Time and cost of red tape on small businesses spiralling: Report

Nearly three quarters of Australian small businesses spend longer complying with regulations than they did two years ago, with one in 10 taking more than 20 hours a week to tackle red tape, according to a new study.

A survey of 870 businesses by the Australian Chamber of Commerce and Industry found that 44% of firms spend between one and five hours a week dealing with various federal, state or local government regulations.

At the extreme end of the scale, 11% of those polled take more than 20 hours a week to comply with red tape requirements.

Worryingly, this regulatory burden appears to be on the rise – 72% of respondents say the time spent on red tape has increased in the last two years.

The impact isn’t confined to the time spent on compliance. More than four in 10 businesses estimate they’ve spent more than $10,000 complying with regulations last year, with a small proportion, 6.9%, shelling out more than $100,000.

Only 10% of those surveyed feel that red tape doesn’t impact the running of their business, while more than half believe that time spent on regulation has hindered their ability to make changes to spur business growth.

The most common areas of regulations, according to the poll, are workplace health and safety and employment regulations.

ACCI said that it will use the results from its first analysis of the red tape burden to highlight the issue to state and federal governments.

“Relieving the red tape burden is a shared objective of the private sector and governments at local, state and national levels,” the lobby group states in its report.

“Translating that into practice has largely eluded governments across the federation, notwithstanding the best of intention evidenced by the recently created COAG Business Advisory Forum.”

“Increasingly, business reporting requirements, administrative burdens and the complexity and accumulation of regulation work against this goal.”

“The burden of red tape is costing business and the community, contributing to stagnant productivity growth.”