23rd September, 2020
COVID-19 has offered an opportunity to change business for the better, and New Zealand business owners and their advisors expect the Government to remain proactive about it.
In the face of a new outbreak of COVID-19 in August, the New Zealand Government’s swift reinstatement of strict quarantine rules prevented the situation from getting out of control.
Yet despite the success of the measures and a drop back to Alert Level 2 restrictions, businesses across the country are still reeling after the brief stint in Alert Level 3.
With the New Zealand General Election around the corner and a recent refresh of financial woes, owners of small-to-medium enterprises (SMEs) and their accounting and bookkeeping advisors are now looking to have those needs addressed.
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As expected, forced closures have continued to cause problems for New Zealand businesses.
The re-establishment of measures such as the Resurgence Wage Subsidy and Wage Subsidy Extension have been vital in helping employers, the self-employed and sole traders stay afloat, but it’s been far from smooth sailing.
Despite the problems the closures caused, Greg Steed, executive officer at the Institute of Certified New Zealand Bookkeepers (ICNZB), said the SME support strategies of the Government were well thought out.
“The Government response was commendable,” said Steed.
“Our small business community does not have access to the financial resources that larger businesses do, so the Small Business Cashflow Loan Scheme and the wage subsidy were lifelines much needed.”
Despite this, Steed said that the scramble after the new announcements left a sour taste in the mouths of many businesses around the country.
“Bookkeepers are inextricably linked to the SME sector so we hear first-hand all the pain, and in rare cases gain, that it has gone through with COVID-19 restrictions,” he said.
With troubles still fresh in the minds and survival still questionable, the ICNZB believes SMEs will take these pain points to the upcoming election.
“The concern is what the next government will do to start the recovery from the impact of COVID-19 and whether small businesses can survive into the future,” said Steed.
“It is what comes next that will determine if the SME sector comes through with acceptable losses or is decimated beyond recognition.”
SMEs want mistakes to be addressed
Although the Government’s damage control has been welcomed, it won’t be enough to satisfy business owners still picking up the pieces. Instead, many want known issues to be acknowledged and amended in the future.
Steed said lessons learned during the pandemic should be implemented in legislation as soon as possible, with remote work as an area with particular room for growth.
“One noticeable change from COVID measures is the shift to working from home. This appears to be a permanent move and will require support for a new generation of remote workers.”
“The rules around remote working need a refresh at the very least and clarity around health and safety obligations at home, tax deductibility of internet access, etc, need reissue.”
While there is certainly room to amend gaps in current knowledge, Steed also flagged the need to prepare for inevitable and large-scale social shifts, with educational support of particular value to SMEs.
“We are at the beginning of a huge technological shift with the rise of cloud-computing and this is only going to be accelerated by changes caused by the pandemic and the shift to working from home it has created for many.”
The standardised electronic invoicing initiative, otherwise known as e-invoicing, is another key area Steed believes shouldn’t be dismissed in the wake of COVID-19.
He cites the need for a continued rollout as a key concern, in addition to the government’s approach, and specifically “how the next government is going to continue to implement this and the impacts it has on businesses”.
With the NZBN and e-Invoicing touted as a way to improve accuracy and security while simultaneously speeding up processing and reducing errors and delays, it’s very quickly clear why Steed believes these time and money savings will be a big decision point for businesses in the upcoming election.
New Zealand businesses have faced considerable pressure throughout the pandemic, so it’s fair to say that SMEs and affiliated parties have a strong desire to prevent such a situation from playing out again.
“Over 97 percent of businesses in NZ are small businesses, make up over a quarter of our GDP, and we often don’t get heard.”
“Including the voice of small businesses in taskforces and advisory groups is important so they can get an accurate picture of the reality for these business owners,” Steed said.
Steed’s understanding of the needs of SMEs shows that business owners are looking for a complete solution – while financial repair after COVID-19 is obviously a priority, Steed emphasised that it should not come at the cost of past promises and future preparations.
For New Zealand business owners, these needs will play a significant role in determining votes in the upcoming election.
Looking for an overview of the major policies being discussed ahead of this General Election? Check out MYOB’s pre-election policy report here.