David Leyonhjelm guest post on Red Tape

The crippling effects of red tape on the economy are unfortunately not restricted to the NSW housing sector.

As chair of the Senate Select Committee on Red Tape, I have so far introduced three interim reports – on the sale, supply and taxation of alcohol; the sale and use of tobacco and nicotine products; and environmental regulation, sometimes called ‘green tape’.

Unless you are a smoker or drinker, the first two might not be of interest. However, environmental over-regulation should be of vital concern to us all. The actual and opportunity cost runs into many hundreds of millions of dollars in lost or delayed investment. And that means a lot of employment opportunities for our fellow Australians.

The origin of the term “red tape” is generally attributed to the 16th century administrative system of the Holy Roman Emperor Charles V, which used red tape for priority documents that required immediate action.

Given that red tape has now come to mean pernicious, corrosive and difficult-to-eradicate regulation, it seems highly appropriate that Charles V is today more remembered for his army spreading syphilis across Europe and thence to the rest of the world.

Like its venereal legacy, the red tape legacy of Emperor Charles V continues to be spread through the incautious infatuations of his Australian political successors.

The Institute of Public Affairs calculates that red tape reduces Australia’s economic output by $176 billion each year, equivalent to 11 per cent of GDP. This cost is reflected in businesses that are never started, jobs never created, and the time lost adhering to bureaucratic requirements.

Throughout our inquiry, we heard again and again that environmental red tape has turned many project approval processes into a bureaucratic nightmare.

A prime example is the Roy Hill iron ore project in the Pilbara that required more than 4,000 licences, approvals and permits for its pre-construction phase, needlessly delaying the project and raising the cost. Likewise, the Carmichael coal mine in central Queensland spent seven years in the approvals process, fighting more than 10 legal challenges and requiring an Environmental Impact Statement running to 22,000 pages.

We have the means to eradicate some of this green tape scourge from our lives.

As we recommended, the Federal Government could bring forward its review of the Environment Protection and Biodiversity Conservation Act, avoid duplicating state laws and create a One Stop Shop – something the Productivity Commission also supports.

It could start focusing on the risks associated with non-compliance with legal rules, rather than the legal rules themselves, a risk-based approach that the Great Barrier Reef Marine Park Authority is already employing with obvious success.

And it could pest-proof section 487 of the EPBC Act that is currently being abused by environmental activists who block projects simply because they can. Since the introduction of the EPBC Act in 2000, the IPA estimates these delays have cost the Australian economy as much as $1.2 billion.
The Red Tape Committee heard countless tales of the adverse effect of native title regulations on project developments, the manipulation of land councils by environmental activists, and the impact of this on the impoverishment of Aboriginal people.

Amending the Aboriginal Land Rights Act to remove the ability of land councils to arbitrarily veto applications for exploration or mining licences would go a long way to assist both Aboriginal development and the economy generally.

To overcome landholder objections to mining that have paralysed the exploitation of minerals and energy, the committee suggested the Commonwealth, state and territory governments consider a system of statutory royalties for landowners.

But the Red Tape Committee can only make recommendations. It is time for governments to take the cure for the Australian economy’s own administrative social disease and start beating the clap out of over-regulation.

David Leyonhjelm is a Senator for the Liberal Democrats

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26 Responses to David Leyonhjelm guest post on Red Tape

  1. egg_

    “Green tape” – green on the outside, red on the inside?

  2. overburdened

    red or green tape is the end presentation of the bureaucratic process, much of it self generated by internal processes not seen by the punters and an unfeasible amount from external agencies.

  3. overburdened

    No meaningful easy fix, I meant to add

  4. “The Red Tape Committee”.

    So the answer to suffocating bureaucratic red tape in this country, is to set up a suffocating Bureaucratic Red Tape Senate Committee, which will generate suffocating bureaucratic red tape “solutions” to the problem of too much suffocating bureaucratic red tape.

    You can’t make this stuff up.

  5. NB

    ‘The Institute of Public Affairs calculates that red tape reduces Australia’s economic output by $176 billion each year’
    Congratulations to the IPA for providing this analysis, and to DL for promoting it. This figure should be shouted from the rooftops until people realize the appalling destructiveness of the regulation nightmare. I hope one day soon there will be a surge for freedom, with voting patterns to reflect it.

  6. I hope one day soon there will be a surge for freedom, with voting patterns to reflect it.

    Just so long as you conform to the Regulations.
    For a start, have you got your Freedom Surging Permit?

  7. Howard Hill

    I hope one day soon there will be a surge for freedom, with voting patterns to reflect it.

    Will it cut into the Football or the Block?

  8. Herodotus

    How about some guest posts from the other high profile party member – Mark Latham.

  9. manalive

    To overcome landholder objections to mining that have paralysed the exploitation of minerals and energy, the committee suggested the Commonwealth, state and territory governments consider a system of statutory royalties for landowners …

    The ‘Heaven to hell’ doctrine doesn’t apply to mineral rights in Australia however in the case of possible hydraulic fracking royalties to landowners there is a further legal complication in that at the required depth the pipes can run horizontally for kilometres from the drill site, so the gas can be extracted from beneath other’s land.

  10. John Constantine

    http://www.abc.net.au/radionational/programs/healthreport/vetch-scandal/3565992

    Another Australian export industry destroyed by their ABC.

    In 2017, the varieties of vetch grown in Australia are not visually substitutable for current lentil varities, but the ban still remains.

    The toxin in the seed coat is not the issue in current varities that it was in the vetch of twenty years ago.

    Only a small thing, but lifting the red tape that destroyed the vetch export industry would be a small step forward.

    [ yes, criminals in Asia killed poor people twenty years ago with the substitution scandal, and the death penalty was reported as used to punish some of the criminals. different vetch grown now though.]

  11. John Constantine

    http://centrestateexports.com.au/services/vetch.aspx

    Yes a small containerised export market exists for Australian vetch, but it is a very slow recovery for the industry.

  12. PoliticoNT

    a risk-based approach that the Great Barrier Reef Marine Park Authority is already employing with obvious success

    If I could just pick up on this comment. The GBR MPA has for the past twenty years stymied all attempts at an aquaculture industry in the area. Often we’re only talking about a low level, regional based federal bureaucrat who does the wrecking. My source? Head of aquaculture for CSIRO – who knows a thing or two.

    Leyonhjelm may be referring to another aspect of what the MPA oversees, but it’s an industry wrecker otherwise.

  13. RobK

    A mammoth task, keep up the good work.

    I shudder when people say “one stop shop”, even though I know it’s with the best intentions. My experience with that term relates to the WA dept of Agriculture/dept of Environment MOU of 1995 to 2004 relating to clearing native vegetation, where the emphasis was wholly and solely on the “stop” part of the “one stop shop”. It’s impact persists today.
    The take home message is streamlining a shit-house process can sometimes just make a shit-house outcome more guaranteed.

  14. karl

    Another Act that has cost our companies millions , not to mention the time delays and opportunity costs, is The Sustainable Planning Act 2009. Not sure if it is Federal or State but we have run into it across 3 states (NSW,Qld,WA).

  15. H B Bear

    What needs to be understood is that much of what provides livelihoods, wealth and benefits modern Australians enjoy would not be possible if attempted today. Can anyone seriously imagine the Snowy Mountains Scheme and the MIA passing Commonwealth and State environmental laws? As it is, the Murray Darling basin is under constant attack to allow fresh water to flow continuously out to sea despite historical photos showing the river mouth closed to the sea.

  16. Texas Jack

    And so the lone gun-toting Leyonhjelm is the last line of defence for sanity in Canberra. Once upon a time you could count on your local Liberal or Nats member to bring a shared commitment to small government to the local pub on a Saturday arvo and handle a crowd with ease. Now all they can stomach are tick-the-box fliers stuffed into mail-boxes wondering if constituents have concerns about diversity, what the government is doing to cool the planet, or private matters like who gets to whistle Dixie at the alter.

  17. Peter

    ” The crippling effects of red tape on the economy are unfortunately not restricted to the NSW housing sector.”

    For a long time I have railed against the effect of regulation on the housing sector. Ultimately I have been unheard and unsuccessful as have others – no one on either side of politics wants to know. What I thought was REALLY telling was a report by the Institute of Public Affairs which unfortunately is no longer to be found on their new web site (its been replaced by a much shorter report with a similar name refocused on problems in NSW specifically). But fortunately I kept a copy on my PC.

    What struck me were figures in a table at page 9 of that report that showed that between 1973 and 2006 land prices in Sydney rose 49.6 times. In Perth they rose 40.5 times. Not all that surprising you might say but here’s the thing. Adelaide land prices rose 69.0 times. Adelaide …….. the city with a dying economy, the population that its flooding interstate (except to the extent it is being propped up by government bringing in migrants – many of whom leave as soon as they can to go elsewhere). The city of empty shops and commercial buildings. But it is also the city of endless red and green tape, of urban boundaries and growth limits and planners who are determined to turn the pleasant suburban city of the quarter acre block into one of a wasteland of medium high density housing, cycle paths and public buses. A kind of antipodean Amsterdam if you will.

    Can anyone seriously believe that even from a low base it is justifiable that Adelaide should have land prices that grew 50% more than Sydney’s over the same period? Well, apparently those in power think it is not only reasonable it is inevitable. And under their control of course, it is. I keep asking myself why – is it because it is a way of picking the pockets of South Australians (land rates are higher on higher valued property so – more money for government) or is it a way of fooling the voting public into believing they are rich and that SA is not really dying? Or is it merely what it appears on the face of it – that we have had endless socialist governments who believe implicitly in the value of more and more and more regulation. All of the above I suspect. But what it does do is demonstrate exactly what happens by regulating and restricting supply – even in the face of flaccid demand. An object lesson in economics – sadly no one in power wants to listen.

  18. Kneel

    “So the answer to suffocating bureaucratic red tape in this country, is to set up a suffocating Bureaucratic Red Tape Senate Committee, which will generate suffocating bureaucratic red tape “solutions” to the problem of too much suffocating bureaucratic red tape.”

    But of course! As Sir Humphrey might say…

    HA: In order to ensure a smooth transition to the new regime of less red tape, we simply must have a committee and of course many inter-departmental meetings so that all potential problems can be identified and classified, and suitable solutions presented, discussed and modified until such time as a general consensus is reached on the appropriateness of the final solution. Since all departments are chronically understaffed, this will require the appointment of at least one secretary and 3 undersecretaries for each department that is likely to be affected, along with a principal secretary responsible for general oversight of the entire project. Given the scope of the changes – which we all fully support – this process is likely to require at least 5 years, after which time a review of the changes introduced since the beginning of the process must be undertaken, to ensure that the final report of recommendations is correct and up to date at the time of printing.
    It is also worthy of note that such a large reduction in the number of rules and regulations would, perforce, require less public servants to administer – at least, once the changes are complete. Such staff reductions would also require the hiring of additional staff in order to ensure a smooth transition and to make sure that such valuable and experienced staff do not have their talent wasted, and that if other suitable employment cannot be found for them, that they are not terminated without appropriate compensation and thanks for their selfless devotion to the endless task of instantiating and administering the governments agenda.
    BH: You mean we have to spend money in order to save money? Employ more people in order to reduce staff? There must be another way!
    BW: Perhaps we could run an advertising campaign: you know, “Red Tape binds the nation together!”

  19. John Constantine

    Trump is chewing the edges of America’s suicidal economic strangulation by removing what government he can.

    Impossible in Australia, as our quisling compliance class are entrenched and can shut the entire place down when any of them are threatened.

    Look at the rebound in Queensland public service under their eternal pony girl.

  20. Rohan

    For the moment, federal parliament can’t legitimately pass any further legislation. So we have a brief reprieve from the creation of new red tape.

    Is this what Sinc means as MT’s potential greatness?

    Speaking of which, reloaders in WA can’t get their hands on powder as no one will transport it. It appears the WAPol have made it so onerous on freight companies no one will touch it. This and other associated red tape has sent small rural firearms dealers broke or forced them to close their doors. Well that’s one way of removing firearms from society. Ban the transportation of ammo and reloading supplies. It’s just an inanimate object then.

  21. Diogenes

    Just up the road a smidge is the proposed Wallarah No 2 colliery. Whilst not the scale of Adani, It has been held up for 20 years , and state planning are expected to make a ‘ final’ for, the third or fourth time, decision sometime before Christmas. Of course once state planning has approved, then they have to go through the feds to get the development and export licences.

    The promoters have promised to hire local as much as they can , which includes Newcastle and the lower hunter, so there should be little or no fifo and to set up an apprentice training scheme, all in area of 30+% youth unemployment.

  22. Chris M

    Fine work, David.

    Well, fine talk at least. Good like that, voting actions not always…

  23. Louis

    Here’s a thought on cutting red tape David. How about the Senate stop having committees and ‘investigations’ on things that are not within the Federal government’s jurisdiction!!!!

    You lot ‘investigate’ something, which always ends in recommendations for more ‘red tape’ and the federal government go off on another redundant and confusing round of introducing federal red tape on top of the State and Local red tape.

    So my first suggestion for reducing red tape is to stop having Senators think they are some type of uber ombudsman and stick to dealing with federal legislation. Perhaps actually repealing some Acts and legislative instruments might be a fine place to start!

  24. Rohan

    Louis
    #2550878, posted on November 12, 2017 at 8:54 pm
    Here’s a thought on cutting red tape David. How about the Senate stop having committees and ‘investigations’ on things that are not within the Federal government’s jurisdiction!!!!

    And deprive the good senator the 5 figure sum to chair the committee? Horror the thought! #easymoney

  25. Malcolm Thomas

    The IPA calculates that feed tape costs the economy $176 billion per year

    Junk stats – repeat them at your own credibility’ peril.

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