Latest / Best of Business / Chris Hipkins: Labour leader on the party's new scheme designed to help out small businesses

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Chris Hipkins: Labour leader on the party's new scheme designed to help out small businesses · Best of Business

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  Speaker 2: In the last week that Christopher Luxem's apologized to small businesses,
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  Speaker 2: the Labor Party is now trying to woo them. The
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  Speaker 2: Labor leaders released party policy focused on small businesses. It
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  Speaker 2: includes requiring big companies to pay small supplies within fifteen
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  Speaker 2: days for smaller invoices up to twenty five thousand dollars,
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  Speaker 2: and also raising the GSTD registration threshold from sixty thousand
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  Speaker 2: to eighty thousand dollars. The Labor Party leader is, of course,
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  Speaker 2: Chris Hapkins Chippy.
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  Speaker 3: Hello, good a, Heather.
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  Speaker 2: Before we get to your announcement, can I just talk
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  Speaker 2: to you about the MMP referendum? Yes or no from you?
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  Speaker 3: No? Clear no from us. Voters kept their say on
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  Speaker 3: this just as recently as twenty eleven. They were very
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  Speaker 3: clear as pretty decisive vote in favor of keeping MMP.
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  Speaker 3: So we should just get on and make that work.
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  Speaker 2: Listen, we've already had Winston speculating as to why the
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  Speaker 2: PM did it this morning. He reckons it's desperation from
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  Speaker 2: the PM. I reckon the PM just agreed with Kerry
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  Speaker 2: because Kerrey liked it. What's your theory?
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  Speaker 3: Oh, clearly there was no plan here. He clearly just
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  Speaker 3: spat it out. I don't think there was much thought
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  Speaker 3: that went into it. But I think Christopher Luxen's feeling
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  Speaker 3: the pressure because he can't manage a government under MP
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  Speaker 3: because he seems to have an inability to work in
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  Speaker 3: a team.
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  Speaker 2: Now, listen on your policy. Okay, so raising the GST
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  Speaker 2: registration threshold from sixty to eighty thousand dollars, I think
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  Speaker 2: a lot of people are going to like. But what
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  Speaker 2: are the businesses that we are talking about here? Is
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  Speaker 2: it just little airbnbs and that kind of stuff.
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  Speaker 3: It'll be a lot of people who are providing sort
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  Speaker 3: of professional services where the main thing that they're offering
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  Speaker 3: is their time and their expertise. Because if you're a
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  Speaker 3: small business and you're doing a lot of stuff where
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  Speaker 3: you're buying and selling goods, registering for GST is probably
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  Speaker 3: still going to make sense through you because you can
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  Speaker 3: claim back GSD on the stuff you're buying, but if
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  Speaker 3: you're selling your time and your labor. So a personal
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  Speaker 3: trainer is a good example. A personal trainer takes on
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  Speaker 3: clients they get up to sixty grand, they say, I'm
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  Speaker 3: not going to take on anymore because that would mean
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  Speaker 3: a whole lot more paperwork. Well, now they'll be able
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  Speaker 3: to take on another twenty thousand dollars worth of clients
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  Speaker 3: without having to go through all of that.
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  Speaker 2: Now we're talking about part time work here, right, This
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  Speaker 2: is not full time work.
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  Speaker 3: Depends on the nature of the work. But you know,
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  Speaker 3: personal trainers people. Many of the people who are going
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  Speaker 3: to benefit from this, people who do the sort of
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  Speaker 3: work that gives them a lifestyle choice that they wouldn't
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  Speaker 3: have if they were in a more regularized employment. So
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  Speaker 3: a personal trainer, someone delivering some consultancy services, those sorts
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  Speaker 3: of people.
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  Speaker 2: Yeah, the stuff about getting them to pay invoices worth
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  Speaker 2: less than twenty five thousand dollars within a certain period
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  Speaker 2: of time and then publish that results. Where are you
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  Speaker 2: expecting them to publish that information?
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  Speaker 3: Oh, there are said guidelines set out they could publish
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  Speaker 3: an annual report. I think it's a law change that
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  Speaker 3: was and that we actually put in place when we
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  Speaker 3: were previously in government, and it was repealed by the
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  Speaker 3: current government. I never quite understood why they did that,
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  Speaker 3: because you know, small businesses shouldn't be a line of
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  Speaker 3: credit for big businesses. You know, big businesses should be
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  Speaker 3: able to pay their invoices on time.
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  Speaker 2: Why are you cutting the investment boost?
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  Speaker 3: Ultimately, we've went out and spoke to small businesses about
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  Speaker 3: what's going to make the biggest difference for them. Ninety
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  Speaker 3: seven percent of out businesses in New Zealand fall into
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  Speaker 3: that business category, and they said far more than investment boots.
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  Speaker 3: The thing that's going to make the difference is the
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  Speaker 3: ability to immediately expense smaller asset purchases. So the moment
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  Speaker 3: you can only expense a purchase up to ten up
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  Speaker 3: to one thousand dollars, we're increasing that to ten thousand dollars.
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  Speaker 3: And small businesses are really clear that actually will make
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  Speaker 3: a bigger difference to them than the investment boost.
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  Speaker 2: Even why scrap the investment boost because this is I mean,
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  Speaker 2: don't we want people to be putting money in the capital.
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  Speaker 3: It's a lot of money that the government have put
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  Speaker 3: aside for investment boost. When businesses have said that it's
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  Speaker 3: not actually making any difference to their investment decisions. More
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  Speaker 3: than half of the businesses told the idea it doesn't
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  Speaker 3: make any difference.
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  Speaker 2: Even that's still almost half who are using it.
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  Speaker 3: Well, those businesses that have committed or are about to commit,
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  Speaker 3: will still benefit from investment boosts because it's not going
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  Speaker 3: to be removed until the middle of next year, till
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  Speaker 3: the thirtieth of June next year. So we're not taking
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  Speaker 3: anything away from those businesses or depending on it based
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  Speaker 3: on the decisions that they're making now. But we're saying
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  Speaker 3: and the longer term, we think that supporting small businesses
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  Speaker 3: and giving small businesses what they're after is the thing
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  Speaker 3: that's going to have a bigger difference to New Zealand's economy.
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  Speaker 3: And they certainly in the immediate term, why.
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  Speaker 2: Can't we do it? Look, I know it's pricey, but
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  Speaker 2: this is exactly where we should be putting our money,
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  Speaker 2: isn't it, Because because this this kind of stuff, this
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  Speaker 2: capital investment, is the kind of stuff that's going to
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  Speaker 2: lift our productivity.
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  Speaker 3: Yeah, but there's no evidence to suggest that that's what's happening.
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  Speaker 3: You know, the government said that this was the thing
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  Speaker 3: that's going to save the economy since the unemployment's gone
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  Speaker 3: up in the economy hasn't grown.
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  Speaker 2: But no, but those are two in related things. But Chippy,
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  Speaker 2: what's the evidence that it's not working well?
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  Speaker 3: Business is saying that that's not making a decision to
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  Speaker 3: the difference to.
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  Speaker 2: The only half of them.
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  Speaker 3: Well more than half. Heather and a significant number of
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  Speaker 3: others were pretty skeptical as well. So it's it's not
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  Speaker 3: making the difference that the government thinks that it is all.
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  Speaker 2: Right, Chippy. Thank you, I really appreciate you, Tom, Thanks
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  Speaker 2: for coming on the show. Chris Hopkins, Labor Party Leader.
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