Counting the cost of red tape in NSW

May 1st, 2014

Red tape creates difficulties for small businesses

Every small business faces a certain amount of red tape, but it seems those in New South Wales are particularly struggling at the moment.

The latest NSW Business Chamber Red Tape Survey showed these companies collectively face $8.4 billion in compliance costs each year - and this figure has the potential to rise.

Whether you're running a non-employing business in the state or one that employs hundreds of staff, the data shows that regulations are proving ever more difficult to contend with.

Stephen Cartwright, chief executive officer of the NSW Business Chamber, said: "The fact that a sole trader who is the owner, operator and the only employee in the business is spending $3,000 a year on red tape compliance shows that we are getting our priorities wrong."

Statistics show that businesses employing between one and four people are confronted with $9,000 of red tape costs every year - a figure that increases to $386,000 for those with 200 or more workers.

Mr Cartwright also noted how in some cases, firms are being deterred from taking on more staff because of the problems it creates.

"Red tape is essentially an artificial barrier we choose to put on our enterprises," he continued.

"For every dollar that is wasted on filling out forms and keeping the government in the loop on what's happening in every workplace, is money taken away from growing a business and paying salaries."

Businesses were asked whether they believed they were overregulated and that the overall impact of these measures was restrictive.

Just over half (51 per cent) agreed with this statement, with many respondents saying that rules are generally far too complex and without sufficient explanation.

When asked to name the most costly business tasks, the three main areas of concern were implementing rules, keeping records and filling in forms.

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