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LVRs will turn funding tap off for many SMEs

David CLARK

Small Business Spokesperson

1 October 2013      MEDIA STATEMENT

LVRs will turn funding tap off for many SMEs

New mortgage lending restrictions will be a kick in the guts to the many small businesses that borrow against the family home – although the Government has yet to do any work in the area, Labour’s Economic Development spokesperson David Clark says. 

“Small businesses are struggling under National. Last year there were 2,500 fewer business start-ups. Part of the problem is that it’s hard to attract investment; so many small businesses borrow against their home. That’s all about to change with LVRs.

“We need to encourage businesses to start up, not turn off the funding tap.

“The Government gave the Reserve Bank the LVR tool in a rushed attempt to fix the Auckland housing market. But John Key and Bill English didn’t think it through. The paper trail shows they didn’t ask for advice on the impact on first home buyers until a month after they agreed the policy with the Reserve Bank.

“It’s also clear they didn’t consider the impact on small business, or home buyers in the regions. The Government has no details on how many small businesses will be affected by LVRs. They should have done the work before agreeing the policy.

“LVRs are a rushed policy. They weren’t thought through. The Government is only now seeing the full extent of the problem.

“Labour believes in small business. We will make training apprenticeships and skills more accessible for SMEs, plans we know are extremely important to small business owners. 

“Too many small businesses are spluttering along. We need to get the small business engine running again. LVRs aren’t helping,” says David Clark.

ENDS

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