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Introduction


Small Business Advisory Group Report 2006

Small Business Advisory Group
[ Last Updated 4 July 2006 ]


Minister for Small Business
Parliament Buildings
Wellington

This is our second report, but it is our first to you in your role as Minister for Small Business.

We welcome you into your new role. We look forward to continuing to be of assistance to you in the discharge of your duties as our Minister.

We have noted that your five priorities in this portfolio are: improving business and management capability; making transactions between SMEs and government agencies easier; enhancing communications between SMEs and government; providing more enterprise education; and eliminating unnecessary, and minimising necessary, compliance costs.

We share and encourage your ambition to make a measurable difference across all those areas.

In the eighteen months since our last report, the business environment for SMEs, particularly exporters, has become tougher. The dollar remains high, other costs such as petrol and wages have increased significantly, and margins have been further eroded. SME concerns have been reflected in the reduced levels of confidence, employment, investment and borrowing recorded in a variety of recent surveys.

That said, the last six years have been generally favourable for business (both employers and employees). But, despite that, New Zealand's levels of productivity remain low by world standards, and our level of GDP per capita still ranks us well below the OECD average.

Therefore, it is increasingly important that the government does all it can to address effectively the barriers that prevent businesses, and SMEs in particular, from achieving the levels of growth that we as a nation so urgently need.

In our last report, we presented to the government 19 practical recommendations we thought would help in this regard. We have evaluated your response to those recommendations. You have been awarded an averaged mark of 5.3/10. This reflects the fact that we have evidence that you positively considered our recommendations (with the exception of enterprise education and PG-free probation periods) but have done little to transform that response into tangible outcomes for business. (Our detailed evaluation is set out in Annex 1.)

In this year's report we:

  • reiterate the importance of SMEs, and thus your role, in delivering the benefits of economic growth for all New Zealanders
  • traverse areas of government activity that we think need your close attention and vigilance as Minister for Small Business
  • present 12 specific recommendations on which we expect you to take action in the next seven months.

Those recommendations are as follows:

  1. That the government demonstrate that the quality of cost/benefit analyses contained in regulatory impact statements has improved by 30 September 2006.
  2. That IRD and ACC develop, implement and communicate a strategy for dealing compassionately with minor misdemeanours or unintentional mistakes.
  3. That HSNO controls be made less complex and simpler to implement.
  4. That the Holidays Act 2003 be revisited, particularly the relevant daily pay clause, to reduce the costs of complying with it.
  5. That the employment law be amended to provide for a performance-based personal-grievance-free probationary period of 12 months for new employees.
  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.
  7. That FBT on business vehicles be simplified by moving it from the FBT return to an adjustment in the employer's annual tax return.
  8. That improvements to the presentation and information on ACC invoices, and their timeliness, be urgently implemented.
  9. That the government run a Small Business Day series in 2006.
  10. That, every year, the Ombudsman targets business audiences, as well as individuals, during his/her regional visits, in order to allow SMEs to communicate specific concerns about regulatory enforcement actions by government agencies and local authorities.
  11. That the government implement a programme that will help it better understand SMEs. That programme should include appointing SME champions in government departments, requiring a senior manager to scrutinise all departmental regulations, and a public/private sector secondment programme.
  12. That the government ensure basic enterprise education is part of the core curriculum.
  • Murray Cleverley
  • Cameron Moore
  • Peter Kitchen
  • Alison Quesnel
  • Denise L'Estrange-Corbet
  • Robyn Reid
  • Lachlan McKenzie
  • Stuart Wilson
  • Nigel McKinlay

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