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Regulatory compliance for Australian SMEs: what’s the solution?

Regulatory compliance for Australian SMEs: what’s the solution?
February 16, 2021 va-admin

Most Australian small business owners will be quick to tell you that all the challenges of running an SME are hard enough, even before taking into account the fast-moving, ever-changing regulatory compliance landscape.

Red tape and industry regulations are a necessary burden. But when there are bills to pay and a business to run, the details and minutiae involved in regulatory compliance are complex and can feel overwhelming.

It’s a fine line.

But has the Australian regulatory landscape become too complex? Is some degree of regulatory reform actually key to ensuring the viability and success of small businesses in this country?

Who’s looking out for small business?

James Pearson, Chief Executive Officer of the Australian Chamber of Commerce and Industry said in the ACCI’s Enabling Safe and Healthy Workplaces for Small Business report, “The regulatory environment in Australia is complex and not scaled to the realities of small business. Most regulations are designed with large businesses in mind and ignore the unique needs and characteristics of small businesses.”

The report confirmed what most SMEs knew to be true: that they cannot be treated as “little big businesses” (in most contexts, but specifically here in the context of work health and safety regulations).

Pearson’s intro went on to affirm that SMEs need help to translate WHS regulations into their own context, as well as help in implementing them, rather than receiving support through “an avalanche of additional guidance materials, or shortened or ‘dumbed down’ documents.”

There’s no doubt: SMEs want to be safe and comply with best practice. Importantly, the report warns against subscribing to prejudice against SMEs that they tend to avoid, or are noncompliant, when it comes to WHS.

It’s worth noting that report was tabled prior to the coronavirus pandemic. So perhaps even more so as we move through 2021, as the Business Council of Australia’s Tim Reed put it so astutely, over-regulation and unnecessary red tape will make it harder for small business to get on with business and create new jobs.

“Unnecessary regulation was one of the first things to be jettisoned during the pandemic in areas such as delivery curfews for supermarkets, approval times for projects and retail trading hours,” he said.

“The long-term removal of these handbrakes on the economy will benefit all Australians. Red tape is not only a burden on business, ultimately it is a cost to consumers.”

Other leading figures spearheading the need for regulatory reform include Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, who stated that government investment in regtech (Financial and Regulatory Technology) would be an effective way to cut red tape for small businesses.

“Research shows us that a quarter of small businesses spend 11 hours a week or more on compliance and close to half estimate the annual cost of compliance is $10,000 plus,” she said at a Senate Select Committee hearing on the matter in July 2020.

She went on to say that with effective use of regtech, the government could streamline processes and reduce the burden on small businesses to interpret and implement complex regulations.

As small business advisers, at Vital Addition (VA) we’re certainly not championing any drastic reforms of those regulations which are necessary for the health, wellbeing and greater good of the whole community.

But the net win for business and regulators alike will be the implementation of a streamlined regulatory process which makes it easier and less financially punishing for smaller businesses to employ new people as they grow, cutting all unnecessary or overtly burdensome red tape, while keeping those necessary regulatory frameworks in place.

If you have concerns about regulatory compliance affecting your business and would like to arrange a complimentary strategy call, get in touch! Call 02 8239 8200 or email info@vitaladdition.com.au today.

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