The social and economic disruption following sudden large-scale adverse events, such as the Canterbury earthquakes, has the potential to affect long term business debt, and change social norms and attitudes leading to increased hidden economy activity during recovery.
To understand these and emerging new risks following the Canterbury earthquakes, and the impact Inland Revenue (IR) has had in mitigating them, we carried out research with small and medium enterprises (SME), tax agents, and stakeholders as part of a three-year longitudinal project.
Key learnings focussed on the need for IR’s response and interventions to be tailored to SMEs’ different stages of recovery, but with recognition that time spent in each stage varies. Therefore, we highlighted flags for IR to identify which recovery stage a SME is in, and the associated policy, operational and communication strategies required. We also drew attention to how IR’s response model needs to change and adapt as businesses change and adapt.
IR used the results to shape its ongoing response to the Canterbury earthquakes and to develop a framework for managing compliance behaviour for future adverse events.