Rightsizing regulation for small business

Rightsizing Regulation: reviewing small business experiences with regulatory processes identifies opportunities to ensure small business perspectives are taken into account.  The report highlights the benefits of accounting for the specific intended and unintended consequences for small business in designing new regulation and the importance of inclusive consultation.

Stakeholder feedback highlights that small businesses feel increasingly burdened by complex regulations. The NSW Small Business Commissioner, Chris Lamont, expressed a growing concern that small business requirements are not being considered in enough detail and that new regulation is adding substantial costs at a time when neither consumers or businesses can afford them. 

“One of the most frequent complaints I hear is the impact of red tape… More than half of the small businesses responding to this review told us that regulation has become harder to navigate in the past year, while only 2 per cent said it had gotten easier,” said Lamont. 

To address these challenges, the final report includes 9 recommendations to support best practice policy development. A key recommendation from the report is the inclusion of a Small Business Impact Statement (SBIS) into the policymaking process. This will ensure that small businesses' unique needs are explicitly considered and factored into policy design. 

“Embedding Small Business Impact Statements into policy design would assist both regulators tasked with compliance as well as small business as it would better quantify the potential costs and benefits of proposed regulation,” added Lamont. 

Feedback from over 1,000 small businesses revealed that only 7 per cent felt regulations were tailored to them and only 13 per cent believed the cost of regulation was justified by benefits. Only 15 per cent of respondents felt listened to and trusted their feedback was used to inform policy decisions. 

“It’s crucial for small businesses to feel empowered and represented when new regulations are being developed and my recommendations provide a pathway for this to occur,” said Lamont.

Further recommendations call for exemptions or tiered regulations, improvements to regulatory impact assessments and independent oversight, building on best practice approaches implemented in other jurisdictions.

View the full list of recommendations in the report.
View a summary of the report.