It’s time to inject some fresh ideas into the problem of red tape. On the government “hit list” since Bob Hawke announced the policy of “minimum effective regulation” in 1986, regulation has nevertheless continued to burgeon.
Since 1986 we’ve required new regulation to run the gamut of cost-benefit quality hurdles embodied in “regulatory impact statements’ (RISs)”.
But it’s not making much progress. You’ve heard of Moore’s Law according to which computers double in power every 18 months. Well, regulation is still obeying “The Law of More” in which the pages of Commonwealth legislation double each ten years.
The RIS process has always lacked political support when push comes to shove. WorkChoices’ RIS read more like a corporate brochure than a cost-benefit study and was ruled non-compliant with the government’s own regulatory policy by the Office of Best Practice Review.
But WorkChoices is now law – bodgie RIS and all.
Even so, something even deeper is amiss.
A Lateral Economics report commissioned by the Victorian Government released today argues that “regulation review” remains mired in the “central planning” paradigm. Think about it – regulation review is regulation of regulators – and it’s suffering from much of the dysfunction of regulation itself.
The major focus is on new regulation as if one could get regulation right first time. Business gave up that idea decades ago. Its central planners – managers and engineers – spend a lot of their time trying to harness and empower employees natural inclination to do their work as well as possible. Our regulatory system is like a factory from the bad old days.
Our report provides examples of opportunities lost because of the time, effort and uncertainty for businesses trying to get regulation changed to enable them to do new things, or to do old things better. And shows how we could benefit from becoming a regulatory pacesetter.
We could set up showcase regulation in greenhouse gas abatement, pioneering new ways of measuring, verifying and auditing carbon emissions. In addition to the international leadership we’d show, we’d be placing Australian companies in the box seat to develop new technologies to export to the world when it caught up.
The report also argues that firms with a proven commitment to excellence should be subject to fewer impositions from regulation.
Firms should have rights to alternative compliance where they can demonstrate auditable systems for delivering on regulatory objectives.