Struggling with a Tangle of Red Tape

05 May 2006

The Advertiser

By Katie Lahey
Chief Executive, Business Council of Australia

Today, South Australian Premier Mike Rann will join his state and territory counterparts and the Prime Minister for what promises to be one of the most important meetings in recent times for Australia’s future.

On the agenda at the Council of Australian Governments (COAG) meeting in Canberra will be at least two issues close to the heart of many businesses in South Australia: red tape and infrastructure.
Sweeping improvements at a state and national level are needed in both areas.

Costly and complex red tape has long been a source of frustration for business. But it is now proliferating at an alarming rate.

Australia-wide, the volume of red tape is growing three times as fast as the rate of economic growth. In 2003 alone, federal and state governments added 33,000 pages of new laws and regulation.

Red tape diverts valuable time and resources into box-ticking and form-filling. This means energy that should go into growing businesses and employing people is being wasted.

Ultimately this means a sluggish, less productive economy.

The state of Australia’s infrastructure is another looming barrier to locking in the nation’s current prosperity.

Our roads, rail, energy and water systems are the arteries of our economy. But the fact is this infrastructure has failed to keep pace with Australia’s recent economic growth.

Unreliable electricity supplies, for example, mean businesses cannot operate with certainty and confidence. The community also suffers when infrastructure is not properly planned to meet expanding demand.

The SA Government is making headway in containing red tape, with recent initiatives such as improving the methods it uses to measure the cost and other impacts of business red tape.

In fact, SA can point to a solid record on this issue, with the rate of growth of new legislation and regulation in recent years well below that of other states and the Commonwealth. But the fact remains: reviews and systems that don’t address the broader issue of red-tape duplication between tiers of government will only provide temporary relief rather than a permanent solution. The same issue applies to infrastructure.

Because our energy, transport and water systems do not stop at state borders, fixing present infrastructure problems and planning for future needs requires a joint approach between federal and state governments.

Like addressing the bureaucracy blow-out, major infrastructure decisions are ultimately issues that need a national as well as a state-based approach.
Reversing the growth in red tape on business and the community must be a priority for the meeting of COAG today.

Part of this must be an agreement to tackle the problem of overlapping and inconsistent regulation between different levels of government.
If necessary, this should be backed by financial incentives and penalties for those governments that don’t comply. COAG must also agree on a national integrated infrastructure reform plan that covers urban and rural water, energy, road and rail transport and urban growth needs for all states and territories.

There must be a system of national infrastructure audits every two years. This will give all governments, including SA, a report card on how major infrastructure is performing and areas of weakness that need to be fixed. All in all, there’s a lot riding on the COAG summit.

Second Thoughts
Fostering the future of educated youth:

  • We must help all our young people finish Year 12 or an apprenticeship, rather than seeing them leave school early for low-skilled jobs.
  • This is the best passport they have to future work and life opportunities.
  • If the completion rate for school or a vocational equivalent among 15-to-24-year-olds increased to 90 per cent by the end of this decade, the economy would be an extra $9.2 billion bigger (in today’s money) each year by 2040.
  • It benefits society by boosting the number of available workers and developing the potential of young people throughout their life.
  • It lessens the risk of young people moving into a life dependent on welfare.




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