Our recently completed annual Business Sentiment Survey 2023 provided some fascinating insights into how small businesses are coping in the current economic environment and also some guidance for the incoming government in terms of its priorities around supporting local small businesses.
Small businesses, by and large, feel abandoned by the current Labour government. Our 2023 survey showed that 74.2% thought that government support for small businesses was inadequate, 12.9% thought it was adequate and 9.7% didn’t know. Just 1.6% thought that government support was either “Good” or “Very good.” Furthermore, when respondents were asked “Do you think small and medium sized businesses are represented adequately at the central government level?”, only 6.5% replied “Yes”, while 93.6% said “No”.
During the past six years, small businesses have battled through the covid pandemic, faced lockdowns, border closures, supply chain breakdowns, higher interest rates and inflation. While these burdens have been faced by all in society, small businesses have done more than their fair share of the heavy lifting through increased compliance, increases to the minimum wage (and its flow on effects), increased holiday entitlements and ever increasing demands for higher remuneration and more flexible conditions.
Many businesses have tried to take these challenges in their stride and faced them by building tighter teams. However, for some, the unrelenting pressure of creating great working conditions for staff in a time of higher prices, less demand for goods and services and uncertain outlooks, is starting to produce cracks in their resilience.
Of course, it would be unfair to place all blame on the Labour government, as many of the economic challenges are global issues such as war, inflation and changing trade alliances. However, the balance of policies to mitigate the worst of the impacts for small businesses from these global impacts simply haven’t been there. Some lockdowns were arbitrary and unfair, immigration settings to bring in skilled workers were not eased when they were needed, and lagged considerably when they were adjusted. As a country, our debt levels have massively increased, and our productivity has plummeted.
New Zealand needs a healthy environment for its small businesses to operate and thrive. Small business is the backbone of our economy in terms of both providing jobs and economic growth. We have many social issues to debate and progress. However, if we don’t provide a solid economic platform to underpin our society, then all our discussions around ideological issues become irrelevant, conflicted and more deeply divided. Surely, we can do better! Let’s hope the incoming government understands the value of small business both to our economy and how, when healthy, they can contribute to a more stable society.