20 September 2004

Media Statement

Let's celebrate job and wealth creators: Tamihere

Minister for Small Business John Tamihere reckons that the latest SMEs (small and medium enterprises) report from the Ministry of Economic Development further proves the case for "thinking small first" when it comes to developing regulation.

The statistical report, in its fifth year, highlights the significant contribution that SMEs make to the economy - 97 per cent of all enterprises employ 19 or fewer fulltime staff, with 86 per cent of all enterprises employing fewer than five staff The report also notes that our major trading partners share similar characteristics.

"Kiwis need to realise and celebrate businesses," Mr Tamihere said today when releasing the new report. "We need to lift our perception of ourselves and start to celebrate the fabulous contribution that our business people make to society. New Zealand's business people are important to us: most of us are related to them, married to them, or working for them."

The report shows that small businesses are key job creators. SMEs contributed 84 per cent of the net employment change between 1997 and 2003 - 162,150 out of the 193,980 extra FTE positions.

"SMEs are the engine room of the economy. Not only are they job creators, they are also wealth creators," Mr Tamihere said. "This report shows that SMEs accounted for almost 40 per cent of the economy's value-added output in 2002. Combine that with the National Bank's figures that show small business growth exceeding that for the economy as a whole for eight quarters straight, and you can see that the sector is humming."

The government is committed to helping SMEs build their capability and to streamlining businesses' interactions with government agencies. On both counts the signs are positive.

Business NZ and KPMG's 2004 compliance study showed a reduction of 17 per cent of average business compliance costs in the last year, and an MED report identified 104 ways that government departments have saved businesses time and money in complying with government regulations since 2001.

"These reductions will help business to get on with business and I am committed to continuing this good work. Even though the World Bank's latest report identified New Zealand as the easiest country in which to do business - we can't rest on our laurels" the Minister said.

"Our small businesses don't have the formalised processes or access to the specialised staff that larger businesses do. That is why new tools such as the Department of Labour's online employment agreement builder are not only very pratical, but also very popular amongst SMEs.

"We can always do better - and the Small Business Advisory Group's first annual report has provided the government with some meaty issues where we can focus on continuing to improve the business environment for small enterprises."

The SMEs in New Zealand: Structure and Dynamics report provides a statistical breakdown of the nature and contribution of SMEs to the New Zealand economy. Information includes the number and size of enterprises, their added-value contribution, a breakdown by industry and performance measures.

The report is available online at www.med.govt.nz.

ENDS

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