Why DA red tape madness is costing NSW businesses $570 million a year

Excessive regulation is costing NSW businesses $570 million a year, as a Sydney business owner revealed he was forced to pay $15,000 for a DA - and get an occupational certificate for stick-on signage.

Sydney business owners such as Ashok Murthy (right), who runs an embroidery firm, and Tim Edmondson of Edco Cleaning Products, say red tape is excessive.

A Sydney business owner was forced to fork out $15,000 and wait more than a year to install stick-on signage outside his shop, in an example of the red tape madness costing NSW businesses $570m annually.

Exclusive analysis from Business NSW reveals more than 247,000 businesses across the state say they face “excessive red tape requirements” at a time of record insolvencies, with ASIC confirming 5691 businesses went bust in the last financial year.

Business NSW chief executive Daniel Hunter told The Daily Telegraph the analysis showed businesses spent more than 164 million hours – the equivalent of 977,000 weeks – on compliance.

“The burden is hitting small and medium enterprises the hardest, draining resources that could be used to hire staff, grow their operations, or invest in new opportunities,” he said.

Business NSW surveyed 751 businesses, prompting Mr Hunter to call for the state government to create a permanent “red tape reporting” portal, a reduction in development application fees, and “standardisation of DA requirements across councils and streamline the DA process”.

CEO of Business NSW, Daniel Hunter. John Feder/The Australian.

“This isn’t about cutting corners – it’s about cutting waste,” he argued.

“When businesses are spending $11m a week on red tape, we have to ask: are we helping them grow, or just holding them back?”

How 150,000 homes could be built in airspace across Sydney to supercharge housing supply

Western Sydney’s $1bn Metro cash at risk as Premier stalls extension plans

Ashok Murthy, who runs an embroidery business in North Sydney, said relocating just a few streets from his previous business site should have been easy.

But a year-long wait for the approval of sticker signage for the front of his business – and a $15,000 cash splash to get a development application together – resulted in a rocky relocation.

“It felt like I was trying to submit plans for the Sydney Opera House,” Mr Murthy said.

“The approval of signage took more than a year.

Ashok Murthy spent $15,000 for a council development application to change the signage on his business, and experienced months of delays. Picture: Rohan Kelly

“We needed an occupation certificate and a compliance certificate, just for the window signs.”

Marrickville business owner Tim Edmundson faced a similar issue, in which a slip-up on a single page of a lengthy development application resulted in a six-month delay and a $250,000 bill.

“We started planning to move approximately a year ago,” Mr Edmundson said. “We engaged a project manager to assist us, (as) there is such a high degree of paperwork.”

But the business owner said an issue with the plans to remove a “redundant fire tunnel and putting in a new roller door” resulted in all of the occupational certificates for the site being voided.

“You live in limbo land,” he said. “You’re never quite sure what you are supposed to be doing.”

Mr Edmundson said the number of business owners who told him they were ready to give up was frightening.

“We are a fourth-generation business and I’ve been working in the family company now for 25 years,” he said. “And I can honestly say that just being in business is much harder than it was two decades ago.”

Managing director Tim Edmondson at his Marrickville business, Edco Cleaning Products. Picture: Rohan Kelly

The red tape wrangle for small business owners comes as wait times for development applications for a change of use of a building blows out from a 40-day average to as many as 147 days in the case of North Sydney Council, 120 days in Parramatta, 97 days in the City of Sydney, and 70 days for Canterbury Bankstown.

Planning Minister Paul Scully said reforms to address red tape madness had been delayed in parliament.

“The Minns Government’s planning system reforms, delayed by the Greens in the Upper House, will improve the system by making it easier and faster to submit and assess a DA whether it be for a family home or a small business,” he said.

Planning Minister Paul Scully. Picture: NewsWire / Nikki Short

“Everyone in the planning system should be providing timely accurate advice to applicants.

“Incorrect advice or unclear requests for information lead to delays which are not only frustrating but cost time and money.”

The reforms will introduce the Development Coordination Authority, which is set to bring 22 state government agencies and entities into one body to standardise consent of developments.