Small and family businesses are the engine room of Australia’s economy but too often, they’re tangled in regulatory, compliance and reporting ‘tape’ that stifles their spark and inhibits their enterprise. ASBFEO, Bruce Billson calls for a better way.

As we step into 2026, it’s time to cut the clutter, make regulation ‘right-sized’ and fit-for-purpose. Australian Small Business and Family Enterprise Ombudsman, Bruce Billson, shares the burden of regulatory and compliance obligations that can impede small business.

2026 brings a moment to reflect on the trials of 2025 and shape a brighter future for our small and family businesses. They make up 97 per cent of Australian businesses – the engine room of our economy, the livelihoods of local communities and the heart of our neighbourhoods, towns and regions. Last year tested their entrepreneurial grit like never before, with fresh and more complex regulatory demands, soaring input costs, squeezed margins, ongoing supply chain stress and evolving consumer behaviour.

Yet, resilience prevailed. 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, leaning on their self-belief, perpetual optimism, relentless endeavour and entrepreneurial instincts to create opportunities. This momentum signals that 2026 can be a year of renewal, reinvigoration and reinvestment for the sector.

Governments are listening but regulatory burdens can impede

Late last year, Small Business Ministers at all levels of government committed to cutting red tape, boosting disaster resilience and conducting a stocktake of support resources to ensure consistent, clear content can be easily found and accessed when needed. That’s encouraging.

Despite small business’s cautious positivity, regulation remains a burden. Small businesses aren’t shrink-wrapped corporates. They simply don’t have the time, resources, headspace, sophisticated systems or the wherewithal to deal with changing regulatory obligations, even with the best intentions. Regulation 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.

Relieving this heavy compliance burden is where governments also need to take decisive action.

Compliance burdens of red, green and white tape

‘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. 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. This could include 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.

ASBFEO deep dive into white tape

To better understand the nature and impact of white tape on Australia’s small businesses, ASBFEO is undertaking a deep dive into the issue. We are looking into 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.

Our most recent Pulse showed that there is positive momentum within many small businesses, particularly those harnessing digital technology and artificial intelligence to boost efficiency and power new waves of growth. While digital systems can help streamline the ‘business of running the business’, I want to continue to shed light on the significant burden of over-reaching and excessive regulatory and compliance obligations that can impede small businesses from competing, thriving, or even surviving.

A smarter and sensible step forward

Breaking down this burden is not just about reducing or recalibrating existing regulations or addressing unintentional burdens, it is about how we approach proposals to create more obligations. It is about ensuring regulations are right-sized for small business, putting them at the centre of decision-formation and design for policies that impact them. 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 businesses must look at how we support, guide, regulate or trade with small business without overburdening them with ‘tape’ that takes them out or needlessly away from delighting customers and finding new ways of creating value. One practical step? Every Cabinet submission, new policy proposal or regulatory impact statement should include a small business impact statement – simple and sensible, just one of our 14 steps to energise enterprise.

Less tape, more thrive

Regulation should be a guardrail that enables safe and fair commerce, and not be so burdensome it crushes the entrepreneurial spirit of hard working and innovative small business owners and leaders. In Australia, we champion the courage of enterprising women and men who dare to build, persevere, back themselves and keep showing up to create livelihoods for so many.

In 2026, let’s give small and family businesses the confidence and clarity they deserve. Together, we can cut the clutter, keep regulation fit-for-purpose, and free up time for what matters most – the opportunity to thrive and grow. That’s how we energise enterprise, boost productivity.

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