Small Business Policy old

Small Business Policy: Building a Stronger Future for New Zealand’s Economy

Small businesses are the backbone of New Zealand’s economy, yet for too long, they have been left to struggle under a system that does little to support them. Unity believes that for New Zealand to become an economic powerhouse, we need a business environment where small businesses can thrive, not just survive.

Fixing the System: A Two-Part Approach

Unity’s small business policy focuses on two key areas:

  1. Laying the Right Foundation for Future Success – Ensuring new businesses start with the right knowledge and tools to succeed.
  2. Helping Struggling Businesses Get Back on Their Feet – Providing fair, practical solutions to stop viable businesses from collapsing due to poor policies and government inaction.

Laying the Right Foundation for Future Success

Currently, anyone can start a business quickly and at a low cost, with no requirement for business knowledge. While this may seem appealing, it sets many people up for failure. Unity is not about making it harder to start a business but ensuring new business owners have the knowledge they need to succeed from day one.

What will change?

  • Basic Training Before Registration: New business owners will complete interactive training covering financial management, tax, health and safety, and business planning before officially registering their business.
  • Accessible and Practical Learning: Training will be designed to be understandable for all, ensuring that great business ideas are not limited to those with formal education.
  • A Simple Business Portal for Tax & Wages: Businesses will pay taxes as they receive income, either weekly, fortnightly, or monthly, preventing them from spending money that isn’t theirs.

Helping Struggling Businesses Get Back on Their Feet

New Zealand has $7.9 billion in unpaid tax debt, much of it from businesses that will ultimately fail. Governments have either ignored this issue or shut down struggling businesses without assessing their potential. Unity will take a smarter approach by:

  • Assessing Businesses Individually: Identifying causes of failure such as outdated equipment, inefficient operations, or large overheads and providing targeted support.
  • Facilitating Business Collaboration: Encouraging struggling businesses to explore partnerships, mergers, or shared resources to improve viability.
  • Converting Tax Debt into Equity: Instead of writing off unpaid tax debt, the government will take an equity stake in viable businesses, ensuring tailored support while benefiting taxpayers through long-term economic growth. The government will not run businesses but will require a return on its investment for turning around a company that was at risk of significant financial losses or closure. This approach allows businesses to recover and continue contributing to the economy rather than simply writing off debts that would be lost through liquidation. By converting tax debt into equity, the government safeguards jobs, maintains economic activity, and ensures a return on taxpayer investment.

Partnering with Kiwi Entrepreneurs: Government Backing for Innovation

New Zealanders have great ideas, but many entrepreneurs struggle to turn them into reality due to a lack of funding, resources, or industry connections. Unity believes that when Kiwis succeed, New Zealand succeeds.

Government-Entrepreneur Partnership Model

  • Case-by-Case Business Partnerships: Instead of relying on risky loans or offshore investment, the government will provide resources—such as funding, infrastructure, or expert guidance—in return for a stake in promising businesses.
  • Strategic Investment in Innovation: The government will only partner with businesses that demonstrate long-term viability, innovation, and job creation potential. For high-growth businesses, if the investment is generating revenue, the government will retain its stake long-term to generate ongoing public revenue.
  • Providing More Than Just Money: Start-ups and growing businesses need expertise, infrastructure, and market access, not just capital. Unity’s model connects entrepreneurs with the right resources to accelerate their success.

A Clear Path for Businesses to Reclaim Equity

  • Buyback Option: Businesses will have the opportunity to repurchase the government’s stake once financially stable, ensuring ownership remains with those who built the business.
  • Long-Term Government Equity for High-Growth Businesses: The government will retain a share of equity in businesses that achieve massive success due to government backing, ensuring taxpayers benefit from public investment.
  • Fair and Flexible Agreements: Each partnership will be structured to reflect the business’s needs and the level of government support provided, ensuring fair outcomes for both entrepreneurs and taxpayers.

Early Intervention and Accountability

Unity believes that businesses should have access to government support at the earliest sign of a downturn, rather than being penalized once they are already in crisis.

  • Early Assistance Programs: These programs will be designed for businesses to proactively contact the IRD for help before financial difficulties worsen, rather than waiting for IRD intervention. Industry groups and business mentors may play a key role in providing support, and funding could be allocated to mentorship programs as part of the initial training for new business owners. Businesses showing signs of financial stress will have access to tailored support, including financial planning, restructuring advice, and operational improvements.
  • Shifting from a Punitive to a Supportive System: The government will focus on identifying and assisting viable businesses before they fail, improving long-term economic outcomes.
  • Ensuring Accountability in Liquidation: Businesses that fail without seeking support will undergo financial scrutiny to detect and prevent fraudulent practices such as phoenixing—the deliberate transfer of assets out of a business before liquidation to avoid paying creditors. If a supportive pathway has been provided and businesses choose not to engage with it, they will face closer scrutiny to ensure accountability and prevent exploitation of public resources.

Stopping Bad Business Practices & Preventing Exploitation

While Unity is committed to supporting genuine businesses, it will not tolerate those who misuse the system.

  • Investigating Financial Activity Before Liquidation: Identifying fraudulent asset transfers before businesses shut down.
  • Stopping Repeat Offenders: Preventing business owners from immediately starting new companies to evade debts.
  • Holding Owners Accountable: Ensuring the IRD enforces accountability so employees, suppliers, and taxpayers are not exploited. If the IRD lacks the necessary resources to carry out these responsibilities effectively, additional funding will be allocated to strengthen enforcement efforts.

Not a Handout, but a Fix for a Broken System

Unity is not creating an unfair advantage for businesses that fail. This plan is about fixing problems that past governments have ignored. With foundational changes such as better training, a simpler tax system, and stricter business regulations, these interventions will eventually become unnecessary. However, immediate action is required to create a fair system that supports small businesses, which are essential to New Zealand’s economy.

Small Businesses Are the Key to New Zealand’s Economic Future

Unity is committed to ensuring small businesses have the knowledge, support, and resources they need to succeed.