12 Sep 2023

Five political parties 'completely missed the mark' when asked about issues of sole traders

8:02 am on 12 September 2023

Hnry founder James Fuller says the results are a spectacular failure. Photo: 123RF

A survey of political parties indicates they may be out of touch with the needs of sole traders, who make up about a fifth of the total workforce.

The survey by Hnry, an accountancy software firm aimed at sole traders, said a canvas of all the political parties failed to address issues faced by sole traders, which were often different from those facing small businesses.

Hnry founder James Fuller said the results were a spectacular failure. Only ACT, Greens, Labour, National and TOP responded to the survey, with no response from other parties.

"They either lumped sole traders in with small businesses, or shoehorned their policies to answer our questions, but completely missed the mark," Fuller said.

"ACT bizarrely raised ram raids as a concern for sole traders, yet by their very nature, they are unlikely to own or operate a brick-and-mortar business, revealing a deep misunderstanding of the sector.

"No one understood who sole traders are and what they do.

"(It is) a level playing field of mediocrity that is woeful, inept and out-of-touch," he said.

Fuller said some of the policies worked against the interests of sole traders, many of whom worked as consultants.

"Labour and National's pledges to cut back on public sector contractors and consultants posed a risk to sole traders, with both major parties failing to differentiate between regular sole trader contractors, and expensive consultants brought in from high-charging global consulting firms," he said.

"A sole trading business analyst working for a government organisation is very different to teams of people deployed from the big four global consulting firms.

"People working in hands-on roles, from finance, to HR, public-facing and policy roles will be casualties of what is essentially a dog whistle policy."

Fuller said the next government should recognise the value of sole traders, as was the case in a number of other closely-aligned countries.

"Australia has grants specifically for sole traders, while in Canada you can claim special benefits when taking maternity leave from self-employment totalling 55 percent of your regular income," he said.

"France runs an effective micro-enterprise tax scheme with differing effective tax rates for sole traders to encourage people into certain professions where there may be need."

Luxembourg's sole traders and freelancers were entitled to credits on their income tax, with self-employed traders in Ireland also able to earn tax credits, he said.

Hnry's most recent Sole Trader Pulse Survey found 30 percent of sole traders reporting mortgage stress, 77 percent cutting costs to deal with inflation, and 92 percent avoiding taking on additional debt.

Fuller said sole traders could be assisted with policies designed with them in mind, such as a minimum living wage for sole traders, an increase in the Independent Earner Tax Credit and targeted tax relief.