ACT’s small business policy package to clear red tape

“ACT delivered major changes in Government to support small businesses, but there is more to do. ACT is committed to going further to cut costs placed upon businesses, and make it easier to comply with our regulatory settings,” says ACT’s Small Business spokesperson Laura McClure. 

"Laws designed to improve pay and conditions haven't done the job. Truly higher wages require businesses that can grow. ACT's policies will grow productivity so people can genuinely take home more at the end of the week.

“For too long, New Zealand politics has been trapped in zero-sum thinking. When a business succeeds, someone else must have lost. When a company makes a profit, politicians look for a way to tax it, regulate it, break it up, or cut it down. Labour and their allies still share that view, which is why we need to lock Labour out to unlock New Zealand’s potential.

“ACT recognises that successful businesses employ people, invest in communities, develop new products, pay wages and taxes, and compete to give customers better choices. Their success creates opportunities for other New Zealanders.

ACT will:

1. Freeze the adult minimum wage for three years. Annual mandated increases to minimum wage have outpaced productivity. For a small business operating on tight margins, it can mean higher prices, fewer hours, reduced hiring, lower investment, or deciding not to create a job in the first place. 

2. Introduce a Training Wage set at 60 per cent of the adult minimum wage for workers under 20, available for their first 12 months with any employer. A meaningful Training Wage would reflect the additional cost of training inexperienced workers and give employers a stronger reason to create entry-level jobs, which are essential for workers early in their career to be able to gain experience. 

3. Allow protected employment exit negotiations without triggering a personal grievance simply by starting the conversation. Meaning an employer and employee can discuss ending an employment relationship by mutual agreement, including an agreed compensation payment.

4. Shorten the time limit for personal grievances and require personal grievance proceedings to be lodged with the Employment Relations Authority within three months of the grievance being raised. Employees have 90 days to raise a grievance, but currently have up to three years to begin proceedings. A shorter timeframe encourages faster resolution and reduces uncertainty, particularly for small businesses that are more exposed to the cost of defending old claims.

5. End compulsory employer collection of union membership fees and make payroll deductions voluntary. Currently, employers must collect and transfer union fees under the Employment Relations Act. Union membership is a relationship between an employee and their union, and employers should not be legally required to administer fee collection on the union’s behalf. This policy was developed from a Member’s Bill by ACT MP Dr Parmjeet Parmar.

6. Modernise the tax treatment of software and digital investment. A modern small business may invest in software that is just as important to productivity as a machine sitting on the factory floor. But tax rules make it difficult to deduct digital investments as depreciable property. ACT will fix the rules so businesses can deduct productive technology investment on a clear and consistent basis.

“New Zealand will not become more prosperous by making it harder to employ somebody, take a chance on a young worker, resolve a dispute, or invest in technology. 

“No party has done more for small business than ACT. This term we have repealed Fair Pay Agreements, restored 90-day trials, reformed employment law, replaced the broken Holidays Act, cut health and safety red tape, simplified AML rules, eased restrictive lending rules, established the Ministry for Regulation and Red Tape Tipline, and passed the Regulatory Standards Act.

“Alongside $14 billion in savings for taxpayers, these changes have cut costs, removed barriers, and made it easier for businesses to hire, invest and grow.

“Party Vote ACT to unlock the potential of small businesses.”

Full policy document available here