Senate debates

Thursday, 12 November 2015

Ministerial Statements

A New Regulatory Reform Agenda

3:54 pm

Photo of Marise PayneMarise Payne (NSW, Liberal Party, Minister for Defence) Share this | | Hansard source

On behalf of the Assistant Minister for Productivity, Dr Hendy, I table a ministerial statement on a new regulatory reform agenda.

The statement read as follows—


The Hon Peter Hendy, MP

A New Regulatory Reform Agenda

12 November 2015

Thank you Mr Speaker.

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 $1billion 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We have repealed over 10,000 legislative instruments and introduced legislation to repeal over 3600 spent and redundant Acts from the Commonwealth books.

For every one dollar added to the cost of regulation, the Government has made decisions that cut over eleven dollars.

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 focussing 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 focussing 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 OECD1 and the IMF2—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 door step.

      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% 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 three3.

      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 products4.

      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 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 compete5.

      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 disruptors like Uber6 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 closure7 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 in to 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 on-going 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.

      Mr Speaker, the Government is 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.

      1 OECD Reviews of Regulatory Reform – Australia towards a seamless national economy (2010), page 14-15


      3 2015 Intergenerational Report, pg. viii

      4 &yr=2015&mth=05

      5 Competition Policy Review, pg. 115


      7 Productivity Commission, Business Set-up, Transfer and Closure, Draft Report May 2015