Why corporate compliance is becoming a $160bn nightmare for small business |
If you own or run a small business in Australia, chances are you didn't start out dreaming of forms, portals, compliance attestations or uploading the same information into five different systems. You started because you had a passion, a skill, a service, a product, a sense of contribution to Australia's economic prosperity and growth and a community that valued what you do.
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Yet more and more small and family businesses tell me they're spending more time on "the business of running the business" than ever before - time that should be spent delighting customers and creating value.
Few small business owners would be surprised by recent Australian Institute of Company Directors research showing the cost of complying with Commonwealth regulations has grown to $160 billion, almost 6 per cent of GDP, up from $65 billion (4.2 per cent of GDP) in 2013. Add state/territory and local government requirements, and it's little wonder the Australian Chamber of Commerce and Industry's 2025 Business Conditions Report revealed 42 per cent of small businesses say compliance has a negative impact on operations.
The Business Council of Australia's Regulation Rumble report found South Australia the easiest jurisdiction to do business under its scorecard - yet even there, opening something as simple as a café still requires dozens of permits and approvals.
But it's not just government where rule-making has gone rogue. Small businesses are increasingly entangled in a quieter, rapidly growing "white tape". These are the administrative and compliance burdens imposed by large businesses on small and family businesses - obligations that go beyond what is legally required of a small business. It's the extra rules some other business decides you must meet before they'll work with you.
Think bespoke reporting templates, mandatory software systems, complex questionnaires or contract clauses referencing Acts that were never intended to apply to a small operator. These obligations are often justified as a large business' effort to meet their own requirements - on modern slavery, climate disclosures, cyber security or corporate governance. But instead of managing the responsibilities themselves, they........