Fed: Red tape cut to bolster IR regime: Howard

AAP General News (Australia)
04-07-2006
Fed: Red tape cut to bolster IR regime: Howard

By Nick Lenaghan

MELBOURNE, April 7 AAP - Prime Minister John Howard hopes that slashing the cost of
incorporating companies will bring more of them under the reach of the government's new
workplace regime.

Mr Howard and Treasurer Peter Costello today announced the government would halve the
cost of incorporation to $400, under its plan to cut hundreds of millions of dollars from
business costs.

The halving of the incorporation fee alone will cost the federal budget more than $200
million over the next four years.

"We don't make any secret of the fact that one of the reasons why we are cutting the
cost of incorporation is to encourage firms and partnerships that might not be covered
by the industrial relations system that's been introduced recently, to make it more attractive
for them to do so," Mr Howard reporters in Melbourne.

He said the cuts would give small companies an incentive to come under the new regime,
which protects firms with fewer than 100 workers from unfair dismissal claims.

"The more companies, the small companies that come within the reach of the government's
industrial relations system, the better," he said.

"We want them to get under the umbrella of it, to get the benefit of it and take advantage
of it. They can only do that if they are incorporated."

Today's announcement is the first half of the government's response to a taskforce,
which compiled a report on reducing regulatory burdens on business.

The government's final response is due by the end of July.

Other changes include increasing the minor fringe benefits exemption threshold from
$100 to $300, and increasing the fringe benefits reporting exclusion threshold from $1,000
to $2,000. Both changes come into effect from April 1, 2007.

Firms will also be allowed to publish annual reports solely on the internet, removing
the requirement to mail them to shareholders.

Mr Costello said a recent survey showed Australia was the quickest and second easiest
place in the world to incorporate a company.

"It can be done in one day in Australia. So for people that want to incorporate and
to start a business in Australia it's as good as it's ever been," he said.

Mr Howard and Mr Costello also said state and local governments must also address the
problem of red tape.

Business groups around the country welcomed the changes, but demanded more cuts to
the costs of doing business.

The Australian Chamber of Commerce and Industry said the government's response was "good start".

"However, there is a way to go," it said in a statement.

"Regulation, especially where it has superficial political appeal, has become the most
favoured immediate policy reaction of bureaucrats, ministerial advisers and their ministers.

"Dealing with this mind-set remains an underlying problem."

Labor's treasury spokesman Wayne Swan praised the work of the taskforce but said the
government's response was inadequate.

It ignored the need for long-term systemic change to business regulation, he said.

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KEYWORD: BUSINESS NIGHTLEAD

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