iscoverComplex regulations have a dampening effect on productivity, forcing firms to spend more time on paperwork and less on production, a management consulting COO has said.
Regulatory complexity a burden for small businesses, management consultant warns
15 July 2025
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8 minute read
Harry Cheema, chartered accountant and COO of management consulting firm Anchoram, told Accounting Times that paring back regulatory complexity could be one way to boost productivity by reducing the administrative burden on businesses.
“When we talk about productivity, we are talking about doing things which are value-generating rather than people spending time on admin or non-value-generating things in the economy,” Cheema said.
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“So just filling in forms and that kind of thing. I think, if regulatory complexity comes down, that will certainly be good [for productivity].”
The government is currently brainstorming ideas on how to boost Australia’s poor productivity performance. In August, it is set to host a roundtable to inform its productivity-boosting policy.
Ahead of the roundtable, small business advocates have called for a reduction in red tape to solve the country's productivity woes.
Small and medium enterprises (SMEs) face an evolving regulatory environment, ongoing cost pressures and stronger ATO enforcement activities following a lax period throughout the pandemic.
This has been reflected in insolvency rates, which have steadily increased year on year since 2022, according to ASIC data.
Cheema said that the regulatory environment was particularly tough on medium-sized businesses.
“I think either you stay too small or you become very big, this whole medium business landscape, it's not good for anyone. You do get squeezed by regulators,” he noted.
As regulations continue to evolve, Cheema added that expert advice could help SMEs spend more time on productive tasks.
“Seek experts, because they can help you. Otherwise, if you're just trying to solve these problems yourself, then you inevitably either spend a disproportionate time doing that stuff, or end up in some sort of issue with the regulators.”
According to Cheema, expert advice from professionals, such as accountants, could make or break for small businesses looking to plan their cash flow and stay solvent.
“If you don't have a good accountant who will actually tell you about liabilities, there's so many hidden future costs that you don't see unless you know what you are doing. So if you have employees, you're going to have leave liabilities.”
“Most of the small and medium businesses, they do cash accounting, they don't do accrual accounting, so they don't fully comprehend at a given point in time, how much they owe to their suppliers, how much they owe to their employees.”
He added that good people and processes were at the heart of a successful scale-up. When small businesses grow, he warned that things could quickly get chaotic if the right processes weren’t put into place.
“Look at building a system, rather than just looking at winning work and delivering work. So whether it's your financial systems, your HR system, your ICT systems, you’ve got to build that.”
“And if you don't do that, you will not be able to manage numbers any more than five to 10 people. It's just beyond the ability of any organisation to do things in a repeatable manner if you don't have systems in place.”
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