Friday, October 31, 2008

Annon says it better than me

Thanks for elevating my comment on small business to the post below.

Some of the resulting comments there either seek to belittle running a small business in NZ as a piece of cake, or to portray public servants as idle bludgers. Both approaches are wrong, and sad.

More to the point is the example of Helen Clark's approach yesterday to building a safety net. Leaving aside the issues of different treatments for different family circumstances, what happens when people like Blade get put out of business by the downturn, as some no doubt will? Seems to me they are not considered at all, and I see no mention of them in any public debate.

Under this regime and current NZ thinking small business people are at the bottom of the heap and are largely ignored, even though many earn an average income if they are lucky. Once they could count on selling their business to fund their retirement. Selling a going concern is often not possible today, except at a bargain price for the goodwill, because of the lack of desire to go into business in the present economic and political climate.

I believe that shift has largely happened under the tenure of Helen Clark.It will be interesting to see how John Key approaches the issue with his announcement today.We need a lot more enterprising small business people. It may not be hard to start up a business in NZ compared to some other countries, but I venture to say the mix of risks, rewards and frustrations in NZ needs to be much more attractive if we are to see the economic growth we need.

Just try asking the banks now for financial support for a small business, and see how far you get. They seem to see it as an excessively risky sector, which was not the case until about a decade ago. Too often in recent years I have seen small business ownership put down as a business option in favour of speculation in property development or rental property. Where has that taken us?

4 comments:

JC said...

You know the real growth industry in NZ? Trusts. When the 39c surcharge came on trusts went from an estimated $2 billion in 2001 to $6 billion last year.

And suddenly income was retained in companies, the wife went on the books and income was split.

Same thing with govt largess on stuff like R&D. Check Google.. there's thousands of entries on NZ seminars for R&D which can advise how to get existing research qualifed and the office administrator on the game.

All good productive Kiwi stuff. No wonder we lead the world.

JC

Anonymous said...

Some of the resulting comments there either seek to belittle running a small business in NZ as a piece of cake, or to portray public servants as idle bludgers. Both approaches are wrong, and sad.


no. the first is wrong and sad.

the second is correct - and also sad.


Just try asking the banks now for financial support for a small business,

Right. The problem is not regulation. It is attitude.
People say "it's access to capital" but that comes down to the same thing. When people buy big TV screens or move up the "property ladder" instead of becoming entrepreneurs, then access to capital is determined by attitude.

NZ from age 1 to age 20 - at least - and for many for their whole lives, everything is provided by the state, and the only other asset you may have eventually is your own house.

That's not shareowning capitalism: that's homeowning communism.

the two big changes required would be - zero company tax rate and zero FTB: yes, anyone who could (i.e. everyone except civil servants) would then have their own company. This effectively gives civil servants a 30% pay cut (yay!) but at least establishes structures for entrepreneurship throughout the community.

Then we need to sell of every school and hospital - and close down all the benefits - so that everything everyone sees from day 1 is provided by capitalism, not by socialism.

and then, just perhaps, we may have people who's dream in life is not to bludge of the state.

thedavincimode said...

No probs Lou. Blade will be fine because he will be embraced in the caring social bosom of The Leader.

OECD rank 22 kiwi said...

Small business is tops.

Fight the good fight Lou Taylor.