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Huge reductions in business compliance costs

Hon Rick Barker
Minister for Small Business

20 July 2005
Media Release

Huge reductions in business compliance costs

The government focus on reducing compliance costs for small business is working.

Small Business Minister Rick Barker today announced that government has significantly reduced the number of compliance costs being incurred by small businesses.

A Ministry of Economic Development report, Ministerial Panel on Business Compliance Costs – Final Report-back, shows that 90% of compliance costs government wanted to eliminate, had been or are being eliminated.

"This is great news for small business, we have listened to small business operators' concerns about compliance costs and we have done something about them. A total 139 separate compliance requirements are gone" said Rick Barker.

In 2000, the government established an 11-member Ministerial Panel to specifically look at how government agencies could reduce compliance costs faced by business.

The panel made 181 recommendations (made up of 162 recommendations and 19 sub-recommendations) - government agreed to work on 155 of both the recommendations and the sub-recommendations. Of the remaining recommendations and sub-recommendations, they could not be agreed to because several compliance costs were in fact necessary, others would have involved massive system change and were not practical and others still were already being overtaken by events and policy shifts at the time.

"We have taken compliance costs seriously and we have taken small business seriously. Now, we can report back that nearly all the compliance costs we identified that we could do away with, have been eliminated."

This comes after the World Bank had already stated in its recent Doing Business in 2005 report that New Zealand is the easiest country in the world to run a business. The report ranks New Zealand as number one for ease of doing business ahead of trading partners Australia, Japan the United States and the United Kingdom as well as 140 other nations.

"With 139 of the 155 identified compliance requirements gone and the remaining 16 identified compliance costs currently being worked on, in due course all 155 identified business compliance costs will be gone, that's got to be good for business," he said.

Mr Barker congratulated government agencies for putting effort into streamlining their systems with business in mind and acknowledged the effort it has taken to untangle the red-tape.

The report notes most government agencies have reduced compliance costs in line with the recommendations made by the Ministerial Panel. In particular the Ministry for the Environment, the Ministry of Economic Development and the Department of Labour had done particularly well with 26, 16 and 16 reductions respectively with other costs being worked on.

"This report is yet another affirmation that our government is supporting our small businesses, we recognise the value of their contribution to New Zealand's sustained economic performance and are responsible for a lot of new jobs," said Mr Barker.


Extra notes.

- Having sought the views of businesses around the country, the panel recommended 181 recommendations, each recommendation representing a compliance cost. This number is comprised of 162 recommendations and 19 sub-recommendations that are reported under the main recommendation it is subordinate to. Of these, 155 were agreed to, agreed in part where elements of the compliance cost were deemed necessary or agreed in principle as they would require a longer time frame to be eliminated.

- Of the 155 recommendations (identified compliance costs) from the Ministerial Panel that were agreed to by government in Striking the Balance 2001:

a. 63 (41%) implemented in full (prior to 2003/04 year)
b. 27 (17%) implemented in full (2004/05 yeah)
c. 4 (3%) in-part implemented (as they were agreed in part)
d. 45 (29%) currently being implemented
e. 16 (10%) superseded by policy changes or were already underway

- Many of the recommendations related to specific central and local government legislation and regulation. Themes around the refinement of legislative and parliamentary processes including specific recommendations around increasing government to sector engagement around e-technology were also identified.

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