the charge, he said. “A post-COVID tourism industry will play an important role in New Zealand’s economic recovery, but it will be different to the one that we are accustomed. There will be new challenges, new opportunities and a new way of working,” he said. Mr Davis said that Tourism New Zealand with lead the recovery plan with the Ministry of Business, Innovation and Employment, the Department of Conservation and industry stakeholders, to reima- Tourism Minister Kelvin Davis gine the way we govern Tourism, how we market domestically and internationally, the target audience, and how we manage visitors when they arrive on our shores. Opportunity to revisit “We have an opportunity to rethink the entire way we approach tourism to ensure that it will make New Zealand a more sustainable place, enrich the lives of all our people and deliver a sector which is financially self-sustaining in the longer term. Given that international travel is likely to be heavily restricted for some time, and features of our tourism industry such as cruise ships are currently banned, this will need to be a phased approach, looking at how we can focus on and promote domestic tourism in the short term and how we can target an international offering,” he said. Mr Davis said that he expected the advice over the next two weeks. Discussion with stakeholders Tourism New Zealand Chief Executive Stephen England-Hall regarded the current crisis as an opportunity to listen to communities and design the future of tourism in New Zealand so that it benefits New Zealand and New Zealanders. “We will be working with key partners to ask questions, listen, and create something we can all be proud of, something that genuinely gives back more than it takes to Aotearoa and plays a key role in our economic success,” Mr England-Hall said. Tourism is $41 billion industry (Breath-taking Milford Sound Tourism New Zealand As part of planning for a restart, Mr Davis said that he and Conservation Minister Eugenie Sage have agreed to review the International Visitor Conservation and Tourism Levy (IVL) Investment Plan. Mr Davis said that this plan was prepared at a different time, for a different future. We are now looking at what aspects of the plan remain fit for purpose, and how the IVL can be best used to help rebuild the tourism industry as part of a restart package. This has been an immensely challenging situation for our tourism industry,” he said. YOUR SUCCESS PARTNER • Stock Management • Print & Hold • In House Design • Online Ordering System Commercial printing service at its best! Your one stop SIGNAGE and PRINT shop Wide Format <strong>Digital</strong> Printing Specialist • Footpath Sign • Pullup Banner •AFrame • Vinyl Stickers • Cor e • Acm • Banners • Canvas Ph (09) 263 8854 14C Ryan Place, Manukau City Email: info@irissigns.co.nz Website: www.irissigns.co.nz PH: (09) 262 4550 42D Lambie Drive, Manukau City Email:sales@merc.co.nz | Website:www.merc.co.nz
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