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Time For New Government Focus To Shift Back To Small Business

Leading business management platform, MYOB, welcomes the new Labour-led Government after a landslide win over the weekend, and is now calling for a renewed focus on support for small business as efforts continue around economic recovery.

MYOB’s recent General Election Snapshot revealed that prior to the polls opening, 74% of SMEs were concerned that insufficient attention would be paid to the issues affecting small business during the election campaign period, despite their importance to the economy.

MYOB NZ Country Manager, Ingrid Cronin-Knight, says the SME sector would be heartened by the fact that some of Prime Minister Jacinda Ardern’s first policy priorities are focused on providing more support for small businesses recovering from the impact of COVID-19.

Ms Ardern said on Sunday that she wants more support for small business and is proposing both changes to the Small Business Cashflow Loan Scheme and the creation of a flexi-wage scheme – the latter comprising $311 million in cash incentives to drive hiring of the unemployed, which would be put in place by the end of the year.

“Before the election, we asked New Zealand SMEs about their key policy priorities. The top three they spoke of were more job creation, tax law simplification and streamlining compliance regulations, and the reduction of the company tax rate,” says Ingrid.

“While the Labour Government currently has a number of policies that lightly address some of these issues, it is important that these priorities are given real focus as part of the ongoing recovery – particularly as initiatives like the Wage Subsidy Scheme wind down.

“It’s imperative that SMEs aren’t left out of the conversation, and that government support and collaboration with small and medium businesses continues to occur as strongly as it did through the worst of COVID-19, over the next three years.”

More job creation

According to MYOB’s General Election Snapshot, nearly half (47%) of SME owners and decision makers wanted the elected government to prioritise more job creation and support for employment growth.

“People need to be trained and upskilled in areas that will benefit the high-growth industries, such as the technology and trade sectors,” says Ingrid. “Investing in training and development in these sectors will assist business owners who are deeply in need of skilled workers, particularly as border restrictions continue.

“SMEs are the backbone of our job industry, with 29% of working New Zealanders employed by these businesses.[1] Assisting business owners and employers financially through the new flexi-wage scheme will help ensure that SMEs can continue to invest in homegrown talent.”

Founder and Managing Director of Hey Mama Movement, Dairne Burns, explains that access to financial support and funding which helps to grow employment opportunities in SMEs, could make a significant difference.

“A key concern for myself, and I believe many business owners, is limited access to capital and investment financing that can help us fulfill our business growth potential. This funding can open many doors and financial support focused on enabling businesses to hire and train key staff – providing jobs and upskilling opportunities to New Zealanders – will not only help businesses continue to grow, but simultaneously support overall technological and business development.”

Tax law simplification and streamlined compliance regulations

Ingrid explains that while SMEs will welcome Labour’s commitment to no new business taxes, 31% of SMEs are keen to see tax law simplification and streamlined compliance regulations.

“Continuing to improve the efficiency of the tax system is good, but what SMEs are really after is some better support in this area, and this could start from the ground up.

“The Government should aim to work closely with SMEs to help introduce more straight-forward regulations and rules in areas where businesses need greater clarity and increased simplification – such as the Resource Management Act (RMA).”

Reduction of the company tax rate

Unsurprisingly, over a quarter (28%) of New Zealand SMEs said they would like the elected government to prioritise the reduction of the company tax rate over the next three years.

“The Labour-led Government has said the reduction of the company tax rate is off the table for the coming term. This is a consistent ask from SMEs, so some will be disappointed that it’s not currently an option being considered,” says Ingrid.

“That said, it would be helpful to open up the conversation and hear more about other policies they have in the pipeline that they believe could provide similar value to the SME community, as they kickstart a new term in government.

“Over the past few months, SMEs have been encouraged by the level of support and interest shown by the previous coalition Government, with 45% believing they deserved to be re-elected. Now, it will be important for the incoming Minister for Small Business to keep this momentum going, while providing a clear focus on the priorities that SMEs have laid out.”

[1] New Zealand Foreign Affairs and Trade, Supporting SMEs, https://www.mfat.govt.nz/en/trade/free-trade-agreements/free-trade-agreements-in-force/cptpp/supporting-smes/

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