Growing red tape burden holding back business growth and innovationDOWNLOAD
27 September 2011: The latest Australian Industry Group/Deloitte CEO survey released today, Business Regulation, points to the high and rising cost of complying with regulation for Australian businesses. At a time when pressures are intensifying to innovate and change business practices, the growing burden of business regulation is proving a barrier to innovation and growth. It requires urgent government attention.
According to the survey of 322 CEOs from the manufacturing, services and construction sectors, the average business spends almost four percent of its annual costs on complying with regulation. This is a major cost impost on business particularly at a time of ever-tightening margins and general global and domestic economic uncertainty.
Other key findings include:
Australian Industry Group (Ai Group) Chief Executive, Heather Ridout, said: "What is painfully clear from this report is the burden regulation is having on the costs of doing business in Australia. Despite all the talk of aspiring to be a seamless national economy our red tape burden is rising not falling. Into this difficult environment, the Government is proposing to introduce a carbon tax which many respondents anticipate will be the major driver of increased compliance costs over the next three years. This is a major concern for business productivity and competitiveness.
"Other key areas identified as needing urgent action include occupational health and safety, workers compensation, industrial relations and regulations affecting the employment of labour and trading internationally.
"Governments need to be proactive to address the regulatory burden and action should include: accelerating the implementation of the recent COAG reform initiatives; reviewing the effectiveness of state government initiatives to reduce the regulatory burden; making regulatory impact statements more consistent and transparent; and improving regulatory agency interaction with the business community, " Mrs Ridout said.
Deloitte Managing Partner, NSW, John Meacock, said: "While it is clear from this survey that regulatory compliance costs remain an issue for business, regulatory change can also present opportunities for business to get ahead of the game. Managing future changes with maximum efficiency should also be accompanied by strategies to take advantage of regulatory change. A strong case in point is the carbon pricing scheme and how organisations can strategically position themselves to take advantage of the changes."
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The full survey can be found at http://www.aigroup.com.au/policy/reports