Australia: Federal Government annouces new round of cuts to regulation

Last Updated: 7 April 2015
Article by Marcus Priest

The Federal Government recently announced it had saved the Australian taxpayers $2.3 billion in compliance costs by cutting red tape as it unveiled a new round of cuts to regulation.

The announcement by Parliamentary Secretary to the Prime Minister, Christian Porter, was part of the Government's third "repeal day", which included the release of the first annual deregulation report. It indicated that the cost of regulatory compliance as at October 2013 was $65.3 billion. The Treasury Portfolio accounts for the largest number of pieces of regulation – nearly 51,000 and accounting for 72 percent of the total cost.

"We set about changing attitudes towards regulation in government, in business and in the community," Mr Porter said on releasing the new report.

"We are instituting a cultural shift in thinking about regulation."

As part of the Government's commitment to cutting red tape, "deregulation units" have been set up in every government portfolio to identify unnecessary regulation and also regulation impact statements are required with every Cabinet submission.

I wrote after last year's first repeal day about the history of pledges by government around the world to cut red tape. I made the point that one man's red tape is another's safety net. Further, while it was the first such "repeal day", past governments undertook regular "house-keeping" to clean up statute books by correcting minor typographical errors in repeal redundant legislation.

Nevertheless, the first repeal day included significant measures to cut regulation, such as in relation to financial advisors. As a result, given that a number of them were contentious, only $1.4 billion of measures from the headline figure of $2.3 billion have been implemented, with the bulk of the remainder likely to be held up in the Senate.

The overall figure for the deregulation measures announced as part of the latest repeal day of nearly half a billion dollars requires some scrutiny. This figure includes government measures announced over the last six months that at first blush don't appear to be intended to reduce red tape.

The largest saving measure, said to arise from "making it easier to navigate around the ATO website" and find "relevant information more quickly", is said to be nearly $50 million, although there is no information about how this figure is arrived at.

Savings of over $10 million from changes to family tax benefit and cutting welfare payments like the School Kids Bonus are not fully explained, apart from a reference to a reduction in "compliance costs" – such as estimating family income at the beginning of the financial year. Cuts to industry grants programs are also said to deliver savings in "compliance costs" of $30 million.

In addition, the savings figure from new deregulatory measures needs to be set off against the costs of $178 million of new regulation. The most significant of these is the Government's new data retention measures, said to create additional cost of $74 million. Amendments to accounting standards for financial instruments adds another $32 million.

Like the first repeal day, this latest announcement involves significant "house cleaning" measures – repealing a number of redundant government advisory bodies such as the Natural Heritage Trust Advisory Committee – that has not met since 2010 – and the Biological Diversity Advisory Committee – that has not had members since 2007.

In addition, 870 amending and repeal Acts introduced between 1980 and 1989 will be repealed and the Statute Law Revision Bill (No 2) 2015 will correct typographical errors in legislation and repeal six spent Acts.

Even so, there are measures reported or announced since the 2014 Spring Repeal Day that will make a real difference. The most significant of these was the decision announced last year to relax restrictions on electronic devices during flight, delivering a saving of $18 million and introducing more flexible screening arrangements at Melbourne and Adelaide airports.

Other measures announced over the last six months include:

  • excluding certain types of low-risk animal feed for both stock and companion animals from the need for Australian Pesticides and Veterinary Medicines Authority regulatory assessment
  • removing the requirement for heavy vehicle operators of B-double truck combinations registered under the Federal Interstate Registration Scheme to fit additional spray suppression devices
  • lowering private health insurers' (PHI) regulatory capital requirements and simplifying reporting requirements
  • changes to the regulation of therapeutic goods to allow Australian manufacturers of medical devices to obtain market approval for most of their products using conformity assessment certification from European notified bodies
  • streamlining the financial reporting requirements for service providers under the Home Care Programme – the most significant change of which is the reduction in the number of annual financial reports needing to be lodged by providers, and
  • streamlining the 457 visa programme.

One notable initiative - said to deliver $41.4 million in savings - is an amendment to sections 18(2) and 23A of the Health and Other Services (Compensation) Act 1995. These amendments will remove the requirement for compensation recipients to submit a statutory declaration about benefits provided under Commonwealth Government programs for Medicare, nursing and residential care.

However, despite such initiatives, it is not quite the "bonfire of red tape" that was promised last year – it is more of a camp fire.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Marcus Priest
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