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Reducing Red Tape for SMEs
1. Innovative. Professional. Objective enquiries@carix.com.au
Stuart Carr
E: stuartcarr@carix.com.au
T: 02 9029 7953
M: 0424 310 150
‘kon gres 2015
Monday September 7th 4.15pm
What will red tape reduction for SMEs mean for
mediation practice?
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What we do?
• Hands on practical advice to SME sector
• Work with 20-30 SMEs annually
• Typical clients- struggling or growing
• Wide range of issues
• Mediation often comes into play
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Depends on who you ask: ATO, Fair Work Australia, WorkCover, other
agencies/regulators
• Private, social enterprises, not for profit
• 5 – 100 employees
• $100K – $100m turnover
SME Definition
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Regulations
Types
CUSTOMER/SUPPLIERS
• Forms
• Processes
GOVERNMENT
• Federal
• State
• Local
STANDARDS
• ISO
• Standards
Australia
• Industry
codes
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Benefits of Regulations
• Protection and safety
• Boost production and productivity
• Make business competitive
• Innovation
• Link local businesses to the world
• Stable competitive environment
• Confidence to customers/consumers
• Level playing field
• Prevents uncompetitive activity
• Fair treatment of employees
• Safer working conditions
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Red Tape
Definition
Red tape has come to mean excessive bureaucracy or rigid
conformity to the rules. It is not a natural phenomenon, but
rather a social construction
Organizational red tape: rules, regulations and procedures
that remain in the force and entail a compliance burden for
the organization but have no efficacy for the rules’
functional object. (1)
(1) Source: Journal of Public Administration Research and Theory: J-PART, Vol. 3, No. 3 (Jul., 1993), pp.273-303
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Rule-Inception Red Tape:
“Rules Born Bad”
• They are dysfunctional at their origin
Sources of rule-inception red tape include (2):
• Inadequate comprehension
• Self-aggrandizement and illegitimate functions
• Negative sum compromise
• Over control
• Negative sum process (e.g., “you can never have too
much democracy”)
(2) Source: Journal of Public Administration Research and Theory: J-PART, Vol. 3, No. 3 (Jul., 1993), pp.273-303
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Rule-Evolved Red Tape: “Good
Rules Gone Bad”
Factors that lead to the evolution of rules into red
tape (3):
• Rule drift
• Rule entropy
• Change in implementation
• Change in the functional object
• Rule strain
• Accretion
• Misapplication
(3) Source: Journal of Public Administration Research and Theory: J-PART, Vol. 3, No. 3 (Jul., 1993), pp.273-303
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• Informal – most commonly used
• Arbitration (only if forced to)
– Expensive
– Time consuming
• Mediation
– Low awareness
– Time consuming
Dispute Resolution Metho
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• Early engagement – assumptions about intent
• Lawyer-free or lawyers at arm’s length
• Constructing a narrative around the issue
• Understanding the other side’s objectives
• Creating a knowledge asymmetry
SMEs: What works?
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• Mediation in contracts
• Education
– Features and benefits
• Trained mediators with business skills
• Agencies – helpful
SME
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SME- Regulatory Engagement
• Fairwork
• ATO
• WorkCover
• WH&S Act
• Customers1
• Others
1 Richard Deutsch Deliotte “Corporate Red Tape”
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Conclusion
“The Iron Law of Liberalism states that any
market reform, any government initiative intended
to reduce red tape and promote market forces will
have the ultimate effect of increasing the total
number of regulations, the total amount of
paperwork, and the total number of bureaucrats
the government employs”. (5)
(5) Graeber, D (2015). The Utopia of Rules: On Technology, Stupidity, and the Secret Joys of bureaucracy