A leading business lobby group believes the Labor government's plan to have its paid parental leave scheme administered by Centrelink should be offered to all businesses.
Small Business Minister Gary Gray announced on Thursday the government will assist small businesses with fewer than 20 employees by relieving them of the administration of Labor's paid parental leave scheme.
Instead, Centrelink will pay these eligible employees directly.
Mr Gray said one of the constant commentaries of small business is the need to cut red tape.
"What we are doing today is cutting even more red tape for small business," he told reporters in Victoria, accompanied by Prime Minister Kevin Rudd.
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The commitment costs $10.3 million over the next four years, and is funded by money that was set aside in the Pre-election Economic and Fiscal Outlook (PEFO).
Australian Chamber of Commerce and Industry (ACCI) chief executive Peter Anderson said the initiative was a step in the right direction.
But he urged the government to provide all business this option "not just those with less than 20 employees".
CPA Australia chief executive Alex Malley said the government has finally admitted to its own mistake.
"Small business has been saddled with unnecessary paperwork and administration costs for nearly three years," Mr Malley said in a statement.
"Business leaders are carefully studying both policy and record of the major parties on red tape. Claiming credit for reducing red tape you yourself created will struggle to pass muster."
Labor is also extending its superannuation clearing house to companies with fewer than 100 employees.
The government first introduced the free online clearing house in 2010 for businesses with fewer than 20 employees, which allows them to pay their super contributions in one transaction to a single location.
The expansion to 100 employees will start on July 1, 2014 at a cost of $4.8 million over the forward estimates, and was also accounted for in PEFO.
Mr Anderson gave "in-principle support" to this extension.
"A one-stop-shop service for employers in meeting their superannuation obligations can help reduce red tape," he said in a statement.
"Given the government clearing house competes with some private sector businesses offering similar services, ACCI encourages the government to work co-operatively with private sector service providers in the industry."
