Batt O'Keeffe to wage war on red tape in business
Eight quangos and 737 rules stymie job creation
Published 27/06/2010 | 05:00
Enterprise Minister Batt O'Keeffe is preparing a blitz against the mountains of red tape that threaten to strangle Irish businesses and swamp out struggling entrepreneurs.
Last Tuesday, the minister pioneered an urgent bill through Cabinet, aimed at giving relief to companies suffering from bureaucracy in both imports and exports.
The Customs Consolidation Bill has set up a one-stop shop enabling businesses to cut through vast mounds of paperwork that have hamstrung their activities amid recessionary conditions.
Last night, Mr O'Keeffe said: "My attitude is that if there is red tape interfering with the profit margin we must put a stop to it, without damaging proper company practices."
Last week, the Sunday Independent highlighted some of the more ridiculous bits of bureaucratic nonsense and the most pointless rules and regulations facing Irish companies.
A recent Department of Enterprise report estimated that small businesses were forking out over €681m a year in order to comply with the swathes of employment, health and safety and company law regulations.
Retail lobby group RGDATA and the Irish Small and Medium Enterprises Association (Isme) believe that compliance may cost small businesses up to 20 per cent of their annual profits each year.
Enterprise, Trade and Innovation Minister Batt O'Keeffe told the Sunday Independent that he is determined to cut the administrative burden on businesses by 25 per cent.
"We are now in the process of measuring costs to businesses -- so-called information obligations -- so that we can draw up a plan to cut the financial and bureaucratic burden by a quarter," Mr O'Keeffe said.
"In particular, we are looking at the red-tape burden in company law, employment law and health and safety law."
The minister is understood to be particularly anxious to cut the cost to businesses of drawing up annual accounts, which cost them €360m each year in administration. "This is a classic example of an information obligation, which, though necessary, is unnecessarily expensive," he added. A high-level government working group is examining a number of options to reduce the cost for businesses to produce and furnish annual reports.
Mr O'Keeffe feels that the red-tape costs associated with maintaining a business here are a key competitiveness issue. He is actively examining ways to cut these costs without damaging the policy goals of the regulations underpinning them.
The High Level Group on Business Regulation, an advisory body made up of key civil servants, employers and trade unions is to present a number of red-tape cuts and business cost-saving measures within the next few weeks. The group includes hedge fund boss Gearoid Doyle, Isme's Mark Fielding, UCC legal professor Irene lynch as well as representatives from the departments of Enterprise, Finance, the Environment and An Taoiseach.
"A series of workshops is underway to discuss simplification options with business, relevant intermediaries and sectoral experts," Mr O'Keeffe said.
"Although the OECD says Ireland is not heavily regulated relative to other European Union countries, the feedback I am getting from the business community is that there is an onerous administrative burden associated with the relevant laws, regulations and rules."
Last week, the Sunday Independent revealed that one 48-page environmental license came with an explanatory booklet three times as large. Another example of bureaucracy gone mad requires hauliers driving a wide load from Dublin to Limerick to have separate licences from Dublin, Kildare, Laois, Offaly and Limerick local authorities. We also highlighted the burden on shop owners -- who need as many as 21 licences to sell everything from DVDs to salmon and batteries.
It has also emerged that, simply to employ a worker, a company must comply with up to 33 regulations. Since 2000, there have been 421 statutory instruments relating to employment law administered by the department formerly known as Enterprise, Trade and Employment. There have also been 157 new employment regulations or orders, and 26 EU directives over the last decade.
While the Government promised to slash red tape 10 years ago, levels of bureaucracy have doubled according to trade bodies. Isme estimates that small businesses have to fill out up to 110 different forms each year.
The high-level group on business regulation was set up to tackle specific red-tape issues. Since 2007, it has tackled almost 70 issues with 38 finalised to the satisfaction of its business members, according to the Department of Enterprise.
However, the arrival of Mr O'Keeffe as minister has given the battle against red tape renewed impetus.
Last week, the Office of the Director of Corporate Enforcement moved to reduce some of the administrative burden on companies by announcing that it was not legally necessary for companies to have the names of directors printed on company letterheads.
Paul Appleby's corporate watchdog unveiled a series of initiatives where companies could reduce the cost of printing up letterheads after changes in directorships.
The Revenue Commissioners is also making serious inroads into the level of red tape. It introduced less frequent VAT3 returns for small traders, which may ease strains on cash flow for SMEs. The Revenue is now offsetting redundancy rebates, paid by the Department of Enterprise, Trade and Innovation, against a firm's tax liabilities. It is also extending e-filing and e-payments.
The Central Statistics Office and Revenue are streamlining data collection from companies, which means that the CSO can cull its annual Business Register Inquiry to businesses. Small companies had been filling out up to 12 CSO forms a year, with fines of up to €1,500 if not returned on time.
The burden of providing statistical information to state bodies is also to be reduced as the CSO is cutting the sample size of its quarterly earnings survey and the agency is to incorporate Corporation Tax and Income Tax returns in the processing of surveys conducted under the Structural Business Statistics Regulation.
The Department of Employment is working on streamlining the application process for employment permits.