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Small Business and Job Growth undeniable Links

3 August 2005

Small Business and Job Growth undeniable Links

"Small Businesses created 131,640 jobs between 2000 and 2004 and accounted for over one third of the nation's economic output," said Small Business Minister Rick Barker today, quoting from the Ministry of Economic Development's latest Small Business report.

The report from the Ministry of Economic Development identified that 131,640, or 60 per cent, of new jobs generated in the four years between 200 and 2004 had been created in small businesses around New Zealand. 96 per cent of businesses in New Zealand employ fewer than 20 people and 86 per cent of those employ fewer than five.

"This represents enormous growth in the small business sector, there have to be more businesses starting up and there have to be more businesses succeeding in New Zealand, for so many people to find work," said Mr Barker.

The report, entitled Structure and Dynamics, provides a statistical breakdown of the nature and contribution of small businesses to the New Zealand economy. The report includes information on the number, size, value-added contribution and a breakdown by industry and performance measures used to asses the output of small businesses.

This contribution to employment outcomes alone represents almost half of all new jobs created since 1999.

"We have seen someone going into a new job at the rate of one person in a new job every ten minutes since 1999, and almost every second person is getting a job in a small business somewhere in New Zealand, this is great news" said Mr Barker.

The report comes on top of recent acknowledgement that New Zealand businesses operate in one of the freest and most open markets in the world and the World Bank in its Doing Business in 2005 report said that New Zealand is the easiest country in the world to do business.

"This Labour-led government has done a lot to assist small business, especially in the reduction of compliance costs where we have reduced the number of costs associated with doing business with government by 90 per cent, we intend on maintaining our World Bank ranking into the years ahead" said Mr Barker.

"What is heartening to see is that in balancing the hard work being done by small business owners against the efforts of the government to make doing business easier, the positive results are starting to show"

The Labour-led government recently announced a number of new, key, small business focussed initiatives designed to make owning and operating a small business easier in New Zealand. Initiatives include the new $40 million Seed Co-Investment Fund, the Inland Revenue and Companies Office small business website, and the $1.42 billion suite of small business focussed tax changes.

"The link between small business success to job and economic growth in New Zealand is undeniable. It is a true testament to the hard work being done by small business operators," said Mr Barker.

The report can be read at


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