SMEswelcome R& Dtax breaks
Small businesses have scored tax and education wins in the Budget but still want to streamline the hassle of dealing with government departments.
New Zealand’s business landscape is composed of 97 per cent small and medium- sized enterprises ( SMEs), that contribute more than a quarter of the nation’s GDP.
Xero managing director Victoria Crone said the Budget was generally safe and predictable:
‘‘ But that’s a good thing businesses,’’ she said.
‘‘ Confidence is gaining, jobs are ing created.’’
The measures that will bring the most relief to the small end of town include a $ 58 million increase in tax deductions for research and development by start- ups.
‘‘ That’s great, in terms of getting cash back into start- ups, and allowing them to invest to grow,’’ Crone said.
Employers and Manufacturers Association chief executive Kim Campbell said the EMA was particularly pleased with the new tax measures.
They will provide tax credits for loss- making R& D carried out by startups, and allow the expensing of previously non- deductible ‘‘ blackhole’’ expenditure.
‘‘ These long overdue measures on their own could well result in a highly desirable pickup in private sector investment in R& D and innovation,’’ Campbell said.
Other bonuses for small businesses include $ 480m of further reductions in
for
small
be-
‘‘ Confidence is gaining, jobs are being created.’’ Victoria Crone Xero managing director
ACC levies in 2016 costs for employers.
Crone said the extra $ 20m to go into tertiary sciences education each year was also a boon to young companies in the ‘‘ new digital economy’’.
‘‘ We desperately need more people coming out of university with those skills, to keep propelling the economy,’’ she said.
The Budget included $ 69m extra over four years for New Zealand Trade and Enterprise, which had been previously announced last month.
The funding would be likely to benefit small businesses with export potential which did not have the resources to employ extra staff or set up an office overseas.
However, the money is somewhat misleading, given the Government previously cut $ 110m of its funding over four years in the 2009 Budget.
Crone said it was disappointing the Budget did not include measures to create a more seamless and efficient interaction with government departments.
‘‘ We were really looking, on of small businesses, for initiatives there,’’ she said.
‘‘ That would just free up a lot of time for smaller businesses, and allow them to focus on growth.’’
that
will
lower behalf more