MYOB Budget verdict: Hints of hope for small business with infrastructure and venture capital investment commitments

• $300m venture capital fund for new businesses seeking growth
• Investment in infrastructure stimulating business growth and employment
• Reform of training and skills programmes to build the workforce of the future

Leading software company, MYOB, commends the Government for its focus on the overall wellbeing of New Zealand in the Budget 2019 but questions whether it is doing enough to relieve the pressures faced by small businesses (SMEs) throughout the country.

MYOB NZ Country Manager Ingrid Cronin-Knight said small business owners may be confused about how the Budget will impact their operations – for better or worse.

“Many SMEs are feeling the pinch with an increase to the minimum wage and the Auckland Regional Fuel Tax putting pressure on the business bottom line,” she said.

“Incentives to offset these imposts would provide the vote of confidence SMEs are seeking from the Government and allow them to further invest in their businesses.”

New Zealand’s small and medium businesses comprise more than 97% of all businesses in the country, contributing 28% of the GDP. The most recent MYOB Business Monitor reported almost half (48%) of the country’s SME sector expected the New Zealand economy to worsen in the next 12 months.

“Although the focus of Budget 2019 is on social issues, areas that provide some reassurance to local business operators are the introduction of the venture capital fund for new businesses wishing to grow, funding for research and development (R&D) in areas of sustainability, a reform of vocational training programmes, and capital investment in much needed infrastructure,” said Ms Cronin Knight.

$300m venture capital fund for startups seeking to grow

“As a strong advocate and supporter of startups, we are pleased to see the Government commit funding to support more startups in accelerating their growth beyond the early business phase,” said Ms Cronin-Knight.

“Access to capital will enable investment in new equipment, hiring more staff, building and delivering more products and services – all factors that will in turn contribute to economic growth in local areas.

“Furthermore, it is great to see a focus on mid-market business growth. The mid-market capital gap is something MYOB has discussed in the past so it is good to see the Government encouraging growth in this sector.”

Last year MYOB produced a report into New Zealand’s mid-market businesses, identifying the business pressures this sector faces and the opportunities for growth.

Investment in infrastructure creating jobs

The substantial investment in infrastructure announced today not only provides the construction and infrastructure sectors with certainty for work over the long term, but also provides a boost to employment and the related sub-contractors, particularly for KiwiRail and the new Hospitals programme.

Ms Cronin-Knight says the infrastructure investment will have flow on benefits for the wider community ecosystem.

“Better rail networks mean farmers can transport their goods more efficiently, saving time and money. Tourists can access area of the country previously less accessible. The hospitality industry benefits from those working and travelling to the regions seeking accommodation and sustenance,” she said.

“We encourage the Government to package the programmes of work in such a way that small businesses can tender for components of the overall contract and thereby directly participate in the opportunities.”

Training and skills building the workforce of the future

With one tenth of all local SMEs citing access to skilled workers as a critical factor in their success according to the MYOB Business Monitor, quality training is vitally important for around 50,000 local businesses.

“The workforce of tomorrow is very different to the workforce of today,” said Ms Cronin-Knight. “The vocational education sector requires funding to improve training courses and options, ensuring we have the skilled workforce appropriate for the jobs of the future.

“However, while the first steps are being taken to make system improvements as part of the review of vocational education, the Government has not identified how or when it will commence the plan to overhaul the vocational education sector. We look forward to seeing those plans in due course.

“A healthy society requires a commitment to helping the vulnerable and at the same time, to investing for economic growth so that all New Zealanders can benefit,” said Ms Cronin-Knight.

“We welcome the commitment the Government has made in areas that will benefit both business and New Zealand’s society as a whole, and we look forward to seeing these promises delivered in a way that encourages economic and social growth.”

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For further comment or other information please contact:

Rebecca Huang, MYOB NZ Public Relations Consultant

M: 021 1122 720 / E: rebecca.huang@myob.com

About MYOB

MYOB (ASX: MYO) is a leading cloud based business management solutions provider. It makes business life easier for approximately 1.2 million businesses across Australia and New Zealand by simplifying accounting, payroll, tax, practice management, CRM, websites, job costing, inventory and more. MYOB provides ongoing support via many client service channels including a network of over 40,000 accountants, bookkeepers and other consultants. It is committed to ongoing innovation, particularly in cloud computing solutions, and in 2015 was awarded the BRW award for the most innovative large company for 500+ employees and placed 2nd in BRW’s Most Innovative Companies Award list across all categories nationally.  For more information, visit myob.co.nz or follow @MYOB on Twitter.