We are in the middle of a productivity crisis, and the policy response has been to bury small business under more compliance every year, almost all of it focused on whether you have a documented policy and a process rather than on what you actually do.
📋 April 2023: managing psychosocial hazards became an explicit WHS duty, with the national framework only completed when Victoria came on board in December 2025.
📋 November 2023: penalties began applying for unfair terms in standard form contracts, forcing a review of standard customer and supplier agreements.
📋 August 2024: a new casual definition, employee-choice casual conversion, a new independent contractor test, and the right to disconnect for larger employers.
📋 January 2025: intentional wage theft became a criminal offence carrying up to 10 years imprisonment for individuals.
📋 July 2025: the super guarantee rate stepped up to its final 12%.
📋 August 2025: the right to disconnect and the casual changes extended to small business employers.
📋 1 July 2026: payday super, the 4.75% award wage rise, the fuel excise reverting, and AML/CTF Tranche 2 capturing around 80,000 mostly small businesses, all landing on the same day.
AML/CTF Tranche 2 is the perfect illustration of how this works. From 1 July it extends anti-money laundering obligations to lawyers, accountants, conveyancers, real estate agents, property developers and dealers in precious metals and stones. What it actually requires is paperwork. You must enrol with AUSTRAC, have a documented AML/CTF program, appoint a compliance officer, train staff, run customer due diligence, report suspicious matters and keep records, with the program independently reviewed every three years at a cost of $3,000 to $8,000. The obligation, and the penalty, attaches to whether you have the program and follow the process. You can build the whole apparatus, run every check, file every form and not stop a single dollar of laundering, because the genuinely sophisticated operators structure around exactly these checks. Meanwhile the cost is real and largely fixed regardless of size. The architecture being dropped on a sole-practitioner conveyancer is broadly the same one designed for a bank. The government's own Regulation Impact Statement put setup at $4,460 for smaller businesses up to $85,550 for larger ones, with ongoing costs from around $6,020 a year, and the compliance providers are quoting more than that. It is regressive by design, a rounding error for the big end of town and a genuine impost on the smallest operators.
This is the thing that actually annoys me, and it is the defining feature of nearly every measure on the list above. The regulation measures inputs, not outcomes. It asks whether you have a policy, a process, a designated officer and a training log, not whether you achieved anything. Regulators write rules this way because inputs are easy to audit and outcomes are hard to measure and harder still to attribute. It is simple to mandate a documented program reviewed every three years. It is difficult to mandate that money laundering actually falls, or that workers are actually safer. So the auditable proxy wins every time, and it proliferates. The perverse result is that the safe harbour becomes the binder. A sensible operator who exercises good judgment but is light on documentation is exposed, while the box-ticker with a thick policy folder is fine, even if nothing they do changes the underlying risk one bit. We saw the same instinct when ASIC made the corporate register harder and more expensive to search earlier this year. The ratchet only ever turns one way, nobody goes back through the stack asking which obligations have justified their cost, and the burden compounds.
What makes this genuinely maddening is that the government's own advisers are telling it to do the opposite. The Productivity Commission's December 2025 report found the ever-growing burden of regulation is a significant brake on productivity, that businesses are spending more time on compliance, and that Australia has slipped on international measures of regulatory burden. It recommended cutting the regulatory burden by $10 billion by 2030. The Treasurer ran a reform roundtable and wrote to 38 regulators asking for ideas to cut red tape, getting back more than 400. All of that was happening while the pipeline above kept loading new obligations on. This is the core of the problem. Box-ticking compliance generates documentation, compliance officers, software subscriptions and audit fees, none of which produce anything you can sell. It is activity, not output. We have a productivity problem, not a motivation problem, and the answer to a productivity problem is never more make-work.
If you are one of the businesses captured by Tranche 2, the practical advice is unchanged. Do not leave it late. Use the AUSTRAC starter kits, get your enrolment in before the 29 July deadline, appoint your compliance officer and document your program now while there is still support capacity. But the bigger point is the one worth making loudly. A regime that grades you on whether you have the right policies and processes, rather than on whether you actually do the right thing, will always reward the form over the substance. It is box ticking with a penalty attached, we are getting more of it every year, and we are doing it at exactly the moment a productivity crisis means we can least afford it.