Election 2020

National’s plan to foster new business post-Covid

The National Party says its plan to help support new businesses will create jobs and foster entrepreneurialism through the post-Covid recession.

Leader Judith Collins has announced the party’s BusinessStart policy in Lower Hutt.

If National is elected, the party’s package, worth to $30,000 per business, would encourage Kiwis to set up small and new businesses over the coming 17 months, Collins said.

And this election would be all about supporting economic rebound, jobs and job creation.

“New Zealand faces its worst economic downturn for 160 years.

“By Christmas, as many as 500,000 Kiwis may be unemployed," she said. "There are already about 200,000 New Zealanders on unemployment benefits, with another 400,000 jobs being kept alive under the wage subsidy scheme that ends on September 1."

Collins said access to KiwiSaver money, tax credits, a fee write-off and financial advice would help those keen to launch a new business when it came to buying kit, making sure they had working capital, and lowering their taxes in the early stages of the business.

The plan was aimed at those who had lost their jobs as a result of Covid-19, and it would run for what was forecast to be the worst of the recession.

Those who wanted to take advantage of the plan would be given a $1000 voucher to see an approved financial adviser or accountant.

If the adviser approved the business plan, the recipient would then be able to access:

Up to $20,000 from their KiwiSaver account; at least $10,000 in tax credits to pay GST or provisional tax when the business starts making a profit; a waiver from the $130 Company Office registration fee; and free mentoring from advisers like chambers of commerce, employers and manufacturers associations and Business Mentors New Zealand from a new $10 million contestable fund.

Recipients would also be able to write off new investment of up to $150,000 for each new asset instantly. This policy was part of a plan previously announced by National, and would apply to all business owners if National led the next government.

“No Government ever creates jobs. You, the business owners and entrepreneurs of New Zealand, do that."

Collins said this proposed policy would provide the basics for new businesses to get going.

However, the plan was only available to those who lost their jobs during the Covid downturn.

If someone shut down their business in order to take advantage of this proposed package, and MBIE detected an attempt to defraud the scheme, the person could face fines and would be denied business support.

This plan was designed to work in conjunction with National’s previously announced JobStart policy, which gave small businesses cash payments of $10,000 for every new, permanent, full-time job they created.

Both BusinessStart and JobStart would run from November 1 to March 31, 2022.

“No Government ever creates jobs,” Collins said in her speech to the group in Petone.

“You, the business owners and entrepreneurs of New Zealand, do that.

“National wants there to be more of you. National wants to back you, as you back yourselves and your mates to get this country working again.”

Like other parties, National was focusing its campaign policies on jobs and job creation, in a bid to win votes as the country moved into the depths of a recession.

During the early days of lockdown, Finance Minister Grant Robertson said the post-Covid recession would be “a quantum greater” than that felt across New Zealand during the global financial crisis.

Treasury’s most recent weekly economic update said employment indicators remained in “contractionary territory”, which signalled a continued softness in the Labour market.

However, manufacturing and services indexes had rebounded into expansionary territory, and credit card spending data supported the view that household spending had been more resilient than expected in Treasury’s Budget Update, delivered back in May.

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