National’s Small Business spokesperson, Jacqui Dean, is obviously intent on keeping the government on its toes on matters within her sphere of responsibility.
She complains that small business owners are still waiting for the Small Business Council to do something for a sector struggling with rising costs and prescriptive labour law changes.
“It has been five months since the council was formed and after four meetings, including one in November, there has been no tangible improvements for small business.
“In fact, despite the council stating, almost eight weeks ago, that it would increase its focus on how it could “better support” small business, nothing has been forthcoming.”
But negative business sentiment still abounds, Dean contended in a press statement which referenced a recent NZIER Quarterly Survey of Business Opinion and its finding that 18% of businesses expect a worsening in economic conditions over the next few months. She said:
“This sustained negativity is well founded because the Government has done nothing for businesses, with its union-friendly employment law changes and hikes to the minimum wage only adding to their woes.
“Surely better support for small businesses should have been the goal for this council, and indeed for the Labour-led Government, from the outset.
“Smaller operators make up 97 per cent of all businesses in this country and employ over 600,000 people, it’s not good enough that the Government and this Council continue to sit back and watch them struggle, while they claim to be doing something about it.”
The NZIER’s Quarterly Survey of Business Opinion in fact showed business confidence recovered slightly in the fourth quarter of last year, although many firms were still downbeat about the economy.
A net 18% of businesses expect economic conditions to deteriorate over the coming months – less than the net 28% of businesses who were pessimistic in the previous quarter.
“We summarise the results as ‘less gloomy’ rather than ‘more happy,'” NZIER Principal Economist Christina Leung said.
Finance Minister Grant Robertson said the data showed overall, businesses’ confidence levels were improving – in particular, they’re more confident about their own activity and their own activity in the future.
But the matters raised by Dean prompt us to ask whether the Small Business Council has had enough time to come up with ideas that will lift business confidence and performance and whether the government has had enough time to act on the council’s recommendations.
It was an alternative to the Small Business Development Group, set up by the previous Government, which “was not as effective as it could be.”
The role of small business in the economy was to be enhanced with a new strategy to drive performance and better connect small and medium enterprises with government, large businesses and research institutions, he said.
“The Small Business Council has a tightly focussed mandate and a fixed term of one year in which to deliver.”
Dean accordingly might be better to wait until August before she passes judgement on the council’s accomplishments – or lack of them.
But it’s fair to say businesses might not have high expectations.
According to this Stuff report on reactions to the council’s establishment and mission, small businesses have little faith in the government’s new council as it tries to win the confidence of business.
Among those quoted were Bryn Thompson, of Metalcraft Engineering, who runs a metal fabrication company employing 24 staff in Christchurch.
He said the new business council would do “zero” for business confidence.
“A concern is that it could become a big business advisory council, especially when you put someone like Christopher Luxon in charge.”
Whangarei book-keeping business owner Di Crawford-Errington said the business council announcement did little to bolster her confidence.
“In my industry compliance costs have been going through the roof, with new regulations around money laundering. It feels like we’re bombarded by extra regulation and that can really knock your confidence down,” Crawford-Errington said.
“Small businesses are the grass roots of Kiwi business, but we still see chief executives of big companies on councils supposed to help us. No one is really listening to us.”
How should the council be judged?
Nash said it would help the government develop a strategy to drive improvement and innovation in the small business sector.
“It will play an important role in lifting the performance of New Zealand’s many small enterprises.”
Nash said he had purposely cast the net wide for the members of the council and deliberately sought out some of New Zealand’s largest enterprises to play a role, in recognition of the connections and networks that are vital to helping small businesses thrive.
“Firms and organisations like Xero, The Icehouse, Fonterra, Chambers of Commerce and the Sustainable Business Network are represented. The Council includes representatives from small and large businesses, financial institutions, academia, education providers, tax experts and government agencies.
“Significant shifts in technology, the global trading environment, and domestic policy settings always present challenges for businesses. The time has come to establish a specialist group to consider some of these strategic issues over a longer timeframe, and pull together advice from a range of institutions and practitioners.
“It will pay particular attention to existing government priorities including regional and infrastructure development, the digital economy, trade and export growth, tax policy, skills development, access to finance and streamlining government processes.”
Nash said the council would take “a bird’s-eye look” at the issues and opportunities for small business and provide insights and recommendations for a government strategy. It would also provide advice on whether there is a case for establishing a Small Business Institute within a New Zealand tertiary institution.
More information on the Small Business Council’s members can be found here:
It comprises 13 members and four government advisers.
A progress report in November said
” … the creation of a small business strategy will take a step forward in coming weeks as the Small Business Council sharpens its focus on the areas that will make the biggest difference to the long term development of the sector.”
The council had identified four key themes to focus on in the development of a strategy that needs to provide real solutions and support for small businesses in the future.
Council chair Tenby Powell said issues around capital and access to finance, management capability and workforce, compliance and enablers, and innovation and sustainability had been identified as priority work areas.
“The Council has covered a lot of ground in the weeks since its formation,” Mr Powell said.
“We’ve taken a bird’s-eye look at the current landscape and the issues small businesses are facing. We have heard from a range of government agencies, businesses and stakeholders like the Tax Working Group, Xero and the Treasury and we have confirmed how the Living Standards Framework will be applied in our work.
“We are now increasing our focus on how small businesses can be better supported to thrive in a future where the changing nature of global trade, rapid development in technology, and changing Government priorities will make for a different operating environment.”
This statement said the council will report its findings in August 2019 – another sign that Dean perhaps should stall with her criticisms.