This month the Coalition released the Coalition’s Policy to Boost Productivity and Reduce Regulation (Policy). The Policy seeks to transform and build on the Labor Government’s regulatory reform agenda, which it states has failed. Notably Prime Minister Rudd has adopted a number of these Coalition policies as part of what he describes as the ‘national competiveness agenda’ including promising to reduce green tape by streamlining the environmental approval process to remove duplication between state and federal government processes, which former PM Gillard promised and abandoned.
Central to the policy is the Coalition’s “fundamental commitment to reduce the red tape cost burden imposed on the Australian economy by $1 billion per year”. Cuts will be implemented by reforming the process by which new regulations are created, implemented and reviewed, cutting existing regulation, reforming existing regulatory processes and implementing “sensible whole-of-government initiatives”, mirroring the administrative and legislative measures that we have seen in existing Coalition states (Victoria, New South Wales and Queensland, and Western Australia) [see table below].
The Coalition Policy
- Will require each department and agency to audit and quantify the cost of current regulation administered by that department and create a dedicated unit responsible for driving red tape reduction, requiring the unit to meet reduction performance targets. To this end, remuneration of department heads will be linked to proven regulation reduction.
- Aims to dedicate two parliamentary sitting days per year to the purpose of repealing unnecessary and redundant legislation. Further responsibility for deregulation will be moved from the Department of Treasury to the Prime Minister and Cabinet and concentrated in a new unit for this purpose. The Office of Best Practice Regulation (OBPR) will be moved to sit under Prime Minister and Cabinet with Cabinet appointing a new Executive Director, with the aim of sheltering the Office from political or bureaucratic pressure.
- Make Regulatory Impact Statements a mandatory part of all submissions to cabinet, required to quantify the financial cost to business and the community. Regulation which does cause financial burden will be required to be offset in other areas of that community or industry. Further, all new regulation will now be subject to a post implementation review five years after enactment.
- Incorporate deregulation into the standing agenda for the Council of Australian Governments (COAG) for the purpose of reducing duplication in regulation and ensuring a reduction in inter-jurisdictional costs. Further, Commonwealth policy will encourage a move toward harmonisation in cross-border regulatory practices in Australia.
Coalition policy commitments relating to green tape reduction
- Reducing regulatory uncertainty through better and more consistent guidance and advice from Commonwealth regulators;
- Replacing mandatory reporting requirements with independent and random audits;
- Supporting the adoption of a risk based approach to enforcement by Commonwealth regulators. The Coalition states that it will develop and implement a whole of government risk management framework for Commonwealth regulators;
- Repealing the carbon tax and associated bureaucracy including abolishing the Clean Energy Finance Corporation, the Climate Change Authority and Energy Security Fund;
- Providing a one-stop shop for environmental approvals by simplifying the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act) to create a single approvals process for all environmental approvals at state level. While standards will not be changed, the process of approval will be streamlined;
- Commissioning an audit of all environmental legislation and regulation at State and Federal level to identify “unworkable, contradictory, or incompatible green tape”.
Implications for business
- The Coalition’s Policy isn’t clear as to whether the streamlining the EPBC Act will also involve an overhaul of the States’ assessment and approval regimes. Note that, in early 2012, COAG discussions indicated that the current Commonwealth Government was only willing to relinquish its approval power if all the States adopted a uniform assessment and approval process. This would be in direct conflict with a Bill currently put forward by the Greens seeking to amend the EPBC Act so the Commonwealth Minister’s approval power cannot be relinquished to the States.
- Current conditions of approvals under the Commonwealth EPBC Act require annual compliance statements or reports to be provided to the relevant regulator and made public. A move from mandatory reporting requirements to “independent and random audits” may result in formal annual reports no longer being required. However, companies would still need to ensure and maintain evidence of compliance with the approval conditions so they have sufficient information in the event of an audit. In this respect, it is unlikely to reduce the compliance effort required of business.
- Green tape reforms, if implemented, will remove or reduce some environmental regulatory obligations (for example, assessment and approval required for low risk activities). They may also improve the efficiency and avoid duplication associated with environmental assessment and approval processes. Compliance and enforcement activities of regulators may also become more targeted to higher risk activities and contraventions of environmental laws. However, as noted above, none of these reforms reduce the need for business to maintain environmental management standards and have systems in place to demonstrate due diligence and compliance.
Snapshot of Green Tape Reduction State by State
Click here to view table.