‘Underwhelming’ budget for business

Budget 2018 has failed to provide certainty for small business and business in general, around industrial relations, tax, red tape, immigration, and minimum wages according to Jen Tweed, Managing Director of SME workplace advisory firm Employsure, with close to 3,000 small and medium sized business clients.

This Budget shows how much small business is talked about but not appropriately backed up she said: “Budget forecasts economic growth, wage growth and a reduction in unemployment, but fails to address the loss in confidence SMEs are experiencing at present. We need more action, and action means making it easier for small business to operate and innovate.”

Industrial relations

“SMEs are undoubtedly concerned about how the proposed changes to industrial relations will impact their business. No one would disagree with wanting to build a more productive, more sustainable and more inclusive economy, but we are concerned with how the various changes proposed for the workplace will enable this especially given the ever-present concern that increasing wage pressures hold for SMEs."

Tax

Budget 2018 assigns $1 billion of operational funding for the R&D tax incentive, allowing businesses to claim 12.5 cents back for every dollar they spend over $100,000 on R&D. However,“Small businesses don’t have the luxury of cashflow and will see the tax incentive out of reach,” she said.

Red tape

Also missing in Budget 2018 according to Tweed, was the customary rhetoric of reducing red tape: “We have had significant consultations with small businesses and the overwhelming view is the legislation is far too complicated for the majority of businesses with less than 20 employees, and no expert HR or legal departments. Our views are that Government should make practical and realistic reforms that make it simpler for businesses to do the right thing; building their confidence to employ, which is what the economy needs.”

Immigration and skills shortages

“SME's need an environment of certainty in which to grow and invest. This budget lacks sufficient support around immigration that will offer the regions short-term relief for skill and labour shortages and long-term commitment to trades and apprenticeship initiatives."

Minimum wage

In addition, minimum wages need to be addressed, “Since small businesses employ majority of the New Zealand workforce and generate a quarter of our GDP, it is vital that they are provided with sufficient support to remain profitable whilst spurring growth.”

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