Auckland business recovery expert and insolvency specialist Tony Maginness replies:

I have a lot of sympathy for businesses who were hoping for some relief, only to see fuel prices (and the OCR) go back up again. Yet while most business owners are looking at how they can work smarter to get through yet another challenge, some are taking unfair advantage.

In the transport industry, for example, we’ve encountered situations where operators are using money they should be putting aside for GST, road user charges and legally required vehicle maintenance to pay their running costs, while underpaying workers or making them exceed their legal driving-hour requirements.

These practices can create an enormous cost advantage over businesses who play by the rules – as much as 40 per cent lower in some cases. This makes it extremely difficult for compliant businesses to compete.

This is also happening in the building and construction sector. We’ve heard reports of contractors not being paid, documents provided to councils not being accurate, and building materials such as insulation being removed from wall cavities after council inspections have taken place.

When this kind of business eventually falls over, it creates a chain reaction of unpaid contractors, suppliers, employees and other creditors left dealing with the financial consequences. It also damages trust in the whole sector.

Another area of increasing concern is the use of caveats over property where, in our experience, there appears to be no sound legal basis for lodging them. A caveat can create substantial pressure and expense if it delays settlement of the property, particularly if owners are accumulating interest on default payments while they challenge the situation.

We take a firm position when a caveat is lodged without proper legal grounds. Where the evidence supports it, we pursue the parties responsible through the courts, as well as their legal representatives.

The broader issue is one of accountability. New Zealand businesses that meet their tax, employment, safety, regulatory and contractual obligations should not be placed at a competitive disadvantage by operators who ignore them.

This kind of behaviour is affecting all of us. If you see this happening in the business you work for, give us a call and we’ll refer you to the right people.