Already struggling to survive some of the worst operating conditions in decades, small businesses are crying out for a simple change that would ease the burden of onerous red tape for tens of thousands of operators.
More than 46,000 small businesses - representing almost five per cent of all employers - would see their regulatory requirements slashed if the threshold for defining a small business was raised from 15 to 25 employees.
Currently, a business with 15 employees on their books is subject to many of the same regulations under the Fair Work Act as major corporations, despite having far fewer resources to devote to compliance.
That can result in a perverse disincentive whereby employers are discouraged from hiring casual workers in response to seasonal variations in demand because it would result in them facing extra compliance costs, the Council of Small Business Organisations Australia said.
"Small businesses aren't equipped with large HR teams or lawyers, and they need right-sized rules and regulations to navigate an increasingly complex IR landscape," said the council's chief executive Luke Achterstraat.
Longer term, the threshold could be increased further but raising it to 25 was a sensible first step, Mr Achterstraat said.
The proposal has gained support in federal parliament, receiving the backing of the teal independents who have added productivity reform to their list of policy imperatives.
Wentworth MP Allegra Spender, who has spearheaded the loosely defined group's foray into the economic debate, said the increasing burden of industrial relations laws were a big part of the problem facing small businesses.
"Small businesses are the driving force of innovation and growth in our economy," she said.
"Productivity is the source of our prosperity and if we want to accelerate productivity growth we must do more to make Australia the best place in the world to start a business. Easing the red tape for these small businesses is an important step."
A survey of small business owners conducted by the Australian Chamber of Commerce and Industry earlier in the year found 45 per cent considered shutting their doors in the previous 12 months.
Four in 10 respondents said they anticipated a reduced or significantly reduced profit this financial year and 82 per cent said red tape was having a major or moderate impact on their business.
"The current compliance burdens are not fair on small businesses, and it needs to stop," ACCI chief executive Andrew McKellar said.
Opposition Leader Peter Dutton blamed the Labor government for contributing to worsening business conditions by driving up power prices and exacerbating inflation.
"A lot of families are really struggling, and a lot of small businesses, cafes and restaurants at the moment," he told reporters on Thursday.
"We spoke yesterday in Dee Why to a local business owner there at the local cafe restaurant. It's the worst he's seen it in 32 years.
"This period is akin to the Whitlam era, where the Labor Party near destroyed the economy ... and that's why costs for every product are going through the roof."
