Slashing red tape could unlock $1 billion in economic activity, BCA says
The Business Council of Australia (BCA) has released its blueprint for regulatory reform, which calls for red tape cuts it claims could unlock an extra $1 billion across the economy annually.
BCA chief executive Bran Black said that reducing Australia’s red tape burden by one per cent could unlock an extra $1 billion across the economy annually.
“We have become too complex a country in which to do business, and that’s a massive handbrake on our ability to lift productivity and living standards,” he said.
“At the upcoming Economic Reform Roundtable, we have an opportunity to address excessive and duplicative rules that impose unnecessary costs on both businesses and consumers.”
The BCA’s reform blueprint comes ahead of the Treasury’s economic reform roundtable this week, which seeks to find solutions to Australia’s floundering productivity growth - the worst in 60 years, according to the BCA.
It said that regulatory complexity placed a $110 billion burden on Australia’s economy, and called for the simplification of regulations in licensing regimes and planning assessments across the country.
Bran Black said that disjointed and overly onerous regulatory requirements were stifling businesses.
“In Victoria, a café owner needs 36 separate licences and approvals before they can pour the first coffee, while a tradie on the Gold Coast needs to pay hundreds of dollars in permits just to fix a tap over the NSW border. This is the regulation we need to fix” he said.
“Our report offers simple fixes that ultimately help businesses, workers, and consumers get ahead.”
The BCA also flagged some ideas for tax reform, singling out taxes which imposed outsized compliance burdens on businesses.
For example, it labeled payroll tax as “one of the greatest compliance challenges” for businesses across Australia due to its fragmented implementation.
It recommended that Australia’s eight separate payroll tax online platforms should be streamlined into a single national platform.
The BCA also singled out the fringe benefits tax (FBT) as a “highly complex tax with significant compliance costs,” adding that one BCA member had reported that FBT compliance costs were 40 times greater than that of company tax for every dollar raised.
FBT also had one of the highest ‘tax gaps’ recorded by the ATO, at roughly 35 per cent, reflecting poor compliance performance.
The BCA called for the FBT minor benefits exemption threshold to be lifted from $300 to $500, and the FBT reporting threshold from $2,000 to $3,000. It also called for the simplification of FBT for car parking, paring it back to no longer include hospital, shopping center, hotel, university and airport parking.
As a general theme, Black said that it was important that duplication was removed between Australia’s state and federal regulatory systems, in order to streamline project approvals and support businesses.
“Ultimately, we need to remove duplication between the state and the federal systems. We need to be working smarter, not harder,” he said.
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