Red Tape: Regulator Responsiveness & Solutions Post-Covid

  • April 27th, 2022 at 11:40 am

Anne Nalder, CEO & Founder of the Small Business Association of Australia recently wrote a submission to The Hon Ben Morton MP to provide feedback on how regulators can best support Australian Businesses in driving up investment. Anne discusses the significant impact of red tape and natural disasters on the SME sector and has made recommendations for the government to address these issues.

The SBAA would like to thank the Hon Ben Morton MP for inviting business and organisations to provide feedback on how regulators can best support Australian business in driving up investment. Issues that face the Small Business industry are often overlooked, and many businesses relish the opportunity to discuss their hardships when given the opportunity.

The Small Business Association of Australia (SBAA) represents 60,000 small businesses throughout Australia. In addition, it also has relationships with 41 business organisations of various kinds.

‘Small Business’ is a composition of micro, small and medium enterprises. 98% of business in Australia are small businesses which represents the largest employer group in the private sector. It is made up of a complicated mix of 3 different groups by size, each requiring their own considerations. Yet, small business in reality is often seen as irrelevant and unimportant. However, it does the heavy lifting pre pandemic, during and post a pandemic.

Red Tape has become a $180billion+ industry in. The SBAA acknowledges that laws are required, but Red tape is strangling small business in Australia, whilst many big businesses are able to continue operating with ease. Regulations are being introduced by people who have never been small business owners, and who do not functionally understand the impact of these regulations on the SMEs industry.

Regulators often do not invest their own money into a business, they avoid risk taking, they are not bound by the regulations they impose and if they mess up, the taxpayer is most likely to foot the bill.

Red tape can be driven by a ‘one cap fits all’ mentality, which simply does not work. As businesses are becoming more sophisticated the Australian Government needs to ensure that small business owners have the necessary tools and support to grow, employ staff, the ability to export and can compete in the global economy.

Currently that is not yet the case. Australia stands 14th in the world rankings of ease of doing business when it should be placed in the top 5. The rankings are based on regulation and the operational burdens placed on small businesses.

Small business needs a bolder approach by a government prepared to reform the sector.

SBAA has composed the Small Business Charter of Australia which contains 10 pillars that document the suggested guidelines for policy makers and governments. It is not intended to be a formal policy document but rather a live document that provides a framework for formulating policy for small businesses. One if its principals is – Think Small Business First’ as the prompter for inclusion when proposing new policy.

Prior to the Pandemic, many small businesses faced prolonged drought, bushfires, floods, the pandemic and then floods again down the east coast of Australia.

As a representative for small business, the SBAA is concerned about the current state of small business in Australia. Some did well, but many are more bruised and battered. The challenges facing them include, staffing shortages, having to go into debt to survive, rising inflation, rising interest rates and rising costs of doing business. In addition, many are suffering mental fatigue and related issues. The cost of doing business in this economy is high; with potential loss of the family home, business and person relationships, potential bankruptcy, and in some cases, suicide should a persons business collapse.

Governments need to stop creating band aid solutions when what is needed are intelligent examinations that lead to correcting the root of the problems.

SBAA is recommending the government take into consideration the following recommendations. Firstly, Government needs to implement a 3-year plan followed by reviews every 12 months.

The first 12 months should consist of the following:

  • Place a moratorium on taxation owed by small business. The SBAA is aware that small businesses woe the ATO significant amounts of tax but closing them down will not achieve anything of value. In fact, it can cause considerable financial and personal destruction.
  • Waiver regulator fees and licences. Some state licences may overlap, and these should be reconsidered.
  • Allow flexibility for small businesses employing under 5 employees, even though there is a labour shortage.
  • Provide a suitable moratorium on insolvency and other measures that will prohibit the take-over and demise of small businesses by stronger entities or by regulators.
  • Implement a cash boost like Job Keeper Mk1. This provided much needed cash flow for those businesses under stress. It could also assist to offset small businesses tax liability, by arrangement.

If you would like to to play an active role in adovcating or supporting small business advocay please contact us.