‘This is the right time to focus on small businesses’: business leader

MOVES to support small business are very welcome.

Small businesses currently have no cashflow, no idea of when they might reopen their doors, and no certainty about the sort of trading environment that might follow the Covid19 lockdown.

Though the wage subsidy is supporting employees of many small businesses, it doesn’t support the businesses themselves, and many are facing a very uncertain future.

This week’s announcement of extra support for small businesses is timely because they desperately need it: the question is whether it will be enough.

The extra support will be largely delivered through changes to the tax system.

In a key move, firms will be able to get cash refunds of previous tax payments.

The arrangement will let them offset current losses against the profits of a previous year and get a refund of the tax they paid during the profitable year.

The announcement also included a change to the rules around commercial tenancies — landlords will face a longer period before being able to cancel a lease.

Further thought is also needed on how to address the current risk facing owners of commercial rental properties, many of them small businesses themselves.

The announcements also support business advice, which will be critical for businesses — along with capital and cashflow — as they come out of the crisis.

The announcements supplement other measures the Government has already taken, including the loan guarantee agreement that allows businesses to be assessed on a precrisis basis for loan eligibility, extending work visas, amending insolvency law, depreciation deductions and waived interest on some tax payments.

But will that be enough for businesses to stay alive during the post lockdown phase of recovery? This is an issue the BusinessNZ network will continue to bring to Government’s attention. It’s critical that our small businesses are supported through recovery, as they are the main driver of the economy.

This would help many small businesses come out of lockdown wellprepared for 21stcentury trading.

It’s important to remember that supporting small businesses is not just a responsibility of Government — it’s up to all of us.

Larger businesses should be encouraged to take every step to involve small businesses in their own economic recovery operations, and to pay invoices to small businesses promptly.

And as customers and consumers, we should all support our local small businesses as soon as the lockdown is over.

This is the right time to focus on small businesses and their needs, as their sustained growth will provide much needed jobs as we emerge and recover from Covid19.— The New Zealand Herald

Kirk Hope is the chief executive of BusinessNZ