No surprises here as government hands control to unions

Business confidence has plunged, which comes as no surprise as this government looks to hand over control to the unions:

Small business confidence has plunged to its lowest level in nine years.

According to ANZ’s quarterly Business Micro Scope survey, 29 per cent of small businesses were more pessimistic about the year ahead in the December quarter, a net fall of 43 per cent from the previous survey.

The 43 per cent turnaround was the largest fall since 2000 and reflected views of both micro firms (0 to 5 employees) and medium-sized businesses (up to 20 employees).

ANZ retail and business banking general manager Andrew Webster said small businesses were facing a lot of change, which was causing uncertainty.

“A new Government, a softer housing market, tightening credit, a fall in dairy prices, capacity constraints and a topping out in previous economic drivers such as strong migration have all contributed to a backdrop of uncertainty at the end of 2017,” he said

No surprises as a business unfriendly government takes control and signals significant changes that will see a return of union power and the removal of hiring flexibility.

Investment intentions across small firms fell 2 per cent, with medium-sized firms showing the biggest decline in investment enthusiasm.

Only one per cent of small firms expected to hire this year, the survey found.

That is real bad, and will hit employment figures hard. Businesses are in lock down and if you don’t believe me ask any new car dealer how sales have been since the election.

The activity outlook in retail was the lowest among all sectors, while the highest was in construction.

Regulation remained the biggest concern for small business owners, followed by finding skilled workers – particularly in construction, manufacturing and retail sectors.

The ANZ composite growth measure for small firms – a key proxy for growth based on firms’ own activity outlook, hiring, investment and profit expectations – fell to +10, from +20, but remained in growth territory.

Webster said indicators showed a tie-in with GDP growth.

“While sentiment may well have soured, small firms are still intending to roll up their sleeves and get on with it,” he said.

They have no other choice other than to knuckle down. Like all small businesses they will make do with less rather than risk hiring new people.

Xero country manager Craig Hudson said the drop in business confidence among small businesses was inline with other survey findings.

One reason confidence is waning could be that the election hangover is continuing and with this comes ongoing uncertainty for small businesses as to what the impact will be for them,” Hudson said.

Low business confidence showed that the Government needed to be more focused on providing solutions to make business easier for small firms, he said.

“These signals from small business also present an opportunity for the Government to implement small-business policy and give small firms the focus they deserve – for example, reduced compliance costs and making it easier to do business.”

Government has no chance of understanding small business, let along big business. None of them have ever run a business, much less paid provisional tax. Most are serial troughers who have lived off one government trough or another.

Business Mentors New Zealand managing director Lisa Ford said the drop in confidence was expected.

“There’s a nervousness out there in the marketplace, which you always get when there has been a change in government. We didn’t have a clean change in government, either, which I think stopped people making decisions in their business,” Ford said.

Changes to the 90-day trial period for employment, proposed increases to the minimum wage and paid parental leave would have also spooked small-business owners, she said.

“Small businesses are very tight on their budgets so any change is going to have an effect. Where organisations are looking to employ maybe two or three people, with that rise in minimum wage, then that will have an impact and they may only employ one.”

Paid parental leave provisions are going to see a massive drop of job opportunities for women. Before you get upset about the inherent sexism there, imagine if you had two 37 something candidates for a job. One male and one female. Both have identical qualifications and identical work experience. The woman has no children but is in a long-term relationship. As an employer do you take the risk that just 12 weeks after hiring the woman she announces that she is pregnant and wants paid parental leave…or do you hire the bloke and make up some believable reason why he got the job and not Missy Want-it-all.

Lumping increased costs on small and medium businesses will only have one result, a lack of new hires and possible retrenchment. The government doesn’t get that. No wonder that business confidence has collapsed.

 

-NZ Herald


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As much at home writing editorials as being the subject of them, Cam has won awards, including the Canon Media Award for his work on the Len Brown/Bevan Chuang story. When he’s not creating the news, he tends to be in it, with protagonists using the courts, media and social media to deliver financial as well as death threats.

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