Regulatory Harmonisation

In May 2007, the Business Council of Australia (BCA) highlighted the results of a study it had conducted that showed that:

Australian businesses are being shackled by the failure of state and territory governments to get their continuing red tape blow-out under control …

The broader business community has indicated that it shares this sentiment. One solution to the problem is the harmonisation of key business regulations across jurisdictions.

In April 2007, Australian Labor Party (ALP) leader Kevin Rudd outlined a coordinated national strategy to radically reduce the regulatory burden on Australian businesses. In his ‘Facing the future’ address to the National Press Club, he said a federal Labor government would:

• harmonise key state and territory regulations across jurisdictions within five years of taking office, including occupational health and safety (OHS) regulation, administration of payroll tax, building codes, and trades and professional body recognition
• achieve this harmonisation by making federal and state governments accountable. The Productivity Commission, through the Council of Australian Governments Reform Council, would be given statutory responsibility to estimate the costs and benefits of harmonisation in each area
• provide a financial incentive to the states and territories to comply with proposed harmonisation reforms:

  … recognising that there are significant national benefits from such reforms, a Federal Labor Government will provide a financial incentive to reward State and Territory governments that implement the reforms. A Federal Labor Government will reward results and not just promises, using a model similar to that which existed under the National Competition Policy reforms.

Harmonisation reforms foreshadowed in certain key areas are indicated below.

Harmonisation—industrial relations

The ALP’s employment and industrial relations policy, Forward with Fairness, seeks to achieve nationally consistent industrial relations laws for the private sector, either through a referral of powers by state governments or other forms of cooperation and harmonisation. The aim of the policy is to remove the complexity resulting from separate industrial relations systems, and to reduce employer compliance costs.

Harmonisation—health and safety

Launching Labor’s workplace safety policy in October 2007, deputy ALP leader Julia Gillard stated that a federal Labor government would impose a temporary moratorium on employers self-insuring under Comcare, and would seek to harmonise OHS laws and streamline workers’ compensation through co-operative federalism.

Harmonisation—building code

As noted above, Rudd has identified building codes as requiring harmonisation. The need for harmonisation is indicated in a Productivity Commission report, Potential Benefits of the National Reform Agenda, which states that, despite having a national building code, state and territory governments retain the ability to make regulations. As a result, there are inconsistencies in several areas (p. 135).

Harmonisation—payroll tax

In April 2007, the then Shadow Minister for the Service Economy, Small Business and Independent Contractors, Craig Emerson, discussed harmonisation in relation to payroll tax. In his report, Lifting productivity growth by reducing business regulation, he indicated that a federal Labor government’s reforms would address eight important areas of the payroll tax system in order to achieve simplification and harmonisation (p. 19). Common provisions and definitions would need to be adopted for:

• timing of lodgement
• motor vehicle allowances
• accommodation allowances
• a range of fringe benefits
• work performed outside a jurisdiction
• employee share acquisition schemes
• superannuation for non-working directors, and
• grouping of business.

However, states and territories would retain control over individual rates and thresholds.

Documentation
Kevin Rudd, ‘Facing the future’, address to the National Press Club, Parliament House, Canberra, 17 April 2007.
Kevin Rudd and Julia Gillard, Forward with Fairness, Australian Labor Party, April 2007.
Julia Gillard, ‘Labor’s workplace safety policy’, speech to Safety Week Conference, 24 October 2007.
Productivity Commission, Potential Benefits of the National Reform Agenda, Report to the Council of Australian Governments, Canberra, 2006.
Craig Emerson, ‘Lifting productivity growth by reducing business regulation’, April 2007.