Small business Minister Jacqui Dean. Photo / Marty Melville.
Small business Minister Jacqui Dean. Photo / Marty Melville.
Industry leaders say the Budget has not delivered for small to medium firms, but Small Business Minister Jacqui Dean disagrees.
Dean told the Herald the Budget did offer opportunities for business growth.
"What it has done is further increase the beneficial environment for small businesses to work in," she said."Quite simply the effective tax cuts which are going to New Zealanders will put more money in pockets which will obviously benefit small business because there will be an increase in retail activity."
Cash flow was vital for many small firms, she said.
"Investment in infrastructure and making gains in state highways, particularly in places around Auckland where a flow of traffic is really important, but also around Kaikoura," Dean said. "Getting Kaikoura's State Highway One off the rail link, open and operating is absolutely critical for the South Island in terms of small business, not just in a local sense, but also for the whole South Island."
Grahame Craig, chair of trustees at Business Mentors, said he thought there was nothing in the Budget that would directly benefit small businesses.
"The only thing that would indirectly affect small and medium businesses would be the funding put into tourism and the increase in consumer spending that's liable to flow through as result to tax cuts," he said.
"There really is no direct strategies that will impact on small and medium businesses like for example, business tax and innovation."
"The increased funding that's going into education and training, both at secondary and tertiary level. There's a huge skill shortage in New Zealand - all around New Zealand - from Auckland where employers are now saying they need more skilled workers and that's true for the regions and right across New Zealand as well."
The $100 million investment allocated for tourism infrastructure was a huge win for small business, Dean said.
"Regional New Zealand is all about small business and tourism business is an increasing activity, the fact that there's such a substantial Budget allocation into tourism facilities is really going to help small business."
Additional infrastructure would ease pressure in tourism hotspots and provide additional opportunities, she said.
Increased funding
"Small business is an important part of the New Zealand economy and there's a direct benefit in the Budget to small business because of the infrastructure growth. Small business needs a growing economy to thrive, it needs people with money in their pockets and people who are prepared and able to invest," she said.
The Government has allocated $5.7m for its Result Nine Accelerator innovation programme and an additional $6.4b to further develop the New Zealand Business Number directory, over the next two years.
Callaghan Innovation has been allocated an additional $75m investment which will be divided up and used to provide training for small businesses.
A focus on export was key for small businesses, both Dean and Craig said.
"I think there's an opportunity to come up with some revised tax structures for small to medium businesses which will encourage expenditure on developing exporting. One area in particular; encouraging spending by businesses on approving their management abilities," Craig said.
He said many New Zealand small business owners did not have formal training.
"The vast majority of business owners have not had formal training in running a business and we see the evidence of that every day," Craig said.
"I would like to see, at some point, some strategies to allow more than 100 per cent deductibility of expenditure on things like R&D, management education, training and exporting."
Looking to the future, Craig said looking at what worked well in the past could be the way forward.
"This country has to develop a much greater ability to create wealth, that's actually behind all of the problems that are currently besetting us," he said.
"In the early 80s there were some very good programmes that were put up in a way of offering 150 per cent of tax deductions, such as if you spend $10 on a particular approved element of expenditure and you got a deduction of $15.
"You only got the benefit if you spent the money and the money had to be spent on very, very clearly defined things."
Xero New Zealand country manager Craig Hudson gave the Budget an overall pass mark, but said it was a miss for New Zealand business.
Grahame Craig, Business Mentors' chair of trustees.
"The people of New Zealand have won, not so much the business side of New Zealand," he said. "There's opportunities missed, I think, from the main pain points of New Zealand business which is productivity and late payments."
It was clearly an election year Budget, Hudson said.
"There wasn't anything called out in the Budget which was technology focused other than $75 million that has been put aside for Callaghan. From a regional business perspective as well, other than the investment they had to do, and the Kaikoura stuff, there isn't really a lot for small business New Zealand."
BusinessNZ said not changing the business tax rate was a missed opportunity to stimulate greater business investment and growth.
