Red tape frustrates SMOs

Small business owners are frustrated by the Government's "petty bureaucracy" and its favouring of large firms, says Labour's spokesman on small business and economic development.

David Clark, MP for Dunedin North, was in Rotorua yesterday where he visited Croucher Brewing, Off Road NZ, Planet Bike and Vetro Mediterranean Foods to get a feel for the issues facing small businesses.

He said the concerns he heard were similar wherever he went in New Zealand.

"Red tape ... petty bureaucracy," he said. "Frustration in the way in which rules and regulations favour larger firms. The National Government does things to support the big end of town."

At Croucher's craft beer brewery on Depot St, owner Paul Croucher explained to Dr Clark the "unfair" tax advantages enjoyed by the big alcohol companies.

He said small companies, such as Croucher, which produced less than two million litres of alcohol per year, had to pay excise tax based on the alcohol content written on the label.

Those who made more than two million litres however had to pay based on the actual alcohol content.

According to food standards, the actual content is allowed to vary 0.3 per cent from what is on the label.

Mr Croucher said large companies could therefore take advantage of a loophole - they could put 5 per cent on a label but keep the alcohol content at 4.7 per cent - which was all they paid tax on.

He would like to see everyone having to pay tax on the labelled content - which he believed would address alcohol abuse issues linked to cheap alcohol, while also earning the government up to $20 million more a year in tax.

Mr Croucher said he had raised the point with several politicians in the past, from more than one party, but consistently got brushed off.

"Everyone just glazes over," he said, adding if he was wrong he would at least like an explanation why.

Dr Clark promised Mr Croucher he would take the issue to Labour revenue spokesman David Cunliffe and "let him look at it".

Dr Clark said the National Government had imposed a number of overheads without taking into account the proportionally greater cost they had on small businesses.

"Small business is the lifeblood of the economy," he said. "The Government seems to have an ideology opposed to growing small New Zealand business."

Dr Clark said it was a "privilege" and "inspiring" to get out and meet small business people.

"My job is to listen to people and formulate policy to address concerns people have," he said. "People are frustrated the Government isn't listening, that's the stories I hear."

He said there was a "two-speed economy" developing in the country.

"[The Government] has put a lot of money into Auckland and Christchurch, but a lot of regions are hurting," he said. "For the country to be doing well, all parts of it have to be doing well."

Dr Clark also met Rotorua Chamber of Commerce members and addressed a small group protesting outside the Distinction Hotel, where Paula Bennett was speaking about welfare reform.