Small businesses are spending an increasing amount of time and money on red tape, according to a new survey.

The National Red Tape Survey, released by the Australian Chamber of Commerce and Industry (ACCI), showed that 72 per cent of businesses were spending more time on regulation than they were two years ago.

The survey of 870 businesses showed that 44 per cent of businesses spent one to five hours per week complying with regulatory requirements and 37 per cent spent more than five hours per week.

Costs for complying with government regulation also increased over the past two years, the survey showed, with 53 per cent of businesses saying they spent between $5000 and $100,000 on compliance.

The findings also suggested the cost of compliance was hindering businesses from hiring more employees.

“We employ one person just to comply with all regulations – it is for that reason we have moved to offshore manufacturing," said one respondent.

"We have partners with companies in the USA and employ over 20 jobs in the USA. These are jobs lost from the Australian and local regional economy."

ACCI chief executive Peter Anderson said the burden of red tape was the shared responsibility of the private sector and all levels of government.

“The burden of red tape is costing business more resulting in negative or stagnant productivity growth. Less red tape allows business to be flexible, innovative and adaptive to changing economic conditions,” he said.

The survey also asked businesses to rate the level of complexity faced when dealing with different governments and regulators.

The Australian Tax Office and Fair Work Australia scored the worst results in terms of high complexity, with 31.5 per cent and 27.8 per cent respectively.