Survey results released by the Australian Chamber of Commerce and Industry showed that regulation (red tape) is have a moderate to major impact on 8 out 10 small business.[1] According to the ABS there are just over 2.6 million businesses in Australia, most of which are small businesses.[2] Against this context, it is easy to imagine important substantial improvements in productivity (not fewer jobs but being able to do more with the same resources). Imagine an improvement to how and where we regulate that provides a small annual increase in profit of $100 per business. This would generate an increase of at least $200 million every year. The moral is that slight changes are worth pursuing. And, on the other side, even seemingly small and innocuous changes to regulation can quietly and quickly reduce productivity. The quality of regulation is part of the cause of Australia’s mired productivity performance[3], although not the sole factor. And it is a factor truly controlled by Australian Government (Federal, State and Local). In my experience, proposers of new regulation understate the costs of regulation, particularly because they tend to focus in on the measurable. Regulation cost reckoners do a decent job of estimating the cost to government of administering regulation and a reasonable job of the additional direct cost to business of complying. Here, think of regulatory returns, compliance audits, legal advice and doing business in a prescribed way. These can be counted but they aren’t the major issue. The full cost includes the indirect cost. I would describe these as the cost of distracting entrepreneurial effort impacting on how a business perceives its market and how it competes. Its also plain exhausting. A common complaint heard from small business is that regulation adds many hours to their working week. Its hard to be innovative when you are exhausted. Echoing this sentiment is a quote in a case study accompanying the ACCI survey stated: ‘The average small business just wants to get on with it, innovate, grow, and contribute to the economy, yet we are suffocated under an increasingly complex regulatory environment and red tape burden.' [4] The above quote neatly summarises the mechanism through which the hidden costs of regulation arise. So, next time you see the estimated cost of regulation in a consultation document for a new regulation, it is likely to be the tip of the iceberg. The view in this post are personal views and do not represent the view of FTI Consulting. [1] Australian Chamber of Commerce and Industry (2024), ACCI Small Business Survey June 2024. [2] Australian Bureau of Statistics (2024), Counts of Australian Businesses, including Entrances and Exits, August 2024. [3] Productivity Commission (2024), Market sector productivity dashboard. [4] Australian Chamber of Commerce and Industry (ibid, p 2).
Jeff Lassen’s Post
More Relevant Posts
-
Finances that not only FEEL good but DO good too🌿 Radical Fractional CFO & Holistic Business Mentor for mission-led founders, startups & SMEs 🌿 Creating a trauma-informed money space ⚖️💗
🌿 Small(er) Business, Big Impact 🌿 At Below The Line Finance: Chartered Accountants & Business Advisors, we believe businesses of every size can be a force for good. That’s why we're proud to support the Better Business Act, which is transforming the way we approach business by making it mandatory to consider people, planet, and profit in decision-making. The Better Business Act offers small(er) businesses like ours a chance to make a bigger impact by aligning financial success with social and environmental responsibility. Take the first step: pledge your support for the Better Business Act and contribute to a more sustainable business world. It only takes a minute! I recently joined the Counting Change Movement - established by Scott Johnson, a collective of Accountants & Bookkeepers, committed to driving ethical change in business through grass roots action. Together we are supporting the Better Business Act. https://lnkd.in/e3PYrs7C #BetterBusinessAct #CountingChange #SustainableBusiness #SmallBusiness #BusinessForGood #PurposeDriven
-
As businesses transition beyond the R10m annual revenue threshold, many need to re-think their approach to B-BBEE In this article, we share some considerations you may need to factor into your business strategy. When do I need a B-BBEE consultant? https://lnkd.in/dHHYmBDJ
When do I need a B-BBEE consultant? - Human Capital Solutions
https://www.humancap.co.za
-
In the increasingly competitive and ever-evolving business world, understanding the intricacies of local business regulations has never been more critical. But let’s get real, navigating the labyrinth-like state and local government regulations can seem intimidating, complex, and at times, overwhelming. That's where we come into play! We're introducing "Understanding Local Business Regulations: Navigating State and Local Government Regulation," a comprehensive guide published by The Malbrue Group. This whitepaper is your GPS through the maze of business regulations, providing a route map that can help your venture stay compliant, competitive, and primed for growth. This whitepaper covers a range of key topics, from the importance of local business regulations and the key areas they encompass to the challenges businesses face while trying to keep up with the complexities of these regulations and the frequent changes. But don't fret! We also provide practical, clear, actionable strategies and solutions for overcoming these challenges. We know it's a lot. But we guarantee it’s worth your time. This isn't just about rule-following. It's about gaining strategic advantages, mitigating risks, building community trust, and paving the way for your business's success. Sounds good, right? We invite you to download, read, and share "Understanding Local Business Regulations: Navigating State and Local Government Regulation" within your network. Arm yourself with the knowledge and tools to confidently navigate the regulatory landscape, and let's position your business for sustained growth and a competitive edge. Because with the right guidance, complexity becomes a possibility. Ready to take the plunge? Download your copy, and let's begin this journey together. The path to mastering local business regulations starts here! #SmallBusiness #BusinessRegulations #LocalBusiness #Compliance #StrategicPlanning #Entrepreneurship #RiskManagement #GovernmentRegulations #BusinessGrowth
-
I lead a pro-active team of accountants that deliver dynamic effective advice that helps your results & bottom line.
What challenges are SMEs facing today? SMEs account for over 99 per cent of all UK businesses and around half of private sector turnover, but they are still uniquely vulnerable to certain challenges that can limit growth. In my experience, the most significant of these tend to include: · Rising costs and lacking economies of scale · Compliance with tax and reporting legislation · Cash flow and cash shortages · Inefficiencies due to administrative tasks To some degree, this is inevitable while a business finds its feet. However, there are steps that business owners can take to minimise the impact of these challenges, such as adopting technology – and not going it alone. The right accountancy and advisory team is key to helping SMEs get the right practical support. For example, most business owners are not experts on corporate taxes, and getting it wrong is both easy and potentially costly for the reputation and financial health of a business. Tapping into expertise is an excellent way of turning these challenges on their heads and identifying additional opportunities for expansion and long-term success. #Accountancy #SMEAdvisory #BusinessAdvisory #SMEAccountancy #SMEChallenges
-
-
The 3 Key Strategies to Empower Businesses At the regular press conference of the Government of June 1, 2024, Deputy Minister of Planning and Investment Tran Quoc Phuong shared that business registration and establishment have been heated topics of societal concern. Regarding business registration in May 2024, Deputy Minister Phuong observed a positive trend. The total number of newly established businesses and those re-entering the market or resuming operations reached 20,000, 1.7 times higher than those exiting and a 10.6% increase compared to the same period last year. Deputy Minister Tran Quoc Phuong shares information about businesses in the first five months of 2024 at the regular Government press conference in May 2024. In the first five months of 2024, the trend shows that the number of newly established businesses and those re-entering the market exceeded those exiting. Specifically, 98,800 businesses were formed or re-entered, while 97,300 left the market, a slight difference of about 1,000 businesses. This indicates that businesses are facing significant challenges in their production and operations in the current context. Regarding business registration, Deputy Minister Phuong affirmed that the Ministry of Planning and Investment has been closely monitoring and regularly reporting to the Prime Minister and the Government, highlighting positive signals of economic recovery and increases in new business registrations. However, he also acknowledged the prevailing difficulties and challenges. Therefore, at the Government meeting on June 1, 2024, the Prime Minister directed specific solutions to actively promote growth in three key areas. Prime Minister Pham Minh Chinh: Prioritize growth and control inflation First, continue to remove obstacles for businesses, especially administrative procedures, to facilitate market entry and smooth operations. Second, improve input factors, particularly through fiscal and monetary policies. This includes maintaining stability and enhancing businesses’ access to credit; proposing tax reductions and considering fee and charge reductions or postponements to increase businesses’ cash flow, and supporting input factors and output solutions. Third, regarding Vietnam’s export market, promote solutions for businesses to promptly secure new orders to sustain their production and business activities. The post The 3 Key Strategies to Empower Businesses appeared first on xe.today.
The 3 Key Strategies to Empower Businesses At the regular press conference of the Government of June 1, 2024, Deputy Minister of Planning and Investment Tran Quoc Phuong shared that business registration and establishment have been heated topics of societal concern. Regarding business registration in May 2024, Deputy Minister Phuong observed a positive trend. The total number of newly estab...
https://xe.today
-
📋 The quarterly national business confidence survey from the Institute of Chartered Accountants in England and Wales (#ICAEW) suggests that business #confidence in the #SouthEast, whilst growing, is falling behind the rest of the UK. You can explore the results of the survey now, which include details of how businesses should respond to the findings and what opportunities to look out for. 👇
Business confidence in the South East has grown but falls behind the rest of the UK
https://www.krestonreeves.com
-
Business confidence saw a slight increase in the September 2024 quarter, according to the South Australian Business Chamber, William Buck Survey of Business Expectations. Adrian Chugg, Managing Parter, William Buck South Australia, highlights that compliance issues have emerged as a growing concern, now ranking as the third most pressing challenge for businesses. The report shows that 53.7% of businesses are dedicating more time to industrial relations compliance, largely due to the new ‘Closing the Loopholes’ law. This has resulted in higher operational costs, leaving businesses caught between the demands of regulation and the need for growth. Read the South Australian Business Chamber, William Buck Survey of Expectations for the September Quarter 2024 here: https://okt.to/NPmt0a Read Adrian Chugg's commentary below. #SOBE #SABusinessConfidence #SABusinessChamber
South Australian businesses caught between regulation or growth
https://williambuck.com
-
Excited to share this insightful article on how Rachel Reeves can champion SMEs ahead of the Autumn Statement. Let's stop the fearmongering and focus on supporting small businesses! Check it out here. 👉 https://zurl.co/4vLK #SMENews #AutumnStatement #SmallBusinessSupport
Stop The Fearmongering: Five Ways Rachel Reeves Can Champion SMEs Ahead of the Autumn Statement - SME News
smenews.digital
-
Product Registration & Compliance Manager @Alshaya Group | Helping Global Brands and Supply Chain Teams with obtaining SABER, SASO IECEE, EER, MOIAT, QGOSM, GCTS/G-MARK, COC, COI and TIR for ME Market Access
Such a great initiative! This new initiative by UK government will introduce a new rule which emphasizes that new regulations can only be introduced when it is “absolutely necessary.” Interesting to note that Programme – which was launched just last year – has already introduced reforms saving 50 million hours of admin work per year for businesses, saving them an estimated £1 billion, which has been pumped back into the economy. Currently, government is seeking views on a number of common-sense changes that will deliver simpler, clearer regulations including New proposals on an alternative model for UK REACH, reducing the need for access to EU hazard data, improving data on ‘use and exposure’ and improving regulator powers, while ensuring high levels of protection of human health and the environment are maintained. #compliance #regulatory #reach #brexit #safety #productsafety #business #growth #law #certification #testing
Brexit freedoms used to slash red tape for businesses
gov.uk
-
Attention all entrepreneurs and business owners, As we approach June 2024, it is crucial to keep in mind the upcoming due dates for filing essential compliances. These deadlines are critical for ensuring that your entity remains in good standing and avoids potential penalties and interest charges. Please take the time to review all the necessary compliances applicable to your specific entity, including but not limited to tax filings, regulatory submissions, and financial reporting requirements. By proactively addressing these obligations, you can safeguard your business from any adverse consequences and maintain a strong compliance record. Your diligence in meeting these deadlines will not only demonstrate your commitment to responsible business practices but also contribute to the overall stability and success of your enterprise. Thank you for your attention to this matter, and please do not hesitate to reach out if you require any assistance in fulfilling these obligations. #taxaccsoft #financialservices #auditingservices #taxfiling #businessowners #employees #compliance #deadlines #businessobligations #entrepreneurship #financialreporting
-
Retired
2moWell argued Jeff - productivity enhancement must be a primary commitment of Government.