IPA pushes Trump-style ‘one-in, two-out’ rule for red tape

The Australian, May 4, 2017

The Turnbull government could apply a Trump-style “one-in, two-out” rule to reduce the regulatory burden on small business, as new research reveals such an approach would have cut red tape by more than 107,000 pages since 2013.

Analysis by conservative think tank the Institute of Public Affairs found that if at least two regu­lations were scrapped for every new one introduced under the ­Abbott and Turnbull governments, there would be 107,885 fewer regulatory pages and 6990 fewer rules.

It follows revelations in The Weekend Australian that the number of pages of commonwealth environmental laws had ballooned more than 80-fold since they began in 1971 and were costing the nation $176 billion a year in lost economic opportunity.

Small Business Minister Michael McCormack said the ­Coalition had reduced red tape by $5.8bn in the past 3½ years but was “certainly open to considering how a one-in, two-out rule may work for small business”.

“By making sensible and simple changes to paperwork, we will enable Australian businesses to spend more time on their business — pursuing new ideas, growing and creating jobs — and less time on unnecessary paperwork, boosting competitiveness,” he said.

Declaring red tape was one of the “primary factors holding back prosperity in Australia”, IPA research fellow Daniel Wild said the rule being used by US President Donald Trump would provide a structured approach to reducing red tape.

Mr Trump signed an executive order in January requiring every agency that introduces a new regulation to find two existing regulations to be scrapped.

“Countries around the world have dedicated regulatory reform programs, but it is noticeably absent in Australia. This makes us less competitive and hinders our ability to attract international ­investment,” Mr Wild said.

“My main concern is the cumulative effect regulation has on our economy … We need to have a process that forces government agencies to think twice before they (add) regulation.”

The IPA said Tony Abbott had pledged to reduce the cost of inefficient regulation before the 2013 election but with “limited effect”.

In its report — “Reducing red tape in Australia: ‘One in, two out’ rule” — the think tank says red tape reduction has been “noticeably absent” from the Turnbull government’s platform in the lead-up to and since the July election.

The Turnbull government scrapped twice-yearly parliamentary red tape repeal days introduced by Mr Abbott, arguing there had been a “significant over­achievement” of its annual target to reduce regulatory costs.

Liberal Democrat David Leyonhjelm, who chairs the Senate committee looking at the effects and restrictions of red tape, said he was sceptical about a one-in, two-out rule. “As soon as you get into each individual item of red tape, somebody somewhere will scream ‘It’s really important and the sky would fall’,” he said.