New Zealand small businesses outperforming Australian counterparts

Rachel and Andrew Chuter started a business in Whangarei after moving to New Zealand from Australia for lifestyle reasons.

Rachel and Andrew Chuter started a business in Whangarei after moving to New Zealand from Australia for lifestyle reasons.

Northland business owner Rachel Chuter says she did not make the decision to migrate from Australia to New Zealand for financial reasons.

She was working in management in manufacturing in Melbourne when she and her husband decided to shift across the ditch in 2004.

When he could not find a suitable job, it was decided that he would instead launch his own security business.

Since then, Whangarei-based ARC Security has steadily grown.

READ MORE: Business confidence soars as 2016 gets off to a hot start

Now, a new survey shows that even though the Chuters moved for a better lifestyle, they might now be on the better side of the ditch for business growth, too.

The latest MYOB Business Monitor shows that after outperforming their Australian counterparts in 2015, New Zealand small business operators are more confident of improved revenue in 2016, too.

The survey was completed by 1000 small-to-medium business in both Australia and New Zealand.

In the second half of the year, the proportion of Australian small-to-medium enterprise (SME) operators reporting a fall in revenue, at 30 per cent, significantly outweighed the 22 per cent who saw a rise in revenue in the 12 months prior to the survey. 

In contrast, 31 per cent of New Zealand SMEs reported a revenue rise in 2015 and 25 per cent saw their revenues decline.

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MYOB chief executive Tim Reed said the strong New Zealand economy through 2015 had a major impact on how confident local business operators were, going into 2016.

He said Australia's economy had been going through a rapid restructuring process after the end of the mining boom.

But New Zealand had been doing well for a number of years.

"Given the solid performance of New Zealand's SME businesses in 2015, it is no surprise that operators are also more optimistic about improving their performance this year."

When asked how they expected their business revenue to fare in 12 months' time, a large number of New Zealand operators expected growth (34 percent), while fewer (21 per cent) expected revenue to fall. In comparison, the Australian SME economy is more finely balanced, with 28 per cent of Australian operators expecting a revenue increase this year and 27 per cent a decline.

Both countries reported a healthy level of steady income, with 46 per cent of Australian SMEs and 41 per cent of New Zealand SMEs saying their revenue levels remained constant over the 12 months.

According to the report, 19 per cent of Australian small business operators expect to increase the number of part-time or casual staff they employ in 2016. This was compared to only 11 per cent of New Zealand operators. The number of full-time roles is also expected to increase significantly in Australia, with 14 per cent of firms expecting to hire more permanent staff. In New Zealand, that number was only 9 per cent. 

Chuter said one of the biggest problems for her business now is finding enough skilled people to fill roles. She had been advertising internationally.

She said it was much easier to start a business in New Zealand than it would have been in Australia.

"We would never have done it in Melbourne. The community were also very accepting and supportive. Business in Australia is less about relationships and more about money."

Australian SMEs are also more likely to spend more on marketing and advertising their business, but the MYOB Business Monitor revealed New Zealand small business owners have more of a focus on technology.

Almost half of New Zealand respondents said they had acquired computer hardware or software for their business in the last 12 months. That is compared to just under one third of Australian respondents. 

In addition, 25 per cent of New Zealand business operators said they would look to increase their investment in IT systems and processes in the 12 months following the survey, while 21 per cent of Australians planned to do so. 

Reed said it was likely New Zealand businesses would have the edge over Australia for some time yet. "There is general momentum in the New Zealand economy, we saw that kick off a few years ago. A lot of business is about momentum."

He said the businesses that said they expected a decline in revenue were probably affected by structural issues in their industries. 

 - Stuff

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