Small business welcomes red tape inquiry but wants investigation for SMEs only

Small business has welcomed a new inquiry designed to investigate the effects of red tape, but says the Government should split the effort in two: one for small business, and one for big.

The move comes after finance and deregulation minister Penny Wong announced the inquiry yesterday, led by Mallesons Stephen Jaques chief executive Robert Milliner and public servant David Borthwick.

The Business Council of Australia has welcomed the inquiry, saying that unnecessary regulation has continued to hurt companies.

“Reducing red tape continues to be a top priority for business,” BCA chief Jennifer Westacott told the Australian Financial Review.

The inquiry itself will assess to what extent the Best Practice Regulation Handbook and its implementation are consistent with the best principles for regulatory quality and performance.

“The Government has been discussing the review with businesses and the review reflects the Government’s continuing commitment to ensure regulation is well targeted and does not increase costs to business and the community,” the Government said in a statement.

It comes after the Government announced a number of goals last year for reviewing regulation impact statements and how they are formed.

But Council of Small Businesses of Australia chief executive Peter Strong says although the investigation is welcome, there should be a dedicated inquiry for small businesses only.

“I’m always positive about something like this,” he says. “But there have been quite a few inquiries like this over the years and the result has been more red tape in almost every instance.”

“It’s hard to support it when we know there’s plenty of red tape that can already be removed.”

Strong says there are a number of areas where businesses could be relieved of regulatory burdens right now which would not require an inquiry, but they have not been done – he argues that effort could have gone into reducing these burdens instead of starting a new inquiry.

“What we want is for the Government to look at big business in its own inquiry, and look at the impact of that separately. And we want something else just solely for small business.”

“Two different studies would make sense, and it would ensure that small business deregulation gets a serious look.”

Strong references two changes that could be made immediately – relieving SMEs of paymaster burdens for paid parental leave and the superannuation collection process.

“You could do those two straight away,” he says.

“Big business may not think of red tape as a burden for small business. But it is, and we need a dedicated study to show some different options.”