Legal

Red tape riddle

Cara Waters /

It’s the case of the mysterious red tape.

As soon as there are moves to cut red tape for business it seems equal amounts of onerous regulations arrive to replace it.

Back in April this year at the Council of Australian Governments Business Advisory Forum in Canberra, the Prime Minister agreed to a six point plan to reduce the costs of regulation.

Following the COAG forum six priorities of the regulation review were established: streamlined environmental assessments; efficiency in major development approvals; better development assessment processes; removal of unnecessary carbon reduction measures; and energy market reforms.

At the time, Amanda Lynch, deputy chair of the Council of Small Business of Australia, told SmartCompany the council was “very happy” with the government’s commitment to reducing red tape, in particular the inbuilt timelines and progress reports which were agreed to in order to ensure accountability.

Lynch said she believed the forum was “more than a talkfest” and that the promises made would be followed through on.

“We are encouraged by the steps taken yesterday and it is really the start.”

But fast forward to yesterday and the Australian Chamber of Commerce and Industry released the results of a national survey which revealed what many businesses already suspect, business is still spending an inordinate amount of time and money bogged down in red tape.

It’s a burden that’s borne disproportionately by smaller businesses, with the ACCI survey finding 44% of businesses spend between one and five hours a week complying with government regulatory activities like filling out forms, applying for permits and reporting business activity.

This time doesn’t come cheaply with 42.2% of the 870 businesses ACCI surveyed estimating they spent more than $10,000 complying with government regulations last year.

A majority of the businesses surveyed also said red tape had a “moderate to major” impact on their business and complying with government regulations has prevented them making changes to grow or expand their business.

What’s more, despite the government’s commitment to cut red tape at COAG, the ACCI survey found 72% of businesses say the time they’re spending on red tape has actually increased in the last two years.

Perhaps the giveaway that it is very easy to talk about cutting red tape for business and very hard to do it came when usage figures from the government’s Small Business Advisory Council’s own Small Business Support Line showed the line spent most of its time fielding calls about government red tape.

The problem occurs when the government attempts to streamline processes, but inadvertently ends up increasing the amount of red tape that business has to struggle through, as appears to have happened with the new ASIC Business Name Register.

While it’s all well and good to talk about cutting red tape perhaps a more useful promise would be not to add any additional red tape.

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Cara Waters

Cara Waters is the former editor of SmartCompany. Previously, Cara was a senior reporter at the Financial Times website FT Adviser in London and she also worked for The Sunday Times in London.

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