Phil Wicks: Small Business NZ Founder on Labour's plan to axe the Investment Boost to focus on small businesses

There are concerns scrapping the Investment Boost could do more harm than good. 

Labour's promising to up the GST threshold, lift the asset write-off, and make big businesses pay small suppliers in 15 days.  

It'll axe the National's $6.6 billion scheme to pay for it – calling it untargeted.  

Small Business NZ Founder Paul Wicks told Mike Hosking this policy could be very useful, with three practical ideas.

But he says changes to the Investment Boost may create larger problems elsewhere.  

Wicks is also sceptical about the blanket rule for paying small suppliers, saying the idea’s good but different industries have different payment cycles. 

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Episode Transcript

Speaker 1 (00:00):
We had moved from labor. As they roll out the
small business policy, they're scrapping the investment boost plan to
pay for it, so it raises the instant asset right
off from one thousand to ten thousand. Phil Wicks is
a small business New Zealand founder and director of BSP Advisory,
and he's with us. Phil, very good morning to you.

Speaker 2 (00:15):
Good morning Mike.

Speaker 1 (00:16):
How are you very well? Indeed, thank you. Aren't we
robbing Peter to pay Paul here?

Speaker 2 (00:20):
Yeah, there is a little bit. Well, I think there's
some ambiguity around whether the changes to the Investment boost
cover everything else that's been done, but there are some
genuinely useful ideas here as well. Yeah, getting businesses paid
fast is a good idea. The GST lifting the GST
threshold should probably should have been done a long time ago.

(00:42):
And it's pretty similar to what's in Australia, I think,
And I think that's definitely a good idea. And the
equipment purchases are being easy to deduct or now there
are three well, I think three practical measures. Is just
whether the changes to the investment Investment Boost actually creates

(01:02):
a larger lot elsewhere.

Speaker 1 (01:04):
Yeah, precisely. That was my point that no one argues that,
you know, making business easier to do is a good thing.
That's fifteen days? Is that in law doable? I mean,
is there any reason why that wouldn't be the case anyway?

Speaker 2 (01:20):
I mean, you'd be surprised at the amount of large
corporates that take a long time to pay small businesses.
You know, well, I know in corporates and it's like
they use them as banks sometimes. So the idea is
good the fifty having it compulsory fifteen days, I think
would be Yeah. I think having a blanket compulsory rule

(01:41):
is probably not so good. I think there needs to
be some thought around that. So the idea is good
and probably needed. But you know, different industries have different
payment cycles, for example, so I'm not sure just having
a blanket compulsory fifteen day payment rule would actually work.

Speaker 1 (01:59):
The business being able to write stuff off? Will you
guys see, Because one of the criticisms of National's policy
or the current government's policy is that the spending wasn't
quite there. But maybe that's bigger. You know, do you
buy Maybe I do, Maybe I don't. If it's a
bit of a small equipment, do people buy more and
if they buy more, do they do more? In other words,
does it help the economy?

Speaker 2 (02:19):
Yes, I think it's can sometimes make decisions that they
wouldn't make. They'll make them faster. So as a result,
you know, a juinary business might want a new edgebend
or something like that, and they may be delaying that purchase,
but something like this can make that purchase come sooner
so they become more efficient. So from that point of view,

(02:43):
it's good. But it's not a you know, it's an
earlier tax deduction, so it's of limited value to a
business that's not currently making a taxable profit.

Speaker 1 (02:52):
Yeah, exactly. So Hipkins yesterday said, you know, an executive
buying a BMW doesn't help the economy. One is that true?
And two is that sort of the petty envy nonsense.
We need to move past.

Speaker 2 (03:03):
It's a petty envy nonsense. We need to move past.
That's it's irrelevant exactly.

Speaker 1 (03:09):
But having said that, we don't know, and this is
what we need to get clear, don't we. So if
if the top stuff, all the biggest stuff under the
current government has gone, then this is not necessarily a
good policy. If they've done this along with the ability
of larger business to write stuff off, then we've got
a net gain, haven't.

Speaker 2 (03:29):
We Yes, exactly right, and that to me that's the
that's the question without looking deeper into it, is you know,
are you just robbing Peter to pay for the like?
Like I said, the three the three key things are
really good, you know, the tax right off, the getting

(03:52):
businesses paid earlier, and the gs, especially the GST one
because that also helps you know, high promising startups. And
we've got to remember that at the current level that's
not profit. Let's just turnover, so there's very limited profit
being made when businesses are at that level.

Speaker 1 (04:09):
All right, I appreciate it very much. Phil Wicks, who's
the Small Business in New Zealand, founder director of BSP Advisory.
What I couldn't work out when I read when I
read the story yesterday, it said labor are silent on
the bigger the bigger write offs of the bigger businesses,
and why didn't somebody ask them saying why you're silent?
And what actually happens. My suspicion, of course, is they've
killed it. They'll take the money. It's six six and

(04:29):
a half billion from memory, right, this is one and
a half billion, So they're banking five. What are they
doing with the five? I think that's the question we
need to.

Speaker 2 (04:37):
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