Second Reading Speech - Omnibus Repeal Day (Autumn 2014) Bill 2014

Type: Speech

Date: Wednesday 19 March 2014

Speaker(s): Hon Josh Frydenberg MP

Location: House of Representatives

Mr FRYDENBERG: The Omnibus Repeal Day (Autumn 2014) Bill 2014 is the first bill in the Government’s 2014 Autumn Repeal Day package.

In April 1946, Sir Robert Menzies’ Liberal Party took out an advertisement in The Bulletin magazine - “we want fewer forms and more reforms” the headline screamed.

Alongside a picture of a husband and wife drowning in paperwork, the advertisement went on to say “I’m fenced in with permits, licences, returns, regulations from every Board, Division and Department under the sun. What I want is to control my own industry…”

It was a message that strongly resonated then, as it still does today.

In every facet of life, from aged care to agriculture, schools to small business and visas to veterans, we are facing an avalanche of regulation that is impeding investment and innovation and the creation of new jobs.

In under 6 years, the previous Labor Government introduced an additional 21,000 regulations, including the Carbon Tax with its 18 separate acts and 1,100 pages of legislation, and the Mining Tax with 11 separate acts and 525 pages of legislation.

This is despite Kevin Rudd’s 2007 claim that “the truth is business regulation is now right out of control. The quantity and complexity of business regulation today is eating away at the entrepreneurial spirit of Australian business”.

And Kevin Rudd’s Small Business Minister, Craig Emerson, who said “we are promising to take a giant pair of scissors to the red tape that is strangling small businesses.” Unfortunately, Labor did anything but.

It is little wonder then, that given this poor performance by the Rudd and Gillard Governments, the World Economic Forum ranked Australia a pitiful 128 out of 148 countries surveyed for “burden of government regulation”.

Or that the Australian Chamber of Commerce and Industry surveyed its members in 2013 and found that 73 per cent of businesses felt the compliance burden had increased in the past two years.

The Business Council of Australia too has documented the overwhelming compliance burden, highlighting one environmental approval process that took more than two years, cost millions of dollars, involved 4,000 meetings, required a 12,000-page report and when the approval came back, it had 1,500 conditions attached, 300 at the federal level, 1,200 at the state level, and 8,000 sub-conditions. How can we expect any company to go through that process?

Unfortunately today, too many of our business leaders share the sentiments of Jos de Bruin, CEO of the Master Grocers Association, who said “many of our members feel that they are in the business of compliance, and do a little bit of retailing on the side.”

Comments such as these from an industry group representing firms employing more than 115,000 staff and contributing more than $14 billion each year to the economy are a call to action. And we need to respond.

It is against this backdrop that the Abbott Government is determined to turn back the tide of red and green tape and adopt a new approach.

Questions must be asked first before any new regulations are passed. What is their purpose? Their cost? Their impact on new entrants? And their effectiveness in managing risk? Only then, when it is absolutely necessary, with no sensible alternatives available, should we proceed to regulate.

We need a new concept of acceptable risk and we need to better understand the cumulative impact of regulation on business decision-making. After all, business is not sentimental and capital is mobile.

Politicians who support new regulation are, in the words of former Productivity Commission chairman Gary Banks, “often rewarded with public acclaim as tangible evidence that the government is ‘doing something’ ”. Just look at the previous Government’s boast that it passed hundreds of pieces of legislation, as if that was an achievement in itself.

As Banks describes, these “uneven political pressures” are “the antithesis of good regulatory process”. The incentives are simply all wrong. Their cumulative impact is to deter investment and innovation and stifle productivity.

As part of the Abbott Government’s new approach, we are implementing a series of reforms which will hold both Ministers and the bureaucracy to greater account.

Cabinet submissions proposing legislative changes with a significant regulatory impact will no longer be exempted from the regulatory impact assessment processes.

Ministers have been tasked to establish designated units within their own departments to advise on deregulation priorities, while each minister is appointing an advisory committee with outside representation to provide advice on where regulation can be cut.

Senior members of the public service are having their remuneration directly linked to their performance in reducing red and green tape.

Two parliamentary sitting days have been set aside for repealing legislation each year, with the first Repeal Day occurring next Wednesday.

And we have committed to an annual target of reducing red tape by $1 billion.

All this is being overseen by the Prime Minister and his department, which has subsumed the Office of Deregulation and the Office of Best Practice Regulation into the Department of the Prime Minister and Cabinet from its previous location in the Department of Finance.

Regulators too are the subject of a new approach. The Government is releasing today a Productivity Commission report which provides a framework for auditing the performance of regulatory agencies.

The Commonwealth has 75 external and 68 internal regulators, each of which vary in size. When they do their job well, they effectively manage risk and advance the interests of stakeholders and the community at large. However, when their performance is sub-par, it can lead to substantial delays, increased costs and complexity, and what can politely be described as “mission creep”.

The perception today is that too many of our regulators are dominated by a culture of compliance and enforcement that stifles productivity. There is also a view that where regulators have the ability to cost-recover their fees from industry, it is industry that bears the impost of regulators’ ­risk-aversion.

The Abbott Government is implementing a series of measures to audit and ultimately strengthen the performance of regulators. In addition to the Productivity Commission’s report, which covers four key indicators - advice and guidance, licensing and approvals, monitoring and compliance, and enforcement – senior ministers in the Abbott Government withportfolio responsibility for one or more of the Commonwealth regulators are now sending letters of expectation to the relevant regulatory head.

These letters make clear that the strategic direction of the Government is to deregulate and lift the compliance burden on stakeholders. Where appropriate, Ministers call upon regulators to reduce any overlap between their functions and those of other regulators, and to undertake an audit of the cost to their stakeholders of regulatory compliance. Where it can be done, the Ministers are also requesting that regulators substitute mandatory reporting requirements with independent audits. The goal of these changes is to create a more practical, risk-based approach to enforcement.

Ahead of Repeal Day next Wednesday, today too is a historic moment for the Australian Parliament. Today the Government introduces legislation and tables documents to repeal more than 10,000 Acts and regulations - the largest ever single bulk repeal in the history of the Commonwealth.

Red and green tape is being cut across nearly every portfolio, slashing the compliance bill for the business and the not-for-profit sectors by more than $700 million.

Significantly, the broader economic impact will be exponentially larger than this as jobs will be created and investments that may have otherwise been delayed or cancelled will now go ahead.

In just over 6 months in government, it is a good start, but there is a long way to go. We are determined to see a cultural shift in Australia’s approach to regulation.

Regulation must never be the default option for government, but only a means of last resort following genuine consultation with stakeholders.

The Abbott Government’s deregulation initiatives, many of which are being introduced today, align with three key themes.

First, removing duplication between different levels of government and between different agencies of government.

The Government has already announced one-stop-shops for environmental approvals to avoid overlap between state and federal regimes. Now one-stop-shops will be extended to offshore petroleum activities in Commonwealth waters, with NOPSEMA (the National Offshore Petroleum Safety and Environmental Management Authority) now empowered to make determinations required under the Environmental Protection and Biodiversity Act without the need to get approval from a second, separate Commonwealth regulator.

David Byers, CEO of the Australian Petroleum Production and Exploration Association, said this move is essential should Australia be able to “win extra market share” beyond the $200 billion already invested in local projects.

We are also removing the requirement for aged care building certification at the federal level, as this merely duplicates requirements at the state level. With an additional 74,000 aged care places needed over the next 10 years, we need less regulation not more if we are going to provide the incentive for the required investment.

In another significant change we are opening up the Comcare scheme to companies who operate in multiple states and want to self-insure. Instead of having to enter into separate workers’ compensation schemes in every state in which they operate, they can enter into a single scheme which is estimated to save industry over $30 million a year in compliance costs.

Second, is the need to streamline onerous and costly reporting requirements.

Labor’s Future of Financial Advice laws imposed a $700 million implementation cost on the financial services sector and needs to be paired back.

The Personal Property Securities Act which mandates that small and large hire firms register serial numbered goods with a Commonwealth authority is more onerous than regimes in place in comparable jurisdictions such as New Zealand and Canada.

Commonwealth grant and procurement guidelines also need to be amended to ensure greater use of template contracts and to increase the threshold for the Commonwealth to make payments with credit cards to assist the cash flow of small business.

The education sector also needs relief, with universities no longer having to submit capital asset management surveys, which provide unnecessary levels of detailed information on the use of their lecture theatres, laboratories, and academic offices.

And the not-for profit sector will also see savings, with the Brotherhood of St Laurence no longer having to report monthly, but instead quarterly, as it oversees the implementation of the Commonwealth’s Home Interaction Program for Parents and Youngsters (HIPPY) program, an important educational service assisting disadvantaged young families.

Third, the Abbott Government will take a common sense approach to regulation.

There is no need for companies to seek separate classifications, for 2D, 3D, DVD or Blu-ray versions of a film like Kung Fu Panda when one classification should suffice.

Job service providers should not be required to keep 336 file cabinets to hold paper copies of job applications when they could be otherwise stored electronically.

It does not make sense for more than 30,000 retailers selling prepaid sim cards to take a photocopy of the purchaser’s ID when similar details are again taken when the phone is activated.

So too for a potato farmer exporting to Korea, they should have the option to self-certify the origin of their produce and not go through the costly and time consuming process of paying for a  certificate of origin.

These are just some of the many examples of over-regulation which we are seeking to correct with our initiatives announced in conjunction with Repeal Day.

The Omnibus Repeal Day (Autumn 2014) Bill 2014, which is before the House, is part of a package of repeal measures, together with a series of other important Bills including the Statute Law Revision Bill No 1 2014 and the Amending Acts 1901-1969 Repeal Bill 2014.

The Omnibus Bill makes a number of changes to:

streamline reporting and information provision requirements for telecommunications providers under the Competition and Consumer Act 2010.
remove Telstra’s standard marketing plan and policy statement requirements, now redundant under theTelecommunications (Consumer Protection and Service Standards) Act 1999.
streamline the Australian Communication and Media Authority’s (AMCA) discretion to investigate complaints under the Media Authority Act 2005, Broadcasting Services Act 1992 (Broadcasting Act) and Interactive Gambling Act 2001.
remove superseded standard form agreement provisions outlined in the Telecommunications Consumer Protection Code requiring carriers to maintain duplicate summaries for each product and service.
grant the Australian Communication and Media Authority the power to exempt classes of licenses that do not have significant revenue from the requirement to provide audited accounts under the Broadcasting Act.
remove redundant permit provisions regarding the operation of sea installations under the Sea Installations Act 1987.
remove requirements to undertake water studies in the Murray-Darling Basin for mining activities which have been superseded by provisions in the Murray-Darling Basin Plan and the Environment Protection and Biodiversity Conversation Act 1999.
repeal the Coordinator-General for Remote Indigenous Services Act 2009 following the decision announced in MYEFO and its function ceasing on 31 January 2014.
remove the certification requirement under the Aged Care Act 1997 that replicates state, territory and local government building regulations for residential aged care facilities..
exempt low volume importers from the licensing requirements of the Ozone Protection and Synthetic Greenhouse Gas Management Act 1989

This Omnibus Repeal Day Bill also proposes the repeal of 43 spent and redundant Acts, some of which have remained on the Commonwealth statute books despite fulfilling their purpose or being superseded, decades ago.

For example, the Approved Defence Projects Protection Act 1947 was enacted to provide for the protection of Approved Defence Projects by making it an offence to prevent, hinder or obstruct an approved defence project. This Act applies to the Woomera Prohibited Area and the Nurrungar Joint Defence Facility. Woomera has been protected under the Defence Force Regulation 1952 since 1976 and the Nurrungar facility was decommissioned in 1999.

Further, the Commonwealth and State Housing Agreement (Service Personnel) Act 1990 was established to transfer property between the Commonwealth and individual States following the creation of the Defence Housing Authority in 1988. The Act was fully spent after five years but remains on the Commonwealth statute book.

Four Acts from the Treasury portfolio remain on the statute book to implement increases to Australia’s quota at the International Monetary Fund in 1965, 1970, 1983 and 1991. These payments have long been made and the arrangements are no longer required. Furthermore, the International Monetary Agreements Act 1947 was amended in 1991 to include standing arrangements to support any payment we are required to make to the IMF when quotas are changed.

By allowing these spent and redundant Acts to continue in force on the Commonwealth statute book, we are making it harder for businesses, individuals and community organisations to find out about the regulations that matter to them. Instead of being able to quickly and easily find and access the regulations they need to comply with, they have to sift through outdated, unnecessary regulations, to determine whether they still apply.

Through our commitment to dedicated parliamentary repeal days and bills like the Omnibus Repeal Day Bill, and the Amending Acts 1901 to 1969 Repeal Bill 2014 and Statute Law Review Bill (No. 1) 2014, this Government is taking decisive action to reduce this burden.

In conclusion, if Australia does not act now to tackle this avalanche of red and green tape, we will be unnecessarily raising the risk on Australia’s $400+ billion investment pipeline, and, in the process, endangering tens of thousands of potential new jobs.

We must never forget in a competitive world, capital is mobile, and in the Asian Century, where the opportunities are so large, we not only need to seize every advantage but we need to eliminate every disadvantage.

This is why the deregulation agenda is so urgent and so important. We must act now, as the choice is ours.

Sir Robert Menzies, Australia’s longest serving Prime Minister, was right when he said, more than 60 years ago, that what was needed was “less forms and more reforms”. The Abbott Government has heeded these words and is now taking the lead.

Australian families, businesses and community organisations all stand to be the great beneficiaries.

I commend this Bill to the House.