8. Unity Means Business

Small businesses drive New Zealand’s economy, but too many struggle to survive. In this episode of Piecing Together Unity, Nigel McFall explores why businesses fail, how tax debt traps owners, and why the current system isn’t working. He lays out Unity’s vision for real change—making business ownership fairer, ensuring smarter financial support, and stopping the cycle of unnecessary failures.

If you care about a stronger, more sustainable economy, this episode is for you.

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Together, we’ll piece it all together — one idea, one story, and one conversation at a time.

Transcript

Kia ora, hello, and welcome to Piecing Together Unity.

I’m Nigel McFall, the founder of the Unity Party. 

As a small business owner, I understand the challenges firsthand. Sometimes, you can do everything right and still fail. There’s always a point where, if you don’t have the money or capital to grow, you can hit a wall—even if your business is successful.

That’s why Unity believes we can restart New Zealand’s economy by not only supporting small businesses but actually partnering with them.

The first step is looking at the foundation. Right now, you can start a business in under ten minutes for less than 150 dollars, without needing any experience or knowledge. While that sounds good in theory, it also means people are jumping in without understanding the risks.

We want to change that. Before registering a business, people should get basic training in financial management, tax, health and safety, and business planning. This isn’t about making it harder to start a business for the sake of it. It’s about making sure people have the knowledge to succeed from day one.

We will make this training interactive and at a level that everyone can understand. We won’t create barriers that stop people from becoming business owners just because of their education background. Great ideas don’t just come from people with higher education. Some of the best businesses are started by people with practical skills, creativity, and determination. Unity will ensure that everyone has access to the knowledge they need to succeed, no matter where they come from.

We also want to create a simple way for small businesses to pay wages and taxes through a single portal. Right now, a lot of small businesses hold onto tax money for months, intending to pay it later, but in reality, that money often gets used for other expenses. Then, before they know it, they owe thousands.

The portal will ensure tax is paid at the time of receiving it or on a scheduled basis, so there’s no risk of accumulating large tax debt. This removes the temptation to use tax money for other things and prevents businesses from falling into the trap of spending funds that were never theirs to begin with.

If businesses are going to fail, they should do so with their own money, not tax money. Right now, New Zealand has 7.9 billion dollars in tax debt, and most of it won’t be recovered when businesses shut down. That’s a huge hole in government funding, and it keeps growing.

Over successive governments, no one has done anything about the growing tax debt. One side ignores it, while the other just shuts businesses down without understanding the potential of that business, its employees, its suppliers, and what it could contribute to New Zealand. We need a smarter approach that looks at how we can turn struggling businesses around instead of just writing them off.

So, how do we fix this?

First, we need to talk to businesses that are already behind on taxes and figure out if they are financially viable. Some businesses might be struggling because of outdated equipment, poor marketing reach, or not having the right technology to operate efficiently. Others may be weighed down by large overheads—things like rent, staffing costs, or operational expenses—that make it hard to turn a profit.

Take a mechanic shop, for example. Let’s say there are two separate mechanics in the same town, both dealing with tax debt and struggling with high lease costs. On their own, neither of them can afford the latest diagnostic tools or take on more staff to improve efficiency. But if they worked together—merged into one operation—they could halve their overheads, share resources, and suddenly, what seemed impossible before becomes viable again.

And it’s not just mechanics. A small café might be in the same boat. Maybe their lease is killing them, and they just don’t have enough foot traffic to stay afloat. But if they teamed up with a bakery that’s also struggling, they could share a kitchen space, reduce rent, and each focus on their best-selling products without needing to carry all the costs alone. The café runs during the day, the bakery operates early mornings, and now both businesses survive where before, both were on the brink of shutting down.

For other businesses, it’s not about merging—it’s about making smarter changes. A retail store might be failing simply because they don’t have an online presence. They’re relying only on foot traffic, but by setting up e-commerce and getting some digital marketing in place, suddenly they have a new revenue stream. They can restructure their debt, negotiate better terms with suppliers, and instead of going under, they find a way forward.

The point is, sometimes businesses don’t fail because they’re bad businesses. They fail because they’re trying to carry too much weight alone. With the right support—whether that’s upgrading technology, getting better financial advice, or finding a strategic partner—some of these struggling businesses could not just survive, but actually thrive. And that’s what we need to focus on: identifying which ones have a real shot and giving them the tools to make it work.

For businesses that are viable, we would convert tax debt into equity, meaning the government would take a small stake in the business rather than just writing off the debt. This approach ensures that instead of the taxpayer losing money on unpaid taxes from failing businesses, that money is instead invested in their recovery—creating a system where businesses can succeed while also returning value to the public. The goal would be to return that equity to the business once it is profitable, has repaid its initial debt, and has built a solid financial history. This would be decided on a case-by-case basis.

Right now, when a business collapses under tax debt, it’s a complete loss for the taxpayer. The government never sees that money again, suppliers are left out of pocket, and employees lose their jobs. But under this system, the government isn’t just absorbing losses—it’s converting them into future revenue. Instead of an immediate write-off, the taxpayer gains a temporary ownership stake, meaning that when the business becomes profitable again, the government gets a return on that investment. This money can then be reinvested into supporting more businesses, creating a self-sustaining cycle of growth rather than constant financial drain.

If we’re helping a small mum-and-dad business get back on its feet, it would be the right thing to do to eventually return that equity once they are stable. But for businesses that grow significantly because of this support—especially those that were previously trading insolvent—taxpayers deserve to see long-term returns. If a business that was on the verge of collapse turns around and starts making millions, it’s only fair that the government retains some equity, ensuring that businesses that benefit from public support also contribute back to the economy in a meaningful way.

This is how we create a smarter economic system—one where taxpayer money doesn’t just vanish when a business fails, but instead works to generate future revenue. We stop unnecessary business closures, protect jobs, and at the same time, turn financial losses into economic growth. Instead of watching businesses fail and writing off bad debt, we create a pathway where businesses succeed, taxpayers benefit, and the economy as a whole grows stronger.

Another thing we need to address is businesses that abuse the system. Some companies shut down not because they have no way forward, but because their owners never intended to run them properly in the first place. They rack up debts, fail to pay creditors or employees, then simply shut down and start fresh under a new name—leaving everyone else to deal with the mess.

These are called phoenix companies, and they’re a massive issue. The same directors fold one business, walk away from their obligations, and start another company doing the exact same thing. They keep the same clients, use the same resources, and continue trading while their unpaid debts are left behind for suppliers, staff, and the tax department to absorb.

Now, not everyone who shuts down a business and starts over is doing this maliciously. Some people genuinely try to make things work but fail due to circumstances beyond their control. It might be because of illness, unexpected financial pressures, or simply a lack of experience and support. That’s why Unity is focused on fixing the foundation—not just punishing failures, but ensuring businesses have access to the right financial guidance, technology, and support before they reach crisis point. By improving access to proper financial management tools, making tax compliance easier, and providing business owners with real advisory support, we reduce the number of businesses failing unnecessarily. Those who need help will get it, while those who deliberately game the system will face real consequences.

But here’s the key difference under Unity’s policy: businesses that do not voluntarily reach out for assistance—especially when they are behind on taxes—will be scrutinised in depth. We are building a clear pathway for struggling businesses to access support, and if an owner refuses to engage with that process, it is fair to say that they did not want their business to be saved. At that point, enforcement action is necessary, because we cannot allow deliberate avoidance to go unchecked while others do the right thing and seek help.

New Zealand already has laws under the Companies Act 1993 to stop phoenix companies. Directors of a liquidated company cannot just start a new business with the same name or assets within five years unless they meet strict conditions. If they do, they can be held personally liable for debts, face heavy fines, or even be jailed. But despite these laws, people are still getting away with it, either because enforcement is weak or because they know how to manipulate the system.

This is why enforcement of existing laws needs to be significantly stronger. Directors who repeatedly liquidate businesses without fulfilling their obligations should not be allowed to simply restart under a new name as if nothing happened. There also need to be harsher penalties for those who intentionally use phoenix company tactics to escape financial responsibility, ensuring that this kind of behavior is met with real consequences. Beyond penalties, financial oversight must improve so that directors meet clear accountability standards before being allowed to start another business.

At the end of the day, running a business is tough enough when you’re playing by the rules. We cannot have a system where responsible business owners are struggling to do things the right way while others repeatedly wipe their debts and start fresh without consequence. Unity’s approach will ensure that those who fail for genuine reasons have the support they need, while those who abuse the system are stopped before they can do further damage.

But I also want to make something very clear. This is not about making failure an advantage or giving people an easy way out. We are doing this because the system is already broken. Businesses have been failing under successive governments, and nothing has been done to stop it. The reality is that businesses that should have been supported were left to fail, while bad operators took advantage of gaps in the system.

Unity’s approach fixes the current problems, but it also puts in place the foundational changes to stop businesses from getting into these situations in the first place. Once these changes are in place, there won’t be a need for this kind of intervention. But right now, we have to create a fair system that supports New Zealand businesses because they are the key to turning our country into an economic powerhouse.

In New Zealand, when a business collapses, the distribution of its remaining assets follows a legally defined order of priority. Currently, the government, through the Inland Revenue Department (IRD), often holds a preferential position, allowing it to claim outstanding taxes before other creditors. This means that suppliers, employees, and other unsecured creditors are often left with little to no recourse to recover their losses.

Unity believes this system is inherently unfair. The government, via the IRD, has access to comprehensive financial data and possesses the tools to monitor a business's financial health in real-time. This privileged position enables the government to identify signs of financial distress long before suppliers, staff, or other stakeholders become aware. Despite this advantage, when a business fails, it's the IRD that gets compensated first, leaving those who are less informed and more vulnerable to bear the brunt of the loss.

To address this imbalance, Unity proposes a restructuring of the liquidation priority framework. Under our policy, in the event of a business failure, priority for asset distribution would be given to suppliers, employees, and other non-government creditors. This approach ensures that those who are most at risk and least equipped to anticipate financial downturns have a fair opportunity to recoup their losses.

Moreover, this policy shift would encourage greater accountability and proactive engagement from government departments. With the IRD's access to detailed financial information, it is both logical and fair to expect the department to take an active role in identifying and assisting businesses showing signs of distress. By prioritizing the welfare of suppliers and employees, we not only protect the backbone of our economy but also foster a more equitable and supportive business environment.

In essence, Unity's approach aims to realign the priorities during business liquidations, ensuring that those who contribute directly to the business's operations and success are not left disadvantaged when unforeseen failures occur.

Right now, if you don’t have money to start a business, you either can’t do it at all or you struggle through, barely making it work. Unity believes that if an idea is viable, people should be given the opportunity to bring it to life, no matter their financial background.

Take someone with a passion for carpentry who wants to start a small furniture-making business. They have the skills, they have the designs, and they know how to market their products, but they don’t have the money to buy the necessary tools or lease a workspace. Under Unity’s approach, instead of this person having to take out high-interest loans or give up on their dream altogether, they could access startup resources through a government partnership. This could mean getting access to equipment, a shared workspace, or initial funding in exchange for temporary government equity—giving them the boost they need to get started without being crushed by debt.

Another example is a young entrepreneur with an innovative tech idea—maybe they’ve designed an app that could help streamline small business operations, but without investment, they have no way to hire a developer or market the product. Right now, unless they have personal savings or connections in the business world, their idea will never get off the ground. With Unity’s model, if the idea is viable, they could receive the necessary startup capital, mentorship, and business support to turn it into a real, profitable enterprise. Instead of a great idea dying due to lack of access, we create more opportunities for innovation and economic growth.

And this isn’t just for high-tech industries. Think about a solo parent who wants to start a home cleaning business but can’t afford a vehicle or the necessary equipment. Under the current system, their options are limited—they either struggle to piece together second-hand tools and work for below-market rates, or they simply give up. Unity’s approach would help provide a pathway—whether it’s funding, leasing equipment, or setting up a cooperative model—so that entrepreneurship isn’t just for those who already have money, but for anyone with a solid business plan and the drive to succeed.

Unity doesn’t want to own businesses, but we do want to share in their success by giving people the opportunity to build something for themselves. If we can lift more people into entrepreneurship—including those from poverty—then we create an economy where everyone has the same chance to succeed, not just those who already have money. By providing the right support at the right time, we give people the power to create jobs, build wealth, and contribute to a stronger economy—not just for themselves, but for their communities.

Unity’s approach is simple. We make sure businesses have the knowledge to succeed before they start. We create systems that make it easier to stay compliant. We support viable businesses instead of letting them fail. And we hold people accountable when they misuse the system.

But we don’t want New Zealand’s economy to rely solely on foreign investment, where we have to keep begging other countries to invest in us, offering incentives just to make it worth their while. That approach keeps us dependent, always having to give something away to attract interest. Instead, Unity believes in investing in New Zealanders—because when we build up our own businesses and entrepreneurs, we create something far more valuable.

By backing our own people and ensuring businesses here have the tools to thrive, we don’t just strengthen our local economy—we set the stage for New Zealand to become an economic powerhouse. Instead of constantly trying to lure investors with tax breaks and incentives, we create a business environment so strong that people are lining up to invest in us.

This isn’t about short-term fixes. It’s about creating a fairer, stronger economy where small businesses don’t just survive—they thrive.

Outro:

That’s Unity’s vision for small business—an economy where we invest in our own people, where businesses get the support they need before they reach crisis, and where success isn’t just for those who already have wealth. It’s about shifting the way we think, moving away from relying on outside investors to drive our economy, and instead, building a system so strong that investment becomes a privilege, not something we have to chase.

New Zealand has the potential to be a leader in innovation and entrepreneurship, but only if we stop treating small business as an afterthought and start recognizing it as the backbone of our economy. When we give everyday people the opportunity to turn their ideas into reality, we create jobs, drive innovation, and build long-term economic strength—not just for a few, but for all of us.

Together, we will piece it all together—one idea, one story, and one conversation at a time.

Until Next Time Take Care