Performance Benchmarking of Australian Business Regulation: Cost of Business Registrations

Research report - Key points

These key points were released with Performance Benchmarking of Australian Business Regulation: Cost of Business Registrations research report on 12 December 2008.

  • This benchmarking study estimates the compliance cost to businesses of obtaining a range of generic and industry-specific registrations required by the Australian Government, and state, territory, and selected local governments:
    • generic registrations relate to incorporation, taxation and business name registrations; industry specific registrations covered are those needed to operate a café, domestic builder, long day child care, real estate agent and winery.
  • No patterns of consistently high or low costs of business registration were found across industries or jurisdictions. Nevertheless, the differences point to opportunities that jurisdictions can explore to reduce compliance burdens.
  • The estimated time costs of business registration were low for generic business registrations and generally low for industry-specific registration
    • businesses almost universally reported that the activities related to registration processes were either 'easy' or 'not difficult'.
  • Most of the differences in costs were attributable to differences in fees, with jurisdictions taking different approaches to setting fees and charges. For example, some jurisdictions did not charge fees for registering a child care business.
  • Processing times for applications showed considerable variation across industries and jurisdictions. But they were generally not excessive and often were very quick.
  • The approach aimed to 'triangulate' data from regulators, synthetic analysis by consultants and business feedback to establish representative estimates. In practice, synthetic analysis was not sufficiently comprehensive and business response rates too low for the data to provide reliable comparisons across jurisdictions. Consequently, the aggregate time cost estimates needed to be based on data provided by the regulators.
  • The study acted as a 'pilot' for the methodology and approaches to data collection. It highlighted several areas for improvement:
    • ways are needed to improve business participation. Benchmarking regulation that imposes more significant, ongoing compliance costs should motivate greater business engagement
    • understanding in detail differences in the processes of each jurisdiction is central to developing appropriate synthetic analysis and regulator questionnaires
    • sequencing is important in data collection, as early business feedback can help to inform the design of the regulator survey and synthetic exercise
    • regulators are well placed to collect data from businesses on compliance costs, so options to work with them to collect business feedback cost-effectively should be explored
    • support from a central coordinating agency in each jurisdiction is crucial to achieving comprehensive and timely responses.

Background information
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