Impact of new business regulations revealed
Amid a slight rise in business confidence, South Australian businesses remain plagued by an increase in costs and regulations, as business conditions hit their lowest since June 2020.
While the South Australian Business Chamber and William Buck quarterly Survey of Business Expectations saw business confidence rise by 3.4 points in the September quarter, general business conditions had their fourth consecutive decline to 81.9 points in an annual decline of 13.8 points, bringing it to the lowest score since June 2020.
The survey found that the cost of doing business remained the biggest issue for 70.5 per cent of respondents but the impact of government regulations went from the fifth biggest issue to third in the last 12 months.
Industrial relations laws, work health and safety regulations and tax requirements were listed as the three most impactful.
The Chamber said the passing of the federal Closing Loopholes Bill in August, which changed the definition of casual employment, introduced a right to disconnect and created the concept of ‘employee-like’ workers, had made 57.3 per cent of businesses spend more time on compliance.
William Buck managing partner Adrian Chugg said while the change had aimed to “foster a healthier workplace environment, the resources required to implement these protocols can be particularly taxing for small businesses”.
“Even the smallest fluctuations in revenue can significantly affect financial viability,” Chugg said.
Compliance with work health and safety regulations is taking 56.5 per cent of businesses longer as well, and 52.2 per cent of respondents said tax requirements were taking longer.
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“Every extra hour spent dealing with compliance is an hour taken away from growing a business, creating local jobs, and supporting South Australian consumers,” Business Chamber CEO Andrew Kay said.
The South Australian Business Chamber CEO Andrew Kay previously called for reform to the payroll tax in the 2024 state budget. Photo: suppliedOne respondent said they believed more small and medium enterprises would decide it was “not worth running a business in SA with the amount of red tape”.
Another said the increase in regulations needing to be navigated had meant “the world is not a better place, just a more costly one”.
“There’s a lot more work required for being compliant with IR/WHS for a small business when previously a lot of these issues were just common sense,” another said.
“There will be less jobs not more. WHS Legislation is over the top and is setting people up to fail and be prosecuted,” another said.
As Prancing Pony Brewery co-founder Corinna Steeb told InDaily recently, the impact of regulations such as excise tax is, for some, the highest cost of production, with the tax increasing twice a year.
“If you put it into a carton of beer, 11 cans are just for the taxman and then GST on top of that,” Steeb said.
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“There’s no valid reason why excise needs to go up; it will not stop people from drinking.”
One survey respondent said that while excise costs where a problem, being required to “forever adjust our labels (and reapply for container compliance) to suit the whims of food labelling lobby groups” was a bigger challenge.
Labour shortage
A lack of skilled workers is still an issue with almost one third of respondents reporting labour shortages.
The proportion of businesses experiencing labour shortages has seen an 8.2 percentage point decline in the previous six months. However, larger businesses reported more frequent shortages, with two-thirds of businesses of 20 or more employees experiencing labour shortages.
“The skills shortage has significantly impacted our business, leading to more frequent injury and property damage incidents,” one respondent said.
“People are not wanting to move rurally and therefore in agriculture we only seem to be able to attract backpackers which causes an ever changing workforce. Lack of housing also doesn’t help,” another said.
“We may lose valuable employees because they can’t afford housing,” a respondent in manufacturing said.
There was a significant increase in the use of AI, with 58.1 per cent of businesses saying they use AI, more than double the 25.4 per cent in the March quarter.
However, only 11.7 per cent of businesses said they had implemented an AI policy.
Training expenditure increased to 122.3 points, making it the highest since June 2008.
