26 March 2014
Repeal day an exercise in deregulation smoke and mirrors
Repeal Day: liberating business, or pure politics?
Repeal day, a political stunt copied from David Cameron's government in the UK, will go ahead in Australia today.
The very fact the government plans to repeal some 10,000 regulations suggests past governments have failed to undertake inventories of their legislation and regulations, or systematically review which ones should remain.
The government intends (until it forgets) to have two repeal days per year, repealing in total around A$1 billion of regulation that has outlived its usefulness.
We are told that we have erected a culture of compliance and enforcement that stifles productivity and that by eliminating all unnecessary regulation we will be liberated. These are bold, even courageous, ambitions.
There are various reasons the government has chosen to go down this route. It gets business off its back for one. Business constantly complains about unnecessary regulation and deregulation is one thing that they can almost all agree upon.
Deregulating anachronistic regulations also doesn't cost much, which is a plus in a fiscally stringent context. Abolishing ôred tape enables the government to look active, setting the agenda. And the champion of the latest initiative, Josh Frydenberg, will see the endeavour as likely to enhance his promotion from his parliamentary secretary position into the ministry.
But deregulation exercises are all about smoke and mirrors. Parliament is unrelentingly cranking out thousands of new amendments and regulations each session, yet governments will periodically want to appear to be reducing the regulatory burden on the community and especially business, as a productivity measure.
Reporting requirements, compliance frameworks and other accountability impositions are increasing at a far faster rate than any rolling back of out-dated regulations (ask any small business, NGO, voluntary association or even sporting club).
There are some big deceptions behind the Abbott-Frydenberg initiative. One is that they claim the abolition of these regulations sitting on the statute books will miraculously save millions of dollars and make us more competitive. Yet most of the ones destined for abolition are truly anachronistic laws and regulations (some decades and even centuries old) that hardly apply to modern business.
Real reform, or abolishing obsolescence?
The prime minister cited a regulation imposed in the 1970s over the conversion from imperial measures to metric, who seriously believes the abolition of this irrelevant oversight will liberate business to be more productive? Other examples include obsolete regulations that applied to state-based naval installations over 114 years ago and to the construction phase of the Snowy Mountains hydro-scheme in the 1940s. These examples illustrate that the government is largely abolishing obsolescence rather than culling modern-day regulations.
Another deception is that most of the irritant regulations mentioned in the speeches by both the prime minister and the parliamentary secretary are matters of state and local government regulation, shopping hours, retailing restrictions, product size rules and labelling. These are the regulations that can suffocate small business (but also sometimes protect them), yet the Commonwealth is not a party to them.
Some areas or regulation involve duplication where previous Commonwealth governments have attempted to over-write its own regulations and requirements onto matters of state jurisdiction (for example, aged care facilities).
You're saving how much?
And who has tallied how much we will supposedly save, the answer is bureaucrats. Officials in every department have been instructed to go back through their old statutes and find ones that no-one can remember and dish these up for deregulation, and in doing so estimate how much could be saved if they were onerous to comply with or administer. The dollars saved should be treated with caution.
There is also delicious irony lurking behind the government's latest deregulation policy, the introduction of a new across-the-board regulatory requirement that every policy proposal to introduce (or abolish) regulation must be accompanied by a Regulatory Impact Statement. So, we'll deregulate by placing another regulatory burden on departments who will have to construct pro-forma assessments of proposed changes.
The government has sneaked through some ideological regulatory cutting along the way. The regulator overseeing charities is being abolished (to please the big faith-based charities) and the regulations governing financial advisers are being watered down (responding to their lobbying, not the public interest). But if one examines the list of acts to be abolished most are irrelevant oversights that have long since been de-operationalised.
Cynics may suggest that a more positive contribution to deregulation might be for the federal parliament to ban all additional legislative activity for a year or two, and give everyone a breather, while investing time in harmonising irksome regulations at the local level.
Legislative instruments such as tax, industrial relations, safety, environment, superannuation are all tinkered with ad nauseum; I don't see governments reversing this trend with pious announcements of repeal days.