Kiwi Businesses Unhappy With Proposed Legislation

Kiwi Businesses Unhappy With Proposed New Legislation •

Strong opposition to GST and other proposed Government legislation • Over 40% of businesses struggling to understand current regulatory environment • Almost a third of business owners dissatisfied with Government support

12 May 2010 - Kiwi business owners are expressing strong opposition to several of the proposed changes likely in next week’s budget and struggling with the current regulatory environment, with almost a third unhappy with the support of the Government overall, according to the MYOB Business Monitor Government Report, released today.

The MYOB Business Monitor is a nationwide survey of over 1,000 New Zealand business owners, across a range of small and medium businesses, from sole traders to mid-sized companies, and representing the major industry sectors. In addition to researching key areas of business performance, the MYOB Business Monitor surveys business owners™ views on the regulatory environment and key legislative changes.

In the latest MYOB Business Monitor Government Report for May 2010, conducted by Colmar Brunton, 31% of business owners were dissatisfied with the Government’s support of businesses like theirs, with only 19% satisfied with the Government’s performance. Business owners in Wellington are more dissatisfied (36%) than the rest of the country with Government support, and business owners in the Retail and Hospitality (40%) and Construction and Trades (37%) sectors show the highest levels o industry-based dissatisfaction.

MYOB New Zealand general manager Julian Smith says that while business dissatisfaction with the Government reflects the impact of the recession – with many of the hardest hit regions and sectors displaying the highest levels of dissatisfaction – unhappiness with specific legislation and the regulatory environment is more of a challenge for the Government in the lead up to the Budget.

“Business owners feel particularly strongly about several key pieces of legislation – especially the possibility of increasing the GST rate,” says Julian Smith.

According to the Monitor, 52% of Kiwi business owners are unhappy with the possibility of an increase in GST, with only 8% supporting the idea. 29% of businesses also oppose proposed property tax changes, with only 8% seeing them as helpful to their business.

“Several existing pieces of legislation have also come in for criticism from Kiwi business owners, including the RMA and – in an increase in dissatisfaction since the November Monitor – the ACC changes,” says Julian Smith.

The Monitor showed 45% of Kiwi business owners finding the ACC changes unhelpful or very unhelpful to their business, with only 8% finding them helpful. In the November Monitor, 40% of business owners saw the changes as unhelpful or very unhelpful.

Julian Smith says MYOB believes the Government needs to work more closely with business to understand how any changes – such as the impact of introducing an increase in GST – will affect them, and work harder to communicate how those changes should apply.

“We know that the current information channels used by the Government, such as their online initiatives, just don’t resonate with most business owners, with only 3% consulting the business.govt.nz website for information.”

“Kiwi business people prefer to work face-to-face, and get their advice from their accountant, friends and colleagues, or other professionals like banks. They’d also like more access to business mentors to help them mange their business.”

However, says Mr Smith, in the lead up to the budget, the Government needs to be mindful of the impact of any change in legislation on Kiwi business owners.

“At present, 42% of Kiwi business owners find it difficult to understand which legislation applies to their business,” says Julian Smith.

“This has actually got worse under the present Government, compared to the 37% of businesses struggling with legislation when we surveyed business owners under the previous Government, which could be seen as a real challenge for National’s business-friendly agenda.”

“Kiwi business owners want greater simplicity, not more complexity – making business life easier, not harder when it comes to business compliance – and every change makes a difference to the time they have to focus on improving productivity and performance.”

“Faced with too many changes, many businesses will likely not apply them correctly – undermining any economic or social benefit of the change – or at worst, the changes will actually hamper New Zealand’s economic recovery.”

“Regardless of the policy, we’re calling on the Government to ensure that after the Budget, their focus is firmly on helping businesses understand what they are trying to achieve, and making it as easy as possible to apply the legislation in their business.”

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