Boost in Kiwi employers requesting restructure and redundancy support

There has been a huge increase in support requests over the past four months.
There has been a huge increase in support requests over the past four months. Photo credit: Getty Images

Requests for restructuring and redundancy support have surged by nearly 50 percent from Kiwi employers in the past year.

The Employers and Manufacturers Association (EMA) believes it's further evidence that the economy is rapidly slowing.  

EMA head of advocacy Alan McDonald revealed while requests have been increasing throughout the year, there has been a "sharp increase" over the past four months. 

"In the year to November, demand for restructuring and redundancy support has increased by nearly 50 percent as businesses responded to the economic slowdown," McDonald said. 

He admits economy and business conditions have become "incredibly difficult". 

"Inflationary pressures are still strong, and this is increasing the cost of doing business, while rising interest rates are dampening consumer demand and increasing debt servicing costs," he added. 

"As a result, many business owners have few options and are being forced to look at how they can reduce costs, including their staffing costs," he explained. "This is reflected in the strong uptick in requests for support that we have seen since August." 

"Unfortunately, this means that people are now starting to lose their jobs and we would expect to see the unemployment rate increase over the next few months as the economic slowdown begins to bite." 

McDonald believes Thursday's GDP figures are "more than likely" to show a marginal increase in economic activity, driven by high rates of migration. 

"The reality is that while New Zealand might technically not be in a recession, for many businesses up and down the country it will feel like we are," he said. 

McDonald said businesses are looking at the Government to "move quickly, focus on the economy and make doing business in New Zealand easier". 

"This includes supporting efforts to bring inflation down, cutting red tape, and reducing the costs of doing business." 

"Ultimately, it is the business community that will drive our economic recovery, but we need the Government to back business to succeed and deliver policy that rebuilds confidence and encourages investment, innovation and entrepreneurship."