Originally published in The Canberra Times.

By Bruce Billson.

The new year brings a moment to reflect on the trials and tribulations of 2025 and to contemplate what we might do to shape a brighter future for our small and family businesses. They make up 97 per cent of Australian businesses – they’re the engine room of our economy, livelihood of our local communities and the heart of our suburbs, towns and regions. Last year tested the entrepreneurial drive and resilience of small and family business like never before, with fresh and more complex regulatory demands, soaring input costs, squeezed margins, ongoing supply chain stress and evolving consumer behaviour. 

The most recent ASBFEO Small Business Pulse showed Australia’s enterprising women and men are not waiting for perfect trading conditions – they’re backing themselves and drawing on their relentless optimism, self-belief and entrepreneurial instincts to create their own opportunities. This positive momentum underscores that 2026 can be a year of renewal, reinvigoration and reinvestment for the sector.

And importantly, governments have been listening. Late last year, the Small Business Ministers at all levels of government committed to cutting red tape, boosting disaster resilience and are doing a stocktake of support resources to ensure consistent, clear content can be easily found and accessed when needed.

Yet despite the cautious optimism, the operating environment remains challenging with regulatory compliance a key burden. Small businesses aren’t shrink-wrapped corporates. They simply don’t have the time, resources, headspace, sophisticated systems or wherewithal to deal with growing, more complex and everchanging regulatory obligations, even with the best intentions. 

Regulation, too often, is typically designed for larger corporates with small businesses only considered later, resulting in regulation of many colours – red, green and white – that is not ‘right-sized’ for Australia’s small and family businesses.

‘White’ tape refers to the regulatory, compliance, reporting and operational requirements imposed on small businesses by larger enterprises in a business-to-business relationship. It can arise due to the larger enterprise needed to meet a regulatory obligation, or because the enterprise imposes certain requirements to do business with them.

White tape adds to the compliance burden on small business and can increase costs within a supply chain and act as a barrier to participation. It is often presented as, “if you want to do business with us, here is what you need to do”, which means the small or family business must take certain actions that require resources, for example, installing special software, meeting bespoke reporting requirements, or changing processes to satisfy the preferences of the larger business. 

It is not just big business flexing their muscle through supply chain requirements, Governments too love a bit of ‘white tape’ when it comes to procurement processes faced by small businesses seeking to add a department or agency as a customer.

To better understand the nature and impact of white tape on Australia’s small businesses, my agency is undertaking a deep dive into the issue. ASBFEO is examining which sectors these practices are occurring and the cost and resource impact they are having on small and family enterprises. Already we have heard about compliance reporting cascading down to small businesses within a supply chain in areas such as modern slavery, climate reporting and workplace safety, often with little or no guidance from the larger enterprise. 

Over the coming months we will be consulting with a wide range of small business stakeholders to get a much better picture of white tape, with the aim of providing insights that are useful for both policymakers and larger corporates. We’d love to hear about your experience.

So as we are starting to see positive momentum within many small businesses, particularly those harnessing digital technology and artificial intelligence to boost efficiency and power new waves of growth, I want to continue to shed light on the significant burden of regulatory and compliance obligations that can impede small businesses from thriving, or even surviving. 

Addressing the regulatory burden is not about simply cutting red tape, it is about ensuring that regulations are ‘right-sized’ for small business. It is about proportionate, risk-based regulation that is informed through early engagement with small business and embedded in regulatory design, not one-size-fits-all regimes. 

Government, regulators and large corporates must ask: what are the right-sized regulatory settings that achieve the intended policy outcome without overburdening small business with red tape or unintentionally torching their entrepreneurial spirit? Perhaps one of the easiest ways to start is for every Cabinet submission, new policy proposal or regulatory impact statement to include a small business impact statement – one of our “14 steps to energise enterprise”.

The Minister’s upcoming Small Business Consultative Group is a welcome addition to the small business ecosystem, where small businesses can share their experiences, ambitions, challenges and insights directly with the Minister. 

Regulation should be a guardrail that enables safe and fair commerce, not a burden imposed on small business that is so heavy that it crushes risk-taking and entrepreneurship. In Australia, we champion the courage of enterprising women and men who dare to build, persevere, and keep showing up. Their drive, relentless optimism, resilience and ingenuity breathe life into the economy, local communities, neighbourhoods and all those with entrepreneurial dreams.

In 2026, let’s give small and family businesses the confidence and clarity they deserve.

Together, we can cut the clutter, make regulation ‘right-sized’ and fit-for-purpose, and free up time for what matters most for small and family business – the opportunity to thrive and grow their business and to devise now ways of delighting customers and delivering value for our nation. That’s how we energise enterprise, boost productivity and keep the engine room of our economy roaring strong.