Greens promise help for small businesses

Russel Norman. Photo / Getty Images

The Green Party is snuggling up to small firms who make up the bulk of businesses in New Zealand by saying it will push for a simplified tax regime for them including a flat 15 per cent tax on those with a turnover of $60,000 or less.

At the policy launch in Auckland this afternoon, co-leader Russel Norman said businesses with relatively modest annual turnover spent too much time and money on tax compliance.

"We plan to give these small businesses the option of paying their taxes on a simplified cash basis on their GST returns.

"For even smaller businesses, company tax can be based on turnover."

Dr Norman said the Greens proposals were broadly in line with those suggested by the New Zealand Institute of Chartered Accountants (ICA) , "and could reduce tax compliance costs by up to a third".

Under the ICA proposal small and medium sized enterprises with a turnover less than $1.2 million a year would account for their income tax and GST on a cash basis at the same time, using the same timing rules.

For businesses that operate under a company structure, the tax due from the company and its shareholders would be merged by levying tax on the company earnings at the same rate as faced by the shareholders.

The ICA also wants to eliminate fringe benefit and entertainment taxes and replacing them with "private use adjustments".

"Micro" companies - those with turnover of less than $60,000 a year - would be taxed at a flat rate of 15 per cent on their revenue, based on the assumption that 50 per cent of their income or sales goes on on business-related expense and the balance is taxed at 30 per cent.

Meanwhile, Dr Norman said the Greens would also seek to "strengthen the domestic market for green innovation" by rewriting government procurement and certification processes "to favour New Zealand-made environmentally sustainable goods and services".

"By greening government procurement policies, local SMEs will face incentives to rapidly innovate to secure lucrative government contracts. Once secured, those SMEs will have a base from which to export their same clean technology solutions overseas."

Those "green government procurement policies" would be supplemented with the Greens' previously announced $100 million start-up capital fund to help small businesses develop clean technology.

The plan dovetails with the Greens' policy of boosting government funding of research and development by $1 billion over the next three years.

"Our plans are fully costed and will create thousands of new green jobs as we transition to a more resilient and sustainable economy", Dr Norman said.