Compliance with government regulation continues to stifle business operations, according to a new report, which shows more than 80% of the businesses surveyed are struggling with red tape.
The Victorian Employers’ Chamber of Commerce and Industry, in conjunction with the Commonwealth Bank, has released the findings of a survey on business trends and prospects.
A total of 300 businesses participated in the VECCI-Commonwealth Bank Survey of Business Trends and Prospects.
Of the 300 survey respondents, 81.3% said the government compliance process is impacting on their business in either a moderate or major way.
When asked how much time they spend complying with regulatory requirements, almost half of the respondents said they spend one to five hours focused on red tape requirements per week.
More than 16% said they spend between six and 10 hours on red tape requirements every week.
“This is clearly time that could be better spent running a business rather than dealing with endless compliance requirements,” VECCI chief executive Mark Stone said in a statement.
Respondents said their compliance burden has increased over the past two years, particularly in the costs associated with compliance.
A total of 60% reported an increase in internal costs, while more than half reported increased costs associated with seeking external, third-party expert advice.
Complying with regulatory requirements has also led to changes in business plans – 20% of respondents are deferring investment plans as a result of the compliance burden.
“The fact that businesses are deferring investment plans as a result of red tape is a worrying trend,” Stone said.
Hiring intentions have also been affected, with 21% of respondents reporting a deferral and 23% changing their plans altogether.
Among the regulations causing the greatest compliance headache for business are those relating to OHS and WorkCover, according to the survey.
Other red tape “hotspots” include complying with consumer protection laws and meeting the administrative requirements associated with state taxes and charges.
Respondents said business compliance costs could be eased by reducing the quantity of existing regulations (31.5%) and better communication from regulators about how to comply with existing regulations (18.2%).
Better communication and consultation with businesses, when regulators develop new regulations, is also seen as important.
“We ask that the government continues to look at measures to reduce the costs of regulatory compliance,” Stone said.
The survey comes on the back of research released earlier this week by MYOB, which surveyed 1004 business owners and managers.
According to MYOB, almost three in five small to medium business operators are dissatisfied with the Federal Government’s support for helping businesses like theirs succeed.
Only one in six are satisfied, according to the study, which shows dissatisfaction has soared in the last two-and-a-half years.
In the March 2010 MYOB Business Monitor, 38% of respondents were dissatisfied, but the July 2012 report saw that figure reach 57%.
This is the highest level of dissatisfaction recorded since the research began in March 2004, and an increase of 5% since the March 2012 report.
According to MYOB chief executive Tim Reed, the recent policies introduced by the Federal Government appear to have “not yet struck a chord” with SMEs.
“The tax loss carry-back scheme is generally seen as positive, but the carbon tax is deeply unpopular amongst business owners,” Reed said in a statement.