Government makes a difference for small business
Tuesday 24 October 2006
Government makes a difference for small business
The government is already acting on most of the latest recommendations of the Small Business Advisory Group, Small Business Minister Lianne Dalziel says.
Lianne Dalziel today released the government’s response to the Small Business Advisory Group’s second report, which contains 12 recommendations to assist small and medium enterprises (SMEs).
“I am pleased to say that in many instances we share a vision on how to improve the business environment for SMEs,” Lianne Dalziel said.
Lianne Dalziel said many of the recommendations were either already being implemented or considered by government, including:
- Instigating the Quality Regulation Review to
ensure regulatory frameworks or their enforcement are not
acting as a barrier to growth;
- Instigating the Business
Tax Review to look at ways of boosting New Zealand’s
competitiveness and productivity;
- Simplifying and
improving ACC forms to minimise compliance costs;
-
Increasing ACC’s and IRD’s flexibility for dealing with
disputed invoices or honest mistakes;
- Improving
information around the Hazardous Substances and New
Organisms (HSNO) Act;
Lianne Dalziel said the government has again rejected the group's call for a performance-based personal-grievance-free probationary period for new employees.
"Employment law already allows for probationary periods to be entered into without taking away an employee's rights. I am pleased that the advisory group has since produced a proposal to streamline personal grievance procedures, not as an alternative to their report, but as a possible way forward. The government is now considering this proposal," Lianne Dalziel said.
The Small Business Advisory Group comprises nine owners of small or medium businesses, and was set up to give this important sector effective input into government policy development. The group released its second report to the government in March.
Lianne Dalziel said the members of the Advisory Group had over the past three years delivered real benefits to small businesses and to government policy-making.
"Some of our most creative ideas are coming out of the SME sector. We're determined to ensure the business environment enables these people to get on with what they do best."
For a copy of the SBAG report and government response go to www.med.govt.nz/sbag
Lianne Dalziel's speeches and media
releases are on www.beehive.govt.nz/dalziel
Q&A:
Government response to SBAG 2nd report:
What Is
SBAG?
The Small Business Advisory Group comprises nine
people who own small and medium sized businesses (SMEs).
Their purpose is to give SMEs a greater voice in policy
development and to advise Ministers of issues facing
SMEs.
The members of SBAG are:
- Murray Cleverley,
Timaru, CEO Economic Development Agency, meat
processing;
- Peter Kitchen, Kaitāia, tourism sector,
Māori business;
- Denise L'Estrange-Corbet, Auckland,
fashion design and retail;
- Nigel McKinlay, Dunedin,
footwear manufacturer;
- Lachlan McKenzie, Rotorua,
farming;
- Cameron Moore, Christchurch,
manufacturing;
- Alison Quesnel, Auckland, health
products, business mentor;
- Robyn Reid, Nelson,
aviation, economic development;
- Stuart Wilson,
Wellington/Auckland, information technology.
The government greatly values the work and views of the first Small Business Advisory group. The current members have agreed to stay on until the end of the year to enable the government to respond to their second report. Applications for membership of the SBAG have been sought from people with extensive experience with small businesses, wide networks, and good analytical and advocacy skills. Nearly 250 applications were received and are currently being considered. Announcements should be made at the end of the year.
Why does SBAG produce a report?
Part of SBAG's
function is to provide ongoing advice to government on any
issues affecting SMEs. Mainly this is done out of the public
eye. However they decided in 2004 to produce a report
setting out some key things they thought government could do
to improve the business environment for SMEs. The group’s
second report was released in March 2006.
In introducing
the idea of a regular report they were following the example
of the Small Business Council in the United Kingdom - the
former Chairman of the Council met with SBAG early in
2005.
What were SBAG's recommendations in the second
report and what is the government's
response?
Recommendation 1: That the Government
demonstrate that the quality of cost/benefit analyses
contained in Regulatory Impact Statements has improved by 30
September 2006.
Response: Improvements to the
regulatory impact analysis and monitoring of cost compliance
systems were covered in the May 2006 Cabinet decisions on
the Quality Regulation Review (Addresses recommendations 1
and 6).
Recommendation 2: That IRD and ACC develop,
implement and communicate a strategy for dealing
compassionately with minor misdemeanours or unintentional
mistakes.
Response: Changes are being made to ACC and
IRD processes for dealing with minor misdemeanours and
unintentional mistakes.
Recommendation 3: That HSNO
controls be made less complex and simpler to implement.
Response: Improved processes for HSNO controls took
effect from 1 July 2006. The Quality Regulation Review (QRR)
is also considering the HSNO, HSE and ACC
frameworks.
Recommendation 4: That the Holidays Act 2003
be re-visited, particularly the relevant daily pay clause,
to reduce the costs of complying with it.
Response: An
independent evaluation found that both employers and
employees understand the new law better than the previous
Act. The Department of Labour (DOL) is working on an on-line
tool for assessing holiday entitlements. The government has
been subsidising small employers to use payroll
intermediaries since 1 October 2006. .
Recommendation 5*:
That the employment law be amended to provide for a
performance-based personal grievance-free probationary
period of 12 months for new employees.
Response:
Rejected because current employment law already allows for
probationary periods to be entered into without taking away
employee rights. It would send the wrong signal on the
importance of beginning and managing employment
relationships successfully.
*NB: Since publishing their
second report the SBAG has suggested a streamlining of
personal grievance procedures. This proposal is attached in
Annex 1 of the government's response and is currently being
considered.
Recommendation 6: That all government
business forms contain a time box in which the person
filling out the form indicates how long it took to complete
(including research/ understanding time) and that the
results and trends from the information in these boxes are
published.
Response: This is being addressed by Cabinet
decisions referred to in the response to recommendation 1.
Responding to the publication of the SBAG report, ACC
included a time box in its self-assessment form for the new
Workplace Safety Discount Scheme.
Recommendation 7: That
Fringe Benefit Tax on business vehicles be simplified by
moving it from the Fringe Benefit Tax return to an
adjustment in the employer’s income tax
return.
Response: Consideration of further changes to
Fringe Benefit Tax rules is being made as part of the
business tax review - SBAG will be consulted in that
process.
Recommendation 8: That improvements to the
presentation and information on ACC invoices, and their
timeliness, be urgently implemented.
Response: The
invoices for self-employed people were simplified in August
2004, and similar improvement to employer invoices will
occur in 2007. ACC will continue to work with SBAG and other
business groups to ensure the changes address their
concerns.
Recommendation 9: That the government run a
Small Business Day Series in 2006.
Response: Meetings
with small businesses are currently being held around the
country as part of the Quality Regulation
Review.
Recommendation 10: That every year the Ombudsman
target business audiences, as well as individuals, during
his regional visits, in order to allow SMEs to communicate
specific concerns about regulatory enforcement actions by
government agencies and local authorities.
Response:
The Chief Ombudsman has agreed to advise local business
associations of Ombudsmans' visits to their region so
businesses can be alerted to the opportunity to raise any
concerns.
Recommendation 11: That the government
implements a programme that will help it better understand
SMEs. That programme should include appointing SME
champions in government departments, requiring a senior
manager scrutinise all departmental regulations, and a
public/private sector secondment programme.
Response:
There are examples of departments developing an SME focus
(small business units in the Ministry of Economic
Development and Department of Labour, industry group in the
Ministry for the Environment and an SME champion in the
Inland Revenue Department). However, SBAG has recently
completed a review of a sample of regulatory impact
statements in which an independent reviewer also raised
questions about the capability of departments to understand
and assess impacts of proposed regulations on small
businesses’ operations. This issue will be addressed as
part of the Quality Regulation Review.
Recommendation
12: That the government ensure basic enterprise education
is part of the core curriculum.
Response: References to
Enterprise Education and entrepreneurship have been included
in the Draft Curriculum Discussion Document released on 31
July 2006.
What happens next?
Work will continue to
complete the work identified as being in progress in the
report back. Ministers and officials will continue to meet
with SBAG and to consider their views of improvements needed
to the business environment.
The website
www.businessconsultation.govt.nz is available for businesses
wishing to register to be consulted by government agencies
during the formulation of policy, or who have regulatory
issues they would like to raise with the government.
ENDS