‘We are concerned’ about hospitality failures, but can’t repeat Labour’s mistakes, PM says

Wednesday, 3 June 2026

Prime Minister Christopher Luxon says the Government is “concerned in general” with the rising number of hospitality closures, after new data showed company failures across the sector jumping 49% in a year.

Company failures across the hospitality sector jumped 49% in a year, with 399 hospitality firms placed into liquidation over the past 12 months.

Hospitality businesses were more than three times as likely to end up in liquidation as the average New Zealand business.

Prime Minister Christopher Luxon says the Government is “concerned in general” with the rising number of hospitality closures and expects New Zealand’s banks to support businesses that went into liquidation.

Centrix said higher fuel costs, softer confidence and ongoing global uncertainty were creating additional challenges for businesses as New Zealand’s economic recovery continued.

“We know we’re going through a very difficult and challenging time,” he told reporters in Christchurch on Wednesday. “The fuel crisis has led to rising costs for a lot of inputs for many businesses in New Zealand, but also around the world.”

Prime Minister Christopher Luxon, alongside Education Minister Erica Stanford and Energy Minister Simeon Brown, in Christchurch on Wednesday.

Luxon said he expected New Zealand’s banks to support businesses that went into liquidation, and that the proper role of the Government was to “[make] sure we’re not making things worse, as the Labour government did, frankly, through the Covid experience”.

The prime minister has repeatedly made the argument that government spending in response to the pandemic - totalling $66 billion, according to the Treasury - fuelled inflation and led to higher interest rates and government debt.

“We want to minimise the impact on inflation and minimise the impact on growth,” Luxon said on Wednesday. “This is an economy that’s projected to grow at 2.7% over the next four years. That is faster than the UK, the EU, Australia, Canada, and many other countries, Japan included … it’s going to generate 220,000 jobs, whether that’s in hospitality or in other sectors.”

Labour said economic conditions under the National-led Government spoke for themselves.

“Since Christopher Luxon became Prime Minister, the economy has shrunk, unemployment has is at a near decade high, homelessness is at an all time record, business liquidations are at the highest since 2010, and New Zealanders have been leaving in droves,” the party’s finance spokesperson Barbara Edmonds said.

“This is not a Government that has a plan to help New Zealanders, and National is definitely making things worse.”

Finance Minister Nicola Willis has provided an economic update after credit agency Moody’s downgraded New Zealand’s fiscal outlook from “stable” to “negative”.

Hospitality failures surge 49%

The latest Centrix Credit Indicator showed 399 hospitality firms were placed into liquidation over the past 12 months, up from 268 a year earlier. The sector recorded the second-highest number of liquidations behind construction.

At the same time, hospitality businesses were seeking finance at a faster rate than any other sector. Credit enquiries from the industry rose 26% over the past year, ahead of agriculture and other service industries.

The contrast highlights the pressure still facing many bars, cafes, restaurants and accommodation providers, despite signs of improvement elsewhere in the economy.

Education Minister Erica Stanford is pushing to pay qualified tradies the same as teachers to combat shortages, but the PPTA argues that being a master of a trade does not instantly make someone a master of managing a classroom.

Only the construction sector recorded more liquidations, with 768 companies placed into liquidation over the same period.

According to Centrix’s liquidation measure, hospitality businesses were more than three times as likely to end up in liquidation as the average New Zealand business.

Across all industries, company liquidations rose to 3023 on a rolling 12-month basis, up 15% on the previous year. March recorded 286 company liquidations and 308 insolvencies, making it the highest March total for liquidations since 2015.

Overall demand for business finance fell 3.8% over the past year, although some sectors continued to perform strongly. Agriculture was one of the exceptions, with demand for finance up 10% and fewer business failures than a year ago.

Centrix said higher fuel costs, softer confidence and ongoing global uncertainty were creating additional challenges for businesses as New Zealand’s economic recovery continued.

While household finances are improving and fewer people are falling behind on repayments, many hospitality businesses are yet to feel the benefits of that recovery.