16/10/2013 - 05:06

Red tape a real problem

16/10/2013 - 05:06


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Nothing beats real-life examples to illustrate the costly and debilitating effect of the bureaucratic process.

Red tape a real problem

Terms such as productivity, efficiency and red tape litter the public policy debate in Australia.

Very rarely, however, do the pundits who advocate boosting productivity or slashing red tape make clear what they really mean.

Readers of Business News this week have some stark examples that inform what might otherwise be a dry policy debate.

Dan Wilkie talks to three business owners who want to establish or expand their operations on and around the Swan River (pp4-5).

Mack McCormack has spent $2 million buying seaplanes and boats and other 'toys' for his adventure tourism business, which sounds like a blast of fun but is struggling to get under way.

Owen Williams has much more sedate plans, having recently launched a Segway tour business – an amazing six years after going to the Department of Transport for approval.

It took special legislation to allow his business to proceed. Hats off to the government for finally making it happen, but shouldn't we despair that special legislation was needed so that someone could run a new small business?

Scott Pryer has a much more mundane problem, being unable to put up extra signage so that people can actually find his business.

The problem apparently, is that the land at Point Fraser, near the Causeway, is a Class A nature reserve.

Whether that classification is warranted is one matter.

More importantly, every time people talk about Class A nature reserves I point to the example of Barrow Island – site of the giant Gorgon LNG project.

The flora and fauna on that island has been preserved because – not despite, but because – it has been carefully managed by Chevron and its forerunners for the past 40 years.

They have been successfully producing oil for all those years and controlling access to the island in the process.

It's a wonderful example of industry and nature co-existing, and that it's not necessary to stop one to save the other.

Why can't we apply that lesson to the Perth foreshore?

Woolworths added to the 'red tape' debate last week by reminding the state government of some of the bizarre retail trading regulations that still exist in this state.

Petrol stations can apparently sell cigarettes before 8am on Mondays but not nicotine patches, and can sell pantyhose after 9pm on Thursdays but not underpants at the same time.

Woolworths has pleaded for a relaxation of shop opening hours to 7am on weekdays and Saturdays, and extend Sunday trading hours.

Boffins at the Productivity Commission in Canberra have recently quantified the impact of red tape.

In a report released last week, they estimated that small businesses in Australia spend up to five hours per week on compliance with government regulations.

"Almost universally, their lack of staff, time and resources present challenges in understanding and fulfilling compliance obligations," the commission concluded.

Importantly, the report mapped out some reforms to improve the situation.

It found that the way in which small businesses experience regulation has as much to do with the approaches of regulators as it does with the regulations themselves.

"Those regulators with effective engagement practices have adjusted their culture by focusing on senior management priorities, training and skills of enforcement staff, performance monitoring, stakeholder feedback, and rewarding behaviour consistent with desired practices," the Productivity Commission report said.

It offered some very simple examples of how regulators can be more responsive to small business needs and capacities.

These include tailoring information requirements around data already collected by businesses, ensuring regulatory information can be readily found on websites, and enabling timely access to regulatory staff.

It's a report worth reading. How long until it gets adopted?


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