Public officials may, in fact, consider that it is the role of private sector professionals and industry organisations to determine and communicate relevant legislative requirements to their clients or members. If this is the case, this should firstly be clearly communicated to these businesses and organisations and, secondly, the government must ensure that the principles in the ‘Code of Good Regulatory Practice’ are not compromised by this. The lived experiences of participants in this study suggest reliance on the private sector or meso oganisations can compromise the code’s requirements for both clarity and equity. Access to high quality advice on regulatory requirements depended upon: the nature of the SME owner’s social capital networks;
the quality of meso organisations servicing the firm; and the availability of financial, temporal and cultural capital reserves necessary for accessing these sources of advice.
Access to private sector sources of advice varied, with all participants expressing distress over the cost of professional assistance. Participants identified the cost of legal and accounting advice as between $320-350 per hour compared with some of their own charge-out rates of between $50-60 per hour. Those SME owners with access to professional advice through their social capital networks had a distinct advantage over those who did not, as indicated by the following comments:
“[accountant/daughter] will give me assistance… when we set up… two new companies… [accountant/daughter] pretty much totally set them up for us… She will help us with software issues to do with PAYE, payment of wages… we don’t often ring our accountant. We’re incredibly fortunate.”
“No, no, we have an accountant, but she’s free”
“ …so [lawyer/daughter] I got her to search all the legislation and she formulated this fantastic letter which we posted off… and I haven’t heard from him since. I had written something that was quite emotive and she said no, no, no, you can’t have any of that… [lawyer/daughter] said it [getting the letter drafted] would have probably cost about $1000 actually.”
“My Dad’s trained me… he’s an accountant for the company [he works for]….”
Commenting on availability of this social capital, one participant remarked:
“Twenty-four hours a day, seven days a week, for no payment, in fact they pay us!”
Trade and professional organisations were an alternative source of advice on regulation. The quality of advice and assistance provided by meso organisations varied, meaning that while some SME owners had access to high quality advice through these channels others did not.
“You have to become a member. You’ve got to be a member of them because they dish out the templates like for my [accreditation] consultant to use… they’re the only ones that have got them,… and to buy them off them you’ve got to be a member and to be a member you have to shell out $350… and you get stickers for your car and you get those gold pins for your suit.”
“…I do get a lot of assistance from places like [two industry-specific organisations]… if I’ve had any issues I just ring them and say ‘look I’ve got a problem with a staff member, what’s the procedure, what do I need to do?’” “Well the organisation that we have for our industry is (a) partially non-existent and (b) worse than the [name of another industry organisation we both knew of].”
“Oh we use them for business advice and for training… its just brilliant… they have their briefings, like every sort of quarter, so it’s not too burdensome… but it’s like a summary of all the new legislative changes that have happened… and they run through some of the court cases on particular things…”
Access to advice through meso organisations demanded a threshold of cultural capital. The participant who had immigrated to New Zealand within the previous five years was unaware of any meso organisations, indicating that a deficit in cultural capital can restrict access to these sources of information and assistance. She described a preference for written rather than oral material due to an inability to process oral presentations at the speed required in seminars. This SME owner was the sole English speaker in her company. The prevalence of such situations in New Zealand is not well-documented. However, it is clear that policy makers should consider whether any organisations that are assumed to be an integral part of the regulatory system are accessible to the business immigrants and investors the government is actively recruiting.
Legislation that is applicable, is presumably so because it is actually needed for the public good, for example, it may protect labour, the environment or competitive markets. No matter how well drafted the legislation, these objectives cannot be fulfilled if the businesses charged with implementing them are unaware that the legislation, or
parts of it, even exist. Effective intervention to improve this awareness would involve increasing the cultural capital of the entrepreneur through education, or reducing the amount of cultural capital required to navigate the system. The latter could be achieved either by improving the manner in which regulatory requirements are communicated to SMEs or by facilitating access to those with the cultural capital to navigate the current system, such as lawyers, accountants or business and professional organisations.