One of New Zealand's top retailers predicts the economy could lapse back into recession, as new figures show a bigger than expected fall in company tax revenue.
The Government accounts show tax income for the September quarter was down by just over $1 billion on Budget day forecasts, mainly due to a fall in corporate tax of $900 million.
The decline in tax revenue is for the three months to the end of September.
New Zealand has been officially out of recession since June, when the economy posted modest growth of 0.1%.
But Briscoes Group chief executive Rod Duke says trading conditions are tough and that is affecting corporate taxes.
Though the economy has officially returned to growth, Mr Duke expects several spikes and troughs before it recovers.
Mr Duke told Morning Report his company is dealing with the tough trading conditions by tightening stock control and cutting costs.
Good reasons for lower tax take - English
Finance Minister Bill English says the tax take of more than $1 billion less than expected suggests businesses have been making smaller profits and losing more than was expected through the recession.
Mr English told Morning Report there are some good reasons for the lower tax take, including businesses holding onto skilled employees.
He says parts of the export sector have been hit hard with the strong New Zealand dollar.
Commerical defaults up 50% - credit agency
New Zealand's largest credit agency says commercial defaults have risen by nearly 50% in the year to October.
Veda Advantage says businesses are falling victim to the recession as increasing numbers default on loans and lines of credit.
Managing director John Roberts says though the recession may be technically over, the bad times still have to feed through the economy.
Mr Roberts says not only is the volume of commercial defaults growing, but so is the value.
Mr Roberts says in 2007, the average default for a small to medium-sized business was $3200. This year, it reached $9400.
Though a business deafulting does not necessary close down, the low credit rating reflects badly and makes trading very difficult, he says.