Red tape forces SMEs to cut staff

Overzealous government regulation has caused Australian small to medium enterprises to reduce the number of workers they employ, according to new research.

IFA sister title My Business has exclusively revealed today (21 September) the findings of new research which provides evidence that regulation is causing an adverse flow-on effect for job rates in the SME sector.

The Scottish Pacific SME Growth Index found a staged reduction in full-time employees among the 1,251 businesses, with turnover between $1 million and $20 million, that are surveyed twice a year.

“Since 2014, the average number of full-time employees of businesses in the SME Growth Index has fallen from 88 to 75,” said Peter Langham, CEO of Scottish Pacific.


“Taking on employees is crucial to growth, and to the economy, yet there is a disconnect between SMEs and regulatory authorities if bringing on new employees, replacing staff or dealing with staff issues is having such an impact on the productivity of the sector.”

CEOs and CFOs have also been posed the question: “If you were Prime Minister for a day, what law or red tape would you change or introduce that would have a major positive impact on your business performance?”

Streamlining the reporting of Business Activity Statements (BAS) topped the list, with almost one in four (24.3 per cent) citing this as being in their sights.

“Despite recent government efforts to streamline BAS, this is still SMEs’ number one area of concern, indicating [that] more needs to be done to relieve this pain point,” Mr Langham said.

This is closely followed by amending the Fair Work Act (22.1 per cent) and cutting business taxes (21.3 per cent). A further 8.2 per cent said that they'd want to push the states to abolish payroll tax altogether.

Just 1.8 per cent of those surveyed said that the introduction of legislated payment terms to stamp out late payments would be their first priority.

“With the federal government’s Red Tape Committee due to table its report to Parliament in December, these results give all levels of government a clear indication of the actions SMEs want,” Mr Langham said.


Red tape forces SMEs to cut staff
SMEs to cut staff, scissors
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