Who wants the Kiwi small business vote?

What's been surprising isn't what the parties are pushing, but what's missing.

Tuesday, November 08 2011 || Comment || BY Julian Smith

We’re well into the election campaign now and the parties have rolled out most of the policy on which they’ll campaign.

In this year’s election there’s a clear distinction between the two parties and already solid preferences are emerging in the electorate. But what has been surprising in this campaign is not what the parties have been promoting, but what’s missing from the manifesto.

No one is really campaigning directly for the votes of Kiwi business. And when I’m talking Kiwi business, I’m not referring to the big end of town, made up of large companies that are more than capable of representing themselves in Wellington.

What’s missing is a focus directly on the needs of the mum and dad Kiwi business – the sole trader or the business of less than five employees – that makes up a bloc of over 400,000 votes.

It's not as if they are a particularly hard constituency to please. According to the latest MYOB Business Monitor, the number one policy that would win the Kiwi business vote is simplifying provisional tax. We’re not even talking about a tax cut. Just a reform of the system, making it easier for business to understand and manage their tax liabilities.

A policy of this kind, according to the Monitor, would win 74% of the business vote – over 350,000 voters – without costing any more than the price of introducing some greater efficiencies in government.

This is not a policy initiative that would fall clearly into the remit of either party. According to the voting preferences shown in the Monitor, there’s room in the hearts and minds of Kiwi business voters for any party that is willing to focus on making their business lives easier, while balancing local investment with even-handed social policy.

All too often the business vote is characterised as right leaning and it seems as if all major parties view them as a lock for the government. According to our latest survey, in the absence of any strong policy alternatives they may be right. 59% of businesses supported National while just 11% favoured Labour.

But what makes it clear that it would be a mistake to view Kiwi business as a guaranteed vote for any party is the mix of policy they prefer. While Labour’s capital gains tax proposal is very unpopular, with 59% calling it a vote loser, almost half (46%) are also opposed to National’s state asset sales. The Labour policy that does enjoy business support is the removal of GST on essential goods and services – a vote winner for 58% of business voters, even though they would be the ones to bear the compliance burden of implementing and managing it.

As we go into the final stage of the election, around a quarter of the business vote is undecided.

To win that vote – and quite possibly influence the final decisions of others – it would be great to see all parties take a real look at exactly what Kiwi business owners, especially sole traders and micro businesses - need to make their lives easier.

Simplifying provisional tax – a vote winner for three-quarters of that electorate – would be a good place to start.