The toolkit that replaced the programme
New Zealand has 546,000 small and medium businesses with fewer than 20 employees. Ninety-two percent of all businesses have fewer than six staff. These are not organisations with HR departments or wellness budgets. They are cafes, trades firms, and hairdressers run by people who are simultaneously the boss, the admin team, and the first responder when someone is struggling.
The government’s answer to their mental health challenge has been, consistently, content. In May 2023, MBIE and Spark Business Lab launched the Brave in Business e-learning series – six videos about managing stress. In September 2024, a memorandum of understanding with the Auckland Business Chamber handed over management of the First Steps platform. Then-Minister Andrew Bayly said the resources had been accessed more than 750,000 times in the past year – a figure that conflates page views with meaningful intervention.
Then in July 2025, RNZ’s Nine to Noon reported that Xero had withdrawn the free Employee Assistance Programme it offered to businesses using its software. Employers who relied on that EAP to support their staff now need to pay for equivalent access through the same international provider. At the exact moment the government is promoting self-help videos, the private sector is pulling back on the practical tool many small employers actually used.
The $7.4 million that never reached anyone
The original programme was not always this thin. In November 2021, the government allocated $10 million for a Small Business Health and Wellness Support Package. A Cabinet paper from August 2022 revealed that less than $2.6 million had been spent since launch, representing a $7.4 million underspend on one-to-one services.
That underspend is the most damning number in this story. The government had money specifically earmarked for direct, human support – the kind that actually shifts outcomes – and failed to deploy it. The pivot to handing a content platform to a business chamber looks less like strategic improvement and more like managed withdrawal from a programme that never achieved its potential.
MBIE’s own 2024 Business Health Monitor found the top three forms of support SMEs actually want: tax breaks and incentives (47%), one-to-one mentoring (32%), and online courses (29%). The thing the government keeps building ranks dead last among the three options. Business owners are asking for financial relief and personal guidance. They are receiving YouTube-adjacent content.
Legal obligations keep growing regardless
Here is where the gap becomes dangerous. The Health and Safety at Work Act 2015 imposes a duty on employers to manage psychosocial risks. Mental health at work is not a nice-to-have – it is a legal compliance matter. The July 2025 RNZ segment examined whether employers actually understand these obligations, prompted directly by Xero’s EAP withdrawal.
Business.govt.nz guidance is explicit: managing health and safety risks associated with stress is a legal requirement. It also notes that one in five New Zealanders will receive a mental health diagnosis in any given year. In a business of five people, statistically one person is dealing with a diagnosable condition right now.
Meanwhile, 23% of NZ businesses made an operating deficit before tax in the 2024 financial year. MBIE’s own research from the 2024 survey period found 58% of businesses facing ongoing challenges including cashflow struggles and growth slowdown, with 36% experiencing a squeeze on profitability. IRD’s 2024 compliance cost report found small businesses spending a median 32 hours a year on tax compliance alone – before you add health and safety, employment relations, and psychosocial risk management.
Good intentions are not capability
Each obligation placed on small employers is individually defensible. Collectively, they represent a growing cost of employment that falls hardest on businesses with the least capacity to absorb it. The government is not wrong to produce mental health resources. The problem is presenting a toolkit as a response to a structural problem.
When nearly a quarter of businesses are running at a deficit, when compliance costs compound annually, and when the private sector is withdrawing the practical support it once provided for free, a six-video e-learning series is not a policy. It is a press release with a website attached.
What small employers need is not more content. They need funded access to EAP services, tax incentives for wellbeing spending, and an honest acknowledgement that legal obligations without corresponding support create a compliance trap. Until the government is willing to spend real money on real services – not just build websites about the problem – the gap between what employers are required to do and what they can actually afford to do will keep widening.
Sources
- Wrong headspace? Govt launches small business mental health tool (2023-05-25)
- Free Mental Health Resources For Business Owners (2024-09)
- Annual enterprise survey: 2024 financial year (provisional) (2025-06-12)
- Small and medium enterprises research and evaluation (2025-02-17)
- Workplace mental health support: do employers understand obligations? (2025-07-07)