Small businesses dynamic and vital contribution to the economy

A new report on the SME sector shows small-medium enterprises form a dynamic and vital part of New Zealand's economy, Minister for Small Business John Tamihere says.

The report, SMES in New Zealand: Structure and Dynamics 2003, is the latest in a series of SME statistical reports jointly produced by the Ministry of Economic Development and Statistics New Zealand since 1999.

The report highlights the significance of SMEs to the New Zealand economy, their financial performance, characteristics and their significance compared to SMEs in other countries.

Mr Tamihere will release the report at 6pm in Auckland this evening when he leads a panel of distinguished business leaders discussing the topic "SMEs: The Engine Room of Our Economy – How to Ensure a Vibrant and Sustainable Business Sector."

Mr Tamihere said the report confirms the importance of the government’s reinvigorated focus on small business.

Using the definition of SMEs as those with the equivalent of 19 or fewer full-time employees, the report shows that 97% of New Zealand firms fit within this category. 87% of New Zealand firms employ 5 or fewer FTEs.

The report builds on related MED research designed to develop an understanding of business practices, performance and perceptions of compliance costs.

“Having a good understanding of the shape of business In New Zealand is essential for developing sensible policies that will aid economic development – this research helps build on that base,” Mr Tamihere said.

Mr Tamihere said a number of recent government initiatives are improving the capabilities and survival rates of small firms. They include:

-The ongoing implementation of the recommendations of the Ministerial Panel on Compliance Costs.
-The recent merger of Industry NZ and Trade NZ, which is improving government service delivery to firms.
-The new SME directorate within Ministry of Economic Development.
-The Small Business Advisory Group, which is to be appointed shortly.
-The SME Summit to be held in February, and subsequent regional SME forums.
-A discussion document on tax simplification for small business, to be released this month as part of the government's ongoing programme of tax simplification.

The SMEs in New Zealand report also examines in detail SMEs’ contribution to employment and value added, and provides information about the creation and transition of enterprises.

The report is available on the MED website: www.med.govt.nz/irdev/ind_dev/smes/2003/

Anew NZ panel discussion "SMEs: The Engine Room of Our Economy – How to Ensure a Vibrant and Sustainable Business Sector" will be held at 6.30pm at AUT Conference Centre, Wellesley St, Auckland.

Other panellists are Employers and Manufacturers Association CEO Alasdair Thompson, Auckland Chamber of Commerce CEO Michael Barnett, Enterprise Manukau CEO Gaille Deighton, Urgent Couriers CEO Steve Bonnici, Lisa's Healthy Foods Ltd MD Lisa Er, NZ Institute of Management CEO David Chapman and Business in the Community CEO Ray Schofield.

For more information, see www.anewnz.org.nz.