New Zealand’s ‘No Frills’ Budget Neglects SMEs

The New Zealand Parliament has approved the country's 2023 Budget, as announced by Finance Minister Grant Robertson. The government's focus on cyclone recovery, public infrastructure improvement, and assisting its people in coping with the rising cost of living has been highlighted in what has been described as a "no frills" budget. While the budget aims to address national priorities, SMEs have expressed concerns over the limited support offered to their sector.

Laurence McLean, Associate Director of Operations from Employsure New Zealand commented, “SMEs are the backbone of New Zealand's economy, [1]representing 97% of businesses in the country, contributing to 29% of employment, and generating over 25% of the nation's GDP, according to a report by [2]Ministry of Business, Innovation and Employment. Despite their crucial role, few direct initiatives benefiting SMEs have been announced in this year's budget, leading to apprehension among business owners. However, the budget does include a handful of financial initiatives specifically targeting New Zealand SMEs, which deserve closer examination.

New Zealand's small businesses in the gaming sector contributing over $400 million in revenue in 2022 an indication of remarkable growth. To support this, $160 million has been allocated for a 20% tax rebate over the next four years, which will benefit video game developers.

Recognizing the importance of technology in today's workforce, the government has allocated $27 million to a digital skills package aimed at expanding the tech sector workforce. This investment will help cover the cost of training new employees in cutting-edge digital skills. The Digital Boost fund, which specifically targets small businesses, has been running for three consecutive budgets. Since 2021, over 48,000 employees from 30,000 small businesses have benefited from this fund, allowing them to stay connected, expand their market channels, and enhance efficiency and productivity.

In addition to digital skills, the budget includes investments of $30 million in technology for horticulture and $18 million in innovation for tourism and hospitality. While these initiatives demonstrate the government's commitment to supporting SMEs, there are concerns that the allocated $75 million for New Zealand's digital capabilities may not be sufficient to achieve the government's vision of a "low-emission, high-skill future."

“As New Zealand's 2023 Budget is rolled out, SMEs across the country eagerly await further details and hope for increased support that will enable them to navigate the challenges ahead,” concluded Laurence.

[1] Small business | Ministry of Business, Innovation & Employment (mbie.govt.nz)

[2] Home | Ministry of Business, Innovation & Employment (mbie.govt.nz)

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