A new forum for small businesses has put together a wish list for the Government to coincide with last week's Zero Budget:
The New Zealand SME Business Network, was launched by Tenby Powell, Sharon Hunter and others in 2011, - with the aim of developing an active group of SME owner / managers who could generate practical ideas to better understand and address some of the issues facing small businesses in New Zealand.
The group, which also includes , professional advisors and members of big companies, "who remember what it was like to small," now has 850 plus members and is expected to reach 2,500 members by the end of the year.
"Our vision is to create a nationwide quorum of small business owners and their advisors with a view to generating consistency of approach to Government with strategic but practical initiatives aimed at creating a more positive small business environment in which SMEs can grow," says Powell.
Growth leads to increased employment, wider educational and training opportunities, positive social impacts and an increased tax revenue. "The challenge now is to get Government to recognise the opportunity that is right under their noses," he says.
Powell, an experienced builder of high performing multi-disciplined teams, sees significant economic and social upside for New Zealand by harnessing the potential "Leadership Thinking" lying dormant within the cultural diversity of SME owners.
Powell and Hunter have invested in a new start-up venture, Envoy360, a maritime security company operating out of Dubai and Singapore, which is experiencing significant growth after only six months of operations despite challenging conditions.
Last week's Budget will have little effect on the country's small businesses but the event gave a number of businesses in the New Zealand SME Business Network a chance to reflect on the changes they would like to see if they were given free reign.
The online survey elicited comments like: "There is a belief by all political parties that big business is the salvation of the economy but it is now and has always been small business that is the backbone in this country."
"I want from the Government, a stronger focus on creating work instead of the austerity programme they have currently. Poverty mentality doesn't work. Nor is the country a business or can it be run that way."
The wishlist of NZ SME Business Network members:
"The Government needs to get real about the true cost of compliance to an SME in time and financial gearing. The banks in NZ, primarily the Australian owned ones, have not supported SMEs through tough times but were keen to throw money at them in the good times.
• We would like easier compliance especially regarding tax but also from the IRD, ACC, OSH, Employment law and local government consents.
• We would like greater transparency in government procurement with more contracts awarded outside of Wellington friends of government employees and away from tired safe overseas options. More buying NZ innovative solutions which means innovative thinkers in government departments.
• A radical rethink about the myriad of compliance issues in one form or another imposed on small businesses.
• Use New Zealanders and build our competency base, rather than continually bringing in overseas competitors.
• Research + Development rules should be clear and simple to understand and not giving one supplier the advantage over another. one supplier of R+D.
• The fact that over 200,000 tax payers (biz and individuals) are behind suggests
that "the system" is flawed. Why not incentivise tax payers to pay on-time with rebates,
as power companies do, and offer an on-line payment system? The National Government is all about increasing productivity and yet government department bureaucracy is hugely inefficient.
• Introduce tax policies that encourage capital investment into productive capacity rather than property.
• Reduce ACC levies to one invoice. Improve data capture and transfer IRD to ACC. Central registry of NZ businesses.
• Local government should pay their bills before the 20th of the month. Many councils including some big ones pay on the 20th which means thousands of businesses do not get paid in time to pay their bills before 20th. All councils should pay all accounts fortnightly
to speed up the use of money.
• Less government in our lives - not more
• Go for flat regular deductions, fewer social activities by local government. Take the example of the new French President Francois Hollande- slash wages of all the top people and have civil servants use video instead of internal travel.
• SMEs in this country currently have few incentives to grow their business and employ more staff as incremental growth has to be significant for a return to exceed the increase in compliant costs. The Government needs SMEs as they are their biggest unpaid tax collectors but are doing little to increase the size of the pie. SMEs need alternative funding options that are government backed without prohibitive restrictive.
• Through public/private partnerships give SMEs access to growth funding in return for a public shareholding. These should be available to more than just high return/high risk industries such as software. Public shareholding should come with active monitoring and supply of managerial/marketing/finance expertise to maximise chance of success. Or provide the same, based on a pool of private capital and the Government pays for expert input and monitoring.
Reward entrepreneurship for value created or added to capital - financial, human, social, operational and natural. Government must invest in and become truly empathetic towards business leadership particularly at the grass-roots level. The birthplace of wealth creation is in new venture start-ups that aspire to grow.
• We need government funded sales and marketing advocates going around business in New Zealand spreading the word about the solutions NZ SME's have to a range of problems. All those businesses who are head down surviving need an advocate/sales person out and about promoting them. Many cannot afford to do it themselves or do not do it well."
A number of NZ SME Business Network members cited this NZ Institute of Chartered Accountants report.
The NZICA believe there is value in decoupling the tax system for small businesses from the tax system that applies for New Zealand's larger, more complex, businesses. A simplification of rules would create an environment that is more conducive to business growth and productivity.
The proposals released by NZICA in a paper called "Simplifying the taxation of small business in New Zealand" for are two-fold: a turnover tax model for micro businesses (not GST registered and no staff), and a system based on GST for small businesses (turnover less than $600,000).