And we wonder why economic growth was stifled and businesses were crippled over the past 6 years:
Deregulation program will pave the way for productivity growth
Josh Frydenberg
The Australian
September 23, 2013 12:00AM
IN the five years from mid-2007, multi-factor productivity declined across the country by 3 per cent.
Last year the respected Economist Intelligence Unit ranked 51 countries for productivity growth, with Australia coming in second last, ahead of only Botswana.
Even Reserve Bank governor Glenn Stevens has weighed in, calling for more action and less debate on the productivity front, saying "improving productivity growth is just about the sole source of improving living standards".
Now the Coalition has returned to government, we have the opportunity to implement the very policies that will reverse our declining productivity and put Australia's economy back on track.
One of the most effective ways to boost productivity is via the micro-economic reform agenda of deregulation.
It is an area where Labor failed and the Coalition must succeed.
In little more than 5 1/2 years, Labor was responsible for introducing more than 21,000 additional regulations, despite Kevin Rudd's promise of a "one regulation in, one regulation out" policy. This dramatically increased the burden on big and small businesses alike. Peak industry bodies were aghast.The Australian Chamber of Commerce and Industry surveyed its members and found that 73 per cent of businesses felt the compliance burden had increased in the past two years.
The Minerals Council found that the average thermal coal project in Australia was being delayed by more than a year compared with similar projects overseas.
And the Business Council of Australia has highlighted one resource development approval process that took years, was extremely costly and required a 12,000-page report, after which approval was finally granted with 1500 commonwealth and state conditions and 8000 subconditions attached.
Such an avalanche of green and red tape stifles investment and innovation, seriously hurting the economy. Unfortunately, under Labor this message never really got through. Even Julia Gillard's own Borthwick-Milliner review last year of her government's regulation impact assessment processes found that "a widespread lack of acceptance of and commitment by ministers and agencies" was a serious impediment to their effective use.
It is this culture under Labor - where passing new regulations was adopted as the default position, as opposed to only when it is absolutely necessary - that the Coalition is determined to change.
A paradigm shift will soon be under way. Driven by the Prime Minister and permeating down through his ministers and the public service, the government will adopt a new comprehensive, considered approach to deregulation. One-stop-shop environmental approvals, streamlined medical research grant processes and transferring the responsibility for administering the paid parental leave scheme from small business to the Family Assistance Office are just some of the immediate priorities.
Not to mention the positive impacts on business that will flow from the abolition of the carbon tax with its 19 separate acts and 1100 pages of legislation, and the mining tax with its 11 separate acts and 525 pages of legislation.
The cabinet, parliament and the bureaucracy will all be galvanised around the deregulation process. Ministers will be required to include regulatory impact statements in their submissions as well as establishing their own ministerial advisory committees from which they will seek recommendations on cutting red and green tape.
Two parliamentary sitting days will be set aside for repealing legislation each year - an initiative not too dissimilar to that under way in other jurisdictions such as the US, where the House of Representatives has regular repeal days under what is known as the Corrections Calendar.
And the performance of senior members of the public service will be assessed in part according to their proven record in reducing regulation, with their remuneration calculated accordingly.
The Productivity Commission will also be tasked to determine a framework for auditing the performance of regulatory agencies.
In the words of the Australian Institute of Company Directors, "regulators have tended to adopt an unduly risk-averse approach to the administration of regulation and are often overly bureaucratic in their interactions with business".
It is essential to the deregulation-productivity agenda that commonwealth regulators do better than this and administer the regulations in a more efficient and effective manner.
In addition to pursuing this groundbreaking whole-of-government approach at the federal level, the Coalition is also determined to promote an active inter-governmental agenda that will lead to the federal, state and territory governments working in sync.
The Council of Australian Governments will be an important vehicle in this regard, promoting deregulation as a standing agenda item to ensure that the Prime Minister, premiers and chief ministers can agree on the removal of duplicative and overlapping regulations wherever they are found.
With the Prime Minister's own department now taking responsibility for the Deregulation Unit previously housed in Finance, the Prime Minister is well placed to lead this charge.
In today's global economy the deregulation agenda has never been more important.
With our economic competitors improving all the time, we cannot afford to pursue anything other than world's best practice.
While cutting $1 billion a year of red and green tape may seem like a daunting task, it is absolutely vital. The quality of our economic future depends on it.
Josh Frydenberg is parliamentary secretary to the Prime Minister with responsibility for the Abbott government's deregulation agenda.http://www.theaustralian.com.au/national-affairs/opinion/deregulation-program-will-pave-the-way-for-productivity-growth/story-e6frgd0x-1226724729098#
