Small-to-medium business owners (SMEs) are on the fence about the Government’s performance so far but there are signs of confidence improving.
The coalition Government received a median score of six out of 10 from SMEs
Cost-of-living crisis biggest issue for most small businesses in MYOB survey
SMEs are on the fence regarding the coalition Government, with just 35% reporting satisfaction. Photo / Michael Craig
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Since the change in government, SMEs prefer Prime Minister Christopher Luxon’s leadership at 45%, with Labour leader and former PM Chris Hipkins behind on 21%.
Fawcett pointed to the Government’s focus on cutting red tape and regulation giving businesses simpler processes as a factor in improving sentiments moving forward.
However, she said that the Government needed to be clearer in communicating its strategy for developing and supporting SMEs in New Zealand.
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A key differentiator in the new Government’s approach was the utilsation of three-month action plans, but half of SMEs surveyed were either undecided on their effectiveness or didn’t think they were helpful.
Just 36% of respondents thought they were effective, making note of clarity on plans and transparency as key reasons why they thought this.
SMEs likewise remain split on the Government’s plan for growing business in NZ, with 46% of respondents unclear on the strategy compared to 41% who were.
Fawcett said that businesses’ confidence would improve once they had clarity on where the Government is headed, especially in the wider economic context.
Familiar challenges remain
The issues SMEs are facing have not changed, with the cost-of-living crisis front and centre for the majority of respondents (62%).
Overhead costs, fuel prices, high interest rates, and low consumer confidence were also key problems raised.
Revenue is down compared to last year according to 46% of respondents, with 19% managing to increase revenue despite tough conditions.
The next three months of work or sales are hopefully set to improve, however, with two-thirds of respondents expecting sales to stay the same or increase over the period.
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The Government’s tax cuts package, alongside potential interest rate cuts and the changes to the official cash rate, are all playing a part in turning the perception around, but the full effect will not be felt for a period.
“Discretionary spending will remain tight for some time yet and for many, it has been a difficult winter due to quieter-than-usual trade,” Fawcett said.
Tom Raynel is a business reporter who covers the small business and retail sectors.
