The Labour-led Government is committed to making small business a top priority, says portfolio minister Stuart Nash.

The Government is actively looking to implement a small business "institute", similar to the Small Business Development Group it had in 2002, to give New Zealand small and medium businesses a voice, Nash said.

"We're really keen to upskill and improve its mandate so we can go a lot harder on the way it advocates small to medium businesses, and we're currently going through what that will look like," the Napier MP said.

"We need to look through a small business lens at any legislation we put in place to see what the impact is."


Nash said the "institute or council" would be set up and launch this year.

"Ninety-seven per cent of our businesses are small-to-medium enterprises, they employ a substantial amount of workers, they are responsible for more than a quarter of GDP - it's not an overstatement to say small to medium businesses are the backbone of our economy, and they're a really big focus for us," Nash said.

Small-business confidence hit a nine-year low in the December quarter last year, largely put down to uncertainty around the incoming Government, but it is expected to bounce back.

Last month Nash attended a small-business summit in Auckland which addressed productivity, where he outlined Government's plans for an institute.

"I want to move away from the culture where Government tells small business what to do, and we define the issues and come up with solutions.

"I want to move to a culture where it's more about engaging with stakeholders and saying 'tell us what your issues are and suggests to us what the solutions may be, because we're here to listen'," he said.

Nash said the institute would play a vital part in developing future policies.

Provisional tax was an issue the Government was committed to fixing, he said.

"No one likes the tax system, it is the bane of the small business owner's life, and so if we can get the message out there that the tax system has changed to make it easier to meet tax obligations then I think that will make a big difference for a lot of small and medium business owners," Nash said.

The Government has implemented the accounting income method (Aim) to combat this, allowing small firms to pay tax as they earn and manage cash-flow. But a business has to opt in before making its first GST payment for the year.

Websites such as and the New Zealand Business Number (NZBN) were "fantastic" resources for small and medium firms, he said.

The Government was also working on a new resource, New Business Journeys, that would inform new businesses about what they need to do and how they need to do it to get started.

Nash said he didn't believe increases to the minimum wage or paid parental leave would be detrimental to small business productivity.

"We exempted small businesses from the 90-day employment trial changes and the reason we did that is because we understood that if you're running an SME, you're probably not an expert in employment law.

"Around paid parental leave, it's just the right thing to do, and we don't think there will be a significant impact on small and medium businesses at all."

Minimum wage increases were also the right thing to do, he said.

"Increasing the minimum wage does increase the costs of running a business as they'll have to pay their workers more but I think most people recognise people who are working have actually got to earn enough money so they can live," he said.

"If the difference between a business surviving or not is based on the increase in minimum wage then the business model is possibly a little tenuous as it is."

Staple Rodway Auckland managing director David Searle said the Government should be investing in training and education for small businesses.

If the difference between a business surviving or not is based on the increase in minimum wage then the business model is possibly a little tenuous as it is.


"If you can provide better training or grants into small business, so they can get better advice and focus on what they need to improve their businesses, I think that will help them succeed," Searle said.

"People go into business because they have a good idea or they are passionate about the tasks that they do and then they can get overwhelmed by all the other things you have to do such as filing GST returns, PAYE returns, and really in my view, small business should focus on what they are good at and get help in the areas they are not good at."

Sixty-one per cent of all new jobs are created from the small business sector. But Searle said there were a lot firms that set up and fail in the early stages because they don't have the business experience or advice needed.

"Small business is an important sector in New Zealand and if we can get small and medium businesses firing then the tax take is going to go up, there'll be higher employment, that money will cycle back through the economy," he said.

Nash said he was putting "a lot of work into" his small-business portfolio.

"We do take the small-business sector very seriously, and I'm keen to change the way that we interact with the small-business sector."