Productivity Commission slams small business regulators

A newly released report by the Productivity Commission has slammed government regulatory bodies, saying they can do more to reduce the compliance and enforcement burdens they impose on small businesses.

A newly released report by the Productivity Commission has slammed government regulatory bodies, saying they can do more to reduce the compliance and enforcement burdens they impose on small businesses.

In the report, titled Regulator Engagement With Small Business, the Commission argues that regulators should ensure they understand how regulation impacts on small business and keep the compliance capacity of small businesses at the forefront of their minds. 

“A regulator’s culture and attitude towards business can be as important as the content of the regulation itself,” Commissioner Warren Mundy said. “There is still significant scope for improvement in the way regulators engage with small businesses.”

To secure benefits for small businesses and, importantly, also for the broader community, the PC report proposes a suite of changes to be implemented by Commonwealth, state and territory, and local governments. These changes include:

  • Regulators adopting a multi-channel approach to communicating with
    small businesses with a focus on the brevity, clarity and accessibility of information.
  • Compliance and enforcement strategies being proportionate to risks posed to communities and facilitate voluntary compliance.
  • Regulators committing publicly to target timeframes for key processes, report on their performance in meeting targets, and consider other measures to improve timeliness.
  • Regulators having access to a sufficient range of enforcement tools and be resourced to do their job effectively, to avoid the shifting of direct and indirect costs onto businesses.

The Productivity Commission found that leading practices in regulator engagement with small business were more commonly adopted by regulators that have implemented a risk-based approach. A stronger focus on risk was found to limit unnecessary intrusion on lower risk small businesses; free up resources to improve frontline guidance and advice services; and enable them to more effectively address higher risks to communities. 

The Commission also found that regulators with effective risk-based engagement policies and procedures were more likely to be better resourced and to have senior leadership that invests in, and fosters, a business focused culture among their staff.

The Regulator Engagement With Small Business report can be read in full here.

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