Hanging by red tape

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  Can anyone name a single law repealed, a single quango quashed, a single agency suttered?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.

and

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.

If you tell a lie big enough and keep repeating it, people will eventually come to believe it. 

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.
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38 Responses to Hanging by red tape

  1. stackja

    Many voters expect government to stop certain people from making mistakes.
    Red tapes is there to help these people. What could possibly go wrong?

  2. atomics

    What percentage of parliamentarians have worked a minimum of 5 years self-employed or running a small business?

  3. Pyrmonter

    TAFKAS is a bit harsh on Graeme Samuel. Would he have preferred his predecessor, Fels; his successor, Mr Unconscionability and Mr anti-market, Rod Sims?

  4. notafan

    Budget axe: the small government agencies abolished by Abbott

    the list

  5. Bruce of Newcastle

    Compare and contrast…

    Deregulation explodes under Trump, 13 regulations killed for every new one, $33B saved (23 July)

    That is despite die-in-a-ditch total war from the Democrats.

    Tony Abbott at least had deregulation days to remove red tape, which Turnbull squelched. Yet another reason why Turnbull was so appalling.

  6. nice try @notafan.

    note the words – merged, consolidated and abolished. how many where actually abolished. the link to the list is somehow gone.

    public service head were replaced.

    any legislation repealed? any budget programs terminated? any regulations removed?

  7. notafan

    What about Flannery’s mob? Pretty obvious that one.

    Gillard created a bunch of stuff that went pretty quickly iirc

    the list is here!

  8. Des Deskperson

    ‘nice try @notafan.

    note the words – merged, consolidated and abolished. how many where actually abolished. the link to the list is somehow gone.’

    Well, in December 2013, there were 162,560 APS employees

    In December, 2018, there were 147,163

    A loss of 15,397 APS jobs!!

  9. Chris M

    Good points Takfas. I haven’t heard of any regulator reduction, only increases. And militant state and local govt officials bent on shutting down small business operation & expansion.

    Now I heard on the grapevine there is apparently some new payroll thing coming from the tax office but no info has yet been sent out about it.

  10. Frank Walker from National Tiles

    The way to end regulation is to cut government spending.

    The mermaids and cockroaches need to be paid fat salaries.

  11. Frank Walker from National Tiles

    Single Touch Payroll?

    You mean, all my employees are now contractors!

  12. Dr Faustus

    Morrison said the government’s previous red tape-cutting initiatives had created savings of $5.8bn.

    Well, duh, Spartacus has failed to read the quote properly.

    As we all know, the doublespeak term “savings” means revenue retained by government that properly should have gone back to someone else from where it came, or costs passed on to the suffering herd.

    As a SME owner/operator I have no difficulty believing that the Commonwealth budget bottom line is bulked out by $5.8bn (no doubt across the forward estimates) by ‘red tape savings’ delivered at my fucking expense. It certainly isn’t flowing through mine.

  13. Squirrel

    Cutting (or at least pretending to) red tape seems to have become a bureaucratic industry in itself, with, no doubt, lots of lovely busy work in the form of task forces, consultancies, reviews etc. etc. to identify what might be cut, to consult on the implementation of such cuts (with backsliding and watering down always the preferred option), and then follow-up reviews and evaluations of anything that is actually cut.

    I will believe they’re serious when the instructions for the annual income tax return, even for people with very simple tax affairs, are readily comprehensible to someone who does not have a sophisticated grasp of written English, and can all be found in one fairly brief document, without the need to search for all sorts of details on the ATO website.

  14. Atoms for Peace

    We need to set up special economic zones with eff all red tape barring OHS.

  15. Shy Ted

    It was an odd, geeky campaign promise for a populist presidential candidate to make. But when Donald Trump in 2016 pledged to kill two Obama-era regulations for every new one, crowds went wild.
    Those cheers stuck with him when he moved into the White House, and he put his promise into an executive order. And now as he opens his reelection campaign, Russ Vought, acting budget office director, has delivered the results sure to win even more rally cheers.
    “We’ve hit 13 to 1,” he told a Heritage Foundation conference on federalism. And cutting so many regulations, he added, has saved taxpayers $33 billion.

  16. Nob

    SMEs account for 60-70% of employment in most developed countries.

    Perceptible difference in Australia seems to be the proportion that are providing services to government , or to SMEs in regulation compliance.

  17. Nob

    Frank Walker from National Tiles
    #3114026, posted on July 23, 2019 at 5:30 pm
    The way to end regulation is to cut government spending.

    Wrong way around. Way to cut spending, or “prevent diversion of valuable resources into valueless work”, is cut the bodies. As long as they exist, they will grow and metastasize. No government agency ever voluntarily said, “Our job is done here” and disbanded itself.

    Start, as Abbott kinda did – kinda sorta – by eliminating duplication of state by Fed.

  18. EJ

    @hzhousewife…You have identified the recent infuriating red tape for Micro Businesses.
    So..being a user of an Accounting & Payroll (desk top version) fully paid outright subscription since 98/99 @599.00 back then, now paying annual $ 1200.00 for the priveledge of using it & any updates, tax scales & compliance reports. Great, so now the Accounting software provider are forcing subscribers to Online versions that are proving to be challenging at best that included the STP compliance. Meantime, the Accounting software provider have decided not to support any updates for any desktop versions from September. If you wish to stay on a desk top version & not migrate to the “Cloud & Online” STP reporting has caused massive headaches, as you now have to pay monthly fees to a provider that can upload your STP requirements if you do not have that option thru the accounting software. Endgame..you must comply with ATO. Time & money out the door!

  19. Nob

    EJ – so minimum $100/month outgo on one item alone, before you’ve even made any revenue.

    I love all those lefties who keep cranking up the burdens and then loftily allege you’re a poor business person if you can’t keep up.

  20. egg_

    Single Touch Payroll?

    You mean, all my employees are now contractors!

    Move ’em off the books?

  21. Fess

    Sorry, but I’m an engineer, not an economist. That 36% of GDP contributed by the three levels of government stopped me in my tracks. Can one of you Cats tell me what government does that increases net productivity? I thought that anything that could be called government productivity (?) comes at the opportunity cost of what could have been done with the money taken out of the economy by taxes.

  22. MPH

    Some of the 36% is counted in the 57%, they are not mutually exclusive and plenty of people get rich skinning the taxpayer. So big business is definitely more than 7% of GDP.

  23. atomics
    #3113958, posted on July 23, 2019 at 3:54 pm
    What percentage of parliamentarians have worked a minimum of 5 years self-employed or running a small business?

    I’ll have to look closer, but as far as I know the only federal politicians who fit that mould are Ken O’Dowd, George Christiansen, Pauline Hanson, & Susie MacDonald,
    A few weeks ago this group included the now departed Fraser Anning & Wacka Williams.

    So about 1.5%

  24. Elizabeth (Lizzie) Beare

    I’ll have to look closer, but as far as I know the only federal politicians who fit that mould are Ken O’Dowd, George Christiansen, Pauline Hanson, & Susie MacDonald,

    Perhaps these four could give a seminar, compulsory for other politicians, on the problems of red tape for small businesses. Educating the politicians is the first step. Most of them haven’t thought about it and have no idea. Make filling in some of the forms and toting up the overall costs a part of the seminar, so it’s experiential. They’d love it. 🙂

  25. yarpos

    “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”

    That’s not the Harvard Law Review, that’s a Yes Minister script

  26. Entropy

    Start, as Abbott kinda did – kinda sorta – by eliminating duplication of state by Fed.

    Yeah, he did nothing
    In fact the duplication has increased. Feds are no good at services, but they are trying to do more and more. From A Canberra Distance, everything looks wonderful, a few jiggles that extra dollars will surely fix.

    Examples of duplication in rural areas:
    Public Health Networks duplicating state services (poorly). In fact how is this LNP creation any different to the Rudd Medicare Local?
    A new Rural Investment Corporation duplicating state rural adjustment authorities (really badly). Creating an unintended race, by the way, to risk replacing private bank lending to the rural sector. This outfit has actually started offering $5 million loans to producers! I suspect it relies on state RAAs to help it do anything too. Anyway shouldn’t exist. Thanks Barnaby you communist.
    Increasing direct payments and grants to local governments to bypass states, regardless of capacity of local government to deliver. One size fits all, so Windorah gets the same as Orange. And what could go wrong in small communities where nearly everyone is a relative of the mayor? And aren’t local governments instruments of the State?
    Direct up front grants to reef plan service providers
    Murray Darling Basin Commish.

    A key feature of these is that they are replacements of RGR era boondoggles or an expansion of the role of federal government in areas it in the past it did notoperate. And it doesn’t have a clue about life outside the Canberra socialist utopia bubble that always has as a first solution gobs of OPM to be the headline be of the media release.

    Life in Georgetown is completely different to a third gen public servant. It reminds me of that Bette Midler song, although of course in this case the APS weenie is God. everything looks wonderful from a distance. The quarterly report says so.

  27. Dr Fred Lenin

    We are now having “triplication “with activite regressive gangrene and globalite councillors lust for power . Migrants and so called refugees , the dysfunctionals brought in to stack the welfare system and increase the number of government employees to look after their demands . The feds have a huge syatem to bring them here and dump them in the cities then give them taxpayer funded welfare which they rort as much as they can with almost no fear of exposure to punishment , then the state aparat houses them and supplies medical treatment most of them need rort and they fill our psychiatric facilities with inbred people . Now I see the Darebin Soviet in nelbourne has a department”we welcome migrants and refugees” with highly paid gangrenes and regressives to look after their needs The local bogans can go and get stuffed , if they are not fauxberiginal . Social Justice is easy with other peoples money and gives a good feeling of superiority ,dont it comrades ? .

  28. Paridell

    The ‘big lie’ quotation from Goebbels is bogus. There is even a website devoted to exposing it: https://www.bytwerk.com/gpa/falsenaziquotations.htm

    Goebbels always maintained that he dealt in truth. It was Hitler, not Goebbels, who defined the doctrine of the big lie. But he too maintained that he dealt in truth. He attributed the big lie to “the Jews, with their unqualified capacity for falsehood, and their fighting comrades, the Marxists”:

    “… in the big lie there is always a certain force of credibility; because the broad masses of a nation are always more easily corrupted in the deeper strata of their emotional nature than consciously or voluntarily; and thus in the primitive simplicity of their minds they more readily fall victims to the big lie than the small lie, since they themselves often tell small lies in little matters but would be ashamed to resort to large-scale falsehoods.

    “It would never come into their heads to fabricate colossal untruths, and they would not believe that others could have the impudence to distort the truth so infamously. Even though the facts which prove this to be so may be brought clearly to their minds, they will still doubt and waver and will continue to think that there may be some other explanation. For the grossly impudent lie always leaves traces behind it, even after it has been nailed down, a fact which is known to all expert liars in this world and to all who conspire together in the art of lying.”

    – Mein Kampf, Vol. 1, Chapter 10

    Ironically, the idea that Goebbels formulated the doctrine of the big lie is so widely circulated on the Internet that it is very widely believed, even though it is baseless.

  29. Kneel

    Cutting (or at least pretending to) red tape seems to have become a bureaucratic industry in itself,…

    Perhaps someone with more time to spare can find the “Yes, Minister” clip where, in order to reduce the number of public servants, Sir Humphrey suggests they need to hire more public servants – to administer the cuts, you see.

  30. Kneel

    …annual income tax return, even for people with very simple tax affairs, are readily comprehensible to someone who does not have a sophisticated grasp of written English, and can all be found in one fairly brief document,…

    Easy.
    Flat rate based on income.
    No deductions.
    Rate to be set such that 90% of taxpayers will pay the same or less than previous arrangements.
    No tax return required.

    Biggest issue: what to do with the excess of “tax agents” and accountants! That’s one “expanding” or “growing” industry that should never need to exist in the first place!

  31. Petros

    Thanks for brining up the single touch payroll, nzhousewife. I fail to see the need when a business is already paying their workers electronically. What are the supposed tax agents doing? Who issues the group certificates?

  32. Elderly White Man From Skipton

    Two zones of red tape and feather beds I would target: the ridiculous bureaucracy in university admin and “research”. Let’s make teaching outcomes the metric and give the researchers a tough competitive test to earn grants. The other one is super. It’s ridiculous. It simply needs a brutal competitive regime based on exoense ratios and net performance – and get rid of all the nonsense “active” management.

  33. Frank Walker from National Tiles

    The insane bigoted superannuant undeserving of his retirement has just said “we need the ARC and to regulate retirement funds” – something that the government has created, built a bureaucracy around and spent billions on in recent years.

    His trolling skills are pretty good, if a little too obvious.

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