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National offers small businesses cash grant, employment law changes

Venkat Raman
Auckland, August 29, 2020

Cash grants for creating jobs, repealing sections of the Employment Relations Act, capital injection for investments and reducing tax compliance costs are a part of the business package offered by the National Party for small businesses.

Leader Judith Collins said that New Zealanders need a government with the experience, the competence and the vision to rescue the economy, save businesses and protect jobs, launching National Party’s ‘Small Business Plan’ in Wellington on August 27, 2020.

Paul Goldsmith and Andrew Bayly, respectively Finance and Small Business spokespersons were among those present at the launch.

Empowering growth, success

Describing New Zealand’s entrepreneurs as critical to economic recovery, Ms Collins said that National Party will empower small businesses to grow, thrive and succeed.

“The only sustainable way to create new jobs is to reduce barriers, costs and uncertainty for the private sector, and in particular small businesses,” she said.

There are four main components to the Small Business Plan. These include (a) Encouraging small businesses to invest in new equipment and machinery by allowing them to immediately deduct new capital investments up to $150,000 (b) Encouraging job creation by providing a $10,000 cash grant for new hires with its JobStart policy (c) Repealing changes to the Employment Relations Act (ERA) enforced by the current government (d) Providing up to $30,000 as capital to New Zealanders who have lost their job to invest in a new business idea through National’s ‘BusinessStart’ Package.

“New Zealand is facing its worst economic downturn in 160 years. More than 200,000 New Zealanders are now on unemployment benefits and a further 280,000 jobs are being kept alive by wage subsidies,” Ms Collins said.

Flexible and productive

The Party’s Business Policy said that National believes in a flexible, productive workplace in which workers get a fair deal and businesses are productive.

“National supports an approach where employees and employers are trusted to work out employment matters themselves in good faith,” the Policy said.

Ms Bayly said that New Zealand’s businesses deserve better employment law and incentives for growth, creating new jobs and take people away from unemployment benefits.

“Kiwi businesses are struggling under the weight of poor regulation and mounting costs. We will simplify industrial relations legislation to reduce red tape and encourage businesses to create new jobs by repealing the Government’s changes to the Employment Relations Act,” he said.

Union objects to ERA repeal

National’s plan of removing the 90-day trial period will not be relevant to small businesses since this clause in the Employment Relations Act will be applicable only to larger companies hiring more than 19 persons as full time employees.

New Zealand Meat Workers Union said that its members were ‘horrified,’ and described the proposal to repeal the ERA as ‘mean-spirited and backwards.’

The Policy seeks to remove breaks including lunch breaks, the Union said.

“Working people have fought long and hard for fair breaks and welcomed the return to scheduled breaks under Labour’s amendments to ERA. National’s proposal to take smoko and lunchtime away from people is absurd and out of touch,” Daryl Carran, the Union’s National Secretary said in a statement.

High performance culture

Mr Bayly said that if elected to form the next government, National Party will review WorkSafe and improve its performance.

“We  will deliver a high performance culture, with an emphasis on a collaborative and reasonable approach to health and safety improvement. National will also require all government departments and agencies to pay their contractors on time and within seven days,” he said.

Mr Bayly said that cashflow is critical to small businesses but only half of all businesses are cashflow positive at any given time.

“When large businesses do not pay their bills on time or in a timely manner, then small businesses with limited working capital are the ones who suffer,” he said.

Tax system changes

Mr Goldsmith said that his Party in government will introduce changes to the tax system aimed at reducing compliance costs for small businesses.

“Our Party has been very clear, we will not be increasing taxes or introducing any new taxes. Businesses need confidence to invest and create more jobs, the last thing New Zealand needs right now is higher taxes,” he said.

Mr Goldsmith said that his government will lift the threshold to expense new capital investment from $5000 to $150,000 per asset and increase the provisional tax threshold from $5000 to $25,000 and raise the compulsory GST threshold from $60,000 to $75,000.

“We will allow businesses to expense an asset once its depreciated value falls below $3000, as opposed to having to continue to depreciate it until its depreciated tax value equals zero,” he said.

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