Commissioned by business management platform MYOB, the survey of just over 500 SME owners and operators from across the country, saw local businesses give the Government a median score of six out of ten for its overall performance since being elected last year.
In terms of satisfaction with the Government’s current level of action and support for businesses like theirs, it appears most SMEs are on the fence – with 39% of those polled saying they were neither satisfied nor dissatisfied with this, while 35% said they were satisfied and just over a quarter (27%) were dissatisfied.
MYOB Executive General Manager – SME, Emma Fawcett, explains that while sentiment around the Government from those at the helm of local SMEs is rather lukewarm, it’s a marked improvement on this time last year.
“Heading into last year’s General Election, we saw that a significant majority of SMEs were dissatisfied with the previous Government and hoping for a change. Now, nine months into this term for the new coalition Government, it’s evident that SMEs are feeling a bit more encouraged by elements of its approach,” she says.
“While our findings show there is still room for improvement in the eyes of the small business community, the current focus on reducing red tape and delivering legislative changes that enhance or simplify business processes will continue to go some way toward this.”
Meanwhile, when it comes to views on leadership, current Prime Minister (PM) Christopher Luxon tops the list for preferred PM at 45%, followed by Chris Hipkins on 21%, David Seymour on 6%, Chlöe Swarbrick on 6% and Winston Peters on 5%.
Action plans and strategy
As the Government aims to drive change this term, a key differentiator in its approach compared to previous governments is its release of three-month action plans. So how is the OKR approach sitting with business owners?
More than a third (36%) of local SME owners and decision-makers surveyed said they find the action plans helpful, with this group of respondents citing clarity on plans, accountability for action, and transparency as key reasons why. In comparison, 30% are undecided about whether they are helpful or not, while 20% don’t believe they are helpful. One-in-10 respondents said they hadn’t heard of the three-month plans.
However, when it comes to the Government’s strategy for business, some uncertainty remains.
Nearly half (46%) of SMEs polled said that they don’t have a clear understanding of the Government’s strategy for supporting and growing local business, and one-in-10 don’t recall seeing a strategy for business. In comparison, 41% said they are clear on the plan for growing local business.
“While the Government’s three-month action plans offer visibility around its shorter-term priorities for the country, the findings of our latest survey show that more clarity is needed in communicating its vision and strategy for growing and supporting New Zealand’s small-and-medium-sized enterprises,” explains Emma.
“Offering a clear direction will provide more certainty, which will in turn help to improve confidence as business owners have more information on which to base their decisions, especially as the economic environment evolves.”
Cost challenges continue to bite
While the Government’s strategy to grow local business is blurry for some, the current challenges impacting SMEs the most are crystal clear, with lingering cost pressures continuing to impact business performance and trade.
Just under two thirds (62%) of SME operators surveyed point to ongoing inflation and cost-of-living challenges as a top pressure, followed by overhead costs (35%), fuel prices (34%), high interest rates (33%), and falling customer demand and consumer confidence (30%).
Demonstrating the impact of these challenges, close to half (46%) of the SMEs polled said their business revenue is down compared to this time a year ago, with just over a third (34%) reporting it is the same as last year and 19% seeing an increase.
Restrained demand and tight purse-strings also continue to make for tenuous sales pipelines. While 40% of SME decision-makers surveyed said they have about the same amount of work or sales in the pipeline for the next three months as they’d usually expect, 34% are struggling with less sales or work lined up than usual. Encouragingly however, 25% of SMEs reported having more work than expected coming down the line.
“While this month’s OCR decision offers a very small glimmer of hope that some respite from rising costs may be coming, there is still a long way to go before the effects are truly felt by local businesses that have been squeezed for a few years now,” MYOB’s Emma Fawcett says.
“Discretionary spending will remain tight for some time yet and for many, it has been a difficult winter due to quieter-than-usual trade. However, with Father’s Day just around the corner and the spring events schedule ramping up with World of WearableArt and international act Coldplay as highlights, we encourage Kiwis to continue to support local as they consider their spending plans around these moments.”
ENDS
For more information, please contact:
Rosie Miller
NZ PR Specialist
E: rosie.miller@myob.com
About the research:
MYOB’s survey of SMEs (with fieldwork conducted by Dynata) comprises a nationally representative sample of 511 owners and decision makers in small to medium-sized businesses in New Zealand. The survey was conducted between August 6th – 19th 2024. Respondents were sampled randomly from the Dynata online panel and screened to ensure they met the qualifying criteria. Quotas were maintained on industry sector, business size/FTEs and region to ensure a reliable and diverse cross section of SME opinions were obtained. The margin of error for the survey is ±4%.