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Tax Office still number one red tape offender

Release Date: 30/01/2012

The Australian Tax Office and local councils continue to dominate the top positions on the leader board of government organisations burying NSW businesses in mountains of red tape, according to the fourth annual Red Tape Survey by the NSW Business Chamber.

The top government red tape offenders with medium to high levels of red tape are:

  1. Australian Tax Office (57.0%)
  2. Local Councils (55.5%)
  3. NSW Department of Planning and Infrastructure (51.7%)
  4. Australian Quarantine and Inspection Service (50.0%)
  5. Fair Work Australia (49.7%)

Over the past two years, six out of ten businesses in NSW have experienced an increase in the cost (62.7%) and time (63.5%) it takes to comply with government red tape. Less than 1% (0.2%) of businesses surveyed said they thought red tape had decreased.

Disturbingly, more than one in every ten (12.7%) businesses surveyed is spending over 20 hours a week on red tape. A further one in five (18.2%) is spending between six to ten hours.

“For all the rhetoric from every level of government about reducing regulatory burdens, the experience of businesses in NSW is one of increasing compliance costs and a mountain of red tape,” said Les Dion, President of the Illawarra Business Chamber.

“Many of these government organisations and departments appearing on the Top 5 list will come as no surprise to business owners who have to deal with their reporting and regulatory requirements day in, day out.

“The ATO demonstrated during the GFC that it could be a supportive and flexible partner with the business community. That support was greatly appreciated by business operators during that tough period but sadly it appears the ATO has not maintained this support more recently.

“The message coming out loud and clear from this survey is that while the complexity of regulations themselves creates difficulty for business owners, the problem in a lot of cases is the fundamental operation of the government agency itself.

Mr Dion said complaints about government agencies included difficulty speaking to a representative, obtaining accurate information, complex and unfriendly websites, inflexibility and unrealistic timeframes.

“There is a growing disconnect between expectations of government agencies and the realities of operating a business. Government agencies need to have a stronger customer focus just like the businesses they regulate.

“The business environment is becoming more heavily regulated, which stifles creativity and innovation. Red tape is an impediment to growth and impacts costs, profits and employment.

“Local council regulation and decision-making continues to be a cumbersome nightmare for business. Business wants certainty and timely decision making from local government – even if the answer is no – business owners want to know where they stand.

Mr Dion said he was concerned by the response that half (50%) of businesses surveyed said red tape was having some impact on the growth of their business.

“We need strategies to remove the burden of red tape which prevents businesses from investing in the future growth of their enterprise. The effects of this are decreased employment opportunities and a weaker economy, generating less revenue for government to invest in essential services and infrastructure.

“All this red tape acts as disincentive for the next generation of Australian entrepreneurs to take on the challenge of running their own business.
On a positive note, Mr Dion said the NSW Business Chamber has been encouraged by the actions of the O’Farrell Government to date in prioritising red tape reduction. In particular, the fact that the Government has announced policy initiatives consistent with each of the primary recommendations set out in the Chamber’s Red Tape Action Plan.

The NSW Government has committed to:

  • Having all agencies pay their bills within 30 days or pay penalty interest.
  • Introducing a Standard Cost Model (SCM) for measuring the costs of regulation.
  • Implementing a “One On, Two Off‟ rule for new regulations. All departments and agencies seeking to introduce new regulation must identify two existing pieces of regulation to be removed.
  • Appointing a cross-border commissioner to help resolve some of the administrative and regulatory issues between NSW and the bordering states of Victoria, Queensland, South Australia and the Australian Capital Territory.
  • Achieving a 20 per cent reduction in red tape within its first term (5 per cent per annum).

“Business has enthusiastically welcomed the appointment of Yasmin King as NSW’s first Small Business Commissioner. The NSW Business Chamber will be collaborating with Ms King to reduce the red tape burden on the NSW business community.

NSW Business Chamber undertook its annual Red Tape Survey of 581 businesses during November 2011.

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