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Small Business (2005) 

 

Labour’s vision

Small and medium enterprises are the backbone of our economy. Much of the economic success we are enjoying as a country comes through the hard work and toil of small business owners and those they employ.

Labour recognises that time spent interacting with government can be time away from growing the business. That is why we have worked hard to cut compliance costs and are continuing that work.  The fact that the World Bank has now ranked us first in the world for ease of doing business shows the policies are working.

Labour also recognises that in order to grow, businesses need strong public services and continued investment in education, industry training and infrastructure so that businesses can get the skills they need and can easily get their products to market. That is why we are continuing to invest in these areas.

 

Labour and Small Business

Under Labour, economic growth has been amongst the highest in the OECD, even greater than Australia, which means the per capita income gaps are closing on those ahead of us.

Small and medium enterprises have flourished under Labour and have contributed in excess of one third of the nation's economic output over the last five years.  This has seen over 131,000 more people working in small and medium enterprises.

 

What we have achieved:

The Labour-led government has made support for small business one of our key priorities.  Labour is proud of its achievements in the small business area:

Under Labour:

  • The World Bank's Doing Business in 2005 report showed that New Zealand is the easiest country in the world in which to do business;
  • The first ever Minister for Small Business was appointed to advocate for the sector at the Cabinet table;
  • A $1.42 billion business tax relief package was introduced. This included:
    • new asset depreciation rates to encourage capital investment,
    • changes to the treatment of R&D expenditure to encourage innovation,
    • an improved fringe benefit tax regime;
  • The modern apprenticeship programme has been introduced to help provide businesses with the skilled workers they need and there are already in excess of 8000 modern apprentices;
  • Tax compliance costs have fallen. The average small firm is saving $2000 per year in reduced tax compliance costs.  The average medium-sized firm is saving $5000;
  • Small business voice in government was strengthened through the establishment of the Small Business Advisory Group made up of people with real small business experience;
  • New Zealand Trade and Enterprise, which funds and supports management and skill capability development for small businesses, has been established;
  • The voluntary business consultation website has been developed so that small and medium enterprise owners and operators can have a greater opportunity to contribute directly to government policy formation in areas important to them.

 

Our Priorities

Labour is committed to small business success.  We will continue to invest in small business and we will continue making business here easier than anywhere in the developed world.

Our focus will be to:

  • Continue to reduce unnecessary regulatory burden;
  • Invest more in modern apprentices and industry training;
  • Continue to make transactions between business and government easier;
  • Continue to enhance two-way communication between business and government;
  • Develop opportunities for youth enterprise skill development;
  • Undertake research that will enable government to better identify and address the needs of small business.

To achieve this Labour will:

  • Align provisional tax payments with GST due dates, reducing the number of payment dates businesses are required to meet;
  • Allow for smaller payments of provisional tax in six instalments, rather than the current three;
  • Enable businesses to base their provisional tax payments on a percentage of their GST turnover, this will allow seasonal firms to benefit because their tax payments will be aligned with their income flow;
  • Subsidise the use of payroll agencies for small and medium enterprises, making deductions for tax, child support and student loan easier;
  • Continue to develop the BIZportal so that businesses will benefit from a single point of engagement with government;
  • Continue to invest New Zealand Trade and Enterprise development programmes and grants that support small and medium enterprises in their first steps as well as in the transition from a new business to a developing business with export potential;
  • Keep our skilled graduates in New Zealand by abolishing all interest charges on student loans for all New Zealand based graduates from 1 April 2006.
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