Quantifying compliance costs of small businesses in New Zealand

This paper reports on a small-scale study of the compliance costs of small New Zealand businesses. Participating firms were asked to keep a record of both time spent and expenditure directly incurred over a thirteen-week period. This differs from previous studies that rely on a firm’s recall of how much time has been spent on compliance over the previous year. The results suggest that New Zealand small businesses, on average, spend less time, but a similar amount of money, on compliance than has been indicated in previous studies. A number of firms do perceive compliance to be a major issue, and in some cases this perception prevents firms from expanding.UnpublishedBollard, Alan (1987), “More market: The deregulation of industry”, in Economic Liberalisation in New Zealand, Bollard, Alan and Buckle, Robert (editors), Allen and Unwin, Wellington. Cullen, Michael, Swain, Paul and Wright, John (2001), More time for business. Tax simplification for small business, Inland Revenue Department, Wellington. Goldfinch, Shaun (2000), Remaking New Zealand and Australian economic policy, Goergetown University Press, Washington. KPMG (2003), Report of the Business New Zealand – KPMG Compliance Cost Survey, Business New Zealand, Wellington. Magnusson, Lars (2001), “The role of path dependence in the history of regulation” in The State, Regulation and the Economy: An historical perspective, Magnusson, L. and Ottosson, J. (editors), Edward Elgar, Cheltenham. Ministerial Panel (2001), Ministerial Panel on Business Compliance Costs, Finding the Balance. Maximising Compliance at Minimum Cost, Ministry of Economic Development, Wellington. Ministry of Economic Development (2001a), Business Compliance Costs Statements: Guidelines for Departments, Ministry of Economic Development, Wellington. Ministry of Economic Development (2001b), Government response to the Ministerial panel on Business Compliance Costs, Striking the Balance, Ministry of Economic Development, Wellington. Spulber, Daniel F. (1989), Regulation and markets, MIT Press, Cambridge, Massachusetts. Stanton, J. L. and Tucci, L. A. (1982), “The measurement of consumption: a comparison of surveys and diaries”, Journal of Marketing Research, 19: 274-7. Stigler, George J. (1975), The citizen and the State : essays on regulation, University of Chicago Press, Chicago. Sudman, S. and Ferber, R. (1971), “Experiments in obtaining consumer expenditures by diary methods”, Journal of the American Statistical Association , 66: 725-35. The Economist (2000), New Zealand’s economy: can the kiwi economy fly? The Economist, December 2, 2000:83-9. Utton, M. A. (1986), The economics of regulating industry, Basil Blackwell, Oxford. World Bank (2004), Doing business on 2004:Understanding regulation, World Bank and Oxford University Press, Washington