Cutting the red tape burden: where public servants come in

By Stephen Easton

Friday October 24, 2014

In the lead-up to the second “red tape repeal day” next Wednesday, the prime minister’s parliamentary secretary Josh Frydenberg spent yesterday morning trying to increase support among public servants for the government’s deregulation agenda.

Speaking at a seminar hosted by the Institute for Public Administration Australia, ACT branch, Tony Abbott’s point man on red tape reduction conceded the shift to a lighter-touch regulatory culture would not succeed without the support of public servants.

“We want to change the government away from its default position of new regulation,” Frydenberg (pictured) said, “to a position where we ask the question: is regulation actually needed, have all avenues been exhausted, and what is the true impact in terms of cost, innovation, entrepreneurship, barriers to entry, on the particular stakeholders impacted by those regulations?”

Deregulation units are now in place in each department; cutting regulatory overlap between different levels of government is now a standing item on the agenda for the Council of Australian Governments; and a new framework for auditing the performance of regulators is being developed, based largely on a draft produced by the Productivity Commission in March.

“That framework has been consulted upon and is being finalised and hopefully will be out publicly next week, for implementation next year,” Frydenberg said.

“What it’s looking at, for example, is how regularly are the regulators engaging with stakeholders [and] do the regulators on the one hand distinguish between their role in publishing guidance notes, and on the other hand enforcing the pieces of regulation? Separating those two roles … would be consistent with good governance.”

He said it was the government’s intention to audit the performance of regulators annually, “to ensure that they’re focused on the role at hand and they are most efficient and effective in their administration of regulation”.

Frydenberg also restated the government’s view that the 151 regulatory bodies in the Commonwealth sphere must change the way they interact with private sector organisations and members of the public, based on the Australian National Audit Office’s new Better Practice Guide on administering regulation.

“The feedback that I have been getting as I go around the country … is that often these regulators have been engaged in mission creep.”

Senior ministers have asked stand-alone regulatory agencies within their portfolio areas to allow industries to self-regulate “where appropriate” and otherwise move to a risk-based approach, Frydenberg said. The 80 or so regulators under departmental authority are hearing the same message from their secretaries, whose performance bonuses are now linked to deregulation as a key performance indicator.

“The feedback that I have been getting as I go around the country … is that often these regulators have been engaged in mission creep,” Frydenberg told the audience. “And as these regulators move to a cost-recovery model, we don’t want stakeholders, industry, to be paying the true cost of the regulators’ risk aversion.

“We can’t mitigate every risk, [so we should ask] what is the cost to the community of a new regulation? And on the other hand, what is the risk to the community if we have a market collapse, a health scare, a building collapse, or whatever?”

According to Prime Minister Tony Abbott, “10,000 pieces of unnecessary legislation and regulation” were removed on March 26 and bills introduced on Wednesday will remove 1000 more. Any new regulations that are brought in will now be subject to mandatory post-implementation reviews within five years, to prevent a return to “a situation where we’re clogging our statute books with redundant and unnecessary regulations”, Frydenberg said.

“Obviously we don’t want those post implementation reviews to be a huge costly exercise in themselves, and the public service and in particular the deregulation units … are focused on this particular issue,” he said in response to a question, which asked if the reviews could be limited to five days or less. “Whether we can do it in less than five days may vary depending on the nature of the particular piece of legislation we’re looking at, but certainly speeding up that process would be a good thing.”

In one example of cutting red tape through legislation introduced on Wednesday, the government wants to remove the requirement that builders tendering for government contracts need accreditation from the Federal Safety Commission. Frydenberg said this excludes local builders from lucrative contracts in regional areas particularly, citing one case where 50 builders were knocked back from putting up new houses for Defence Housing Authority in their local area.

In another example, Frydenberg said the requirement for aged care providers to notify the Department of Social Services of key personnel changes was seen as “superfluous and unnecessary” by the government.

Another audience member pointed out that in some areas, stakeholders wanted to see more government regulation, not less.

“Clearly there’s going to be some new regulation that is going to be needed to respond to concerns so it would be a case-by-case basis,” Frydenberg responded. “[…] The point I want to get across is, we as the public service and as the government don’t want the default position to be a big tick for new regulation.”

Roundtables with stakeholders and senior members of the public service will be held in coming weeks and months to work out issues around which products, services and systems already approved in “trusted international jurisdictions” can be sold in Australia without further assessment, he added, describing the new policy as “one of the most significant regulatory changes that we’ve announced”.

“We can’t do it without the public service, we can’t do it without the input of stakeholders, but we are determined to continue to cut red tape,” he said.

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