The Institute of Public Affairs’ record levels of red tape generated by state and federal government and its effects on the economic potential of Australia, was discussed on ABC Illawarra Mornings on 8 November 2023.
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Below is a transcript of the interview.
Nick Rheinberger:
Just lately, the IPA has done some research into red tape and they reckon it’s at a record high across Australia. Saxon Davidson is one of their research fellows and joins us now. Good day, Saxon.
Saxon Davidson:
Good morning. Thank you for having me.
Nick Rheinberger:
How would you define red tape?
Saxon Davidson:
Red tape are laws and regulations that go beyond minimally effective regulation. They are more or less laws and regulations that are out of date, not fit for purpose, and sometimes just ineffective at providing the minimally effective regulation that is…
Nick Rheinberger:
… and what becomes red tape?
Saxon Davidson:
Well, I can give a great example. So there’s a New South Wales state law regarding native vegetation, for example. Now everyone agrees that we need to protect our native vegetation and sustain it and maintain it. However, there’s a law within the Local Land Services Act that extends the definition to native to dead vegetation, which means that farmers and private land owners can’t clear that land. And this certainly has greater effect in times of great heat and as well prevents businesses from being able to enact their own business on that land. Now that is what I would define as greater than the minimal effect of regulation.
Nick Rheinberger:
Fair enough. Fair enough. If it’s dead, it’s dead. So you can’t even clear that?
Saxon Davidson:
No.
Nick Rheinberger:
Okay. Well that’s a very good example. So if we assume that that’s where you’re drawing the line on regulation that is really not necessary, what’s the growth curve been like?
Saxon Davidson:
Well, we’ll start at the federal level. It has grown by 88% since 2005, which is the earliest available data with the methodology that we have used and has grown at two thirds greater than the overall growth in the national economy in that time. What we’ve also seen is that the growth of regulation and red tape has increasingly lacked in transparency. 97% of the growth since 2005 has been seen by laws and regulations that have been implemented by regulators and ministers through delegated legislation rather than the normal parliamentary process.
Nick Rheinberger:
Right. Okay. So tell me a bit about your methodology, because I understand you’ve worked with George Mason University. Tell me about that part of it?
Saxon Davidson:
Yes. So the research report that we released on Monday applies the methodology called reg data, which was pioneered by George Mason University’s Mercatus Centre. Reg data is a machine learning method to count the regulatory restrictiveness clauses of legislation and regulation. Words and phrases such as shall may, must not, may not, shall not to measure the regulatory burden within specific laws and regulations.
Nick Rheinberger:
Right, okay. So having done all of that, you’ve looked at this at the federal level. What do you think it’s doing to the national economy?
Saxon Davidson:
Well, it’s growing, as I said earlier, two thirds greater than the overall growth in the national economy. And the more time that businesses have spent filling out forms, applying for permits, sometimes duplicated permits, the less time they have to provide the key household goods and services that everyday Australians need. And we’ve seen the price of services and goods skyrocket in the last 18 to 24 months and we cannot drive down those prices if businesses are being burdened by a record level of red tape at both the state and the federal level in every state across the country.
Nick Rheinberger:
Now you’ve got some interesting suggestions to try and combat this. One is parliamentary repeal days.
Saxon Davidson:
Yes.
Nick Rheinberger:
What would they do?
Saxon Davidson:
So parliamentary repeal days is where state and federal parliament sit for two days every year to exclusively repeal abolish legislation and regulations that are out of date, duplicated at the state and federal level or just are bad. They’re ineffective and inefficient. And now because we’ve got governments and state, actually we should be using national cabinet to be removing duplicated laws. And if we can coordinate through national cabinet to decide where state government should be doing this, where federal government should be doing that.
Nick Rheinberger:
National cabinet to repeal state laws?
Saxon Davidson:
Well, no, we should just be using the existing national cabinet meetings that are existing.
Nick Rheinberger:
Right, okay.
Saxon Davidson:
Between state and federal. Between state and federal…
Nick Rheinberger:
I know national cabinet already meets, but it feels like you’d be introducing red tape to cut red tape.
Saxon Davidson:
Well actually that was interestingly, when the government between 2013 and 2015 was successful in cutting red tape, an 11% decrease across two years, they were actually using the delegated regulation clauses to remove old and bad laws through parliamentary repeal dates.
Nick Rheinberger:
Oh, okay. And the other thing is that apparently in the U.S. they have a one in two out rule. Is that across every state or just in the federal government?
Saxon Davidson:
That was just across the federal government and it was quite effective. Around the end of 2016, the US was actually in one of its most regulatory periods in its history. And then by 2021, 2022, it actually decreased quite substantially.
Nick Rheinberger:
So this means if you introduce a regulation, you have to repeal two pieces to get it in?
Saxon Davidson:
Yes.
Nick Rheinberger:
What was the result of that? Was that actually effective?
Saxon Davidson:
Well, this makes sure that the new laws that are being brought in are actually contemporary and you’re actually removing two laws that are out of date, not fit for purpose or ineffective, inefficient.
Nick Rheinberger:
Amazing. All right, Saxon, great to talk to you. Thank you.
Saxon Davidson:
Thank you for having me.
Nick Rheinberger:
That’s Saxon Davidson, the research fellow at the Institute of Public Affairs here at ABC Illawarra.
This transcript from ABC Illawarra Mornings from 8 November 2023 has been edited for clarity.
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