Report: 60% of NZ’s small business owners dissatisfied with Government

New data from MYOB’s 2022 Business Monitor shows economic confidence has worsened over the past six months among small and medium business operators, with implications for how they feel about the sitting Government.

Prime Minister Jacinda Ardern enjoyed a significant groundswell of support from the public and from business owners ahead of New Zealand’s last General Election in 2020, but after nearly two years of COVID-19 and the economic headwinds that it’s brought about, that seems to be shifting.

This and other findings captured by the latest MYOB Business Monitor – an annual survey of more than 1,000 small and medium business (SME) owners, operators and decision makers from across New Zealand – indicate the Labour Party may have an uphill battle if it’s to retain power in the next General Election.

Key statistics from the 2022 MYOB Business Monitor:

• More than two thirds (68%) of local SMEs believe the economy will decline in the coming year
• Dissatisfaction with Government performance sits at 60%
• National’s Christopher Luxon leads preferred PM poll by 17 points

For those decision makers expecting the economy to decline in the next 12 months, 29 percent indicated they believe that decline will be significant, while just 16 percent predict an improvement.

Business confidence approaches all-time low

For MYOB’s Head of Go-to Market, Jo Tozer, the falling confidence of business owners could be correlated to increasing business pressures as they relate to pandemic restrictions, rising costs and the prospect of higher interest rates to come.

“If we just look back over the past six months, SMEs have had to navigate a tough second half of 2021, worsening supply chain disruptions and inflationary pressures, and a new COVID-19 outbreak hampering operations and staffing abilities in the first few months of this year,” she said in a recent release.

“It was concerning when we saw the proportion of SMEs saying they expected the economy to decline reach 55 percent in October last year, up from 41 percent in March, but these latest confidence numbers are even more worrying.”

This Business Monitor sees business confidence in the economy drop to one of the lowest levels since the survey began in 2009. It’s rivalled only by March 2020, when 79 percent of business owners said they expected worsening economic conditions over the year.

National Party leader now preferred PM among SMEs

The drop in confidence for the economy appears to be matched by rising levels of dissatisfaction in the sitting Government, indicating that Prime Minister Ardern may have more challenges ahead of her.

When asked which local factors are having the biggest impact on their confidence in the economy, government leadership came in third with half of businesses citing this as a top factor, after the ongoing impacts of the COVID-19 pandemic (62 percent), and the rate of inflation (55 percent).

Similar negative sentiment is also reflected by growing dissatisfaction among SMEs around the Government’s performance.

Satisfaction has changed significantly over the past year, with 60 percent of survey respondents saying they’re dissatisfied with Government performance over the past year, including more than a third (35 percent) who say they’re very dissatisfied.

This trend may also be motivating a shift in leadership preferences among business owners, with the new National Party leader, Christopher Luxon, listed as preferred Prime Minister for 42 percent of respondents. Ardern snared 25 percent, while ACT leader David Seymour comes in a distant third with nine percent.

“While historically our polling has shown National to be seen by SMEs as the political party with the greatest understanding of business, in the lead up to the 2020 General Election, we saw a very strong amount of support and satisfaction from SMEs for Labour and its leadership,” Tozer explained.

“Although we saw some of this support for the party tail off in our SME Snapshot last September, Prime Minister Jacinda Ardern was still well ahead in the preferred Prime Minister stakes sitting at 40 percent ahead of Judith Collins’ 16 percent, so there has been a notable change in sentiment both towards the Government and Opposition from SMEs over the past six months or more.”

But with NZ’s General Elections occurring every three years, and the next one probably more than a year off, there’s still plenty of time for these sentiments to shift yet again.