If you own or run a small business in Australia, chances are you started because you had a passion, a skill, a service, a product, to make a living, pursue a dream, perhaps a sense of contribution to Australia’s economy, doing your bit to add value to your community. You probably didn’t start out dreaming of forms, portals, compliance and reporting obligations, or entering the same information into five different systems.

Yet more and more small and family businesses tell me they’re spending more time on “the business of running the business” than ever before, taking time away from delighting customers.

Recent research by Australian Institute of Company Directors (AICD) showed the cost of complying with Commonwealth regulations has grown to $160 billion, nearly 6% of GDP, up from $65 billion (4.2% of GDP) in 2013. The Australian Chamber of Commerce and Industry’s 2025 Business Conditions Report revealed 42% of small businesses say compliance has a negative impact on operations, particularly smaller operators.

White tape weighs on small business

Rules and regulations certainly serve a purpose. It’s the regulatory steps that add no real value or no longer really serve as intended, that weigh down small business. And it’s not just government where rule‑making has gone rogue. Small businesses are being increasingly entangled in a quieter, rapidly growing phenomenon: white tape.

White tape refers to administrative and compliance burdens imposed by large businesses on small and family businesses – obligations that go beyond what is legally required of a small business. It’s the extra rules some other business decides you must meet before they’ll work with you.

It shows up quietly in bespoke reporting templates, mandatory software systems, complex questionnaires, or contract clauses referencing Acts that were never intended to apply to a small operator. These obligations are often justified as part of large businesses’ efforts to meet their own requirements – on modern slavery, climate disclosures, cyber security or corporate governance – but instead of managing those responsibilities themselves within their operations, they cascade them down the supply chain.

It’s a story we’re hearing across Australia – this is happening with little guidance, little standardisation, and little regard for the cost, time, expertise required of a small business.

What we hear from small businesses

Modern slavery clauses are now common in supply contracts. Large companies above the threshold must lodge Modern Slavery Statements. Small suppliers are not required by law to do the same. Yet many are still asked to sign contractual obligations that feel like they carry hidden liability. They describe being given dense references to the Modern Slavery Act 2018 with no explanation of what they mean or how to comply and a complete lack of clarity. That’s white tape.

Australia is moving toward mandatory climate related financial disclosures. Already, larger firms – often customers – are asking small suppliers for detailed Scope 1–3 emissions data. But small businesses don’t or can’t readily collect that data, can’t easily calculate it, and in many cases don’t have access to the necessary information because it lies with upstream suppliers. Still, the requests – and implied accountability for the accuracy of the data – keep coming, often via bespoke spreadsheets or paid third party platforms of uncertain trustworthiness. We’ve argued for comprehensive decision-support tools that guide small business to matters material and relevant to them.

In banking, prudential risk assessments and climate-related reporting increasingly expect small business customers to provide data that is not accessible, standardised or proportionate. This is white tape in its purest form – shifting reporting expectations because they are convenient for larger firms, even when unreasonable.

White tape is prevalent in procurement. We’ve seen small suppliers given contracts containing obligations across modern slavery, cyber security, whistleblower protections, ESG reporting, diversity and inclusion – all referenced simply by citing the relevant Acts, with no practical guidance, proportionality or examples. Complex procurement participation requirements can lead to small business suppliers not even putting their hat in the ring, which also means consumers miss out on the positive value, agility, competitiveness and innovation force that small suppliers can provide.

Across sectors, small businesses say they are repeatedly asked for the same information in different formats – ABNs, insurance certificates, safety documentation, gender equity data, cyber security attestations, environmental declarations. Some buyers insist on proprietary portals. Others require PDFs uploaded in oddly specific ways. Some mandate training that duplicates WorkSafe, industry or government requirements. These inconsistent, duplicated “make work” tasks drain precious hours each month. No wonder industry groups are calling for common templates, aligned requirements and “tell us once” models – and for clarity about what is reasonable to ask of small suppliers.

ASBFEO push for better regulatory discipline

Regulatory complexity undermines innovation and investment. White tape and regulatory over‑reach act as a productivity tax. And it’s taxing, draining time and energy, pulling small businesses into a web of rules and legal frameworks never designed with them in mind.

The Productivity Commission has repeatedly warned that regulatory creep and administrative overload suppress business dynamism. If we’re serious about productivity, innovation, and fairness, we must cut red tape where it’s excessive and confront white tape where it’s unnecessary, unhelpful, and unfair.

This is why ASBFEO continues to push for better regulatory discipline, including:

• Genuine consultation with small business on new rules
• Small Business Impact Statements in Cabinet submissions
• Stronger regulator performance assessments
• A commitment to right‑sized regulatory design

International models show what works:

• The UK’s Primary Authority model enables small businesses to get consistent, assured regulatory guidance, reducing conflicting requirements across jurisdictions.
• The EU’s SME Test requires regulators to identify disproportionate impacts on small business and adjust policies accordingly.
• Canada’s Small Business Lens obliges regulators to quantify SME compliance costs before introducing new rules.

These models share one principle – think small first – and it’s time Australia did the same.

Share your experience

Too often, small businesses carry compliance loads intended for larger firms. To unbind the rogue compliance web, we need real world examples, straight from the businesses experiencing them. Your experiences will directly shape recommendations to government on rightsizing regulation, improving standardisation, and reducing burden shifting onto the smallest businesses in the economy.

Share your experience by contacting Advocacy@asbfeo.gov.au.