I still remember my first job.
I had just turned 14 years old when I started working every Friday night at the local fish and chip shop.
I probably thought at the time that I was learning skills that were only relevant to working at a chippy – I now realise that I learnt some lifelong lessons.
I watched the owner of the business slave over the vats of hot fat almost every day. I watched his wife, who was there almost every night, do the books in the corner of the kitchen.
I watched the children – all three of them, work shifts to help keep things ticking over. I was there the night they were robbed, and ran with them down the street as the night’s takings disappeared in front of their eyes. I saw what it was like to run a small family business.
Job & Wealth Creators
That was why, when (Labour Party Leader) Andrew Little asked me a few years ago the portfolios in which I was interested, I did not hesitate to say, ‘Small Business.’ Not only are a majority of businesses that make up the New Zealand economy small to medium enterprises, sole operators and contractors, they are also wealth and job creators.
But it is fair to say that policies in recent times have not reflected the huge role that small businesses play in our economy.
I have spoken to a large number of smaller operators who have all given me a similar message – systems in New Zealand are built around the big operators, not the small ones.
We want that to change.
In 2015 we made our first announcement in response to one of the most common requests that I heard from small operators, “Please do something about Provisional Tax’.
Our regime creates a huge amount of fear for business who are required to forecast their earnings for the next year, if they get their payments wrong, they will be lumped with significant penalties and interest payments.
We listened to that feedback, and in response, came up with a new voluntary way of paying Provisional Tax called ‘Flexible Tax for Business.’
It would allow an entirely flexible voluntary withholding tax, to let businesses meet their tax obligations at a rate of their choosing and on their own timetable, rather than the current rigid system.
It would put a business in control and would mean that they could align their tax payments to their cash flow, with a pay as you go regime that would be similar to PAYE.
The Government saw the wisdom in this idea, and suggested something similar (but not quite as far reaching) last year, with plans for the new regime to take effect in 2018. We still think we could go further though, and not just when it comes to tax.
In my travels, I have also heard businesses tell me that finding the capital to grow can be a real stumbling block. The options are limited – family and friends are a common source, and the banks (if you have a home to leverage).
But with people having increasingly turning to housing as a source of investment, what if we created an incentive for investment in our productive economy, namely our small business operators?
We would not be the first to take on an idea like this.
The United Kingdom already has a scheme that matches investors with start-ups or small businesses seeking finance who meet certain criteria.
In return, investors receive substantial tax breaks.
But not all benefits are one-way.
About three-quarters of Enterprise Investment Scheme companies said that investments increased their sales; over half said productivity had increased as a result of the investment; and just under three-quarters of companies said they had employed more people as a direct result of the investment. It makes good sense, and is exactly the kind of thing we are committed to investigating.
There is always more that we could be doing though, and rest assured you will be hearing more from us on how we can show our support for small businesses in 2017.
Meanwhile, be kind to your local chippy!
Jacinda Arden is Member of Parliament on Labour Party’s List from Auckland Central Constituency. She is the Party’s Spokesperson for Justice; Arts, Culture and Heritage; Children; and Small Business. She is also Associate Spokesperson for Auckland Issues.
On January 12, 2017, the Party announced that she was the sole nominee from Labour to contest in the Mt Albert by-election scheduled to be held on February 25, 2017 to fill the vacancy caused by the resignation of David Shearer, who is taking up UN diplomatic assignment as the Head of the Peacekeeping Force in South Sudan.
Editor’s Note: Indian Newslink, which belongs to the ‘Small Business Sector,’ instituted the ‘Best Small Business Award’ when it launched the Indian Newslink Indian Business Awards in November 2008. Since then, scores of small businesses have demonstrated their vision, strength and penchant to grow, with nine of them honoured for their creditable performance. This Category will continue to be an attraction in the Tenth Anniversary of ours Awards this year.