Red tape still proves to be huge challenge

DESPITE pledges by governments to cut red tape, most small and medium-size businesses say they are being strangled by the complexities of running their enterprises.

In polling by National Australia Bank, 69 per cent of small businesses said it took a lot of effort to deal with red tape.

Forty-four per cent of businesses surveyed for the bank’s latest study into key issues affecting the sector also said that they did not understand the tax system as it applied to their business.

NAB business and private banking chief customer officer Angela Mentis said it was no surprise such a large proportion of smaller businesses still cited red tape as a concern.

“Anyone who runs a small business understands only too well the pressure of complying with monthly BAS (business activity statements), annual income tax returns and a host of other paperwork,” she said.

A simpler tax system was needed to free up time for those running small business, Ms Mentis said.

Nearly 60 per cent of the businesses surveyed also said they spent far too much time working in rather than on their business.

Ms Mentis said while the research affirmed running a business could be satisfying, day-to-day administrative and regulatory challenges could take a toll on business owners.

Also nearly half of small and medium-size businesses believe they are being hamstrung by skills shortages in their sectors.