Bureaucracy reduction must reach companies

Reducing bureaucracy and improving legislation are important location factors and essential for Germany's future competitiveness. The digital processing of administrative services and legislation that frees companies from unnecessary documentation requirements acts like an economic stimulus package and promotes economic growth.

How is the reduction of bureaucracy measured?

The burdens that a law causes for the economy are represented by the ongoing (annual) compliance burden and the one-off compliance burden. The reduction of the compliance burden must be the top priority for an effective reduction of bureaucracy.

The Bureaucracy Relief Acts I, II and III did not live up to this claim. Although the Third Bureaucracy Relief Act reduced the current compliance burden by €1.168 billion in 2019 and 2020, a one-off compliance burden of €2.583 billion was incurred in the same period. It thus fails to achieve its goal of providing tangible relief for businesses. The one-off compliance costs are a particular burden on companies, as they have to raise the necessary funds immediately, without these investments being matched by corresponding revenues from the outset. These one-off costs must no longer be disregarded. Bureaucracy reduction must reach companies promptly and directly.
The planned Bureaucracy Relief Act IV must live up to the claim of creating noticeable relief for the economy. The BDA appeals to the Federal Government to implement the proposals from the business community, such as the reduction of record-keeping and retention requirements for companies under the Minimum Wage Act, in order to drive forward the reduction of bureaucracy in a more determined and ambitious manner.
Preventing new bureaucracy
The best contribution to a sustainable reduction of bureaucracy is a moratorium on burdens. New burdens such as a legal right to "home office", an obligation to record working hours or the introduction of liability for companies through the "Supply Chain Act" must be avoided. Instead, working time legislation should be made more flexible and possibilities for fixed-term contracts extended. The Online Access Act must also be implemented and the company account for the digital processing of administrative services introduced. In view of the economic consequences of the COVID-19 pandemic, it is essential to refrain from introducing new burdensome regulations for companies.
Implement the "one in, one out" principle consistently and comprehensively
The commitment of the Federal Government, the Bundestag and the Bundesrat to the principle of "one in, one out" lays a foundation stone for reducing bureaucracy. According to this principle, for every new burden introduced, a previously existing burden must be reduced or eliminated. Compliance with this principle is monitored by the State Secretary's Committee for Bureaucracy Reduction and the National Standards Control Council (NKR). It would have been logical for the NKR to also be able to initiate an examination of the draft laws of the Bundestag and Bundesrat for bureaucracy increase.
The "one in, one out" decision must be implemented consistently. The stringent enforcement of this principle needs clear definitions. This does not mean abandoning enforcement in favour of "politically desired measures". It is necessary to do so. It is also necessary to include in its scope the burdens arising from the implementation of EU law. For employers and entrepreneurs, it makes no difference whether bureaucratic burdens originate in EU or national regulation. Ultimately, the compliance burden caused by a new legal regulation must also be compensated in line with the "one in, one out" principle.
The EU Commission's "Better Regulation" agenda can get better
We welcome the strengthening of the Regulatory Scrutiny Board in the impact assessment procedure. Many positive aspects of the German National Regulatory Scrutiny Board are reflected here. In our view, the principle of discontinuity should also be introduced at EU level. If a proposal of the EU Commission does not find the support of the Council and the Parliament within one term of office, it should then be considered to be dead. In order to avoid new burdens, it is also right that important economic concerns should be taken into account through early involvement in the consultation procedure. We also welcome the fact that Commission President Ursula von der Leyen has spoken out in favour of introducing the one in one out principle at EU level. It is an important sign that the reduction of bureaucracy is also to be resolutely pursued at European level.
19. November 2020

Bureaucracy reduction