Peter Hendy (Eden-Monaro, Liberal Party, Assistant Minister for Productivity) Share this | Link to this | Hansard source

by leave—Today marks the fourth red tape repeal day of this government. The coalition made a commitment before the last election to reduce red tape by $1 billion annually. I am pleased to announce on behalf of the government today that we have achieved double that target with $4.5 billion in red tape savings announcements in our first two years. We have repealed over 10,000 legislative instruments and introduced legislation to repeal over 3,600 spent and redundant acts from the Commonwealth books. For every $1 added to the cost of regulation, the government has made decisions that cut over $11. We have improved our systems for regulatory decision making and begun to change the culture of decision makers and regulators to one that recognises the burden that is imposed both by the regulations and by the way they are administered. It is not 'mission accomplished' but we have certainly achieved a great deal in two years.

I will shortly have more to say about how we can build on these successes, but let me say at the outset that the future agenda will be focusing on productivity, as the driver of prosperity and improvements in our living standards. In addition we will particularly be turning our minds to how we can better reduce the regulatory burden on businesses and individuals across all levels of government.

Today we announce that we are focusing a renewed, larger effort to involve the states and territories in regulatory reform. The states have indicated their desire to engage the Commonwealth on taxation issues. We will be looking to them to engage much more strongly on removing duplication and regulation that hamper innovation and productivity.

For almost 25 years, Australia has experienced an unprecedented expansion of our economy. It is recognised here and internationally—by the OECD and the IMF—that our performance has been made possible by two major forces:

We are smart people living in a diverse and open country. We have the world's fastest growing markets at our doorstep. Historically, we also have a strong track record of seizing new opportunities and technologies.

However, we can all see the emerging pressures in Australia's economy. Most obvious and immediate, the terms of trade have fallen by 30 per cent since their peak in 2011, driven by lower commodity prices. This is forcing some difficult adjustments in our economy.

Over the longer term, like many other countries, our demographics are also slowly shifting. Today, there are four to five working-age people for every person over the age of 65. By mid-century, this ratio is expected to fall to fewer than three. There will be more pressure on our aged-care and healthcare services, but with proportionally fewer people to deliver and pay for them.

Ultimately, it is productivity growth that is the primary source of a sustainable improvement in a nation's living standards. We have an ambitious policy agenda that includes looking at every aspect of the tax system, reforming our Federation to improve service delivery particularly in health and education, competition reform, and strengthening the security of our financial system.

Another key part of our economic policy is regulatory reform. Inefficient and ineffective regulation takes resources away from people, drives up costs for businesses, and drags down our economy. Our goal is not only to reduce the cost of complying with regulation but, where regulation is necessary, ensure it is designed in the best way possible. This means regulation that is fit for purpose and easy to comply with. It also involves changing the way we think about regulation—so that it is not seen as a costless way to address policy issues.

What have we achieved so far? Since 2013, the commitments we have made to reduce regulatory costs have amounted to $4.5 billion per year. This is well beyond the cumulative $3 billion target the government committed to at the last election. What this equates to is less time required by individuals and businesses to fill out forms; less time seeking external advice; and less hard earned revenue spent on building systems and purchasing equipment to meet the regulatory requirements of the government.

For example, we're continuing to develop new ways to make our tax system easier to comply with. The latest taxation tool—myDeductions—allows individuals to record their deductions using their phone. The days of the shoebox full of old receipts are gone.

We're committed to implementing a single permit system for coastal shipping to build a more competitive and efficient shipping industry. This enhances the access of Australian manufacturers and primary producers to cheaper, reliable shipping services and makes our products more competitive internationally and domestically.

We're implementing a more proportionate risk-based framework to assess industrial chemicals whilst maintaining safety standards. This means low-risk industrial chemicals will get to market faster, allowing companies like cosmetics manufacturers to create new products as well as safer versions of existing products.

Over the course of 2015, we have cut red tape to the tune of hundreds of millions of dollars through continuing to improve the administration of the tax system, enhancing communication through digital disclosure, the student visa program, and the Pharmaceutical Benefits Scheme, to name a few items. I invite people to visit the Cutting Red Tape website to see the full list in a document we are releasing today titled 'The Australian government spring repeal day November 2015', where scores of initiatives are outlined.

We are genuinely changing how and why we regulate. During 2015 we have made Commonwealth regulators more accountable for the regulatory burden they create through the common set of performance measures established under the Regulator Performance Framework. Cabinet decisions are informed by a regulation impact statement that lays out the costs and benefits of proposals.

The government's efforts are being recognised. We have reversed the decline in our global ranking of the burden of government regulation. In 2015, Australia climbed to 80th in the world according to the World Economic Forum. Just two years ago, we were 128th. But we're not content with being 80th in the world—we can and will do better.

The Cutting Red Tape agenda has been an important element of our economic strategy. As the government's new Assistant Minister for Productivity, I have no doubt that the time is right to build on this success. So we are starting a new chapter in our approach to regulatory reform. It needs to support flexibility in our economy so that we encourage innovation to the greatest extent possible.

Regulatory barriers can also hinder competition and the market forces that push firms to innovate and perform at their best. As the Harper review found, there is still a multitude of Commonwealth, state and territory, and local government regulations that create barriers to entry, advantage some businesses over others or reduce incentives to compete. We need to look at all our options for supporting innovation as well as to engage more effectively with the states and territories and local governments.

The Commonwealth can only achieve so much for the Australian economy on its own. Inefficient regulation costs more than just time and money—it makes our economy less agile. We have all seen this in the difficulty and pace of our regulatory regimes in adapting to digital disrupters like Uber or the rise of online retailing. In an age of rapid technologically driven change, we simply can't set and forget when it comes to rules and regulations. The recent draft Productivity Commission report on business set-up, transfer and closure rightly noted that our regulations and our regulators need to be flexible and adaptive in the face of evolving technology. In short, we need to build into our efforts the process of continual regulatory review, to ensure that our regulatory frameworks remain fit for purpose.

Over the coming months the government will work with stakeholders on the priorities important to our economy, on the tools to assess and prioritise change, and on the schedule of reform. In particular, the government invites the states and territories to work with the Commonwealth, either bilaterally or through COAG, to revitalise the unfinished productivity reforms within our federation. This does not mean that ongoing removal of unnecessary and ineffective red tape will stop. We are not going to rest on the gains we have made. We are enhancing the policy reform agenda so that it has a broader focus, while still relieving the regulatory burden.

The government are proud of what we have achieved to date and the bills before the House today are a further step. We look forward to working with the wider community on developing new ideas and sweeping away business constraints in order to continue the economic success of Australia. I present a copy of my ministerial statement.

Jim Chalmers (Rankin, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

I relish the opportunity to talk about productivity and the opportunity to respond to this ministerial statement. Our economy is undergoing a very important transition away from one based on very high prices for our commodities into one that must be based on the ability of our people to turn technological and other change to our personal and national advantage.

We have had a remarkable quarter century of economic growth, but that quarter century of growth will be in serious jeopardy unless we build new sources of opportunity and new ways to create jobs. As the opposition leader says, Australia's choice is between being a smarter nation or a poorer nation. We have made good choices before in the 1980s, 1990s and during the GFC, which I mention not as some sort of nostalgic shibboleth but as a demonstration that good decisions are not beyond us in this country. Our history should be behind us pushing us forward, not in front of us pushing us back. Good choices are within our reach. But if we get them wrong, if we focus on wrong things, we can kiss goodbye the living standards which have been the hallmark of our recent history and a benchmark for the rest of the world.

Being smarter not poorer is really about being more productive. Productivity growth is what we need if we are to create wealth, to lift living standards in this country and to ensure there is enough opportunity and enough employment to go round. There are all kinds of ways to slice and dice the data on productivity growth, but in essence the story is that in the 1980s we had terrible productivity growth at 1.3 per cent; in the 1990s it was terrific at 2.1 per cent; for the first decade of the 2000s it was 1.4 per cent, roughly where it is now; and the IGR forecasts use the long-term average of 1.5 per cent.

I do not have time to dig into all the reasons for our productivity performance or the influences on it, or to discuss the softness in productivity growth right around the world. The point is this: we can argue about what is causing our current productivity growth of 1.4 per cent, but it is beyond argument that that kind of productivity performance is insufficient to maintain and advance Australian living standards.

Faced with this serious challenge, it is disappointing to see that the sum total of the government's plan is to wage this ridiculous war on legislative punctuation, which they describe as 'red-tape reduction'. When I heard last night that we were getting a statement this morning from the Assistant Minister for Productivity, I have to confess I did get my hopes up. I printed it out, I settled in, I made a coffee and I got the little pink highlighter out, but my hopes were dashed. I was combing through the statement looking for the value and ready to colour in the big points, but the lid never came off the highlighter. The felt never hit the page. Not a millilitre of pink ink was spent.

Instead of a well-considered plan to genuinely boost productivity in this country, we got a recycled version of the same old limp and lifeless slogans of repeal days past. This is the fourth repeal day in the life of this government. It has become a tattered, yellowing hand-me-down from one parliamentary secretary or assistant minister to another—from the member for Kooyong to the member for Pearce and now for the member for Eden-Monaro.

From past repeal days, it is worth reminding ourselves that, amidst all the fanfare and all the noise, we have had three sets of omnibus bills that have totalled $56.8 million in deregulatory savings. We have had the repeal of a law related to the registration of mules for defence purposes. We have had the repeal of a law relating to state navies. We have had changes from 'e-mail' to 'email,' from 'facsimile' to 'fax'. We have had acts repealed where the principal act had already been repealed. We have had the repeal of the Delivered Meals Subsidy Amendment Act 1980 when the main act, the Delivered Meals Subsidy Act 1970, had already been repealed in 2009. We had the removal of 40 hyphens, two commas and one inverted comma. We have had two full stops changed to semicolons and one semicolon changed to a full stop. We have inserted one new full stop, one colon, one hyphen and one comma. What a joke!

The Omnibus Repeal Day (Spring 2014) Bill has not even passed the parliament. The bill from autumn 2015, once it was introduced in March 2015, took nearly six months to be debated in the House of Representatives. Out of the $56.8 million in savings from the three sets of bills only $14 million have passed the parliament.

Those opposite are long on fanfare and short on reform. On this side we are up for genuine red-tape reduction. In government we abolished more than 16,000 acts and legislative instruments—16,794 to be precise—and we instituted the seamless national economy reforms that lowered business costs by $4 billion a year—something that I was personally proud to work on in another role in this building.

The government like to claim, as the assistant minister did moments ago, that the decisions they have taken will save $4.5 billion per year. It is worth reminding everyone what this includes. It includes nearly $200 million from stripping away consumer protections as part of the Future of Financial Advice reforms and $5 million out of the pockets of cleaners through the abolition of the Commonwealth Cleaning Services Guidelines. I could go on and on about the farcical nature of these so-called red-tape reductions, but I think you get the point. The point is this: when this country needs a serious plan to boost productivity in this nation they get instead, from their government, the recycled talking points of the Abbott era, the same over-claimed savings and the same hole in their economic agenda where productivity growth should be.

It says it all about those opposite that in a ministerial statement on productivity there is nothing about education, nothing about human capital, not even infrastructure and more specifically broadband infrastructure. When I printed out the statement, I thought that there was a page missing, I thought that I had got the ordering wrong, I thought the printer might have broken as I went through it, over and over again, looking in vain for some reference to human capital—arguably the most important driver of productivity in an economy like ours. There was nothing about teaching and training our people for the jobs of the future; nothing about giving them the tools they need to succeed in a modern market economy, characterised by the breathtaking pace of change by grasping new technological opportunities; nothing about lifelong learning or the workforce that we will need to be competitive; nothing of the sorts of issues that my colleague the member for Kingston spends her time working on when it comes to lifelong learning in this country.

Productivity growth will not come from eliminating commas in legislation nor, for that matter, from slashing penalty rates or jacking up the GST. It will take economic leadership, but the gains will come from the bottom up, from a better educated workforce and from better infrastructure, including 21st century broadband infrastructure. It is left to Labor to fill the gap in the economic debate left by the failure of those opposite to understand these basic truths. On this side of the parliament, the Leader of the Opposition and the colleagues on the front bench have released more considered and costed policies from opposition than any other alternative government in more than two decades, and many of them, if not most of them, are carefully calibrated to boost productivity in our economy.

Our plans to substantially reform universities so that we have more and better quality graduates actually finishing their degrees, high-quality degrees, that are workforce ready when they finish will boost productivity in our economy. Our special focus on more graduates, teachers and start-ups in the science, technology, engineering and maths disciplines will boost productivity. Coding in Australian schools, primary and secondary, the language of the 21st century, will boost productivity. A start-up year at university to create a culture of innovation and invention will boost productivity, as well as a TAFE funding guarantee to provide certainty to the vocational training sector.

All of these things will make our workforce more capable and adaptable, and will contribute to future growth of productivity in Australia, especially when you consider them hand in hand with our plans to turbocharge infrastructure by strengthening Infrastructure Australia and giving it the capacity to work with other financing options to build the infrastructure that we need to be a productive economy.

We are in a defining moment in our national economic trajectory. We need to work out how to make this extraordinary change work for us and not against us. It is always the right time to be thinking about and talking about productivity but acting as well, and that has never been more true than it is now. We cannot count on our history. We cannot count on that quarter century of growth to deliver another quarter century of growth from here. If we do not become more productive, we will go backwards; we will not grow in a sustainable way.

The government's failure to treat productivity as a priority risks turning economic growth and opportunity into a memory. We need dedicated, forward-thinking investment in the drivers of growth and opportunity in this country. The government cannot spin their way out of the challenges we face—soggy growth and sluggish productivity—and they cannot just have another day of editing away misplaced commas and hyphens because that will not cut it either.