Approximately 8600 pages of new tax rules have been created since the Abbott government was elected in September 2013, according to data compiled by law firm Mills Oakley.
Mills Oakley has been compiling an index of any binding tax-related legislation and rulings since October 2012. The monthly index includes both state and Commonwealth generated material.
Speaking to SmartCompany this morning, Mills Oakley private advisory partner John Storey said between September 2013 and the end of June 2014, some 8600 pages of material associated with tax changes has been generated by Australian governments.
In the month of June, 1077 pages of new tax rules were created.
The index only includes tax-related material and legislation that is enacted. Also included are decisions and rulings from the Australian Tax Office and the state revenue offices and related explanatory material.
While the total figure includes state-generated material, Storey says the majority of the material is created by the Commonwealth.
“The idea is, the government talks about cutting red tape but what actually happens each month is there is a constant stream of new laws or revisions or reinterpretations,” Storey says.
“That’s never ending.”
Storey says there was a “lull” immediately after the Abbott government was elected, but since May 2014, the rate of new material being created has returned to a longer-term trend of around 700 pages a month.
Storey says the timing of the added compliance is also frustrating, with “large spikes” occurring in June each year when businesses and their tax advisers are already preparing for the end of the financial year.
“The states and the Commonwealth have their budgets around May or so and by July they introduce new legislation in Parliament in order to get changes enacted in time for the next financial year,” Storey says.
While Storey says the federal government may be reducing red tape in other areas, even if tax measures are introduced that benefits SMEs, that still creates new material to explain the changes and therefore “doesn’t change the workload”.
And it is the small end of town that wears the biggest cost, according to Storey, who says the avalanche of material that is needed to be understood in order to comply with tax laws “hits small business proportionately hard”.
“They don’t have the resources to employ a team of accountants to deal with tax compliance,” he says.
Storey uses the recent introduction of the $20,000 asset write-off scheme as an example of a measure to help small business that has still created a “huge amount of paperwork”.
“To take advantage of that there is a huge amount of paper actually involved in making changes,” he says.