Bouwend Nederland, together with seven other industry organizations, has responded to the recently published progress report on regulatory burden from the Ministry of Economic Affairs. It is clear that the amount of regulatory burden is increasing and that concrete and firm measures are needed to reduce it. It is striking that entrepreneurs experience difficulty in complying with a third of the rules. They are also increasingly forced to use external parties to comply with the regulations.
Bouwend Nederland, VNO-NCW, MKB-Nederland, Aannemersfederatie Nederland Bouw en Infra, InRetail, Koninklijke Horeca Nederland, Koninklijke Metaalunie and ANKO (Algemene Nederlandse Kappers Organisatie) find it unacceptable that the growing regulatory burden leads to further cost increases for them.
Rules are only being added, including from Brussels, but rarely anything is being taken off, the industry associations argue. The Advisory Committee on Regulatory Burden announced in May that the cost of regulatory burden will have increased by over €400 million by 2022 alone, while less than €12 million has been taken off. Under the previous administration (Rutte III), the total increase was at least €5 billion(see also the Regulatory Burden Monitor)
More space
"With all the transitions going on and the investments this requires, entrepreneurs need air. Reducing the regulatory burden, including through more exceptions for SMEs and scrapping unworkable rules, is one of the easiest and cheapest things a new administration can do to give them a little more space," the business organizations argue. "Even the European Commission now has a one in, one out policy and a hard reduction target to remove 25% of its reporting obligations. In the Netherlands, even more is needed."
Complexity
On the positive side, the current regulatory burden approach of the Ministry of Economic Affairs is already much firmer than under the two previous cabinets. Promising is the SME Indicator Companies approach, which not only measured the regulatory burden on companies in six specific sectors, but also the workability of those rules. That approach shows, among other things, that entrepreneurs have to hire external advice for two-thirds of the obligations because they are so complex. Fifteen to 20 percent even require external hiring by law. "This involves high costs and this is another area where the knife must be cut," the business organizations believe. "Reduce the regulatory burden costs caused by external consultants, who, moreover, often charge very different rates for the same services."
More exceptions, fewer paper tigers
The smaller the company, the higher the regulatory burden. The regulatory burden measurements at indicator companies show this adamantly. Therefore - as in Brussels - it should be considered much more often to exempt small companies from new and existing legislation, the entrepreneurial associations say. "That is an effective tool to reduce regulatory burden." In addition, a next administration should rigorously cut national headlines on European rules and the swelling stream of reporting obligations.
Most obligations employer
The SME Indicator Program, conducted by SIRA, also shows that the regulatory burden and the accumulation of obligations are greatest in the social domain, with respect to employment. These include the continued payment of wages and reintegration during illness, the transition compensation and the many health and safety regulations, such as the obligation to appoint a prevention officer from the very first employee. SIRA makes numerous proposals in the report for each ministry to reduce the regulatory burden for entrepreneurs. "So now it is up to the ministries," he said.
Burden of stifling regulations is still one of the most frequently heard complaints from entrepreneurs. Here lies a big challenge for a next administration. "A U-turn to less regulatory burden and more facilitative policies would greatly help the entrepreneurial climate in the Netherlands."
