“When they change the tax system, at least the Federal Government spoke to the likes of MYOB and they send you a patch,’’ Barrenger says.
“But when they change the award system, everything has to be done manually and there are so many different awards out there.”
Regulation bun fight
He says he has spent his time at workshops and he has talked to a number of people, and he was still no clearer on how to comply with the new rules.
“I still don’t know if I have it right. When you have to go to workshops and hold meetings just to comply and then still not be 100% confident you are complying, that’s just wrong,’’ he says.
He says the different pieces of red tape for small businesses and start-ups are quite small. But they all add up.
“You add it all together and you have this unwieldy beast where you are trying to comply with all the different regulations and paper work.”
The Coalition has seized on the red tape issue, and has condemned the Government for directing the Productivity Commission to look at the impact of regulation on small business, saying the Government is clueless on how to handle the problem.
Shadow Small Business Minister Bruce Billson says 12,000 regulations have been introduced since the last Federal election. Federal small business minister Nick Sherry has hit back, saying the Coalition had imposed the biggest red tape impost of all with the GST.
Barrenger says both sides of politics have failed to do anything about the problem. Politicians, he says, simply don’t get it. They deliberately keep things vague and nothing happens.
“Name me one of them who has actually stuck their hand in the air and said, ‘This is the red tape I am going to target’,’’ he says.
Teething problems
Council of Small Business of Australia (COSBOA) general manager Robert Mallett says there is a new addition to the growing pile of red tape for start-ups: paid parental leave.
Fully funded by the Federal Government, the Family Assistance Office pays the money to the employer who passes that on to the employee on leave, effectively turning the company into a payroll clerk and adding another administrative layer.
“We were asking the Government why they needed to introduce new red tape but they absolutely didn’t want to listen to us,’’ Mallett says.
“It means business owners have to spend more time managing this payment that should never have been touched in the first place.”
He says the changes to the awards are particularly complex, forcing employers to spend hours working it out.
“Working out how to pay someone is the least productive thing you can do,” Mallett says.
He says the amount of red tape has increased over the years. “At the end of the day, what you are trying to do is comply with the regulation, whether that’s state, Federal or local and they just keep adding to the problem,’’ he says.
Paperwork overload
Pring questions whether the amount of red tape has increased but insists that the Government certainly has not got rid of any.
He does not believe the amount of red tape discourages people from setting up businesses but entrepreneurs are not prepared for it.
“People have other reasons for entering business and I am not sure the compliance load would discourage, but once they have made a decision to enter a small business, they would certainly find themselves spending more time complying than they would otherwise expect to spend,’’ Pring says.
“They would be spending more time on paperwork than core business.”
He says the biggest red tape load would be the multiple reporting lines for tax, something he hopes will be addressed in the October tax summit.
To reduce the amount of red tape, he suggests business owners look at their structure.
“For a very small business, the partnership approach works well with top marginal tax rate not cutting in until $180,000 so for a husband and wife partnership, it could do it until their income exceeds $360,000,’’ he says. “Partnerships are a very effective structure.”
Apart from that, he says, there is little else businesses can do.
“I am not sure people can do a lot more to reduce red tape because they are still required to file and comply,’’ he says. “Having systems in place is always good but at the end of the day, they just provide information that you have to report.”
