Friday, October 31, 2008

What really counts

Thanks to all the people who commented on the post below about small business. Especially "Blade" whose grassroot honesty actually counts a hellava lot more than academic surveys, in my book anyway.

I've been in small business for the best part of 20 years and at the end of the day what counts the most is cashflow. It is impossible to "win" every day. You take the profits and losses as they are dealt but the pressure of meeting those weekly or monthly "nuts to crack" is huge. It is a risk that many people will now not take and we are a much poorer country for it.

How did we arrive at this point. In simple terms our political system has made the "takers" now equal to the "producers". This causes political stagnation, as both sides square off against each other, each vying for the huge no mans land. As Bernard Hickey points out in his excellent post the easiest option for the producers is to vote with their feet rather than stay and fight a against a "system" that is so bloated and virtually impossible to change. As he says we are being "hollowed" out.

Which is a bloody shame because NZ is a country of fantastic opportunity, natural wealth and peace but as a society we have set ourselves up to ultimately fail.

What really annoys me the most is the way politicians have no respect for the value of cash. $50,000,000 in their minds is justified as "it's only $10 each" whereas 95% of them wouldn't have a bloody clue as to how to create the wealth in the first place. They have no comprehension of the daily risks that have gone on in peoples lives so they can have that cash served to them on a platter, with a 10% penalty if it arrives cold.

We run the huge risk of becoming a country of takers rather than givers. And I don't want my children living in a hollow country.


Anonymous said...

@ Lou
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?

Lou Taylor said...

Thanks Annon
Your wise comments set out the reality of small business and ultimately NZ life far better than I ever could.

OECD rank 22 kiwi said...

Small business is the backbone of New Zealand.

It's sad to see people try to do it down.

Sus said...

Lou & Anon: Politicians have no respect for what it takes to *produce* the dollar they so gleefully steal. Like it or not, the world is divided into those who produce & those who consume.

The bigger the state, the greater the number of consumers ... all feasting upon the efforts of the producers, while having the temerity to impose all manner of regulations on them (producers).

It's the ultimate insult to disrespect your provider, while a) helping yourself to her money and b) demanding that she follow your rules.

Here, *technically*, John Key is barely different from Helen Clark.

It's why I put my money where my mouth was & became a member of NZ's only non-socialist party.