By Steve Marsten
Many Australians in business consider the regulatory environment in which we all operate - to be a significant concern over the next 12 months.
Some of the frustration stems from the inadequate harmonisation of regulation across state and federal jurisdictions. This has been highlighted by the differing and often knee-jerk reactions that have occurred during the Covid pandemic by various state governments. It also highlighted how some Government leaders appeared to get things right while other paid a high price for either lack of early action or lack of monitoring. Either way many SME’s paid the ultimate price and never re-opened.
Other SME’s are still bleeding especially if they are in a particular industry such as fitness or hospitality. They will pay a significant price as Governments call for immediate shutdowns despite all efforts that have been put in place to keep their business and patrons Covid safe.
Hence you can understand why some business owners are worried about dealing with the sometimes confusing and contradictory overlap or inconsistency between Federal and State regulation.
It is likely, however, that most of the pressure on small business stems from the sheer weight of new regulation coming online. Australia is very much in a regulation ‘on’ phase. If the community and government today believe a sector is not running well, there is a tendency to step in and regulate.
Consequently, there is a crumbling trust in institutions and organisations which has eroded the benefit of the doubt that used to allow business to attempt to solve its own problems. At the pointy end of much of this is the continued fallout from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. The Federal Government’s response to date has been to identify and introduce some 41 separate pieces of legislation. When this much legislation gets introduced there is often the risk that some aspects of it will overlap, some aspects may be inconsistent, and some aspects may have unintended consequences. Yet this is the environment in which Australian business is now operating.
Gone are the days when regulatory change used to be preceded by extensive rounds of consultation with industry and relevant experts. The trend toward more – and more stringent – regulation is almost guaranteed to continue well into this decade.
The Federal Government will remain under community pressure to get tough, introduce more laws, and to enforce them more vigorously. So, if you’re one of the majority of business leaders who consider this to be area of concern how can you usefully approach the challenge heading into the 2021? Apart from doing the right thing and being seen to be doing the right thing, every business should be continue looking to modernise, standardise and digitise its legal, risk and regulatory compliance functions so they become unified and more proactive. This should be the core of your business strategy.
For more information on these issues feel free to contact the team at Appleby Chartered Accountants on 07 3876 6211 or firstname.lastname@example.org.