There’s a new party running the country, Labour, and Napier MP Stuart Nash has picked up one of the most coveted and important portfolios – in fact he’s got two – Minister for Small Business and Minister of Police. We thought it was important to get Stuart’s views on how the government can support SMEs and what opportunities he sees exist for the Hawke’s Bay economy.
What’s your business background?
I have a Master’s degrees in law and management and have worked in sales and marketing for large corporates (Carter Holt and Fletchers) and elsewhere in the private sector. I spent seven years importing and trading petrochemical derivatives into New Zealand, Australia and Singapore and also worked in strategic development (writing business cases justifying capital development). So, rather wide and varied.
What do you think are the most common challenges for SMEs?
There are a number, and it often depends upon where we are in the economic cycle, what sector the company is in and how mature a firm is; however, the three that I have heard constantly are:
- Provisional tax – people tell me they hate the system!
- Access to affordable capital in order to grow and expand.
- Finding good employees. The new government is looking at innovative ways to address all three issues.
What role does government have in supporting SMEs?
First and foremost, we can change the law and alter the regulatory settings to make it easier to do business. For example, this year sees the introduction of the Accounting
Income Method (AIM) for paying tax for the SME sector. This is pretty much like PAYE for small-to-medium businesses (and I would advise all SMEs to ask their accountants about this). AIM should provide more certainty to SMEs around tax payments and make planning ahead much easier.
The www.business.govt.nz website also provides a treasure trove of advice to small businesses, from constructing an employment agreement to writing a business plan to paying tax and everything in-between. It really is a fantastic resource.
So, the government’s role can be anything from providing advice and support through to, for example, proactively helping companies develop new markets overseas.
What initiatives to support SMEs will you be looking to roll out over the next 12 months?
One that I can talk about is reconstituting the old Small Business Development Group into a body with a much stronger mandate to advise government, advocate on behalf of the sector and provide solutions to the issues that are important. I would like this body to inform the research that needs to be done in order to support change and also take a level of responsibility for information dissemination.
Then there is the AIM, which should make paying tax easier. I will absolutely be
pushing the NZ Business Number, which is an amazing initiative whose value isn’t well understood. This needs to change. There are a few other initiatives that we are planning but just can’t discuss at this point in time.
How do you think Labour and your success will be judged by SMEs?
Always a tricky one. For me, it has to be about ease of doing business. While everyone acknowledges there has to be a certain level of compliance, if we can remove unnecessary red tape and replace this with initiatives that actually make doing business easier, then we all win. Of course, there will always be businesses that fly and those that fail, but if we can help get more off the ground and minimise the number that crash, then we all do well.
What Hawke’s Bay business people and businesses do you admire?
There are the obvious high-profile ones like, for example, Rod Drury (Xero), Jenny Yule (Porse), Hamish White (NOW), Rob Darroch (FPG), Kate Radburnd (Pask Winery), Hamish Whyte (Furnware), Claire Vogtherr (Holly Bacon), John Bostock, Kirsten Wise, Kevin Atkinson, the Tremain Family and the Beatons. There are, however, many small, medium and large companies that do fantastic work in the Bay.
For example, we have just had some work done around our section and the quality of work from the excavation company through the team that put in the retaining walls and the firm that laid the concrete is absolutely legendary! I admire and respect anyone and everyone who is out there making it happen.
Who has been a mentor in your career?
I haven’t really had what I would call a mentor. There are a few people whom I have regularly sought advice from at various times over the years or who have been role models in terms of how they conduct themselves or the quality of their leadership, but no one stands out over anyone else.
How do you think the Hawke’s Bay economy is performing?
The local economy is doing extremely well. There are a few retailers and tradesmen who I talk to regularly in order to keep a track of how things are going. While it is completely unscientific, all report that spending is up, there is a lot of work on and there is plenty of people visiting and living here who have cash to spend. I remember talking to a group of young Napier entrepreneurs about three years ago, and they said that the major barrier to doing business in the Bay was the cost of airfares between Napier and Auckland. With Jetstar’s arrival, this has changed. We should not underestimate the value that Jetstar has brought to the region.
What general improvements could be made to keep the local economy strong?
More people moving here with money and ideas and businesses. We need to make Hawke’s Bay the ‘easiest place to start and run a business from in the country’.
Also, there aren’t many here who understand the size and potential of the Maori economy. Once all the settlements are concluded, I think the level of economic activity will increase. Already Ngati Kahungunu, under Ngahiwi Tomoana’s operational leadership, is a significant investor in the Hawke’s Bay economy, with the vision, power, resources, governance and operational skills – and mandate – to really make a significant difference.
While I can’t comment about the work of the Hastings District Council, I do think the Napier City Council has done some fantastic work over the last little while to really spruce the city up in an effort to once again turn it into a premium destination to visit, live and do business. Still plenty more to do in terms of reducing compliance and increasing advocacy and proactive support, but we will get there.
What investment model do you support for adding new infrastructure to the Napier Port?
I have yet to see the business case for any of the options, but I am keen to see the Port retained in local ownership (and there are a couple of ways this can happen while still meeting the requirements of the shareholders – you and me).
Do you see any water storage projects getting off the ground in Hawke’s Bay? If so, where?
Our economy is closely tied to three variables we have no control over: the weather, commodity prices and exchange rates. So in order to mitigate economic risk, we need to exercise control over that which we can control. Water is one variable that we can have a level of control over, thus mitigating the risk of damage due to adverse climatic events. I am, therefore, a fan of water storage. After listening to all sides, I came to the conclusion that the Ruataniwha Water Storage Scheme (RWSS) wasn’t the optimal model for the region. I am, however, a believer of the value of on- site storage and other innovative ways of capturing water that doesn’t cost the region close to $1 billion to implement. I await with interest the Hawke’s Bay Regional Council’s next step in this area.
How closely will you work with the Minister of Regional Economic Development?
Very closely. We are good friends as well as cabinet colleagues. I will advocate hard for any worthwhile project that I believe will add value to the region. There are already three that I have discussed with him that we will hopefully be able to progress. While I won’t win every battle, I will certainly push our case extremely hard.
In the briefing from the Ministry (MBIE), they talk about road shows, when is this likely for Hawke’s Bay?
It’s likely to be Thursday 7th June. Further details are to come closer to the time.