Red tape missing from State Budget, but strangling small business every day

Thursday 15 June, 2017

When Queensland Treasurer Curtis Pitt handed down his third State Budget yesterday, plans to reduce the red tape burden on businesses were notably absent.

This is particularly surprising off the back of the Federal Government’s Budget announcement that $300 million will be offered over two years to the State and Territories who sign up to a National Partnership on Regulatory Reform to lessen the regulatory burden on small businesses.

While there will be a continuance of the Palaszczuk Government’s Better Regulation Taskforce, it was hoped that red tape reduction would become a top priority across all departments and within leadership to be truly effective.

A 2014 Deloitte Access report which assessed the red tape in both Australia’s public and private sectors found government regulations cost about $27 billion a year to administer and cost businesses $67 billion a year to comply with.

Fast forward three years to today and this total figure is likely to surpass $100 billion.

Governments across all three tiers know that reducing the cost and time it takes to tackle red tape is essential to the growth of businesses, no matter what size.

Yet despite the efforts over the years, bureaucracy and redundant regulation remains as one of the largest drains on the entrepreneurial energy that is required to boost the small business economy.

To be released next month, CCIQ’s upcoming 2017 Red Tape Survey, a biannual report which canvassed the views of over 550 businesses, has found that seven in 10 businesses believe there to be a moderate to major impact on their business in needing to comply with government regulatory requirements.

Furthermore, the report found that red tape was predominantly a small business issue, with most larger companies able to absorb the time and cost imposts.

Some recommendations to be put forth in the report include:

  • Set a target to reduce red tape for businesses by 25 per cent every year, as agreed to by each government department, minister and leadership.
  • Identify the red tape ‘hotspots’ where regulatory reform efforts are prioritised to effectively reduce compliance burden and unlock greater economic activity.
  • Undertake a Business Impact Statement (BIS) when introducing new legislation to explicitly consider the impact on competition and the resulting costs on businesses.
  • Implement a ‘one on, two off’ policy (repeal two principle legislative instruments with the introduction of a new one in the same portfolio) that will force a review of existing legislation, drive cultural change across government and reduce the overall stock of legislation. 
  • Simplify and improve the procurement process to remove roadblocks for small businesses to participate, as well as consider alternative ways to increase the share of government services provided by the private sector.

The raft of complex, costly and sometimes redundant regulation that small business owners must face before being able to hang up the ‘open for business’ sign, or as part of their day-to-day operations limits the time they can spend on growing their businesses.

This means less innovation, less opportunities for job creation and a loss for consumers who are looking for new products or services that have kept pace with changing consumer demands.

With the State Budget falling short in recognising the impact of red tape on small businesses, the frustration around the ever-increasing paperwork looks sure to remain as a critical issue for the business community.

And it is certain to be a major issue for small business waiting to see respective party policies ahead of the next State Election.




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