Business Supports Government’s Zero Budget Approach

Media Release: May 21st 2011.

Business Supports Government’s Zero Budget Approach

• 68% want to see a return to surplus faster

The Government’s strongly signaled ‘zero-budget’ approach will find favour with New Zealand business when it is announced this week, a new study reveals.

The MYOB business monitor, a regular survey of over 1000 small to medium enterprises, found that 68% of businesses supported “an increased focus on cutting Government expenditure to ensure the New Zealand Budget returns to surplus faster.”

MYOB General Manager Julian Smith said that businesses will welcome the Government’s commitment to fiscal responsibility and see targeting a return to surplus as an extremely important goal for the economy.

“What this survey shows is that businesses want the Government – and the country – to be able to operate within its means,” said Julian Smith.

“Throughout the recession and the recovery, business owners – and Kiwi households – have had to budget very tightly and ensure they are getting the best value for every dollar they spend. They expect that the Government will do the same.”

As well as wide support for its financial management, the Government received its highest rating since it entered Parliament for its support of business. 21% of businesses said they were “satisfied” with the Government’s performance in helping their business succeed, up 3% from October 2011. However, disapproval still outweighs satisfaction with the Government’s performance, with 29% of businesses dissatisfied with the Government’s support.

Julian Smith says small and medium sized businesses around the country are not only the engine room of the economy and responsible for a significant proportion of employment, they are also the nation’s tax collectors – giving them a unique insight into the country’s budget.

“Through PAYE, GST, company tax and the other taxes they administer, businesses actually handle most of the nation’s tax take, so for them, that money is real. They know where it comes from and how hard it is to generate, so they support any efforts to make sure that money is spent wisely and efficiently.”

However, businesses would be disappointed that no progress is being made on their most preferred policy: simplifying the rules around provisional tax payment, Mr. Smith said.

“80% of business owners support simplification of provisional tax rules and processes to make it easier for businesses to meet their tax obligations, so it’s disappointing that this idea is not on the Government’s agenda. What’s interesting is that business is not asking for a special tax cut or any government assistance, they just want it to be easier to do business and get on with the job.”

Business owners, especially in small business, were also supportive of moves which would help their employees.

“Small business is remarkably centrist in that way,” said Mr. Smith. “Small businesses owners have a very close relationship with their staff, so they want to see them looked after.”

“For example, 38% of business support raising the minimum wage to $15 an hour, even though it would cost them more in wage costs, 49% would like to see gender pay equality enshrined in legislation, and 49% support the introduction of compulsory KiwiSaver, which would cost them more in increased employer contributions. Businesses really want to see government working to help their employees – and they are prepared to pay to make this happen.”

Businesses Top 5 Preferred Policies.

1. Simplification of provisional tax rules and processes to make it easier for businesses to accurately determine and meet their tax obligations – 80% support.
2. Fast Track the Ultrafast Broadband Rollout – 69% support.
3. Increased focus on cutting Government expenditure to ensure the NZ Budget returns to surplus faster – 68% support.
4. Increased Government funding for innovation, research and development by NZ businesses –66% support.
5. Changes to the ACC system to introduce competition and private insurance – 63% support.

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