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Life in the farce lane

By Nicholas Gruen - posted Thursday, 14 September 2006


Any discussion of the government’s latest bout of red tape busting should begin with Lord Atkin’s great joke about rowing being the perfect preparation for public life. Why? Because rowing allows you to face in one direction while travelling in the other.

Over the decades a cycle of red tape busting has become evident going back arguably to Malcolm Fraser’s “razor gangs” and certainly to Bob Hawke’s time.

Taking the face of a clock at twelve on the dial, in response to the groans of business about over regulation, politicians get into “something must be done” mode. By 3 o'clock a public inquiry or departmental committee is appointed.

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Casting round for ideas it produces a red tape busting plan (remarkably like the previous one). By six o'clock we’re implementing the plan. By nine, things are pretty much back to normal and regulation proceeds apace - the spirit and even the letter of our measures to counter red tape are now routinely violated.

So, by the time the big hand points to twelve well ... “something must be done”.

Bob Hawke announced the policy of “minimum effective regulation” in 1986. He established the small secretariat that became the Office of Regulation Review (ORR). Its job was to raise the bureaucracy’s awareness of good regulatory principles and to act as a gatekeeper preventing bad regulation being passed.

In 1991 and again in 1994 Keating’s strategists whispered into their bureaucrats’ ears “we need something on red tape”. On each occasion the modest role, status and resources of the ORR were (modestly) escalated.

In 1994 bold plans were announced to ensure that Regulatory Impact Statements (RISs) accompanied all business regulation. And a Council on Business Regulation was announced to oversee the battle against red tape.

The actual implementation of these plans was derisory.

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Nearly three years after the announcement, the ORR published the bureaucracy’s compliance with these policies (though several more years passed before individual agencies were fingered with disaggregated reporting). Seventy-eight per cent of regulations were non-compliant with another 14 per cent partially non-compliant. That’s not a misprint - just one in twelve regulations was fully compliant!

It took over a year for the Council on Business Regulation to meet at all and it managed just one more meeting before rightly and unceremoniously passing into oblivion. Who cared about these transgressions and idiocies? No one much. There was no scandal, and nothing that anyone said in parliament or outside managed to gain “traction” as they call it these days.

Enter the Howard Government with a bold new promise - to cut red tape in half for small business. It appointed the late Charlie Bell - then a youthful CEO of McDonalds Australia - to tell it how. Charlie didn’t know, but the Canberra bureaucrats working with him rounded up the usual suspects. The report’s recommendations? Strengthen RIS requirements and the gatekeeping role of the Office of Regulation Review.

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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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