Big value in small business

Small businesses should give themselves a pat on the back - they have been a dynamic driving force behind New Zealand's growing economic prosperity, and providing a massive increase in the number of jobs on the market. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

 

Our government values the contribution of small business and recognises their importance to our economic well-being.  This was clearly demonstrated with the creation of the Small Business Minister's post at the Cabinet table.

 

As the Minister for Small Business, I am proud of what this government has done so far because no other government has done as much for small business in New Zealand.

 

We have introduced a $1.42 billion suite of tax enhancements including:

 

·               $9.9 million to improve the business information portal, a one stop shop for information needs that already has useful business tools.

·               $6.62 million to boost mentoring services and advisory boards, making more money available for training promotion and assistance to establish advisory boards for businesses.

·               Changed rules for depreciation so there is now alignment with the useful life of assets costing a total of $260 million by 2007/08.

·               Changes to Fringe Benefit Tax rules, increasing the threshold to a more realistic $5,000 per business tool worth $28 million by 2007/08.

·               We will subsidise payroll agents, to reduce overheads.

·               Investment in a package to simplify Provisional Tax, costing $46 million by 2007/08.

·               Allowing businesses to calculate provisional tax payments on GST returns.

·               $4.5 million over the next three years for carbon tax mitigation.

 

And the list just goes on.  Budget 2005 saw the biggest investment this government has ever made in small business.

 

Our investment has reduced the cost of doing business in New Zealand so significantly that the World Bank ranks us first for ease of doing business.

 

It is easier than the United States, Japan, and United Kingdom and Australia.  There are 144 other countries that rank behind New Zealand.

 

In 2000, we established an 11 member Ministerial Panel to look at reducing compliance costs to business.  In just five years, this government has eliminated, or is working to eliminate, 155 compliance costs to business within government agencies.

 

A huge 90 per cent of the compliance costs identified as unnecessary by the panel have either been eliminated or are being eliminated and the remaining 10 per cent have been superseded by policy changes already underway at the time.  This is great news and affirms that our government has taken compliance costs concerns seriously. We listened and we’ve delivered.

 

Examples of the kinds of reductions in the cost of doing business with government agencies include the Ministry for the Environment, where 26 reductions have already been made, 16 reductions in the Ministry of Economic Development and the Department of Labour and the list goes on.

 

Statistics New Zealand has introduced a new $2.8 million, four-year package aimed at reducing compliance costs and improving access to business information.  For businesses that supply information to Statistics NZ, the process will become easier and less time consuming.

 

Alongside that will be a new web-based service to provide information to businesses against which they can benchmark their performance.

 

The Ministry of Economic Development launched a website designed to make government consultation with business smoother, more accessible and more efficient.

 

The Inland Revenue recently announced that for a small business, tax compliance has reduced by a massive 40 per cent, and 50 per cent[1] for medium sized firms since 1992.

 

This week, Economic Development Minister Jim Anderton announced the introduction of the $40 million Seed Co-investment Fund that will commit funds over four years to high growth potential firms in New Zealand.

 

Economic development agency, New Zealand Trade and Enterprise has provided support, advice, and training to over 12,300 businesses across New Zealand over the last year. 

 

The Labour-led government has a demonstrated commitment to ensuring that doing business in New Zealand is easier.

The KPMG 2004 Business Compliance Cost Survey 's research confirmed the downward trend between 2003 and 2004 showing that businesses were faced with much lest cost per employee than before and in particular showed significant reductions for businesses with fewer than 20 staff.

 

This represents good progress and our government's aim is to keep New Zealand ranked number one for ease of doing business.

 

As Minister I want engagement and communication between business and government to be easier and clearer.  I want to see more opportunities for young people to attain quality enterprise education. I want there to be further research to understand even better, the dynamics of small business to help us more effectively meet the needs of those in business.

 

Continued success for small business, is continued success for New Zealand.

 

 

Rick Barker, Minister for Small Business, 25 July 2005