(10 August 2018 – New Zealand) Small businesses in New Zealand are being assured of a more prominent voice in government policy.
Small Business Minister Stuart Nash has appointed a 13-person “Small Business Council” to advise the Government on how best to improve the economic contribution of small businesses, which already employ about 600,000 New Zealanders. The major demand of a discounted tax rate that had been suggested appears unlikely however. The council seeks to find better ways to “connect” small businesses with the Government, large businesses and research institutions and would have one year to deliver. It would advise the Government on whether it should set up a Small Business Institute which would be attached to a university.
The council will include representatives from large businesses including Fonterra and Xero, several business groups such as the Sustainable Business Network, the Bankers Association and chambers of commerce, an Auckland University academic, as well as small business owners themselves. Fonterra Co-operative Group cut the price it intends to pay farmers for milk and issued a profit warning on Friday, citing a squeeze on margins across its business and a need to bolster its balance sheet. The profit downgrade is the latest in a series of problems to hit the world’s largest dairy exporter, which has seen its shares slump this year over concerns about governance, execution of strategy and its Chinese joint venture.
The council will pay particular attention to regional and infrastructure development, the digital economy, trade and export growth, tax policy, skills development, access to finance, and the streamlining of government processes, Nash said. The Tax Working Group chaired by Sir Michael Cullen has been asked by the Government to consider whether small businesses should be offered a special lower rate of company tax. But officials from Inland Revenue and the Treasury strongly advised against that in April, saying a discounted tax rate would be “poorly targeted, complex and likely to reduce productivity”. The new council will meet monthly and will replace the Small Business Development Group which hasn't met since June last year. It will chaired by Tenby Powell, director of Auckland firm Hunter Powell Investment Partners.