Red tape is strangling Australia's primary resources industries

Bookmark and Share Economics & Deregulation | Daniel Wild
The Australian 15th August, 2016

The Palaszczuk government's proposed changes to native vegetation laws demonstrate how Australia's economic growth and prosperity is being held back by red tape.

Changes to native vegetation laws introduced by the Newman government in 2013 encouraged agricultural production by allowing land clearing on private property according to requirements outlined in self assessable codes. These codes specify in great detail how land clearing is to be managed to minimise negative environmental effects.

Lyndon Schneiders, the Wilderness Society national campaign director, claims these changes led to the decimation of Queensland's biodiversity. This claim is wrong and lacks context.

Firstly, there are still rules governing native vegetation clearing. About 15 codes of conduct specify precisely what can be ­undertaken during land clearing. While these codes are self-­assessed, they carry significant bite: failure to comply could put a farmer in jail for up to five years.

Secondly, the clearing done so far has barely affected endangered or threatened species. That land has much higher social value when used for production.

Thirdly, land clearing has been anything but a free-for-all. Even Schneiders' own estimate of one million hectares of clearing represents only a tiny proportion of the total agricultural land in the state. In fact, this equates to just a 0.6 per cent increase in agricultural use because of land clearing. And even this is an overstatement: a share of that clearing would have taken place under previous laws.

Fourthly, in 2013 the Queensland government set a target of doubling agricultural production by 2040. It is inconceivable that this would be achieved through productivity improvements alone. More land needs to be developed if the Palaszczuk government is to meet this target.

Finally, not once does Schneiders reference agribusinesses, jobs or communities. The agriculture sector in Queensland employs 65,500 people in 30,500 busi­nesses, contributing more than $10 billion to the state economy each year. What will happen to these workers and businesses under the Palaszczuk changes? Schneiders doesn't say. Perhaps they don't count.

And it gets even worse. Under the proposed laws, if a farmer follows government advice and clears land, but the advice is later found to be wrong, the farmer could be held liable. This is not a remote risk. The Queensland Dairyfarmers' Organ­isation noted that information provided by ­departmental officers has often been found to be incorrect.

Additionally, the onus of proof would be reversed. Landowners would not be entitled to compensation should their land value plummet. And the changes will be retrospective.

Unfortunately, landholders all across the country are similarly ­affected by bad red tape. The draft Productivity Commission report into regulation of agriculture, ­released on July 29, made this clear by highlighting the array of complex, duplicative and inconsistent red tape requirements on the sector.

Nor is agriculture the only sector struggling with the red tape burden. Australian prosperity is built on primary industries but state and federal governments are loading them up with excessive, unnecessary and often counter-productive rules and regulations.

Just last week one of Australia's largest potential uranium mines, the Yeelirrie mine located in Western Australia, was blocked because of the effect it could have on blind, microscopic desert prawns that are just 0.3mm in size.

Constructing the Roy Hill iron ore mine required 4147 licences, permits and approvals from federal, state and local governments.

And it has taken more than six years and a billion dollars for Adani to get approval for its central Queensland coalmine - and that development still might not even go ahead.

The Institute of Public Affairs has calculated that red tape costs the Australian economy $176bn a year in forgone economic output - equivalent to 11 per cent of GDP.

Reducing this imposition must be central to any plan to spur growth and restore our nation's ­finances.

By now, the only realistic ­option to repair the federal budget is to boost the economy with a comprehensive and revitalised red tape reduction program.

Cutting spending is effectively off the table. And raising taxes would further hamper growth and job creation.

There are no silver bullets in economic reform. But there are certainties. Cutting red tape to allow businesses to develop our natural resources and create jobs will stimulate growth, which is the only way we will ever repair the budget.