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 feature on bureaucratic madness in the skilled trades.

"Everyone talks about climate change, environmental protection, regulations and bans. But who talks about relieving the burden on tradespeople and small and medium-sized enterprises?" Manfred Todtenhausen , master electrician and member of the Bundestag (FDP), opened a symposium on bureaucratic burdens organized by the FDP parliamentary group at the Düsseldorf Chamber of Skilled Crafts.

You can find more information about the bureaucratic madness in the skilled trades in our special feature of the same name.

“We would like to take action,” he said. In North Rhine-Westphalia, this is working very well with the deregulation packages that the center-right state government has put together and implemented. At the federal level in Berlin, things are somewhat different. The third bureaucracy relief law is still pending. Unfortunately, Economics Minister Peter Altmaier (CDU) is not as effective as hoped . He is merely 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.

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

Following this, economist Philipp Schade from IW Consult presented his study, "Ten Theses on Strengthening Small and Medium-Sized Enterprises and the Skilled Trades," commissioned by the FDP parliamentary group. The problem, he stated, is clear: "Bureaucracy stifles economic growth, hinders investment, and stifles business start-ups." He argued that policymakers have a responsibility to create a framework within which superfluous regulations and legal provisions can be identified and subsequently reduced. Schade noted a standstill in the reduction of bureaucracy since 2012. Given the current economic slowdown, he asserted that policymakers have a responsibility to further accelerate this reduction effort.

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.

 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