As Australia prepares for an important economic reform round table, the nation’s leaders are highlighting the pressing issue of regulatory burden. Australian Treasurer Jim Chalmers has repeatedly stressed that regulation should be a “really, really big focus” of the talks. On Wednesday, Prime Minister Anthony Albanese convenes a leaders’ round table at The Lodge. This year’s meeting will address the rising complexity of regulatory mandates that hamper productivity and economic growth.
With an eye on combating the scourge of “regulatory creep”. She thinks it comes from the increased public appetite for government to act on each and every new problem that crops up. In just the last 20 years, an average act has nearly doubled in number of words. At the same time, the substance of the conditional terms has changed significantly in recent years.
The economic production implications of these regulatory challenges are equally troubling. Albanese will underscore the point that even if all these regulations are well-intentioned, their combined impact is costing the economy hundreds of billions each year. The government is committed to taking the best ideas into account which were submitted during round table discussions. These insights will be a key factor informing its decision-making process.
The Impact of Regulatory Creep
Danielle Wood’s forthcoming address at the National Press Club will focus on the decline of policy emphasis on growth and the decreasing appetite for reform in wealthy nations over recent decades. Here, she argues that putting safety first will involve difficult trade-offs, while governments struggle with the public’s desire for an intervention every time.
“It does not mean government should never intervene or pursue other conflicting goals, but the benefits of growth should not be traded away quietly or lightly.” – Danielle Wood
Unsurprisingly, the broader research from the Productivity Commission paints a dismal picture when it comes to construction times. According to NAR, the time it takes to get new houses and apartments built has jumped 50 percent in the last 30 years. The hold up is in part due to complicated approval procedures. Wood terms these “regulatory hairballs,” and they take a toll on most areas of our economy.
“It’s not the time laying bricks that’s blown out. It’s the approvals processes: from planning, to heritage, to building approvals, environmental and traffic impact statements.” – Danielle Wood
Australia’s peak business organisations have mounted an impressive campaign to cut red tape by 25 percent. They plan to do this by 2030, though they’ve acknowledged multiple barriers to reaching this goal. This new initiative is the answer to tremendous demand for reform. It’s a joint letter from 29 organizations that speak for independent, small, medium and large businesses across the country.
Government’s Commitment to Productivity
According to Australian Treasurer Jim Chalmers, the government is hell-bent on making productivity a priority. Their children’s futures should not be sacrificed to save a buck in this most important area. As his administration works to cut red tape, he has called attention to how regulatory burden stifles economic development and entrepreneurial creativity.
“Nowhere is this more evident than in the growth of regulatory burden.” – Treasurer Jim Chalmers
Chalmers said Australians are looking for answers from their federal government now more than ever. This rising demand perpetuates a vicious cycle, in which citizens come to see more regulations as a benefit. He cautions against this trend.
“When combined with Australians’ tendency to look to government for answers — our ‘Canberra fix’ — we have ended up with a system that dampens growth.” – Treasurer Jim Chalmers
The opposition, through Andrew Bragg, shadow minister for productivity and deregulation, are calling for just that. The Baker administration’s mantra that deregulation has to be a hallmark of this administration’s productivity agenda is going to be challenged by Bragg’s speech on Thursday.
“More rules is always seen as good. The minister can announce the problem is solved. The caravan moves on. The dog barks.” – Andrew Bragg
Bragg acknowledges that the public loses interest in how new rules are enforced, until a major macroeconomic scandal occurs. He doesn’t view this as an indictment as much as a call for better communication and execution when it comes to making regulatory changes.
Business Community’s Voice
It is the business community’s frustration with the regulatory maze that has finally gotten under their skin. Matthew Addison, a member of one of Australia’s most influential business intermediaries, spoke up about his concerns. In the second, he argues that the avalanche of red tape is strangling small businesses.
“Our small businesses are buckling under the weight of excessive red tape, with regulatory burden and a patchwork of complex compliance obligations slowing growth.” – Matthew Addison
Bran Black from the Unity Cafe further painted the impact of this by sharing how hard it has been on local cafes and small businesses. He emphasized the need for streamlined processes to prevent owners from navigating an overwhelming number of licenses before they can operate.
“So a cafe owner in Melbourne doesn’t face 36 licences before they can pour a cup of coffee.” – Bran Black
At this economic reform round table, speakers from the right and left will discuss their views of the economic crisis. They’ll address some of the biggest challenges ahead and share ideas on how to cultivate a climate that inspires growth and innovation.
