I've changed my mind about red tape, but cutting it won't solve everything
Business's third idea is for governments to cut back all the 'red tape' that has tied business up in knots and to improve planning and the approval of major projects. It's not hard to see how this would make businesspeople's lives a lot easier and add a bit to their profits.
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But here's the thing: it's equally easy to see that reducing excessive regulation and speeding up the approval of major investment projects and even ordinary homes could indeed make a probably small but worthwhile improvement to the economy's productivity.
Certainly, those hard-nosed folk at the Productivity Commission are convinced. In her speech on Monday, the commission's boss, Danielle Wood, gave some hair-raising examples of excessive regulatory requirements.
One provider told the commission it is required to complete 15 separate accreditation processes across the health and social care services. Another said it was accountable to 350 pieces of legislation and regulations, and has a minimum of 16 program audits every three years – many of which require them to provide the same information over and over.
Yet another service provider said the cost of repetitive audits and accreditation processes runs into the hundreds of thousands of dollars each year.
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Elsewhere, businesses complain of delays extending to years for the approval or rejection of major construction projects, and many months for ordinary homes.
Now, I used to be sceptical of demands to get rid of red tape, fearing they were disguised demands by business fat cats to be able to damage the natural environment wherever they saw fit and build housing anywhere and everywhere. But the greater specificity of the latest proposals has convinced me there's a real problem that is indeed wasting a lot of the private sector's time and money.
Part of the problem is government agencies responsible for protecting the environment, or occupational health and safety, or public safety who, in their zeal, set the highest standards without regard for all the other things we need to protect – including our standard of living.
They're like the French teacher who wants their students to spend all their time preparing for their French test, at the expense of all the other subjects they're being tested on.
But a further complication is overlap between our three levels of government. If businesses in particular fields are being regulated by federal, state and local government, with overlapping and conflicting regulations and separate forms to fill in, this is confusing as well as wasteful.
Loading
And then you've got the sad truth that government departments and agencies are constantly temped to abuse their power over the rest of us, and often do. We know how private monopolies commonly overcharge and give their customers poor service. They do this for no other reason than that they can.
But the government is also a monopoly, and its departments and agencies are just as commonly able to abuse their power over us. They are the law, we can't take our business elsewhere, and if it suits them to wait many months for their approval to build something, that's your problem, not theirs. They save a little by employing too few workers to keep the approval process to time, and you bear the cost of the delay.
The more you think about it, however, the more you realise that streamlining regulation, so that a better trade-off between the many conflicting objectives of government is achieved, and the many cases of overlap between the three levels of government, won't be easily or quickly done.
Maybe it would take a royal commission, with a continuing monitoring authority, rather than a three-day roundtable.
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I've changed my mind about red tape, but cutting it won't solve everything
Another favourite supposed productivity booster would be for the Albanese government to reverse the industrial relations changes it made in its first term, which were intended to shift the balance of bargaining power away from employers and towards employees. Business's third idea is for governments to cut back all the 'red tape' that has tied business up in knots and to improve planning and the approval of major projects. It's not hard to see how this would make businesspeople's lives a lot easier and add a bit to their profits. Loading But here's the thing: it's equally easy to see that reducing excessive regulation and speeding up the approval of major investment projects and even ordinary homes could indeed make a probably small but worthwhile improvement to the economy's productivity. Certainly, those hard-nosed folk at the Productivity Commission are convinced. In her speech on Monday, the commission's boss, Danielle Wood, gave some hair-raising examples of excessive regulatory requirements. One provider told the commission it is required to complete 15 separate accreditation processes across the health and social care services. Another said it was accountable to 350 pieces of legislation and regulations, and has a minimum of 16 program audits every three years – many of which require them to provide the same information over and over. Yet another service provider said the cost of repetitive audits and accreditation processes runs into the hundreds of thousands of dollars each year. Loading Elsewhere, businesses complain of delays extending to years for the approval or rejection of major construction projects, and many months for ordinary homes. Now, I used to be sceptical of demands to get rid of red tape, fearing they were disguised demands by business fat cats to be able to damage the natural environment wherever they saw fit and build housing anywhere and everywhere. But the greater specificity of the latest proposals has convinced me there's a real problem that is indeed wasting a lot of the private sector's time and money. Part of the problem is government agencies responsible for protecting the environment, or occupational health and safety, or public safety who, in their zeal, set the highest standards without regard for all the other things we need to protect – including our standard of living. They're like the French teacher who wants their students to spend all their time preparing for their French test, at the expense of all the other subjects they're being tested on. But a further complication is overlap between our three levels of government. If businesses in particular fields are being regulated by federal, state and local government, with overlapping and conflicting regulations and separate forms to fill in, this is confusing as well as wasteful. Loading And then you've got the sad truth that government departments and agencies are constantly temped to abuse their power over the rest of us, and often do. We know how private monopolies commonly overcharge and give their customers poor service. They do this for no other reason than that they can. But the government is also a monopoly, and its departments and agencies are just as commonly able to abuse their power over us. They are the law, we can't take our business elsewhere, and if it suits them to wait many months for their approval to build something, that's your problem, not theirs. They save a little by employing too few workers to keep the approval process to time, and you bear the cost of the delay. The more you think about it, however, the more you realise that streamlining regulation, so that a better trade-off between the many conflicting objectives of government is achieved, and the many cases of overlap between the three levels of government, won't be easily or quickly done. Maybe it would take a royal commission, with a continuing monitoring authority, rather than a three-day roundtable.
