Phil Wicks: Small Business New Zealand Founder on the Government's business start up grant

A small business advocate says a Government grant must do more than throw money at a problem.  

The Taxpayers’ Union has revealed the business start up grant has dished out $38 million with little to show for it.  

Documents retrieved through the Official Information Act show hundreds of the recipients struggled and returned to a benefit within two years.  

Small Business New Zealand Founder Phil Wicks told Andrew Dickens the recipients are the furthest people away from the labour market.  

He says they can still succeed but need more mentoring, structure, and clear expectations. 

LISTEN ABOVE 

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
We've got some evidence of bad spending by the Ministry
of Social Development and OIA by the Taxpayers Union has
revealed the government spent over thirty eight million dollars on
business startup grants and they gave them to beneficiaries. However,
the Ministry doesn't track the performance of the businesses to
see how they do once we give them the handout,
and the real kicker, hundreds of those given the grants

(00:22):
we're back on the benefit within two years. To talk
about this, I'm joined by Phil Wicks, who is the
Small Business New Zealand founder.

Speaker 2 (00:28):
Morning to you, Phil, Good morning, here are you?

Speaker 1 (00:31):
I'm good? Is this bad fund management? George just playing stupidity?

Speaker 2 (00:36):
Well, I'll also entrepreneurship. You know, it's being my life
up with small business own. It's both. Starting business is hard.
It's not a quick fix rund employment. If I was
going to use taxpayers made to help people into business
has to be more than just writing checks and wishing
them a good wishing.

Speaker 1 (00:52):
Them good luck, patting on the back and go go
to it. I don't want to be rude, but the
guys that they've given us thirty eight million dollars to
are already unemployed and there may be a reason for that.

Speaker 2 (01:02):
Yeah, Australian business is not a social service. It's a
high risk commercial decision. You need skills, planning, support, resilience,
not just a lumplification as you see to put on
the back. Now often people on these schemes of the
furthest from the labor market. I guess it doesn't mean
I can't succeed, you know, And I said, I'm all
for entrepreneurship, but it does mean they need more structure,

(01:26):
more mentoring, and clearer expectations, not less and you got
a proper recourse on what happens as well.

Speaker 1 (01:33):
You could say we have tracked this because we've found
out that hundreds of the people who got these grants
we're back on the benefit within two years, So we
can assume that the business has failed. And so we
can assume, you know, the whole program did not work.
So we should just stop it, shouldn't we?

Speaker 2 (01:50):
Yes? I would think so. If you take somebody who's
been on a benefit for a long time and government
grant child them a business owner, but you don't wrap
proper support around them, you're almost you're almost setting them
up to fail and sending them straight back into straight
back into a benefit.

Speaker 1 (02:07):
How should we spend thirty eight million dollars in a
better way?

Speaker 2 (02:11):
Well, there are schemes, you know, there are some very
good government schemes. The Capability of Vout scheme for one,
which is it's a small you know, I think it's
a very underfunded scheme, but it's very well run. It's
run very well by the regional business partners. There's a
good structure around it, and an office of generally offers

(02:33):
a very good return on investment. You know, business owners
get up to it's fifty fifty funding, they get up
to five thousand dollars. But you can trace back and
we've done that with our own clients that have benefited
from that scheme. I think about a year ago, had
to look at everybody that had been throughout with ours,
and you know, we could measure that on average they

(02:54):
over a long term they've got about I think it
was about one hundred and eleven percent growth. Now that's
you know, that's a return on investment that's well run.
You can measure it, and you know that those businesses
that succeed off of more into the economy, there's more
tax that they're paying, there's more people that they employed.
So that's an example of a of a really well
run scheme. But there's a lot of Like I said,

(03:16):
there's a lot of support support around there. You know,
if you're going to do anything like this, you must
make the money conditional on masked milestones, you know, finishing
a business plan, complete training show, some actual customers, hit
some revenue, few targets. Yeah, yeah, Well that's how investors
work in the real world.

Speaker 1 (03:34):
Isn't exactly right? Execu rate phil works. I thank you
for your time, Small Business New Zealand founder. For more
from Early Edition with Ryan Bridge, listen live to News
Talks it Be from five am weekdays, or follow the
podcast on iHeartRadio