9500 pieces of legislation to be scrapped: The four cuts which will impact your business

Prime Minister Tony Abbott is announcing extensive red tape repeals today as part of the government’s promise to streamline business regulations.

Abbott will promise to cut red tape for business and charities by more than $700 million and announce the scrapping of more than 9500 pieces of legislation.

Small Business Minister Bruce Billson told SmartCompany this morning the cuts are mainly “largely redundant requirements that no longer have a place in our economy” and include some acts of Parliament that date back to Federation and deal with issues like when the states had their own navies.

Billson says it’s “a great day for small business” and in amongst the cuts there are four big cuts which will impact on SMEs. 

1. Paid parental leave payroll requirements

The government is going to try again to remove the payroll function imposed on employers for the government’s paid parental leave scheme.

Earlier this year the opposition voted against government legislation to remove the compulsory “pay-clerk” requirement of the paid parental leave scheme.

Billson says “it serves no good public policy purpose” and estimates scrapping this requirement will save businesses $44 million a year.

2. Easier government procurement and tender processes

Billson says a simplified government procurement and tender process will change the way smaller businesses interact with government in this area.

“Many small businesses tell me how hard it is to win government work and the Commonwealth is a difficult and overbearing customer,” he says.

The government will change the Commonwealth contract suite, saving an estimated $38 million by simplifying the tendering process for contracts below $200,000. It avoids the need for specific legal advice.

3. Simplifying the Personal Properties and Securities Register

As reported earlier this week in SmartCompany, today’s cuts will include changes to the PPPSR, removing some of the reporting requirements.

“It is particularly relevant to the hire industry, businesses requiring specialist equipment for a specific job are required to register that transaction and the time to register will be extended to reflect commercial realities,” Billson says.

4. Self-insurance under Comcare for national businesses

The red tape repeals will also include an announcement allowing companies operating across state borders to self-insure under the Comcare workers’ compensation scheme.

“This is more a benefit for medium and larger businesses operating in a number of jurisdictions, it allows national employers to opt in to use the Comcare system,” Billson says.   

But the government’s cuts also controversially include scrapping the Small Business Tax Assistance Act which includes the motor vehicle tax concession for small business, concessional depreciation write-off for small business, loss carry-back rules for companies and low income superannuation contributions.

The government moved to abolish the act earlier this year but it is still sitting before the Senate.

Mark Chapman, head of tax with lobby group Taxpayers Australia, said the removal of these measures will actually increase red tape for small businesses, as small businesses will have to keep records on assets that would be unnecessary under these concessions.

“The Liberal Party prides itself on being the party of small business, but the removal of these concessions is actually a kick in the teeth for small business,” Chapman said in a statement.

But Billson says the government is taking the responsible course of action and adjusting the instant asset write-off threshold back to its previous level and providing a simplified pooling arrangement for asset depreciation in line with the government’s election commitment.

“Accelerated depreciation measures have appeal but need to be affordable, sustainable and responsible” Billson says.

He says the instant asset write-off was supposed to be funded by the mining tax but the tax hasn’t raised anywhere near the money it was supposed to.

“We have to start to live within our means,” Billson says.

“There are lots of things we might like to do but can’t afford at this time due to the precarious financial position we have inherited from Labor.”

What won’t be cut

The red tape repeal will not include plans to cut back on gender reporting requirements for business.

“There is a discussion going on about what size of organisation those requirements should kick in, the discussion is how many employees should have that mandatory obligation, some employers find that advantageous, it is about right sizing those requirements,” Billson says.

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