Sex sells, but compliance costs - MP hears retailer's worries

By PAULA OLIVER

With the dust settled and the media circus gone, Wellington Central MP Marian Hobbs yesterday sat down and got the message about the irks of running a small sex gear business.

And despite the novelty of the merchandise around her, it seemed that the concerns expressed were familiar - tax, the cost of new holidays legislation, and other compliance costs.

Hobbs' visit to sex gear retailer and manufacturer D-Vice was the first of a series involving 33 ministers and MPs over the next fortnight.

They will visit small businesses to identify concerns held by operators and try to figure out how the Government can help.

D-Vice co-owner Nick Mercer yesterday said that after the media had given up efforts to embarrass Hobbs by asking her to hold certain items, the two had a "great meeting".

"She did seem to understand the issues I was bringing up. The people with her were taking a lot of notes."

Since D-Vice began life six years ago, it has increased its turnover by what Mercer estimates to be 4000 or 5000 per cent.

It now employs 20 people and has outlets in Wellington, Auckland and Melbourne. It exports to the United States, Canada, Hong Kong and Australia.

Mercer said her main concerns involved tax and holidays.

"I talked about how it would be good if there was some incentive for paying tax on time rather than just penalties for paying late. And also the opportunity to pay more frequently, because large-sum payments have a big effect."

Mercer said that legislation providing a minimum of four weeks' annual leave for all workers from 2007 was a big worry.

"The cost of wages and covering replacement staff will go up horrendously."

Other Holidays Act changes that require workers to be paid time-and-a-half and be offered a day in lieu for working on a public holiday may force D-Vice to reconsider opening on those days, she said.

"We try at the moment to open as much as we can. We find that if we close too often the customers don't really trust that we'll be open."

Hobbs' office sent an adviser to meet Mercer at the end of last year to get an initial feel for her concerns.

When Hobbs arrived yesterday, Mercer said she was well prepared.

"I must say Marian was very nice to deal with, she did seem to be listening."

The media, however, were another story.

"It was like having a group of unruly boys there."

Mercer hopes the meeting will be fruitful. She understood that a lot of the issues she had raised would actually be addressed.

The next step towards change comes next month when a Small Business Day is launched by the sector's minister, John Tamihere, in Wellington.

Mercer said she would attend a breakfast launch with other owners and see what came of it.

The final suggestion she made to Hobbs was to acknowledge employment by small businesses.

Mercer said she knew the business could not grow without more staff, but it would be good to have some acknowledgment of the difficulties for smaller operators.

"Some sort of tax break or some sort of concession for small businesses would be a damn good idea. It is a slog. Even though our turnover is high and we are talking much bigger numbers these days ... it doesn't actually mean that all of that extra turnover is going into our pockets."