10 September 2008

NZ still one of the world’s best places for business

Minister for Small Business Clayton Cosgrove welcomed today’s release of the World Bank’s Doing Business 2009 survey showing that New Zealand has retained its second place ranking for ease of doing business.

Mr Cosgrove said New Zealand’s regulatory environment has consistently ranked either No 1 or No 2 by the World Bank since the survey began. He said for New Zealand to retain its second-place spot in the face of an increasingly competitive global business environment is a fantastic result.

“This survey recognises the government’s ongoing drive to improve the regulatory environment,” Mr Cosgrove said. “We have worked hard to minimise the amount of time business people spend on paperwork so they can focus on their businesses. Today’s number two ranking is an endorsement that our approach is working, and that this country is one of the most business friendly in the world.”

The World Bank’s Doing Business survey is an annual cross-economy study that measures government regulations and their effect on business across 178 economies. The Survey uses 10 key indicators to measure and compare ease or difficulty of operating a business. Economies receive a ranking for each key indicator; and an overall ‘Ease of Doing Business’ ranking.

Mr Cosgrove said a highlight from today’s announcement is New Zealand’s jump from third to first place for the Starting A Business Indicator. “The average number of days to start a business in the OECD is 13.4 days while in New Zealand it takes approximately one hour. This is thanks to the cooperation between the Companies Office and Inland Revenue which means new businesses can be given their GST number at the same time as incorporating their company online - a major time saver for small businesses.”

“It is also worth noting that comparative to our Australian neighbours, businesses here pay a lot less in tax as a percentage of their profits. In Australia the total tax rate as a percentage of profits is 50.3% whereas in New Zealand businesses pay 35.6%. This is also below the OECD average of 45.3%.”

Mr Cosgrove said the government recognises it must continue its programme of improvements to retain New Zealand’s internationally competitive business environment.

“Recent initiatives such as changes to the tax regime announced in Budget 2008 will have a positive effect on future survey results,” Mr Cosgrove said. “The Standard Business Reporting project we are currently developing will revolutionise government and business interactions, by allowing businesses to file information only once with government, in one place, therefore reducing the compliance burden and saving time.”

Mr Cosgrove said today's findings by the World Bank is one of several independent studies showing ongoing improvement for New Zealand's business environment. These include the latest Business New Zealand-KPMG Compliance Cost Survey of business people that shows compliance costs have fallen by a third since 2005 for firms employing five or fewer staff.

ENDS

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