Labour says it would give small businesses a bigger share of government contracts, lifting small firms' share of taxpayer funded procurement by $300 million a year.

Announcing his party's small business policy at Christchurch pyrotechnics business Fireworks Professionals today, Labour leader David Cunliffe also said a government he led would help firms with less than 20 employees by cutting unnecessary red tape.

Too many small businesses were struggling at present and Labour would reverse that, "making the lives of small business owners easier and more productive through a more responsive government" Mr Cunliffe said.

"Our plan to increase the portion of government procurement undertaken by smaller companies, by at least $300 million by the end of our first term, presents significant opportunities for the sector.


Labour would further increase small businesses' share of government by 1 per cent a year until it reached 20 per cent of all procurement.

"Some of our most successful companies got their start via Government procured contracts. There is no reason smaller firms should miss out only because of their size.

Mr Cunliffe said Labour would also tackle "overly burdensome " tax compliance regime for small businesses by building on the NZ Institute of Accountants proposal that small businesses should have to spend no more than one hour a month filing one return for both income tax and GST.

He also said a Labour government would reprioritise more resources within the Ministry of Business Innovation and Enterprise towards "combing legislation for redundant and archaic requirements and law with unintended consequences".

"Where possible, industries will be delegated greater scope for self-regulation while ensuring appropriate safeguards are in place." An example of the type of red tape Mr Cunliffe was talking about were the regulations faced by Fireworks Professionals requiring fireworks being transported to remain stationary for no more than six hours unless stored in a licensed shed. That meant that if a truck delivering fireworks to the North Island was held up when crossing Cook Strait by a delayed ferry sailing it had to be started up and driven around the block in Picton every six hours to comply with the law.

Mr Cunliffe said small businesses would also benefit from Labour's recently updated youth employment policy under which they could apply for a $9,100 subsidy when taking on a young unemployed person.