Minister Beljaarts: “Companies are spending too much time, money, and energy on regulatory burdens. Preventing unnecessary regulatory pressure on entrepreneurs must therefore be considered as early as possible in new policy. Specifically, this should be taken into account at the time of creating regulations in the ministries. We are now specifically taking an extra structural step for the smallest companies. It must always be explicitly weighed whether they can receive exceptions or lighter obligations.”
Changes in the Business Impact Assessment
The main changes in the Business Impact Assessment are:
- The no, unless principle will apply to reporting obligations.
- If obligations are included in laws or regulations, the starting point is that entrepreneurs must be able to carry these out within their own SME, even in small enterprises.
- It must be explicitly weighed whether an exception or lighter application should apply to relatively small companies with few employees.
- The Business Impact Assessment must be submitted as completely filled out as possible before advising the Advisory Board on Regulatory Burden (ATR). In early March, the House of Representatives approved the permanent status and additional powers for the ATR, including the obligation to involve the ATR structurally and early in the preparation of new regulatory proposals. This is expected to have positive effects on regulatory burden.
- With the renewed Business Impact Assessment, a low-burden implementation will be the standard in the national implementation of European regulations, and deviating from this requires a clear justification.
New SME Indicator Companies
Simultaneously with the renewal of the Business Impact Assessment, the results of the new SME indicator company studies have also been published. The total number of SME indicator companies is being expanded from 6 to 9. The new sectors being studied are the chemical manufacturing industry, the automotive sector, and the financial advisory sector.
An SME indicator company is a fictitious company in a certain sector to which as much legislation and regulation as possible applies. By analyzing this legislation and regulation, we map out how much time and money entrepreneurs spend on it. The workability of rules is also examined, and whether they fit with business operations. The results help to effectively address rules that are poorly enforceable.
The main conclusions from the new studies are:
- 64 to 80 legal obligations apply to the indicator companies, the majority of which are structural.
- The regulatory costs per year for the SME indicator companies are approximately €494,000 in the chemical manufacturing industry, approximately €54,000 in the automotive sector, and approximately €98,000 in the financial advisory sector.
- The financial advisory sector has the highest regulatory costs. This primarily stems from sector-specific regulatory costs, which account for 77% of the total regulatory costs.
- For the other two sectors, the sector-specific regulatory costs are also higher than for sectors in earlier studies. For the chemical manufacturing industry, it is 56% of the regulatory costs, and for the automotive sector, it is 41%.
These results are used by the Ministerial Steering Group on Entrepreneurship Climate, Regulatory Burden, and Enforceability to further address regulatory burden.
The House of Representatives has been informed about the new SME indicator company studies and the amendment of the Business Impact Assessment by Minister Beljaarts.
Less Pressure with Rules
Tackling unnecessary regulatory burden is a top priority for this cabinet. Therefore, Minister Beljaarts presented the Action Program Less Pressure with Rules last December, of which the renewal of the Business Impact Assessment and the expansion of the SME indicator companies are part.
The cabinet aims to prevent unnecessary regulatory burden and make existing bottlenecks more workable, both at the national and European levels. Through the regulatory burden reduction program, existing bottlenecks are being addressed to alleviate regulatory costs, such as the CO₂ reporting obligation for work-related mobility and labor conditions legislation. This action program is a cabinet-wide task to make regulation simpler and more effective.