What will change for small businesses under Labour?
What will the new government mean for small businesses in New Zealand? Here are some of the proposed changes and how they might have an impact on your small business:
The minimum wage is going up
The current minimum wage is $15.75 an hour for adults – that’s been forecast to go up to $16.50. This may increase your costs. NZ First has a policy that would increase minimum wage to $20 gradually over the next three years. Clients are already asking us to analyse how this will impact their profits.
New workplace relations laws
Labour plans to replace what they call National’s “fire at will” policy with “fair trial policies”. (Although I don’t know how many employers would describe the current situation as a “fire at will” environment.) Labour plans to encourage the living wage, tweak the Equal Pay Act and introduce fair pay agreements – more here.
Paid parental leave is increasing
Currently at 18 weeks, Jacinda Ardern has promised to raise paid parental leave to 26 weeks. This is great for parents, although it can affect productivity for employers.
Immigration numbers are tightening up
If your business struggles to find local workers and relies on immigrants, you could find you have a smaller pool of people when it comes to employment. This is particularly common in hospitality and seasonal work. If you’re going to need international workers soon, move quickly before these changes are put in place.
Secondary tax will be eliminated
Labour’s tax policy includes getting rid of secondary tax, which helps prevent people with two jobs being overtaxed during the year. If you and/or your employees have two jobs (and 75,000 Kiwis do), this is going to make life simpler and reduce accounting costs.
Apprenticeships for the unemployed
If you need an apprentice, it could soon be easier. The ‘Dole for Apprenticeship’ scheme will subsidise employers who are willing to take on a full-time apprentice who is currently unemployed.
Tax credits for R & D
Undertaking research and development? You could get a tax credit at 12.5%. Could be a super idea.
A young entrepreneur policy
Labour’s Young Entrepreneurs Plan would let any Kiwi aged 18 to 23 apply for up to $20,000 to start a new business with a great idea.
A new tourism and infrastructure fund
A $75 million fund has been promised, which will pay for projects to “improve the experience of visitors to New Zealand and enhance our natural environment”. If your business relies on tourists, this could be good new for you.
That’s a taster of what we’re likely to see over the new few years – depending on your business, you may need to plan for changes. We can help with most of changes, and we’ve already started looking at the impact they will have on a range of companies, so give us a call if you have any questions.