Question Time February 10, 2009 7. Small to Medium Sized Enterprises Government Assistance

[Uncorrected transcript"”subject to correction and further editing.] 7. CRAIG FOSS (National"”Tukituki) to the Minister of Finance: What comments has the Minister seen following the Government's announcement last week to provide assistance to small and medium businesses?

Hon BILL ENGLISH (Minister of Finance) : Many people have welcomed the Government's package, which reduces compliance costs for business and provides support for provisional taxpayers over the next few months. Among the comments I have seen are those from Claire Massey, the Director of the New Zealand Centre for Research into SMEs who says: "It's sending a signal that, "˜we are listening, we can help, we are thinking about what we can do to reduce the pressure points'."; and another comment from one Ms Dot Kettle, Chief Executive Officer of the Nelson Tasman Chamber of Commerce, and"”I understand"”a former staffer of the former Government, stating that reducing compliance costs and providing tax relief was imperative and that the chamber welcomed the Government's good intentions in this area. Craig Foss: What further comments has the Minister seen following the Government's announcement last week to provide assistance to small and medium businesses? Hon BILL ENGLISH: There were a range of other published comments from people representing business, but the most heartening comments have been"”for me"”from those battlers who are running small businesses who have said that at last they had a Government that was on their side. Hon David Cunliffe: Has the Minister seen the comment from Brian Gaynor in the Weekend Herald that the Australian Government's approach to the current downturn makes our response to the economic crisis look extremely cautious and conservative; the comment from John Armstrong in the same paper that the $480 million package was widely welcomed as long overdue but likely to be a drop in the bucket when the crunch comes; or the comment from the National Business Review describing it as "largely mundane", and does the Minister now agree that these measures, although positive, largely reflect Labour's pre-election announcements and incentives, and in no way reflect a sufficient response to the coming grave economic crisis? Hon BILL ENGLISH: Yes, and no. Hon Jim Anderton: Does the Minister accept the analysis that the $480 million package for 220,000 small to medium sized businesses over 4 years amounts to $10.50 a week, which would hardly buy a big packet of peanuts at the supermarket? Hon BILL ENGLISH: The package sets out what are reasonable measures that will benefit a range of businesses, some of them are measures that the previous Government came up with, but the significant measures are related to the provisional tax requirements around the next payments in May, which will leave $250 million or one-quarter of a billion dollars in the bank accounts of businesses. That is about as far as the Government can go at the moment without heading down a path of incurring large deficits and ever-increasing debt. Craig Foss: How does the Government's small to medium sized enterprise package fit with its jobs and growth plan for managing the economy through the recession? Hon BILL ENGLISH: This package fits along with a number of initiatives designed to protect people from the sharp edge of recession but also, in the long run, to ensure that we prepare our economy for recovery. Businesses across New Zealand have told us that these are reasonable and responsible measures, and are pleased to see these measures taken alongside significant changes to the Resource Management Act, reductions in tax, and further spending on infrastructure.