Performance Benchmarking of Australian Business Regulation

• 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.

Performance Benchmarking of Business Regulation

The Productivity Commission has released two companion reports, benchmarking business regulation across jurisdictions: one on the Quantity and Quality of Regulation, the other on the Cost of Business Registrations.

The first report provides indicators of the stock and flow of regulation and regulatory activities, and quality indicators for a range of regulatory processes, across all levels of government. The indicators provide some baseline information for each jurisdiction, against which trends in the quantity and quality of regulation might be assessed in the future. It is apparent that there are significant differences across jurisdictions, reflecting different regulatory approaches as well as the characteristics of the jurisdictions themselves.

The second report provides estimates of compliance costs for business in obtaining a range of registrations required by the Australian, state, territory and selected local governments. The registrations include generic requirements for incorporation, taxation and business name registrations. In addition, the Commission benchmarked specific registration costs incurred for five types of business (a café, builder, long day child care, real estate agent and winery). It emerged that the estimated time costs of business registrations were generally relatively low, with most costs and differences across jurisdictions relating to fees and charges.

These reports are the first instalment of a series of studies benchmarking Australian business regulation across jurisdictions. They have also served to test the usefulness of different survey techniques and benchmarking indicators and provided lessons for future exercises. In particular, the business registrations study highlighted the potential challenges in obtaining adequate data from individual businesses.

The reports should facilitate a more informed discussion about comparative performance and help jurisdictions identify where they might improve their regulatory performance.

• Preliminaries
  • Cover, Copyright, Opportunity for further comment, Terms of reference, Contents and Abbreviations
• Overview - including key points
• Chapter 1 Background
  • 1.1 Origins of this study
  • 1.2 Purpose and scope of the study
  • 1.3 Conduct of the study
  • 1.4 The Commission's approach
• Chapter 2 Business registration in Australia
  • 2.1 Purpose of business registration
  • 2.2 Australian system of business registration
  • 2.3 New business registrations in Australia
  • 2.4 Business registration processes
• Chapter 3 Generic business registrations: Australian Government
  • 3.1 Registering a company (incorporation)
  • 3.2 Tax-related business registrations
• Chapter 4 Generic business registrations: state and territory governments
  • 4.1 Registering a business name
  • 4.2 Registering for payroll tax
• Chapter 5 Industry-specific business registrations
  • 5.1 Registering a café with outdoor dining
  • 5.2 Registering a domestic builder
  • 5.3 Registering a long day care centre (child care)
  • 5.4 Registering a real estate agency
  • 5.5 Registering a winery
• Chapter 6 Choice of indicators of business registration compliance cost
  • 6.1 The costs of registering a business
  • 6.2 Data sources and reliability
• Chapter 7 Cost of generic Australian Government registrations
  • 7.1 Registering a company (incorporation)
  • 7.2 Tax related business registrations
  • 7.3 Benchmarking Australian Government registrations
• Chapter 8 Cost of generic state and territory government registrations
  • 8.1 Registering a business name
  • 8.2 Registering for payroll tax
• Chapter 9 Cost of registering a café with outdoor dining
  • 9.1 Registering a food business
  • 9.2 Registering outdoor dining facilities
• Chapter 10 Cost of registering a domestic builder
• Chapter 11 Cost of registering a long day care centre (child care)
  • 11.1 Registering a long day care centre
  • 11.2 Registering as Child Care Benefit approved service provider
• Chapter 12 Cost of registering a real estate agency
• Chapter 13 Cost of registering a winery
  • 13.1 Obtaining a liquor licence
  • 13.2 Registering for the Wine Equalisation Tax (WET)
• Chapter 14 Conclusions
  • 14.1 Approach to estimating compliance costs for business registrations
  • 14.2 Generic registration comparisons
  • 14.3 Industry-specific registration comparisons
  • 14.4 Difficulty with, and duplication of, registrations
  • 14.5 Lessons for future benchmarking
• Chapter 15 Comments from jurisdictions
• Appendix A Conduct of the benchmarking study
• Appendix B Approach to sourcing data
• References