Business compliance costs continuing throughout the COVID-19 crisis has "horrified" a tourism leader who is urging the Government to consider reforms.
Māori Tourism chief executive Pania Tyson-Nathan told the Epidemic Response Committee the tourism industry is already struggling with hospitality and travel restrictions, and regulatory costs just add to the pressure.
"If I can ask all of you around the table to consider the regulatory environment," she told the committee on Tuesday. "I'm horrified at the types of compliance costs that our businesses have to contend with."
Tyson-Nathan said Māori tourism employs about 14,000 people, and with the pressure of lockdown measures, the industry has "already started to see the impact straight away" with some businesses closing or going into hibernation.
"Hospitality is a huge employer of Māori and Pacific Islanders, and the same with tourism. So, I'm not just talking Maori tourism businesses employing Māori, I'm talking about right across the sector."
She welcomed the Government's help such as the wage subsidy scheme and interest-free loans. But she said if the regulatory compliance costs for businesses were reduced for a period of time, it would help businesses in the industry stay afloat.
"I think everyone agrees the rules need to apply. What we need is a year off - not a year to pay them off. That's pretty much the response we're getting."
She highlighted an example from the Wanganui area - a small business with eight staff slapped with $47,500 in regulatory costs, including $10,000 for health and safety, $5000 to get a boat surveyed, $25,000 in concession fees, and more.
"If you could give that guy a year off he could employ his eight staff and they will do stuff. He is largely domestic, he will get through this, but when you're paying those kinds of costs on top of trying to keep doors open and everything else, it's an issue," she said.
"I've got businesses all over the country and I have to say we should have been across this before COVID-19. I was mortified at the sorts of costs that our businesses have to pay.
"So, let's accept that the rules need to apply - the boat's got to be safe, everything else has got to be in place - but I do think it's time for you all to sit around a table and have a look."
ACT leader David Seymour told Tyson-Nathan he is "sorry that it's taken a crisis for more people to recognise regulation and compliance is like tax but the Government doesn't get any revenue - businesses just pay costs".
If you're not familiar with compliance costs, they are the administrative or paperwork costs created by government regulation. An example is new rental regulations the Government introduced in 2019, which National wants to axe.
If elected to power, National has promised the repeal of 100 regulations in its first six months in office and would require future governments and regulatory agencies to undertake at least one regulatory simplification process every three years.
Research commissioned by the Employers and Manufacturers Association (EMA) in 2019 showed successive governments have dropped the ball on keeping an accurate tally of the cost to business of complying with regulation and how it affects productivity.
The research found that it's not the regulations that businesses dislike, with businesses saying IRD has its act together while most said they understand the need for health and safety regulations. It's the cumulative load that had most concerned.
"It just grows and grows and grows," Tyson-Nathan said. "It goes against productivity goals in my view. You're spending so much time on compliance and not enough time in the business."
The EMA research found that the cost of compliance for business in 2016 was $5 billion, or 2.9 percent of GDP, but that was based on 2012 data because governments have not updated accurate figures since then.
That cost would probably be a lot more today, the research said.
"On one hand, businesses are being urged to improve productivity, but on the other there is an increasing focus on compliance with government requirements," EMA chief executive Brett O'Riley said at the time the research came out.
Tourism Minister Kelvin Davis has confirmed to the Epidemic Response Committee that a "response and recovery package" for the tourism industry will be included in Budget 2020.
