Labour misleads on small business numbers

Labour MP David Clark’s claim that the number of new start-up businesses has fallen fails to understand the reality of the Global Financial Crisis, Minister for Small Business John Banks said today.

“While the total number of start-ups has fallen since 2007, 92 per cent of those closures were zero-employee firms – in other words the self-employed,” Mr Banks said.

“This indicates that people are choosing the security of being an employee rather than taking the risk of being self-employed. It is completely understandable in the current economic climate that people become more cautious about leaving their jobs to start a small business.

“The good news is businesses that have been starting are doing well.  

“The Statistics New Zealand Business Operations Survey 2012 shows the proportion of small businesses exporting and conducting R&D and innovation activities are both increasing.

“Export businesses with 6-19 employees have increased from 15 per cent to 23 per cent in the past year. Businesses which employ between 1-19 employees have actually increased every year since 2008.

“To really support small business we need to get the fundamentals right.  That’s why the National-led Government is focused on sound economic management which includes getting back to surplus by 2014.

“Part of this plan is the Business Growth Agenda which includes a huge range of support for business, such as the Regional Business Partners Network, New Zealand Trade and Enterprise programs, and work is being undertaken on the introduction of a single business number.

“In contrast, a Labour Government would increase the costs to small business by introducing a capital gains tax, introducing compulsory redundancy payments of up to six months’ worth of employee’s wages, increasing public debt to fund new spending, nationalising the electricity sector, having different rates of GST or income tax based on activity type, and removing the 90 day probation period for new employees.

“On top of this, Labour want to ramp up the Emissions Trading Scheme which would increase the cost of power, petrol and other goods, and resist reform of the Resource Management Act which currently creates costly delays for businesses trying to develop their resources.

“None of these policies will help small business,” Mr Banks said.

ENDS