Vol. 497 No. 7
3 Mr. Perry asked the Tánaiste and Minister for Enterprise, Trade and Employment the progress, if any, made on the issue of administrative simplification within Partnership 2000 commitments; and if she will make a statement on the matter. [26234/98]
The commitment in Partnership 2000 to introduce a national strategy on administrative simplification is being progressed through the Strategic Management Initiative. A working group on regulatory reform prepared a report setting out the essentials of a national strategy on administrative simplification. The Department of the Taoiseach, in co-operation with my Department, is formulating proposals regarding implementation of such a strategy and the Taoiseach will bring these proposals to Government for decision in early 1999.
Progress has also been made on a number of the specific issues which Partnership 2000 included under the national strategy. For example, on the commitment to remove the statutory audit, the Government has approved a draft scheme to amend the Companies (Amendment) Act, 1990, including the removal of the statutory audit from companies with a turnover below £100,000.
On the commitment to establish a consultative forum, a small business users panel has been set up to explore how the administration of PAYE and social welfare by small businesses can be simplified.
My Department has also been pursuing the recommendations in the report of the Task Force on Small Business relating to the reduction of administrative burdens. To date, of the 37 recommendations relating to this issue contained in the report, 60 per cent have been fully or partially implemented. In view of the passage of time since the task force reported I have asked the Small Business and Services Forum to review the outstanding recommendations in the report.
Will the Minister confirm that an interdepartmental committee in her Department has a report on this issue, which has not been published? Will she also confirm that the administrative and regulatory environment in which small businesses operate is a critical component of competitiveness and that over-regulation stifles a great deal of business? A business person wishing to comply with the essential aspects of Government imposed regulatory and legislative requirements relating to PAYE, PRSI, VAT, corporation tax, social insurance and employment legislation must comply with the 27 legislative provisions. An employer in a small company employing eight people would have to spend 1,000 hours dealing with regulations to comply with the essential requirements laid down by the Government and such a business must meet certain requirements if it has a turnover in excess of £100,000. That is a very low turnover for a small business and very few small businesses that employ any staff would have such a minimum turnover figure. It is necessary that this matter is examined by the Minister.
I agree with Deputy Perry. The burden of implementing many of the laws we pass in this House is much greater on small businesses than on large businesses. The taskforce report shows that the PAYE-PRSI system involves a burden on payroll costs that is four times higher on a small business relative to a large business. That is why this recommendation was made in chapter 6 of Partnership 2000.
A draft memorandum is being prepared on the various recommendations. One of the key issues is whether we should establish a central unit attached to some Department with responsibility for this area. The Taoiseach will bring that memorandum to Government in line with the agreement under the Strategic Management Initiative. I expect that will be done in early 1999 after which decisions and recommendations will be made and the report will be published.
What about the internal report?
There are various groups meeting to discuss this matter. My briefing notes do not refer to an internal report. I am not aware of nor have I seen one, but if there is one I would be delighted to ensure it is published and made available to the committee of which the Deputy is a member or to any Member of the House. We have the view of the Department on how we should move forward on this area and a review of the Revenue Commissioners and the Department of Social, Community and Family Affairs in this regard. There are a number of Departments involved, including the Department of Finance. Each Department has its perspective on what it would like done in this area.
We made a decision recently in the context of the forthcoming amendment to the Companies Act to change the audit requirement for small businesses. There are many other issues that need to be dealt with. Ideally we need an integrated tax and social welfare system, which would be a more simplified system. Some of the decisions made yesterday will help in that regard. A simplified system would help small businesses. I will check if there is an internal report, and if there is one, I will report back to the Deputy.
Will the Minister consider setting up a business test panel on which small business practitioners would be represented to examine the administrative consequences of new legislation on small businesses? The results of such a process could be included in relevant memos to Government. The administrative consequences of further legislation for small business could be discussed and such a process could be effective in simplifying the code of change in this area. The SMI report is required and should be published as soon as possible.
We have a small business users panel which does what the Deputy has requested. It includes representatives of various Departments, chambers of commerce and representatives of small business. If there is a gap in its representation and the Deputy wishes to suggest a group that should be represented on it, I would be delighted to add it to the panel. The users panel considers all these matters and advises accordingly. We will publish the SMI report.
