I’ve just had a read of John Key’s speech today announcing measures to help small and medium businesses through the recession. And my first reaction is ‘that’s it?’
5% less provisional tax, whoopie. At the end of the year you get back any excess you’ve paid or have to pay any underpayment. At the end of the year you end up with the same tax bill regardless. You just get to hold a little bit of money a little longer. So, the value of this change is only the interest on the 5% less in provisional payments for, on average, half a year. What’s that going to work out at? Something like (30%x5%x4%) 0.06% of profits.
A few percent off the use of money interest rate, having to do PAYE once a month rather than twice for a few more businesses, more tax deductibility for legal expenses… expanding the Export Credit Scheme looks like a good idea but it’s still a pretty small move in the scheme of things.
I don’t think that expanding the Disputes Tribunal’s jurisdiction from $7,500 to $15,000 ($20,000 with parties’ consent) is going to set the economy on fire either. And one has to wonder whether they will see allocating more funding to the Tribunal so it can hear the extra cases without creating a bottleneck. Key makes no mention of doing so.
All up, these changes are meant to inject maybe a couple of hundred million a year into the economy, 0.1% of GDP, $30 each.
It’s not that these changes are ‘bad’, it’s just that they’re ‘so what?’. It’s like they asked some business owners for a list of minor (and cheap to fix) niggles rather than set out to develop a major plan. Still, at least they’re actually doing something. But it would be nice to see the Government take the bull by the horns, rather than fixate on small beer.