FDP advocates for reducing bureaucracy

The FDP parliamentary group presented a short study on reducing bureaucracy at the Düsseldorf Chamber of Crafts and Trades and proposed ten measures to ease the burden on small and medium-sized businesses.

This article is part of the special topic Bureaucratic madness in the craft industry

"Everyone talks about the climate, environmental protection, regulations and bans. But who talks about easing the burden on trades and small and medium-sized businesses?" The master electrician and member of the Bundestag (FDP), Manfred Todtenhausen, opened in the Chamber of Crafts Düsseldorf a symposium of FDP parliamentary group on the topic of bureaucratic burden. 

More information about Bureaucratic madness in the craft sector can be found in our special issue of the same name.

"We would like to act," he said. In North Rhine-Westphalia, this is working very well with the deregulation packages that the CDU/FDP state government has put together and launched. At the federal political level in Berlin, things are somewhat different. The Bureaucracy Relief Act III is still pending. Unfortunately, Economics Minister Peter Altmaier (CDU) not as effective as hopedHe is only a "minister of announcements," not a "minister of implementation."

Reducing bureaucracy is the topic of the time

Reducing bureaucracy is the topic of the time, as Andreas Ehlert, President of the Chamber of Crafts Düsseldorf"This bureaucracy and over-regulation of the economy is simply a brake on our companies." He quoted the crafts president Hans Peter Wollseifer: "The political will to make progress in reducing bureaucracy is continually weakening." This hits the nail on the head. "We craftsmen are faced with a Abundance of complex and complicated form requirementsthat we have to deal with." This could ultimately take away one's desire to be an entrepreneur. His question: "Where is the visionary who designs the model of an efficient state – through the opportunities arising from digitalization.

Ten theses for strengthening small and medium-sized businesses and crafts

The economist then presented Philipp Schade IW Consult presented its study "Ten Theses on Strengthening Small and Medium-Sized Enterprises and Crafts," commissioned by the FDP parliamentary group in the Bundestag. The problem is clear: "Bureaucracy slows economic growth, slows investment, and slows down business start-ups." Politicians have a responsibility to create a framework in which superfluous regulations and legal provisions can be identified and then eliminated. Schade presented a Standstill in the reduction of bureaucracy since 2012 Given the slowing economy, politicians have a responsibility to further advance the reduction.

Documentation requirements are the biggest burden for companies

The minimum wage is the central issue when it comes to bureaucracy. The greatest burden for companies here is documentation requirements. A moderate reduction of these requirements (such as limiting the duration of daily working hours, extending the recording period) could provide relief. The documentation requirement for recording working hours is also too far-reaching. A possible solution: transferring the obligation to the employees. Raising the thresholds could relieve medium-sized companies of their accounting obligations. Shorter deadlines for document retention could cut bureaucratic costs by half. "Company audits often relate to years long ago and also generate high archiving and personnel costs." The academic recommended timely audits to reduce these costs.

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 Based on the study by Phillip Schade, the FDP parliamentary group has proposed ten measures to relieve the burden on crafts and small and medium-sized businesses:

1) Minimum wage
For employees affected by minimum wage regulations, companies only document the duration of their daily working hours. This is the only time that is relevant for payroll. This is only required once a month, ideally at the same time as the monthly payroll.
2) Obligation to record working hours
Employers will have the opportunity to impose a mandatory obligation to record working hours on employees. This applies particularly to employees with trust-based working hours and flexible working arrangements such as mobile working or home office. This will save bureaucratic costs of €1,7 million, or 80.000 working hours per year.
3) Accounting obligation
The threshold will be raised to €100.000 in annual profit or €1 million in annual revenue. By raising the threshold, we will relieve approximately 1,3 million companies with a total volume of over €3,2 billion from their accounting obligations.
4) Duty to retain records
The retention periods will be reduced to five years. Combined with timely audits, this will reduce bureaucratic costs for government and companies by €1,7 billion.
5) Company audits
By shortening the statute of limitations for assessment and suspending the expiration of the assessment, the law stipulates that external audits by the tax authorities may be initiated retroactively for a maximum of three tax years. This ensures timely audits and relieves companies of storage and personnel costs.
6) Business start-ups
Young companies and businesses need to be able to focus on their business, not on bureaucratic procedures and forms. To achieve this, we're reducing administrative procedures to such an extent that incorporation is possible within 24 hours at a central administrative contact point ("one-stop shop").
7) Administration
To make dealing with authorities easier for businesses, a one-stop shop will be established for all administrative procedures and services. Businesses will have a single point of contact and submit information and data only once (a "once-only" principle) – ideally online.
8) Procurement law
In addition to strengthening electronic procurement ("e-procurement"), procurement procedures will be harmonized across national borders. For example, through the mandatory use of standardized forms and wording, as well as greater use of the already legally enshrined option of requiring evidence in the form of self-declarations.
9) Register
The registers are being modernized so that the most important administrative services can be offered digitally. This improves data protection and also makes it easier for companies to access certain government data. This saves time and money and not only relieves the burden on companies, but is also a fundamental prerequisite for the digitalization of administration.
10) Bureaucracy brake
To effectively reduce bureaucracy, the "one in, one out" rule will be further developed into "one in, two out." It must also take into account the one-time compliance costs for companies and be applied to the 1:1 implementation of EU law.

Source: Free Democratic Party in the German Bundestag