November 26, 2012

Small business compliance

Overwhelmed by regulatory paperwork? “One of the biggest bugbears for small business is inefficient or unnecessary regulation” says the Hon. Brendan O’Connor MP, Federal Minister for Small Business. He pinpoints how government reforms are cutting red tape.

We asked the Federal Minister for Small Business, the Hon. Brendan O’Connor MP, to outline how the government’s helping to do away with excess compliance.

You mention: “One of the biggest bugbears for small business is inefficient or unnecessary regulation, which pushes up costs and hits productivity.” What are the key red tape concerns for small business that Government has identified?

I’ve met with thousands of small businesses around the country to find out what the problems are, and more importantly what the solutions are. The issues they generally raise with me are too much paperwork, and employment regulations such as workers’ compensation and superannuation.

That’s why we’ve introduced the Small Business Superannuation Clearing House, a free service that allows small businesses to make all their superannuation obligation payments in one simple online transaction, no matter how many different funds are involved. This can save small businesses up to eight hours of paperwork a quarter.

We’ve also introduced the National Business Names Register, which allows businesses to register their name in every jurisdiction in one easy online process and with one low fee.

As well, we’ve introduced legislation to quickly and efficiently repeal 12,000 unnecessary regulations, which will ease the burden on business.

I make this commitment to small business – convince me of the case to remove a particular regulation or requirement, and I’ll do my best to convince the Government.

Are these regulation bottlenecks spread through all tiers of government – federal, state and local?

All governments are committed to reducing the regulatory burden on business. As I said, we’re repealing 12,000 unnecessary regulations. At the Commonwealth level, we’re working closely with the States and Territories to deliver a seamless national economy, including 27 reforms to reduce the regulatory burden on business. This work will be complemented by the COAG Business Advisory Forum moving into 2013.

I’m working with the States and Territories, and their chambers of commerce and industry, to identify unnecessary regulations that frustrate small business on a day-to-day basis. And a Commonwealth/State Taskforce is looking into specific ways to remove overlaps in reporting obligations, with a focus on increasing the use of online business reporting.

How will compliance reform help Australian businesses be more productive, efficient and competitive?

We’re committed to ensuring regulations are well-designed, enacted only where absolutely necessary and at minimum cost to business. At the Commonwealth level, we’re reforming the policy process so as to think ‘small business first’, because small businesses have fewer resources – be it time, money or staff – to dedicate to their compliance obligations. We know that when a business starts employing staff, its red tape increases. And also when a business has to deal with multiple levels of government, it can become bogged down in red tape.

Unnecessary red tape diverts resources away from more productive uses and can create a disincentive to invest and innovate. By cutting red tape, we can give small business back their Sundays or some of their evenings. This will give them more time to run their business, and it provides for an increased focus on growth and job creation.

There’s a trend to reform across an entire sector. Can you elaborate?

Red tape reform is an ongoing process. Over the past five years, the Productivity Commission has undertaken annual reviews of regulation in key industry sectors to identify unnecessary burdens on business.
The best thing any Government can do is to not impose any unnecessary red tape in the first place, which is why we now have a ‘whole of Government’ approach – ensuring that before any new policies are developed, we look for any possible negative impacts on small business.

We’ve also introduced legislation that not only repeals 12,000 unnecessary regulations, but will also simplify the process of repealing regulations, which are subject to sunset clauses. Currently, ‘sunset instruments’ must be reviewed strictly ‘regulation by regulation’. Our legislation will encourage review of regulations in a more coherent way – for example, by looking at regulations across a whole industry sector.

How will the Small Business Advisory Committee (SBAC) help with reform?

The SBAC meets regularly and has two roles:

  • To provide broad advice to the Government via me, as the Minister for Small Business, on small-business policy matters as well as current and emerging small-business issues and trends.
  • To advise Government in the policy development stage of the regulatory impact of policy proposals on small business; the compliance costs of the policy proposals for small businesses; and any potential impacts.

In this regard, the SBAC can help prevent any inadvertent impacts on small business.

Read the Minister for Small Business’s address to the NSW Chamber Business Leader’s Luncheon.

Read the Business Council of Australia’s discussion paper to the COAG Business Advisory Forum.