In brief - Several deregulation priorities at risk of not being achieved
The Reform Council of the Council of Australian Governments (COAG) has reported that the deregulation priorities at risk of not being achieved according to schedule include OH&S, national trade licensing, regulation of chemicals and plastics, mine safety and directors' liability, as well as a number of other reforms.
COAG Reform Council presents report on progress towards deregulation
On 3 February 2012, the COAG Reform Council presented its third annual report to the Prime Minister on the National Partnership Agreement to Deliver a Seamless National Economy.
Twenty seven deregulation priorities and 17 areas of competition reform are provided for in the National Partnership Agreement. Facilitation and reward funding is to be paid to the states and territories by reference to certain criteria linked to the achievement of the 27 deregulation priorities.
The assessment of whether pre-determined milestones and performance benchmarks have been achieved before an incentive payment is made is the responsibility of the Reform Council. At stake are reward payments of up to $200 million in 2011-2012 and up to $250 million in 2012-2013.
The Council's report is the first which seeks to inform the Commonwealth government's decision as to whether or not the first tranche of the $200 million payment is to be made. The Council found that five reforms attracting reward payments are at risk.
Nationally harmonised occupational health and safety laws
The implementation of a nationally harmonised occupational health and safety system has been delayed because New South Wales, Victoria and Western Australia have not taken action to implement the model Work Health & Safety Bill agreed in December 2009.
On 5 May 2011, the NSW government introduced draft legislation to adopt the model bills, but they were amended in the Legislative Council. The amendments related to the right of the unions to bring a prosecution where WorkCover NSW and the Director of Public Prosecutions had decided not to prosecute. The amendments arose from a concern that a number of review procedures needed to be negotiated prior to the unions having the right to bring a prosecution action.
The Victorian government has indicated that it will not be in a position to proceed until a Victorian-specific regulation impact statement has been undertaken and evaluated. The Western Australian government has indicated that there are four areas of the model bill that it may not adopt.
National trade licensing system
The object of this priority was to establish a national trade licensing system to allow tradespeople in specified occupations to work in all Australian jurisdictions. Western Australia and the ACT have not enacted applicable legislation. Western Australia, Tasmania, the ACT and the Northern Territory have not enacted or commenced legislative actions authorising the National Occupational Licensing Authority to operate in their jurisdictions.
Chemicals and plastics
The Reform Council reported that progress on reforms to the regulation of chemicals and plastics is mixed. Three of 16 "early harvest" reforms being led by the Commonwealth (i.e. those measures which could be implemented reasonably quickly) remain incomplete.
Reforms related to the environmental labelling of chemicals are not running to schedule. Updated implementation plans for industrial chemical reforms have not been provided. Furthermore, the Commonwealth Attorney-General's department has not provided an implementation plan for agreed reforms to the regulation of security sensitive ammonium nitrate.
The reform agenda contemplated the implementation of a national mine safety framework to create a nationally consistent health and safety regime in the mining industry through the delivery of seven strategies, namely:
- nationally consistent legislative framework
- competency support
- compliance support
- nationally coordinated protocol on enforcement
- consistent and reliable data collection and analysis
- effective consultation mechanisms
- collaborative approach to research
Among other things, the Council has expressed concern that delays to the finalisation of core and non-core mine safety provisions, as well as the development of the mine safety database, could impact on the timely commencement of the reform and that jurisdictional variations may impact upon the establishment of a nationally consistent legislative framework.
Principles relating to the imposition of personal criminal liability for corporate fault by directors was agreed in 2009/10. However, the Reform Council was concerned that there had been no process at a multi-jurisdictional level to consider whether the reforms proposed by individual jurisdictions were sufficient.
Although COAG has set new milestones, the Council is concerned that the output for this reform may not be achieved on time.
For more information on this aspect of the reform agenda, please see our article Proposed reforms to personal liability of directors and officers under Corporate Fault Reform Bill 2012.
Legal profession, energy, heavy vehicle, rail safety and shipping reforms also at risk
The Reform Council also concluded that:
- the proposed regulatory reform relating to the legal profession to allow legal practitioners to operate in all jurisdictions without having to meet multiple professional registration requirements is also at risk
- certain competition reforms relating to the energy market are at risk
- the deadlines set for full implementation of the reforms contained in the Intergovernmental Agreement on Heavy Vehicle Regulatory Reform, the Intergovernmental Agreement on Rail Safety Regulation and Investigation Reform and the Intergovernmental Agreement on Commercial Vessel Safety Reform may not be achieved, with insufficient interim milestones being specified to track progress properly
Fulfilling reform agenda will bring multiple benefits
The Council has made some broad recommendations to the effect that COAG takes steps to remedy the deficiencies noted in the reform agenda.
Given the need for a long term strategy for economic and social participation, a national economy driven by competitive advantages and greater sustainability, the Council's "report card" serves as a timely reminder for all jurisdictions and industry participants to focus on those reforms which will be of national benefit. This is particularly the case given the acknowledged need to improve, for example, national productivity and workplace mobility and flexibility.
It is undoubted that the major economic reforms since the 1980s have significantly improved the efficiency of the Australian economy. The Commonwealth Department of Finance and Deregulation has estimated that 10 of the 27 business regulation reforms under the National Partnership Agreement will add approximately $3.5 billion per year to the Australian economy, with approximately $1.8 billion flowing to business.
However, a substantial amount of work remains to be done before those benefits flow. Hopefully, all significant market sectors will be substantial beneficiaries of further economic reform.
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