THE federal government’s upcoming red tape repeal day is set to deliver multi-million dollar productivity gains to the agricultural sector, according to Parliamentary Secretary to the Prime Minister Christian Porter.
Mr Porter presented farm industry stakeholders with a detailed analysis of the Coalition government’s red tape reduction agenda, when he spoke at the annual ABARES Outlook conference in Canberra last week.
The former Western Australian Attorney General and Treasurer entered federal politics at the 2013 election and is being tipped by some commentators as a future Prime Minister.
A commercial lawyer before entering politics, Mr Porter showed ABARES delegates how the government’s red tape reduction and cost-saving agenda was being forged by an intricate evidence-based approach to political decision-making.
“I think it’s true beyond reasonable doubt, based on all the evidence I’ve seen, that in 2015 there will be less federal regulation in the Australian economy than there was in 2014,” he said.
“The stock of federal regulation measured by its cost to the economy has decreased this year compared to last. I’m certain of that, beyond reasonable doubt.
“I think it’s highly likely that this is the first time that there has been a downturn in the amount and cost of federal regulation in the economy, in several decades, perhaps ever.
“It’s highly likely that it’s the first time in our history that any federal government has put in place a concerted plan to reverse the costs of regulation.”
Red tape cutting commitment
The Coalition has committed to saving the economy $1 billion per year by removing excessive bureaucratic costs that stifle business productivity and efficiency.
Mr Porter said the government had already saved the economy $2.1b through two previous annual red tape repeal days.
“What we have achieved is over 400 decisions with an impact of less than $10 million per year, so 400 smaller decisions which percolate down throughout the whole community, and there have been 38 decisions with an impact of more than $10 million per year,” he said.
“And what all that adds up to is around about $2.1 billion worth of compliance and delay and administrative cost savings to the Australian economy.”
Mr Porter said agricultural gains to date have included; $6.9m by updating the Biosecurity Act; $2m via improved guidelines for timber importers; $1.9m in compliance savings for the Farm Management Deposit (FMD) scheme; and $5m for improved online cargo management.
He said the FMD changes decreased compliance costs for farmers but the estimated $1.9m didn’t include any measure of productivity impacts generated from the savings.
About $700,000 per year has also been saved by extending the registration period for ag-vet chemicals, meaning businesses won’t need to reapply as often and therefore have less paperwork compliance to manage, the WA Liberal MP said.
“Watch this space,” he said to Fairfax Media.
“In two weeks we’ll have our third repeal day and we’ll announce a pretty substantive increase to that $2.1 billion worth of savings that we’ve already achieved.
“I can’t give away any secrets because (Prime Minister Tony Abbott) will kill me.
“But always on these repeal days there will be agricultural specific items and there will be a few rural and regional items to look out for.
“And there will also be items that affect the general population, which is where I’m trying to focus my energy on, which will affect rural and regional communities as well.”
Drilling into deregulation
Mr Porter said the Coalition had also saved $156m a year in time-compliance costs through a simplified tax return lodgement system which benefitted every Australian, including farmers and farm employees.
“By fixing a form or indeed getting rid of a form you can save massive amounts of compliance costs and time in the Australian economy,” he said.
At ABARES, Mr Porter said prior to the Abbott government coming into power, no methodology was in place to accurately measure the overall impact of regulatory costs and savings on the national economy.
He said the centrepiece of the new methodology was a regulatory impact statement process that drills down into minute details.
“Everything that increases or decreases the cost of compliance of regulation in Australia has to have a regulatory impact statement – that is whether it goes to cabinet or not,” he said.
“The process has been strengthened by this government to allow greater consultation with industry.
“We have put specific deregulation units into each of the commonwealth government departments and very importantly, for first time ever, there is a proper measurement on impacts to Australians, not just business.”
Mr Porter said the process included a Prime Ministerial exemption which was like a 'wild card' to avoid the need for cabinet approval.
He said the Coalition had only used the Prime Minister’s exemption once compared to 27 occasions in the previous Labor government.
The carbon tax repeal had saved $85.3m while the mining tax repeal had also removed $10.3m in compliance costs.
He said 125 entities were forced to go through the process of proving compliance but only 20 of them ended up paying the mining tax.
'Highly suspicious' of red tape
“Why are we putting so much effort into reducing red tape?” Mr Porter said.
“Because we’re highly suspicious of the fact that red tape has grown unabated every single year, since Federation.”
According to Mr Porter, 2015 is the first time in the history of the Commonwealth government that the total cost of legislation, regulations and administrative decisions is known, “which is quite a remarkable thing,” he said.
“Regulation is a problem that creates a problem and the problem that regulation creates is a productivity decline problem.
“Productivity decline is not mono-causal - there are lots of different things that contribute to productivity decline, it’s kind of like a monster that has several parents - but a big part of productivity decline in Australia has been over-regulation,” he said.
“There will always be regulation but the trick is to make sure that you are consistently reducing the stock to save the economy money and increase productivity.”