How will the budget affect your business?

How will the budget affect your business?

Small business people right across New Zealand want to know what the impact of the budget will be on their bottom line, says Michael Fresnel, Principal, NZ Accounting.

Taking it purely on the numbers, unemployment will remain high for now while consumers remain focussed on the government’s message to save and pay down debt – and business owners should fully capitalise on this, he says.
“It seems to me that the economic recovery is slower than the government anticipated – and the budget seems to reflect that on a whole for small business owners. There will be additional compliance costs because kiwisaver goes up, but in real terms, the government is just returning things to how they were before the recession.”

And since these changes don’t kick in until 2013, he believes business owners should relax and just focus on core activity, control overheads and consider growth strategies leading into 2013.

“In my view, the economy is heading in the right direction – and although we have high unemployment, that means more competition for jobs, which means wages on offer now can be set at levels in preparation for higher wage costs related to kiwisaver in 2013,” he says.

Now is also a great time to consider other fixed costs, taking into account property prices, low interest, and available retail and commercial space, he says.

“It’s certainly the right time to consider moving from leasing to owning – prices are reasonable and landlords are looking to exit, given the change in government policy towards property investment.

“Equally, landlords are more negotiable than ever, with mortgages to pay on empty space. So now is also a good time to consider relocating to better premises for the same money.”

And even variable costs like telephone, power and stationery should be analysed, says Fresnel.

“Consider a full review of all of your costs while business is quiet – examine all of the options, and if there is a better price on offer, take full advantage. It might be little pennies, but a dollar saved is still a dollar earned.”

ENDS

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