Compliance costs fell on a per business basis in the region, but remained around the same for each employee, the sixth annual KPMG-Business NZ compliance cost survey found.
Compliance costs for Southern firms dropped from $26,626 in 2007 to $25,009 in 2008.
However, average costs per employee went up slightly from $927 to $931.
"The significant figure here is the cost per employee, which is still much higher than the national average of $728. Although this is driven by the average size of the local businesses taking part in the survey, it still points to the weight of compliance being greater in the South, particularly for small businesses," Mr Simpson said.
The survey measured compliance costs relating to tax, employment, the environment and other issues.
It asked participants to estimate their costs in each area and to rank their compliance concerns.
As in 2007, tax remained the top issue, with 70% of the sample listing it in their top three areas for improvement.
Commerce Minister Lianne Dalziel was in Dunedin yesterday when the survey was released.
This time last year, she promised to make real progress in getting the costs down.
While claiming that compliance costs had fallen overall, she acknowledged in an interview that the costs for micro-businesses - those with fewer than five employees - were still too high.
However, help was on the way, as by the end of the parliamentary term she had achieved her three major goals as Commerce Minister, Ms Dalziel said.
There was a change to the regulatory impact assessment legislation which meant the quality of the regulation-making process was assessed.
She had tabled in the House the Regulatory Improvement Bill, which allowed for minor adjustments of law without involving officials across a wide range of departments.
"It is important we identify the little problems, because the little things become big headaches for small businesses. The Bill is a vehicle for making a lot of changes all at once."
The big win that Ms Dalziel was most proud of was the standardisation of business reporting.
Businesses had been critical of the time it took to fill in forms for various government departments, such as Statistics New Zealand, Inland Revenue, ACC and the Department of Labour.
Ms Dalziel said she had asked the departments whether was there a way of ensuring that data could be collected just once and found there was - if it was collected electronically.
A trial was under way now to reduce the number of times a business had to interact with the government.
The Netherlands and Australia were already using the electronic collection of data.
New Zealand hoped to use those two countries as an example and refine it further for local use, she said.
Mr Simpson said the costs per employee remained high in Otago and Southland, partly because of the size of enterprises but also the way legislation was designed.
"As we have a one-size-fits-all approach to legislation in New Zealand, smaller enterprises face the same challenges as larger ones but have fewer resources to deal with them."
It could be argued that the picture was worse than the survey showed, given that the average regional member surveyed had 12 full-time equivalent employees, compared with 27 in the sample.
Many smaller firms would have been too busy "complying" to respond to the survey, he said.
