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Setting up business: we’re prize winners

Written By: - Date published: 10:31 am, January 18th, 2012 - 35 comments
Categories: business, public services - Tags:

Yesterday I officially set myself up in business.  As a GST registered independent contractor. It took about half an hour. Both IRD and ACC’s websites were easy to navigate and understand.

I do admit I got a little befuddled trying to figure out the correct ACC classification for what I do (enthusiastic nagging, recruitment and communications at your service)so I phoned the call centre.  It was answered immediately by an incredibly helpful and friendly real live human being who sorted my out in about 7 minutes.

Why do we insist on swallowing the myth that the right perpetuates out about NZ businesses being bought to a standstill by a tangle of red tape and burdensome regulation?

Forbes ranked New Zealand second easiest country in the world to do business in, with only Canada scoring higher in the metrics gauging red tape, investor protection, corruption, property rights and monetary freedom.  We scored pretty well too in terms of market performance, technology and tax burden.

We’re also ranked the fifth most effective government in the developed world.

So let’s see: it’s not red tape that’s holding NZ business back and it’s not a ‘bloated’ public service.  I know for sure it ain’t high wages and I doubt it’s the union movement with less than 20% of all workers in a union.

So what’s left?

35 comments on “Setting up business: we’re prize winners ”

  1. Paul Campbell 1

    This is so true – I run a small business, do my own PAYE (a line of 6 cells in a spreadsheet is all you need, including kiwisaver) – I’ve also done the same in California – things are so much easier here – those on the right who continually complain about pretend ‘red tape’ are living in a bubble, they have no clues about the rest of the world – as a great kiwi philosopher once said “they don’t know how lucky they are”

  2. Jono 2

    When I became employed on a full-time basis by a small consultancy a few years ago, it took the director 10-15 minutes to find, edit and produce a fully satisfactory employment contract for me from the DOL website. Easy as pie.

    • pmofnz 2.1

      Maybe you could email MUNZ members a copy – they’ve been bickering over theirs for months.

      • McFlock 2.1.1

        There’s some really helpfuil information on good faith and other employment principles that port management should have a gander at.

      • Lanthanide 2.1.2

        MUNZ members have a satisfactory employment contract already. That’s kind of the point of the strike action.

  3. Lanthanide 3

    Thanks Jenny. This is something I really want the left to hammer home. Rodney Hide in particular always went on about “red tape”, why was he never actually challenged?

  4. millsy 4

    Businesspeople only complain about ‘red tape’ if they find they cannot pay their workers 50c per hour, sack them at will, and pour what they like down the drain.

  5. Colonial Viper 5

    “Red tape” is a marketing meme to sway the vast majority of people who are not business owners and who do not organise companies and trusts themselves.

    It has several different effects.

    1) It perpetuates the myth that Govt and politicans are to blame for economic problems, not our system of business, finance and capitalism, nor our rich list.

    2) It forwards the neolib notion of always cutting back Govt power to increase corporate power.

    3) It makes the masses respect owners and corporates more for their fight for success ‘despite’ all the red tape.

    4) It deflects away from the inability of many business people to add real value to their communities in their businesses, as opposed to simply extracting value.

    The fact that the Left does not have a systematic and effective counter narrative after all this time is damning as it sways the minds of too many voters to the Right viewpoint.

    • Perhaps we should be talking about the fact that our managers and CEOs are too incompetent to wield a pair of bloody scissors. Red tape is not hard to deal with in this country, as earlier pointed out.

  6. Jenny Michie 6

    It’s funny that you never hear the right talking about the standard of management in NZ. From quite a lot of first hand experience this is an area in which we could improve….

    • King Kong 6.1

      Congratulations. Your one day in business certainly allows you to authoritively comment on NZ’s regulatory environment.

      The reality is that banking, tax and company compliance is pretty good here (probably aided by the fact there are fuck all of us). This is probably what these ranking agencies are using for their tables.

      The real headaches come when you actually want to make or build something. I guess this only becomes an issue for firms who are actually adding value.

      • lprent 6.1.1

        I guess this only becomes an issue for firms who are actually adding value.

        You mean like I do all of the time. I’ve been developing, building and selling products and services my entire working life and never noticed a problem with red tape in NZ. I have noticed it in the US, aussie, and the UK.

        However there is one area of business that is actually regulated quite highly here – an I heartily support it.

        That is property developers. Because they have an appalling record of producing good added value for their customers (my leaky building was a good example), there is quite a lot of red tape for them. When you look at people whinging about red tape, it is almost invariably some property developer or builder who wants to produce crap…

        So KK. Does that describe your “added value” situation? Producing buildings and property with flaws that you’d like to flick on to someone else?

        • King Kong

          Construction is one industry that springs to mind. You are right about ensuring standards of quality but regulations have encroached into areas that just add time and cost (which usually ends up on the consumers bill) and serve no purpose in ensuring that the product is as it should be.
          The same is true in industries such as farming, forestry, fishing, manufacturing and hospitality, to name a few.

          • McFlock

            so what are the specific regulations you think waste time and money?

          • lprent

            Construction does spring to mind. The upfront costs involved in ensuring that I didn’t have a leaky building are way way less than the costs expended in trying to fix and extract money after the fact. Not to mention that wear and tear on me worrying about going bankrupt because some idiot builder fucked up. But there is a simple solution. Lets just ensure that all people in construction are required to carry full prepaid liability cover and that those cases are only allowed to be dealt with in mediation with 3 month limit on resolution. It’d only push the cost up, but I wouldn’t get heart attacks from it….

            There isn’t that much red tape in manufacturing. I was in manufacturing for many years and some of my relatives are still operations or production managers. Most of the red tape is to do with not killing or injuring people or making sure that firing people without reason is limited. Basically it doesn’t worry good managers because the standards are far lower than any good manager would do anyway. It simply makes it harder for incompetent managers. It is also way easier than any other 1st world country I have looked at.

            Most of the “red tape” in farming and forestry has to do with those industries being lousy neighbours – especially when it comes to polluting waterways and dropping crap over public highways. Those cost other people.

            I have zero idea about hospitality…. But generally I’d prefer not to die from diarrhoeal discharges.

            Basically in NZ “red tape” smothering business is a mantra that idiots use. If there weren’t idiots then most of it wouldn’t be required. Mostly it is only the idiots trying to cut corners who have problems with it.

            • Rich

              Construction: try building something in the UK. You’re required to get council architectural design approval, with the final decision made by elected councillors, not officials. Same everywhere else in Europe (in wealthy Switzerland, they process planning approvals on a three year cycle).

              Of course some countries have a more liberal approach. Try Somalia, that well known propertarian haven.

      • Paul Campbell 6.1.2

        I’ve been in business for 7 years, exporting the whole time, you think I don’t sell a product? don’t add value? I’ve brought millions into the local economy while creating a footprint minuscule compared to the mess made by a single dairy farm. And as I said NZ is a great, easy place to do business – now if only we could get Mr Key’s friends the currency speculators out of our exchange rate – my take home has gone down by 30% since he took office.

        • King Kong

          Well done you. Lets all become computer programmers. The answer was just in front of our faces the whole time.

          • McFlock

            nah – you need to understand logic to be a programmer.
            That rules out most nats.

            • Lanthanide

              Given the average salary of programmers, I think actually they’re strongly right-leaning.

              • McFlock

                fair call 🙂

              • Colonial Viper

                A lot of programmers/computer science types are quite Left leaning actually – systems mindset. lprent?

                • lprent

                  Seems to split all over the place. But old computer programmers tend to be left leaning. I think it has something to do with the patience…

                  The dropout rate amongst younger programmers is pretty intense as they tend to sideline themselves into deadends by chasing the money rather than the 25% learning curve. Obviously the right leaners tend to be short termers more than left leaners.

                  • Draco T Bastard

                    But old computer programmers tend to be left leaning. I think it has something to do with the patience…

                    I think you’ll find that it’s got to do with logic. Can’t be a good programmer without being able to realise the needed logic and so the illogic of our present socio-economic system stands out even if only at a sub-conscious level.

                    • There’s a definite split. Some people are smart enough that they can justify their prejudices after the fact, and they’re incentivised to do so after about a year of working as a programmer due to the high salary.

              • John D

                left/right has got stuff all to do with how much you earn. This kind of argument is facile.

                • King Kong

                  True. But when you earn a reasonable ammount you do get to experience first hand how you feel about handing over large chunks of it for socialist governments to waste.

                  • Placebogirl

                    I earn well and the only money I begrudge the government is the money they waste on demonstrably losing propositions like the Puhoi holiday highway.

        • John D

          Paul – I am in the same boat. Offshore client in UK. Paid in pounds

      • Draco T Bastard 6.1.3

        1.) Standard Ad hominem attack
        2.) Puts forward an assertion as to why the ease of doing business rankings are so high
        3.) Asserts that headaches begin when trying make something despite all the firms that actually do make something (the biggest problem with them is that they seem to get sold offshore every time they do)

        Yep, standard RWNJ troll.

      • Rich 6.1.4

        I’ve been in business here for several years and in the UK previously. NZ compliance is remarkably straightforward and taxes are low (unreasonably so – it’s trivially easy to turn some kinds of income into capital gains and avoid tax entirely).

        If you can’t meet NZ compliance standards, the chances are you’re sufficiently fucked up that you’ll be out of business anyway in a year or so, probably owing thousands to your poor customers, workers and suppliers.

  7. John D 7

    Yes I would agree that regulation is relatively light when it comes to setting up and running a business in NZ.

    Xero ( I am not affiliated) is a fantastic online tool for managing your books too. Another Kiwi creation.

  8. coolas 8

    ‘So what’s left?’ in holding business back, asks Jenny.

    How about the pale, stale, male business elite who think they’re born to rule. They choke NZ board rooms. Pack of greedy, dull, parasites, I reckon.

  9. Peter 9

    “Why do we insist on swallowing the myth that the right perpetuates out about NZ businesses being bought to a standstill by a tangle of red tape and burdensome regulation?”
    Maybe due to all that economic propaganda in the newspapers people insist on reading, really the economy section bores me to death. Can they please for the sake of my sanity find (and read) an academic journal that doesn’t draw inspiration from Milton, Rand and their ilk. *shudders*

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