Voting is under way in the New Zealand general election. Explore the main parties’ pledges at Policy.nz, but here’s a whistlestop tour of what’s on offer for small businesses.
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Small businesses have long been considered the bread and butter of New Zealand’s economy, accounting for 28% of all employment and over a quarter of the country’s GDP. Defined as firms with fewer than 20 employees (including those that are self-employed), New Zealand is thought to be home to more than 530,000 small businesses, many of which, in recent months, have been more than a little battered and bruised. To soothe the concerns of small business owners nationwide, here are just some of the policies on offer ahead of election 2020.
Cash flow support
With access to finance one of the main challenges small businesses face, Labour has promised to expand its Small Business Cash Flow Loan Scheme for businesses affected by Covid-19. The scheme currently offers interest-free loans to small and medium-sized enterprises (SMEs) and, if re-elected, would extend it for another three years until the end of 2023 and the interest free period from 12 to 24 months. Labour says it would also regulate merchant services fees (ie fees charged to retailers for debit and credit card transactions) to allow retailers to keep more of their sales, and aim for government departments to pay 95% of domestic invoices in 10 business days.
Meanwhile, National says it will “guarantee” all government departments and agencies pay their contractors on time and within seven days, as well as establish a voluntary initiative committing large New Zealand businesses and not-for-profits to pay local businesses on time and within 30 days.
Reducing regulation and compliance burden
In an effort to further reduce compliance burden for small businesses, Labour wants to accelerate the implementation of an online business licensing, consent and permit system which it argues would reduce regulatory compliance and make it easier for small businesses to deal with one another and with the government. This would be supported by a move requiring electronic invoicing for all state sector interactions by December 2022. The party says it would also consider establishing a cross-government unit to assess the impact of any new regulations on small businesses.
National has also pledged to reduce excessive regulations by simplifying the employment dispute resolution process and providing guidance to businesses on complying with anti-money laundering laws. It also wants to review regulation affecting small businesses specifically through a joint initiative with IRD, ACC, Statistics NZ, MBIE and WorkSafe NZ to identify areas of regulatory duplication and require government departments to measure the cost of regulation for small business.
As for Act, the party says it’ll go even further than this and commission an independent review of every major regulatory regime, including health and safety, financial markets and health products, and subsequently abolish any regulations that fail to pass a cost-benefit analysis. It’s also proposed shortening the personal grievance process between employers and employees, and allowing employees to be fired immediately for major safety infringements.
A number of proposals have been put forward by the National Party with the aim of reducing the cost and compliance of the tax system for small businesses. They include increasing the provisional tax threshold from $5,000 to $25,000, the compulsory GST threshold from $60,000 to $75,000, and the threshold to expense new capital investment from $5,000 to $150,000 per asset. The latter has also been put forward by Act, but instead of raising the threshold for two years like National, the party says it would be raised permanently.
With Labour, the party says it will continue to provide tax relief for businesses, which it started back in April, as well as simplify how businesses calculate provisional tax. On provisional tax, The Opportunities Party says it would simply abolish provisional tax for SMEs altogether.
National’s JobStart policy says that for every new full-time, permanent employee that gets hired, the employer would receive a $10,000 cash payment. This would be capped at 10 new employees (or $100,000 per business) and would be available until March 2022. Alternatively, Labour has opted to expand subsidies for employing people at risk of long term unemployment, also known as the flexi-wage scheme.
Meanwhile, the Act Party says it would freeze the minimum wage for three years and introduce voluntary 12-month trial periods for new employees in order to incentivise businesses to hire more people. It would also increase the proportion of funding per apprentice paid to business owners to ensure that the costs and risks of apprenticeships are shared equitably.
Labour argues that small businesses are struggling to embrace new tools and has proposed funding digital technology training worth $2,500 to cover fees for courses or to help create a digital action plan. It says it’ll also continue to develop a long-term plan for how the government can help businesses adopt new technology.
National, on the other hand, wants to provide funding for small business owners to access management training and business advisory services as well as more funding for companies to access business mentoring and start up advisers. For unemployed people with at least 10 years trade experience, it also wants to provide training for these New Zealanders to start their own business.
Meanwhile the Greens want to fund sustainable business leadership training programmes for local firms to adapt to new modes of operation, feeding into its overall focus on sustainability and buying local.
Explore the parties’ pledges in more depth at Policy. The essential campaign dates are here. For all you need to know about the cannabis referendum click here. For the assisted dying referendum click here.