Time is right for government to address over-regulation.. Untangling red tape essential for construction businesses to thrive

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Updated: October 4, 2013

(Sept 2013) – Mid-market businesses, including many in the construction sector, punch well above their weight in terms of their contribution to the economy, but they could do even better if they had less red tape to deal with, according to Ian Coleman, Managing Director of compaction specialist business Conplant.

“While mid-market businesses – those with turnover in the range $10 million to $250 million – represent a small fraction of all businesses inAustralia, they’re responsible for more than a third ofAustralia’s business revenue,” Ian says. “But mid-market businesses have to deal with significant and ever-increasing amounts of red tape that really inhibit our ability to get on with the job of driving productivity and growth.”

Ian says the change in Federal Government makes now an ideal time to assess and address the ways that red tape and over-regulation are impacting on mid-market businesses and the broader Australian economy.

“GE Capital’s recent Australian Mid-Market report shows the middle market sector adds about $425 billion to the Australian economy and accounts for 3.2 million full-time jobs or 1 in 4. The report also found mid-market players to be inherently resilient, so these companies are extremely important to our economy.”

Ian knows firsthand about the resilience of the mid-market. Conplant expanded into a number of non-core business areas just before the global financial crisis, and like many businesses, Conplant was hit hard by project cancellations and postponements due to funding cutbacks.

“We’ve come out of that period much sharper and our financial performance is now much stronger as a result. We worked hard to restructure and get back to our traditional core business. The business is back into a position of financial strength and we’re now in a growth phase.

“There is plenty for us to be positive about. Conplant recently won a major national safety innovation award and last year we won an Australia-wide industry choice award for service excellence. We like to think we’re a progressive and innovative company that adds value for our customers.

“We’re focused on delivering high quality products and market leading innovations, but the administrative burdens on this sector definitely make things much harder than they could or should be,” he says.

“This is the sector that can offer real productivity gains, but we’re so tied up in red tape, including semi-regular changes and proposed changes that are often poorly thought through, it makes it difficult to find the necessary time to focus on critical areas like productivity and  growth opportunities.”

Ian says businesses like ours and our customers’ are increasingly being made responsible for the regulation of their sub-contractors.

“Changes to the Immigration Act, for instance, make Conplant responsible for informing our sub-contractors about their legal obligations when employing their staff, to ensure we avoid civil and criminal proceedings. We also have 11 pages of guidance for managers on managing our relationships with sub-contractors. We issue them with a Code of Conduct, check Safe Work Method Statements, workers compensation insurance and general insurances and have to ensure they are kept up to date so they can continue to operate as sub-contractors relative to employment legislation. Administering these and many other requirements such as those imposed by the Personal Property and Securities Act (PPSA) takes up a lot of time. Private enterprise is taking on more of the burden of regulation, but many mid-market businesses don’t have the resources to do this while still maintaining a balanced focus on other important areas of their businesses.”

The World Economic Forum recently ranked Australia20th on its competitive index, despite having the world’s 12th largest economy. It also put Australia in 80th place for pay and productivity, down from 40th position in 2007/08.

“Remaining competitive and improving productivity is simply crucial for Australian businesses,” Ian says. “I’d like to see industry and government work together to find better ways for mid-market business to function and thrive.

“Businesses like Conplant are innovative and optimistic. We’re proud of our achievements and excited about what the future holds, and we want to find ways to make it easier for Australian business to get ahead.”