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Gisborne Small Business - First to See the Light

Gisborne Small Business - First to See the Light

Speech to Gisborne Small Business Day

Speech to Gisborne Small Business Day, Gisborne Hotel, Gisborne, Friday April 2, 5.30pm

Good evening and welcome to Gisborne Small Business Day - a celebration of small business in your region.

We are now more than halfway through our series of 24 regional Small Business Days, and the enthusiasm and commitment I have seen so far from businesspeople up and down the country has been tremendously encouraging.

And I know that the people involved in running Gisborne's businesses are every bit as enthusiastic and committed as their counterparts around New Zealand.

Nearly 90 per cent of the region's land area is used for farming - the highest proportion of any region in New Zealand - but of course farms are businesses like any other and farmers are some of the hardest working and canniest businesspeople you can find.

Agriculture, forestry, horticulture and associated manufacturing businesses are the backbone of the district's economy, not to mention the contribution of the wine industry, with Gisborne being the country's third-largest grape-producing region.

The challenge for the region in reaping greater rewards from farming, fisheries and other commodity-based industries is to develop value-added products through greater innovation and use of technology.

One really good local example of this is Tawari Apiaries. In co-operation with local beekeepers and with the help of a Technology New Zealand grant, Tawari has upgraded its honey processing to meet medical standards - which will significantly increase the value of each litre of processed honey. The ultimate aim is to produce manuka honey medical dressings. So you start with a pretty ordinary product - honey - and by thinking harder and smarter, you turn it into something pretty special. That's the sort of thinking New Zealand business needs more of if it is to add value to its products, if it is to lift productivity and achieve sustainable growth.

Tourism is also an important industry for the region, bringing 385,000 visitors who spent $91 million in 2002. Visitor numbers are expected to increase to 447,000 by 2009 and visitor spending is expected to increase to $123 million. Much of that growth in tourism is expected to come from increasing numbers of international tourists.

Currently Gisborne is one of New Zealand's lesser-known tourist destinations, and tourism infrastructure is limited, but there is great potential for its unique attributes to attract greater numbers of tourists - the Whale Rider phenomenon is a great example of how distinctly New Zealand, distinctly Maori and distinctly East Coast flavours can be a big drawcard for overseas visitors. An internationally successful film based on a book by Gisborne writer Witi Ihimaera and filmed in Gisborne and Whangara is a great advertisement for the region.

The treasures you have to offer visitors are significant and diverse: you have stunning uncrowded beaches, beautiful pohutukawa, thermal springs, more than 100 marae, you bask in high sunshine hours, and of course you are the first city in the world to see the sun each day.

Extensive development in tourist accommodation, such as the new Captain Cook Motel and the development of the Portside Apartments and hotel complex, and the prospect of Gisborne soon becoming a port of call for international cruise ships, will bring further growth to tourism in the region that is very good news for small business.

Gisborne has the smallest and most sparsely distributed population of any region in the North Island, and its population has been declining in recent years and is expected to fall another 6 per cent in the next 20 years. With 28 per cent of its population aged under 18, and with about 45 per cent of its population identifying as Maori, the Gisborne region is also the youngest region in the North Island, and the region with the highest proportion of Maori.

If you can unlock the tremendous potential of that young Maori population, the rewards for the region and for business will be great, and it is encouraging to see that the next generation of young entrepreneurs is already well on its way to business success. It is fantastic to see that Lytton High School's Maori performing arts tutoring business E Tipu e Rea has won the Young Enterprise Scheme award for Maori business for three years running, and Ngata Memorial College's CD of Ngati Porou waiata also picked up the YES award for commitment.

While Gisborne doesn't top the charts on a number of economic indicators, there is still plenty of good news for the region. Unemployment in the region has nearly halved in the last three years, from 10.4 per cent in March 2001 to 5.5 per cent now. The real estate market is undergoing a boom, and five national and international retailers are reported to be looking for potential sites in Gisborne.

I would like to congratulate the efforts of a number of local groups that have significantly boosted business in the region. Gisborne Chamber of Commerce (now in its 126th year, which has to be some sort of record for longevity) has been active through initiatives such as the Business Achievement Awards and its new branding and marketing strategy, while Gisborne District Council's business assistance programmes such as the Business Grow advisory service have also been a valuable boost to local business.

So there is a lot going on locally to support business, and we in government are committed to working in partnership with you to help create a positive, business-friendly environment.

One of the most common complaints we hear from small business is that they endure a heavy compliance burden, and we are battling away on a number of fronts to reduce red tape for business.

First I think we need to put this issue in some perspective - and the reality is that New Zealand does comparatively well by international standards regarding the level of compliance and regulation.

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.

However we can always do better, and this Government is doing a number of things to reduce the compliance burden:

- Increased the amount of compliance that businesses can deal with electronically. You can now file electronic tax returns, make on-line payments, access tax calculators and receive advisory support on-line. Soon it will be possible to complete and submit all major forms electronically and view your tax information online. Last year I launched the Biz portal that allows businesses access to a range of information and Government agencies through one Internet site. And the Employment Agreement Builder launched last month allows businesses to use an easy on-line template to draw up employment agreements.

- Made sure we are listening to small business. In December 2000 we set up the Ministerial Panel on Business Compliance Costs to advise on how we should be reducing compliance costs, and the Government has implemented, or is in the process of implementing, 80 per cent of the panel's 162 recommendations. And last year I set up the Small Business Advisory Group so we can hear directly from real small businesspeople about what we can do to help them.

- Put up barriers to new compliance costs. Since 2001 the Cabinet has required that a business compliance cost statement be completed for any proposals that have red tape implications for business. This provides a robust, transparent process that means we are thinking about the impact on small business before any regulation or legislation is implemented, rather than trying to tidy up afterwards.

Made it easier for small businesses to pay tax. Last year we released the discussion document Making Tax Easier for Small Business. It includes initiatives such as a subsidy for small businesses to use a payroll agent, standardising GST and provisional tax rates to the 28th of the month, and a 6.7 per cent discount for new businesses as an incentive to pay tax in their first year of business.

So that outlines just some of the things we are doing as the Government to make doing business easier, but of course I would welcome any comments and suggestions from you on what you think would be of most assistance to you. So I thank you for your participation here today and welcome your comments and questions.

For more information about the Small Business Days series, go to www.smallbusiness.med.govt.nz

ENDS

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