In a submission to the Department of Prime Minister & Cabinet, Bruce Billson says small businesses are made to shoulder the weight of ‘disproportionate’ government regulation.
Billson published last week his submission to the DPM&C consultation paper about how national regulatory responsiveness can better support economic resilience.
The Australian Small Business and Family Enterprise Ombud told the department the COVID-19 pandemic shone a light on the benefit of a responsive and dynamic regulatory environment for the interest group he represented.
“The burden of regulation falls disproportionately on small businesses who lack the resources of their larger counterparts,” Billson said.
“In all circumstances, regulation should be ‘right-sized’, proportional, implemented with consideration for timing and to minimise cumulative or duplicative impacts.”
To lift economic resilience, the ombud said regulators needed to improve industry engagement. This included working with SMEs and their representative groups to ensure any changes to how they were regulated were ‘fit for purpose’. Doing so would result in more practical regulations and better communication.
“To maximise compliance where new regulation is implemented, we suggest regulatory agencies work with industry and peak bodies as well as small business trusted advisers to ensure changes in regulation are effectively communicated through the sector,” Billson said.
Punitive measures for businesses that break the rules should also be a matter of last resort, the ombud argued. When dealing with SME non-compliance, regulators should consider a range of factors such as a record of previous offending (or lack thereof) and the maturity of the enterprise.
Billson said proactive, targeted support measures were preferred in cases where an SME had failed to keep up with regulatory changes.
“For example, where an unintentional error is made by a newly operational small business, that business should be provided with targeted education and guidance rather than be subject to punitive measures,” he said.
The ombud’s submission to DPM&C also recommended that, where necessary, regulation of businesses be simplified. This approach would empower SMEs to continue the beneficial work of the sector to rebuild local communities, especially in the natural disaster preparedness and resilience context.
“To assist small business in managing exogenous shocks, we recommend regulatory agencies be provided with the appropriate powers to implement temporary simplified regulation, freeing up small business resources,” Billson said.
“Where this regulation is demonstrated to be the effective minimum intervention to achieve the desired standard consideration should be given to the long-term implementation,” he added.