Small business is doing it tough

The state of small business in New Zealand
Part 2 of 3
By Michael Baines

Small business is doing it tough

The much quoted ‘rock-star economy’ phrase has never had much meaning for many of New Zealand’s small businesses.

For most sectors that don’t directly involve extracting milk from cows it’s been a long hard graft out of the recession triggered by the Global Financial Crisis. The sharp fall in dairy prices means that farmers are now in belt-tightening mode, a place that most of New Zealand’s small businesses never left in the past several years.

Despite this, at the first sign of an upturn in GDP figures councils seized the opportunity to ratchet up the costs faced by business.

For many businesses, not just motels, when times are tough you batten down the hatches until the storm passes, meaning that non-essential spending is deferred. For a motel, that means when times get better that’s when you do the maintenance and modernising that you’ve put off.

There’s no question that the last couple of years have been good ones for the sector, with the summer just been particularly strong in terms of bed nights. So this ought to be the time when motels can spend up and spruce up, but it’s not.

From the top of the North Island to the bottom of the South Island, motels have been struggling to cope with increasing rates bills and mounting piles of red tape.

Any small business owner wants to grow their business, and in doing so they will reinvest into their local community in terms of creating jobs and spending on goods and services. But so many motels are prevented from doing this because of the greed of councils and their spiralling financial demands

Most councils I come across seemingly have no grasp of what is happening in the real world, where people have to work for their money. Unless something changes soon we will be a country of former rock stars, reduced to penury as we relive our one-hit wonder (dairy) glory days.

Michael Baines is the Chief Executive of the Motel Association of New Zealand. Mike has extensive experience working on behalf of small business through his work with trade associations, economic development and in the retail sector.

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