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SMEs Spend As Much On Red Tape As Big Business

28 July 2003

Media release

SMEs Spend As Much Time On Red Tape And Compliance As Big Business

A red tape survey reveals small-medium businesses spend as much down time on Government-related red tape issues over the course of a year as larger counterparts.

Michael Barnett, chief executive of the Chamber of Commerce was commenting on findings of a red tape survey conducted among Auckland members.

The survey reveals that companies with staff of 5 or less spend 172 hours annually, or nearly four and a half weeks full time, on Government-related red tape and compliance issues.

In contrast, larger businesses spent more total hours on the same issues. For example, businesses employing 6-to-20 staff spent 185 hours on Government-related red tape issues, businesses with between 21 and 99 staff spent 306 hours a year on the same issues, and businesses employing between 100 and 999 staff spent 351 hours.

However, when the numbers are re-worked on a per employer basis, the owner-operator business person who employs no staff spends significantly more time on these issues compared to larger companies. The hours spent by the owner operator is 172, compared to 86 hours for the companies with a staff of between 1 and 5, and 26 hours for companies with a staff size of between 6 and 20.

For large businesses, those employing between 21 and 99 staff spend just 14 hours a year per employee on compliance and red tape, and the big companies with staff of 100 or more spend just 3 hours per employee on these issues.

Commenting, Michael Barnett said that the overwhelming message of the survey is that if more small businesses are to grow into medium sized and big businesses, owner-operators need to find ways to hire more productive staff in a way that enables red tape and compliance issues to be delegated without adding unproductive costs to the businesses bottom line.

“It’s a balancing act, and which clearly many small businesses have yet to learn how to tread,” concluded Mr Barnett.


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