WITH the launch of Small Business month only days away, red tape is stifling business growth across New South Wales, with nearly one in five small businesses forced to halt expansion plans, according to the state’s peak business body.
October is NSW Small Business Month, a month-long program for small businesses across New South Wales to attend free and low-cost events aligned to their individual business interests.
The program is a unique opportunity to celebrate the state’s vibrant small business community and their contribution to the economy.
But new research from Business NSW reveals 72 per cent of businesses rated regulatory demands as high, up from 53 per cent in August 2023.
Business NSW CEO Daniel Hunter said red tape is bleeding businesses dry, blocking productivity, and holding back growth.
“Unless urgent action is taken, it will continue to hinder business potential and strain the economy,” Mr Hunter said.
Those calling regulations excessive rose from 11 per cent to 19 per cent, while only 21 per cent felt the balance was right, down from 33 per cent.
Among small businesses, those finding regulations demanding climbed from 50 per cent to 70 per cent, with excessive ratings increasing from 11 per cent to 18 per cent over 19 months.
“These rising regulatory costs are more than just paperwork headaches,” Mr Hunter said.
“They pose major obstacles to business efficiency and innovation, quietly sapping energy and diverting focus from core activities.”
The research found small businesses typically spend between two and 10 hours per month on regulatory tasks, medium businesses 11 to 20 hours, and large businesses more than 40 hours each month, and regulation and compliance ranked as the second biggest challenge for New South Wales businesses in December, 2024.
Meanwhile, 63 per cent of businesses dealing with the New South Wales planning system in the past five years reported negative experiences, compared to just 6 per cent positive.
Business NSW is calling on the NSW Government to act urgently to reduce the burden on businesses by creating a permanent online “red tape reporting” portal where businesses can flag regulatory issues, supported by twice-yearly government meetings to address key concerns and reduce Development Application fees and associated costs to ease the financial strain on small businesses.
“These measures will build a more transparent and responsive regulatory environment,” Mr Hunter said.
“It’s about cutting unnecessary costs and complexity so businesses can focus on what matters most – serving customers and supporting the local economy.”
