The Business Council of Australia has called for an immediate focus on addressing their mammoth “$110 billion red tape cost blow.” This is a concern that is hurting businesses everywhere in the country. The Council agrees that clearing up just a fraction of this regulatory tangle would save us billions. They are pushing for these commonsense changes to free up billions in savings. The request comes amid mounting alarm over decades’ worth of stacked federal regulation. Since the introduction of these largely unchecked rules under the Abbott government in 2014, this compliance burden has hindered productivity and economic growth.
Business Council President and CEO Gary Toebben yearns for the last serious “sunset” audit of red tape in 2014. Currently, there is no uniform central agency to oversee and coordinate to prevent duplication and even contradictory regulatory frameworks that may arise. As businesses struggle to navigate eight different regulatory regimes across various states and territories, the Council proposes harmonizing these disparate schemes to streamline compliance.
Proposal for Regulatory Harmonization
In its new report, Moving New York Forward, the Business Council lays out a few essential recommendations to relieve the regulatory burden. The biggest proposal would boil down to aligning regulatory frameworks. This new provision will make it easier for businesses to understand and meet compliance requirements, cutting through confusing regulations with greater efficiency.
Bran Black, chief executive of the Business Council, said the status quo was not acceptable. He stated, “Are there opportunities to consider overlaps, and where there are overlaps dispense with one of the overlaps? Do we really need, for instance, 36 different licenses in Victoria in order to pour a first cup of coffee?”
The group further recommends temporarily suspending restrictions on trading and delivery hours for individual retailers. This proposed shift would help foster a more vibrant, dynamic retail environment. It would allow firms to serve their customers in new and innovative ways.
The Business Council has been advocating to improve licensing regulations in order to attract more tradespeople. Through interstate compacts, they’re pushing for the automatic recognition of qualifications across state borders. This project is focused on making it easier for tradespeople who want to work across multiple jurisdictions to foster a more mobile, flexible workforce.
Addressing Inconsistencies and Compliance Challenges
The burden of compliance is further complicated by varying rules from state to state. These misalignments affect every aspect of a company’s operation. They set limits on times of day when retail stores can open, when various products can be sold, and when employees are able to be on-site.
“The compliance burden needlessly costing billions is a result of years of accumulated regulations without sufficient oversight,” said Bran Black. Third, he called for a new red tape stocktake to determine whether existing regulations are still necessary or are currently impeding productivity.
The Economic Reform Roundtable, directed by Treasurer Jim Chalmers, kicks off in under a week. This context surely lends a lot of timing consideration to the Business Council’s proposals. Black is optimistic that if everyone comes to the roundtable discussions willing to listen and collaborate, their efforts will result in meaningful reforms.
So here’s what I’m really saying—I truly believe we should all be going into this round table with the most open of minds, he said. We are in the midst of a dangerous national productivity crisis. If we fail to address it, your daily quality of life, safety and increasingly, long-term climate vulnerability will be impacted.
The Broader Context of Regulatory Reform
The Reserve Bank recently cut its productivity growth forecasts to their lowest. Against that potentially explosive political backdrop, the industry’s push for regulatory reform is coming on like a freight train. Accordingly, the Bank has sounded the alarm. If we’re unable to improve productivity, we can’t expect wages to rise as fast, increasing the risk of higher inflation.
Almost 30 Australian industry associations have joined forces to call for the Australian government to commit to a net zero target as the UK government has done. At a minimum, they want to reduce the costs of regulation by 25 percent by 2030. This ambitious goal reflects a growing consensus among industry leaders that action must be taken to reduce unnecessary compliance burdens.
Bran Black pointed out that during the COVID-19 pandemic, many small regulations were swiftly lifted, demonstrating that it is possible to adapt regulations in response to changing circumstances. In the aftermath of the pandemic, there seems to be an unwillingness by some key players to continue the momentum for these changes.
We witnessed this during COVID—many of these small regulations disappeared literally overnight, he remarked. “And post-COVID people were pretty comfortable retaining the status quo.”
The Business Council’s recommendations are aimed at making compliance less burdensome. Underlying all of this is their desire to set a positive stage for the success of businesses. The new proposal to appoint a dedicated “minister for better regulation” would mean that these issues would have constant attention and monitoring, keeping this issue at the forefront.
