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Summary
- SMEs are economic engine of New Zealand economy.
- SMEs are majorly positive that Budget 2021 will be good for their businesses.
- Many businesses have hopes on various fronts from the upcoming budget.
Small and medium enterprises (SMEs) are those firms that have fewer than 20 employees. SMEs employ 28% of Kiwi workers and add roughly over 25% of New Zealand’s economic output, as per Stats NZ data. There are nearly 530K small businesses in NZ, representing 97% of all firms.
COVID-19 severely impacted small businesses, resulting in their revenues to fall and making it challenging to survive. The recovery of New Zealand's small businesses following COVID-19 is crucial to the economy's long-term viability and prosperity, as well as the livelihoods of thousands of small business owners and their employees.
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As the Budget day is just 2 days away, SMEs are hoping that this budget would include persistent support for their businesses. Equity in trading relations, a planned approach to tackle supply-chain issues, funding for future wage subsidies, loosening visa requirements for hospitality staff, are some of the issues that various small and medium businesses are keeping their hopes pinned on.
Survey shows some optimism on budget offerings
MYOB SME Snapshot survey is a national survey of more than 500 small and medium business owners and decision makers.
The survey revealed that NZ SMEs are largely optimistic that the upcoming budget will be good for their businesses. As per the survey, 51% of SMEs are confident that the policies declared will bring good news for businesses like theirs, while 44% are not.
DO READ: Budget 2021 To Aid NZ’s Goal Of Achieving Zero Carbon Emissions by 2050
Here are top 5 Budget Priorities as per the MYOB SME Snapshot:
- 38% want to see a reduction of the company tax rate to 25%.
- 23% want a permanent increase to the provisional tax threshold.
- 20% want more support and training for apprentices.
- 17% want increased investment in roading infrastructure.
- 15% want additional targeted financial support for COVID-19 relief.
A noticeable year ahead
Tim Deane, ASB's executive general manager for business banking, stated that the coming year would be noticeable, based on discussions of the bank with a variety of small business customers in a variety of sectors.
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Small companies in New Zealand have a low degree of resilience. He added that ASB shifted about $3.6 billion of loans into principal relief agreements and provided respite from current lending requirements to meet SME requirements over the past year.
Deane also revealed that the bank also created ASB Business Hub to handle cash flow, digitised a business or finding business mentors or advisors. He noted that the number of SMEs using the Hub is still increasing, leaving the fact that it has been a year since the first COVID-19-induced lockdown.
(NOTE: Currency is reported in NZ Dollar unless stated otherwise)
