Red tape: more reform needed

CUTTING red tape for business is a mantra chanted by governments of every political persuasion, but the latest evidence indicates that this intent has not translated into a good outcome.

The Business Council of Australia’s latest scorecard of red tape reform gave Western Australia an overall rating of five out of 10.

The only state WA outperformed was Tasmania, which had a four-out-of-10 rating.

The good news for WA is that the state has lifted its rating since 2007, when it was judged the worst in the country.

“Having received the lowest assessment in the 2007 scorecard, Western Australia’s improvement on every benchmark is encouraging,” the report concluded.

To put this in context, the Business Council’s overall assessment of WA has gone from “poor” to “adequate/good”.

Most other states got the same overall assessment from the Business Council, which said it had identified significant reforms that were needed in all jurisdictions.

“More needs to be done to improve the regulation-making processes within all jurisdictions, particularly in respect of accountability and transparency benchmarks,” the report stated.

The best overall assessment was for Victoria; its key initiative in this area was the establishment in 2004 of the Victorian Competition and Efficiency Commission.

The VCEC’s role includes advising on regulation, assessing the merit of regulations, and collating the volume of regulation produced each year.

It gets administrative support from the state’s treasury department, but – and this is crucial according to the Business Council – it is an independent oversight body.

The positive steps taken by the WA government include the commencement last year of a formal process for assessing the impact of new or amended regulations.

This includes the completion of two-page regulation impact statements (RIS).

The state government also established the Regulatory Gatekeeping Unit, within the Department of Treasury and Finance.

The Business Council said internal oversight initiatives, such as those in WA, were good steps towards creating an institutional framework that performs some of the ideal elements of oversight.

The ‘ideal elements’ include reviewing RIS compliance and making an economic assessment of the regulatory burden.

“The BCA recommends that more states consider creating independent agencies, or improving the independence of their existing agencies, to increase accountability mechanisms,” its report said.

Former treasurer and commerce minister Troy Buswell was a champion of the reforms introduced in WA; there has been less to report on this front since he was dropped from the ministry, however.

Mr Buswell’s reforms included the establishment of the red tape reduction group to identify opportunities to cut down on existing regulation.

Led by Ken Baston MLC and Liza Harvey MLA, the group produced a useful report, Reducing the Burden, which was released in February this year.

The report made 107 recommendations to cut red tape for businesses and consumers.

These included streamlining heavy vehicle transport regulation, to save businesses $16 million.

The proposed changes included reducing the volume and complexity of paperwork currently needed by trucking industry operators.

The group also proposed reducing compliance on local governments, and improving marine and caravan licensing arrangements.

Mr Buswell said in February the government’s formal response to the report would be announced in “coming months”; that has not occurred yet.

He also noted that many recommendations from the report required cultural change in the public service.

The response to the report poses a big challenge.

It’s all well and good for a couple of backbenchers to speak to industry and report back on opportunities for red tape reduction.

That will only translate into action if people with influence, preferably a minister or two, vigorously and persistently promote the reform agenda.

Commerce Minister Bill Marmion signalled the state government remained focused on cutting red tape when he announced last month that WA would not follow some national payroll tax reforms because of the high compliance costs they entailed.

Judging by the Business Council’s latest assessment, a lot more action is needed.