The 2017 General Election is this weekend, and with just days to go, many experts are saying the result is too close to call. Regardless of which party forms the next government, there are likely to be changes in the wind for business owners.
Here, we look at a couple of each of the two main parties’ policies and what they might mean for your business.
Labour: Flexible voluntary withholding tax
Labour is proposing to introduce a flexible voluntary withholding tax as an alternative to the current provisional tax system. It would provide businesses with the ability to pay their tax at a rate and time of their choosing, with the payments acting as a credit against their end-of-year tax bill.
If this policy was instigated, it would enable your business to align tax payments with cash flow.
National: Fast-track ultrafast broadband
Building on work already completed, National is proposing to invest an additional $130 million into expanding the existing ultrafast broadband programme. They intend to cut two years off the completion timeframe (from 2024 to 2022) and include an additional 190 small towns.
This policy would benefit your business if you are reliant on fast data transfer speeds and are still waiting for UFB to be installed, or if you are based in a small town that is included in the expanded programme.
Labour: Auckland regional fuel tax
Labour intends to introduce a 10c per litre fuel tax to the Auckland region, which would be collected by the Auckland City Council through infrastructure bonds and targeted rates. They aim to raise $160m per year to spend on new transport investments, with a view to easing the traffic congestion that costs Auckland $2 billion annually.
If your business relies on the transport of people or goods, an improvement of Auckland’s traffic congestion would be a significant benefit to your productivity.
However, you will also likely face higher operating costs because of the tax. If your business consumes items that are transported, they may become more expensive as a result of suppliers passing on the additional cost of the tax.
National: Product authenticity scheme
National is considering implementing a scheme that would introduce authenticating standards of quality for locally-manufactured products. This would make them more attractive to overseas consumers who place value on purchasing New Zealand-made items.
If your business manufactures and exports, the new standards could increase the demand for your products.
However, the compliance activities required to gain authentication may raise your operating costs.
It’s hard to tell which way the vote will go on Saturday, but whatever happens, by being aware of the possible outcomes, you can plan for them accordingly, helping your business to be better prepared for the future.