Red Tape choking business

04-04-2014

A major survey of Australian business shows that red tape continues to strangle business – and it’s getting worse.

According to the second national Red Tape Survey, released by the Australian Chamber of Commerce and Industry last week, about 70 per cent of businesses surveyed report that regulatory burdens have increased over the past 12 months.

Nearly a third of them say they have become "much higher."

More than 50 per cent of all businesses indicated they had no capacity to pass the cost of regulation on to consumers. And fewer than 5 per cent of businesses reported being able to pass on all the costs to consumers.

Unsurprisingly, almost two thirds of those surveyed indicated that regulatory requirements had a negative impact on their business and a similar proportion considered their industry to be overregulated.

Overwhelmingly, businesses considered regulation to be poorly explained by regulators, inconsistently enforced and unnecessarily strict.

Perhaps the most disturbing element of the survey is the finding that almost 40 per cent of businesses reported that regulatory requirements had prevented them from making changes to grow their business.

ACCI's Acting Chief Economist, Burchell Wilson, said: "There is a clear frustration within the business community about the extent of over-regulation and the costs it is imposing. Regulation stifles business growth and chokes off the jobs that would have resulted from that growth."

"There are also messages of despair in the survey, with businesses indicating that the relentless build-up of new regulatory obligations and constant regulatory changes were pushing them closer to the point where it would be easier to shut down their operations."

Mr Wilson said the survey findings demonstrate a pressing need for a targeted and disciplined deregulatory agenda.

Every opportunity needs to be taken to lift the crushing burden of red tape on business," he said.

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