I See Red
Tony Abbott, as prime minister in 2014, delivered two definitive speeches about the need to cut the red tape that was infuriating business. This reform is now more important than ever.
‘Our mission is not bigger government’
House of Representatives, Canberra - 19 March 2014
This is the Government’s first report on red tape and what we’re doing to reduce it. Next week, the parliament will have its first ever repeal day: to abolish regulation and legislation that’s outlived its usefulness or is doing more harm than good.
Cutting red tape is at the heart of this Government’s mission: to build a strong and prosperous economy for a safe and secure Australia.
Red tape is what officials wrap people in when they think that government knows best. Cutting red tape is a sign that this Government and this parliament want Australians, individually and in the community, to have more control over their own lives. It’s an acknowledgement of the people, our masters.
Next week’s repeal day will scrap more than 9,500 unnecessary or counter-productive regulations and 1,000 redundant acts of Parliament. More than 50,000 pages will disappear from the statute books. Removing just these will save individuals and organisations more than $700 million a year, every year.
The first repeal day will abolish the Australian Charities and Not-for-Profits Commission because people serving our community don’t deserve a new level of scrutiny. It will abolish the Independent National Security Legislation Monitor because all relevant legislation has already been reviewed and the former government ignored all the Monitor’s recommendations.
Redundant acts regulating – for instance – the 1970s conversion from imperial to metric measurement, governing state naval divisions (that became part of the Royal Australian Navy 101 years ago) and facilitating the construction of the Snowy Mountains Scheme (that was completed in 1974) will all go.
As a result of repeal day, films will only need to be classified once – not again and again when they are reissued in DVD, blu-ray or 3D.
As a result of repeal day, businesses won’t have to re-apply to use agricultural chemicals and veterinary medicines because one approval should be enough.
Universities will no longer have to submit capital asset management surveys in addition to other surveys which cover essentially the same thing.
And jobs agencies will no longer be required to keep paper records of every applicant which, in one agency alone, occupied 336 filing cabinets.
Businesses will no longer be required to administer the former government’s paid parental leave scheme, saving them an estimated $48 million.
“Next week’s repeal day will be the first of many. Under this government, there will be at least two a year – because we will make people’s lives easier, not harder”
Associated with repeal day, national businesses will be allowed to operate under one workers’ compensation scheme right around our nation rather than have to operate in up to eight.
Next week’s repeal day will be the first of many. Under this government, there will be at least two a year – because we will make people’s lives easier, not harder.
It’s worth recalling that the first parliament of the Commonwealth of Australia passed just 513 pages of legislation – that’s just half a page of legislation per day. That’s worth contrasting with the last parliament, the 43rd, which passed half an Act of Parliament per day. Between 2007 and 2013, under the former government, some 21,000 new regulations found their way into national life. No doubt, some of these were good and necessary but some, clearly, were overkill at best.
Why should a long day-care centre with 15 staff and 75 places have to do paperwork said to cost, on average, $140,000 a year – which is $2000 a child or nearly $10,000 a staff member? The result of this is fewer child care services and higher prices for the ones that exist.
Why should a Sydney café that serves alcohol and has outdoor seating be subject to 21 local, 29 state and 25 Commonwealth regulations or sets of regulations? That’s 75 different hoops to jump through that mean higher costs for businesses and fewer jobs for Australians.
Why should Australian medical researchers collectively put 500 years of work into preparing grant applications – of which only 20 per cent succeed? That’s time not put into finding cures for disease.
Likewise, why should every Australian university be required to report more than 50 sets of data to the Commonwealth Department of Education and a further 50 to other government entities. Because, again, this is time and money that’s not directed to teaching and research.
Of course, government should be confident that standards are maintained and that taxpayers’ money is accounted for but it’s too easy for officials to do their job at others’ expense in the name of safety or accountability.
A reason why bricks and mortar retailing is losing out to on-line sales is the compliance costs that shops face – from planning regulations to product standards.
A reason why our farmers find it hard to compete is that one dollar in every six of their earnings, the NFF says, is spent on compliance.
About 60 per cent of Australian businesses are sole traders and 85 per cent have fewer than five employees. All too often, the local newsagent, dry cleaner, baker and butcher has to be the accountant, marketer, HR manager and cleaner for the business as well as the chief salesperson. They are virtually suffocating in red tape and it’s well past time to say “enough”.
On the World Economic Forum’s global competitiveness ranking, Australia has slipped six places in four years, to 21st. Australia’s ranking on the burden of government regulation, is 128th – yes, 128th in the world – nestled between Romania and Angola. On The Economist’s productivity growth ranking, we come second last, just ahead of Botswana.
The first instinct of democratic politicians, confronted with a problem, is to promise to make it go away. Like a fence at the top of a cliff, sometimes regulation is necessary but there’s a limit to what government should do to protect us from ourselves.
More regulation is not the solution to every corporate, community or personal failing. Sometimes, we just have to accept that mistakes are inevitable and that misfortunes are unavoidable. When someone in authority gets it wrong, the best outcome might be a timely resignation rather than more regulation. When it comes to making us act responsibly, good example may be better than more rules.
As Tony Blair has conceded, government can’t guarantee a risk free life. “Ambiguity, uncertainty, the wisdom that comes with failing and changing your mind”, he says, “are all essential to progress”; because “a risk averse public sector will stifle creativity and deny to many the opportunities to be creative”.
Since day one, this Government has been cutting red tape. On day one, we began the process of scrapping the carbon tax. Repealing the carbon tax removes over 1,000 pages of primary and subordinate legislation and removes compliance costs from over 75,000 businesses. Repealing the carbon tax not only takes a $9 billion handbrake off our economy and gives a $550 bonus to households but will provide a direct red tape saving to business of $85 million a year.
And repealing the mining tax will save businesses more than $10 million in compliance costs.
Fifty-five announced-but-unlegislated tax measures will no longer proceed – including the previous government’s $1.8 billion FBT hit on the car industry, and the cap on self-education expenses that would have hit tradies, nurses and teachers.
Every cabinet submission now has a regulation impact statement so that its potential impact on business, community groups and households can more readily be identified.
All Commonwealth government portfolios now have a dedicated deregulation unit, formed from existing staff, because it’s sometimes more important to repeal old laws than to pass new ones.
Each cabinet minister is expected to consult widely before finalising new policy because the first law of government should be: do no harm.
At the December COAG meeting, all states and territories agreed to create one-stop shops for environmental approvals so that major projects will only need to be assessed once, not twice. There’s already a one-stop-shop for offshore environmental approvals which the office of best practice regulation estimates will save businesses $120 million a year.
Soon, NH&MRC grants will run for five years – not three – so that successful medical researchers will spend less time filling out forms.
This government is making it easier for people to do business with government by reducing reporting requirements, by using credit cards more and by paying bills on time.
“Every department and agency will be required to contribute towards the $1 billion a year, every year, in red tape cost savings that the government is committed to deliver”
This government has also scrapped the aged care workforce supplement that forced providers to sign up to union-dictated enterprise bargaining agreements.
All these measures demonstrate our seriousness about reducing red tape and making it easier for people to go about their lives. But this is just the start, not the finish.
Every department and agency is conducting a comprehensive audit of the costs it puts on individuals and entities so that it can put a dollar figure on the cost of compliance and reporting and start reducing it every year.
Every department and agency will be required to contribute towards the $1 billion a year, every year, in red tape cost savings that the government is committed to deliver.
The Productivity Commission is finalising the indicators that will make red tape reduction easier to judge.
Not only will deregulation become a standing item on the COAG agenda but there’ll be less red tape within COAG, with the number of ministerial councils dropping from 22 to eight.
The reviews that the government has in-train – into competition policy, workplace law, and the financial system – all have a deregulatory focus.
The White Papers that the government plans – into tax and into the federation – are both intended to reduce overlap and complexity.
We are carefully considering the former government’s changes to coastal shipping and its changes to trucking rates to ensure that they make doing business easier, not harder.
For too long, governments have acted as if the Australian people work for them. People don’t work for government; government should work for people. It’s government’s job to serve the people; not people’s job to serve the government. In simple terms, we work for you. And we’re working for you today by creating the biggest bonfire of regulations in our country’s history.
Our mission is not bigger government; it’s bigger citizens with more opportunities.
To the Australian people, I say: this is about saving you money, saving you time, and trusting your common sense to make more choices about your life.
I am proud of the progress that the Government has made to date – but it’s only the start of what is to come.
‘We are suffering from regulatory overkill’
House of Representatives, Canberra - 22 October 2014
After the success of the first “Red Tape Repeal Day” on 19 March 2014, Prime Minister Abbott announces the second repeal day will include simplified tax returns and smoother interactions with the bureaucracy for people and businesses.
Today, bills are introduced for the second Red Tape Repeal Day. It is the second of many to come.
Every day, this Government is working to build a strong, prosperous economy for a safe, secure Australia.
Every day, we are seeking to identify ways to make life easier for individuals, community groups, charities – and businesses large and small. Our Economic Action Strategy aims to remove the burdens from business, make our country more competitive, and drive more jobs and higher living standards for all Australians.
Today, I am pleased to report that since the election, this Government has reduced annual red tape costs by over $2 billion. And this more than doubles our original commitment of a $1 billion a year cut in red tape costs.
While some regulation is necessary and nearly all regulations originally had some point, we are now suffering from regulatory over-kill. Between 2010 and last year an Act of Parliament was passed every two days. Under the former government, some 21,000 new regulations became part of our national life. And that does not include the regulations, laws and by-laws that were added at state, territory and local levels.
While it is easy to point to bizarre examples, like the ACT Government’s attempt to require safety supervisors at sausage sizzles, the purpose of this Government is to look beyond the absurd. It is to identify the raft of red tape that adds costs without a commensurate public benefit.
Talk to any butcher, newsagent, dry cleaner or café owner and he or she will tell you that it is the accumulation of regulation that damages initiative, productivity and the willingness of people to ‘have a go’. If red tape can grow incrementally, then it can be cut in the same way. That is what the Government is doing today.
When it comes to regulation, we are changing the culture of government. Deregulation units are now in place across government. Ministerial Advisory Councils have been established so that the people impacted by decisions can have a say on them. Portfolio regulation audits are underway. The performance pay of senior public servants now includes deregulation as a key performance indicator.
The site – cuttingredtape.gov.au – has been established, allowing every Australian to make a contribution to the Government’s deliberations on cutting red tape.
Regulatory Impact Statements are required for cabinet submissions because assessing the cost of any regulation is as important as knowing its benefits.
Soon, a regulatory performance framework will drive cultural change within regulators and help to ensure that regulations are administered effectively and efficiently.
In March, we held the first ever Red Tape Repeal Day. On that day, nearly 10,000 unnecessary or counter-productive regulations and 1,000 redundant acts of Parliament were removed. That day we relegated some 50,000 pages of redundant regulation from the law books to the history books.
Since the first Red Tape Repeal Day, we’ve scrapped the Carbon Tax and the Mining Tax. Scrapping the Carbon Tax not only saves the typical household $550 a year, not only has it removed a $9 billion a year handbrake from our economy and provided a direct red tape saving to business of $85 million a year.
“We are a government freeing up businesses so that they focus on the people they are meant to serve”
Each Repeal Day is an opportunity to reduce or eliminate regulation and legislation that has outlived its usefulness or does more harm than good. And today, we add to this, with almost 1,000 acts and regulations to be scrapped – more than 7,200 pages. These changes, large and small, are about making people’s lives easier.
We are a government freeing up businesses so that they focus on the people they are meant to serve.
We will make it easier for bricks and mortar shops to compete with online stores by reducing their compliance costs – because, all too often, the retail sector has to interact with multiple agencies from local, state and national government.
We’re making it easier for Australian Apprenticeship Support Network providers, who will no longer have to maintain some 3 million paper files and waste money every quarter doing so. By reducing administrative costs, these service providers can better focus on assisting apprentices and employers in meeting the skills Australia needs.
We are also making life simpler for users of managed investment schemes, who will no longer have to undertake two separate ‘know your customer’ checks before they can complete their applications because one check should be enough. Every year, there are over 500,000 new applicants for these schemes. Every duplicate check costs a managed fund around $40, as well as the time the customer spends providing the same information twice.
In healthcare, we are reducing the time taken to list medicines on the PBS, to improve access to vital, life-saving medicines.
And we’re delivering a one-stop shop for environmental approvals.
Reducing these approval delays is expected to result in regulatory savings to business of over $426 million a year.
Our Industry Innovation and Competitiveness Agenda is promoting lower costs, better skills, and the ‘have a go’ ethos that is so much a part of the Australian character. By reinvigorating Australian businesses, we’ve reinvigorated the economy.
Deregulation is an essential part of that agenda because ‘bubble wrapping’ our creative minds in red tape stifles innovation and flexibility. Importantly, the Competitiveness Agenda included proposals to reduce duplication of our regulatory arrangements where trusted international standards have already been met or trusted international assessments have been made.
Our guiding principle is that if a system, service or product has been approved under a trusted international standard or risk assessment, then Australian regulators should not impose any additional requirement, without a demonstrable reason to do so.
We are already seeing the benefits of this. For instance, the Therapeutic Goods Administration has just advised Cochlear – who make the bionic ear – that all its products are eligible to use European Union certification to streamline TGA certification, and that implementation will begin from next month. This change, according to Cochlear, will mean thousands of people in Australia and overseas will have access to the very latest devices, sometimes up to a year earlier than may otherwise have been the case.
We’re making it easier for small to medium exporters to finance their export activity, now that the Export Finance and Insurance Corporation has the flexibility to lend directly for all types of exports – not just capital goods – reducing business costs and processing time. As well, EFIC’s adoption of accelerated execution processes for some transactions could shorten processing time by 40 per cent and this could save an average of $5,000 per export contract.
These measures will make it easier for entrepreneurs to transform ideas into reality, and create an environment where small businesses can do more.
And with changes to the Corporations Act governing the administration of general meetings, the management of Australia’s largest companies can spend more time focussed on managing their company than managing their shareholders by making it harder for activists to make vexatious requests for shareholder meetings.
“Where we can make it easier for people to spend their time as they choose, rather than waste it filling out forms, we should”
We’re making these changes because people don’t work for government, government should work for people. It is government’s job to serve the people; not people’s job to serve the government.
We are a country of people who work hard, pay their taxes, volunteer in their local community and save for their retirement. And where we can make it easier for people to spend their time as they choose, rather than waste it filling out forms, we should.
A working mother, for example, who doesn’t want to be contacted by telemarketers during her spare time, will be able to register both her home and her mobile phone numbers on the Do Not Call Register. We’re now also making sure she doesn’t have to remember to re-register every eight years by keeping her numbers on the list indefinitely.
This same mother could also benefit from the rollout of the myTax online portal, that pre-fills individuals’ returns, so they don’t have to spend hours flipping through the pages of a paper tax return. For over 250,000 people, this programme should reduce the time taken to submit a tax return.
And the broader myGov system means that Medicare, Centrelink, and Child Support customers can obtain information, make claims, and access services, without having to visit a service centre in person, or spend time on hold on the phone.
Cutting red tape is about making life easier. It means anything from less time in airports waiting in queues because of SmartGate, to more forms of identification that marriage celebrants may accept. Cutting red tape should mean less time in queues, less time filling out forms and less time searching for information.
These changes, and other changes since September 2013, have removed over $2 billion in annual red tape cost. But this is the start, not the end.
We are not only cutting red tape, but changing the culture that fosters and encouraging it. Regulation should not and must not be the default option for policy makers because more regulation is not the answer to every corporate, community or personal failing.
We are a country with highly skilled, highly capable people running our businesses, helping community groups and making our country better. We are putting more trust in them, more trust in them to make the right choices, and we know that our people are up to the task.
I am proud of the progress that we have made so far, and I pledge there is more to come.