Christchurch Convention Centre

I am very pleased to have the chance to say a few words at what might be called the Small Business Expo but which is the largest business event in the country. It speaks volumes about the determination and talent of Sarah Trotman and her team that for the first time this Expo is being held not only in Auckland and Wellington, but also here in Christchurch.

This expo is a great opportunity for business people to step back and look at their business. One of the many things that Sarah and I are in agreement on is that if people don’t look to their own capability first they are missing the best opportunity they have to grow their business. It’s the old adage “for things to change, first I must change”. Looking to your own capability only comes from time spent working 'on' rather than 'in' your business.

I have had this reinforced time after time as I have travelled around the country meeting SME owners and listening to their stories. I am in awe of the tremendous talent, energy and passion that is our SME sector and I am grateful to those who have allowed me to share their secret of turning a good idea into a commercial proposition and then taking on the world.

Two of my specific goals as Minister for Small Business are to make transactions between SMEs and government agencies easier; and to provide a quality regulatory environment that eliminates unnecessary compliance costs and minimises those that are necessary. There is a link between the two.

I have just been to visit the World Bank in Washington DC and they were very complimentary about New Zealand’s business environment. As you may know New Zealand is currently rated second in the world by the World Bank for ease of doing business.

I was able to tell them that one of the areas that we have already improved since their last survey was the ease with which you can get a tax number when forming a company. Since last month New Zealand businesses have been able to apply for their business tax number and register for GST when they incorporate their companies online. This means that setting up a company in New Zealand has become a one-step process, which in most instances will take less than an hour to complete.

It is just one example of the Labour-led government’s drive to ensure that the regulatory environment does not create any unnecessary barriers to business growth. This is the task the Prime Minister gave me last year.

One of the lessons I have learned from the Review that followed is that government has to look at regulation from the business perspective. The government may see the Companies Office, the IRD, ACC, MFE, OSH, DOL, or Statistics. But business just sees "the government" and they ask "why do I have to give the government the same information over and over again?” To encapsulate this question, I developed a phrase which simply asks: "Why can't the many arms of government extend a single hand to business?"

I believe that the answer to that question, which is essentially about the government- business interface will be an e-solution and given that research has identified that around 90% of SME operators use computers and have an internet connection, this looks a very realistic prospect to me. As a government, we have been very keen to establish that all important two-way communication, whereby we can let business know what they want to know and need to know and also whereby businesses can effectively communicate any on-going concerns to the government.

That’s why we set up a website that is entirely about business – something to help you with everything you need to know; and maybe even to prompt you about some things you don’t know you need to know. Originally it was called biz.org.nz, but on the 15th of this month I re-launched it as www.business.govt.nz.

Have a look at it when you get home. I hope you are as impressed as I was when I saw it. I think you will notice that this was designed with busy business people in mind and that is because it was designed by business people. And I hope you also notice that it is not just crammed with government information – although that is all there – but that we have information links through to up-to-the-minute information from the private sector as well.

From a comprehensive business events calendar on the one hand – to links to all the chambers of commerce and economic development agencies and every networking group or organisation we could find. It’s a one-stop-e-government shop. It also has something I am very keen on - checklists – from start-up to growing your business, finding a mentor, updating your thinking on latest marketing strategies. But don’t let me tell you, go see for yourself and let us know what you think. We want to keep it relevant and we will only know that if you tell us.

Another site we started a while back enables businesses to let us know what they think about the rules that affect them and how they would improve them:www.businessconsultation.govt.nz. The aim of the website is to gather information about how businesses think the rules they operate under should work. This website is your chance to have a direct say on how regulation affects you. It asks simple questions like:
“Do you have concerns about the way business rules are implemented?” - Then tell us.
“Do you have a solution in mind?” - Then let us know.
“Would you like to become one of a group of businesses that we regularly consult on proposed or existing legislation?” - Then we'd really like to hear from you.

The message is: don't just complain - get involved. No-one knows the problems businesses face quite like businesses themselves. It's the government’s job to make sure that regulations do what they're designed to do, and by taking part in the process and contributing ideas businesses can give us invaluable feedback that isn't available from any other source.

I can give you an example from the other week. I visited a business – the owner says, ‘how come, on a Monday morning, ACC sends me a form to fill out confirming my staff member’s earnings over the last few weeks when she has had an accident over the weekend. I’m busy on a Monday, chasing up orders. Why can’t they get the information from IRD and just get me to confirm it?” What a good question. I’ve already raised it with the Minister for ACC and her officials are working on a solution now.

This is the sort of work I have been doing over the past year and apart from the enormous satisfaction of seeing the truly innovative ideas, products and services that are coming out of our SME sector, I get a real sense of achievement at chipping away at these irritating issues that get in the way of business getting on with the job.

If there is one thing I have learned since becoming Minister for Small Business it is that there are considerable differences between the big and the small ends of town.

As a result, the government has deepened its understanding of SMEs and how we can improve their operating environment. During the Quality Regulation Review, business has told us they want clear, accessible, user-friendly information in their language – not government-speak. SMEs have said don’t look at this from the perspective of the individual regulatory framework; look at the cumulative effect of the many regulatory frameworks we deal with. SMEs have said don’t punish us for a simple case of misunderstanding or misinterpretation and, while you are at it, don’t change the rules part way through the exercise.
Tell us what to do and we’ll do it, but don’t tell me that my good track record counts for nothing. Don’t think for one minute that one size fits all.

In my address at the Wellington expo, I spoke about KiwiSaver in the context of the benefits it will bring. Up until now we have only been able to observe jealously the effects of a compulsory workplace superannuation scheme which has turned the 20th largest economy into the 4th largest capital market in the world. Although New Zealand has not gone down the track of a compulsory scheme, but rather an automatic enrolment and opt out scheme, it is going to make a real difference to our savings record over time. Figures released recently by the Minister of Finance show that the take-up rate has been three times that expected by Treasury. Of the 92,000 people who are part of Kiwisaver so far 80,000 are already in employment but have chosen to opt in. Of the remaining 12,000 who have been automatically enrolled as they started new jobs, about a quarter have chosen to opt out. So it's on its way and it will be great to watch those numbers increase over time.

When I visit small businesses, I am told there are two major barriers to growth that exist outside any consideration of the regulatory frameworks – skilled labour and finance. Kiwisaver will go some way to address those deficits.

Another way to gain and retain good staff is to recognise that they have a life outside the workplace. This is usually referred to as work-life balance and flexible working hours. I joined with my colleague, Ruth Dyson, a week ago to launch a couple of tool kits to help employers respond to these, one of which is particularly targeted at SMEs.

I made the point that flexible work relationships can offer real benefits to small and medium sized enterprises, but that they have to work for the employer, the employee and the work team if they are going to work. I also made the point that commitment and trust are a two way street. If you offer flexibility to your employees, you are likely to get it in return when your needs change. There is a well-established link to improved productivity as well so it truly is a win-win.

In conclusion, I return to my opening remarks: SMEs are motivated, innovative, and entrepreneurial. But it is their unrealised potential for growth that makes them critical to New Zealand’s future, not just their numbers. Capacity building within the SME sector remains my number one priority.

If every owner of every firm with high growth potential could be afforded the opportunity to spend time on their business instead of in their business, then imagine what a powerful force that would represent in economic terms.

And that is my ambition for the SME sector as the Minister for Small Business. It is not only that the voice of small business is heard at the Cabinet table; it is that their potential for growth is unleashed for the benefit of the nation as a whole.

And I hope that this Expo gives Canterbury business owners some of the tools they need to realise that ambition.

Thank you.