SMEs hope for more focus from Government
Tax simplification still key concern
R funding welcome – but not accessible for all
New Zealand’s SMEs may have been left wanting more from today’s Government Budget, according to leading accounting and
business solutions provider MYOB.
MYOB New Zealand sales manager – SME Solutions Division Scott Gardiner says that while local businesses won’t be surprised by today’s budget, they would have wanted to see more specific
policies that recognise the importance of growing this vital sector of the economy.
“A large majority of New Zealand’s SME community approves of the Government’s handling of the economy, according to our
regular Business Monitor research,” says Scott Gardiner.
“National’s ‘steady-a-she-goes’ approach over the last several years has seen both confidence in their economic policy
and their support for local business rise, especially as the fortunes of businesses across the SME sector have
improved.”
However, Mr Gardiner believes over the next 12 months, local SMEs will be looking to the Government to provide both more
investment and, in particular, greater simplicity for the SME sector.
“Today’s extension of the R tax credit scheme will be welcomed, especially in our burgeoning SME tech-sector. However, the majority of local SMEs
aren’t in a position to qualify for the scheme.”
“Instead, what they are looking for is more Government focus on the things that will make a difference across the
board.”
In the latest MYOB Business Monitor survey of over 1000 local small and medium businesses from across the country, 71%
of SME operators thought small businesses should be given special tax breaks.
This call was particularly strong from operators in the retail and hospitality sector, in which 81% of operators believe
the Government should provide tax relief. Business operators in the transport and logistics sector (77%) and the trades
(76%) were also strongly in favour of SME tax breaks.
“I think cutting the business tax rate is something that currently runs contrary to the Government’s focus on returning
to surplus,” says Scott Gardiner. “However it is clear that SMEs feel they could be doing more to stimulate growth and
investment in the small business economy.”
Mr Gardiner says, in contrast to the Australian Budget earlier in the month, SMEs didn’t feature particularly strongly
in today’s announcements.
“The Australian Government was very clear on the value it saw SMEs bringing to the local economy. Their budget had a
raft of stimulus packages that were wholly focused on SMEs – from tax reduction to credits on small capital
investments.”
“And while New Zealand SMEs can be satisfied they are currently in a better place than their Australian counterparts,
they could be forgiven for looking across the ditch and wondering whether more of that approach could be provided here.”
According to the latest MYOB Business Monitor SME economy report, released in March, 32 per cent of local SMEs saw
revenue rise in the last 12 months compared to just 23 per cent of SMEs in Australia.
“We are coming off our record levels of growth in the SME economy though, and with some constraints around increasing
fuel costs, the higher dollar, and slowing demand in the dairy sector – as well as from key export markets like
Australia, many business owners believe now is the time to start considering new investment in SME growth.”
Mr Gardiner says one of the key areas the Government could support SMEs without significant cost is in the area of tax
simplification.
“The Government’s focus on the development of the New Zealand Business Number in the Budget is a good sign of their
intentions to simplify interactions with government agencies.”
“However, every year, number one on the wish list for SME operators is for the Government to simplify provisional tax.
It’s a constant bugbear of small business – and anything that can be done in the area of tax simplification will make a
major difference to business.”
In MYOB’s pre-election Monitor survey, 67 per cent of SME operators supported the idea of simplifying provisional tax.
Just 15 per cent supported the idea of a capital gains tax, with 60 per cent opposed, while only 25 per cent wanted to
see GST introduced for online purchases from offshore – while 36 per cent were against the idea.
“Our SMEs really are the lifeblood of the local economy. They not only provide a direct contribution to the economy,
they also stimulate local growth – especially in the regions; they employ many staff – often giving young people their
first employment opportunity; and they create knowledge through research and sheer entrepreneurialism.”
“I’m sure most SME business owners will – when they get a couple of spare minutes to look up from the work they are
doing – appreciate the Government is continuing their prudent approach to managing the economy. However, it would be a
great vote of confidence in all the value they bring to our economy if the Government were to signal that – like the
Australian Government – New Zealand’s SMEs are a real focus for the year ahead.”
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