If you read the NZ Herald Management column last Friday, you’ll see we contributed our take on the importance of sound, clear and articulate management by leading from the front.
Archive for the ‘News’ Category
Key Unveils Jobs and Growth Plan
In Hot Topics, News on February 5, 2009 at 1:13 pmChanges to streamline and ease tax payments sit at the heart of a major strategy to boost small businesses announced this morning by John Key in Auckland.
In a pivotal speech by the Prime Minister, Key unveiled a five part strategy aimed to make doing business easier for the important small business sector – 97 percent of New Zealand businesses employ under 20 staff.
The strategy includes:
* A suite of tax changes,
* An expansion to the Export Credit Scheme,
* An extended jurisdiction for the Disputes Tribunal,
* The expansion of business advice services, and
* A prompt-payment requirement for Government agencies.
But it is 11 separate tax changes that are the meat of the strategy and Key estimated it will take half a billion dollars out of government coffers and keep it in business’ bank accounts, where it can keep companies afloat and help with cashflow under pressure in the recession.
And the major changes small businesses will welcome are to provisional tax – at the moment small businesses have to estimate what they will earn in the next year and pay that to the Inland Revenue Department.
If businesses get it wrong, they then suffer penalty fines.
In a volatile climate where businesses are under pressure in a recession, that is a tough call for businesses to make and a harsh regime.
Key is promising to make it easier.
Key also promised a “series of fast-tracked Government building projects. These will keep more New Zealanders working as the international crisis hits home.”
Details will be announced next week.
“They are specific projects that were chosen because they are worthwhile and can be geared-up quickly. They will employ Kiwis with diggers, hammers and spades in regions throughout New Zealand. And in turn they will help keep suppliers and sub-contractors, shopkeepers and sales staff in business.”
Larger, longer-term infrastructure projects will also be announced in the coming months.
In the specific small business package, at least five of the tax changes will be fast-tracked to apply from April 1 this year.
Key also promised the changes will reduce the compliance and form-filling – a perennial source of complaint from small business owners, and an important area for Key to show some victories in.
Most significant, the Government will help cashflow by temporarily reducing the amount of provisional tax businesses are required to pay.
The standard method of calculating provisional tax payments is to assume that they will total 105 percent of last year’s income tax, or 110 percent of the year before that.
The Government will lower that formula to 100 percent of last year’s income tax, or 105 percent the year before – giving firms a positive cashflow boost by allowing them to delay some of their tax payments into future years.
The second major tax change is a reduction in what is called the ‘Use of Money Interest Rates’ – penalties businesses pay for not getting their tax payments quite right.
“We’ve listened to businesses who’ve pointed out that the taxman’s interest rate is out of whack with market interest rates,” Key said.
“We agree that these rates must come down. This is not a time for excessive penalties from the taxman. We will drop the underpayment penalty rate from 14.24 percent, to 9.73 percent. This change will be effective from the end of this month.”
The third change is a cutback on the number of times businesses have to file PAYE and Fringe Benefit Tax (FBT) returns.
Around 15,000 businesses will be able to move from paying PAYE twice a month to paying it only once a month, and from paying FBT four times a year to paying it only once a year.
GST also comes in for attention – impacting 47,000 businesses – by increasing the amount that a small business can turn over before it has to register for GST, up from $40,000 to $60,000.
“We will also allow more firms to account for GST when they actually get paid, rather than when they issue an invoice. We will do this by increasing the GST payments basis threshold from $1.3 million to $2 million, which will affect up to 14,000 firms.”
The other major plank to the announcements is a promise the government will lead by example as a prompt payer of its bills.
“All businesses who supply goods and services to government agencies should receive payments promptly. At the moment that does not always happen. That needs to change,” he says.
Amongst the remaining initiatives announced today:
Exporting businesses struggling to find short-term trade credit will have help from an expansion to the powers of the Export Credit Office so it can provide short-term trade credit insurance on export contracts with payment terms of less than 360 days.
The number of small claims that result in District Court action is reduced – what Key termed a trouble spot for small businesses – and the financial threshold at which cases can be heard at a tribunal is raised.
Lastly, the Government will expand an 0800 helpline to assist businesses who may want help.
The steps targeting small businesses come after sweeping changes to the Resource Management Act were unveiled yesterday, designed to help fast-track big projects with economic spinoffs.
It is all part of what Key has termed his ‘rolling maul’ of initiatives to lift New Zealand out of recession.
He said the combined effect of infrastructure spending, together with tax reductions and the small business package “will mean that New Zealand will experience a fiscal stimulus amongst the top five in the developed world, when compared on a relative basis.”
“That stimulus package will help keep our economy ticking over even as global demand falls, and it will help many businesses and families keep their heads above water. “
Taken from Stuff.co.nz: http://www.stuff.co.nz/4837768a13.html
Leadership
In News, Team on February 2, 2009 at 11:54 amMore than ever the challenge that management faces at this time is leadership above all else.
Take your leaky boat – a good skipper would always know that he has leaks in the hull and when the time is right they’ll need corking. A good skipper is also going to have his eye on the horizon and see the swell coming. The action he then takes in imperative – he has to lead his crew.
There is no point in CEO’s being nervous – this does not make for a good leader. It takes clarity of thought, articulation of the purpose and the ability to persuade, cajole and carry with them the whole team. This is a time when plans count for little.
It’s a time for putting together a battle plan and a war chest and a team that are fully briefed on the plan and are clear on the consequences of failure. So you see, it’s all down to leadership and if you doubt your skills as a leader your people will too and that could be fatal.
We’re currently operating under dark clouds that have not been seen since the end of 1945 and the benefit of being in NZ is that we can see them on the radar.
Now is the time to -
- Divest yourself of business luxuries that don’t contribute to the bottom line.
- Be clear with all of the team and unafraid to lose some of them if they can’t see /aren’t prepared for the long haul.
- Manage your finances pro actively and invoice your key advisors in your thinking and planning process.
- Seek help sooner rather than later.
- Be prepared to shed low profit/high dependency clients and customers.
- Get very good very quickly at producing key management information.
- Don’t sacrifice marketing budgets but do rationalise your expenditure.
- Take a line by line approach to you OPEX budget and be vigorous in cutting out waste.
- Use any down time to communicate with the team and ensure that everyone is focused and still on message
- At some stage we will move out of this phase of the economic cycle. You’ll need to be in good shape fiscally and as a team to take advantage – more than enough reason for working on points 1-9.
An extract from an interview with Gill South of the New Zealand Herald Business Pages
New Zealand Herald
In News on September 7, 2008 at 10:23 pmWe recently made a contribution to Gill South’s Management column in the New Zealand Herald. You can read more here
