SMEs’ growing dissatisfaction with gov’t

After a strong showing in the general election, Labour is losing its appeal with small business, according to a new MYOB poll which reveals SMEs’ growing dissatisfaction with the current government.

The MYOB 2021 Government Performance Snapshot – a survey of nearly 800 local SME business owners and decision-makers – found that nearly half (45%) of New Zealand’s SMEs are dissatisfied with the Government’s overall performance since they won the General Election in October 2020, while nearly two-in-five (39%) SMEs said they are satisfied.

Additionally, 41% of SMEs said they are dissatisfied with the Government’s general level of support for business, while more than a third (37%) said they are satisfied. The current level of dissatisfaction in this area reveals a jump of 18 percentage points in 14 months – in MYOB’s July 2020 General Election Snapshot, nearly a quarter (23%) of SMEs said they were dissatisfied with the Government’s level of support for business.

MYOB Head of Customer Service, Jo Tozer (pictured) says the findings demonstrate that SMEs feel they aren’t seeing enough support from the Government, particularly at a time when they are dealing with the impacts of different Alert Level restrictions due to the current Delta outbreak, as well as widespread uncertainty about the future.

“Last year we saw the Coalition Government step up when it was most needed and support SMEs through the introduction of targeted financial support packages and loan support schemes,” says Jo Tozer. “But even with further financial support offered for the recent Delta outbreak, the same issues stemming from the broader impact of COVID-19 still exist this year – like disruption to supply chains, the difficulty of bringing in skilled or seasonal workers, and dealing with limited customer-numbers due to the border closures.”

ACT gaining SMEs’ support

The growing mood of dissatisfaction around the current government is likely contributing to a major shift in voting intentions since the election. According to MYOB’s latest Snapshot, in the 2020 General Election the Labour Party received 44% of the SME vote, National 32%, ACT 9%, the Green Party 5%, and New Zealand First 3%.

The data also revealed that more than a third (35%) of SMEs believe the political party they voted for hasn’t performed to their expectations. Of this group, 37% said the National Party would be their new preferred party now, while almost a quarter (23%) said they would vote for the ACT Party. A quarter (25%) said they did not know who they would now vote for.

“Last year, our insights showed Labour as the favourite among the SMEs we surveyed and that was the first time in our polling that Labour had come out on top with small business. However, as we’re seeing this year, a lot of this vote is now on the move – and to the benefit of other political contenders, particularly National and ACT,” explains Jo.

“Again, this year has been a tough slog for business, and while the Government has re-introduced financial support measures for SMEs in light of the recent lockdowns and offered some special packages to hard hit sectors like tourism, it may not be enough to secure the SME vote. There are a number of bigger challenges at play that are still on the mind of local business operators – like housing, skills shortages, wage inflation and consumer confidence – and our results show that SMEs are clearly keen to see more action on these issues as they look for political alternatives.”

National has greater understanding of business needs

When it comes to which political party is perceived to have a better understanding of business, the National Party tops the list. Nearly half (46%) of SMEs surveyed said the National Party has a greater understanding of their business needs, compared to the Labour Party (30%) and the ACT Party (23%). These new insights reveal another shift from the MYOB 2020 General Election Snapshot, where 37% of SMEs said National, 33% said Labour and just 4% said the ACT Party had the greater understanding of their business needs.

The National Party is also proving popular among SMEs in sectors such as agriculture (56%), manufacturing (55%), retail and hospitality (49%) and construction (39%), with these SMEs saying they believe the National Party has a greater understanding of their business needs. The ACT Party is also sitting well with SMEs in the agriculture sector, with more than two-in-five SMEs (42%) saying that the ACT Party has a greater understanding of their business needs.

Ardern still SMEs’ preferred leader/PM

Despite the levels of dissatisfaction of the current Government’s performance, Prime Minister Jacinda Ardern remains the preferred Prime Minister, according to 40% of SMEs. Reflecting the trend seen in other political polls when it comes to opposition leadership, ACT leader David Seymour is the second most preferred leader/Prime Minister for SMEs, sitting at 17% – just slightly ahead of National’s Judith Collins at 16%.

“Support for the ACT Party and David Seymour has grown a lot in 2021 – particularly considering just 9% of SMEs told us they had voted for ACT in the 2020 General Election,” Jo says. “While we could see awareness and popularity increasing slightly in our pre-Election Snapshot last year, the party – and particularly its leader – appears to be getting more cut-through on issues that concern SME owners and decision makers.”

Tax incentives, harder line on lending and opening the borders high on SME wishlist

“For any party looking to reach the owners and operators of the more than half a million SMEs in New Zealand, our latest Snapshot offers some clear direction on a range of policy areas for consideration,” explains Jo.

Actions SMEs would like to see the Government offer, according to the MYOB Government Performance Snapshot:

• 28% said offer tax incentives/rebates for SMEs who work exclusively with local suppliers
• 23% said take a harder line with the banks on small business lending (to improve access to funding)
• 22% said open the borders by 2022 to more countries to help increase customer numbers
• 22% said provide more free training/courses for upskilling
• 21% said open the borders by 2022 to more countries to help fill job vacancies.

“Most of the actions that SMEs would like to see implemented, link back to the impacts of the pandemic. From wanting government support to work with local suppliers and improving access to funding, to providing certainty around opening the borders now the vaccine roll-out has ramped up, it is evident that SMEs are looking for greater support to adapt and plan in line with the key challenges we are seeing in the current economy.

“With a significant number of SME votes on the move since the election, there’s a real opportunity for any of the major parties to show that they’re listening to the needs of local business,” says Jo.