IPA supports war on ‘strangling’ red tape

The Australian, August 14, 2019

Ahead of a crackdown on red tape, analysis has revealed that government regulation of the economy has risen to an unprecedented level.

The first comprehensive assessment of federal laws and regulations has found the number of restrictions increased almost 50-fold since 1975, the last year of the Whitlam government, according to the Institute of Public Affairs.

“The number of regulatory restrictions in laws and regulations — instances of ‘shall’, ‘must’, ‘may not’, ‘should’, ‘required’, and ‘prohibited’ — has leapt from 2000 in the late 1970s to 95,000 in 2015,” the IPA said in a statement based on joint research conducted with the US-based Mercatus Centre.

The analysis, which will soon be replicated at a state level and updated at a federal level to cover the past four years, found the extent of regulation was 20 per cent higher than in the US

The pioneering IPA technique used, which focuses on the use of restrictive words in regulation rather than simply counting pages, has been used to compare the regulatory footprint of the US and Canadian governments.

 

Federal Assistant Minister to the Prime Minister and Cabinet Ben Morton said the next wave of the Coalition’s red-tape reduction, kicked off by Tony ­Abbott in 2013, would be “surgical”. “We want to reduce the burden and unleash the animal spirits in business to grow the economy and create jobs,” he said, noting he would reveal which sectors would be the focus “in coming weeks”.

IPA research director Daniel Wild said red tape was “the single biggest impediment to economic prosperity in Australia”.

“Business investment is lower today as a percentage of GDP than during the Whitlam years because of red tape, which has kneecapped productivity growth and wages growth,” he said.

The IPA analysis also found the number of words in legislation and regulation per restriction had increased from about 100 in the late 1980s to nearly 200.

“The philosopher Harry Frankfurt argued in 2005 that the amount of bullshit in the world is increasing,” the authors noted.

Scott Morrison has lauded the government’s track record on red tape. “We set ourselves the goal of reducing the burden of regulation on the economy by $1 billion each and every year. And we succeeded. Between September 2013 and December 2016, this initiative yielded red tape savings of $5.8bn,” the Prime Minister said.

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    “The analysis, which will soon be replicated at a state level and updated at a federal level to cover the past four years.” Whilst that will be a good start. However, as we have posted previously, Local Government red tape which seems not to have included in the IPA study, is by far, “the single biggest impediment to economic prosperity in Australia” for small business and needs to be addressed and curtailed as a matter of priority.

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