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Small Business Booming on North Shore - Tamihere

Hon John Tamihere Speech

Small Business Booming on North Shore

Speech to North Shore Small Business Day

Speech to North Shore Small Business Day, Bruce Mason Centre, Friday March 12, 5.45pm

Welcome to North Shore Small Business Day. It's great to see so many of you take time out from your very busy schedules to attend this event here today, and I hope that you find it a valuable experience.

In particular I hope you had the chance to hear today's Lunchtime Inspiration speaker Alastair Ferguson, who truly is an inspirational speaker, not only on the subject of business success, but also in demonstrating that balance in business means more than just your bank balance - and the importance of following your dreams.

I hope you have also been able to take out time from running your businesses to attend some of the seminars here today that have provided some very practical advice on topics such as employment relations, business growth and networking.

This is the sixth in a series of 24 Small Business Days being held around the country and I am pleased to report that the feedback I have been getting so far from small business has been very informative and helpful, and will no doubt help shape future Government policy and direction regarding small business.

While some of the concerns will obviously vary between North Shore and, for example, the West Coast, where I visited last week, many of the issues relating to small business have common ground around the country.

My brief for the Small Business Days is to engage directly with the people involved in the day-to-day reality of running small businesses, so we can hear first-hand about the issues concerning small business, what drives their success and what holds them back. Too often in the debate we hear from business lobby groups at one end of the spectrum and unions at the other, and the debate can often bypass the actual people involved altogether. So that's why I am here today to have that conversation with you.

North Shore City has certainly got a lot going for it as a business-friendly environment. It is the fourth largest city in New Zealand and is one of the fastest growing, with population growth consistently exceeding the national average.

Last year North Shore's population passed the 200,000 mark, and in the next couple of decades it is expected to increase by another 30 per cent to reach more than 255,000. Much of that population growth has been fuelled by immigration, and more than 12 per cent of the city's population is of Asian descent.

The 200,000 people who live on the North Shore make up five per cent of New Zealand's population, and they are on average wealthier, better educated and likely to be in employment than your average New Zealander.

In 2001 North Shore City residents had the country's second-highest median personal income; they were also much more likely to have a tertiary qualification, with 38 per cent tertiary qualified, and at the end of last year just 3.9 per cent were unemployed, compared to the national average of 5.3 per cent.

The North Shore is home to nearly 19,000 businesses, employing the equivalent of more than 76,500 fulltime employees - five per cent of the county's workforce - and almost half of those employees are professional and technical workers.

Employment growth is consistently high on the North Shore, with nearly 2400 new jobs created in the year to February 2002 alone. Strong growth has come from the business, property service, communications, retail and education sectors. North Shore's communications workforce grew by an astonishing 275 per cent between 1994 and 2002 - more than 10 times the national growth rate.

Technology has been a key factor in the development and growth of business in North Shore City. In particular the e-centre at Massey's Albany campus (an enterprise incubator to grow entrepreneurial technology companies), the Smales Farm technology park in Takapuna, and the North Shore ICT Project have made a significant contribution in supporting emerging businesses.

So its all looking pretty good for small business on the North Shore, with the city experiencing positive growth and development in the areas vital to business success. Of course that rate of growth and development brings its challenges as well as its opportunities for business - for example it is likely to contribute to problems such as traffic congestion and skills shortages. But overall the positives for North Shore business far outweigh the negatives in this very exciting time of strong growth.

Before I hear from you about the issues that are important to you as people involved in small business, I'd like to tell you about a few really good initiatives the Government has implemented recently to help small business.

Just this month we announced that self-employed people who choose to pay provisional tax in their first year of business will get a 6.7 per cent discount. The discount will mean that up to 17,000 taxpayers will save $3.6 million. For example, for income of $60,000, the discount will amount to nearly $1000 - and will help businesses avoid the "double whammy" of paying two years' tax at once in their second year of business.

We have also just introduced the Employment Agreement Builder. This is a great on-line tool that allows employers to create employment contracts that meet legal and regulatory requirements, simply by ticking the clauses they want, and deleting those they don't. It is a really practical way in which we can make regulation in the area of employment law much faster and easier for businesses.

Another recent Government initiative that will help small business is the Small Business Advisory Group that I appointed last year to hear more clearly and directly the needs of small business. The nine people on the group are a hugely inspiring bunch of people. They come from a diverse range of sectors and regions, but the main thing they have in common is a wealth of talent and experience in running small businesses. They know the challenges and difficulties of setting up and running small businesses, and they know the disappointments as well as the successes small business can bring. In short, they are champions of small business.

I'm finding out exactly what I hoped of the group - they're giving me very direct, very straight-up advice on what small business would like us to be doing on their behalf. Already the advisory group has made a number of recommendations, and right now we're working on those recommendations. The work being done by the advisory group will go hand-in-hand with the excellent feedback and information I am getting from the Small Business Days to inform and drive the Government's programme regarding small business.

One of the issues I hear a lot about in small business is compliance. Of course, there will always be grumbles from businesses about compliance and demands that the Government does more to reduce red tape. And as Minister for Small Business I am committed to cutting through as much of the red tape as I can. But I think we risk losing perspective on the compliance burden, and therefore also risk losing sight of the really important issues that underlie business success.

In reality, New Zealand does very well in international comparisons of compliance costs. The World Bank has just released its Doing Business 2004 report, which reports on the ease (or difficulty) of starting a business, hiring and firing staff, enforcing contracts, getting credit and closing a business in more than 130 countries. The report shows that New Zealand is the least regulated country in the world, and one of the easiest places to start a business.

Judged across five criteria, New Zealand was judged to be the least regulated country, followed by Australia, Canada, Sweden, the United Kingdom and Singapore. According to the report, it costs just US$28 to register a company in New Zealand and it takes just three days. By comparison it cost US$402 and two days in Australia, US$264 and 18 days in the United Kingdom, and a massive US$3228 and 20 days in Switzerland.

So I think we shouldn't forget how lucky we are in business in New Zealand in many ways. That's not to say that we shouldn't always look to do better, but we must ensure that we do not let issues of compliance overshadow and detract from the debate we need to have to ensure that we do achieve the growth, increased productivity, prosperity and savings we really need to have sustainable economic growth in this country.

If New Zealand is to return to the OECD's top 10 from its current ranking of 20, there are things we must do better. We must have smart businesses that are globally competitive, that are strongly connected with customers, and are founded on good ideas and talented, skilled people.

I think the North Shore is providing a great example of how we can achieve those goals, and if you have any ideas on how you think we can better help you, I'm all ears. As I said before, the Small Business Days aren't about the Government telling you what it good for small business - it is about hearing from you about the things you think will work to help small business. So I would now like to thank you again for your participation here today, and I'd like to hear your questions and comments.

For more information and the full programme of Small Business Days go to www.smallbusiness.med.govt.nz


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