What the general election means for small businesses

Policy changes for small businesses and a small business expert on how the outcome of the general election might impact small businesses.

At a glance

Here’s a snapshot of the article’s insights:

  • The National Party will form government with support from the ACT Party.
  • The party has promised to reduce tax for small businesses and promote regional tourism
  • Abolishing median wage requirements for work visas is also a priority for the new government.
  • There is an opportunity to make legislative changes to benefit small businesses, according to BusinessNZ’s Catherine Beard.

New Zealanders headed to the polls on 14 October and came away having elected a new government after seven years, with an outcome that might impact small businesses in taxation, regulation and business confidence.

Christopher Luxon of the National Party will become the country’s next prime minister, with his party to form a government with the support of the ACT Party.

Small business policy changes

Prior to the election, the National Party promised that it would, among other things:

  • Remove tax depreciation for commercial buildings, which it says would create an estimated $525 million in revenue
  • Consider changing tax rules for startups that relate to the payment of their employees
  • Roll back Fair Pay Agreements, a system that encourages bargaining for minimum employment terms, in the first 100 days
  • Create a fund for promoting regional tourism events, allocating $5 million over four years that would be open for applications from regional tourism organisations
  • Abolish median wage requirements for work visas, which it says are too high in tourism and other industries
  • Raise the maximum age for working holiday visa applicants from 30 to 35 for all eligible countries
  • Change the way the Recognised Seasonal Employer program works by removing the 30 hours per week minimum with an average of 30 hours per week across the working period

A business expert on the election outcome

Some businesses may welcome changes promised by the new government if they eventuate, says Catherine Beard, Advocacy Director at BusinessNZ.

Catherine Beard for Business New Zealand, September 2023. Photo credit: Stephen A’Court.

“As an example, New Zealand has a very complicated Holidays Act, which dictates how businesses conduct payroll for employees taking holiday leave,” she explains. “It’s a very difficult piece of legislation to understand.

“This work was underway under the previous government, and I think it will be fast-tracked under the new government.”

“New Zealand has a very complicated Holidays Act, which dictates how businesses conduct payroll for employees taking holiday leave.” – Catherine Beard

Catherine says that BusinessNZ is producing a briefing for incoming ministers that is intended to advocate for the interests of business owners.

That material would contain recommendations about the Natural and Built Environment Act, says Catherine. She believes the legislation, which mandates natural and built environment planning for land use and management, can impact businesses in the building industry.

“The feedback we received from the business community was that it was more difficult to work with than the previous legislation,” says Catherine. “There has been a determination from the National and ACT Parties to address that.”

According to Adrienne Begbie, Managing Director of Prospa New Zealand, businesses would benefit from support in taxation.

“SMEs are particularly vulnerable to the current economic headwinds,” she says.

Resilience in the face of change

While regulations, requirements, and governments can change, it’s also true that, regardless of the government of the day, small businesses can and do persevere.

Remember to focus on your business’s value proposition – whether that’s offering a personalised service to clients, selling a line of products that no one else does, or speaking with every customer who walks through the front door.

Changes are on the horizon for small businesses. Talk with a Prospa lending specialist about how a Prospa Small Business Loan could help firm up your finances as we approach year’s end.

The information on this website is provided for general information only and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from financial, legal and taxation advisors. Although every effort has been made to verify the accuracy of the information as at the date of publication, Prospa, its officers, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy, or omission from the information for any reason, including due to the passage of time, or any loss or damage suffered by any person directly or indirectly through relying on this information.