The small and medium-sized enterprises (SMEs) sector is a key battleground in the upcoming election, as finance leaders from the major parties face off in a debate tomorrow. The SMEs are concerned about rising inflation, interest rates, crime, and compliance costs, and want to see more support from the government. According to a new survey, most SMEs are dissatisfied with the current Labour government and favour National as the party that understands their needs better.
Inflation and interest rates top concerns for SMEs
The Covid-19 pandemic has had a lasting impact on the economy, and many SMEs are still struggling to recover. A nationwide survey of over 550 SME owners and decision-makers by MYOB found that rising inflation and the cost of living is the biggest business concern for the next 12 months, according to 64 per cent of participants. This was followed by rising interest rates (35 per cent) and the risk of recession (31 per cent).
The survey also found that 38 per cent of SMEs said they were less profitable in the last three months, compared with 26 per cent who were more profitable and 36 per cent who said it was about the same. The survey results reflect the latest data from Statistics New Zealand, which showed that consumer prices rose by 5.3 per cent in the year to September, the highest annual increase since 1990. The Reserve Bank of New Zealand has signalled that it will raise the official cash rate (OCR) from its record low of 0.25 per cent to curb inflationary pressures.
Crime, costs and compliance are key election priorities for SMEs
The survey also asked SMEs what they would like the elected government to prioritise over the next three years. The top answer was harsher penalties for criminals, with 43 per cent of respondents choosing this option. This comes amid a wave of crime targeting retailers, especially in Auckland, where shop owners have reported being robbed, assaulted and threatened by gangs.
Other priorities for SMEs included GST removal from fresh food items (33 per cent), tax law simplification and streamlined compliance (28 per cent), increased investment in crime prevention and protection for business owners (24 per cent), targeted support for increased availability of skilled migrant workers (20 per cent), and reduction of the company tax rate (20 per cent).
National leads the SME vote, Labour trails behind
When it comes to voting intentions, National is leading the SME vote with 42 per cent, followed by Labour and Act on 15 per cent each, according to the survey. The Greens and Te Paati Māori both polled at 3 per cent. The survey also found that nearly two-thirds (64 per cent) of respondents believe it is time for a change in government. Just 21 per cent said the current Labour government deserved to be re-elected, while 10 per cent said it made no difference to them which party or coalition is in power.
Almost half (47 per cent) of SMEs said National has a greater understanding of their business needs, followed by Labour and Act tied on 15 per cent. National has promised $14.6 billion in tax cuts for workers funded through $8.4 billion in cost savings and $6.2 billion in revenue garnered from a foreign buyer tax on property worth over $2 million, taking online gambling and raising charges on some visas.
Finance leaders to debate tomorrow
Finance Minister Grant Robertson and National’s finance spokeswoman Nicola Willis will go head-to-head tomorrow in a special debate centred around the SME sector, moderated by NZME Business Editor at Large Liam Dann. The debate will be held at the Cordis Hotel in Auckland from 7:30am to 9am, and will be livestreamed on nzherald.co.nz.
The debate will cover topics such as tax policy, monetary policy, immigration policy, infrastructure spending, climate change policy, and Covid-19 recovery. The debate will also feature questions from SME owners and representatives from industry groups such as BusinessNZ, Retail NZ, Hospitality NZ, and ExportNZ.
