Liam Hehir has identified a problem with Labour’s focus on small business.
It is obvious, their complete lack of talent in their caucus of anyone who has run a small business…and of course their spokesperson who has only ever written a few papers while interning in the House of Commons a few years back.
It was encouraging to see Andrew Little push his party to update its definition of working people beyond the narrow paradigm of the cloth-capped worker on the assembly line.
The man has a pretty good chance of being New Zealand’s next prime minister, after all, so it’s good to see him take a realistic view of work in the modern economy.
One difficulty he might have is that his caucus remains light on small and medium-sized business experience. There are only a few members of the caucus, for example, who will have an understanding of what it actually means to grapple with GST, manage debtors, meet payroll and personally bear the costs of regulatory requirements. These are unique pressures that you don’t get as an employee of the state or working in a large company.
I have always liked the story of how former United States senator and Democratic presidential nominee George McGovern came to appreciate this. After losing a re-election in the Republican wave election of 1980, McGovern needed something to do in his retirement years. Having long held an interest in hospitality, he decided to use his savings to buy a small hotel and conference facility in Stratford, Connecticut.
It was not long before a terrible truth dawned on McGovern: being a small businessman was much, much harder than it looked when he was a history professor and a politician. His business went under in less than three years. Most of McGovern’s savings went with it.
In the years that followed, McGovern often wrote about his business failure with great intellectual honesty. He said a big part of the reason his business went bust was that the costs of complying with tightening health and safety requirements had become crippling. Complicated tax rules and business regulations also meant that hotel management had to dedicate a lot of time to form-filling and reporting to various agencies. That left less time to spend actually running and promoting the hotel so that it could attract paying customers.