Taxation Bill: First Reading - Rahui Katene
te-pati-maori
Wed Feb 11 2009 13:00:00 GMT+1300 (New Zealand Daylight Time)
Taxation Bill: First Reading - Rahui Katene
Wednesday, 11 February 2009, 9:29 am
Speech: The Maori Party
Taxation (Business Tax Measures) Bill: First Reading
Tuesday 10 February 2009; 5.40pm
Rahui Katene, MP For Te Tai Tonga
There is no question that the investment Aotearoa makes in small and medium-sized enterprises has been increasing over recent years.
Since 2006, the number of small and medium-sized enterprises has increased two percent; while those employed by these same enterprises have increased a massive 18% since 2001.
Indeed, the economic landscape of this country is dominated by the impact of small-to medium enterprises or SMEs.
And within this, we know that as of 2007, the total value-added produced by Maoribusinesses grew to approximately 2.0% of New Zealand's GDP compared to 1.2% in 1996.
Building resilient businesses which have the internal fitness to stand up to the ongoing financial market instability, and the heightened risk of economic vulnerability, is therefore of importance to us all.
Just how bleak the prospects look for some of our small to medium enterprises, is seen in the recent quarterly survey of business opinion sponsored by the New Zealand Institute of Economic Research.
The survey was sufficient to shock the sector into action. 44 percent of companies reported a drop in activity throughout the December quarter - the worst result for close to forty years.
The effects are immediate. About a third of firms predict they will have to cut staff by the end of March 2009, compared to just seven percent in the last quarter.
The signs are all there for hard times ahead.
And so it was in that context, that my colleague, Dr Pita Sharples, just two weeks ago called Maori business experts, tribal entrepreneurs, and whanau leaders together, to consider ways to insulate and protect the Maori economy through the impact of economic recession.
That esteemed group had just two hours to come up with possible solutions.
It was a challenge that from all accounts they rose to.
Out of that session at the Maori Economic Summit, came a raft of suggestions including the removal of tax for small and medium businesses to keep cash flowing, and for Maori to concentrate on skills training where there are gaps in the labour market.
And so here we are today, considering a host of amendments to current and proposed tax laws to reduce business compliance costs for small and medium businesses.
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The package includes raising the reporting thresholds on PAYE, FBT, and GST, and introducing simplified rules for deducting legal expenditure.
And importantly the package debated today will instigate changes to reduce tax liability faced by small and medium businesses, assisting with cash flow.
This is a big day for the Maori Party.
In our policy manifesto we made the commitment to incentivise small businesses to grow.
We signalled that unnecessary compliance costs would be reduced.
And we noted that we would invest in strategic alliances across central and local government, industry, business and Maori communities.
The particular priority of the Maori Party's business policy is to support the development and innovation of small businesses, including minimising taxation and compliance costs.
Today's legislation sees many of these great ideas come into fruition.
This Bill is another illustration of the concept that what is good for Maori, is good for the country as a whole.
The assistance package brings into swing some eighteen initiatives which will help small to middle enterprises weather what ever storm awaits.
It's designed to take the pressure off the sector by protecting businesses from suffering when the cashflow is scarce; building capability to withstand shrinking markets, and focusing on tax, cashflow and regulation.
It's all about building confidence in the sector.
In this sense, the acclaim from Professor Massey, Director of Massey University's Centre for SME Research, has gone down well.
Professor Massey estimates that the sector will achieve efficiencies of up to $480 million which are effective immediately in easing a situation where cashflow is tight; while also preparing for the long term.
We welcome this package today as an innovative and comprehensive approach which ties together many separate strands of opportunities to act as a buffer against the worsening fiscal position.
A fortnight ago, at the Maori Economic Summit, the boss of the Stock Exchange, Mark Weldon, made the point that this is the time to look beyond conventional methods of economic stimulation.
The eighteen steps encompassing tax related charges, trade finance, disputes tribunals and faster payments do exactly that. There are business related tax deductions; compliances thresholds are raised; the export credit scheme is expanded; the scope of the Disputes Tribunal is expanded; business advice services are extended; and there's the prompt payment requirement.
Another initiative mooted at the Maori Economic Summit was that as a specific measure to help firms retain staff the hui also suggested small firms be able to defer their provisional tax payments for three years
The package doesn't go that far, but it does amend the provisional tax uplift rate, arguing that the threshold could be reduced or eliminated reducing the magnitude of a taxpayer's provisional tax payments.
Finally, I take this moment to acknowledge Nga Kanohi Marae o Wairarapa which yesterday launched the marae-based trade training programme.
The programme invites nominees from eleven marae onto a three-year programme funded by the Ministry of Social Development to provide young school-leavers with skills to enter the trade industry.
The programme is designed for rangatahi who may be at a loose end but are committed towards making a constructive contribution in their community.
Alongside developing confidence in work readiness, the programme will also nurture the trainees in upholding the mana of their marae.
I wanted to celebrate their success in talking to this Bill as I believe initiatives such as trade training are another key component of what we could reasonably expect as a package to help our communities see out the recession.
With the prospect of jobs dwindling, the probability that many Maori young people will be disproportionately represented amongst the unemployed is high.
And so we need to look again at our schools and our tertiary training providers to ensure that we can ensure that if students are having longer time in study or in school, that their experience is meaningful and will lead towards enhancing their employment prospects.
We support this Bill at its first reading, and will welcome any more innovative proposals emerging at the select committee stage.
Ends
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