THE Productivity Commission has backed moves by the Abbott Government to cut red tape for small businesses, urging more action on regulatory burdens.
A report from the Commission, to be released today, argues regulators need to keep the compliance capacity of small businesses "at the forefront of their minds".
It argues government agencies need to do more to understand how regulation impacts small businesses.
Commissioner Dr Warren Mundy said there was still "significant scope for improvement" in the way regulators engaged with small business.
The report will strengthen Abbott Government moves to tackle red tape, with moves already underway to set up "deregulation units" in every federal department.
Among the Commission's recommendations were better communication between government and business, and a renewed focus on "voluntary compliance".
"Small businesses feel the burden of regulation more strongly than other businesses," the report reads.
"Almost universally, their lack of staff, time and resources present challenges in understanding and fulfilling compliance obligations."
The report also recommended public commitments to improve "timeliness" of government decisions and strategies to "avoid the shifting of direct and indirect costs onto businesses".