Budget 2021: Small business reacts to 'pump-priming budget'

The Government has committed to spend $44 million on a digital skills programme that will provide up to 60,000 small business with digital skills. Photo / Getty Images

The Government has committed to spending $44 million on a digital skills programme that will provide up to 60,000 small businesses with digital skills training to aid in "the transition to future ways of working".

The two-year programme, an extension of the Digital Boost Training Programme, will also include advisory and support services to assess the needs and create digital business action plans for 30,000 small businesses.

Small Business Minister Stuart Nash said providing support to small firms was a key part of the Government's "five-point plan for our economic recovery".

The programme, he said, would grow the digital skills and capabilities of the workforce, improve productivity and create more resilient businesses.

"Digital commerce also contributes to a higher wage, higher productivity and lower carbon economy and builds our brand as a safe and secure place to live, invest, trade, visit and do business," Nash said of the Budget funding allocation.

MYOB's Krissy Sadler-Bridge, senior sales manager at the accounting firm, said the move to add additional investment to continue the Digital Boost programme was positive.

"The difference for small business in regards to what digital adoption can make for them is significant," Sadler-Bridge told the Herald.

"It can be really difficult for businesses to work out where to go next and how do it, so by having an advisory team as part of the digital adoption programme will be beneficial."

The Budget allocated $10m to boosting rural connectivity over the next two years.

Sadler-Bridge said this was also a win for small firms in the regions and would likely encourage them to consider the use of more digital solutions to boost business.

With $300m set to be invested in low-carbon technology, this was another area that could potentially benefit small and medium-sized firms, she said.

The Government has committed to spending $57.3 billion on infrastructure over the next five years. Sadler-Bridge said it was hard to know if there were any gains for small business.

"Infrastructure was top of the list of what small businesses wanted the government to be spending on, but the big question here for small firms is understanding how they are going to get access to this infrastructure budget."

Jamie Farmer, managing director of Grow NZ Business, described this year's Budget as a "pump-priming budget", which would benefit businesses in the short term, by providing an injection of cash to the economy through spending on infrastructure and benefit increases.

"Tactically, in the next 12 to 18 months it pumps some cash through and gets the machine moving faster, but it doesn't address some of the strategic issues, in fact it might exacerbate some," said Farmer.

He said he was surprised to see no funding allocation to help with staff skill shortages or supply chain issues - the two biggest problems facing business at present.

Farmer said the $44m allocation to digital skills training for SMEs was a small sum, and a lot of companies would typically spend more than that in a year.

"It's good there is $200m in there to help tourism, that's a positive and will be well-received, but the fact is to help tourism we've got to get the right people into the country to be able to provide that great experience."

Farmer said there had also been a missed opportunity to invest more into digital acceleration for business.

"It is a pump-priming Budget, putting more cash into the economy in the short term and not addressing the strategic issues of business owners in New Zealand."

Jamie Farmer of Grow NZ Business. Photo / Getty Images

The Canterbury Employers' Chamber of Commerce said the Budget "overlooked the role of business in the country's economic recovery".

Chief executive Leeann Watson also said the funding for the Digital Boost programme and other business support did not go far enough.

"The continuing funding for Digital Boost is a positive, however, it is only one slice of business support. While it will help some businesses with digital enablement, small businesses will tell you that's only one of a raft of challenges they face every day - on top of responding to the impact of Covid - and some of which have larger priority," she said.

"One key issue is skills shortages and the inability for some businesses to access staff, especially in light of the recent immigration 'reset' and acknowledging that building our skills pipelines can take time. There is also the increasing costs of legislative changes such as the increase in sick leave allowance, which will have a significant impact of businesses across the board, and particularly small businesses."

Leeann Watson. Photo / Getty Images

Kirk Hope, BusinessNZ chief executive, said the needs of business and the economy should have had more attention.

"Additional investment in infrastructure, and training and digital skills will be appreciated, along with the plan to develop a scheme to help support unemployed people find new jobs.

"However, there is little else directly focused on building the economy or easing the burden on businesses.

"Business was keen to see less burdensome regulation, policies to stimulate growth and development, and more certainty around business policies into the future.

"We'd appreciate a plan to fix the housing crisis and more certainty around the plan for economic recovery from Covid.

"From a business perspective, the Budget represents a missed opportunity for growth."

The Employers and Manufacturers Association (EMA) also agreed that there was not much in the Budget for business.

"While no one would argue against supporting our people, we had hoped for better growth projections and more practical support for businesses," EMA chief Brett O'Riley said.

"We believe one of the barriers to better growth and productivity are labour shortages, made worse by closed borders and limits on immigration. A recent survey of our members on labour shortages highlighted again how much they are struggling with this - across all sectors, at all skill levels and across the country."

O'Riley said the announcement of a social insurance scheme to assist those made redundant would be welcomed by employers if it was structured correctly.