Small businesses are the backbone of New Zealand's economy, but owners don't necessarily feel they have the corresponding heft when it comes to getting into the ear of politicians. Photo: Alexia Russell
The chief executive of the Rotorua Chamber, Melanie Short, makes no bones about how tough life is for small businesses these days.
“In the last fortnight we’ve had three hospo businesses go out of business, and a contracting business.
“As one of the businesses that went into receivership last week said, everything was fine – until it wasn’t.”
Her concern hit the headlines when she asked the Prime Minister about how long struggling local businesses could hang on, given rising costs and fewer customers.
It was Christopher Luxon’s answer that really put the spotlight on the issue, for all the wrong reasons. He later apologised, but his perceived lack of empathy was also a factor in the leadership coup against him last week.
Today on The Detail we look at how small businesses have a big impact – and ask what they want from a government.
Short says the Rotorua Chamber is apolitical and she doesn’t want to relitigate last week’s controversy. But the data from the organisation’s latest business pulse survey painted a picture of a decent drop in business confidence – the sharpest drop seen over the last nine years they’ve been running the survey.
“And also, as you would expect, the affordability of doing business was also impacted.
“Our businesses in Rotorua are resilient and quite innovative but at the same time it’s been quite a long period of time and we’ve had to put our all into everything. We’re just looking for some stability, some improvement … and we’re hearing that’s coming but right now we’re feeling a bit tired by it all.”
It’s been a long Covid hangover for businesses in this tourist-town.
“We’ve had the impact of Covid, we’ve been through recessions, emergency housing, etc … so we continue to reinvent ourselves but I guess the question was, ‘when is this improvement coming?’ We know there’s a whole lot of external factors that we have to deal with as well, as a country. We get that. But the message that we want any party to hear at the moment is that, you know, we want to be listened to, we want to be talked to about the various issues we’re having and we just want to be heard.”
New Zealand is a nation of little guys. Over 97 percent of firms employ fewer than 20 workers, and we have more than 600,000 enterprises. They collectively employ nearly 30 percent of NZ’s total private workforce.
In the year to March 2026, 3,023 companies were placed into liquidation, more even than last year’s 15-year high. Liquidations have climbed more than 70 percent over three years.
At the same time, in the year to July, more than 62,000 companies were incorporated – the highest number in five years.
But several financial commentators have said many people are effectively buying themselves a job, possibly after being made redundant … and some of the new formation numbers are just ownership changes.
Stats NZ data indicates just 27 percent of small to medium enterprises established in 2015 were still in business in 2025.
Catherine Beard, the Director of Advocacy for Business NZ, tells The Detail that while things have been tough, we are starting to see better indicators coming through.
The latest monthly performance and manufacturing index shows things picking up, “which is encouraging”.
“We know that in tough times, bigger businesses are more resilient, they tend to weather the storm better, and smaller businesses do find it more difficult.”
And while small businesses make up a massive part of the economy, Beard says they probably don’t feel they have the corresponding heft when it comes to getting into the ear of politicians.
She says Business NZ is acting on a report it did on what’s keeping small businesses awake at night and is rating various government agencies on how they’re doing to solve these problems.
That includes health and safety regulations, finding their way around immigration regulations to bring in specialist staff, and employment agreements – “everything around hiring and firing for small businesses can be problematic because they just don’t have the internal resources, they don’t have internal HR, they don’t have internal legal.”
Beard says in spite of our country having a reputation for being easy to do business in, she believes that’s a bit of a myth – and while it’s easy to register a new company, dealing with the regulatory complexity is difficult.
And she says businesses say they don’t want government handouts – but they do want stability; in the economy, and in government policy.
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Alexia Russell
Alexia Russell is producer of The Detail podcast. More by Alexia Russell
