Raising the minimum wage and introducing a regional fuel tax for Auckland will impact SMEs, but the news is not all bad, according to Auckland Chamber of Commerce CEO, Michael Barnett.
“Both the changes to the minimum wage and fuel tax will have an obvious effect on costs of goods and services and, in the case of the minimum wage, the increase in costs will be progressive over the next three years.
“The instinctive response is that prices will have to increase. They may do – but SMEs need to look closely at how they can mitigate the new costs. They need to be thinking about things like technology, innovation and reviewing productivity.”
Government has signalled the minimum wage and fuel tax will be implemented as soon as possible so Barnett is urging SMEs to start planning immediately.
“Small businesses need to be having conversations now about how they can adapt to meet these challenges. They need realise that their staff too will face change with the fuel tax increasing the cost of getting to work, so staff need to be part of the conversations and the planning.”
Barnett says while the regional fuel tax will raise some much needed funds for Auckland’s transport programme he warns it is nowhere near a full solution.
“We are going to need plenty of other initiatives and tools – road pricing and more private public partnerships, for a start.”
He says there is some potential good news for SMEs in comments this week from Prime Minister Jacinda Ardern about the Government’s upcoming tax review.
“The Prime Minister has said she would like to see the tax review look at examples from other countries where they tax SMEs at a lower rate than large corporates. So our businesses need to keep that in mind and realise that things might not be as severe as they think.”
· For more information contact Michael Barnett at 0275 631 150.