Red Tape: Government Breaks Its Own Rules

This week’s annual report from the Office of Best Practice Regulation (OBPR) reveals that the federal government’s checks on red tape are falling short.

‘This independent assessment shows the federal government is failing to follow its own rules,’ said BCA Chief Executive Katie Lahey.

‘The government came to office promising business that it would target the regulatory burden as a way to boost productivity. This is an important promise. The best practice regulation process deserves full government support.

‘But the government’s overall performance is on a downward trend.

‘As regulation expands year after year, it becomes ever more important for government to show that any new rules will actually bring benefits to Australian society. As we see regulation increase, it will be harder to get the productivity gains Australia needs.’

The best practice regulation system aims to ensure that new regulations are a last resort, and are thoroughly scrutinised so that they are introduced only if it is clearly demonstrated that they are essential and at minimum cost to business and consumers.

Compliance with best practice regulation requirements in making government decisions fell from 90 per cent to 85 per cent in 2008-09. Publication of Regulatory Impact Statements fell even further, from 91 per cent to 84 per cent.

It is especially disappointing that the Treasury was the worst offender against the best practice requirements. This department, more than any other, should be able to assess the range of viable options – including non-regulatory options – and their costs and benefits.

The OBPR report also indentifies a number of regulatory proposals which, for ‘exceptional reasons’, were not subject to a regulatory impact assessment before being introduced.  These proposals – including important changes to industrial relations, private health insurance and tax measures affecting Australians working overseas – have significant implications for business.  The government’s best practice processes require that their impact is assessed within one to two years after they are implemented.  Given the nature of those proposals it is essential that this requirement is properly met.

‘Overall, this is a disappointing report card for the federal government,’ said Ms Lahey.