Insufficient Information
Information provision is a key component of the regulatory environment. Business people are busy and have a wide range of activities to manage. Their ability to understand what is required of them is affected by the size of their business, as well as its management capability and financial resources. For example, compliance can be more complex and challenging for a small business operated by a family than it is for a large business which has ready access to in-house support from a professional management team and advisers such as accountants and lawyers. A common theme from the interviewees was that regulators need to provide clear, accessible and user-friendly information to let businesses know exactly what they need to do to comply with the law.
Summary of the issues:
The core information provision "problem" was that communicators and their audience appeared to be unaware of each others' needs or were talking past each other. This hindered understanding and resulted in frustration on both sides and excessive cost to businesses.
Businesses commented that the way in which some government information is provided made it difficult to understand. This caused confusion and misunderstandings amongst interviewees and their staff about their respective obligations. This lack of clarity meant some businesses gave up trying to understand requirements and proceeding on the basis that they were compliant until informed otherwise. Others incurred significant costs to retain the services of specialist advisors to explain and/or take care of compliance.
Some businesses appeared poorly informed about existing procedures/requirements. Some of the issues raised by these businesses were in fact examples of information provision problems or communications breakdowns. In certain instances, businesses were misinformed about government requirements by third parties. Employment Relations and Health and Safety were particularly common areas for misunderstandings.
For some interviewees, especially those from smaller businesses, the main problem was information overload. The volume of material from various sources including central government agencies, local government, industry bodies, and private providers proved too much to process. The time required to identify the relevant information proves a major barrier to these businesses' ability to access correct information.
Some businesses identified the tone of the information provided as a concern. An overly legalistic tone seemed to stress the possibility of legal action, and detracted from any feeling of a partnership relationship.
Specific areas of concern included tax, hazardous substances and health and safety requirements, the ACC levy, immigration requirements such as working holiday visas, the Consumer Guarantees Act and the KiwiSaver scheme. Interviewees also queried whether there was a systematic and adequate level of information support for new businesses.
How business sees it:
Provide a user-friendly facility where a business can find out all relevant requirements affecting its operation, particularly through the start-up years. This could cover collective contract rules, which are difficult for employees to understand and for employers to explain. [retail]
The Consumer Guarantees Act is broadly worded legislation and lacks clarity. [retail]
Enhance the clarity of existing information – for example, the Hazardous Substances and New Organisms Act is hard to understand, and compliance is very costly because of the time trying to work out what is required and in many cases making an interpretation. [wine]
Frequently changing gas requirements were so confusing that a hazardous goods consultant now comes annually. [wine]
The requirements of the Approval in Principle scheme for immigration purposes are not well explained. [horticulture]
Small businesses receive as much information about legal requirements as businesses five times the size, and don't have the time to read it. [wine]
A proactive "what do you want – how can we help?" approach from agencies would be preferable to threats of prosecution. [retail]
Interviewees commented that putting information on a website is not enough, as:
- businesses do not regularly check departmental websites;
- departmental websites can be difficult to navigate; and
- not everyone has access to the internet, and not all areas have access to broadband.
Interviewees also proposed that agencies should give reminders of what is required in advance, instead of taking a punitive approach when mistakes occur through lack of information.
Government initiatives to address information provision include:
The Department of Labour:
- undertook a number of initiatives in the first half of 2007 to improve the information and guidance provided to business on a range of issues, including: use of probationary periods; how to manage the parental leave process and returning to work; and managing the health and safety of contractors. Improvements are being made to enhance the navigation of Immigration New Zealand's website, with the section for employers due to be reviewed;
- is developing an online Hazard Builder for small and medium-sized enterprises, which aligns with ACC requirements for the new Workplace Safety Discount;
- is undertaking a review of current publications on managing employment relationship problems to provide, for example, explicit guidance for employers on "how to fire" and probationary periods; and
- the Minister of Labour was expected to report to Cabinet by 31 August 2007 on options to improve the functioning of the employment relationship problems resolution system.
ERMA New Zealand has a programme to develop user-friendly guidance on HSNO requirements, particularly aimed at SMEs, and operates a dedicated toll free service (0800 376 234) to support industry compliance.
ACC:
- introduced, from June 2007, new levy invoices that provide clearer information for business; and
- is providing to businesses, as part of its levy setting process this year, more understandable and accessible information about how it sets its workplace levies.
The Inland Revenue Department is seeking to increase support for new businesses in the future through proactive communication at the outset by telephoning those businesses that are employing their first employee (i.e. who become new employers). On average it calls approximately 500 employers per week, and has contacted 6,279 employers since 1 March 2007. The Inland Revenue Department now plans to commence phase two of this proactive contact initiative, whereby new businesses are contacted with a view to helping them understand tax obligations.
The Department of Internal Affairs undertook a targeted information provision campaign on how to deal with problem gamblers in March 2007.
Land Transport New Zealand has produced a fact sheet (no. 53) that explains operating conditions for normal over-dimension loads.
The New Zealand Customs Service has instituted the Frontline programme to assist new clients with excise.
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