Life in the farce lane

With Charlie Bell reporting that taxation accounted for three quarters of small businesses' red tape burden, the Howard Government accepted most of his recommendations. Oh - and it introduced the GST. The GST’s high compliance costs have been widely attributed to the Democrats’ meddling. But administrative burden is implicit in the very nature of the GST - in its being itemised on each invoice and tracked through each chain of production.

Here’s a former Commonwealth Treasurer on the subject.

“A multi-stage VAT (i.e. a GST) was rejected fairly quickly because it would have imposed an enormous paperwork burden on both taxpayers and collecting authorities.”

The speaker? John Howard in 1981.

In fact no country has yet cracked the riddle of regulating without strangulating. But though we’ve led the world on reform on many fronts, things don’t look too promising here. My hunch is that, if any country ever cracks it, it will find that the art of regulating well is rather like running a very large, complex organisation well.

That requires leadership in which there is more alignment between word and deed - between the big and the little picture - than has been part of our own political culture for some time. It requires the development of regulatory institutions that are disciplined in their measurement of the costs and benefits of what they do, genuinely responsive to input from those they regulate and for those on whose behalf they regulate.

That is easy to say, but very hard to do. When governments are not ignoring their own "less red tape" slogans, they’re violating them with casual abandon. Red tape busting plans place great store in the role of Regulatory Impact Statements (RIS) in enforcing a cost-benefit mentality in regulation. But though they’re costly to produce, many are slipshod - some triumphantly so.

While Gary Banks and his colleagues beavered away on the latest red tape busting plan - probably the best ever - the Government’s controversial WorkChoices legislation was presented to Parliament complete with its very own RIS (to formally comply with the last red tape busting plan). Its entire analysis of WorkChoices’ “costs and benefits to employees” comprises a skimpy paragraph pointing only to its protection of employment standards.

Now you don’t need to oppose WorkChoices to recognise that this “analysis” of the packages effects on workers owes more to George Orwell than Adam Smith.

If we aspire to run one day, there’s no time like the present for learning to walk. We could start by holding our politicians accountable for their past undertakings, before imagining that their latest announcements are anything more than tokens.