Assisting business development
[ Last Updated 15 August 2008 ]
Strong, growing businesses are critical to the success of the government's Growth and Innovation Framework (GIF), and for social development. Sustained economic growth requires innovative, capable, and profitable businesses that generate wealth and provide employment.
Small and medium enterprises (SMEs) have an important role to play in achieving the higher economic growth targeted by GIF. These are businesses with fewer than 20 full-time employees, but they:
- make up 97 per cent of New Zealand companies
- employ 43 per cent of the workforce
- produce 39 per cent of all goods and services
- are the source of many of the new products and services that drive economic growth.
The role of government
The government recognises that innovative and successful businesses are essential for economic development. GIF therefore includes a range of programmes designed to assist business development and to reduce compliance costs.
Recognising the importance of SMEs
The government has introduced a range of initiatives aimed specifically at SMEs.
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SME Directorate
In 2003, the Ministry of Economic Development established an SME Directorate within its Industry and Regional Development Branch. The Directorate is an advocate for small business to and across government. The focus of the unit includes:
- informed advocacy
- effective small business input into the development of policies that affect small business
- improved understanding of small business
- improved government service delivery to small business.
You can email the SME Directorate at: info@smallbusiness.med.govt.nz.
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Small Business Advisory Group
The Small Business Advisory Group (SBAG) consists of individuals who have either operated as or worked with small businesses. SBAG was established to act as a sounding board for government on new policy initiatives and to enhance communication between government and small business.
If you would like to raise any issues with SBAG you can contact them at:
sme_advisorygroup@med.govt.nz.
Assisting business
The following links are examples of government initiatives and programmes aimed at assisting businesses.
Legislative changes
- The Business Law Reform Bill 2003 contains changes to a range of business law statutes. In aggregate, the changes are intended to make the law clearer, more efficient and more effective. Most of the amendments are based upon suggestions from business law practitioners, enforcement agencies, and the business community.
- Improving employment relations and the working environment is a key government focus. Recent changes to the Employment Relations Act 2000 and the Holidays Act 2003 are aimed at simplifying the law and enhancing relations between employers and employees. The Employment Relations Service [external link] has extensive information on these Acts as well as services and tools designed specifically for employers.
- The Resource Management Amendment Act 2003 [external link] includes provisions aimed at reducing compliance costs and simplifying the consent process. The Ministry for the Environment has established an environmental planning website designed to provide advice on best practice under the Act.
Research and development
Research and development (R&D) is a major factor in helping New Zealand firms grow and become more innovative. Technology New Zealand [external link] administers three schemes aimed at increasing the ability of firms to undertake R&D.
- The Technology for Business Growth scheme fosters technological learning and innovation. It part-funds R&D projects to enable firms to develop high-value, technology-based and export-oriented products, processes or services.
- Technology Industry Fellowships provide a subsidy to support the placement of researchers or technologists in firms to build linkages and enhance understanding of technological innovation in a commercial environment.
- SmartStart (previously TechLINK) provides support to overcome early barriers to technologically innovative R&D projects. The grant is available to companies with turnover of less than $50 million, and covers up to 50 per cent of the expenditure in technological projects.
Compliance costs and employment legislation
The government recognises that minimising compliance costs is crucial to creating an environment that allows New Zealand businesses to innovate and operate to their full potential.
For this reason, before deciding to make any regulatory change or intervention, the government carefully considers the expected costs and benefits to business. Almost all regulation will have some costs, and these need to be weighed against the objectives and expected benefits of regulation.
The benefits can be wide-ranging (e.g. economic or social), and may accrue to business, consumers, the New Zealand economy or society as a whole. Government departments are required to prepare Regulatory Impact Statements and Business Compliance Cost Statements where proposals have compliance cost implications for business.
The government has undertaken several initiatives focused specifically on reducing compliance costs for business. These include:
- Ministerial Panel on Business Compliance Costs Review [external link]: In December 2000, the government appointed a panel of people with a broad range of business skills to report to them on compliance costs. The report-back in June 2003 confirmed the implementation of many of the 162 wide-ranging recommendations submitted by the panel.
- Tax Simplification Programme [external link]: This is the government's ongoing programme to make tax compliance easier for SMEs. A discussion document released in August 2003 suggested several initiatives, including government support for preparing payrolls. The report-back on this paper is expected in mid-2004.
- Business Law Reform Bill: This omnibus Bill makes amendments to a wide range of commercial law statutes with a focus on compliance cost reduction.
- Electronic Transactions Act: By providing improved and clarified legal status for electronic information, this Act will reduce compliance and transaction costs for business.
Contacts and links
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