Interesting that Labour is bad for small business.....
A recent study by Massey University proves what most people know…Labour is bad for business and a four year terms would be better as well.
A four-year election term may help prevent smaller firms listed on the New Zealand Stock Exchange getting into strife as a result of fast-track policy changes made by new governments, says a Massey University academic.
Dr Chris Malone, a senior lecturer in the School of Economics and Finance, says billions of dollars are lost to the economy because firms, particularly smaller ones, are unable to cope with policy changes brought on by a change of government.
“Four years instead of three in the political cycle would give government more time to phase in policy instead of rushing reform through. This could give smaller firms breathing space to adapt and adjust to the new environment,” he says.
Dr Malone’s comments arise from the findings of a research paper he co-wrote with Associate Professor Hamish Anderson, who is also from Massey University. The paper found small firms have performed much worse under left-of-centre governments than right-of-centre governments since 1972. It also found stock returns are generally significantly higher under right-of-centre governments.
Dr Malone says there has been recent global interest in whether stock markets prefer a right-of-centre or left-of-centre governments – and that researchers were surprised when research in the United States showed its stock markets preferred Democrat governments.
The conventional wisdom had been that Wall Street liked a Republican government “but when they went and looked at the long history of returns they found that during Democrat governments things whistled along pretty well,” says Dr Malone.
The opposite, however, is true for New Zealand. While large firms do relatively well under either the left or right, small firms have underperformed significantly during Labour terms. Dr Malone says perhaps in the United States, Republican governments are more likely to get involved in wars and external policies that can damage the sharemarket but, in New Zealand, right-of-centre governments haven’t had this responsibility and their pro-business focus has shown through in stock returns.
While it might be expected that small firms would struggle during periods of intense reform, such as Rogernomics in the 1980s, the Massey research found they struggled generally through all Labour government terms.
“Small firms in particular can’t handle a changing environment very well. They don’t have access to professionals; they typically don’t have the cash resources or the ability to raise cash if things get tight; and they find it harder to pass on business risks.”
Imagine how bad it would be if the Greens were part of the mix.
Ele Ludemann at Home Paddock notes:
The left like to talk about big business as if there’s something wrong with that.
But their anti-business policies hurt small businesses more and anyone with investments, whether they’re personal or through KiwiSaver, will also be disadvantaged by policies which add costs and hamper productivity.
This paper gives people another good reason to give National three more years – #3moreyears