By Paul Hemsley

Small businesses in cleaning, construction and real estate sectors will benefit from the NSW Government’s move to cut the red tape for contract work.

Through the state government’s changes to procurement processes, registration processes will be easier and applications will now be assessed faster, which will help small businesses get a larger share of government services contracts.

Minister for Finance and Services, Greg Pearce said the changes will make it simpler, easier and more cost effective for business.

Mr Pearce said the government has looked at improving its engagement with small and medium businesses that have been locked out of winning a reasonable share of government business.

“These are positive steps to remove the red tape and confusion that have complicated the process in the past,” Mr Pearce said.

Council of Small Business Australia CEO, Peter Strong said this is a good development because a lot of procurement processes at all levels of government side with big business.

Mr Strong said the impact of contracts on small businesses is important because larger contractors may pass on government demands to the smaller business contractor.

“The small contractors will find that they can’t bid for work in a government building, so they end up working for a larger contractor.

“You end up with a lack of competition because the small business owner would probably get more money working directly for the government but in the end it would cost the government less money,”  Mr Strong said.

Mr Strong told Government News the larger businesses wield the contract and they take money for themselves and they “screw over” the small business person who’s competing for a living.

As a result, this policy from the NSW Government now starts to develop better competition, according to Mr Strong.

Mr Pearce said insurance and indemnity requirements will be reduced and businesses will be able to provide services for a wider range of work types without having to go through further assessment.

Mr Strong gave a past example regarding indemnity requirements that a contractor would need $20 million of professional indemnity coverage but the job might be worth only $800.

“So the cost to get to $20 million worth would be at least $5000, so they hadn’t thought it through,” Mr Strong said.

He said the government is showing that "real thought" has gone into this plan because public servants now have to think about how these clauses push small businesses out of the market.

Mr Strong argued that the at all levels of government, one of the issues is often not the regulation, but the attitude around the public servants who enforce it.

“At the local government level in particular, an area of our focus, you see some of the licencing, health and police in local government areas have no idea about implementing the rules without really thinking about the impact or whether they make sense,” Mr Strong said.

He said these simplified procurement processes will eventually work their way down through to local government.

The noise will come from local people themselves who will ask why real estate agents in another local government area are getting access to property management when they can’t in another area, according to Mr Strong.

“There are some good local governments out there, but most aren’t. Most are not small business friendly, there is no doubt,” Mr Strong said.