The new government’s intention to raise the minimum wage and introduce a regional fuel tax for Auckland will impact small-to-medium sized businesses (SME), and SMEs need to start planning now for these initiatives, the Auckland Chamber of Commerce warns, with brokers’ guidance likely to be needed.
Auckland Chamber of Commerce CEO Michael Barnett said the rise in the minimum wage (over the next three years), and the increase in fuel tax for Auckland will have an obvious effect on the cost of goods and services.
“The instinctive response is that prices will have to increase,” he said. “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.
“Small businesses need to be having conversations now about how they can adapt to meet these challenges. They need to realise that their staff too will face changes with the fuel tax increasing the cost of getting to work, so staff need to be part of the conversations and the planning.”
Barnett said while the regional fuel tax will raise some needed funds for Auckland’s transport programme, he warned “it’s 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 said.
Barnett said 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,” he noted. “So, our businesses need to keep that in mind and realise that things might not be as severe as they think.”
