Jason Matthews:
Daniel Wild is the Deputy Executive Director of the Institute of Public Affairs and he joins us now.
Daniel, good morning.
Daniel Wild:
Good morning.
Jason Matthews:
You’ve been talking about this for years. What is driving our obsession with red tape and regulation?
Daniel Wild:
Yeah, you’re right. We have been talking about this for a long time because it’s one of the biggest issues that faces our economy. Now, one of the things that’s driving this, to be honest with you, is that there’s a lot of jobs in it for bureaucrats.
Jason Matthews:
[inaudible 00:00:30].
Daniel Wild:
The reality is that public servants don’t want to cut red tape because that means they’re going to be cutting their own jobs. We did a bit of work on this about a year ago and we found that at the federal level alone, so this doesn’t include councils and states, just at the federal level alone, there’s 107,000 people that are employed to come up with and enforce regulation on the Australian people. And that’s gone up something like 20% over the last couple of years. So you could probably say that the only growth industry in Australia is creating red tape and imposing it upon the productive sectors of the economy.
Jason Matthews:
What does red tape mean by the way?
Daniel Wild:
Well, red tape are rules that are in excess of what’s needed to achieve a given outcome. So there might be an outcome that you want that we agree with as a society, for example, making workplaces safer. Everybody agrees with that. There is a lot of different ways you can do it. Red tape is when you’re putting in rules that are more than what you need to achieve the outcome that you’ve set out to do. And this is a classic example of what happens in a lot of government departments, which is what’s called mission creep or scope creep, which is, you have a very well-defined role, but then year by year, day after day, you expand that role in order to justify your job and to get more money out of the government as well. And that’s one of the things that’s driving the regulatory growth.
Jason Matthews:
It’s not just out of government. I mean, I want to ask you, what is the cost of this to the economy? Because when you look at developers, people building homes, there’s always these steps you’ve got to go through and you just got to keep paying people to hopefully approve it. It’s ridiculous. What is the actual cost?
Daniel Wild:
Well, if you want to take one component of it, which is housing, it’s about $200,000 is the cost to a new bill today.
Jason Matthews:
Stop it.
Daniel Wild:
I mean, that’s just absolutely insane, the amount of costs there. And we did a bit of work a little while ago for the economy as a whole and it was about 176 billion every year that red tape is imposing on the economy. If we come back to housing though, I just want to run this stat past you because it’s mind-boggling. So in 2014, it took about eight and a half months to get from approval to completion of a house. Today it’s about 13 months. So it’s gone up by over 50%.
Jason Matthews:
If you’re lucky.
Daniel Wild:
If you’re lucky. And that’s just from approval to completion. So that doesn’t include all of the time that it takes to get the damn thing approved to start with. And everybody’s got a war story of dealing with the council trying to get these housing approvals done. I reckon what we need to do is we need to actually put a time limit saying that you must make a decision as a council within six months. And if you haven’t made a decision, then the build can go ahead because there needs to be some kind of accountability.
Jason Matthews:
Yeah. Yeah. You snooze, you lose, I guess. But it’s not just red tape. There’s all these other different colours of tape now as well.
Daniel Wild:
Well, the biggest one is green tape. Green tape refers to all of the environmental regulation and legislation that comes with it. And we’ve seen a lot of that with the net-zero policies. And as a matter of fact, just because I had nothing better to do on a Tuesday morning, I was having a bruise through the National Construction Code. Now that’s at about, I call it, 937 pages long, if you don’t mind. It buried in there at page 484, they have the objectives. Now, I would’ve thought one of the objectives of the national construction code is to get things built and constructed. No, silly me. It’s actually to reduce greenhouse gas emissions.
Jason Matthews:
What?
Daniel Wild:
That’s actually built in. It’s baked in to the national construction code. So when we hear about things like net-zero, it sounds very abstract. It sounds very high level, but don’t forget the decisions that are being taken by governments at a high level are getting embedded into every single nook and cranny of our economy. And the fact that builders have to care about cutting emissions when they’re trying to build a house is one of the main reasons why they can’t get the house built to start with.
Jason Matthews:
It’s incredible. You’re up against it from day one. Have we become just plain old-fashioned too woke?
Daniel Wild:
Oh, we have become way too woke as a country now. There is a need for regulation. Everybody agrees with that.
Jason Matthews:
I know that.
Daniel Wild:
But the problem that you’ve got here is that you’ve got the outsourcing of common sense. The outsourcing of common sense to bureaucrats who have never had to build anything in their lives, have never had to make payroll, they’ve never had to pay a salary.
Now I’m not questioning their motives. I’m sure there’s many, many good bureaucrats, but the reality is that common sense has gone out the window. I mean, how can we say we’re progressing as a society when the amount of time it takes to do anything has increased exponentially. And by the way, I’m not sure the quality is going up either.
Jason Matthews:
No. 100%. 100%. So what’s the fix? What do you want to see done? Let’s say we have a change of government, right? It could only be One Nation perhaps at the next election. What’s the first thing you’d like to see happen?
Daniel Wild:
Okay. Well, the first thing is you’ve got to actually have accountability for the bureaucrats that are imposing the rules. So as I mentioned before, you’ve got to enforce timeframes for decisions to be made. It’s not good enough.
Jason Matthews:
We can’t have that. We can’t have that.
Daniel Wild:
Yeah.
Jason Matthews:
I’ll be on stress leave. If you make me accountable for my job, I may have to take three months off.
Daniel Wild:
Well, I got to tell you, if 107,000 bureaucrats take three months off their job, well, maybe the economy will start growing again.
Jason Matthews:
Yeah, maybe.
Daniel Wild:
I think it’ll be too bad of a thing. But you’ve got to get accountability in there, number one. Number two, get rid of the duplication. We don’t need things regulated at the council level, the state level, and the federal level. Only one level. So if the state government’s doing it, fine. The council and the feds don’t need to be involved.
And I tell you what, here’s a third one for you. And this might sound a bit wonkish, but it’s actually a really big deal, which is how the GST is distributed. At the moment, if you’re a state that’s doing really bad like Victoria, you get more GST revenue. So they’re piling on the regulation, businesses are fleeing. And guess what Canberra does? They say, “Oh, here’s more money for you.”
Jason Matthews:
Yeah. They’ve also got an election coming up as well.
Daniel Wild:
Well, you’re bang on with that, but the point here is that states need to be rewarded for doing the right thing, not the wrong thing, which is what happens at the moment.
Jason Matthews:
Yeah. Oh, look, I’m thankful that we have a government that is pretty proactive here in Queensland. I’d hate to be living in Victoria. Other countries, they’ve cut red tape, haven’t they? And have they seen like good … I mean, the U.S., I think when Trump first came in, he said, “I’m cutting all red tape.” Have they benefit from all this?
Daniel Wild:
Oh, they have, big time. Actually, what they did in the U.S. and the first Trump administration was fascinating. Talking about accountability, they imposed rules which said that if you’re going to put in one new piece of regulation, you’ve got to repeal at least two-
Jason Matthews:
That’s right.
Daniel Wild:
… already on the books. It was one in two out policy. Now Trump claimed they did one in 20 out. I don’t know if that was quite true. But nonetheless, they did actually cut the volume of regulation and red tape for the first time in generation.
So at the end of the day, what they did is they set the high level objectives saying, we need to reduce the regulatory impost in our society, for sure. If there is a valid regulation, things like health and safety, great. If you can improve it, go for it, but find something on the books, one or two things on the books today that you can get rid of and then you can justify putting in the new rule. Because otherwise, it’s like having a regulatory budget, you know? Otherwise it’ll just go up. It’s a ratchet effect. It keeps going up unless you put a rule in that says it must go down.
Jason Matthews:
I love it. I love it. You know what though? The thing is nothing’s going to change. This is just a, I don’t know, fanciful chat we’re having. And nothing’s going to change, Daniel. Sadly, I think we’re putting on more bureaucrats. In fact, I don’t know if you’re aware of this. The Courier Mail today has done the top 45 public servants. They’re even getting their own day in the paper.
Daniel Wild:
Yeah. Well, look, I’m probably not quite as pessimistic as that. It’s been a pretty average few years for our country. But look, I think Australians are starting to wake up to these problems. I mean, it’s not just the regulation. It’s this massive population growth from mass migration. It’s the fact that productivity is going backwards. It’s the fact that things are just harder than they used to be. So I think there is a growing awareness in the community that things can’t keep going the way they are. So look, I’m probably a bit more optimistic that we can fix some of these things.
Jason Matthews:
I hope so.
Daniel Wild:
Getting rid of net-zero is an example. If you get rid of that, I tell you what, you’d see prices come down pretty quickly. So there are fixes to this. Unfortunately, it’s going to take a bit of time.
Jason Matthews:
Daniel, love this chat, mate. You’re welcome anytime. Daniel Wild is the Deputy Executive Director of the Institute of Public Affairs. Thanks for your time this morning.
Daniel Wild:
Good on you. Thank you.
Jason Matthews:
No worries.
