David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Link to this | Hansard source

I present the final report of the Select Committee on Red Tape on the effect of policy and process to limit and reduce red tape, together with the Hansard record of proceedings and documents presented to the committee. I seek leave to move a motion in relation to the report.

Leave granted.

I move:

That the Senate take note of the report.

The Select Committee on Red Tape was established in October 2016. I chaired the committee.

The committee has tabled interim reports on the effect of red tape on the sale, supply and taxation of alcohol; tobacco retail; environmental assessment and approvals; pharmacy rules; health services; child care; occupational licensing; and private education.

This is the ninth and final report of the committee, and examines the policy and process to limit and reduce red tape.

The problem of excessive red tape is well known. In 2013, the Abbott government introduced its deregulation agenda, aimed at reducing red tape, boosting productivity and strengthening the economy.

A stocktake of Commonwealth regulation revealed a regulatory footprint of about 1,800 pieces of primary legislation, 12,200 subordinate instruments and 71,000 pieces of quasi-regulation. The compliance cost of these 85,000 regulations was estimated at $65 billion annually, or about 4.2 per cent of GDP.

The red-tape reduction taskforce said:

Excessive regulation or 'red tape' stifles job creation, reduces investment, lowers innovation and lessens productivity.

The Productivity Commission estimated that regulatory compliance costs could be as high as four per cent of GDP, and savings from removing inefficient regulation could be up to 1.6 per cent of GDP.

The Institute of Public Affairs estimated red tape reduces economic output by $176 billion, or 10 per cent of GDP. They said: 'Red tape is the single biggest barrier to economic opportunity and prosperity in Australia. It's cost includes all of the businesses which are never started, the jobs never created and the pay rises which never materialise because of red tape.'

The deregulation agenda involved 18 policy measures, including omnibus repeal days. In 2014 and 2015, parliamentary sitting days were set aside for the repeal of unnecessary or redundant legislation and regulations.

But in 2015 the Australian Chamber of Commerce and Industry published its third red-tape survey, showing that regulatory burden continued to concern businesses. The majority of respondents said the amount of red tape had increased over the past 12 months.

The IPA submitted that, despite the deregulation agenda, the scale and scope of regulation had expanded with more than 107,000 pages of regulation introduced since 2013. The majority of this regulation has been created through subordinate legislation, instigated, as it put it, by 'an unelected administrative state which is gradually eroding the rule of law.'

The Australian Small Business and Family Enterprise Ombudsman said that reducing the quantum only addresses part of the problem. It said, 'The churn has its own costs here as well. For small business, changing—even if you're taking two out and putting one in—itself is a problem.'

The Council of Small Business Organisations argued that the focus should not be on volume but on having 'good regulation and good regulators'.

The council noted that there had been at least eight red tape busting task forces formed and reformed since the 1980s plus any number of committees within and between government departments. Plus the same number of committees, task forces and forums at the state and territory levels.

Five common themes of regulatory burden were identified by a task force on reducing the regulatory burden in 2006:

The committee heard, in each of its interim inquiries, multiple instances of each of these types of red tape affecting industry.

Perhaps most consistent was duplication between and among federal/state and other regulations. One example: in the private education inquiry, the National Catholic Education Commission referred to duplication in financial reporting to federal/state education departments and the charities' regulator, the Australian Charities and Not-for-profits Commission.

Intrusion into state responsibilities by the Commonwealth was also a concern. For example, in the alcohol inquiry, the Australian Hotels Association argued that the regulation of licensed premises is appropriately managed at the state/territory level. There is no need for the federal government to get involved.

It's clear that red tape remains a major problem.

But we need to know the dimensions of the problem and its trajectory. The committee recommends that government conduct a whole-of-government stocktake of Commonwealth regulation every three years.

We also need to make reducing the red tape burden the responsibility of each department and agency. The committee considers each department and agency should be required to publish its self-assessment reports under the Deregulation Agenda as part of its annual report. This would increase transparency and accountability under the Deregulation Agenda, consistent with the KPIs, as well as providing opportunities to monitor progress and identify reform priorities.

Further, the KPIs may not be sufficiently clear or robust to avoid bureaucratic 'interpretation' to negate their purpose. The committee would like to see each department regulator obliged to focus on key questions, such as: what ill is the regulation intended to avoid? How well is it doing this? What are the other consequences of the regulation? Is there another way of achieving the intended outcome?

The committee recommends the government revise policy measures implemented under the Deregulation Agenda to focus more on the appropriate reasons and purpose of Commonwealth regulation, and to ensure that any such regulation is made fit for purpose, appropriate and proportionate.

The committee recommends the government initiate a five-year review by the Productivity Commission of the productivity and economic impacts of the Deregulation Agenda.

In addition, it considers that Commonwealth regulators would benefit from having regular stakeholder feedback on the business impacts of the Deregulation Agenda similar to the ACCI's Red Tape Survey. The committee recommends the government, in collaboration with the representative business organisations, develop a red tape survey to be conducted every two years to ascertain stakeholders' views on the practical operation and outcomes of the Deregulation Agenda.

This feedback would enable regulators to monitor these impacts, formulate better regulation, and most importantly, build better relationships with regulated entities.

Red tape is without question one of Australia's biggest hindrances to a more prosperous Australia. As the IPA said, there are many good things that don't happen because of it.

This committee has shone a light on some areas in which it causes harm, and made some well-considered recommendations. Unfortunately, the government doesn't seem to have got the message. Notwithstanding the Deregulation Agenda, the government's responses to the interim report recommendations so far have been negative or neutral at best.

The solution to red tape may require more drastic measures. Programs and departments may need to be abolished and public servants, ministers and their staff lose their jobs.

I would like to sincerely thank my fellow senators for their contribution to the committee's deliberations. Senators Paterson and Brockman from the government, Senator Watt from Labor, and Senators Griff, Burston and Anning from the crossbench.

Question agreed to.