Council of Small Business Organisations
of Australia Ltd.

Submission to the

Taskforce on Reducing the Regulatory Burden on Business.

21st November 2005

TABLE OF CONTENTS

1.	Background on COSBOA
2.	Introduction
3.	Terms of Reference
4.	The Impact on Small Business
a)	Tax
b)	Superannuation
c)	OH & S.
d) 	Employment
e)	Business Registration (ASIC).
f)	Insurance and Workers Compensation
g)	Banking
h)	Health and Hygiene
i)	Telstra
j)	Tax Threshold
k)	Liquor Licensing
l)	GST
m)	Structural Changes
5.	Our membership
6.	Conclusion

1.	Background on COSBOA

The Council of Small Business Organisations of Australia Ltd (COSBOA) is widely recognised as a peak body of small business organisations, industry groups and individual members. It was founded in 1979, incorporated in 1985 and operates through a secretariat based in Belconnen, Canberra.
We represent the small business sector in Australia. All members have the opportunity and means to influence, at political and government levels, for the well-being and future of their member small businesses.
•	We provide the small business sector with information.
•	We assist individual members and member associations.
We help individual members and member associations develop business opportunities through our affiliations with key organisations. All members can use COSBOA’s affiliations and contacts with industry and business organisations.
We help members influence their external business environment, especially in the area of government policy.
COSBOA assists members by monitoring government activities, influencing the development of government policies, presenting industry viewpoints and providing opportunities for members to become involved in policy development.
COSBOA is the primary lobbying vehicle for issues relating to the small business sector.
COSBOA members can have ready access to information on key policies impacting on the small business sector.
COSBOA is headed by a Board of Management and the Chair, Mr. Bob Stanton, who also presides over the quarterly Council meetings consisting of all members, these are usually held in Canberra.
COSBOA also holds the National Small Business Summit annually and boasts the attendance of the Prime Minister on 4 of the 5 occasions it has been held. This reflects the importance of small business to the Australian community and the economy.

2.	Introduction

The Members of COSBOA have had at the top of their list of requirements from the Government “Red Tape” for a long time. The Bell report in the late nineties was received well but with the subsequent introduction of GST an enormous amount of process and procedure was developed to be administered by small business, all on behalf of Government without compensation.

There are 1.3 million small businesses in Australia all of which must comply at some level with Government red tape. This is most evident when a small business employs their first staff member.

As stated at the task force small business round table, small businesses are feeling swamped by the procedures they face just to exist and this is not just directly with Government. Indirect red tape is also playing havoc with the little time available to small business owners and their staff.

The key to reducing red tape does not lie with the word reduction alone, we feel as much can be done by introducing and developing facilities and tools for small businesses to assist them to comply. Easy to use web sites and Government supplied IT services should be developed and provided to make it easier for compliance.

Partnerships between the Government and software providers present an ideal opportunity to take advantage of an integrated approach. As IT is developed, a holistic way of thinking should be adopted by regulators to ensure a diminished workload on the business sector. 

It must be strongly pointed out that COSBOA does not want to see any further deregulation of industries or professions that would allow the entry of unqualified persons passing themselves off as professional service providers. We see opportunities for utilising industry association. 

3.	Terms of Reference
The Taskforce will: 
•	identify specific areas of Commonwealth Government regulation which are unnecessarily burdensome, complex, redundant or duplicate regulations in other jurisdictions; 
•	indicate those areas in which regulation should be removed or significantly reduced as a matter of priority; 
•	examine non-regulatory options (including business self-regulation) for achieving desired outcomes and how best to reduce duplication and increase harmonisation within existing regulatory frameworks; and 
•	provide practical options for alleviating the Commonwealth’s ‘red tape’ burden on business, including family-run and other small businesses. 
The Taskforce will report by 31 January 2006.

4.	The Impact on Small Business

a)	Tax
The burden on small business to comply with tax legislation is considerable and other than a few intrepid souls, most hand the responsibility to their accountant or have employed staff to assist. These costs are the costs to be measured by this inquiry. Taxes such as GST, PAYG, FBT, Company tax all impact on small businesses. 
b)	Superannuation

The small business sector was disappointed by the introduction of super choice. Even though we agree with the principal the Government handing administration of the system to the employer instead of ensuring employees were responsible for their own money perpetuated the problem.

Because employers already look after the payroll and many deductions of employees the Government seems to think that the business community is a handy way of introducing further outsourced systems relating to employees.

c)	OH & S.
Employers have been wearing an ever increasing burden regarding occupational health and safety. The principle of safety at work is paramount however the procedures introduced and diminishing level of SELF responsibility concern small business owners greatly.
d) 	Employment
COSBOA has frequently heard from member association and their members that the most onerous part of red tape is the process of employing staff. Tax, IR and induction processes often see new employers revert back to non employers as it all seems too hard.
It is this area that often is seen at the main reason industry associations retain members; assisting these associations may be one way to ensure small business get the assistance required.
Record keeping requirements are extensive and in many small businesses are either not done or passed onto accountants who in turn pass back the appropriate cost to the small businesses.
e)	Business Registration (ASIC).
With the introduction of WorkChoices many businesses will be looking to register as a company in order to take advantage of some of the benefits that will be available.
The Government should look seriously at ways to help small business to become a company without the cost and onerous procedures currently involved with ASIC.
The Form based system of reporting should be replaced by a web based profile system. This view has been expressed to the ASIC Business Advisory Committee.
AT COSBOA we feel there must be either a relaxing of the procedures or an easier method of registering as a company. This must not only be with regard to the paperwork and cost but also the onerous responsibilities that go with being a Director of a company, the legal duty of care. 

f)	Insurance and Workers Compensation 

Financial Services Regulations along with other legislation has resulted in massive forms being presented to business when the annual insurance and workers compensation payments are invoiced.

Business finds this overwhelming and confusing and is not reading the contents, to their detriment. Simple short forms are required to ensure an understanding in this sector.

g)	Banking

The banking system is now so complicated and policy oriented that customer service is impossible. Small business owners do not have the time to queue to deposit cash or the patience to deal at the branch level. Red tape involved in gaining loans, operating accounts and even understanding the intricacies of each banks system is driving small business away.

Web based systems are not yet at a stage where they are user friendly even though the banks are manipulating customers towards it.

The main point here is that banks are inefficient and are trying to pass on the Government requirements due to legislation such as the Privacy Laws to customers without success.   

h)	Health and Hygiene

State level heath laws are impacting on small business greatly especially in the food service areas, Food Health Plans, extra costs for equipment, sometimes when not required, and bad interpretation of the law by individual offices are placing a drain on low resourced businesses.

i)	Telstra

The limits on communication between the different levels of Telstra that are in place in order not to allow the undermining of competition in fact prohibit the efficiency of their own system.

Small business has often had trouble dealing with both sides of Telstra at the same time and competitors of Telstra that are restricted in what they are able to offer by the limitation placing on them by Telstra.

j)	Tax Threshold

COSBOA requests that all tax and tax related tax thresholds be indexed in order that creeping inflation does not render these thresholds a hindrance to the scheme they are attached to that are originally designed to help small business. IE: Superannuation monthly income limit. GST threshold for small business, etc.

k)	Liquor Licensing

Following deregulation of the liquor industry in Victoria in 2002, the health lobby has brought about re-regulation by way of the introduction of bans of certain products being sold.

Also a re-regulation of the industry through the introduction of compulsory codes of conduct that exceed regulations and even the Act itself, in Victoria.

An example of this demonstrated that in the area of VIC/NSW border people that have qualified for a Responsible Service of Alcohol certificate in one state do not have those qualifications recognised by the other state. This creates problems for retailers in both states who operate on both side of the river/border.

In the security industry there are firearms instructors who are training people on both sides of the NSW/VIC border. The instructor who has his firearms registered in one state can not use them on the other side of the border. This situation follows the introduction of the so called national firearms laws.

l)	GST

It has been discussed at COSBOA that GST across the board would benefit the smooth operation of the GST and BAS systems. Although we realise this may be politically unpaletable it serves to highlight the hindrance on small business when a political compromise is introduced and complicated matters.

m)	Structural Changes

Thought should be given to moving the Office of Regulatory Review to a department or office outside Treasury.  Suggestions from within our ranks include Prime Minister and Cabinet or the Office of the Leader of the House or even a separate statutory body. 

Regulatory Impact Statements should include the small business sector within their own processes.

The Office of Small Business has showcased a new programme where a costing model can be used to estimate the cost impact on business, of proposed legislation. We feel this sort of programme, used at all Government levels, would help highlight concerns of the small business sector before legislation goes through Parliament. It should be remembered that it only measures in dollars and not the impact to lifestyle or other social concerns.

It has also been noticed by small business associations that there has been an increase in the number of Government Departments reducing the allowable time to make submissions to regulation reviews etc. We proposed that there should be a minimum of one month to allow interested parties to consult and to also provide (hopefully) a better quality submission.

Submissions to Cabinet should include these impact statements and draft costings to highlight the possible impact on small business of proposed legislation. This should relate to current legislation as well and a concerted effort to repeal un-necessary legislation should be undertaken.

5.	Our membership
•	Australian Equipment Lessors Association (AELA) 
•	Australian Gift and Homewares Association (AGHA) 
•	Australasian Performing Rights Association Limited (APRA) 
•	Business and Professional Women Australia (BPW) 
•	The Retail Confectionery and Mixed Business Association Inc. (CAMBA) 
•	Civil Contractors Federation (CCF) 
o	Civil Contractors Federation, NSW 
o	Civil Contractors Federation, Vic 
o	Civil Contractors Federation, Qld 
o	Civil Contractors Federation, WA 
o	Civil Contractors Federation, SA 
o	Civil Contractors Federation, Tas 
o	Civil Contractors Federation, NT 
o	Civil Contractors Federation, ACT 
•	Retailers and Shop Keepers Association of NSW (RTSA NSW) 
•	Furnishers Society of Victoria (Inc) (FSV) 
o	Furnishers Society of Australia 
•	Independent Station Owners 
•	Independent Retailers Organisation Inc (IRO) 
•	National Association of Retail Grocers of Australia (NARGA) 
o	Retail Traders and Shopkeepers Association of NSW 
o	WA Independent Grocers Association 
o	Tasmanian Independent Retailers 
o	Queensland Retail Traders and Shopkeepers Association 
o	IGA Retail Network 
o	Small Retailers Association of SA 
o	Canberra Small Business Council 
•	National Independent Retailers Association (NIRA) 
o	Retail Traders and Shopkeepers Association of NSW 
•	State Retailers Association of South Australia 
o	Queensland Retail Traders and Shopkeepers Association 
•	The Retail Traders Association of Tasmania 
o	Independent Retailers Organisation of WA 
•	The Retail Confectionery and Mixed Business Association Inc. 
•	Lottery Agents Association Victo 
•	Pharmacy Guild of Australia 
o	Pharmacy Guild, ACT 
o	Pharmacy Guild, NSW 
o	Pharmacy Guild, NT 
o	Pharmacy Guild, Qld 
o	Pharmacy Guild, SA 
o	Pharmacy Guild, Tas 
o	Pharmacy Guild, Vic 
o	Pharmacy Guild, WA 
•	Phonographic Performance Company of Australia Limited (PPCA) 
•	Queensland Retail Traders and Shopkeepers Association (QRTSA) 
•	Real Estate Institute of Australia (REI Aust) 
o	Real Estate Institute, ACT 
o	Real Estate Institute, NSW 
o	Real Estate Institute, NT 
o	Real Estate Institute, Qld 
o	Real Estate Institute, SA 
o	Real Estate Institute, Tas 
o	Real Estate Institute, Vic 
o	Real Estate Institute, WA 
•	Small Business Association NT (SBA NT) 
•	Tasmania Small Business Council (TSBC) 
•	Timber Merchants Association (TMA)
Other Business Associations that include larger companies are able to form a small business committee and have that committee join COSBOA as a full member. 

6.	Conclusion

Red tape has become the most common issue in surveys of small business over the past two decades. Council members of COSBOA always rank the issue as the number one hindrance to efficiency in our sector.

The answers lie in education of the small business sector, systems for business to use to deal with the compliance issues and most of all a strong awareness of the down the stream effect of regulations on business at the coal face.

There must be a realisation at all Government levels and in all bureaucracies that the business sector is not an agent for Government and should not be expected to act as collector and or distributor of Government services to their employees.

Tony Steven
CEO

COSBOA
PO Box 6336
Kingston ACT 2604

Ph: 02 6251 1773
Fax: 03 6234 7566

E-mail: tony@cosboa.org
Website: www.cosboa.org