PM Jacinda Ardern announced a raft of policies to support small businesses, including $1.5 billion toward extending the small business loan scheme. Video / Gavin Ogden
Labour is promising a raft of new small business policies in a bid to keep the "engine room of our economy humming," as the economic fallout of Covid-19 continues to bite.
If re-elected, Labour would extend the small business cash flow scheme for another three years, pour more Government moneyinto tailored business advice and make changes to small business tax schemes.
It would also crackdown on the amount of money businesses pay for contactless payment services, which cost Kiwi businesses two or three times as much as the same services in the UK and Australia.
Labour's small business spokesman Stuart Nash, alongside Labour leader Jacinda Ardern, made the announcement in Tauranga this morning.
"Our message to small businesses is that we have got your back," he said.
Today's policies were focused on what he called the "next phase," which includes improving cash flow support, lowering costs and levelling the business playing field to "help businesses bounce back faster".
A cornerstone of today's plan was the extension of the small business cash flow scheme – a Government loan for small businesses worst hit by Covid-19.
That scheme has been taken up by more than a quarter of New Zealand businesses so far.
The scheme entitles eligible businesses to a $10,000 loan, plus an additional $1800 per full-time employee. The loan is interest-free if it's paid back within a year, and 3 per cent a year every year after that.
Applications for this scheme were due to close on December 31 this year – but Labour is promising to extend that by a further three years.
As well as this, the interest-free period will be extended to two years.
The extension will cost an extra $1.5 billion and will be paid for through the Government's Covid-19 response fund, allocated in this year's budget.
The cost is largely due to the writing off of the loans interest payments and administration costs.
Another key plank to Labour's small business policy is its promise to regulate contactless payment schemes, such as paywave.
The most recent Retail NZ Payments Survey revealed that these fees are 1.1 per cent in New Zealand, but just 0.6 per cent in Australia and just 0.3 per cent in the UK.
Nash said these high fees are costing New Zealand businesses roughly $13,000 more than similar businesses in Australia.
Visa payWave transactions reach a new monthly milestone. SUN 18May14 - SUN 18May14 - WGP 10Oct14
"The point where customers transact with businesses is a source of both health and economic concern," he said.
The plan, according to Nash, is to regulate the payment system likely putting a cap on how much banks are allowed to charge for these fees.
Labour has also promised to create a $2,500 Digital Training Voucher to help pay for digital training.
This training will be provided through trusted advisor organisations such as Chambers of Commerce and industry associations.
"Small businesses are the lifeblood of our economy and will continue to be at the centre of our policies. We will keep up the momentum of recovery," Nash said.
Key elements of Labour's small business proposal:
• Interest-free loans more widely available, zero-interest period extended
• Tighter regulation of merchant service fees charged to retailers
