The Morrison government has a laser like focus on reducing red tape and green tape. Yeah yeah. Blah blah. They talk a big game but are really playing tiddlywinks.
Take today’s latest example. Just reported in the AFR:
The prudential regulator has whacked Commonwealth Bank’s superannuation arm with additional licence conditions, 17 months after it was revealed to have charged dead customers financial advice fees.
Importantly, let’s make it abundantly clear. TAFKAS is not excusing or endorsing what CBA is alleged to have done. BUT.
APRA is the prudential regulator. ASIC is the conduct regulator.
APRA issues banking licences. ASIC issues financial services licences.
Why then is APRA slapping conditions on CBA’s banking licence for conduct related to its financial services (not banking) business?
Why. Because hey. They are regulators, they need to be tough and banks are bad and the budget needs some more penalty dollars.
Red tape and green tape does not just exist in the form of rules written on paper. It also takes the form of vague and fuzzy regulations and laws, written by lazy and inept legislators, which give apparently near endless powers to regulators to go beyond their mandates. It creates uncertainty. It creates risk. It necessitates lots of external lawyers, accountants and compliance advisors. It adds to the cost of doing business which then translates into the price paid by consumers.
Let TAFKAS repeat. Complexity is a subsidy. It does not hurt the large organisations. They have the power to pass on the costs. It hurts smaller businesses and kills competition.
But the lack of competition is really what regulators want. They want a handful of large and fat clients; such that the regulators don’t even need to get out of their ergonomic chairs (or off their yoga balls) to slap around.
The next time the economic commentariat goes on about poor retail sales figures being a drag on the economy, perhaps they might be asked why are the retail sales figures poor? Could it perhaps be the drag on production from laws, regulations, taxes and regulators? Could it be? Just maybe?
Laser focus on reducing red and green tape. Yeah right.
Look at what they do not what they say. Even better. Look over there while they restructure the public service to implement policies that don’t exist.