Section 8: Conclusions
The New Zealand research on compliance that existed prior to this study provided valuable feedback on how particular pieces of legislation could be improved, in order to make compliance less onerous. On another level, it also provided researchers and policy makers with an understanding of the intangible costs of compliance overall, rather than focusing solely on those costs that are tangible and/or measurable (e.g. financial). This approach (which combines an awareness of tangible costs with those that are intangible) is important if policymakers are to fully understand this broader perspective on the "costs" of compliance. This depends on studies in which researchers take an integrated approach to the problem, using sociological and psychological frameworks as well as those provided by the study of economics.22 Conceptually this broader perspective is reflected in emerging perceptions of compliance as a commitment, rather than a cost or burden. Instead of "having to" comply with government regulations, a firm is choosing to commit to (or invest in) its own future.
Re-framing compliance issues so that negative (i.e. cost) aspects are de-emphasised is useful in defining the boundaries for investigating the situation (i.e. enabling questions to be more neutrally phrased can be helpful in obtaining constructive suggestions). It may also have benefits for government agencies that are engaged in encouraging certain behaviours (by individuals and/or firms). Given that the extensive international research on compliance suggests that the majority of firms maintain a "reactive" stance in terms of compliance, irrespective of initiatives undertaken by governmental agencies to encourage "proactive" behaviour, (with small firms particularly at fault in this regard23), government agencies need all the help they can get in "selling" compliance as an important element in every firm's development.
However, no matter how businesses are presented with the benefits of compliance, and however frequently they hear that compliance is not a cost but an investment, they will only act willingly if they believe that government will listen to their concerns and is interested in their perceptions of the impact that compliance has on their ability to improve firm performance and act in innovative ways. The recent reports from the New Zealand government suggests that this situation exists, but to date the agencies concerned with reducing the compliance burden have been hampered by a lack of evidence about the way in which the managers of New Zealand view the indirect impacts of compliance.
As the results summarised above show, New Zealand business people are articulate about the impact of legislation and regulations on their business practices. The respondents to this survey could name the pieces of legislation that concerned them and describe in some detail the way in which they felt they impacted upon them. They could also clearly voice their opinion that the impact of compliance has increased over the last two years. However, when they were asked to select from a list of factors where the "effort and distraction of complying with New Zealand regulations" was included, this was not the top factor. This place instead went to the "conditions and regulations placed by overseas governments" (see Figure 7). While this may be of little comfort to those concerned with growth in New Zealand firms (given the difficulty of removing or minimising the impediments placed by overseas governments), it is heartening that in the context of a study on the relationship between growth and business compliance, that the New Zealand government was not automatically blamed for restricting growth.
Having said this, there was considerable detail about some legislation, particularly from the perspectives of certain industry groups. Food labelling is an issue that is causing great concern to those in the food industry at present, while MAF came in for criticism from the primary sector. The researchers expected this situation to occur. They also expected there to be identifiable differences in the responses of the other groups that were sampled.
For example, it was assumed that managers from firms with growth intentions would exhibit concerns with some pieces of legislation, for example, acts that they were dealing with for the first time because of expansion. The researchers also expected respondents from these firms to be more tolerant towards compliance as a whole, seeing it perhaps as a necessary corollary of growth. These assumptions were largely borne out.
Similarly, it was assumed that managers from firms of different stages would hold different perceptions of compliance. This was borne out to a degree. For example, firms that are "new" were under-represented amongst those citing the arrangements surrounding the release of an employee as a distracting factor. Conversely, "mature" firms were over-represented in relation to this factor, perhaps demonstrating an example of the cumulative nature of compliance: perhaps the respondents from the mature firms were in fact remembering an experience from the past.
Finally it was assumed that there would be differences in the responses between firms of different sizes. The reports from the Ministerial Panel suggested that non-employing firms would have different perceptions of compliance than those that do employ, and that those employing reasonable numbers of staff (in this survey those with more than 11 FTEs were grouped together) would also exhibit different perceptions. Again, this assumption was largely borne out, though there were some interesting deviations from the researchers' intuitive conclusions. For example, it appeared that larger firms had appropriate systems in place for dealing with compliance (with those employing more than 11 FTEs often under-represented in the groups identifying a concern). However, they were over-represented in relation to some issues, such as getting consents to use land, water or air.
This study has gathered a large amount of detailed information on the way in which New Zealand firms view the various activities that go under the heading of "compliance". This has confirmed the assumption that the managers of different types of New Zealand firms would have different perceptions of compliance, and different experiences of the way in which complying has impacted on their ability to improve productivity and to plan and undertake strategies that will assist the firm to grow. Particular concerns were identified which relate to the size of the business, its stage, its involvement in export, its growth intentions and the sector to which it belongs. This information will be of value to all those agencies that are concerned with minimising the burden of compliance.
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