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Regulation made easy is no joke!

By Nicholas Gruen - posted Thursday, 12 May 2005


With results ranging from funny to tragic, regulation to detect or prevent wrongdoing often imposes mounting inconvenience on the public while leaving wrongdoers completely untouched.

Last week, 24-year-old Duncan Shephard from Caboolture was fined $750 plus court costs and given a 12 month good behaviour bond.

His crime? Telling a joke.

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Shephard was at Canberra Airport travelling back to Queensland and joked that he had guns and cocaine in his luggage. He’s in good company. Groucho Marx was detained by customs officials after filling in a form giving his occupation as “smuggler” and asking his wife loudly what she’d done with all the opium after they’d inspected his luggage.

This newspaper reported police saying that jokes at airports occur far too often. My sentiments entirely - though we shouldn't forget all those jokes made outside airports. Even as you read this, jokes are being told. Several every second can amount to hundreds, even thousands every hour. And that’s just in Greater Brisbane. And jokes are just the tip of the iceberg. Research indicates that so called “quasi-jokes” are even more common - wry routines, animated asides, sardonic shrugs, risible recollections, frivolous frippery.

This problem, of compliance burdens that are substantial enough to inconvenience the public but not to stop wrongdoing, is replicated in most of our dealings with authorities.

Take the regulation requiring banks to do “100 point” ID checks on account holders. It’s certainly cumbersome. Why doesn’t a passport count as 100 points? Obtaining one involves close scrutiny and (we hope) a thorough check against birth records. Still the system requires something more. I guess the reasoning is that a criminal might forge a passport, but they’ll never forge a credit card bill.

Yet at the same time you can get a referee of suitable standing quite unknown to the bank to vouch for your ID, a process that must be routinely used by those wishing to rort the system. I’ve signed those forms as a referee and never once been rung for confirmation of my identity. And if one bank has gone through this rigmarole, why can’t it confirm your identify to other banks?

Most regulatory problems are usually there in spades in the tax system. Remember the early days of the GST when the requirement for oodles of information on Business Activity Statements was justified in part as fighting avoidance. Reasoning: You might lie in one box on the GST, but you’ll never lie in two.

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But what more fitting, what more tragic place to ram home the farcical nature of some approaches to regulatory compliance than our old friend airport security? I recall a time when a few coins and or a small belt buckle triggered a personal inspection with hand-held metal detectors. Not any more.

A friend of mine carried a nail-file onto a plane in his suit coat. No problems! Coming home with the nail-file in his briefcase it was detected and confiscated. When my friend asked why he had been given metal cutlery with his airline meal security officers called it wryly, one of life’s little ironies. After a brief absence post September 11, metal cutlery on board is making a comeback in response to customer complaints about plastic.

Airport metal detectors no longer react when I walk through them with the following load:

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First published in The Courier-Mail on May 4, 2005.



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About the Author

Dr Nicholas Gruen is CEO of Lateral Economics and Chairman of Peach Refund Mortgage Broker. He is working on a book entitled Reimagining Economic Reform.

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