“A game changer”: Regulators to face new rules when playing against small business

Regulators and bureaucrats will have to abide by a new regulatory performance framework when dealing with small business, says Small Business Minister Bruce Billson.

Billson confirmed to SmartCompany this morning regulators such as the Australian Tax Office will themselves become the subject of regulation to make sure its behaviour towards small business is “reasonable and proportionate”.

The move follows a recent conference discussion which saw Australia’s top regulators admit there are major regulatory roadblocks making it harder for small business to do the right thing.

The new rules are expected to form part of the Abbott government’s innovation and competitiveness agenda, which is anticipated to be released in the coming weeks.

Billson says the government’s action is a part of its billion-dollar red tape reduction campaign, designed to remove “unnecessary and ineffective” regulation.

“We are keen to reduce the stock and cost of regulation and to make sure regulators think about their own performance in the implementation of the burden of compliance,” says Billson.

Billson says the framework will be designed to avoid a “gotcha” approach when dealing with small business and will require regulators to self-assess effective operations as well as undergo an external review process.

Regulators will also be required to communicate clearly with small businesses and consider the “capacity of the respondent to meet regulatory expectations”.

“If you’re administering a regulatory burden and the bulk of those affected are small business, don’t behave or dream up some arrangement that needs 20 people in the compliance department,” says Billson.

“It’s about educating our regulators and it’s about a shift in culture.”

Billson encourages small business owners to contribute to the regulatory performance framework at cuttingredtape.gov.au, although submissions close today.

Peter Strong, executive director of the Council of Small Business of Australia, described the new principles as “fantastic”, telling SmartCompany: “Bruce Billson should be congratulated.”

“It’s about everyone working more closely together … It’s a really good thing, one of those game changers,” says Strong, who points out COSBOA has been leading the charge on the introduction of the new regulatory framework.

Strong says the principles will apply to any regulator that “deals with small business”, and it “goes way beyond” the likes of the Australian Competition and Consumer Commission and the Australian Securities and Investments Commission.

But Strong says it is important the new framework “does not go over the top and make the regulators’ lives harder” because “they will just end up acting like us, just ticking boxes”.

Strong says some of the changes, which are in response to the Productivity Commission’s findings from last October, have already begun filtering through, including the way the Fair Work Ombudsman operates.