Sussan Ley (Farrer, Liberal Party, Shadow Minister for Justice and Customs) Share this | Link to this | Hansard source

I rise to speak on the Statute Stocktake (Regulatory and Other Laws) Bill 2009. Much as the annual stocktake at the back of any manufacturing business or shop takes place every year, this is a similar activity in relation to statutes—and, I hesitate to add, probably about as exciting, but necessary. This bill is the result of a stocktake of Commonwealth business regulation conducted in 2008. Bills of this nature have the full support of the coalition, as they are an essential tool in the process of keeping the Commonwealth statute books accurate and up to date. The acts to be repealed are self-evidently obsolete and have been superseded by other legislation. Of the acts to be amended, most of the proposals relate to transitional provisions for periods that have expired. Schedule 1 of the bill contains amendments to 17 acts. Schedule 2 repeals eight acts and makes consequential amendments to three other acts. The most notable of the changes affect the Trade Practices Act 1974 and the Telecommunications Act 1997.

The amendments to the Trade Practices Act involve the repeal of part VB. These were the GST price exploitation provisions which were enacted following concerns that price rises unrelated to the GST might be represented to be caused by the introduction of the GST. Given that the GST has now been in place for about 10 years, it is unlikely that any such representations will be made from now on. Any misrepresentations as to price would be covered by other prohibitions.

The amendments to the Telecommunications Act relate to the regulatory framework supporting a digital data capability of 64 kilobits per second in which Telstra was the declared provider. Telstra’s declaration has been repealed and the market now provides data capabilities far beyond the rate provided for in the act.

The bill also proposes to repeal the Income Tax (Franking Deficit) Act 1987. This tax ceased to be payable after June 2002. The relevant provision of the Income Tax Assessment Act was repealed in 2006 as inoperative. The 1987 act is therefore redundant.

The coalition supports this bill, as its purpose is to reduce costs incurred by business in understanding and complying with outdated regulatory requirements, giving effect to the coalition’s commitment to reduce the level of poorly designed and ineffective regulation on Australian businesses.

Kelvin Thomson (Wills, Australian Labor Party) Share this | Link to this | Hansard source

The Statute Stocktake (Regulatory and Other Laws) Bill 2009 proposes the amendment or repeal of almost 30 acts to remove outdated regulation. It will reduce costs incurred by business in understanding and complying with outdated regulatory requirements, giving effect to the government’s commitment to reduce the level of poorly designed and ineffective regulation on Australian business.

Well-designed and targeted regulation is essential to reduce cost and complexity for business in the not-for-profit sector. The stocktake bill is another step towards meeting the government’s commitment to continuously clean up red tape and continue a Labor tradition of microeconomic reform. It is important to consider this tradition in light of the recent debate over which political party is the authentic custodian of economic reform, as opposed to being a pretender.

The strength of Australia’s economic performance prior to the recent global financial crisis represented a marked turnaround from a lengthy period of economic malaise. During the 1970s and 1980s output growth slowed, inflation and unemployment rose and productivity growth was consistently low by international standards. By the late 1980s, Australia’s ranking on the international ladder of per capita incomes had slipped from 12th to 16th. In recognition of the policy related inhibitors on growth, from the early 1980s the former Labor government embarked on a program of extensive economic reform. According to John Quiggin, in his paper Economic governance and microeconomic reform:

The election of the Hawke Labor government in 1983 was a pivotal event in Australian microeconomic reform.

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The Labor government, and particularly Keating, used the contrast between Fraser’s cautious approach to financial deregulation and Labor’s embrace of the policy to represent the Liberals as captives of  ‘old money’ interests reliant on a cosy system of intervention and mutual protection.

The decade that followed saw the liberalisation of capital market controls, the abolition of import quotas and phased reductions in tariff assistance. The heightened competitive pressures from these changes, in turn, prompted the introduction of greater flexibility to Australia’s previously rigid and highly centralised labour market arrangements and various institutional and regulatory reforms to promote more efficient delivery of infrastructure services. The implementation of the wide-ranging National Competition Policy by the Keating government built on the reform agenda of the 1980s and delivered a premium of 17 years of economic growth. Underpinning this strong performance was a surge in Australia’s rate of productivity growth. For example, in the five-year cycle to 1998-99, productivity growth rates were the highest for at least 40 years, with the increase effectively boosting the average Australian household’s annual income by $7,000.

According to a Productivity Commission report many factors can influence productivity growth, but a number of analytical studies indicate that microeconomic reforms—including National Competition Policy—were a major contributor to Australia’s productivity surge in the 1990s and have been to the economy’s increased resilience in the face of economic disturbances. The reforms achieved this by increasing the pressures on both private and government businesses to be more productive through increased competition, while simultaneously enhancing their capacity to respond through more flexible work arrangements and the removal of unnecessary red tape and the like. One of the main ways in which National Competition Policy and related reforms have boosted total output is by reducing the costs and prices of many goods and services. Indeed, National Competition Policy has had a dual role in this regard—not only has it provided a means to improve productivity and thereby lower costs but also by promoting competitive markets it has created pressure for most of these cost savings to be passed on to consumers.

The increase in Australia’s GDP and national income also substantially boosted taxation revenue, as the National Competition Policy agreement on competition payments anticipated. This has increased the capacity of all governments to fund a range of services of benefit to the community, such as health and education, and to provide social welfare support. The party that stands at the helm of this reform agenda is the Labor Party. By contrast, the Liberal Party bequeathed to Australia Work Choices. Work Choices exacerbated red tape and created top-down bureaucratic management of industrial relations, purely to indulge the Liberal Party’s ideological obsession. An opportunity was lost under the Howard government to build on the microeconomic reforms of the previous Labor government.

As part of a microeconomic reform agenda that facilitates well-functioning market economies, efficient regulatory regimes are necessary to enhance rather than diminish the capacity of businesses to generate productivity growth. These regimes are an important tool in realising policy objectives. Since taking office, the Labor government has established an institutional and policy framework that consciously reflects the OECD’s best practice principles for regulatory quality and performance. Advocacy for better regulation has been significantly strengthened by giving it explicit cabinet level status. The government has strengthened regulatory impact assessment requirements by combining the efforts of the Office of Best Practice Regulation with a new deregulation policy function within the Department of Finance and Deregulation. A one-in, one-out policy has been adopted to ensure there is no net increase in regulatory burden. Strengthened policy oversight processes are providing greater quality assurance in respect of new regulatory proposals, improving policy design and providing a capacity to more readily target inefficient regulation.

The stocktake bill reflects the government’s systematic approach to delivering its ambitious regulatory reform agenda, which includes reviewing all pre-2008 subordinate regulation—as announced in the Updated Economic and Fiscal Outlook—to document those regulations which impose net costs on business and identify scope to improve regulatory efficiency. At the interjurisdictional level, the Minister for Finance and Deregulation is co-chairing, with the Minister Assisting the Finance Minister on Deregulation, Minister Emerson—whom I see here—the COAG Business Regulation and Competition Working Group, which is taking forward 27 regulatory reform priorities agreed under the COAG National Partnership Agreement to Deliver a Seamless National Economy and inviting the OECD to conduct a review of Australian regulatory settings and policy development processes to be completed by December this year, which will provide valuable insights to support the government’s commitment to strengthen processes for regulation making, review and better regulatory outcomes.

Regulatory reform measures that deliver benefits to business will in turn enhance productivity, and increasing productivity after it languished under the Howard government is imperative to meeting the challenges of an ageing population. According to the Productivity Commission:

Competition related and other reforms can also directly assist in offsetting the economic impact of population ageing. For instance, reforms which reduce constraints on labour supply will ameliorate one of the important aged-related brakes on Australia’s future growth potential … carefully considered market-based approaches can sometimes be employed within a managed framework to improve the cost-effectiveness (including the quality) of ‘human services’ and deliver better environmental outcomes. Given the projected escalation in expenditure in areas such as health and aged care, taking advantage of all opportunities to improve the efficiency of service delivery will be especially important.

The challenge for governments in navigating out of the economic crisis is to recognise the opportunity to embrace reform and address imbalances in the economy. This includes microeconomic reform efforts directed at enhancing productivity and economic growth facilitated by a regulatory regime that does not suffocate our recovery from the economic headwinds that have battered the globe. Again, according to the Productivity Commission:

Microeconomic reform is about providing incentives for greater productivity. Productivity growth is the key to higher living standards. This means making better use of our resources—natural, financial and human. But microeconomic reform can also deliver better value, quality and choice to the community. Microeconomic reform thus plays a part in enhancing prosperity, opportunity and social support—all of which are integral to community wellbeing.

Labor governments have demonstrated their courage in undertaking difficult but necessary reform and will continue to do so. Microeconomic reform along with Keynesian stimulus undertaken by the government is appropriate for the current economic cycle. Aggregate demand needs jump-starting. To withdraw fiscal props too early may cause a contraction similar to what happened in 1937 when there was a switch to contractionary fiscal and monetary policy. Building business confidence through reform of the like of this statute bill also forms a part of the government’s policy tool kit that creates a positive feedback loop that is good for jobs, sustaining demand which in turn finds its way back to business through sales. I commend this bill to the House.

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

In summing up I want to thank the members for Farrer and Wills for their contribution and the great insights that the member for Wills has just provided on the importance of the deregulation agenda of the Rudd government to lifting productivity growth, which is tomorrow’s prosperity. I want to acknowledge the role of the coalition on this occasion in supporting this legislation, because it will make a contribution to microeconomic reform and that task of improving productivity growth in the Australian economy, which certainly in the year 2007 had ground to a complete halt.

Well-designed and targeted regulation is essential to reducing costs and complexity for business and the not-for-profit sector. It forms a key part of the government’s commitment to ongoing microeconomic reform. Well-designed regulation increases Australia’s productivity and international competitiveness, and fosters innovation and structural flexibility. The Statute Stocktake (Regulatory and Other Laws) Bill 2009 underlines the government’s commitment to reduce unnecessary or poorly designed regulation. It proposes to amend or repeal almost 30 acts where the provisions no longer have any function or purpose, including the Income Tax (Franking Deficit) Act 1987 and a number of acts relating to the removal of the digital data service obligations. The redundant regulation was identified through a regulatory stocktake conducted by Commonwealth departments in 2008. It was the first stocktake of its kind conducted since the Federal Register of Legislative Instruments commenced in 2005. The review identified a large stockpile of redundant or potentially redundant regulation. In addition to this bill, the government’s wider regulation clean-up exercise is expected to remove around 200 pieces of unnecessary subordinate regulation over coming months.

Further, in an effort to better understand the impost on business and to identify scope for further regulatory efficiencies, a review of 30,000 subordinate regulatory instruments is being conducted to identify reform priorities and ensure that the current stock of regulation is being adequately managed and tested for ongoing relevance. While it may go unnoticed by many, leaving outdated and redundant regulation increases costs for business. It is harder to identify which rules apply, and resources are diverted to irrelevant and inefficient activities. There is also a higher probability of inconsistent or overlapping rules. This bill represents just one element of the government’s ambitious regulatory reform program. Mercifully, I am not going to take members of the chamber through the 27 areas of deregulation—

Maria Vamvakinou (Calwell, Australian Labor Party) Share this | Link to this | Hansard source

Hear, hear!

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

and the sighs of relief are audible! Through COAG, we are working with the states to achieve a more consistent and harmonised national approach to key regulatory issues. On 2 July 2009, COAG reaffirmed its commitment to microeconomic reform and the critical role that the national partnership to deliver a seamless national economy, and its regulatory reform agenda, plays in enabling productivity gains for the future.

At the Commonwealth level, the Minister for Finance and Deregulation is partnering with his ministerial colleagues to deliver regulatory reform in areas of Commonwealth regulatory responsibility. Examples include reducing the length and improving the readability of product disclosure statements for financial products and reviewing health technology assessment arrangements to remove unnecessary costs and facilitate earlier patient access to innovative and cost-effective new health technology. The global economic stresses we have faced and continue to encounter remind us of the importance of delivering microeconomic reform efforts that enhance productivity. A sustained commitment to better regulation is a central tenet of our microeconomic reform agenda. This bill is an important step in delivering on the government’s commitment to continuous improvement in regulation. I commend the bill to the chamber.

Question agreed to.

Bill read a second time.

Ordered that this bill be reported to the House without amendment.