With the budget fast approaching, a survey of small-to-medium sized businesses has revealed their thoughts on a range of economic policy issues.
Business management software provider MYOB surveyed 1,015 business owners around New Zealand to find out what they thought.
Lower taxes for SMBs
“Our research found 63% of business owners support introducing a graduated company tax scale like Australia's,” says MYOB New Zealand general manager Carolyn Luey. Australia’s most recent budget saw company tax rates for businesses earning up to $10million drop to 27.5%, with those above paying 30%. The goal is to reduce company tax rates down to 25% for all businesses by 2026-27.
New Zealand business all currently pay 30%. “We think there is a case to me made for supporting small and startup businesses with a lower rate and gradually extending the rate to cover all businesses.”
“Leaving them with more cash means they’re more likely to invest in new staff, new equipment and growth,” Luey says. “New Zealand small businesses need to remain competitive, especially those who are trading with the world.”
Asset write-offs The survey found that 68% of business owners would like the government to introduce an instant asset write-off scheme to spur investment.
“In Australia, small businesses can instantly write off new assets up to $20,000, meaning businesses receive a tax benefit and big productivity gains from upgrading plant and equipment.”
“Introducing a similar scheme here would be welcomed by business owners.”
The survey found 91% of respondents support moves to ensure multinational businesses pay their fair share of tax on profits made in New Zealand.
Offshore retailer GST
However, owners were more evenly split on the introduction of GST for offshore retailers with 46% in favour and 34% against. “It’s also interesting to see such high support for measures to make multinational businesses pay a fair share of tax on profits earned in New Zealand," says Luey. “There was also strong support for many of the changes this government has introduced."
The 90-day trial period for new employees received 68% support, while introducing a new pay-as-you-earn alternative to provisional tax was backed by 73% of business owners.
Looking ahead “In terms of next steps, 62% of respondents were keen to see government assign a proportion of its procurement contracts to small business and 68% want to see the Holidays Act reformed to simplify how leave entitlements are calculated.”
MYOB has been working alongside New Zealand businesses for more than 25 years and these two issues have consistently rated highly on the policy wishlist.