It has been said, often, that the Abbott-Turnbull-Morrison governments have undertaken a program of “red-tape reduction”. But who has said it? According to the Guardian:
(Prime Minister) Morrison said the government’s previous red tape-cutting initiatives had created savings of $5.8bn.
Really. Have they. Can anyone name a single law repealed, a single quango quashed, a single agency suttered? Any one? Any one? Bueller? Bueller? Bueller?
How about this one from ASIC. In its report on cutting red tape, ASIC advised that:
ASIC has helped the law work better for business by granting over 700 applications for relief between 1 October 2018 and 31 March 2019.
So let’s get this right. To reduce red tape suffocating your business, you need to ask ASIC’s permission to ignore the red tape. You have to ask nicely, politely and almost certainly with the assistance of a high priced lawyer. And you have to wait until ASIC decides that you are worthy. And only if ASIC likes you.
Is that red tap reduction? How’s that for $5.8billion of savings. Savings for who? Certainly not the business sector.
In their latest warm and fuzzy contribution, likely a Ken Henry legacy, NAB noted:
Australia’s SMEs are the backbone of the Australian economy, employing seven million people and accounting for 57 per cent of the nation’s GDP.
Australian SME owners say they devote too much time to dealing with red tape. In fact, 48 per cent feel overwhelmed by the complexity of running a business and 57 per cent think they spend too much time working in their business rather than on it.
And what does NAB propose or recommend that government do about this?
Crickets. Why? Because red tape and regulatory complexity is a subsidy. A subsidy from small business to big business. Small business does not have the time or money to engage in writing clap trap reports like this or in dealing with red tape.
And for all the talk about woke capital and the identy politics of big business, small business does not have the time, money or the inclination to engage in this crap.
But let’s do the sums. Let’s accept NAB’s number that SMEs account for 57% of GDP. Add in the 36% (odd) of GDP that the 3 levels of government account for. What does that leave? 7% of GDP is big business in Australia. Yet 90% of laws and regulations and regulatory effort political attention is spent on the 7%. The 7% who are quite happy for red tape to increase because it creates barriers to entry and protects them from smaller competitors. Enterprise agreement anyone?
State monopoly capitalism by proxy.
But hey. The Prime Minister says that said the government’s previous red tape-cutting initiatives had created savings of $5.8bn. So it must be true.
Consider the following description (published in the Harvard Law Review) of a typical US administrative agency and then consider the recent hubbub around APRA:
- The Commission promulgates substantive rules of conduct.
- The Commission then considers whether to authorize investigations into whether the Commission’s rules have been violated.
- If the Commission authorizes an investigation, the investigation is conducted by the Commission, which reports its findings to the Commission.
- If the Commission thinks that the Commission’s findings warrant an enforcement action, the Commission issues a complaint.
- The Commission’s complaint that a Commission rule has been violated is then prosecuted by the Commission and adjudicated by the Commission.
- This Commission adjudication can either take place before the full Commission or
before a semi-autonomous Commission administrative law judge.
- If the Commission chooses to adjudicate before an administrative law judge rather than before the Commission and the decision is adverse to the Commission, the Commission can appeal to the Commission. If the Commission ultimately finds a violation, then, and only then, the affected private party can appeal to an Article III court
Graeme Samuel, a not so successful regulator (hmmm) has lead a review into another regulator (APRA) and has recommended that this regulator (APRA) be given the power to decide who gets and does not get what jobs in a private company and how much they get paid or not paid. And the government has agreed!
Red tape reduction oh yes. This will end well. Oh yes.
But hey. The government’s future red tape-cutting initiatives will created savings of $100 gazillion dollars of savings and create 15 trillion jobs.
Everyone repeat after TAFKAS. Ignore the first bit, but emphasise the second:
- Increasing regulation will reduce red tape.
- Destroying jobs will create jobs.
- Creating household budget deficits will deliver a government budget surplus.