One Economy Needs One Set of Rules for Business

The BCA wants Australia’s state and federal governments to attack the growing tangle of business red tape and put in place a single, seamless set of rules for all businesses by 2010.

The fragmented economy we currently have creates a whole range of unnecessary burdens and costs for business and the wider economy, which have been estimated to be as high as $16 billion annually.

In its paper launched today, Towards a Seamless Economy: Modernising the Regulation of Australian Business, the BCA says a single system of business regulation – or a seamless economy for business – should be agreed to by the states and Canberra.

If the governments cannot agree to create a seamless economy, the BCA urges the federal government to step in and create national business schemes in key areas of regulation, allowing companies to opt out of inefficient state and territory systems.

“With Australia part of a global economy we need one national set of rules for business. There are 32,000 businesses operating across state borders, and they are confronted with different rules for each of our eight states and territories, sometimes duplicated by national regulation,” BCA President Greig Gailey said.

“Business regulation remains an outdated, state-based system that has more in common with the 1950s than the needs of an economy operating in a fast-paced, competitive, international economy.

“Under this regime, it’s little wonder new business regulation continues to grow three times as fast as the economy,” he said.

Mr Gailey said if the Council of Australian Governments (COAG) was serious about tackling federal–state barriers to a more productive economy, it must overcome its past inertia and create a seamless economy for business regulation as a matter of high priority.

“This includes completing harmonisation of regulation in the 10 so-called ‘hotspots’ of inconsistent and overlapping business red tape that were targeted for reform by COAG two years ago but on which we have not seen any real progress.

“The hotspots are major barriers to our economic activity in regulatory areas including occupational health and safety, building regulation and product safety.”

In its paper the BCA calls on COAG to:

  • Implement a seamless economy for business regulation by 2010.
  • As an immediate priority, complete harmonisation of the 10 COAG regulatory hotspots by the end of 2009, with remaining business regulations to be harmonised by 2010.
  • Implement processes to maintain a seamless economy in the future by better systems of business regulation making.

“As the Minister for Finance and Deregulation, Lindsay Tanner, highlighted recently, the OECD has found Australia is the world’s worst performer when it comes to regulatory harmonisation,” Mr Gailey said.

“The OECD confirmed what a raft of reviews identifying different examples of overlap and duplication has already highlighted. It’s now time for governments to get on and actually resolve them.”

“With no state elections for twelve months and a new reform mindset, backed by governments committing to a clear reform program, we have an unparalleled opportunity to make substantial headway towards achieving a seamless economy.

“Australians have known for decades what needs to be done to modernise Australia’s business regulation. What we now need is strong leadership to turn reform rhetoric into reality,” he said.