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$32bn cost of admin and red tape

Adam Zuchetti
Adam Zuchetti
21 September 2017 1 minute readShare
Productivity, time, cogs, business

Australian SMEs are collectively losing almost $32 billion in productivity annually as a direct result of administration and regulation.

Accounting software provider Sage profiled 3,026 SMEs across 11 countries, including 278 here in Australia, and found that local businesses are spending 81 working days per year on administration – including that imposed by regulators including the tax office. The implied loss from this amounts to $31.8 billion.

Various types of administration encountered by businesses are presented in the findings, including operational aspects such as recruitment and staff training, processing invoices as well as regulatory aspects including tax and payroll.

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This backs up a separate research from Scottish Pacific that has found red tape is causing SMEs to shed staff.

Accounting is the biggest drain on productivity in Australia with 27 per cent of all admin. Tax contributed a further 15 per cent.

 

Commenting on the findings, Sage’s APAC marketing director Elaine Seeto said: “Imagine how we could benefit by removing this burden and replacing it with productive tasks, like winning clients or improving products.”

However, Australian business owners should spare a thought for those in other countries. The research suggests Australian firms have the second lowest admin burden of the countries surveyed (behind Ireland).

American firms spend three times more on admin than Australian firms, and Spanish and South African businesses more than double.

 

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$32bn cost of admin and red tape
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Adam Zuchetti
Adam Zuchetti

Adam Zuchetti is the former editor of MyBusiness and a senior freelance media professional, specialising in the fields of business, personal finance and property. In 2020, he also embarked on his own business journey – inspired in part by the entrepreneurs and founders he had met through his journalistic work – with the launch of customised pet gifting and subscription service Paws N’ All.

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