Big offshore projects are getting lots of Government help while the rest of business is drowning in extra costs, writes JIM EAGLES.
There is a huge and worrying contradiction at the heart of the Labour Alliance Government's strategy for encouraging economic growth.
In its enthusiasm to pick new winners it seems to have forgotten about the 277,965 businesses the country already has.
It doesn't seem to understand that the single most important thing that could be done to get the economy moving is to provide a favourable climate for all those businesses to operate in.
Instead, while deputy prime minister Jim Anderton is putting a huge effort into smoothing the path for a handful of selected companies, the rest of business is left to carve its way through an increasingly impenetrable thicket of red tape.
Anderton and his cabinet colleagues do not seem to appreciate the risk that for every new operation they lure to New Zealand a hundred existing companies may give up trying.
The Government has hailed successes like the arrival of Sovereign Yachts in Auckland, where it will eventually provide 300 jobs, and Ericsson Synergy in Wellington, where 150 people should eventually be employed.
Anderton rightly points out that under the previous hands-off policy those 450 skilled jobs would probably not have come to New Zealand.
But, according to the latest figures, the existing companies already provide the equivalent of 1.4 million fulltime jobs. Yet far from smoothing the path for those companies the Government has made their progress more difficult.
Business New Zealand calculated that over its three-year term government policies will have added $26,398 to the costs of a firm with around 20 employees. And that is on top of heavy compliance costs.
The Government has, not surprisingly, chosen to belittle that figure.
Each time business costs are increased - even by something as small as requiring employers to pay staff to go to union training courses - there is less money to spend on new plants or increasing staff. Every time it is made more difficult for businesses to do things - such as by tightening the rules for biotech research - it becomes less likely that new projects will go ahead.
All too often the point is eventually reached where entrepreneurs stop pushing, decide to settle for earning enough money to lead a comfortable lifestyle, or sell out and buy a bach and a boat, and another economic opportunity is lost.
Unfortunately, in spite of all the conferences, informal dinners, working parties and reports at which that message has been given, the Government is unable or unwilling to do anything about it.
Instead of reducing the impediments to business across the board its approach has largely been to provide special treatment to a selected lucky few.
This is illustrated perfectly by the Government's efforts to deal with the imminent surge in forestry production.
Industry New Zealand set up a sector group for the wood processing industry to discuss what might be done to facilitate the development of extra processing facilities. The industry has consistently made it clear that the biggest impediment to development is the Resource Management Act which makes getting consent to develop new facilities far too time-consuming, costly and, in the end, unpredictable for investors to take the chance. But the act seems politically untouchable and so nothing has been done to improve it.
Does that mean the whole exercise has been a waste of time? "Oh no," explained an Industry NZ manager. "If we got an approach from an overseas investor interesting in building a forestry plant we'd just do as we did with Sovereign Yachts. We'd go to the authorities and try to facilitate a way through the requirements."
That is all very fine for those lucky enough to get that VIP treatment. Anderton has proudly pointed out that with his help Sovereign Yachts managed to get through all the red tape in just five months instead of the several years that is the norm.
But what about all the businesses that don't get that service? There were several established yacht firms in Auckland that were not too thrilled at seeing a competitor able to avoid all the compliance costs they faced. If the act is such a problem for the Government's showcase winners that it requires ministerial intervention wouldn't it be a good idea to sort it out for everyone else?
That is not to say the Government has done nothing for business. On the contrary, there has been a constant outpouring of initiatives intended to help entrepreneurs.
On the opening day of the Innovate Conference, for instance, the Government unveiled a $2.25 million scheme to allow small businesses to send staff overseas or to bring experts here. The next day it announced details of another new fund which will give up to $500,000 towards projects which encourage a positive attitude towards business.
There are now so many programmes designed to assist innovative New Zealanders that it is hard to keep track of them. A survey last year by the Independent Business Foundation found most small to medium businesses surveyed had no idea of what was on offer or even what Industry NZ did.
That is not to say all those initiatives are bad. It is great for firms to send staff overseas to gain expertise, to tap into the work of government scientists, to get help breaking into foreign markets or to receive advice on developing new products. The effort the Government has put in on the trade promotion front, especially, is laudable.
But those activities are the decorations on the cake, not the cake itself, they aren't what businesses most want and they aren't what is needed to double the rate of economic growth.
What is needed? Forget Business New Zealand, the Business Roundtable and the Auckland Chamber of Commerce which give the same advice so often they sound like stuck records. How about listening to the smallest businesses in the land?
Home Business New Zealand has asked its members what their biggest election issues are. Only 3 per cent said they would like more free business support. Instead, 38 per cent said they would like more tax relief and 21 per cent opted for lower compliance costs.
The rest of the business community would wholeheartedly agree.
Those living in neighbouring properties were made to leave as the fire took hold.
