The threat facing small business

The threat facing small business

Opinion Series – The state of small business in New Zealand
Part 1 of 3
By Michael Baines

One of the most-beloved aspects of our character that sets us apart as Kiwis is the ‘number 8 wire’ mentality. The idea that New Zealanders are prepared to give anything a go and through hard work and ingenuity are able to create success.

This is true across so many aspects of Kiwi culture, and nowhere is this more evident than in business. Small business, defined as those with 20 or fewer employees, make up 97 per cent of all enterprises in New Zealand according to a 2014 Government study.

So many of our largest companies are wholly or partly owned overseas, it’s our small businesses that truly fly the flag of Kiwi business success.

But instead of being celebrated our small businesses are slowly being strangled.
More and more businesses are being pushed to the brink and the main culprit is local authorities.

Over the past decade we’ve seen a culture develop where councils believe the role of business is to provide them with funds with which to pursue their pet projects.

Unlike businesses, councils have not had to suffer through the global financial crisis. Through their own misguided ventures, many New Zealand councils are heavily indebted and so they turn to ratepayers, inflicting hefty rate rises and onerous regulation in a bid to claw their way back in to the black.

Despite the best efforts of many business people councils can’t seem to understand that if they keep piling costs higher then businesses will fold. Without business, there is no workers. Without workers, there are no houses. Without houses, there are no rates. Then where will the councils be?

Enough is enough. Even the 2014 study noted the damage excessive regulation can cause to small business. It seems as though councils weren’t listening. If they can’t exercise common sense and lower the cost burden to business then it’s the duty of central government and legislate to bring the local authorities back into line.

Michael Baines is the Chief Executive of the Motel Association of New Zealand. Mike has extensive experience working on behalf of small business through his work with trade associations, economic development and in the retail sector.

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