New business advisory group runs into criticism

By KEVIN TAYLOR

The Government wants to set up its own advisory panel of plumbers, dairy owners and other small-business operators - but does not want to hear all their concerns.

Cabinet papers reveal the Government is setting up a small business advisory group and a dedicated director of small business within the Economic Development Ministry to champion the case of small business.

But no-go policy areas, such as tax, will be clearly spelled out to members.

The papers obtained under the Official Information Act say the group will have between six and eight members chosen from the private sector for their expertise, experience and understanding of small businesses.

Government departments will be expected to talk to the group when developing policies.

The papers reveal that $650,000 is being set aside to finance the group until next June, and more resources in the ministry will co-ordinate small business work across Government departments.

Business New Zealand chief executive Simon Carlaw and Auckland Chamber of Commerce chief executive Michael Barnett both feared the new advisory body was an attempt to marginalise existing business organisations.

Carlaw said Business NZ was not being used because it would push issues the Government did not want to hear about, such as lowercompany tax rates and lessregulation of the workplace.

Barnett described the plan to have no-go policy areas as "fundamentally stupid".

"What that means is you can only tinker, and Governments have been tinkering with legislation for businesses for years and that is why we don't make progress."

But Small Business Minister Paul Swain denied that the Government was marginalising anyone.

Rather, he wanted to "drill below" business bodies to tap into the knowledge and concerns of small business owners and those advising them.

Swain said he was "very keen to have a small business owner, a dairy owner or plumber or something like that on the group", plus someone with an e-commerce focus.

The papers say existing ways of consulting small businesses on the impact of Government policy are not always effective.

"This means their views are not always understood or adequately reflected in the policy outcomes."

The papers also warn of risks with the group's creation, saying its boundaries - those areas of Government policy that are "not open to debate or review" - would have to be clearly spelled out.

Swain said one of the most important decisions the Cabinet had made was to create a director of small business within the ministry.

Another crucial decision was the formation of a group of ministers, including Finance Minister Michael Cullen, to look at small-business issues.

Hitherto, work across departments on small business had not been co-ordinated properly.

The revelations about the Government's push on small business issues come as the ministry tomorrow releases a study, called Firm Foundations, on New Zealand business practices.